Social Distancing for Mega-Million Fun and Profit

For the world’s super rich, the thrills don’t come cheap. But they do keep coming — even amid a pandemic. Case in point: this past Monday night’s historic Sotheby’s art auction, the first-ever “hybrid” sale of high-end artwork. On site in London, Hong Kong, and New York, socially distanced Sotheby’s specialists took in phone and online bids for four-and-a-half hours of often breathless auctioneering.

The evening’s bubbling bidding would set a new world’s record “for the most expensive work ever sold to an online bidder” — and then, on another piece, go on to set another.

The most dramatic action came on a triptych — a three-panel painting — from the avidly collected British artist Francis Bacon. The bidding started at $48 million, then settled into a cat-and-mouse duel that involved a mystery online bidder from China who kept trumping the previous highest bid by $100,000. The work finally sold for nearly $85 million.

Another spirited round of bidding involved a “brightly colored forest scene” by an artist who committed suicide last fall. A work by that artist, Matthew Wong, had never sold before this week for over $62,500. At Monday’s pandemic-time auction, his forest scene went for $1.8 million.

Irrational exuberance, anyone?

And what has the world’s rich so excitedly exuberant? The stock market. In 2020’s second quarter, the world learned Wednesday, the shares of America’s 500 largest publicly traded corporations soared 20 percent, this century’s highest-ever quarterly S&P 500 ascent.

That rates as good news for anybody with appreciable dollars invested in the stock market — and particularly good news for the richest of the global super rich, the sort of folks who collect multimillion-dollar artworks as casually as the rest of us accumulate refrigerator magnets.

Researchers at Wealth-X have just published their latest annual Billionaire Census. The richer the billionaires, the new Wealth-X stats show, the higher the share of publicly traded stocks in their personal portfolios.

Billionaires worth no more than $2 billion, for instance, have 21.3 percent of their fortunes sitting in stocks. For billionaires worth between $10 and $50 billion, by contrast, stock holdings make up nearly half — 48 percent — of their net worth. That share rises to 76.8 percent for billionaires worth over $50 billion.

American billionaires dominate all these net-worth tiers. Overall, the Wealth-X stats detail, Americans account for 28 percent of the global billionaire population. The United States hosts 788 personal fortunes worth at least 10 digits, more than the combined billionaire populations of Germany, Russia, Switzerland, the UK, Hong Kong, India, Saudi Arabia, and France.

In 2019, the wealth of these U.S. billionaires rose 13.9 percent, according to the new Wealth-X data. Earlier this year, that wealth dipped sharply, then came roaring back, as the Institute for Policy Studies Billionaire Bonanza analytical updates have documented. Between mid-March — the point the pandemic first clobbered the United States — and mid-June, the total wealth of America’s billionaires climbed over a half-trillion dollars, from $2.948 trillion to $3.531 trillion.

Meanwhile, here in early July, the coronavirus pandemic is still setting national caseload records, and weekly unemployment claim totals have over the last 15 consecutive weeks run more than twice as high, the Economic Policy Institute reports, as the worst jobless claim week of the Great Recession.

How can the stock market be strutting so nicely amid these levels of health and economic disaster? Simple. All the wealth and power the super rich have amassed over recent decades is now paying off royally. The awesomely affluent have both a White House and a Federal Reserve committed to doing “whatever it takes” to keep share prices from collapsing. They have Wall Street’s back.

And so the wealth of the wealthy continues to pile ever higher, and Monday night’s landmark Sotheby’s auction offers one vivid marker of just how high that pile now soars. One painting up for grabs at the auction — Jean-Michel Basquiat’s Untitled from 1982 sold for $15.2 million. In 2000, the same painting went for $398,500.

Sam Pizzigati writes on inequality for the Institute for Policy Studies. His latest book: The Case for a Maximum Wage (Polity). Among his other books on maldistributed income and wealth: The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970  (Seven Stories Press).