How much wealthier are you this year?
I was reading a story that dropped across my desk and caught my eye from Australia, where the top of the rich list, Gina Rinehart (mining) over doubled her wealth (109%) in the last 12 months, to now have a 29 billion dollar fortune. What was interesting is that overall, the top 200 richest in Australia added a collective 24% in 2020 to have a total wealth of $424 billion.
“At the start of the pandemic many of the fortunes of the nation’s wealthiest were crumbling, but they have proven to be exceptional business builders. They have taken advantage of shifting demands within the economy, driving overall wealth to new highs.”
This was a quote taken from the article and the Australian Financial Review, who compile the list. Do you get the feeling that the impacts of the Covid epidemic aren't impacting everyone equally? With their "fortunes crumbling" at the start, it seems that they are pretty fortunate with the timing - but of course it is because they are "exceptional business builders".
While many, many normal people have been impacted heavily by layoffs and let-goes, those with the means have extended their wealth incredibly. It seems that for the most part, the epidemic has proven to be a brilliant tool for extracting more from the bottom and funneling it to the top and it doesn't look like the process is going to slow down any time soon.
Part of these record gains is due to the money being printed and pumped into the global economies, with bailouts going to businesses and and institutions, but not so much going directly to the people. This means that it is up to the corporations to distribute the wealth, but that hasn't seemed to have happened and instead, they are going from strength to strength. It is going to be interesting to see the aftermath reports come out of the closet over the next few years, but by then it will be too late to do much about it.
The impacts of these lockdowns are going to not only be felt in many social ways for years to come and personal wealth of normal people, they have apparently extended the gap to the rich in ways that mean we will be subject to even more reliance on and control from them. When Bezos extended his wealth from around 110B to 200B, it was very well covered, but he is not the only one - with the 644 billionaires in the US adding almost a trillion between them since March.
The wealth of the nation's billionaires rose to $3.88 trillion as of October 13, a jump of $931 billion from March, an analysis from Americans for Tax Fairness and the Institute for Policy Studies, two left-leaning groups, found. That's almost twice the $2.1 trillion in wealth held by the bottom half of the U.S. population, or about 165 million people, they added. source
Pretty incredible that 644 people in the US have as much wealth as the bottom 165 million, hey? But, that doesn't factor in all the people that aren't billionaires, but might only have between 10 and 999 million, each. I wonder what percentage of the country has over 10 million in wealth and how much it is in comparison to everyone else in the US.
While there is the one percent, but people don't seem to realize that the percentage difference between the bottom of the one percent and the poorest, is less than the bottom of the one percent and the richest. I don't think we have to feel too bad for those poor millionaires that just scraped into the 1% though, as they aren't exactly on the bread line.
It was said above about the billionaires being exceptional business builders and this isn't untrue, as they are very good at building wealth and taking advantage of situations, as they have the disposable capital to invest at pretty much any time and no fear of destitution. But, while fortune favors the brave, if there is no mortal risk, is they actually brave? Fortune favors the rich and in this economy, once rich, it is very, very hard to lose it. While we protect our "right to be rich", we don't recognize that it is much like a token inflation pool where there are billions of people vying over what is being released, without realizing it is a tiny fraction of the entire supply and the majority of the supply is already staked to a handful of users.
If we are going to look at the centralization of wealth, what does it mean when 650 people have the wealth of 165 million other people in the economy, what does it mean when 1% own so much?
From an article last year (2019) in Bloomberg:
The very richest had assets of about $35.4 trillion in the second quarter, or just shy of the $36.9 trillion held by the tens of millions of people who make up the 50th percentile to the 90th percentile of Americans -- much of the middle and upper-middle classes.
What that means is that just with the addition to the billionaires since March, the flippening has already happened and now the richest in the US own more than the entire middle class. Factor in all the other very rich who made gains and the likely retraction of wealth in that middle-class group, and I would predict that the wealth gap has grown much, much larger since the start of the pandemic.
Wealth inequality is going to be the driver for a great deal more social unrest, what we have seen so far in the last six months with riots and taking over regions of cities is just the start, and it isn't going to be confined to the US alone. We are likely seeing the beginning of one of the most tumultuous times in living memory and it is probably going to bring a great deal more violence with it.
I do not know precisely what can be done about it, but at some point the economy is going break under the strain of itself, a system designed to do exactly what it has done, create a gap between the rich and the poor. With wealth attracting wealth, the speed of growth for the richest is exponential, as is the slide into poverty as the top consumes evermore of the tail, with even those making gains at the bottom, still slipping further behind the top.
[ Gen1: Hive ]
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