March 29, 2020

Loose Ends: Powerball!

“There are three ways to make a living in this business,” says Jeremy Irons, playing a Wall Street C.E.O. in “Margin Call.” “Be first, be smarter, or cheat.”

Now there is a fourth: Powerball.

Last week, the chance of winning the biggest lottery in Connecticut’s history was one in 195,249,054 — about the odds of Herman Cain’s winning the Republican nomination for president. But when three executives at Belpointe Asset Management in Greenwich, Conn., bought a $1 ticket in the Powerball lottery, it became, overnight, $254.2 million.

The winners elected to take a lump sum, giving them $151.7 million and a tax bill of about $48 million. That’s $34.6 million per winner. And yet Timothy C. Davidson, Brandon E. Lacoff and Gregory H. Skidmore didn’t look happy about their astronomical rate of return when, as mandated by Connecticut law, they appeared at a news conference holding a giant check made out to Jackpot Winner.

Why so glum? It’s not hard to identify reasons for their distress.

First, personal embarrassment. They knew that media reports would lead with lines like this one from The New York Times, “The lottery is full of rags-to-riches tales. Now the 1 percent has its own feel-good story.” And the thing of it is, in Greenwich they’re not 1 percenters. In a haven where many have had Powerball wealth and then some for decades, there are, a longtime resident told me, three kinds of money. “There’s ‘world money,’ which lives in houses that start at $20 million. There’s ‘Wall Street money,’ which means, ‘I’ve got $10 million.’ And there’s ‘I’ve done well money,’ which lives in houses that cost less than $7 million. That’s these guys.”

Worse, these oh-so-few millions have created unwanted transparency. The trio has given no interviews, but they don’t have to; a few minutes with Google and Google Earth will tell the curious, the envious and the resentful more than Greenwich’s wealthiest would like them to know. And not just about these men.

A few years ago, Belpointe developed Beacon Hill, “the first guard gated town community in downtown Greenwich.” These 16 stone-and-shingle homes, set on 1.75 acres, are massive by non-Greenwich standards. In their 4,400 square feet, you’ll find as many as five bedrooms, 10-foot-high ceilings, white oak floors, wine cellars and “tasting” rooms, plus the obligatory exercise room. A calculator on the Web page saves you the trouble of wondering if you can afford to live here. Put down 20 percent of the $2,595,000 purchase price, take a 30-year fixed-rate mortgage at 5 percent, and your bank will want $11,344 a month from you.

These are not numbers that will endear Greenwich to many in the 99 percent. And remember, this is Greenwich at the low end. Let your fingers do some walking down Round Hill Road, and you’ll find yourself taking a virtual tour of a “livable scale” home with a 70-foot marble reflecting pool and fountain in the courtyard, an 86-foot great hall and a 52-foot indoor pool. Price: $42,900,000. And, surely, there are better.

Pity the Powerball winners. There are, as they know well, many asset managers who have “one large” — a billion dollars — to invest. Belpointe has $82 million. Collectively, the winners are worth more than their employer. And yet, in Greenwich, they’re schmoes.

But would the barbarians at the virtual gates listen to the facts? Sadly, no. Occupy Greenwich could so easily follow.

Jesse Kornbluth is the editor of

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Most Presidential Candidates Are Not the 99 Percent

A look at the finances of those vying for the presidency shows that almost all of them rank at the very top of the country’s earners. In other words, they are the 1 percent.

The possible exceptions are Representative Michele Bachmann of Minnesota and Representative Ron Paul of Texas, whose annual household earnings may not exceed the estimated cutoff of $700,000 for the top 1 percent, and Gov. Rick Perry of Texas, who has yet to file a financial disclosure.

Buddy Roemer, the former governor of Louisiana, probably does not make the cut either, which may be one reason Mr. Roemer paid a visit to the protest encampment in Zuccotti Park in Manhattan to express his solidarity.

But Mitt Romney, whose fortune, totaling as much as a quarter of a billion dollars, dwarfs those of his rivals; Jon M. Huntsman Jr., whose father owns a global chemical company; Newt Gingrich, a successful author; Herman Cain, a businessman who reports earnings of over $1.2 million; and Rick Santorum, the former senator, who took in over $700,000 last year, are all solidly in the 1 percent, as measured by assets, income or both.

The wealth is not limited to Republicans. Though President Obama was not in the 1 percent in 2006, before his entry to presidential politics, he earned between $1.8 million and $6.8 million last year, largely from book royalties.

