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About this talk
Michael Milken talks about using your own particular set of skills to make real change in the world. In his case, the energetic mind that once created exotic bonds is now driving the "Manhattan Project of cancer" -- with lifesaving results.
About Michael Milken
Michael Milken was credited with creating the junk bond market in the 1970s and '80s. Now he's become an activist for -- and a major funder of -- groundbreaking medical research Full bio and more links
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I thought today I would take a few minutes to try to talk about creating value: how you can leverage your own capabilities, how you might be able to increase your effectiveness; but more than that, how you can make the world a better place for you, your family, your community, and use the skills and use the skills that many of you in the audience have been given. And those that have those super-skills, even leverage them more.
So, I thought I'd first talk a little bit about financial technology and what it's given the world an opportunity to look at here. And my own life was dramatically affected by my days at Berkeley. I chose to go there. But the free speech movement allowed you to engage. It also provided me a very unusual opportunity: my first financing assignment. I was able to raise 1100 dollars to bail 700 people out of jail: a dollar-50 a person with a 50-dollar deposit. So, back in 1964 it was not that difficult to raise that type of money.
But that was a minor effect on my life, compared to the Watts riots, which happened when I was home from Berkeley on vacation. And the dream capital of the world was on fire, troops were in the streets, and I learned that civil rights was a lot more than where you sat on the bus or where you go to school or where you can go to the bathroom, but a right to participate in the American dream and our economic society.
And I went back to Berkeley and created my little formula: that, what is prosperity? It's a function of having financial technology, which serves as a multiplier effect on human capital, social capital and real assets. And if we reflect on the last 30 years, we see we've accomplished quite a bit. 62 million jobs created in our country -- 62 million new jobs. And with the concern about people being laid off today, we have the world's greatest job-creation machine. It's millions of small businesses, many of which have access to capital through financial technology today that offset the continual drop and loss of jobs by large companies. In fact, if you look in the 1980s, when financial technology really took hold, in the early 1980s, you'll see that the spread opened up dramatically. Small companies' access to capital accelerated their job growth, and large companies continued to lay off people and reduce their size. The most valuable company in the world today, General Electric, has increased in value almost 25-fold in 20 years, and employs today 25 percent less people than it did 20 years ago.
Well, what about other areas? Not just leveraging economic, but one of the real growths in our economy in the United States in the past 20 years has been philanthropy. How can we leverage philanthropy? How can we leverage your ideas in the nonprofit sector, and what can we do there? Now, the amount of giving in America has increased dramatically from 15 billion to 140 billion over the past 35 years. However, as a percentage of our economy, it hasn't really changed that much. It's about two percent of our economy. And so the amount of dollars that are being given is actually pretty small compared to the amount of human capital, the amount of time and effort and creativity that our population's been putting in.
But the great growth in our society, that many of you have participated in, is the growth in private and family foundations. They've grown from 22,000, when my brother and I founded the Milken Family Foundation, to 54,000 today. They've grown from about 25 billion in assets to almost a half a trillion today. How can that half a trillion, which is a gigantic number, leverage itself in a world economy that dwarfs it? Traditional philanthropy has continued to work in the same areas: feeding the needy, sheltering the homeless, and particularly, supporting religion. But, as many of you have participated, venture philanthropy has grown up. The people tend to be younger. Different ideas. Trying to leverage on their companies' assets, their assets, and their creativity at a very young age.
I'd like to take you back eight years, briefly, and talk about the challenge that I was faced with at CaP CURE. Prostate cancer was the most-diagnosed cancer in America. No one ever spoke about it, and there was little to no research. This young man, Jonathan Simons, was one of our country's leading scientists, an M.D./Ph.D. from Johns Hopkins. He chose to go in the field of prostate cancer. He was told by his adviser, are you sure you want to do this? There's very little money; in fact, this would be career suicide if you pick this career. Luckily for us, he went ahead and picked this career. And we at CaP CURE focused on supporting the Jonathan Simons of the world.
Today, Jonathan runs the cancer center at Emory University, and just received a grant from the Woodruff Foundation for 100 million to move there from Hopkins. 700 programs later, let's see what's occurred in the last eight years. In 1993 -- the year I was diagnosed with prostate cancer -- 43,000 men passed away in America. It was projected, with an increasing age of our population, that this number would dramatically increase over the next eight years to well over 55,000 men passing away. What's actually occurred in the last eight years is, instead of an increase, we've had a decrease in the number of American men dying from prostate cancer. In fact, the difference in the last eight years between the projected rates and the actual rates amounts to 70,000 American men. That is the same number of people that saw the Superbowl this year in Tampa. 70,000 families, 70,000 American men are alive today, versus what we had projected just eight years ago. While we haven't cured this particular disease, and we haven't reached the levels of childhood leukemia or testicular cancer, where we have about a 95 percent cure rate today, in just eight years, through increased public awareness, research measured in millions of dollars, not billions of dollars, we've dramatically changed the outlook.
