Farhad Manjoo is an opinion writer for the New York Times. In this column, he says that the wealth of American billionaires has grown dramatically during the pandemic. We know that millions of Americans are facing hunger, poverty, and evictions. Inequality is expanding.
He writes:
When I called up Chuck Collins on Tuesday afternoon, I found him glued to one of the grimmest new metrics documenting America’s economic and social unraveling.
Collins is a scholar of inequality at the Institute for Policy Studies, a progressive think tank, and since March he has been tracking how the collective wealth of American billionaires has been affected by the coronavirus pandemic. In previous recessions, Collins said, billionaires were hit along with the rest of us; it took almost three years for Forbes’s 400 richest people to recover losses incurred in 2008’s Great Recession.
But in the coronavirus recession of 2020, most billionaires have not lost their shirts. Instead, they’ve put on bejeweled overcoats and gloves made of spun gold — that is, they’ve gotten richer than ever before.
On Tuesday, as the stock market soared to a record, Collins was watching the billionaires cross a depressing threshold: $1 trillion.
That is the amount of new wealth American billionaires have amassed since March, at the start of the devastating lockdowns that state and local governments imposed to curb the pandemic.
On March 18, according to a report Collins and his colleagues published last week, America’s 614 billionaires were worth a combined $2.95 trillion. When the markets closed on Tuesday, there were 650 billionaires and their combined wealth was now close to $4 trillion. In the worst economic crisis since the 1930s, American billionaires’ wealth grew by a third.
It is difficult to think of a more succinctly obscene illustration of the unfairness of the American economic and political system.
“The economy is now wired ‘heads you win, tails I lose,’ to funnel wealth to the top,” Collins told me.
Billionaires amassed their new billions just as millions of other Americans plunged into dire financial straits. More than 20 million people lost their jobs at the start of the pandemic. As Congress lazily contemplates whether or not to bother to continue to provide economic assistance to America’s neediest, as many as 13 million people are at risk of losing the expanded benefits that keep them just beyond the grip of hunger and homelessness.
Food banks across the country are bracing for another surge in demand. If a federal moratorium on evictions is allowed to expire at the end of the year, millions of Americans will have to pay months of back rent — making them vulnerable to what housing advocates warn will be a wave of evictions.
Why are American billionaires doing so well while so many other Americans suffer? Part of the story is garden-variety American inequality. Stocks are overwhelmingly owned by the wealthy, and the stock market has recovered from its early-pandemic depths much more quickly than other parts of the economy.
But some billionaires are also benefiting from economic and technological trends that were accelerated by the pandemic. Among these are the owners and investors of retail giants like Amazon, Walmart, Target, Dollar Tree and Dollar General, which have reported huge profits this year while many of their smaller competitors were clobbered as the coronavirus spread.
Then there are companies that have bet on the rapid digitization of everything. Eric Yuan, the chief executive of Zoom, became a billionaire in 2019. Now he is worth almost $20 billion. Apoorva Mehta, the founder of the grocery-delivery company Instacart, was not a billionaire last year; this year, after a spike in orders that led to a new round of investment that pumped up the value of his company, he’s safely in the club. Dan Gilbert, the chairman of Quicken Loans, was worth less than $7 billion in March; now he commands more than $43 billion.
But like in the rest of the economy, there is a great deal of stratification even among billionaires — richer billionaires got even richer in 2020 than the poorer ones did.
Some of the numbers are staggering. Jeff Bezos, Amazon’s founder, was worth about $113 billion at the start of the pandemic. Now he is worth $182 billion — an increase of about $69 billion. Jim, Alice and Rob Walton, three of the largest shareholders of Walmart, saw their combined wealth grow by $47 billion during the pandemic.
This is a good time to urge you to read The Spirit Level: Why Greater Equality Makes Societies Stronger.
The more equal societies are, the happier they are. We are sinking into an abyss of anger, hopelessness, envy, and despair.
Reblogged this on David R. Taylor-Thoughts on Education.
Yeah….and all the jobs now being added to the economy are pretty low wage, the moratorium on rent/evictions will expire soon and many more will lose housing, health insurance and other benefits and stimulus benefits will have to end. So the billionaires are making out like bandits right now, but if no one has much money to spend, how will they be able to sustain these numbers in the market? They’ve already sucked all the juice from the turnip crop…..you reap what you sow! MeThinks that come January/February, the financial world will take a dive for the worse….and that may not be a very bad thing? We should always strive for a state homeostasis.
Actually wages went up not because workers received more wages. More low wage workers are unemployed or out of the work force.
Does anyone know if landlords– or at least small landlords– are being protected from foreclosure during the moratorium on rents/ evictions? When we bought a 2-family in Brooklyn, the rent covered 1/2 our mortgage/ RE taxes. We could not have lasted 8 months without it. My parents ran a small contracting biz, whose seasonal volatility was evened out by owning a residential & a couple of commercial rentals… They would have gone bust w/o that income for 8 months… There must be many people in those situations.
