Billionaires Now Collectively Hold a Record-Breaking $10 Trillion in Wealth
By Igor Derysh, Salon Published October 17, 2020
Billionaire wealth increased to $10.2 trillion through the end of July, setting a new record amid the coronavirus pandemic even as millions of unemployed people fall into poverty.
Wealth held by billionaires around the world rose to $10.2 trillion in July, up from the previous record of $8.9 trillion in 2017, according to an analysis by Swiss bank UBS and consulting firm PwC.
The number of billionaires also rose from 2,158 in 2017 to 2,189 this summer, according to the report.
Not all billionaires saw their wealth increase, though some saw their wealth rise by close to 50%. Health care billionaires, for example, saw their wealth increase by 50%. Technology billionaires saw their wealth rise by 42.5%. Billionaires in the entertainment, financial services, materials, and real estate sectors saw increases of 10% or less.
While the UBS analysis looked at billionaires around the world, a separate analysis by the Institute for Policy Studies and Americans for Tax Fairness found that billionaire wealth in the United States has grown by $792 billion, or 27%, since the beginning of coronavirus lockdowns in March. The combined wealth of American billionaires now tops $3.7 trillion.
Some prominent billionaires have done particularly well. Amazon CEO Jeff Bezos has seen his wealth rise more than 60% during the pandemic to $195 billion through late August, according to the analysis. Tesla CEO Elon Musk saw his wealth more than triple to $85 billion over that time frame.
The study pointed to President Donald Trump’s 2017 tax cuts, which helped billionaires keep more of their earnings. The UBS study noted that Trump’s desired capital gains tax cut, billed as a pandemic-related stimulus, would overwhelmingly favor the richest Americans.
“For billionaires, this is a heads-we win, tails-you-lose economy, boosted by Trump policies to funnel wealth to the top,” Chuck Collins, the head of the Institute for Policy Studies’ Program on Inequality, said in a news release.
“The pandemic profiteering of America’s billionaires shows taxes on the wealthy must go up substantially to narrow the wealth gap and raise revenue vital for our big climb back from disaster,” added Frank Clemente, executive director of Americans for Tax Fairness. “By demanding even more tax cuts for the rich at this crucial moment President Trump shows he is as out of touch with our nation’s needs as America’s billionaires are disconnected from our nation’s misery.”
Some executives, like Zoom CEO Eric Yuan and Bezos, have profited from a boom in business caused by the lockdowns. Others have profited directly from government aid distributed to their companies. But most billionaires saw their wealth increase due to rising investments, buoyed by a stock market surge propped up by government assistance.
The rising wealth amid an economically devastating pandemic threatens to deepen longstanding inequalities.
“Extreme wealth concentration is an ugly phenomenon from a moral perspective, but it’s also economically and socially destructive,” Luke Hilyard, the executive director of the High Pay Center, a think tank that focuses on excessive executive pay, told The Guardian. “Anyone accumulating riches on this scale could easily afford to raise the pay of the employees who generate their wealth, or contribute a great deal more in taxes to support vital public services, while remaining very well rewarded for whatever successes they’ve achieved. The findings from the UBS report showing that the super-rich are getting even richer are a sign that capitalism isn’t working as it should.”
UBS executive Josef Stadler also acknowledged that billionaires could face societal backlash over their growing wealth as many people face months if not years of struggles.
“We’re at an inflection point,” he told the outlet. “Wealth concentration is as high as in 1905, this is something billionaires are concerned about. The problem is the power of interest on interest – that makes big money bigger and, the question is to what extent is that sustainable and at what point will society intervene and strike back?”
But it’s far from the first time that billionaires profited while millions suffered. The Institute for Policy Studies found that the wealthiest 400 billionaires in the US not only recovered from the 2008 recession within three years but increased their wealth by 80% over the following decade. By comparison, the bottom 80% of earners have still not recovered.
While government intervention has helped billionaires accumulate even more wealth, the lack of government action since the spring has resulted in an estimated 8 million Americans falling into poverty since May, according to a study from researchers at Columbia University. The lack of additional stimulus payments and the expiration of enhanced federal unemployment benefits has resulted in 6 million Americans falling into poverty over just the last three months, according to a study from researchers at the University of Chicago and Notre Dame.