The gap between the candidates and the electorate is especially striking in an election season in which the economy is foremost in people’s minds and politicians are trying to demonstrate that they can feel the pain. Many people believe that those responsible for the financial crisis escaped punishment with the help of political allies.

Democrats have more or less embraced the Wall Street protesters, while Republicans have wavered between dismissing them and trying to redirect their anger from Wall Street to the White House.

The protesters are far from the only potential voters disturbed by the growing wealth divide. In a recent New York Times/CBS News poll, 69 percent of respondents said that Republican policies favored the rich. Twenty-eight percent said the same of Mr. Obama’s policies, while only 23 percent thought his policies favored the middle class. Sixty-six percent said the country’s distribution of wealth should be more even.

The wealth of the candidates exacerbates the sense that politicians are far removed from middle-class American lives. “You want to know that elected leaders understand the consequences of their political decisions,” said Kathleen Hall Jamieson, the director of the Annenberg Public Policy Center at the University of Pennsylvania. “Does that candidate understand what I’m going through right now? What my family is going through? Do they know what it’s like to lose your home, to lose your job?”

Of course, presidential politics has long been a sport for the rich, and candidates need not be middle-class themselves to convince voters that they understand. Some, like Mr. Cain and Mr. Perry, may win people over with their stories of ascent from humble beginnings.

But even bootstraps are not strictly necessary. “A rich person can represent the 99 percent,” said Judy Goldstock, a retired social worker protesting in Zuccotti Park. “Look at Kennedy.” 

Mr. Romney has scolded his audiences at times for “attacking people based on their success.” And Mr. Cain proclaimed, “If you don’t have a job and you’re not rich, blame yourself.” (Or, he later amended,
blame Mr. Obama.)

The 99 percent meme has shifted the debate from the days when President Obama spoke of raising taxes on families that made more than $250,000. “Many people could see a future in which they might make $250,000,” Ms. Jamieson said. “Very few can see a future in which they would be a member of the 1 percent.”

The alienation is evident in a study of mothers who shop at Wal-Mart, where pollsters found that the women did not believe their elected officials could understand what it was like to be consumed by the price of milk, gasoline and college tuition.

“We asked, ‘If your elected officials knew about your life what would they do?’ And somebody said, ‘Cry,’ ” said Margie Omera, the founder of Momentum Analysis, a Democratic polling firm that along with Public Opinion Strategies, a Republican firm, has been tracking the women since May 2010. “They always want to know, ‘When is my bailout going to come?’ ”

In focus groups, the women discussed the satisfaction they derived from watching “Undercover Boss,” a reality show in which top executives take a turn at the bottom of the ladder in their own companies.

Membership in the 1 percent can be measured by wealth or by income. By household wealth, the cutoff point would be a projected $9 million in 2010, according to an analysis of the Federal Reserve Board’s Survey of Consumer Finances by Edward Wolff, an economist at New York University. The cutoff for annual household income would be about $700,000, Mr. Wolff said. (Using Internal Revenue Service figures, which count earnings differently, the Congressional Budget Office puts the earnings cutoff at $350,000 for the 1 percent in 2007.

At Zuccotti Park, protesters described the 1 percent variously as people who “can just make money with money,” “the ones so interested in making profits that they’re willing to lay off hundreds of thousands of people a year,” and “anyone who doesn’t create a product.”

Even by the numbers, though, it is hard to tell precisely where the candidates stand. The majority have not released tax returns, and their financial disclosure forms give only a range of assets and income. Mrs. Bachmann’s income was listed at $280,000 to $840,000, and Mr. Paul’s was $360,000 to $1.1 million, which included their Congressional salaries of $174,000.

The disclosures exclude the candidates’ homes and other noninvestment property, as well as the salaries of their spouses. Most disclose income over a period longer than a year, from which The New York Times calculated annual earnings. The candidates were likelier to rank in the elite in income rather than in assets. Mr. Cain’s net worth topped out at $6.6 million, for example, and Mr. Santorum’s at $2.6 million.

Mr. Perry appears to be among the least affluent of the leading candidates. He earns $150,000 a year as governor, and his wife makes $60,000 a year at a nonprofit organization. But the couple have made money in real estate deals, including one that pushed their income above $1 million in 2007. Various news organizations have estimated the Perrys’ net worth at just over $1 million.

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