NEW YORK (Reuters Breakingviews) - The memoir of Ameritrade founder Joe Ricketts is the latest edition of a growing subgenre: the defensive billionaire memoir. Authors of such works suggest joining the three-comma club is simpler than one might think. It mostly involves a scrappy upbringing, an early setback, and – most importantly – work. So much work.
The title here says it all: “The Harder You Work, the Luckier You Get.” In Ricketts’s case, this is at least partially true. The discount brokerage pioneer grew up in a humble family in mid-century Nebraska. He supported a growing family working as a Dun & Bradstreet credit reporter and also put himself through college. He then tried to join the 1960s stock market boom, but only became a stockbroker as it started to go bust – and ultimately devoted his all to creating a thriving financial services business. That company, now called TD Ameritrade, last month agreed to merge with rival Charles Schwab in a near-$30 billion deal.
But he also profited from being in the right place at the right time – literally. Telecoms firm AT&T created an advanced communication system around Omaha to take advantage of what it thought would be high usage from a nearby air force base. This activity didn’t materialize, so AT&T instead tried to make Omaha the hub for toll-free numbers. This was a big help to an upstart brokerage that wanted to take advantage of rule changes by offering low-cost trading mostly by phone. The 1980s and 1990s raft of banking deregulation and rapid technological innovation also didn’t hurt.
Sure, many others benefitted from these same forces, yet fell short, including some of Ricketts’s early partners. And this difference is at least partially explained by his grit and monomaniacal focus on making his business succeed. But this is obviously only part of the story. First, if becoming wildly successful took nothing more than Midwestern values and a willingness to log 80-hour weeks, then almost every restaurant owner in Big 10 country should be a member of the 0.0001%.
And Ricketts’s hyper-focus on work can sometimes make him a pretty dislikable narrator. He admits that it was insensitive of him to ask that his wife, Marlene, deliver their next child after working hours. But he never really apologizes for forcing her to give up her teaching career to become his subordinate – even though she expressly said she did not want to.
And he seems to find it reasonable that he forced his high-school-aged daughter to keep answering phones when tornado sirens sent other employees to the basement. In his words, “There’s no tornado in New York.” Again, this wasn’t in the service of saving lives. He was saving investors a bit on commissions.
To be fair, Ricketts acknowledges his good fortune. But the book’s overriding message is the hackneyed idea that success is mostly about working harder than the next guy. A similar message comes across in the recent memoirs of private-equity magnate Stephen Schwarzman – “What It Takes” – and Home Depot co-founder Ken Langone – “I Love Capitalism!”. And then there’s U.S. presidential wannabe Michael Bloomberg, founder of the eponymous financial information firm and competitor to Breakingviews parent Thomson Reuters, who not only released an updated memoir, but also gave so-called unprecedented access to the author of a recent, mostly laudatory biography.
One of the reasons the wealthiest are feeling the need to lay out their hardscrabble bona fides is that they aren’t winning any popularity contests right now. Not only are democratic presidential candidates Elizabeth Warren and Bernie Sanders – and a decent portion of the French economic profession – calling on them to wield less influence, but the majority of Americans also now support a wealth tax. A poll by Monmouth University published on Dec. 10 showed twice as many voters view Bloomberg unfavorably than favorably.
So these books are effectively an attempt to justify their high net worth. Sure, these guys do genuinely seem to believe that others can learn from their stories – and that their hard-earned success should give them this platform. But it’s hard not to get the sense that the countless references to their sweat equity are mostly a bid to keep the pitchforks at bay.
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