The problem has been even worse globally. Between 88 million and 114 million people around the world have fallen into extreme poverty, defined as living on less than $1.90 per day, since the pandemic hit, according to the World Bank. There are now more than 700 million people living in extreme poverty and researchers expected that number to keep rising.
“This is the worst setback that we’ve witnessed in a generation,” Carolina Sánchez-Páramo, the global director of the World Bank’s Poverty and Equity Global Practice, told The Wall Street Journal.
World Bank Group President David Malpass argued in a speech this month that the problem is worse in developing economies because “rich countries” have the resources to expand sweeping “government spending programs” while poorer economies have few tools to mitigate the economic damage.
The US, by contrast, should be doing better if not for Republican reluctance to increased government relief. Federal Reserve Chairman Jerome Powell warned Congress last month that inaction in the face of growing inequality would be highly damaging to the economic recovery.
“Those are things that hold back our economy,” he said at a news conference. “If we want to have the highest potential output and the best output for our economy, we need that prosperity to be very broadly spread.”
Many analysts have also faulted Powell and the Fed for contributing to the growing inequality with policies “disproportionately benefiting stockholders,” according to the Associated Press.
Just as the coronavirus has exposed longstanding health disparities between the richest and poorest Americans, the growing inequality is largely the result of a “catastrophic failure to tackle inequality” well before the pandemic struck, according to a report from Oxfam International.
“Governments’ catastrophic failure to tackle inequality meant the majority of the world’s countries were critically ill-equipped to weather the pandemic,” said Oxfam interim executive director Chema Vera. “No country on earth was trying hard enough to reduce inequality and ordinary people are bearing the brunt of this crisis as a result. Millions of people have been pushed into poverty and hunger and there have been countless unnecessary deaths.”TIME IS RUNNING OUT We urgently need your help to tackle the challenges this country is facing — from increasing racism and police violence to attacks on democracy and the fight for the White House. Please do what you can so we can amplify the voices of hundreds of journalists, activists and changemakers working tirelessly to turn things around. Donate Now This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source. Igor Derysh
Igor Derysh is a New York-based political writer whose work has appeared in the Los Angeles Times, Chicago Tribune, Boston Herald and Baltimore Sun.
Why the super rich keep getting richer
Grace Blakeley
This week, Amazon CEO Jeff Bezos saw the largest single-day increase in
wealth ever recorded for any individual. In just one day, his fortune
increased by $13 billion. On current trends, he is on track to become
the world’s first trillionaire by 2026.
Those on the right wing of politics argue that extreme wealth is a
function of hard work, creativity, and innovation that benefits society.
But wealth and income inequality have increased dramatically in most
advanced economies in recent years. The richest of the rich are much
wealthier today than they were several decades ago, but it is not clear
that they are working any harder.
Mainstream economists make a more nuanced version of this argument. They
claim that the dramatic increase in income inequality has been driven by
the dynamics of globalization and the rise of “superstars.” Firms and
corporate executives are now competing in a global market for capital
and talent, so the rewards at the top are much higher — even as
competition also constrains wages for many toward the bottom end of the
distribution.
According to this view, high levels of inequality are a reward for high
productivity. The most productive firms will attract more investment
than their less productive counterparts, and their managers, who are
performing a much more complex job than those managing smaller firms,
will be rewarded accordingly.
But here again the narrative runs aground on contact with reality.
Productivity has not risen alongside inequality in recent years. In
fact, in the United States and the UK productivity has flatlined since
the financial crisis — and in the United States, it has been declining
since the turn of the century.
There is another explanation for the huge profits of the world’s largest
corporations and the huge fortunes of the superrich. Not higher
productivity. Not simply globalization. But rising global market power.
Many of the world’s largest tech companies have become global
oligopolies and domestic monopolies. Globalization has played a role
here, of course — many domestic firms simply can’t compete with global
multinationals. But these firms also use their relative size to push
down wages, avoid taxes, and gouge their suppliers, as well as lobbying
governments to provide them with preferential treatment.
