“We are developing into a plutocracy.” These words are not from Bernie Sanders, but Paul Volker, the former chair of the Federal Reserve under both Presidents Jimmy Carter and Ronald Reagan.
One indicator that we are drifting toward plutocracy is whether great fortunes grow or disperse over decades. A healthy economy and society sees the creation and dispersal of wealth over generations, as families give to charity, pay taxes, and pass wealth down to ever increasing numbers of heirs.
“These dynastic families aggressively use their wealth and power to rig the political rules and preserve and expand their private wealth dynasties.” But because of changes in tax law and aggressive use of trusts and tax dodges, we are now witnessing a resurgence of dynastic inherited wealth. There are 15 dynastically wealthy families now on the Forbes 400, according to a report I recently co-authored, Billionaire Bonanza 2018: “Inherited Wealth Dynasties in the 21st-Century United States.”
The three wealthiest dynasties are the Walton’s of Walmart, the Mars candy family, and the Koch brothers, heirs to the country’s second largest private company, the energy conglomerate Koch Industries. These are all enterprises built by the grandparents and parents of today’s wealthy heirs and heiresses.
These three families own a combined fortune of $348.7 billion, which is four million times the median wealth of a U.S. family. Since 1982, these three families have seen their wealth increase nearly 6,000 percent, factoring in inflation. Meanwhile, the median household wealth went down 3 percent over the same period.