With billionaire Donald Trump the Republican frontrunner, it may seem like the impact of the ultra-rich on our public life is reaching new heights. A self-proclaimed billionaire (Trump still hasn’t released his tax records), Trump’s anti-establishment, anti-Wall Street, anti-free-trade rhetoric has him running as a traitor to his class, though. A loose affiliation of the super rich has been scheming to halt his rise — most recently, Mitt Romney –but so far, without any success.
In fact, there are plenty of signs that plutocrats are losing their grip on the levers of power and influence. Yes, income inequality continues to rage. But plenty of people with ten-figure net worths simply aren’t getting the satisfaction to which they have become accustomed.
We may have reached Peak Plutocrat.
The phenomenon can best be seen in politics, where the kings of private enterprise are having a tough time playing kingmaker this time around.
Bloomberg for President
Remember that? If you blinked, you missed it. In late January, the former Mayor of New York Michael Bloomberg, proprietor of the eponymous company, whose fortune is estimated at $36 billion to $48 billion, briefly considered jumping into the race. Never mind that third-party candidacies don’t do well in the U.S., or that Bloomberg’s constituency (coastal rich people who are socially liberal) are generally in the Hillary Clinton camp already.
The candidacy of Mike Bloomberg, the billionaire candidate beloved by billionaires (hedge fund giant Bill Ackman wrote a passionate pro-Mike op-ed in the Financial Times), failed to launch.
And then there was Jeb!
Former Florida Governor Jeb Bush blew through $100 million of the establishment’s money before bowing out.
Stanley Druckenmiller, the retired hedge fund billionaire, is backing.... John Kasich.
The dealmakers from 2012
In 2012, Sheldon Adelson, the Las Vegas casino magnate, played an immensely influential role in the Republican primary and general election. In 2016? Not so much. The Las Vegas Review Journal, the newspaper (!) Adelson recently purchased, has endorsed Marco Rubio, a victor in precisely one caucus. And Adelson has yet to put his card on the table.
The Koch brothers feel ‘disenfranchised’
For their part, the Koch brothers, who have used their billions to build a highly effective political operation that runs in parallel to the Republican party, are feeling disenfranchised. Far from adopting the Koch Brothers’ line on free trade, or immigration, the Republican field is running in the opposite direction. “You’d think we could have more influence,” Charles Koch groused to the Financial Times.
On March 3, Reuters reported the Koch brothers had decided not to use any of their war chest to fight Trump’s candidacy. As Reuters notes, “the brothers made the decision because they were concerned that spending millions of dollars attacking Trump would be money wasted, since they had not yet seen any attack on Trump stick.”
No longer minting money, either
Billionaires are not doing so hot in the stock market, either. Bill Ackman, the proprietor of Pershing Square, shot the lights out in 2013 and 2014; Ackman’s brand of dramatic activism and willingness to go all-in on high-profile stocks gave his fund a impressive returns. But last year, his main fund was off 20.5 percent, net of returns; it’s off more than 15 percent so far in 2016. Whoops! John Paulson, the hedge fund manger who shot to prominence on the backs of bearish bets on the housing market and was thus elevated into the market sage, is literally half the asset manager he used to be.
As air comes out of the markets that Plutocrats rely on and love — the stock market, yes, but also junk bonds, tech start-ups, natural resources — their spending power and public influence are starting to deflate. (The egos, not so much.)
Real estate values wane
High-end real estate in London, which has functioned as a sort of safety deposit box for the globe’s ultra wealthy, is starting to fall. In Manhattan last year, the number of contracts signed on condos worth more than $10 million fell 16 percent, from 270 to 227.
So if you’re in the business of selling trophy properties to ultra-rich people, you may be struggling. Christie’s reported that its sales of fine art were down 11 percent in 2015 and Sotheby’s said that so far this quarter, sales are off 33 percent.
TV, the lagging indicator
Don’t get me wrong. While signs are everywhere that their influence on our culture and economy are declining, the Plutocrats — like the poor — will always be with us. And they will often be unavoidable. One of the better new shows to debut this TV season is Showtime’s Billions, featuring Damian Lewis as Bobby Axelrod, a Steve Cohen-esque hedge fund manager. Billions has been picked up for a second season.
But even a show that humanizes and dramatizes plutocrats is a sign of their peak. When it comes to business trends, television shows are always an extremely lagging indicator. In the fall of 2000, the debut of a show about the bull market, The$treet, presaged the impending market crash. In October 2005, ABC aired Hot Properties, a sitcom starring Sofia Vergara about a group of realtors in California. The housing market began to crash the following year.