When we formed the Milken Foundation 20 years ago, our major thrust is in education. And as I interact with many of you in the audience, this is one of your passions. A huge industry. The second-largest industry in our country. How can you change education? With a 400 billion dollars being spent in K-12 education in our country, how can any foundation, even the largest, have a dramatic effect? This was an issue my brother and I faced almost 20 years ago.
And our solution was, we had to find a way to motivate teachers. Let communities know that maybe the most important person in their community was that teacher in first grade, kindergarten, second grade, fifth grade, eighth grade in their community. Single them out. When I went to the teachers' unions in the early 1980s, they told me they told me giving more than 250 dollars to any teacher would turn a teacher against a teacher. So we told them, well, we've changed a few things, so we're going to start at 25,000 per teacher. If you're a teacher in Southern Illinois, 25 years of teaching, two master's degrees, that's about your annual pay today. So we reached out, and we tried to go and find teachers, and we're in 43 states in America today, 1,650 teachers later. We tried to let the community know that they were the star.
But more than that, we tried to let the teacher know how much we appreciated them. If you ever need to be uplifted, join us in September, October, November on these tours around the country. It is an uplifting feeling, and a chance to meet America's heroes every day. I'd like to show you a little film that captures what we tried to do. These people that perform their work and their love every day, trying to get them in the public eye.
(Video) Reporter: ... the best educators, and he's right here in Boston. For the second year in a row, a Pittsburgh public school teacher is the winner of a major national award. Today in Tampa, one teacher got a big award that as Bill Logan tells us, was a big surprise.
Lowell Milken: Rubylinda Zickafoose!
Reporter: She didn't know; no one here knew. To receive one of the most prestigious awards an educator can get: The coveted Milken Award.
LM: I came here today with a secret. Before you walk out of that door, every one of you, you're going to know what the secret is. Catherine Blair.
Reporter: For more than a decade, the Milken Foundation has honored outstanding principals and teachers for the important work they do. The award's purpose is to focus attention on America's very best teachers. The Milken Family Foundation Award brings both fame and fortune.
LM: Scott Nelson. The recipient of this award receives a financial prize of this. Your principal will be up there. We're here today to recognize excellence in education. We're here to talk about greatness. Ron Dodson! Tim Tutt!
Tim Tutt: OK. The alarm is going to sound, and so is our [unclear] -- -- give it up for [unclear].
Rubylinda Zickafoose: My lifelong dream is to be a teacher. Boys and girls, dreams do come true. Man: My number one mission is to make sure that those students have all the best opportunities they possibly can have in their lifetime. And if each one of them helps somebody make something better of themselves, then I've done my job.
Michael Milken: I gave you a chance to see my brother in that video. That was his swing, primarily through the north. But if you have medical problems, one swing through the country is an uplifting feeling. We hear about all the problems in education, but there is greatness. Out of three million people in our country working, we have tried every year to pick those 100, 200, 300 that are shining examples of everything you can be, and letting their communities know.
One of my favorite stories is, I was going into this community to give an award one day. And we identified this teacher who had devoted 30 years of his life to education. And he had a best friend living next door, who was a practical joker but his best friend. And we let his friends know that he was going to receive this award. His friend was the wealthiest member of the community, but did not move over 20 years, and still lived in the same house, next to his other friend, who was a teacher.
Well, that day, the day before, he got a call telling him that he had won a major award,this teacher. And the award had a large financial 25,000-dollar attachment to it. He came home that night and told his wife that he was called out of his classroom by the next-door neighbor, the practical joker, who was imitating the state superintendent of education. (Laughter) And he was really pissed, because he was in the middle of a science experiment. And he kind of had him going for a few minutes, until he mentioned there was 25,000 dollars' reward. Who ever gave 25,000 to a teacher for doing what they do?
So, he and his wife that night decided they were going to get back at him. All these years of practical jokes. That night they went out and let the air out of eight tires -- their two cars -- of the next-door neighbor. The next day he goes to work, and there's thousands of people there. There's a band. He walks into the gym. There's the state superintendent. They're all there for him. His wife arrives a little late, because she couldn't keep a secret, so the minute he left the house they went and whisked her there. That night, his next-door neighbor came over, and told him they really wanted to be there. They went out -- (Laughter) -- they went outside, and the air had been let out of their tires. They went in their garage, opened the garage, and the air had been let out, and some hoodlums that night had come in. So they now were faced with a very difficult decision: do they tell or don't they tell. They decided, OK, for all those practical jokes, for all those years, they're not going to tell. (Laughter)
But these stories are repeated every day. We had a woman from Hungary the minute the Iron Curtain came down, who we flew to surprise her daughter in 1988 in Connecticut, to see her daughter win an award. And when she got up to speak, she talked about how she always wanted to be a teacher in Hungary, but she didn't pass this test high enough to become a teacher in Hungary, so instead, she became the country's leading heart surgeon instead. But she had always wanted to be a teacher, and here, her daughter, who had made it to the United States, was winning an award that night.
