Dan's Papers - March 28, 2008 - Rich, Richer, Richest

Forbes Magazine published its annual list of billionaires last week. There are 1,036 of them that have been identified by a team of 40 reporters working in nine countries around the world. 463 of them are in the United States. And in the United States, the greatest collection of them is in New York City.

I found it fun to look through the list, which they publish alphabetically (along with by country, rank and industry.) There's a profile on about 20 of them, sort of at random, and one is about a local Hamptonite, John Catsimatedes, who is on the list for the first time at $2.1 billion.

I looked through the alphabetical list, seeing whom I might also find on it that has a house out here. First of all, I was particularly surprised that one person I know was not on the list, considering the way he has been behaving. You know who you are. (Ten hands just went up.)

Herb Allen Jr. is on the list at $2.0 billion. Ron Baron, the financial mogul, makes the list at $1.5 billion. Leon Black, a frequent visitor here, is at $4.0 billion. Mayor Michael Bloomberg is at $11.5 billion. Peter Brigar Jr., manager at the hedge fund Fortress, is worth $1.2 billion, and Edgar Bronfman Jr., the entertainment mogul, is at $3.2 billion. I mentioned John Catsimatidis at $2.1 billion. Barry Diller, the entertainment mogul, is at $1.3 billion. Charles Dolan of Cablevision does not frequent the Hamptons, but he is a Long Island success story and I report that he is at $2.5 billion, if you include his family.

I want to break in here to note that in this early group, practically everybody except our esteemed Mayor is sort of scraping the bottom of billionairedom. During this alphabetical tour, I have passed somebody who is not a Hamptonite, but in red is indicated as the #1 billionaire in the world - Warren Buffet at $62 billion. All these other billionaires, scraping along, have red numbers alongside them such as #784 or #412 or #962. I wonder what it's like to wake up in the morning and think about that while putting your pants on one leg at a time. Pretty depressing, no?

One of these among the letter E, for instance, is Michael Eisner at $1.1 billion. Forbes rates him at #1014. He's been parachuted out of Disney and is sinking fast. And he doesn't have a house in the Hamptons. I'm told that when he gets up, he puts on those shiny black oversized Mickey Mouse shoes. But maybe that's wrong.

Philip Falcone, founder of Harbinger Capital Partners, is at $1.7 billion. Stephen Feinberg, founder of Cerberus Capital Management, is at $1.0 billion. The investor J Christopher Flowers is worth $2.0 billion. Theodore Forstmann of Mecox makes the list at $1.0 billion. He used to run the Huggy Bear tennis tournament. Insurance mogul Maurice Greenberg is at $1.9 billion. Joshua Harris, the financial management billionaire, is at $2.0 billion.

We have a few members of the Hearst family out here in the Hamptons. The only New York Hearst on the list is Austin Hearst at $2.1. Three others, all over $2 billion, are based in California. But none that I know are on it.

An odd thing was that for a number of years, the Hearst family held fundraisers out here to help pay the maintenance of the Hearst Castle in California. There's some arrangement with the state of California that allows it to be open to the public, yet the Hearsts, who built this former private home, have to pay for some of it. I never could understand it. I can understand cancer research or the Bridgehampton Child Care and Recreation Center. But the Hearst Castle? The Hearsts, I thought, could get along without our help.

There's a William Hilton based in California on this list at $2.3 billion, but no New York Hiltons.

Carl Icahn is on the list at $14.0 billion. He's the 46th richest man in the world. I see him out here from time to time. And of course, when you go over the Triborough Bridge, there's his name backwards in giant stainless steel letters, mounted on the top of the Carl Icahn sports stadium at Randall's Island, and he now pays all the bills this stadium for the kids of New York.

Pharmaceuticals baron Michael Jaharis is on the list at $1.9 billion. In the Js, by the way, there are two West Coast guys on the list. One is Apple's Steven Jobs at $5.4 billion. He has a way to go to catch Microsoft's Bill Gates, who at $58 billion, after giving much of his fortune to charity, has dropped to being just the second richest man in the world.

David Koch, the oil pipeline executive who has a house in Southampton, is at $17.0 billion, the same amount as his brother Charles, based in Kansas. Retired businessman Jerome Kohlberg Jr. is at $1.5 billion. Henry Kravis, leveraged buyout king, is at $5.5 billion. Ron Lauder, the cosmetics mogul, of Wainscott is at $3.2 billion. His brother Leonard is at $3.3 billion, according to Forbes. What's that all about?

Ralph Lauren, who is opening up his fifth store on Main Street in East Hampton this summer, is at $4.2 billion. His stores include a kids store, a candy store, his main Polo General Store, a Ralph Lauren rugby store and a Ralph and Ricky Lauren jeans store. Lauren had hoped to open a restaurant in an alley off Main Street too, but the Village gave him a hard time, so he has dropped his option. The new owners are planning to reopen it once again as the Blue Parrot, which is what it was for a quarter of a century before he bought it.

