Billionaires get richer as unemployment reaches record levels

https://finance.yahoo.com/news/weal...om-coronavirus-pandemic-report-182111832.html

As 30 million Americans have lost their jobs over the last six weeks amid the coronavirus pandemic, America’s billionaires are becoming even richer. According to a new report from the Institute for Policy Studies, a left-leaning think tank, over the past 6 weeks, American billionaires have seen their wealth increase by $406 billion — a boost of just under 14% to their net worth.

An initial decline

“U.S. billionaires have seen ups and downs over the same period. Their ranks increased from 607 to 614 people, but their total wealth declined from $3.111 trillion in 2019 to $2.947 trillion in 2020,” the report noted.

But unlike most Americans, the country’s wealthiest have managed to recover their losses, and in many cases increase their net worth.

After an initial decline, by April 5, billionaire collective wealth rose to $3.017 trillion from $2.9 trillion a few weeks prior. “The U.S. billionaires, the last couple of weeks seem to be ‘delinking’ from the U.S. economy,” said Chuck Collins, one of the authors of the report. “There are some huge winners.”

Just 5 days later, according to the report, their wealth surged to $3.229 trillion — surpassing their 2019 levels.

“Between March 18 — the near bottom point of the pandemic financial swoon — and April 10, 2020, U.S. billionaire wealth rebounded by $282 billion,” the report states.
‘Pandemic profiteers’
Roughly half of the world’s billionaires have seen their wealth increase since the beginning of the year. According to the report, eight billionaires in particular saw their wealth increase by over $1 billion each.

“There’s a subgroup of people you can call ‘profiteers’ that are economically reaping enormous benefits,” Collins said.

Most billionaires derive their net worth from business holdings and investments.

How they did it

But, he said, the “larger trend” is that Wall Street “typically” rebounds faster than the rest of the economy.

“It’s still volatile,” Collins said. “The markets may still go down substantially but in the short term, it’s odd that so much bad news would be accompanied by a surge and an updraft at the top.”

Additionally, Collins says, going into the pandemic, the scales were tipped in favor of the billionaire class. “The reward funnel,” Collins explained, moves upwards. “The tax policies were favorable to that class,” he added.

What’s more, stimulus packages passed by Congress have also benefited some of the country’s wealthiest.

‘Unseemly’ and ‘unethical’

Collins said that in exchange for coronavirus stimulus packages, companies should give greater transparency, especially about where they make their profits.

He has also called for an excess profits tax so that “companies that are making so many windfalls of this moment” are taxed at “steeply progressive levels.” The funds gained from this tax, he said, could be reinvested into public health.

“You need the government to step in and say ‘this is not the moment to grab and hoard wealth, and extract from other people’s misfortune’,” Collins said. “It’s unseemly and unethical.”

“We are… creating a ‘we are all in this together moment’,” Collins said. “And some are using that moment to extract wealth from the economy.”