The rich are not like us

By ROBERT P. BOMBOY
By Robert P. Bomboy

My mother, when she was young, liked to hum a catchy tune called “Ain’t We Got Fun.” It was a song from the Roaring 1920s but it had a rebirth a few years later, during the Great Depression, when its refrain – “the rich get richer and the poor get poorer” – seemed wryly ironic.

No one seems to see that irony today.

The rich have taken over. The 400 richest people in America have more money than the bottom 150 million of us put together. Even with the huge losses of the past month, the richest people in America still own more than a quarter of the stock market. They own a third of all the property in America, and a third of anything else that can be owned.

They own Congress; more than half of all its members are millionaires, and they intend to keep what they have and grow even richer. While the richest rake in literally billions, half of us are keeping our families going on less than $30,000 a year, even with the $2 trillion coronavirus package signed into law last week. The poor have virtually no savings, no wealth at all. Most American families own little or no stock. In fact, the poorest half of America owns just one-half of 1% of the investments.

Anyone who’s ever played the stock market knows that information is the best kind of power. Knowing in advance that the market stands to go up or down suddenly can mean millions to an investor. When the deadly coronavirus struck America in February at least five rich and powerful U.S. Senators had the inside information to save themselves millions.

They are Senator Richard Burr, chairman of the Senate Intelligence Committee, Dianne Feinstein of California, James M. Inhofe of Oklahoma, and both of Georgia’s senators, Kelly Loeffler and David Perdue. All but Senator Burr offered well-practiced excuses for their actions and responses to CIA and other intelligence briefings about the coronavirus and its potential economic effects:

“I wasn’t at the meeting.”

“My husband handles those things.”

“I wasn’t even aware of the securities being sold.”

As a powerful committee chairman with a longtime interest in pandemics, Senator Burr heard frequent briefings on international conditions. On February 13, the day after a briefing that connected the frightening coronavirus with its potential economic effects, Burr sold off as much as $1.72 million of his stocks in 33 different transactions and liquidated a large share of his investment portfolio. His sales were well-timed. Within two weeks the stock market began its steep nosedive.

It was not the first time that Burr had moved suddenly to protect his wealth.

In 2008, after he heard the Treasury secretary at the time, Henry Paulson, talk about challenges that banks were facing — as the nation was entering the Great Recession — Burr called his wife and told her to withdraw as much cash as possible. “I want you to go to the A.T.M., and I want you to draw out everything it will let you take,” he later recalled.

Senator Loeffler, whose husband is the chairman of the New York Stock Exchange, safely dumped millions in stocks after attending a private January briefing about the coronavirus. She began off-loading stocks the same day as the briefing. She and her husband made 28 more stock transactions through mid-February; and all but two of those transactions were sales.

Senator Feinstein sold between $500,000 and $1 million worth of stock on Jan. 31, less than a month before panic about the virus caused markets to plunge. Her husband, the investment banker Richard Blum, sold stock worth between a million and $5 million on Feb. 18.

Senator Inhofe dumped as much as $400,000 worth of stock on Jan. 27.

Senator Perdue traded in nearly 100 transactions bought and sold in equal amounts. Exact figures cannot be determined because senators are only required to report transactions within ranges.

The 20th century novelist F. Scott Fitzgerald is supposed to have said, “The rich are not like us.” And his friend Ernest Hemingway replied, “Yes, they have more money.”

Robert P. Bomboy has written for more than 60 national magazines and is the author of six books, including the novel “Smart Boys Swimming in the River Styx.” He taught for more than 30 years in colleges and universities, and he has been a Ford Foundation Fellow at the University of Chicago and in Washington, D.C.