Jeff Bezos and Amazon are a case in point. Amazon has become America’s
largest company through anticompetitive practices that have landed it in
trouble with the European Union’s competition authorities. The working
practices in its warehouses are notoriously appalling
https://tribunemag.co.uk/2018/11/organising-amazon. And a study
https://optimalcompliance.com/blog/2020/01/13/amazon-ranked-worst-out-of-the-big-six-us-tech-companies-for-aggressive-tax-avoidance/ from
last year revealed Amazon to be one of the world’s most “aggressive tax
avoiders.”
Part of the reason Amazon has to work so hard to maintain its monopoly
position is that its business model relies on network effects that only
obtain at a certain scale. Tech companies like Amazon make money by
monopolizing and then selling the data generated from the transactions
on their sites.
The more people who sign up, the more data is generated; and the more
data generated, the more useful this data is for those analyzing it. The
monetization of this data is what generates most of Amazon’s returns:
Amazon Web Services (AWS) is the most profitable part of the business by
some distance.
Far from representing its social utility, Amazon’s market value — and
Bezos’ personal wealth — reflects its market power. And the rising
market power of a small number of larger firms has actually reduced
productivity. This concentration has also constrained investment and
wage growth as these firms simply don’t have to compete for labor, nor
are they forced to innovate in order to outcompete their rivals.
In fact, they’re much more likely to use their profits to buy back their
own shares, or to acquire other firms that will increase their market
share and give them access to more data. Amazon’s recent acquisition of
grocery store Whole Foods is likely to be the first of many such moves
by tech companies. Rather than the Darwinian logic of compete or die,
the tech companies face a different imperative: expand or die.
States are supporting this logic with exceptionally loose monetary
policy. Low interest rates make it very easy for large companies to
borrow to fund mergers and acquisitions. And quantitative easing —
unleashed on an unprecedented scale to tackle the pandemic — has simply
served to raise equity prices, especially for the big tech companies.
As more areas of our lives become subject to the power of big tech, the
fortunes of people like Bezos will continue to mount. Their rising
wealth will not represent a reward for innovation or job creation, but
for their market power, which has allowed them to increase the
exploitation of their workforces, gouge suppliers, and avoid taxes.
The only real way to tackle these inequities is to democratize the
ownership of the means of production, and begin to hand the key
decisions in our economy back to the people. But you would expect that
even social democrats, who won’t pursue transformative policies, could
get behind measures such as a wealth tax.
“Building back better” after the pandemic will be impossible without
such a tax — and the vast majority of both Labour and Conservative
voters support such an approach, according to a recent poll. And yet it
appears that Labour’s leadership are retreating from the idea.
In an interview the other day, I was asked why we should care about Jeff
Bezos’s wealth if it makes everyone else better off. But the extreme
inequalities generated by modern capitalism are making obvious something
that Marxists have known for decades: the superrich generate their
wealth /at the expense/ of workers, the planet, and society as a whole.
In a rational and fair society, the vast resources of a tiny elite would
be put to use solving our social problems.
Source: Jacobin 7/26/20 https://jacobinmag.com/
Historic transfer of wealth to the super-rich as COVID-19 deaths hit record numbers
Bob Hennelly / Salon https://www.alternet.org/author/salon/
Where you or would see misery, the super-rich see opportunity. (That
includes the billionaire president.)
Indeed, amid a pandemic with a six-figure death toll, America’s
wealthiest capitalists are consolidating their unprecedented gains
realized thanks to the spread of a deadly virus their chief protector
Donald J. Trump is working overtime to spread. The coronavirus news
cycle was a perfect cover to mask what has really been happening.
Thus, as Trump’s so-called policies kill tens of thousands of Americans,
he’s making the richest even richer.
Even as the death toll mounts, including any number of essential
workers, the downdraft of Trump’s Depression is kicking in. Remember all
the hot air about premium pay for the essential workforce? According to
the latest monthly Bureau of Labor Statistics https://www.bls.gov/news.release/empsit.nr0.htm, hourly earnings for
private nonfarm payroll shrank by 35 cents and hour, while
nonsupervisory workers lost 23 cents an hour.
Based on the President’s actions, it appears that he subscribes to the
dubious herd immunity theory that almost killed Prime Minister Boris
Johnson
https://www.salon.com/2020/03/27/british-prime-minister-boris-johnson-tests-positive-for-covid-19/.
