The Dow Jones has hit 20,000 basis points since the start of the industrial average in 1896, but rather than celebrating, some of the richest of the rich are building bunkers to prepare for a potential apocalypse. These “preppers” are making other investments too. They are buying houses in New Zealand, which has become a popular spot in case of a calamity. Billionaire Peter Thiel just secured property and citizenship there. And they are getting elective surgery. Steve Huffman, the 33-year-old Co-founder, and CEO of the online community Reddit, got Lasik so that he would be able to be more independent in case of emergency.
“If the world ends — and not even if the world ends, but if we have trouble — getting contacts or glasses is going to be a huge pain,” the San Francisco resident tells Evan Osnos as part of The New Yorker’s chronicle of the elite’s end-of-the-world preparations.
In addition to the eye surgery, Steve Huffman has accumulated guns, ammunition, and motorcycles so that he would not get caught in traffic jams during an evacuation. The notion of “doomsday prepping” was popularized in the mainstream by the National Geographic channel’s show by the same name. The show’s website offers a quiz titled “How prepped are you?” so you can test your own likelihood of surviving an apocalypse. Former Facebook product manager Antonio García Martínez bought wooded land in the Pacific Northwest that he has stocked with generators, solar panels, and ammo, the New Yorker reported.
Antonio García Martínez said, “You just need so many things to actually ride out the apocalypse. I think people who are particularly attuned to the levers by which society actually works understand that we are skating on really thin cultural ice right now.”
In particular, the political climate has made many coastal elites anxious about the future.
“I think, to some degree, we all collectively take it on faith that our country works, that our currency is valuable, the peaceful transfer of power — that all of these things that we hold dear work because we believe they work. While I do believe they’re quite resilient, and we have been through a lot, certainly we are going to go through a lot more,” Steve Huffman said.
Doomsday prepping crosses political lines. When Barack Obama was elected to his second term, conservative preppers hunkered down, collecting canned goods and gold coins and buying products hawked by Glenn Beck and Sean Hannity, the New Yorker reported. As today’s preppers tend to have more resources, they are investing in tech-based currencies like Bitcoin as well as in precious metals, since they are looking to secure assets in systems not tied to the stability of government structures.
More than half of Silicon Valley billionaires have outfitted themselves for a crisis, whether with a bunker, second home, or vacation spot, estimates Reid Hoffman, the Co-founder of LinkedIn. And prepping is not a solitary pursuit.
Tim Chang, the managing director at venture-capital firm Mayfield Fund, tells Evan Osnos that survivalism has become a popular hobby, like bowling leagues for the 21st century.
“There’s a bunch of us in the Valley. We meet up and have these financial-hacking dinners and talk about backup plans people are doing. It runs the gamut from a lot of people stocking up on Bitcoin and cryptocurrency, to figuring out how to get second passports if they need it, to having vacation homes in other countries that could be escape havens. I kind of have this terror scenario: ‘Oh, my God, if there is a civil war or a giant earthquake that cleaves off part of California, we want to be ready” Tim Chang said.
After all, the same imagination that powers Silicon Valley can also terrify it. “When you do (think big), it is pretty common that you take things ad infinitum, and that leads you to utopias and dystopias,” says Roy Bahat, the head of a San Francisco-based venture-capital firm Bloomberg Beta.
And the Valley’s preppers have the resources to help soothe their troubled minds. “The tech preppers do not necessarily think a collapse is likely,” says Yishan Wong, an early Facebook employee and the CEO of Reddit from 2012 to 2014, to The New Yorker.
“They consider it a remote event, but one with a very severe downside, so, given how much money they have, spending a fraction of their net worth to hedge against this…is a logical thing to do.” Wong also underwent “eye surgery for survival purposes,” reports Evan Osnos.
How billionaires got even richer
The world’s 2,365 billionaires enjoyed a USD 4 trillion boost to their wealth during the first year of the pandemic, increasing their fortunes by 54%, according to a new analysis by the Program on Inequality at the left-leaning Institute for Policy Studies. The most dramatic drops have occurred in Russia, where there are 34 fewer billionaires than last year following Vladimir Putin’s invasion of Ukraine, and China, where a government crackdown on tech companies has led to 87 fewer Chinese billionaires on the list.
Between March 18, 2020, and March 18, 2021, the wealth held by the world’s billionaires jumped from USD 8.04 trillion to USD 12.39 trillion, according to the IPS’ analysis of data from Forbes, Bloomberg, and Wealth-X. Amazon.com founder Jeff Bezos, the world’s wealthiest person, saw his fortune soar to USD 178 billion from USD 113 billion, or 57%, during that time, the study found. All told, the total wealth of the world’s billionaire class grew 54% during the pandemic year, IPS reported.
The ballooning wealth among the world’s richest people is sparking calls for a “wealth tax,” or an additional tax that would be added on top of regular income and capital gains taxes. More than 80 unions and left-leaning organizations sent a letter to President Joe Biden urging him to reverse some Trump-era tax cuts they say largely benefited the wealthy, while also adding a 10% tax on incomes above USD 2 million.
But so far, a wealth tax is proving elusive in Washington, D.C., even as two-thirds of Americans express support for the idea of raising taxes on people earning more than USD 400,000. Rather than taxing the growing wealth of the nation’s billionaires and millionaires, Biden wants to pay for his USD 2 trillion American Jobs Plan by boosting the corporate tax rate to 28% from its current 21%.
In the meantime, the wealth disparities between the world’s richest and poorest citizens have only widened during the pandemic. Some tax experts say a wealth tax could hurt growth prospects for lower-income people, not help those prospects. It also could incentivize the ultra-wealthy to hide or off-shore their income as well as their assets which would be the basis for taxing their wealth.
“A wealth tax would have a negative impact on the economy. It would reduce national income, discourage saving and encourage consumption,” among other downsides, noted Tax Foundation economist Erica York in a blog post. Chuck Collins, a researcher at the IPS’ Program on Inequality and the author of the book “The Wealth Hoarders,” doesn’t buy those arguments.
“It makes total economic and moral sense to tax billionaire wealth windfalls to help pay for pandemic recovery. Our pain has been their gain. Even with the proposed wealth tax, they will be billions wealthier than prior to the pandemic,” Chuck Collins said.
Wealth Tax: $1.5 trillion in 10 years
Various wealth taxes have been proposed in recent years, partly in response to widening inequality. Among them is Senator Elizabeth Warren’s “ultra-millionaire” tax, introduced by Representatives Pramila Jayapal and Brendan Boyle. All three are Democrats.
Their plan would levy a 2% annual tax on the net worth of households and trusts between USD 50 million and USD 1 billion while adding another 1% tax on fortunes above USD 1 billion. In all, billionaires would pay an additional 3% annually on their wealth under this plan. If such a tax had been in place, global billionaires would have paid USD 345 billion in wealth taxes. Applied only to US billionaires, it could raise USD 1.5 trillion over the next decade, IPS estimated.
“It makes sense that the infrastructure investments to revitalize the US economy should be paid by closing corporate tax loopholes that incentivize shipping jobs overseas. It truly is a build the US economy package,” Chuck Collins said.
“A wealth tax will be one of the options for future revenue — along with other provisions to ensure that wealthy individuals pay their fair share of income and estate taxes,” he concluded.