It is interesting that the Village gave him a hard time and he just graciously retired from the fray. What if he wanted to go to war with the Village? Well, he's got $4.2 billion. The Village's annual budget is $17 million. I don't know who would win, but if you do the math with that comparison, you get that Lauren could pay the salaries of every Village employee for the next half a century if he so chose.

Hedge fund founder Thomas Lee is worth $2.0 billion. The real estate mogul Leonard Litwin is at $1.1 billion. Just in case you wondered, Michael Milken, the disgraced junk bond king who served time in jail, is on the list at $2.3 billion. But he lives in California. Media mogul Rupert Murdoch, now of New York having moved here from Australia, is at $8.3 billion.

Real estate mogul Paul Milstein is worth $4.5 billion. Samuel Newhouse, who owns Conde Nast and other publishing companies, is at $8.5 billion. Daniel Och, hedge fund founder, is worth $3.6 billion. Lynne Pasculano & family, owners of New England Confectionary, are worth $1.0 billion. John Paulson, hedge fund founder, is at $3.0 billion and Nelson Peltz, who owns the fast food chain Arby's, is worth $1.3 billion.

Ron Perelman of Revlon and East Hampton is at $9.5 billion. Pete Peterson of Mecox is at $2.0 billion. There are 11 Pritzkers on the list, all around $2.5 billion. None have houses in the Hamptons.

Industrialist Ira Rennert, who built the 110,000-square-foot palace in Sagaponack, is on the list at $3.5 billion. Marc Rich, the wealthy Wall Streeter who lived in exile in Switzerland for 15 years to avoid an indictment until finally famously pardoned by President Bill Clinton, is at $1.5 billion. His ex-wife, Denise Rich, with whom he has remained friends through it all, has a house here.

Wilbur Ross, the industrialist and investment banker who has homes in Southampton and Palm Beach, is at $1.7 billion. Related's Stephen Ross, the skyscraper builder, is at $4.5 billion. And Vornado's Steven Roth, another skyscraper builder, is at $1.3 billion. Speaking of the letter R, there is no Rattiner on the list. There may have been one before, but if there was, he has dropped off.

Marc Rowan, partner at Apollo Management, is at $1.5 billion. Real estate mogul Tamir Sapir is worth $1.5 billion and Wall Street giant Steven Schwarzman is at $6.5 billion. Herbert Siegal, the television mogul who formed United Paramount Network with Viacom, is worth $1.3 billion. Hedge fund manager James Simons is at $5.5 billion. High-end real estate developer Sheldon Solow is at $2.0 billion. George Soros, co-founder of Quantum Fund, is worth $9.0 billion. Jerry Speyer, whose family-run real estate company owns the Chrysler Building and Rockefeller Center, is worth $2.0 billion. Owner of Leucadia National Corp., Joseph Steinberg, is at $1.5 billion. Leonard Stern of Bridgehampton, the Meadowlands and formerly of Hartz Mountain, is at $4.1 billion.

Former Sotheby's chairman, A Alfred Taubman, is at $1.7 billion. Joan Tisch and Wilma Tisch, the widows of the much missed Preston and Lawrence Tisch, have $4.0 and $2.5 billion respectively. Donald Trump, the TV star, author, resort, restaurant, casino and skyscraper owner, who is an occasional visitor out here, is at $3.0 billion. Sandy Weill of Citigroup is at $1.4 billion. Daniel, Dirk and Robert Ziff, who inherited the Ziff-Davis publishing empire, are at $3.5 billion each. Builder Jerry Zucker is at $1.2 billion and Mort Zuckerman of East Hampton, the Artists-Writers Game, the New York Daily News and real estate, and who is pursuing Newsday, is at $2.3 billion.

So here's my idea. I think it's fair to say that there is an amount of money that, if you've got that much, you can probably get whatever you want - houses, cars, trips, clothes, airplanes, art, good food. And I think that amount is less than a billion dollars. Above that is dabbling.

So. According to Forbes, the average fortune of all 453 billionaires in America is $6.53 billion. What if it were $5.53 billion? I propose that for every $6 billion out there, the billionaires give $1 billion for philanthropic gifts to be spent on health, education, the housing market and, ok, pride fighting. If my math is right, the total would be about $3 trillion. This is a significant amount. But it is just one notch in six in the portfolio. It's not like anybody won't be able to afford to eat.

I'd make one exception to this rule. For anyone who is down at the bottom of the billionaire list and finds that taking out one dollar in six would drop them out of being able to say they are billionaires, I say they don't have to endure that. Let the givebacks stop when their net worths drop to $1,000,000,001.