If extreme poverty is at one end of the spectrum, “extreme wealth” is at the other. The coronavirus pandemic has truly helped those belonging to that category. Jeff Bezos, Elon Musk, Mark Zuckerburg and six American tech titans added $360 billon to their already extreme wealth, $1 billion every day.
FB Zuckerburg is worth more than $100 billion. Tesla’s
Musk competes with Amazon’s Bezos for the first spot, usually decided by the
moods of the stock market.
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In most countries, rich and poor, the unemployment
rate now exceeds 15%. The pandemic has provided the biggest economic shock
since the Great Depression. In the USA alone, 20.5 million Americans lost their
jobs. Low wage earners, manual workers have been disproportionately affected,
struggling for economic and emotional survival.
This has led some economists to talk of the “K shaped
recovery”. The wealth of the rich and the extreme rich going up and the poor
classes staring at a financial abyss.
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Even experts now assert that stock markets are
completely divorced from reality. Covid-19 numbers and share prices are capable
of reaching peaks at the same time. However, for the extreme billionaires, stock
markets are always real. Why did their shares boom during the pandemic? Because
you and me and everybody else was helping the super rich. Just six stocks; Amazon,
Facebook, Netflix, Google, Microsoft, Apple were responsible for 60% of the
market boom. Even those of us who are not Americans made increasing use of
these brands.
Since 2014, tech stocks have dominated share markets.
But the pandemic was an unforeseen gift for them. Work from home, online
schools and universities (Google classrooms), bored people running marathon
film sessions on Netflix, people ordering every little thing from Amazon, food
delivery apps, and flourishing social media (WhatsApp owned by FB) meant we
were all helping the extreme billionaires get richer every day.
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The total wealth of billionaires went from $8 trillion
(twelve zeros after eight) to $13 trillion in twelve months.
The central banks of the world injected an
unprecedented $9 trillion stimulus to save the economy. It is suspected most of
this stimulus went into financial markets and from there into the pockets of
the extreme billionaires.
Elon Musk is a special case. He is considered by some
as a visionary hero who will make the world clean with his electric vehicles.
The gullible young who invested in Bitcoin, succumbing to Musk’s tweets, consider
him an evil manipulating genius. (Bill Gates’ wise advice: invest in Bitcoin
only if you are richer than Elon Musk). Until the pandemic, Musk was never part
of the top 10. Tesla’s share had lingered around $60 in 2019. During the
pandemic, it rose 15 times, peaking at $900 a share; making Musk the world’s
richest man. He then went and bought $1.5 billion worth of bitcoin, like going
to a Gap store and buying a pair of jeans. Unlike Gates, Bezos and Zuckerburg;
Elon Musk is eccentric and volatile. I suspect he can go down as rapidly as he
went up.
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What do these ultra-rich need so much money for, is a
question frequently asked by those who don’t have much money. In fact, it is
often observed that the ability and willingness for charity are inversely
proportional.
Bezos, accused of risking the lives of Amazon workers,
donated $150 million (0.26% of the profits), Musk reportedly gave $5 million (0.004%
of the wealth windfall) and a few dozen ventilators, Zuckerburg’s wife gave
$104 million (0.36%) to support covid research, testing and treatment.
Bill Gates, known for his philanthropy, donated $1.75
billion (7.3%). Other noteworthy exceptions were McKenzie Scott, Bezos’s
ex-wife and Jack Dorsey, Twitter’s CEO, who continue to donate substantial
amounts.
Most other American extreme rich resorted to what is
known as “zombie philanthropy”. They donate to trusts created and controlled by
themselves. The money will stay in those trusts until the pandemic is over, and
then be quietly taken back. It is the same with taxes. Most extreme rich are
able to use their financial muscle to find enough loopholes to pay little or no
taxes.
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I won’t blame those guys if they wish the pandemic to
continue forever.
Ravi