This is why we need a renewal of the union movement, a strong union movement. It would be nice if we could get rid of the Taft-Hartley Act for openers and all the right to work for less laws in this country. The GOP is rabidly opposed to unions and the Democratic party has not been a strong friend of unions for many years. US unionization rate-10.1%, Sweden- 64.9% (2018 figures for both countries). Gee, I guess there is no war on unions in Sweden.
This populist Blue Collar retired Union activist does not disagree with you. Unfortunately too many Union members do .
Take Staten Island NY , the only Red borough in the City of NY. Also the highest unionization rate in the City , mostly municipal workers including teachers and union tradesman . Yet Max Rose who came in , in the Blue wave of 18 and tried to separate himself from the Squad. Taking a middle of the road yet pro worker image just lost . He did not just lose he got whipped. Neo Liberal Democrats from Clinton to Obama may have failed Union workers . But Legislatively the House had passed EFCA and the Pro Act twice. Only to watch it die in the Senate.
Thomas Frank partially covers it . But Kurt Andersen’s “Evil Geniuses: The Unmaking of America ” gives a thorough examination of what went wrong.
As Andrew Young (no fan) once said “the middle class is getting what it deserves. ” They forgot who they were and fell for the racial dog whistles for 50 years .
It is no accident that Unionization drives in the South, in most of the country, fail along racial lines.
BTW, it is no surprise that State Island is having a huge Covid outbreak. They believe Don the Con.
retired teacher
They saw the first wave as striking minority communities in “essential services ” Like supermarkets and other industry that could not work from home. Like rural America they never thought it would affect them.
I don’t entirely understand your shorthand, Joel. (Maybe I need to read the authors you recommend.) Do you really attribute the fall of unions to racism? What little I’ve been able to glean from googling over the years: some sort of affective tide seemed to turn w/the steel strike of ’59, a pyrrhic victory that helped usher in foreign steel import. I’m sure there’s much more to it than that. I’ve read analyses claiming it tested the limits of the New Deal order, so perhaps a political watershed, encouraging the New Deal backlash seen openly in Goldwater’s candidacy (then heading underground). As late as mid-‘70’s, when I was a buyer in an engrg-constr firm, I remember the first time we ever bought non-US (Japanese) steel: it felt like a scandal, was guilt-ridden.
But it seems the public saw the ’59 steel strike (& accompanying auto & electrical worker strikes) as an overreach, & perhaps that injected a sort of fragility that allowed Reagan 20 yrs later to blame unions & set about busting them, with public support—at a time when everyone was looking for scapegoats for decline in mfg jobs caused by automation & rising Asian markets… ? Meanwhile I’m glad to learn the Congress has been on this, & again as recently as Feb. We need a Dem-majority in Senate.
Joel-
I recognize the preference to ignore the history of anti-black sentiment in the Italian-American population segment. (Substantiation for the conclusion about the attitude can be found on-line in the Britannica Encyclopedia)
Data from an internet search-
Staten Island has a higher percentage (35.7%) of Italian Americans than any other county in the U.S.
Of the 66% of people in Staten Island who are religious, 56.4% are Catholic. There are at least 4 times more white Catholics living in Staten Island than any other borough. (White Catholics nationally supported Trump at 60%.)
IMO, if the Catholic hierarchy in Staten Island encouraged families of union members to vote Democratic, the picture would begin to change. Nationally, the Catholic hierarchy is growing its influence for and within the GOP.
“(Substantiation for the conclusion about the attitude can be found on-line in the Britannica Encyclopedia)” – couldn’t find, would you mind providing link? thanks
Bethree-
I couldn’t quickly find the entry. In a prior thread I quoted from the source and identified it. The topic is not novel. A couple of sources I quickly found are, “Are Italians Racist? Let’s Talk About It”, by Maria Elisa Altese (4-24-2019, VNY La Voce di New York) and, a discussion at Millions, 2-22-2019, “What is Italian America? It’s Complicated”, by Ed Simon. If you scroll down to the paragraph that begins, “But as Gulielmo explains, by the 2nd and 3rd generations …Italians were not always white and the loss of that memory is one of the great tragedies of racism in America…we traded Giuseppi Garibaldi for Frank Risso- Philly’s racist mayor in the 70’s…we’re saddled with Antonin Scalia and Rudy Giuliani…”
The authors of the 3 cited references didn’t believe (nor, do the overwhelming majority of observational writers and pollsters believe) that it is necessary to qualify with an added statement, “The characterization of the demographic segment is not all inclusive i.e. not every individual in the segment can be described thus”.
I hope the precedent for that understanding of common practice exists in this thread.
The current dichotomy in the economy demonstrates that the stock market is not the economy. Billionaires and some corporations are making tons of money. Even in certain real estate markets there are bidding wars because buyers want to benefit from low interest rates. The other side of the economic coin is very different with people lining up at food banks and widespread evictions on the horizon.
When it comes to the stock market, what goes up can also come down. Stock market wealth is not guaranteed to always climb.
Yep….and the higher it climbs, the farther it has to fall! What goes up must always come down.
Once you pass a billion, your holdings multiply regardless of stock market.
Check out Bloomberg’s Billionaires Index