So, they're our heroes, and they're our examples for the profession, and we have a major challenge continuing to uplift their own views. But what about this value of life? Healthcare priorities. There's a beautiful place -- it's not as beautiful as the TED conference -- but it's not too far away from here. It's called Lake Tahoe. In fact, it is so beautiful that I even decided to build a house there. It's the largest alpine lake in North America: it's 22 miles long and 12 miles wide, and its average depth is 1,000 feet. Now, I spent many years working in Manhattan, but Manhattan fits very nicely into Lake Tahoe. In fact, it isn't really the best idea, but you could put eight Manhattans in Lake Tahoe. God forbid, eight Manhattans in one location. It holds 39 trillion gallons of water, and if each gallon was worth a dollar -- pretty cheap, relative to Evian -- if each gallon was worth a dollar, it would not be enough to measure the financial assets of our country: of individuals, states, corporations, which total about 50 trillion dollars. But that's a small part of the real value of our country, when the value of our human capital is well in excess of 200 trillion.
So what about the economic value? We recognize life is precious. One life. Priceless. But what about the economic value of a life, of investing in medical research? The Milken Institute and Kevin Murphy and Bob Topel did work, and said, If we could eliminate cancer, what is it worth? 46.5 trillion dollars. Almost as much as the entire financial assets of the United States. 46.5. And what about heart disease? What about if we could eliminate all heart disease, just in the United States of America? Well, it would be worth 48.4 trillion dollars -- almost as much as the entire financial assets. Can we reduce cancer deaths? Can we eliminate them? Well, we can invest some money in the project. 46.5-trillion-dollar payoff, just to our economy, and how much do we invest a year? Four billion. Four billion versus 46.5 trillion: 10,000 to one. Now, that's an investment more than almost any company we can find today. Maybe we could invest more money, and maybe we'll only get a 1,000-to-one return on our money.
So how can we be a little more creative? One of the things I wanted to do today was call for a new organization. I've spent about one-third of my time going back and forth to Washington in the last eight years, trying to point out the value of medical research, cooperation of for-profit and nonprofit industries, so I'm going to suggest and leave it open to you that we need to form a new nonprofit organization. We're going to call it the Institute for Health Priorities. Now, that isn't the world's greatest name, but flying here today, that was the best I could think of. But I'm opening it to you for any suggestions.
Now, what is this group? It's nonprofit, it's non-partisan, and it's publicly funded -- non-governmental money. What's its job? What's its mandate? Focus on public-private interaction. Analyze the economic effects of why we should invest in medical research, and how it can spur our economy. We all hear every day, well, if we cut the discount rate by half a percent, we can spur our economy. That's a pretty small effect on our economy to solving one serious medical problem. It's a fraction of what it would do to grow our economy. Leverage our technology from space and the military, increase public awareness and think globally to solve these problems.
At CaP CURE our goal was to get people out of their silos and get them working together. This group needs to be staffed by economists and academicians and clinicians and physical scientists and computer scientists, and most importantly, people focused on ethics of using the technology that's available to us today. We need to work with pharmaceutical companies, biotech companies, government agencies, advocacy groups, insurance companies, legislatures, to try to push forth and use the technology that's at our disposal today to put forth this agenda. And if we can accomplish this, we can also focus on another thing: that called our environment. We're going to have a conference -- not the level of TED -- but we're going to have a conference in about a month at the Milken Institute in conjunction with the United Nations Foundation and the Nature Conservatory. We're going to see if we can figure out financial technologies to monetize the rainforests and other environmental issues.
If I threw out a hypothesis that the rainforests are worth 50 trillion dollars, most of the nations where they're located need capital today, not in the future. Well, how do we create those financial technologies in order to allow them to maintain them, and others to own them and protect them, so we can figure out what these things are useful to? Well, why do we care? 50 percent of all of our pharmaceutical products have come from plants found in the rainforest. In fact, of the 3,000 plants that are found to have any anticancer properties, 70 percent of them lie in the rainforest. Some movies that the entertainment industry has brought us, no different than Jules Verne predicting that we're going to find the answer to the problem -- whether it's medicine, man, or something -- might lie there. We just like to make sure they're still around when we have the capabilities of finding out why those plants have been put on this planet. You can go to milkeninstitute.org if you want to learn more about it, or you can think up your own ideas.
So, in closing: Yes, you can leverage. Supporting one teacher might affect 1,000 lives. Letting that person know you care, letting them be successful in their career, leveraging your abilities of working for-profit, nonprofit, with our government in medical research, using the enormous speed of the computers that are offering us today, and their storage capabilities, to solve problems. So we owe it to ourselves, and we owe it to our children.
So what is our promise? What is our goal? Our goal is a world of abundant resources without cancer and other serious diseases. We know how to do it, and this is our legacy for our children. And I hope that you have an opportunity to leverage your own creativity in finding these solutions. Thank you very much.
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