Former Democratic presidential nominee Hillary Clinton deployed a popular but misleading statistic during her Wednesday evening remarks at the Democratic National Convention, claiming that billionaires had grown $400 billion richer during the coronavirus pandemic.
Amid her endorsement of new nominee Joe Biden, Clinton told viewers, “it’s wrong that billionaires got $400 billion richer during the pandemic while millions lost $600 a week in extra unemployment.”
But the claim that billionaires’ net worth has soared during the pandemic is based on misleading accounting, calculating their change in net wealth from the bottom of the market, and thereby maximizing their “earnings” in the crisis.
Clinton’s claim, which has been widely repeated in the press, parrots statistics released by the left-leaning Institute for Policy Studies and Americans for Tax Fairness. To arrive at the $400 billion figure, the two groups calculated how much billionaires’ net worth have rebounded from the approximate trough of the coronavirus-ignited stock market crash on March 18.
But that statistic does not tell the full story, omitting the net worth of America’s wealth prior to the precipitous drop in the market. A MarketWatch analysis from late May found that the top 50 billionaires’ net worth fell $232 billion between the market’s peak, on Feb. 19, and May 23.
The wealth of billionaires like Jeff Bezos and Bill Gates has likely recovered further since then. But that’s thanks to the stock market rally—a leading indicator of future economic health—not to their profiting off of the pandemic.
That the $400 billion figure is misleading has not stopped Democratic politicians from deploying it on the campaign trail. Sen. Bernie Sanders (I., Vt.) earlier this month cited the same figure as Clinton in calling once again for a wealth tax, specifically on the “obscene wealth gains billionaires have made during the public health crisis.”