Covid Conversations With One of America’s Richest Men
(Bloomberg Businessweek) -- On the day the coronavirus was declared a pandemic, I called the richest person I know. The world was spiraling into chaos, with 118,319 confirmed cases and 4,292 deaths in at least 100 countries, and I thought someone so well connected might know what was going on.
“What the f---, I’m not worried,” he said. “I’m sure I already have it. What do I care?” His family was heading to their country house outside New York City, but he was staying put, working the phones for his job investing billions of dollars for clients. He didn’t know much about the unfolding catastrophe, which made him just like everyone else.
The next day, March 12, the stock market collapsed, ending an 11-year bull market. The S&P 500’s 9.5% plummet was the biggest since Black Monday in 1987. I called the investor back. “It’s not this panic, ‘Oh my God, the world is going to end,’ ” he said. “Everyone knows it’s over in two months.” His dismissiveness was almost eerie. “You know the world is fine.”
In the previous 24 hours, the World Health Organization had reported almost 7,000 more cases globally, and the death count had grown by more than 300. Northern Italian hospital hallways were filling with beds. Tom Hanks fell sick in Australia. March Madness was canceled. Broadway shut down. President Trump congratulated himself on what a great job he was doing and said it would all go away.
I want to tell you a bit about the guy I called up—my billionaire. There’s no way to understand American power without understanding people like him. He’s part of a generation of executives who’ve made fortunes from the proliferation of private equity, hedge funds, and other forms of financial engineering over the past few decades, as Wall Street became more and more central to the U.S. economy. Wealth on his scale sometimes flattens a personality, but he usually comes off as open and lighthearted, with a confidence that can be infectious rather than off-putting.
Members of his class are supposed to be brilliant at analyzing and managing risk, so I was surprised to find that he seemed unbothered by what looked to the nonbillionaires around me like a uniquely dangerous threat. I asked him how his circle was talking about the virus. “Some people are going to die, but it’s old people, and if they do, it’s OK,” he replied. Then he paused. “Not that it’s OK. This isn’t that bad.”
He seemed to know how cold and disconnected that sounded. Some billionaires take pleasure in playing up nasty reputations, but this one considers himself to be thoughtful, generous, lucky, and friendly to his workers. Still, he didn’t walk his words all the way back.
It felt somewhat perverse to be soliciting the thoughts of someone so privileged and well protected at a time of such intense vulnerability. Why should Americans hear from a rich White man right now? Without question, the stories of the people who were suffering, and those who were on the front lines aiding them, needed to be told urgently. At the same time, there were already signs that the unequal system Wall Street thrives on would exacerbate the crisis, while lower-income communities were disproportionately harmed by both the virus and its economic effects. There was speculation, as New York City declared a state of emergency and Congress negotiated sweeping relief packages, that the pandemic could become a great equalizer, a cataclysm that would lead to change that leveled an unlevel field. Or it could prove to be just another opportunity for the country’s most powerful capitalists—to make money, and perhaps to tilt the field further. If anyone could help me gauge this dynamic, I thought, it would be my billionaire.
I asked him if I could keep calling. He said yes, and that he’d tell me what was really on his mind as long as he remained anonymous. After considering what might be coming in the U.S., I agreed. I wanted to know how people like him would experience this calamity. And I couldn’t turn away.
We spoke again the next week, on March 16. The days in between had been ugly. Case numbers in New York City were starting to boom, and officials sent home more than a million students. The U.S. declared a national emergency, and Covid-19 tests were in short supply. Wall Street was in the midst of its worst week since the global financial crisis. Worldwide, there were 167,515 reported cases and 6,606 deaths.
The investor told me the economic wipeout didn’t look so bad if you compared it with the vastness of the U.S. economy. Technically, this was true, but Federal Reserve officials were already tearing through their playbook from the last crisis. Big banks were preparing to shut branches. I asked him if he’d talked to the boss of the biggest one, JPMorgan Chase & Co.’s Jamie Dimon, and he sneezed. “Now if you’re on a bus and you start sneezing, everybody gets upset,” he said. I asked if he actually takes the bus. “No,” he replied.
I mentioned that other rich people were scrambling to protect their health. Some were securing special access to virus tests and experimental drugs, if not their own ventilators. “I could get my hand on a test,” he said. He told me his peers were quietly inquiring about reserving beds at private hospitals in case they got sick. He had connections to the boards of the best hospitals but said he’d call in favors only for the people closest to him
Meanwhile, he joined his family at his country house, taking work calls on the phone. There was no staff, so he drove to the store himself, wearing a mask. He could have hopped in his private jet and escaped, but really, he pointed out, where was he going to go?
