capitalism

Roughly 3 out of 4 American billionaires have seen a rise in their net worths. Elon Musk alone has tripled his net worth during the pandemic.

Michael Hobbes, Senior Enterprise Reporter, The Huffington Post, wrote in The Huffington Post:

“Other than Netflix, Andrew Cuomo and the virus itself, no one has benefited from the COVID-19 pandemic more than American billionaires.

“Over the last six months, roughly 3 out of 4 members of America’s 10-digit-wealth club have seen a rise in their net worths. Sixteen American billionaires are worth at least twice as much now as they were in March. And Jeff Bezos, who was already worth $113 billion at the start of 2020, is heading into the year’s final stretch $73 billion richer.

Michael Bloomberg and Charles Koch are both up by $7 billion, and Mark Zuckerberg has added another $46 billion to his already staggering $54 billion in wealth. Elon Musk found time between COVID truther tweets and CPAP machine donations to take his fortune from $25 billion to $92 billion.”

Michael Hobbes adds:

“Some billionaires have gotten richer as a direct result of the pandemic. Amazon, for example, was one of the few companies in the United States to expand as consumers locked down at home and avoided brick-and-mortar retail. Facebook, Google, Tesla and Microsoft have also boomed in the past six months, adding to the fortunes of their respective billionaire founders.

“Most billionaires, however, have grown their wealth not as business leaders but as investors. One of the ongoing mysteries of the COVID-19 recession is why it has — so far at least — barely touched the stock market. After falling roughly 35% in February, both the Dow Jones and the S&P 500 returned to pre-pandemic levels in just 126 trading days, a turnaround that may be the fastest ever recorded.

“Others benefited directly from government relief funds, a significant portion of which went to large companies. Musk is among the billionaires who have increased their wealth by attracting investors who are betting that their companies will come out of the recession stronger than when they went in.”

The Huff Post article says:

“There are also larger forces at play. The pandemic wealth gap is a culmination of America’s decades long trend of increasing inequality. Since 1980, taxes on billionaires have fallen 79%.”

The article tells about union representation:

“Unions, which help workers negotiate for a larger share of profits, represented roughly 1 in 4 workers in 1979, but now represent only 1 in 10.”

It refers to the history of the wealthy group’s getting richer during economic disaster:

“Nor is this the first time the wealthy have benefited from an economic disaster. After the 2008 recession, billionaires not only restored their wealth within three years, they managed to nearly double it again by 2018. The bottom 80% of income earners still haven’t recovered.”

It refers to job loss during the pandemic:

“Whatever the long-and short-term reasons, though, the net worth of the wealthiest Americans is becoming increasingly unmoored from conditions in the country around them. Just over 11 million Americans lost their jobs between February and August 2020. Thirty-nine states have lost more jobs in 2020 than they did during the Great Recession. But as workers lose their jobs and struggle to pay rent, their bosses and landlords are still, somehow, winning big.”

Huge disparities

In another report on May 11, 2020, CNN said:

“The United States is suffering a horrendous pandemic. But while the coronavirus itself is indiscriminate, there are huge disparities in who suffers from the resulting economic fallout.

Columbia University researchers project that poverty rates in the United States could soon reach their highest levels in half a century. Yet as my colleagues and I track in a new report for the Institute for Policy Studies, the wealth of America’s billionaires actually increased by nearly 10% over just three weeks as the COVID-19 crisis took hold.”

The report “Billionaires are getting even richer from the pandemic. Enough is enough” said:

“Extreme wealth inequality, in short, is America’s “preexisting condition.” And unless we act intentionally — with ambitious public policies aimed at reversing inequality — the pandemic recovery will supercharge our existing inequalities of income, wealth and opportunity.

“We’ve seen this happen before, in the recovery from the 2008 economic meltdown — which, for most Americans, was never complete. Indeed, most US households went into this pandemic with a lingering economic hangover from the 2008 crash. Only the top 20% of US households had fully recovered the wealth they had prior to the Great Recession.

“By contrast, my colleagues and I found that the Forbes 400 — the wealthiest 400 billionaires in the United States — had fully recovered their wealth within three years. Within a decade, their wealth had increased over 80%.

“We see that pattern repeating now on a shockingly compressed timeline.”

The report said:

“Already, the combined wealth of US billionaires is higher than a year ago, according to our study. At least eight of these billionaires have added another $1 billion to their wealth during the pandemic.

“Among these ‘pandemic profiteers’ are Zoom CEO Eric Yuan and Steve Ballmer, former CEO of Microsoft, which owns Skype and Teams. Both Yuan and Ballmer are profiting off the boom in videoconferencing.

“But no one has benefited as handsomely as Jeff Bezos of Amazon, who has seen his wealth skyrocket by $25 billion since January 1 as homebound customers lean heavily on online shopping, grocery delivery and streaming. This wealth surge for one individual — greater than the entire GDP of Honduras — is unprecedented in the history of modern markets.

“In short, while the majority of Americans lurch toward a recession worse than the crash of a decade ago, a tiny number of billionaires is set to make out like bandits.”

It added:

“Complicating matters, billionaires’ extraordinary wealth gives them extraordinary influence over the political process, which they’ve used to slash their tax bills astoundingly over the last few decades. According to our data, the taxes paid by America’s billionaires, measured as a percentage of their wealth, decreased by a stunning 79% between 1980 and 2018.

“Given all this, it’s not surprising that policy responses in times of crisis tend to reflect the priorities of the wealthiest first. Last time, in 2008, we bailed out the banks on Wall Street, but not the homeowners and small businesses on Main Street.

“This time, in the $2.2 trillion stimulus that Congress passed, ordinary households got a one-time $1,200 check. People earning over $1 million, however, could receive an average tax windfall of $1.6 million, according to analysis released by two congressmen.”

The report suggested:

“Instead, Congress should design stimulus bills to put more money in the pockets of ordinary people. An initial six-month universal basic income of $1,500 a month per adult, for households with incomes under $70,000, would reduce economic stress and destitution and boost struggling local communities.

“Money distributed to working people is much likelier to get spent quickly, as people flock to grocery stores and gas stations and other local businesses to meet their immediate needs. Bailouts to the rich and corporate giants, by contrast, may end up getting spent on stock buybacks or funneled offshore instead.

“To help pay for our recovery, Congress should levy a 10% millionaire surtax on incomes over $2 million, which would generate about $635 billion over the next 10 years, according to the Tax Policy Center. Other measures should include a wealth tax and a progressive inheritance tax.

“Meanwhile, we should guard against profiteering and windfall profits by ensuring vigorous congressional oversight of the stimulus funds already passed and by levying an excess profits tax, as we have during times of war.

“Finally, the frontline workers who deliver the packages, groceries, meals and care for those of us staying at home deserve health care coverage, decent wages and workplace rights and protections — to protect their wealth and health.”

The report raised the issue of inequality:

“Extreme inequality may be America’s pre-existing condition. But with the right actions now, we can exit this pandemic on a pathway to a more decent and equitable society.”


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