Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else (50 page)

sent a memo
Jeffrey Katzenberg, “The World Is Changing: Some Thoughts on Our Business,” Walt Disney Company memorandum, January 11, 1991. http://www.lettersofnote.com/2011/11/some-thoughts-on-our-business.html.

The ideas Katzenberg laid out in his 1991 memo
Eduardo Porter and Geraldine Fabrikant, “A Big Star May Not a Profitable Movie Make,”
New York Times
, August 28, 2006.

The terms of the deal were undisclosed
Bernard Weinraub, “Disney Settles Bitter Suit with Former Studio Chief,”
New York Times
, July 8, 1999.
Dick Tracy
cost Disney $47 million to produce. See James B. Stewart,
DisneyWar
(Simon & Schuster, 2005), p. 111.

“the stewards of a rich man”
Smith,
Wealth of Nations
, Book V, Chapter I, Section 107.

a seminal paper published in 1931
Gardiner C. Means, “The Separation of Ownership and Control in American Industry,”
The Quarterly Journal of Economics,
1931.

“the princes of industry”
Adolf Augustus Berle and Gardiner Coit Means,
The Modern Corporation and Private Property
(Transaction Publishers, 1932), p. 4.

“different from and often radically opposed to”
Ibid., p. 114.

Berle and Means were leading architects of the New Deal
Glenn Fowler, “Gardiner C. Means, 91, Is Dead; Pricing Theory Aided U.S. Policy,”
New York Times
, February 18, 1988.

“The average salary plus bonus for top-quartile CEOs”
Michael C. Jensen and Kevin J. Murphy, “Performance Pay and Top-Management Incentives,”
Journal of Political Economy
98:2 (April 1990), pp. 225–64.

The companies under their stewardship
Roger Martin, “The Age of Customer Capitalism,”
Harvard Business Review
, January 2010. Figures on America’s GDP from 1932 to 1976 come from Angus Maddison.

By one measure, the academic advocates of pay for performance
Carola Frydman and Dirk Jenter, “CEO Compensation,”
Annual Review of Financial Economics
2 (December 2010), pp. 75–102.

Between 1993 and 2003 the top five executives
Lucian Bebchuk and Yaniv Grinstein, “The Growth of Executive Pay,”
Oxford Review of Economic Policy
21:2 (2005), p. 283.

These were, of course, the decades when the 1 percent
Marianne Bertrand, “CEOs,”
Annual Review of Economics
1:1 (2009), p. 130.

Until the early 1980s, the chief executive earned
Kaplan and Rauh, “Wall Street and Main Street,” pp. 1004–50.

“A 10 percent increase”
Brian Bell and John Van Reenen, “Firm Performance and Wages: Evidence from Across the Corporate Hierarchy,” CEP Discussion Paper No. 1088, May 2012. http://cep.lse.ac.uk/pubs/download/dp1088.pdf.

The surge in CEO salaries
Kevin J. Murphy and Jan Zabojnik, “Managerial Capital and the Market for CEOs,” (Queen’s Economics Department Working Paper No. 10, October 2006. p. 1).

“The six-fold increase of U.S. CEO pay”
Xavier Gabaix and Augustin Landier, “Why Has CEO Pay Increased So Much?,”
Quarterly Journal of Economics
123:1 (2008), pp. 49–100.

“In the U.S., you can more or less do”
Chrystia Freeland, “Capitalism Without the Capitalists,”
International Herald Tribune
, December 22, 2011.

A decade ago, two young economists
Marianne Bertrand and Sendhil Mullainathan, “Are CEOs Rewarded for Luck? The Ones without Principals Are,”
Quarterly Journal of Economics
116:3 (August 2001), pp. 901–32.

“We cannot continue to see chief executives’ pay”
Julia Werdigier, “British Government Looks to Rein in Executive Pay,”
New York Times
, January 23, 2012.

“The Lin story has broken out into the general culture”
David Carr, “Media Hype for Lin Stumbles on Race,”
New York Times
, February 19, 2012.

CHAPTER 4: RESPONDING TO REVOLUTION

“A lesson from the technology industry”
Reid Hoffman and Ben Casnocha,
The Start-Up of You
:
Adapt to the Future, Invest in Yourself, and Transform Your Career
(Crown Business, 2012), p. 71.