The catastrophe spread. By March 23, New York City’s case count was rising by thousands each day. People at Rikers Island jail fell sick, and city hospitals were running out of masks and gloves. The U.S. was threatening to become a new hub for the virus, right as Trump was saying the economy would soon reopen. The U.K. announced it would lock down. Deaths were spiking in Western Europe and Iran, with 14,509 in total worldwide, and 332,930 cases.
When I spoke with my billionaire that day, I thought he might be scared or sad. Instead, he was irritated. “Everyone’s working remote and realizing remote sucks,” he said. I asked how it was different from the 2008 financial crisis. “I have to make individual calls. It’s so hard. It’s so hard to deal with all these things. You can’t get five people in a room, 10 people in a room. I’m dealing with all this shit with my hands tied behind my back.”
The country was sliding toward a recession, leaving Wall Street facing billions of dollars in potential loan defaults. But it was also profiting from the carnage. JPMorgan’s derivative traders were on their way to making $1.5 billion in the first few months of the year, while a small group of hedge funds was pulling in billions from exotic types of bets. It wasn’t just credit-default swaps—the derivative that starred in the 2008 financial crisis—but credit-default swaps on indexes that were themselves made up of credit-default swaps. Private equity executives, who together had about $2 trillion of cash to spend, were on the hunt for bargains.
In Manhattan, fevers had been reported inside Goldman Sachs Group Inc.’s skyscraper, but some traders at JPMorgan’s derivatives desk were still sitting close together. My billionaire thought young and healthy workers should be in the office, and he didn’t just mean his own. “Why aren’t we saying, ‘Hey, anybody who’s 30 or under, you guys still go to work—you guys just don’t see your parents?’ ”
One answer was that they might be afraid to die. A poll would soon show that almost 9 out of 10 Americans weren’t ready to return to daily life. His pronouncement sounded like the ones coming from Trump and his circle. The president was now saying the economy should restart quickly despite the warnings of health officials.
The billionaire saw Trump as a buffoon, and yet he mostly agreed with what the president was saying about the virus. “If people aren’t going to work, it’s a depression. Trump isn’t wrong. He just doesn’t know how to explain it,” the billionaire said. He took a stab at putting it succinctly: “Do you want to end up losing your life savings so that the old person you don’t know can live?”
I asked if he intended to say that Americans were going to have to die to save the economy. Public health and private profit were at odds, he answered, and one was going to win out. “By focusing on the economy, a lot of people are going to get sick. And if we focus on public health, a lot of people are going to lose their jobs,” he said. “I know which way it’s going to end, but you can’t say it. You sound insensitive. In today’s world, everybody’s going to attack you.”
Wall Street holds sway over millions of American workers. Private equity firms buy up companies and exercise control over their employees. Activist investors buy up stakes in companies and can push them to cut staff. Alternative funds help determine the fate of corporations by owning their debt or lending to them directly. I wondered if the carnage might present opportunities for my billionaire to profit. It would, he told me. But what he seemed to crave right then was a return to the economic reality he’d known before.
“The person who explained this best to me is my contractor,” he said, referring to a man who was building a house for him. “I say to him, ‘Hey, what are you going to do if we have this lockdown? How long do you think we won’t be able to build for?’
“He looks at me like, ‘What, are you talking to me?… If you’re willing to pay us, we’re willing to show up.’
“I said, ‘Aren’t you worried?’
“He said, ‘I don’t have money in the bank like you. If I ain’t working, my family ain’t eating, and then my mortgage ain’t getting paid. Can I take two weeks off? Sure. But anything more than that? No.’
“I said, ‘OK, I don’t care. If you guys want to show up, I’ll pay you.’
“He looked at me: ‘Hey, big guy, this is America.’ ”
The billionaire stopped his story and addressed me directly. “How would you like it if you didn’t get paid?” he asked. Then he shifted gears.
“Why don’t you talk about yourself?” he said. “How much do you make?” He ventured a guess and was way off. I wouldn’t tell him by how much or in which direction.
“Don’t be embarrassed,” he said. “You’re doing a great job.”
By the end of March, forklifts were loading bodies into refrigerated trucks outside New York City hospitals. In Staten Island an Amazon.com warehouse worker led a walkout over health concerns and was swiftly fired. Black communities were being hit especially hard. And in the past week the number of deaths worldwide had more than doubled, to 36,405, with 750,890 cases.
There was action in Washington, though. Trump had signed the largest stimulus package in U.S. history, a $2 trillion bill that doled out loans and tax breaks to businesses big and small, sent $1,200 to many Americans, and provided an extra $600 of weekly unemployment benefits. But it still left millions of people vulnerable in a country where about 27.5 million were without health insurance and more than 100 million still had to be physically present at their jobs.
My billionaire and I didn’t discuss any of that when I called. It was after dinner, and he had to get back to his family. “I’m playing Risk,” he said.
