The very rich are richer than people imagine.
A peculiar chapter in the 2020 presidential race ended Monday, when Bernie Sanders, after months of foot-dragging, finally released his tax returns. The odd thing was that the returns appear to be perfectly innocuous. So what was all that about?
The answer seems to be that Sanders got a lot of book royalties after the 2016 campaign, and was afraid that revealing this fact would produce headlines mocking him for now being part of the 1 Percent. Indeed, some journalists did try to make his income an issue.
This line of attack is, however, deeply stupid. Politicians who support policies that would raise their own taxes and strengthen a social safety net they’re unlikely to need aren’t being hypocrites; if anything, they’re demonstrating their civic virtue.
But failure to understand what hypocrisy means isn’t the only way our discourse about politics and inequality goes off the rails. The catchphrase “the 1 Percent” has also become a problem, obscuring the nature of class in 21st-century America.
Focusing on the top percentile of the income distribution was originally intended as a corrective to the comforting but false notion that growing inequality was mainly about a rising payoff to education. The reality is that over the past few decades the typical college graduate has seen only modest gains, with the big money going to a small group at the top. Talking about “the 1 Percent” was shorthand for acknowledging this reality, and tying that reality to readily available data.
But putting Bernie Sanders and the Koch brothers in the same class is obviously getting things wrong in a different way.
True, there’s a huge difference between being affluent enough that you don’t have to worry much about money and living with the financial insecurity that afflicts many Americans who consider themselves middle class. According to the Federal Reserve, 40 percent of U.S. adults don’t have enough cash to meet a $400 emergency expense; a much larger number of Americans would be severely strained by the kinds of costs that routinely arise when, say, illness strikes, even for those who have health insurance.
So if you have an income high enough that you can
- easily afford health care and good housing,
- have plenty of liquid assets and
- find it hard to imagine ever needing food stamps,
you’re part of a privileged minority.
But there’s also a big difference between being affluent, even very affluent, and having the kind of wealth that puts you in a completely separate social universe. It’s a difference summed up three decades ago in the movie “Wall Street,” when Gordon Gekko mocks the limited ambitions of someone who just wants to be “a $400,000-a-year working Wall Street stiff flying first class and being comfortable.”
Even now, most Americans don’t seem to realize just how rich today’s rich are. At a recent event, my CUNY colleague Janet Gornick was greeted with disbelief when she mentioned in passing that the top 25 hedge fund managers make an average of $850 million a year. But her number was correct.
One survey found that Americans, on average, think that corporate C.E.O.s are paid about 30 times as much as ordinary workers, which hasn’t been true since the 1970s. These days the ratio is more like 300 to 1.
Why should we care about the very rich? It’s not about envy, it’s about oligarchy.
With great wealth comes both great power and a separation from the concerns of ordinary citizens. What the very rich want, they often get; but what they want is often harmful to the rest of the nation. There are some public-spirited billionaires, some very wealthy liberals. But they aren’t typical of their class.
The very rich
- don’t need Medicare or
- Social Security; they don’t use
- public education or
- public transit; they
- may not even be that reliant on public roads (there are helicopters, after all).
Meanwhile, they don’t want to pay taxes.
Sure enough, and contrary to popular belief, billionaires mostly (although often stealthily) wield their political power on behalf of tax cuts at the top, a weaker safety net and deregulation. And financial support from the very rich is the most important force sustaining the extremist right-wing politics that now dominates the Republican Party.
That’s why it’s important to understand who we mean when we talk about the very rich. It’s not doctors, lawyers or, yes, authors, some of whom make it into “the 1 Percent.” It’s a much more rarefied social stratum.
Thasos is at the vanguard of companies trying to help traders get ahead of stock moves like that using so-called alternative data. Such suppliers might examine mine slag heaps from outer space, analyze credit-card spending data or sort through construction permits. Thasos’s specialty is spewing out of your smartphone... Thasos gets data from about 1,000 apps, many of which need to know a phone’s location to be effective, like those providing weather forecasts, driving directions or the whereabouts of the nearest ATM. Smartphone users, wittingly or not, share their location when they use such apps... Before Thasos gets the data, suppliers scrub it of personally identifiable information, Mr. Skibiski said. It is just time-stamped strings of longitude and latitude. But with more than 100 million phones providing such coordinates, Thasos says it can paint detailed pictures of the ebb and flow of people, and thus their money... Thasos says it can count the phone-carrying shoppers who ditch their regular grocers when a new Whole Foods opens, or gauge drilling activity by sizing up the crowds at oil-patch bars. By identifying the census block where each phone spends the night, Thasos algorithms estimate how far customers travel to malls and shoppers’ incomes... Thasos won’t name its clients, but Mr. Skibiski says it sells data to dozens of hedge funds, some of which pay more than $1 million a year... This month, Thasos is set to start offering data through Bloomberg terminals. A measure of mall foot traffic will be widely available.. Mr. Skibiski and scientists at Sense studied movements of prepaid phones, looking for users who arrived at the airport on Monday mornings for business flights or dined in expensive restaurants... Census data is the model, Mr. Pentland said—detailed enough to have value, but not so detailed that individuals can be identified… In September, as Hurricane Florence churned toward the Carolina coast Thasos watched evacuation zones and found that in well-to-do census blocks, 65% of the people fled, while only 39% left poor areas. Such information could inform disaster response or infrastructure spending, yet it might also have commercial value. “You might look at that and say, ‘Gosh, I could price insurance differently,’ ” Mr. Pentland said.
