Good news on the wealth front
One of Connecticut’s favorite sports is teeth-grinding over our loss of wealth. We’re in the majors.
It’s a great game because you can set up a billionaire fantasy league — will Karen Pritzker leave? When will Ray Dalio break $20 billion? — and also look at the big picture.
We’ve got the Red Sox and the Yankees: One side says Connecticut sucks, everyone is leaving for great places like Boston and Florida. The other side is true blue, taking losses in stride and believing our yankee roots will keep our super-rich at home.
We’ve had some good news lately in Connecticut in both the billionaires fantasy league and the big picture.
First, the Forbes list of the 400 richest Americans shows nine Connecticut members, up from seven one year ago. The list, which came out last week, shows four new Connecticut names including Vince McMahon of Greenwich, whose WWE wrestling empire has gained stock value.
Among the two who exited the list, yes, it’s true dear cynics, Paul Tudor Jones II departed for Florida. But Peter Buck, the Subway restaurant co-founder, simply dropped down to the poorhouse — $1.5 billion. The cutoff for this club is $2.1 billion.
At the very top of the list, Amazon founder Jeff Bezos skyrocketed to $160 billion, leaving longtime former No. 1 Bill Gates in the dust at $97 billion. Both took a hit in Wednesday’s stock market bloodbath but save your donations for the truly needy.
In Connecticut, Ray Dalio, the iconoclastic Bridgewater Associates hedge fund founder, moved to the Top 25 at $18.1 billion, up from $17 billion and No. 26 last year. Steve Cohen the Greenwich hedge founder who recently regained the right to manage other people’s money, held firm at $13 billion, the No. 36 spot in the nation.
At stake in all this, the reason we care, is that Connecticut’s government, as you may have heard, is broke — facing a shortfall of $2 billion in the fiscal year that starts next July 1. If we could finagle a very small increase in the state income tax for the very, very richest residents, we could help make ends meet.
That of course would drive some of them to Florida, where they’re probably headed anyway, and we could be worse off. I’m sure we can cut a deal involving foot-long sandwiches, forested Westport hedge fund campuses and parties on the Thimble Islands — but that’s for another day.
As for the big-picture, here’s the headline: Connecticut’s status as the richest state is solid and safe. Year after year, including the most recent data released in late September, shows out lead is unchallenged.
The richest state? We’re not talking about how the typical family is faring; that would be Maryland in most years. For pure wealth, we’re talking about total income, just north of $250 billion, divided by the total number of men, women and children who live in the state.
That number was over $71,000 in only one state in 2017: Connecticut.
Our $71,823 was more than $20,000 ahead of the nation’s per-capita income in 2017. That’s right where we were five years ago and bigger than the $15,000 difference we had in 1998, adjusted for inflation.
Our lead over No. 2 Massachusetts has slipped. Credit the spectacular gains in metro Boston. We led by $4,193 in 2017, down steadily from a head-spinning $9,112 in 2010, as the recession wreaked havoc. But from the late-90s until 2005, the Connecticut lead ranged from $4,500 to $5,500.
It’s the super-rich that keep us on top in the richest-state sweepstakes. Down the line, Connecticut isn’t keeping up with the nation in overall income gains. For example, we’re still strong but falling compared with the rest of the nation in median household income, the broadest measure of prosperity for typical families.
So the rich matter. Some flee Connecticut with a loud roar, like Eddie Lampert, the investor who took his ESL and Sears Holdings fortune to Florida six years ago.
But more quietly, some stay here and nurture their wealth, and their state. This year’s Forbes 400 list adds Bradley Jacobs, whose logistics firm has made three billionaires, and sisters Alexandra Daitch and Lucy Stitzer, heirs to the Cargill fortune.
Then there’s David Stemerman, who liquidated a $1.6 billion hedge fund in 2017, less than a decade after he founded it, to run for governor. I asked Stemerman if he intended to stay if he lost the Republican primary, which he did.
His answer: Yes, at least until the last of his five children are grown. That, in one household, is the story of why Connecticut’s status as the richest state remains unthreatened despite years of lagging growth.