Resuscitating the Middle Class

An Interview with Leo Hindery, Jr., Managing Partner, InterMedia Partners

EDITORS’ NOTE Leo Hindery chairs philanthropy toward resuscitating the With the realization that we need to re- the Smart Globalization Initiative at middle class. That can take a lot of form K-12 education in the U.S., why hasn’t the New America Foundation. He forms, but if that is the underlying there been more of an impact and what has resumed his role as Managing goal, you’ll see different results in the more can be done? Partner of InterMedia Partners, LP, next half dozen years than you would We could reform the system if we would which he founded in 1988. He is a have otherwise. acknowledge the obligation of the nation to ad- member of the Council on Foreign While there is need elsewhere, dress it. Corporate executives used to consis- Relations, and the author of It Takes a it sometimes seems that people tently say that they had responsibilities to the CEO: It’s Time to Lead with Integrity don’t focus on how great the need community and the nation as much as they had (Free Press, 2005). Formerly CEO of is in the U.S. as well. to their employees and shareholders. In 1997, AT&T Broadband and its predeces- You have an obligation as a citi- the Business Roundtable from which a lot of sors, Tele-Communications, Inc. zen fi rst to your own nation. When Bill trends fl ow, decided that the only responsibil- (TCI) and Liberty Media, Hindery Leo Hindery, Jr. and Melinda Gates began their mission ity was to shareholders. So the whole premise was Senior Economic Policy Advisor in Africa and Asia, it was thought that of corporate philanthropy took it on the chin for U.S. Presidential candidate John Edwards the U.S. had stability among its middle class; we at that time. The largest companies in the U.S. from 2007 to 2008, and later unoffi cial economic didn’t realize that over 90 percent of workers now don’t come anywhere close to the level of advisor to now President Barack Obama. He is a have seen no real wage increase since 1967, so philanthropy that their predecessors achieved. graduate of Stanford Business School and Seattle it was logical that the Gates’s directed much of If corporate leadership doesn’t feel any respon- University. their philanthropy overseas. sibility to communities and the nation, then it’s But now throughout the entire country, easy to understand why they won’t support COMPANY BRIEF New York City-based we have unprecedented levels of hunger and school bonds to improve public education be- InterMedia Partners is a private equity fi rm that people going to bed cold because of heating cause their children usually don’t go to public makes control investments in media compa- oil costs. So we have to be more sensitive to our schools. So we’ve created a bifurcated society nies. Currently investing its seventh fund, own poverty in America. between the haves and have-nots. The haves InterMedia (www.intermediaadvisors.com) is Will these needs be addressed by gov- have their own education system and the have- focused on media content catering to under- ernment, the private sector, or public/pri- nots have a different one. Yet, we still have a served audiences. vate partnerships, and when those in need tax system where I pay a lesser rate of tax than look at the lack of action in Washington, is the people who work for me. Are we moving in the right direction when it tough for them to remain optimistic? Are you surprised to fi nd that not much it comes to addressing economic recovery? There is a tipping point when the structural has changed? True recovery, when all is said and done, breakage is so acute that it’s nonsensical to think When you target an entity or institution day is measured by the middle class being fully em- the private sector alone is suffi ciently able to fi x after day, people get tired of it. I don’t know yet ployed in real terms and fairly compensated. The it. We thought the federal and state governments where the anger is about income inequality and reality today, however, is that more than 27 mil- role was to provide a safety net and that there jobs, but it’s going to come and when it does, it lion women and men are either unemployed or was a level in society below which no one would will be a tsunami. underemployed, more than eight million of whom ever fall and never be homeless, hungry, or cold. Is the U.S. on a path to fi nding that its have been out of work for more than a year. Much of the philanthropy of the likes of global competitors have passed it by? This discussion needs to transcend a lot of Andrew Carnegie, Henry Ford, and the Rockefellers Without substantial structural improve- assumptions about how we conduct ourselves was based on longer term initiatives around edu- ment, we’re going to wake up as the third- as citizens. It would call into question some cation, because they believed President Franklin ranked economy before long. When you of the issues that Bill and Melinda Gates con- Roosevelt and others in government when they talk about emerging markets, in most cases, fronted when they set up the Gates Foundation. said the government would take care of the safety you’re talking about what is called state capi- They could have done the traditional kinds of net issues. But because of the current acrimony talism. Traditional capitalism can’t easily com- philanthropy, but they looked at a large part of between the two political parties, the premise that pete against state capitalism because it so often the world that was living on a dollar a day and there will always be a safety net for the average cheats. You can decide you want to fi x that fact they decided to put it there. American has been compromised. and react accordingly, or you can watch us go They recognized more than 10 years ago So where should our monies go? As we from being the world’s largest economy to the that there are times in society’s evolution when give out malaria nets in Africa, we should also third largest. you have to recalibrate how you conduct your- be giving blankets in New York City to peo- Are you having trouble being optimistic? self, and this is one of those periods for the U.S. ple who are huddled in their homes on cold I’m as pessimistic as I’ve ever been be- For the nation as a whole, including those who evenings. cause the most basic social responsibilities have are committed to philanthropy, this might be In the past, I would never have thought that been politicized, which I thought was not pos- the time to back up and do what the Gates’s did philanthropy in America on a large scale was go- sible in this country under our founding in Africa and parts of Asia, which is direct your ing to have to address issues of basic necessity. documents.• 88 LEADERS POSTED WITH PERMISSION. COPYRIGHT © 2012 LEADERS MAGAZINE, INC. VOLUME 35, NUMBER 2