What should good societies do when a weal-thy few reap enormous financial windfalls during a global pandemic?While millions lost their lives, livelihoods, health and wealth, the world’s...
What should good societies do when a weal-thy few reap enormous financial windfalls during a global pandemic?
While millions lost their lives, livelihoods, health and wealth, the world’s billionaires and super-rich prospered. According to research from Americans for TaxFairness and the Institute for Policy Studies, between 18 March 2020 and 19 February 2021, the combined wealth of US billionaires increased by $1.3trn, a 44.6 percent increase in the space of just 48 weeks.
The concentration of wealth is staggering. There are now 661 billionaires in the US, with a total wealth of $4.26trn as of 19 February 2021, up from $2.9trn on 18 March 2020, nearly a year earlier. For perspective, the combined wealth of the bottom half of all US households, 165 million people, is $2.4trn, according to the Federal Reserve.
Elon Musk’s wealth grew by an astounding $157bn, from $24.6bn on 18 March 2020 to $182bn on 19 February 2021, a nearly seven-fold increase, boosted by the rapid increase in the value of Tesla stock.
Jeff Bezos’s wealth grew from $113bn to $189bn over the same period, an increase of almost 60 percent. Mark Zuckerberg’s wealth grew from $54.7bn to $95.7bn, fueled by his ownership of Facebook.
Dan Gilbert, chairman of Quicken Loans, saw his wealth skyrocket by 559 percent, from $6.5bn in March 2020 to $42.8bn on 19 February 2021.
These are democracy-distorting levels of concentrated wealth and power. And many of these billionaires control powerful companies with the ability, especially during the pandemic, to consolidate their market share and monopoly power over large sections of the US and global economy. Amazon, Walmart and Target have all benefited from having their main-street competition effectively shuttered under the artificial economic conditions of the pandemic.
The wealthy do not always benefit during economic adversity. In the aftermath of the 2008 recession, US billionaires saw their fortunes decline along with everyone else’s. It wasn’t until almost four years later, in September 2012, that the total wealth of the Forbes 400 exceeded its pre-2008 recession levels.
While some increases in billionaire assets mirror the overall rise in stock markets, the largest gains reflect their ownership stakes in powerful companies that have taken advantage of temporary monopoly and home isolation conditions created by the pandemic.
Online retail, restaurant and food delivery apps, telemedicine, big pharma, and video-conferencing have all reaped windfalls from the unusual pandemic economy. Of the roughly 56 new billionaires that emerged over 2020, many are associated with initial public offerings at companies like Doordash, AirBnB and Snowflake.
These unseemly inequalities are the context for a debate over who should pay for trillion-dollar COVID-recovery packages. While politicians of all persuasions have largely avoided talking about how to pay for the trillions in deficit spending over 2020, the moment has now arrived.
Excerpted: ‘COVID-19 Has Exacerbated Extreme Levels of Inequality. It’s Time for a Billionaire Wealth Tax’