We picked up again the next day, April 1. The game was still going on. “We wiped out the other two guys,” he told me. “I think I’m in a good position.”
I asked him if he’d reconsider our anonymity agreement and let me use his name in the story. No, he said. Americans were too angry at rich bosses. “Everybody’s perception is the same: ‘You should be paying us irrespective of the fact that we’re not working. And if you don’t, it’s because you’re greedy.’
“You’re wrong. Sure, I’m happy to pay you for a month. I’m happy to pay you for two months. But at a certain point you have to stop.”
I wanted to know if he could understand why employees might feel they deserved pay for work they were missing only because of a national emergency. He dove into a genuine attempt at empathy. A month ago, he acknowledged, most Americans hadn’t expected to get paid without working. “Now it’s, ‘Hey, wait a minute. I can’t work, not because I don’t want to, but I can’t. And you should be paying me, and if you don’t, you’re jeopardizing my life.’ ” He went on in the voice of a worker: “So-and-so can afford to pay me, but I can’t afford to go to work. If I do, I’m jeopardizing my life. Is my life not worth it?”
He remembered that he’d originally wanted young and healthy employees to get back to work as soon as possible. But he’d changed his mind. “Everybody’s come to the conclusion, myself as well, you can’t do that. Because you’re having people who are 20 and 30 getting symptoms and being rushed to the hospital,” he said. “The system is overwhelmed, and if the system is overwhelmed, you might as well wait.”
Inside the White House, Trump had been backtracking from his cheeriness, warning at a briefing of great pain to come. Over the past three years, his administration had been particularly good for rich executives, cutting their taxes and stripping back corporate rules. I asked the investor what he made of the president on the whole.
“The things he’s done on the business side I would tell you have all been positive. Does that offset all the harm he’s done? Economically, yes, for me, that’s been beneficial. Socially, how it hurts people, how I view the world, no, I would rather have less money to have a better world. But, OK, my punishment is I have more money to have a more f---ed world.”
Two days later I called him back and asked who won his game of Risk.
“I did,” he said.
When we spoke again two weeks later, on April 19, pain was everywhere. In a month, 22 million workers had filed unemployment claims, shattering the U.S. record and wiping out the entire decade of job gains that had followed the financial crisis. Self-employed people were still waiting for the unemployment benefits promised by the $2 trillion rescue package. In the meantime, infections had more than tripled in the U.S., to about 700,000, and the death count had crossed 30,000.
The billionaire’s family was doing fine. He seemed to be the only person I knew who wasn’t experiencing near-constant bewilderment, dread, and rage. “We watch the briefings, and we feel horrible, but then you get back to what you’re doing,” he said.
At work he was looking for investment opportunities and figuring out how and when to seize them. His contractor was still building, sending crews in shifts. When I asked him about the sea of workers losing their jobs, he said the people running corporations had no choice but to let them go. “They’ve got no revenue, and nobody’s going in. It’s nobody’s fault. You just feel bad.”
The U.S. government was on an all-out blitz to prop up markets. The Federal Reserve had bought so many bonds that its balance sheet had topped $5 trillion for the first time, and that was before it took the unprecedented step on April 9 of unveiling a program to provide as much as $2.3 trillion in loans.
When I asked the investor if he was in any financial danger, he told me work wasn’t keeping him up at night. He said that the outbreak hadn’t created any catastrophes or triumphs for him and that he was thinking about what to do next. How did he stay so calm? “When you’ve been lucky, you just assume you’re always going to be lucky,” he said.
I thought about the rage at bosses he’d described on our last call and asked him if I could float some ideas about the source of that anger. Was it the sheer size of the gap between the rich and the rest of us? He shrugged that off. “You’ve always had that gap,” he said. “Now everybody knows about it.” I pointed out that inequality had gotten worse. He insisted that the most significant change was how much attention we’ve been paying to the gap. He blamed social media.
I wondered if the bubbling frustration might be fueled instead by the different ways billionaires loom over our lives, and not only because we can’t check email, stream movies, or post photos without their products. Earlier in April, Bill Gates had suggested his foundation would spend billions of dollars to fund a coronavirus vaccine, reminding everyone that it was the rich, as often as not, who seemed to be guaranteeing our survival, rather than government. I asked the executive if depending on the goodwill of such a small group might make us resent them.
“That makes no sense,” he said. “Why is there deep rage that somebody’s helping you?” He again steered the blame to social media, where “everybody is trying to show you how great their life is, so there’s a constant comparison.” He told me people hadn’t been as mad at John D. Rockefeller, apparently forgetting the breakup of Standard Oil Co. “David Geffen is posting a picture of himself on a boat. And somebody just got laid off. Do you think you would be mad at that? Yes.”
