Boo-Hoo Billionaires: Why America's Super-Rich Are Afraid for 2020
The 1996 US election was all about the “soccer mom”; 2004 belonged to the “Nascar dads”; Donald Trump won the White House with a “basket of deplorables”. Every election cycle seems to have a key demographic said to define the race, and 2020 is no different. This is the campaign of the “boo-hoo billionaire”.
There’s a billionaire in the White House and two of the top Democratic rivals for Trump’s job, senators Bernie Sanders and Elizabeth Warren, have made ever-widening income inequality central to their campaign.
“I don’t think that billionaires should exist,” Sanders said recently, citing the “immoral level of income and wealth inequality” that has only deepened under the Trump administration.
One billionaire bid for the White House has already flamed out. Howard Schultz, Starbuck’s former barista-in-chief, ended his run almost as soon as it had begun chased away by angry crowds who labeled him an “egotistical billionaire asshole!”
That hasn’t stopped another billionaire, hedge-fund mogul Tom Steyer, running for the Democratic nomination. And now former New York mayor Mike Bloomberg, founder of the eponymous media empire, is also making moves to enter the race, fired up by the billionaire bashing. Ironically, Bloomberg (net worth $52.3bn) signaled his intention to get in the race by getting his name on the ballot in Alabama, one of the poorest states in the union with a median household income of $48,123.
Kevin Kruse, professor of history at Princeton University and co-author of Fault Lines: A History of the United States Since 1974, believes there’ll be more to come. “The Trump candidacy made a lot of them think, ‘Well, if this guy with his inherited wealth, who went bankrupt all the time, if he can do it, why not me?’”
The mistake they make is ignoring Trump’s charisma and “huckster showmanship”, said Kruse. “They think because they have even more money they will have more charisma. That’s not the case, It wasn’t with Schultz, it isn’t with Steyer and it’s not going to be with Bloomberg,” he said. “The idea that Mike Bloomberg is going to do well in Alabama is insane.”
That’s not what the billionaires think. As Warren and Sanders have stepped up their attacks, a host of plutocrats have gone public with their anger at all this billionaire-bashing, and some are already coming out for Bloomberg.
For them, this is personal. The “great plute freakout of 2019” as Anand Giridharadas, the author of Winner Takes All, a recent study of the deleterious impact of elites, has called it, is literally reducing billionaires to tears.
Asked about his views on the 2020 election on CNBC earlier this month, moist-eyed investment giant Leon Cooperman, worth $3.2bn according to Forbes, could barely hold back the tears.
“I care. That’s it,” he sobbed, eyes cast down and shuffling papers.
Cooperman has clashed with Warren in recent months after she proposed higher taxes on the super wealthy. “I believe in a progressive income tax and the rich paying more. But this is the fucking American dream she is shitting on,” Cooperman told Politico.
“The vilification of billionaires makes no sense to me,” Cooperman told CNBC. He called her policies “idiocy” and said it was “appealing to the lowest common denominator, and basically trying to turn people’s heads around by promising a lot of free stuff”.
Warren responded with a tweet, saying: “One thing I know he cares about – his fortune. He’s a shareholder in Navient, a student loan company that has cheated borrowers and used abusive, misleading tactics. He even went so far as to ask how I might impact his investment in the last earnings call with Navient.”
Her campaign is now selling mugs stamped with Billionaire Tears.
Days later, a far perkier Cooperman went on CNBC to celebrate the news that the “terrific” Bloomberg was potentially in the race. “He’s a unifier, he’s bright, he’s immensely successful, he’s been extremely generous with his resources,” he said.
Cooperman was particularly impressed that as New York’s mayor, Bloomberg successful blocked a proposed billionaires tax. “He resisted, and he explained that if you lose one billionaire, you lose more revenue than you are gonna get from everyone else. So he understands how the system works.”
The problem for this caterwauling Croesus and his cohorts is that, in fact, many billionaires know that the system does not work. Over the last few years a bevy of billionaires have warned that the society that created them faces an existential threat in income inequality.
The yawning gap between rich and poor is now a “national emergency”, hedge-fund king Ray Dalio ($18.7bn) wrote in an 8,000-plus-word blogpost on Linkedin back in April. Dalio’s fears have been echoed by JP Morgan boss Jamie Morgan ($1.6bn), Warren Buffett ($87bn) and others but none have matched his devastating and detailed critique.
As Dalio points out:
The wealth of the top 1% of the population is more than that of the bottom 90% of the population combined
Forty per cent of all Americans would struggle to raise $400 in the event of an emergency.
There has been little or no real income growth for most people for decades.
The childhood poverty rate in the US is now 17.5% and has also not meaningfully improved for decades.
The opportunities for people like Dalio (born to a jazz musician in Queens) or Cooperman (the son of a Polish plumber) are disappearing. The rate of economic mobility in the US – the opportunity to earn your way out of poverty – is now one of the worst in the developed world.
But Dalio’s “solutions” sound less impressive than his critique: more “leadership from the top,” bipartisan cooperation and “clear metrics”. Kruse is not surprised billionaires don’t have the answer.
“The reality is that government isn’t a business,” he said. “They are fundamentally different enterprises. What you are able to do in business doesn’t pan out in foreign affairs, in domestic policy. Convincing your board of directors is one thing; convincing Congress to pass legislation is entirely different.”
But that won’t stop the billionaires from wanting to add 1600 Pennsylvania Avenue to their property portfolio – even if the peasants have gathered with their pitchforks at the gates.
“There is something about the very wealthy, they don’t have enough people telling them that they are full of shit,” said Kruse.
[Dominic Rushe is business editor for Guardian US. He was part of the Guardian team that won the 2014 Pulitzer prize for public service journalism. Click here for Dominic's public key. Twitter @dominicru]