Millionaires Say They Don’t Care About Impeachment, But Their Actions Speak Louder Than Words
President Donald Trump was impeached by the House of Representatives on Wednesday evening in a vote that largely fell along political lines. Meanwhile, a three-hour train ride away, Wall Street shrugged and continued on with its business.
The general disregard by both Wall Street and Main Street millionaires of this historic action, one which will likely be dissected in the annals of history, highlights an ever-increasing gulf between the political and financial classes.
Sure, CEOs and board members sitting at the helm of large companies have recently steered toward the political. Billionaires also wielded the power to wage costly campaigns for and against the impeachment of Trump—they have the ears and hold the purse strings of elected officials and sometimes even decide to run for office themselves. But there are just 600 billionaires living in the U.S.
In reality, it’s the nation’s 18.6 million millionaires (the majority of whom have between $1 and $5 million) that make up the plurality of wealth here, and with less exorbitant bank accounts, they don’t have as much control over their political fates as their ultra-high net worth counterparts.
Market uncertainty caused by the whims of D.C. mean more to this group’s bottom line, and unlike Tim Cook (or the fictional Logan Roy), they can’t pick up the phone and tell the political elite to cut it out.
Some things, like uncertainty around trade negotiations and the 2020 elections bother them, but when it comes to impeachment, “they just couldn’t give a damn about it,” said John Rampton, a millionaire serial entrepreneur who considers himself a connector to and influencer of the tech elite.
“I didn’t watch the trials, but I hear the news or watch on Twitter,” he said. “People think a lot of it is fake news and literally mostly anything political is so biased one way or the other way that they’ve stopped caring, or at least paying attention.”
Ted Oakley, managing partner at Oxbow Advisors, a firm that works with hundreds of millionaires across 25 states, said that not one of his clients has brought up impeachment as a serious concern.
“Most of these millionaires are honestly just sick of it, the whole thing,” he said. “They want to concentrate on what’s ailing the country right now and not impeachment. Most of our people think we’ve just been treading water here for the last two years and they’re pretty disgusted. They don’t want to think about impeachment really or even talk about it.”
That might be because millionaires tend to identify more closely as Independent or Republican than with the Democratic party.
Research by Spectrem Group, an investment advisory firm, found that 32% of millionaires with wealth between $1 and $25 million identify as Independent, 38% identify as Republican, and 30% as Democrats. The country as a whole, meanwhile, is evenly split between the Republican and Democratic party, with the majority of voters affiliating as Independents.
“When you ask questions about impeachment stuff, millionaires probably think a lot of it is silly because the larger percentage of them are Republicans,” said Catherine McBreen, managing director at Spectrem. She added that millionaires who identify as Independent “are pretty happy with their current financial situation, especially compared to where they were a year ago, even 44% of Democrats say their current financial situation is better.”
Still, she noted, millionaires say that impeachment is “silly” and that they anticipate a strong year ahead, but they’re taking actions that contradict those statements.
“We see they’re keeping more money in cash right now than they were last year, which means they are nervous about volatility. When we compare people’s portfolios based on political leanings, there’s only minimal differences,” McBreen said.
Rampton agreed that there was a fear that the end of Trump’s presidency, via impeachment or the 2020 election, could upturn the economy.
“Every person says that if Trump gets kicked out of office or isn’t reelected, the economy will suffer, even people who don’t like Trump,” he said. Rampton himself is “hoarding enough cash to weather a couple years of stormy weather.”
His billionaire friends, however, are thinking about things differently.
“They think ‘oh, I’ll take a hit’ versus millionaires who think ‘a lot of my net worth is tied up in my business and if my business takes a 30% hit i’m going to be in a very bad position.’ Billionaires have $50 to $100 million dollars just sitting there,” he said. “They’re still investing money, they’re still pushing things.”
Billionaires will always take more risk, agreed Brad McMillan, chief investment officer at Commonwealth Financial Network.
“They’re more aware that their wealth gives them the time frame to invest over the long term and not to worry so much about short term fluctuations,” he said. He’s had plenty of conversations with millionaires recently, “on how to mitigate risk in the sense that a downturn is coming. You know we’ve seen a lot of money moving out of equities and into fixed income.”
Still, McMillan hasn’t seen nearly as much impact on the markets as he did during the impeachment hearings of former Presidents Bill Clinton and Richard Nixon.
“What’s really going on is that the noise level has been so high on the political front for so long that largely it just gets filtered out,” he said, “whereas during the Clinton impeachment it rattled markets, this is just seen as one more iteration of the policy wars going on so it doesn’t rise above the noise.”
Investors, he explained, realized that the outcome for impeachment had long ago been determined along party lines. The Democratic-majority House will impeach the president and the Republican-majority Senate will keep the president in office.
“We’re either more resilient or numbed, but from an economic perspective it’s eating away at confidence,” he concluded.
Meanwhile, David Lesperance, who has spent theplast 30 years helping millionaires and billionaires with expatriation, says he’s never seen such a surge in business.
“Since the Fall, I’ve probably seen an increase from two emails a week to five a day. It’s mostly people freaking out about what to do, I have a client who works in game theory who said ‘I can’t game this anymore,’” he said, before noting that there was no such uptick in business when Bill Clinton faced his own impeachment.
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