Sure, the Demopublican Centrist Michael Bloomberg is spending a lot of money on his presidential bid, but the former mayor has a lot more money: $52 billion.
Bloomberg is running in part because he opposes the progressive candidates' "extreme wealth taxes" which would see him paying $3.7b under a Sanders presidency, $3b under a Warren presidency or $512m under a Steyer presidency — per year.
That $32m that Bloomberg has dumped into his ad-buy? It's 1.1% of the tax bill he'd owe under Warren in the first year.
Lavish political spending is a rational calculus when it comes to the ultra-rich: the Kochs — who have been pouring money into oligarch-friendly organizations and campaigns for a generation — have seen a massive return on their investments. Amazon was making a similar calculus when it dumped unprecedented sums into the local Seattle elections — though Amazon's investment failed in large part because the impropriety was so blatant that it motivated voters to cast ballots against it.
As Alexis Goldstein points out in the New Republic, Bloomberg doesn't have to win the election for his investment to pay off — all he has to do is discredit the politicians arguing for a wealth tax. And that's before you calculate the benefits to Bloomberg of snuffing out the movement to reform Wall Street, whose subscription fees to "Bloomberg terminals" put that $52b in his pocket in the first place.
It is hard to say what the perfect billionaire hedge against a Warren or Sanders administration would look like. Despite the abundant fearmongering among the billionaire class that a Warren or Sanders presidency would cause a drop in the stock market, this is a retread of the same alarmism that greeted the Obama administration. That prophecy failed to come to pass, so a simple bet against the S&P 500 probably won’t cut it for the oligarch looking to shield his boodle from the ravages of a more equitable society. Bloomberg is embarking on a more creative hedge, one that also allows him to finally realize his long-dreamed desire to run for president. This is a method that Bloomberg previously deployed at a smaller scale, spending $100 million (or about $174 per vote) in his 2009 campaign to be reelected mayor of New York City.Whatever ultimately happens in Bloomberg’s bid for the presidency, as long as his presence in the race is able to make a dent in the support for Warren and Sanders, he is further insulating himself from a future where he’d have to pay a single-digit percent of his wealth annually in taxes. We can likely expect Bloomberg to strike the same wealth-friendly tone the company he owns does on its “About” page, which proclaims “we believe profit and principles are not mutually exclusive. They reinforce one another.” But as one billionaire’s presidential run has already ended in ridicule (remember Howard Schultz?), and the vast majority of Democratic voters remain happy with the existing choices, one might hope Bloomberg would borrow a different section of his company’s motto, “doing the right thing,” and not run at all.
Michael Bloomberg’s Big Hedge [Alexis Goldstein/New Republic]
(Image: Rubenstein, Jericho, CC BY, modified)