Trump has publicly articulated his strategy of “slowing testing
https://www.cnn.com/2020/06/22/politics/donald-trump-testing-slow-down-response/index.html”
while not providing tests for the Federal workforce https://thechiefleader.com/news/news_of_the_week/afge-warns-reopening-without-virus-precautions-puts-workers-at-risk/article_02ab7ed2-b16d-11ea-9d2a-6329004dc54e.html/?&logged_out=1_,_ and
he’s found insidious ways to cripple the states’ response to the virus.
And Trump’s strategy has produced truly malignant results. The states
that followed his errant advice pressed ahead with re-opening. Now, 30 states https://www.healthline.com/health-news/covid19-cases-rising-states-reopened
report an increase in COVID-19 cases, putting many hospitals in dire
straits.
With his campaign recklessly
https://www.salon.com/2020/06/22/how-k-pop-fans-and-tiktok-users-came-together-to-humiliate-trump-in-tulsa/
criss-crossing the country, Trump is the ringmaster of the nation’s
largest super-spreader events. Meanwhile, the lobbyists he’s appointed
to dismantle the regulatory state that oversee occupational health,
labor, public health and the environment continue on their pre-COVID
project of remaking the state in the image of big business.
And let’s not forget Trump’s pressing the Supreme Court to undo
Obamacare just as millions of Americans are cut adrift from their
employer-linked healthcare and fret over the healthcare implications of
surviving a bout with COVID-19.
Sick and impoverished
The accumulative result of this multi-faceted assault on the American
population, particularly communities of color, has been stunning
particularly when it comes to the rapid transfer of so much household
wealth to the richest while the poor suffer under the weight of the
pandemic-spurred recession.
As we saw during the so-called recovery from the Great Recession, Wall
Street’s parasitism of the national economy hit those same
neighborhoods of color https://www.pewresearch.org/fact-tank/2014/12/12/racial-wealth-gaps-great-recession/
hardest.
And it is happening all over again.
A analysis from the Americans for Tax Fairness (ATF) https://americansfortaxfairness.org/ and the Institute for Policy Studies https://ips-dc.org/ – Program on Inequality (IPS) documented
that in the span of three months, “the U.S. added 29 more billionaires
while 45.5 million filed for unemployment.”
The Washington Post reported that on June 14, the Federal Reserve
estimated that “more than $6.5 trillion in household wealth vanished
during the first three months of this year as the pandemic tightened its
hold on the global economy…. roughly equivalent to the economies of the
United Kingdom and France combined.”
As Chuck Collins https://ips-dc.org/ips-authors/chuck-collins/,
Director of the Program on Inequality and the Common Good https://ips-dc.org/inequality observed “since March 18th, the US
Billionaire class has seen their wealth increase by 20%, or $584
billion, since the rough beginning of the pandemic.”
Panic profits
As has always been the case in stressful times, predatory capital feeds
off the panic from something like the coronavirus. In times of great
instability, like just before war breaks out, people out of fear and the
need to get out of harm’s way, sell off whatever meager assets they own
to those who have the liquid capital to buy them.
Similarly, in a recessionary pandemic , there is great profit to be made
of off scarcity on selling N-95 masks to the highest bidder. Indeed, the
sky’s the limit for what you can get for ventilators when tens of
thousands of people are gasping for air in hospitals where the dead are
being stacked like cord wood.
This radical reversal of fortunes for American households in just 90
days threatens to gut whatever remains of the middle class, who may not
yet fully appreciate just how dire things are. Remember, before the
Trump flash depression/mass die off event, the Federal Reserve reported
that 40 percent of Americans could not scrape together $400 without
borrowing it.
Gig serfs and per diems
No doubt well over half of Americans are likely in that boat now,
setting the stage for the New Age kind of Feudalism — where the
oligarchs, who were already running things, can consolidate their
domination of our political system.
Back on June 10, Federal Reserve Chairman Jerome Powell said we were
experiencing “the biggest economic shock in the U.S. and in the world,
really, in living memory” going from “the lowest level of unemployment
in 50 years to the highest level in close to 90 years, and we did it in
two months.”
