SO RICH, IT'S SICK
World’s biggest billionaires stack assets even higher during global pandemic
No one has weathered the COVID-19 pandemic quite like America’s booming billionaire class.
Since the coronavirus started shutting down much of the U.S. economy in mid-March, the country’s top 20 billionaires all watched their net worth balloon by multiple billions — while much of the rest of America struggled to stay afloat.
Amazon boss Jeff Bezos – the richest man in the world – posted a stunning 70% spike in his net worth as his personal holdings surged from $113 billion in midMarch to $192 billion on Friday, according to real-time tallies from Forbes.com.
Tesla and SpaceX boss Elon Musk saw his personal fortune skyrocket nearly 300% during the same period, jumping from $24.6 billion in mid-March to $92 billion last week.
Facebook co-founder Mark Zuckerberg became a centibillionaire for the first time in late August, when his newly minted riches took him from about $54.7 billion in mid-March to the breathtaking $100 billion benchmark.
Some of biggest windfalls went to Quicken Loans mortgage magnate Daniel Gilbert, Zoom Video boss Eric Yuan and Twitter co-founder Jack Dorsey.
Gilbert’s riches exploded more than 600% over the past seven months to reach $46 billion last week. Yuan’s family wealth more than quadrupled to $24.7 billion, and Dorsey’s treasure chest more than tripled to reach $10.1 billion.
“The top 70 U.S. billionaires have as much wealth combined as the bottom half of all U.S. households,” Chuck Collins, a senior scholar at the Institute for Policy Studies, a Washington think tank, told the Daily News.
Collins, the great-grandson of meatpacker Oscar Mayer, gave away his inheritance at a young age and later co-founded the group Patriotic Millionaires.
He calls the COVID-19 pandemic an “accelerant” to the country’s growing class divide and expects the rich to keep getting richer as millions of other Americans slip into poverty now that the CARES Act social safety net has dried up with no replacement.
“Next week, I predict we’ll hit a trillion dollars of wealth increase for the 640 billionaires in the U.S., unless the market tanks. As of [Oct. 12,] U.S. billionaires had seen their wealth increase over $930 billion since mid-March,” he said Thursday.
Over the same seven months, U.S. unemployment hit a record 14.7% in April, its highest level since the Great Depression, before edging down to 7.9% last month. Before the COVID-19 national emergency, the unemployment rate was 3.5% in February.
The federal deficit, meanwhile, soared to a record $3.1 trillion for the fiscal year that ended Sept. 30, the Treasury Department confirmed Friday.
Collins said the resurgent stock market has essentially uncoupled itself from the broader economy and is driving much of the billionaires’ bonanza.
Investors are “making bets on the future,” and the biggest gainers are the billionaires best-positioned for the era, he said. These so-called “pandemic profiteers” are breaking new ground in the fields of cloud-based technology, video conferencing, prescription drugs and online retail, he said.
“Wall Street is anticipating the next wave of monopolies, where huge winners will crowd out everyone else,” he said. “It’s a de-linking of Main Street’s real economy and Wall Street’s speculative economy.”
As more brick-and-mortar stores close due to coronavirus containment measures, investors expect Bezos’ Amazon to pick up that slack, the thinking goes.
And Musk’s pioneering positions in electric cars, sustainable power and space travel seem like smarter, future-leaning investments compared to fossil fuels.
Indeed, one billionaire who’s actually seen his fortunes wane during the pandemic is petroleum baron Philip Anschutz.
His eye-watering wealth built largely through oil-drilling and railroads has dipped from $11 billion in mid-March to $10.1 billion seven months later, according to Forbes.
Tech tycoons are the new industrialists, and they’re dominating their respective markets with minimal government oversight, experts said.
“The high-tech billionaires are doing so well because they’ve cornered the market,” former U.S. Labor Secretary Robert Reich told The News.
“If we still had anti-trust laws with any teeth, we’d have either busted up Amazon by now or made sure Bezos shared some of the algorithms in his secret sauce. But anti-trust has been dead for years, so Bezos is making a killing,” he said.
He said the lack of anything resembling an “excess profit tax” during our coronavirus emergency also is benefitting billionaires. Such statutes were enacted during WWII to tax profits in excess of prewar earnings.
“If we had [one] now, we’d probably see that high-tech firms would not be able to exploit this emergency and enjoy such high profits,” Reich said.
And of course the ultra-wealthy have harvested huge sums thanks to the 2017 Trump tax cuts and the decision by the Federal Reserve in March to start buying back massive amounts of corporate debt to smooth market volatility.
“All of that contributed to making the rich even richer over the last several months,” Reich said.
“Corporations for years were taking advantage of low interest rates to buy back stock, giving their executives and investors a sort of sugar high. A lot of that would have been junk after February and March, but the Fed stepped in and bought the debt. It was a form of bailout for the big companies, and the execs get the benefits,” he explained.
The experts who spoke to The News also agreed billionaires simply have the means to make themselves nearly immune to market mayhem.
They spend millions on the socalled “wealth defense” industry, hiring tax specialists, lawyers and money managers to protect their prosperity.
“They shift their money into dynasty trusts, offshore tax havens and anonymous shell companies to avoid taxation. We should be very concerned. When billions come due for all this deficit spending, they’re going to be like the freeloaders trying to slip out the back door of the restaurant without paying the bill,” Collins said.
“They have trillions of dollars hidden in the shadows,” Collins said of those at the top.