Eight days later, George Soros hosted twenty
Chrystia Freeland, “The Credit Crunch According to Soros,”
Financial Times
, January 30, 2009. Unless otherwise specified, all quotes in this section originally appeared in this piece.

an average of 31 percent
Charles Morris.
The Sages
. p. 3.

According to a study by LCH Investments
Rick Sopher, “Great Money Managers,” self-published by LCH Investments, November 2011. After retiring in 2010, Soros was overtaken the following year by Bridgewater’s Ray Dalio.

“I converted my hedge fund into a less aggressively managed vehicle”
George Soros.
The Crash of 2008 and What It Means
. p. 122.

only one of them had foreseen
Justin Lahart, “Bears Top List of Economic Forecasters,”
Wall Street Journal
, February 13, 2009. The fifty-one did even less well on unemployment—none came close to predicting it would rise to 6.9 percent by the end of 2008.

“No one realized the extent and magnitude of these problems”
Statement of Richard S. Fuld, Jr., before the United States House of Representatives Committee on Oversight and Government Reform, October 6, 2008.

“I made a mistake”
Transcript of House of Representatives Committee on Oversight and Government Reform Hearing on the Role of Federal Regulators, October 23, 2008.

“we always assume regime stability”
McFaul e-mail to CF, February 22, 2011.

“active inertia”
Donald Sull, “Why Good Companies Go Bad,”
Financial Times
, October 3, 2005.

“These failed firms”
Clayton Christensen,
The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail
(Harvard Business School Press, 1997), p. xv.

“vast, silent, connected”
W. Brian Arthur, “The Second Economy,”
McKinsey Quarterly
, October 2011.

Facebook’s Mark Zuckerberg
Zuckerberg attended Ardsley High School for two years before transferring to Phillips Exeter Academy.

“Dopamine, a pleasure-inducing”
Ajay Kapur, Niall Macleod, and Narendra Singh, “Plutonomy: Buying Luxury, Explaining Global Imbalances,” Citigroup Global Markets Equity Strategy report, October 16, 2005.

“I recognize that sometimes survival requires a positive effort”
CF interviews with George Soros, May 2009 and December 2008.

“My theory of bubbles was a translation”
CF interview with George Soros, May 2009.

“That experience has allowed him to see through artifice”
CF interview with Jonathan Soros, July 14, 2009.

“Whenever I read about people not seeing it coming”
CF interview with Keith Anderson, June 26, 2009.

“They have their own style and their own exposure”
CF interview with George Soros, May 2009.

Soros “didn’t interfere in the running of their accounts”
Ibid.

“Basically, it involved a large amount of hedging”
Ibid.

Soros was not only unfamiliar with fancy new derivatives
Ibid.

“In a time like this, where the uncertainty is so big”
CF interview with George Soros, December 16, 2008.

“That’s what makes this macro investing”
CF interview with Keith Anderson, June 26, 2009.

“I was very lucky”
CF interview with Azim Premji, January 25, 2012.

“India is growing at 8 percent”
CF interview with Ashutosh Varshney, November 13, 2011.

“You could start a business”
Kaitlin Shung, “Chinese ‘Fugitive’ Lai Changxing Faces Deportation in Canada,”
China Briefing
, July 13, 2011.

“Well, the U.S., like I said”
CF interview with David Neeleman, September 14, 2010.

“The next ten years”
Chrystia Freeland, “Working Wealthy Predominate the New Global Elite,”
International Herald Tribune
, January 25, 2011.

Following the model of Nucor, which revolutionized
Ibid. pp. 101–8.

“Yes, you need to be bold and extremely committed”
Jennings, “Opportunities of a Lifetime.”

“Slow or hesitant business leaders”
CF interview with Aditya Mittal, November 11, 2010.

“
If Lai Changxing were executed”
Mark Mackinnon, “Lai’s sentencing marks the end of China’s Great Gatsby,”
The Globe and Mail
, May 18, 2012.

He calls that period his “lost years”
Parmy Olson, “The Billionaire Who Friended the Web,”
Forbes
, March 28, 2011.

“There was a period of time”
Miguel Helft, “The Class That Built Apps, and Fortunes,”
New York Times
, May 7, 2011.