The implosion of our national economy that working people rely on has
happened so quickly our standard measurement tools are failing to
capture the dire nature of our current circumstance. Imagine you are in
a plane that’s hurtling to the earth so fast your altimeter is pinned in
position. You don’t have a sense of the rate of decline, just that you
are going down.
What pandemic?
In some ways we have been here before, where our commander-in-chief used
his power to prevent the electorate from protecting itself from a deadly
virus. Last time, it was out of concern for successfully prosecuting a
world war. This time, the subterfuge is intended to grease the skids for
Trump’s re-election.
It was President Woodrow Wilson https://meaww.com/the-great-american-cover-up-did-woodrow-wilson-facilitate-the-outbreak-of-the-spanish-infleunza
who actively suppressed word of the so-called Spanish Flu in 1918-20,
because it would have hampered the U.S. World War I effort. At least
675,000 people died in the United States and 50 million around the
worldwide. More American soldiers https://www.history.com/topics/world-war-i/1918-flu-pandemic died
from the Spanish Flu then were killed in combat.
And yet in a spin job even Trump would envy, the global scourge would be
forever named for Spain, not because it was the point of origin, but
because word of it surfaced in the press there —as their country did not
have the effective war time press censorship we had here.
The long slide
Long before COVID-19 struck, there were signs of just how much things
were deteriorating for the nation’s population with three years of
declining life expectancy. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7144704/ Increased rates
of suicide, alcoholism and drug abuse all played a role.
These data points were reported as individual trendlines and never
contextualized as the clearest signs of the abject failure of 21st
century capitalism and the ravages of unbridled greed.
It was that willful blindness by the elites, the media and much of the
top leadership in both political parties that set the stage for the
catastrophic rise of Trump.
He blended the grapes of ripe resentment in the rustbelt over being
abandoned by multinational corporations, and he mixed it with the bitter
white grievance that fingered immigrants “who were getting everything
for free” as the culprit for their slide.
Now, throughout the pandemic and the civil unrest sparkled by the murder
of George Floyd, the economy and its unprecedented unraveling has been
relegated to the “C” block on cable news.
We will get the occasional aerial view of thousands of cars lined up for
a bag of groceries, but those images could easily be mistaken for lines
of cars waiting for COVID-19 testing.
Then, after we have gotten the official COVID-19 numbers from the news
anchors, which the CDC https://www.usnews.com/news/health-news/articles/2020-06-25/cdc-coronavirus-has-infected-10-times-more-people-than-previously-thought
recently conceded may only be reflecting 10 percent of the actual
ravages of the virus, we will get stock quotes on which corporations are
the best at maximizing their profits in our time of national emergency.
All of this useless information is bookended with commercials from
corporations telling us “we are all in this together
https://www.fastcompany.com/90483063/were-all-in-this-together-why-brands-have-so-little-to-say-in-the-pandemic.”
Hardly.
Source: Alternet July 3, 2020
Top healthcare CEOs raked in combined $300 million in 2019
Jake Johnson
Annual financial filings compiled by /Axios/ Friday show that 10 of the nation's top healthcare CEOs took home more than $300 million in combined pay in 2019, compensation that Sen. Bernie Sanders denounced as "outrageous" and indicative of the industry's greed. "While Americans continue to pay, by far, the highest prices in the world for prescription drugs, the top 10 healthcare CEOs made over $300 million in compensation last year," tweeted Sanders, a 2020 Democratic presidential candidate. "We will end the greed of the pharmaceutical industry and pass Medicare for All," added Sanders, who has been targeted by industry-backed ad campaigns against universal healthcare. /Axios /reported that the executives' eye-popping compensation in 2019 "mostly came from large stock gains."
Ari Bousbib, CEO of pharmaceutical data firm IQVIA, raked in more than $104 million in 2019, according to /Axios/' healthcare executive compensation tracker. Gary Guthart, CEO of clinical technology firm Intuitive Surgical CEO, brought home nearly $50.5 million. David Ricks, chief executive at pharmaceutical giant Eli Lilly, made over $30 million. "The healthcare system is a firehose of spending," /Axios/ noted, "and a good chunk of that money always makes its way to the top."Source: Common Dreams 3/6/20 https://www.commondreams.org/