Badmouthing Billionaires

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As lovely as it is to see one’s beliefs confirmed in headlines — and as awful to see them contradicted — a life in journalism has taught me that a headline that is too good to be true, isn’t true, and one that is too awful to be believed, isn’t true either. An example of the former appeared in media everywhere last week, confirming deliciously what some of us firmly believe about the worsening inequality in America: “American Billionaires Got $434 Billion Richer During the Pandemic.” 

Forbes Magazine ran the story! Bernie picked it up and ran with it! Oh, the outrage! Damn them! The humanity! Wait a minute.

Which billionaires? And how do we know it was exactly $434 billion, not 433 or 435? And what do they mean, “during the pandemic,” which isn’t over yet and which started, when, exactly?

The first two questions actually have reasonable answers. The “new study” being quoted (if you read far enough into the small print to find out, was conducted by Americans for Tax Fairness and the Institute for Policy Studies) relied on data maintained by Forbes Magazine on about 600 American billionaires. That “data” relies heavily on stock market indexes, from which Forbes infers net worth. So, as is often the case, the word “data” as used here translates to “rough guess.”

Still, so far, so okay. Where we hit the tall weeds is when we ask what they mean by “during the pandemic.” The study dated the pandemic from March 18, a date that will not live in infamy because nothing special happened on that date. But the researchers decided that was the date on which the country’s reaction to the pandemic —  admonitions about staying home, using masks, employing social distancing — reached critical mass. They added up the billionaires’ presumed net worth on that date, did so again on the date they ended their study, May 19. Voila. A $434 billion gain. 

All of which might seem reasonable until you see the chart above, which shows not only the gains in the S&P 500 stock index between the dates of the study, but before its presumed start date. In the month prior to the start date used in the study, the stock market, presumably in response to the news of the spreading global pandemic, had lost a gut-wrenching thousand points. Then, in the two months covered by the study, the market recovered 500 points. Leaving the billionaires about $400 billion poorer than they were at the top of the market in mid-February, but yes, as the “study” concluded, $434 billion richer than they had been at the bottom of the market in mid-March.

(Two exceptions, headlined in all the stories about this “study,” were Jeff Bezos of Amazon, who benefited from the tsunami of online buying stimulated by the lockdowns, and Mark Zuckerberg of Facebook, ditto.)  

But as to the sloppy study confirming our worst fear and most fondly held beliefs, it is merely another example of what Mark Twain meant when he said there are three kinds of lies: lies, damn lies and statistics. Lies of all kinds are being churned out by so many players these days that they have obscured the world in a toxic haze of misinformation. Rule Number One in trying to find a way toward rational comprehension of what is going on is to never accept a story about “a new study” or “a new poll” without finding out who paid for it; who did it; and how they did it.

The other Rule Number One is: don’t inhale.