So none of this was about frustration with the system itself—with tax cuts that favor the rich, government bailouts for big corporations, or the decline of the social safety net? “I’m sorry,” he said. “Nobody’s worried about the system. They’re mad about what’s happening in their life.”
I reminded him that his views on some things had evolved since the pandemic began. Could he eventually change his mind about this? “It’s not ‘the system,’ ” he reiterated. “Everybody’s got to stop with ‘the system.’ ” He didn’t sound exasperated, just amused. His voice had the same tone of charmed mellowness it’d had five or so weeks earlier. It’s a rich sound.
“Grasshopper,” he said. “Grasshopper, I’ve got to teach you.”
We didn’t speak again for another month. By then, May 22, more than 325,000 people around the world had died of the virus, and 5 million people had been infected. In the U.S., employers had cut 20.5 million jobs in April, tripling the jobless rate in the span of a month, to its highest point since the Great Depression. Covid-19 was killing people in majority Black counties at a rate more than twice the national average. As states moved ahead with reopening plans, especially in the South, anxiety about virus flare-ups was rising.
Wall Street, though, was thriving. The stock market had bounced into the third-quickest rebound in history, in part because of the massive interventions from central banks around the world. Every hour for the previous eight weeks, the Fed and its global peers had been buying an average of about $2.4 billion of financial assets, according to data compiled by Bank of America Corp. “Everything is going great,” the investor said. “Work has gone really well.” It was “actually a really interesting time.” I asked about the video calls he’d said he hated. “Now I’ve gotten into Zoom. I have! I like it now. I like to see the face.”
His voice brimmed with enthusiasm. The plan at work was “to try to take advantage of the situation.” I asked him what kind of advantage he meant. “I used the wrong words,” he replied. “It’s not ‘take advantage.’ It’s a huge opportunity for us. That’s what it is.”
But his initial phrase lingered. “You’re in the right place at the right time,” he said a few minutes later, “and you can take advantage of that.”
The rich were poised to profit while the vulnerable suffered and the elderly died. It was such a bleak picture. “Yes, it is,” he said. “It’s horrible”—he recognized the extent of the agony. He just didn’t seem able to imagine an alternative.
Someone nearby called him to dinner. He said he’d have to go soon. I asked whether he thought it was fair for the richest to keep getting richer.
“I don’t know,” he said. “Is war fair? Do people die in a war? Yes. You’ve got a virus that is affecting people. It’s pretty clear who it affects.” He meant people who were old and sick. “So nature is saying, ‘I’m going to pick on you.’ Is it fair? Is it right? No.” His voice was as steady and calm as ever. “But that’s life.”
Three days later, a White Minnesota police officer knelt on George Floyd’s neck for about eight minutes. The footage of Floyd begging in vain for his life sparked nationwide demands for equal justice for Black Americans. It was the first thing I asked my billionaire about when we got on the phone for our final interview, on June 5.
“It was just surprising. I mean it’s like, Why? I didn’t understand,” he said. Officer Derek Chauvin had been charged with Floyd’s murder. “I don’t think he wanted to kill him. I think he wanted to embarrass him. He wanted to show him who was superior. He wanted to give him pain.”
Police brutality, he added, was utterly wrong. I asked him about the movement protesting it from Minneapolis to Manhattan and well beyond. The demonstrations had mostly been peaceful, but the windows of some fancy Midtown shops had been smashed. “I don’t like when somebody overruns a police station and burns it. I don’t like when you’re destroying property,” he said. “If you don’t like the system, I have no qualms. You want to break the system? Then you’d better be in charge.” His words rang in my ears.
Three months earlier, when my billionaire had picked up my first phone call, the global financial system had been buckling under the threat of a pandemic. Now the financial system had roared back—vindication, of a sort, for one of its biggest winners, who didn’t see any need for it to change fundamentally. For most everyone else, there would be consequences. About 17 million more Americans were on track to become food insecure in 2020, bringing the total to 54 million. White-collar workers who’d lost their jobs were facing fewer open positions and the prospect of lower pay if they landed one.
Those failures weren’t independent of the reasons people were packing streets and bridges. The protesters were demanding that American systems that had let them down be reshaped—systems marked by racism and other forms of inequality that exclude some and privilege others. Their demands might start with policing, but they didn’t end there.
My billionaire had in mind something more incremental: replacing bad sheriffs, police chiefs, and other officials, rather than radically transforming or abolishing the infrastructure they oversee. “It’s easy to change the system—it really is. It’s never hard to change the system. We have a way of going about that,” he said.
“You want to change the system? I get that. You want to break the system? You better win. Because, if you don’t, the system is going to break you.”
Read next: How Companies Fleeced American Workers Out of Wages and Benefits
©2020 Bloomberg L.P.