On Friday, Davis, who has worked as a Web designer and travel scheduler for Stone, became the latest associate of the political operative to appear before the grand jury convened by special counsel Robert S. Mueller III.
.. At least half a dozen of Stone’s associates have been subpoenaed or been contacted by the special counsel’s office. Investigators have been looking into Stone’s communication with the Twitter persona Guccifer 2.0
.. Late last month, Stone, 65, posted a photo of Davis, 41, and her son on his Instagram account, writing: “Why do FBI agents dispatched by Robert Mueller keep asking a number of my current and former associates if I am this baby’s father? What does this have to do with Russian Collusion and the 2016 election.”
.. Davis, a poised and articulate speaker who has touted her business acumen, had a compelling backstory, one with natural appeal to Stone, a bon vivant with a long-established reputation for taking delight in all things salacious who sometimes quips that he is “tri-sexual. I’ve tried everything.”
.. In her late teens, she says, she was already working in the finance industry, eventually becoming a vice president at an East Coast hedge fund in her early 20s. She noticed how highflying finance types celebrated by hiring prostitutes. Sensing a business opportunity, she opened a high-end prostitution service in New York.
.. At its height, she says, she had a roster of 10,000 clients willing to pay more than $1,000 an hour for sex or companionship. She managed the business but didn’t have sex with clients herself, she says. Her staff called her “Mama Fabulous.” She also developed her own websites — a skill that would come in handy years later when she met Stone.
.. Davis has claimed repeatedly that Eliot Spitzer, the former New York governor, was one of her frequent clients, using the code name “James” while he was serving as the state’s attorney general.
.. Davis was arrested and sent to Rikers in 2008, the same year that Spitzer, who was never charged with a crime, resigned as governor after the New York Times reported that he’d patronized the Emperors Club VIP, another high-priced prostitution service.
.. Stone, who’d helped her through months of her pregnancy, had a suggestion for the infant’s name: “Roger.”
“Roger kind of felt like he deserved it,” Davis says with a chuckle. “I said, ‘Absolutely not!’ ”
Instead, Stone and his wife, Nydia, became the child’s godparents.
.. Stone’s quarters are equipped with broadcasting equipment for his regular appearances on Infowars, the controversial, conspiracy-oriented website run by Alex Jones. As the Mueller probe has progressed, the apartment — much like Stone’s home and office in Florida — has become a command center in his campaign to discredit the investigation.
Five Star politicians, including the group’s founder and current leader, pondered such radical cures to Italy’s economic woes as restructuring its enormous debt and establishing a currency in addition to the euro.
.. The Janus Global Unconstrained Fund, managed by William H. Gross, lost 3 percent in one day.
.. Hedge funds have been building up their short positions for months, betting that Italian bonds will face another bout of selling pressure
.. the same strains that prompted the earlier bout of selling — weaker countries running up potentially unsustainable debts — are showing again.
.. “These people feel very strongly that deficit limits make no sense,”
.. a robust market for futures contracts tied to Italian government bonds had made it easy to bet against Italy
.. In addition to betting against bonds, many prominent hedge funds are calculating that the share prices of large Italian companies will fall drastically.
.. Bridgewater, the world’s largest hedge fund, has a number of short positions on Italian financial institutions, including UniCredit, Italy’s biggest bank
.. “What we have had so far is a political event, not a credit event,” he said, referring to the point when a country runs out of money. “The endgame is still 12 to 24 months out.”
.. What has spooked investors the most has been the Italian ruling party’s flirtation with a second currency.
.. Strapped Greek and Italian citizens could use this alternate currency to pay taxes and for things like gasoline or health care from the state.
.. “Italy is a conservative country,” Mr. Bonansinga said. “I am just not sure that people want to leave the euro.”