Insider Exclusive: The Wall Street Journal’s Billionaire Love Song
Updated: Sep 10, 2021
By Jeffrey D. Sachs
I love The Wall Street Journal editorial board’s missives to America’s billionaires, climate skeptics, and freedom fighters against vaccine mandates. The editorials are among the tenderest love letters of our day. Even better, they are often hilarious. This week’s bouquet to the billionaires, “Bernie Sanders Runs Out of Billionaires,” is perhaps the funniest on record, proving the very opposite of what the editorial board certainly intended.
The WSJ editorial board doesn’t like how Bernie Sanders is so nasty to America’s wonderful 724 billionaires, calling on them to pay increased taxes to support the rest of the 330 million Americans. What might actually become of the billionaires if they had to pay some part of their capital gains? We are no doubt speaking of tender and fragile souls, who are doing their best to hold up despite Sanders’ withering assaults.
To prove the point, the WSJ editorial writes that Bernie is calling for $4.5 trillion in infrastructure spending over the coming decade, while the 724 billionaires have only $4.4 trillion of wealth. The editorial board acknowledges that the wealth number is an underestimate, as it dates from March while the stock market has soared since then. Still, the editorial board’s point is this: Bernie’s spending would burn through the pockets of the billionaires, leaving them bereft.
This is quite a remarkable observation, no doubt vastly more remarkable than The Wall Street Journal intended. First, let’s parse the numbers a bit. Bernie is actually asking for $3.5 trillion in his new budget resolution, not $4.5 trillion. The Journal raises it to $4.5 trillion because it says that Bernie also “has kind words for President Biden’s $1 trillion infrastructure plan.” Yet the editorial board knows that the $1 trillion bipartisan plan (not “Biden’s plan”) does not call for any new taxes.
Using the correct number for Sanders’ budget resolution, $3.5 trillion, the billionaires’ wealth could indeed pay for the entire decade-long budget spending, with a lot to spare. Indeed, the 724 billionaires could each keep $1 billion in wealth for themselves (on the theory that $1 billion is sufficient to make ends meet) and still have enough left over, $3.7 trillion, to cover the entire 10-year budget resolution for the whole nation.
In fact, we wouldn’t even need all 724 US billionaires to cover the budget cost. According to Bloomberg Billionaires Index, which updates the wealth of the world’s richest 500 people on a daily basis, there are currently 163 Americans among the world’s richest 500 people, with a combined net worth of $3.5 trillion as of August 30. Their combined wealth has actually risen by $500 billion since the start of the year! Thus, we would need the wealth of just 163 Americans to cover the nation’s new infrastructure and social spending for a full decade, without having to bother the poorer 561 billionaires not among world’s richest 500.
Inexplicably, the WSJ editorial board doesn’t see the bigger point, that just a few hundred Americans -- whether it’s 163 or 724, or heaven forefend, a few thousand (adding some Americans with only hundreds of millions of net worth) -- could actually fund a full decade of America’s new infrastructure and social programs. How bizarre, how amazing, and how profoundly helpful this fact can be for a nation with such obvious and massive needs.
The billionaires know better than anybody that the U.S. tax code has hardly touched their vast capital gains, thereby enabling them to accumulate vast wealth while paying virtually no taxes. Recognizing that fact, they might also recall the famous words of Andrew Carnegie, who knew a thing or two about sharing his wealth to improve society: "The man who dies rich dies disgraced." Whether through taxes or philanthropy or a combination of the two, these billionaires should step forward now.
At the same time, The Wall Street Journal should finally stop depicting $3.5 trillion as some vast unaffordable sum for our country. Just 163 Americans could actually fund it! America as a whole certainly can, as it will be just 1.3 percent of the $272 trillion in U.S. gross domestic output forecast by the CBO for 2021-2030. America urgently needs the infrastructure, and can readily afford it, if the rich and corporations do their part.
The editorial board also knows full well that Bernie Sanders is not demanding that the billionaires hand over all their wealth. He is advocating a mix of modestly higher taxes on corporations and high-income Americans, as well as I.R.S. enforcement against tax cheats. Yet for The Wall Street Journal, any tax on their beloved billionaires and mega-millionaires is too much. The rest of us know that the WSJ editorial board’s extreme solicitude for the super-rich is threatening to wreck America, including the tiny class of super-rich that it so deeply adores.
Jeffrey D. Sachs is University Professor at Columbia University.