US Billionaires Got 70% More Wealth Under COVID. They Didn’t Deserve Any of It.Luke Savage Jacobin
New data shows that Elon Musk's fortune grew by 750% during the pandemic. It's not because he worked 750% harder than the rest of us.
In this regard, newly released data from the Institute for Policy Studies offers remarkable clarity as to the scale of the billionaire class’s COVID-19 windfall in America — the top-line numbers almost beggaring belief. In short, the combined wealth of the country’s billionaires has risen by 70 percent since the beginning of the pandemic, jumping from just under $3 trillion to roughly to over $5 trillion as of late last week. This spike in concentrated wealth has also seen many millionaires become billionaires, with the ranks of the class as a whole swelling by 131 — from 614 in March 2020 to 745 today. To put that in perspective, as the institute’s Chuck Collins notes, $5 trillion easily exceeds the $3 trillion currently held by the poorest 50 percent of America’s households — meaning that well under a thousand individuals now own almost 70 percent more wealth than half the country combined.
Though many have seen their fortunes skyrocket during the pandemic, such increases have been quite unevenly distributed. Elon Musk, for example, has seen the paltry $24.6 billion he owned in March of last year grow to $209.3 billion — a spike of more than 750 percent. For comparison, the country’s second-richest man, Jeff Bezos of Amazon, has added a mere $80 billion to his fortune, while Bill Gates has gained $34 billion. Whether taken together or examined in isolation, the numbers are dizzying (a full list is available here), and the policy solutions are obvious. The average billionaire pays an effective federal income tax rate of only 8 percent, and, thanks to various loopholes, exemptions, and jurisdictional gaps, most billionaire wealth simply eludes taxation altogether.
In many ways, the billionaire class’s pandemic windfall is simply a reminder of what most of us intuitively knew already: American society is deeply unequal, the rich are getting richer, and extreme concentrations of money badly need to be taxed. But it’s also arguably the best occasion in years to call into question the deeper axioms of wealth and wealth creation used to sustain and legitimize the existence of billionaires — and to underscore the simple reality, obscured by decades of ideology and propaganda, that extreme wealth has nothing to do with hard work or even innovation. Elon Musk hasn’t produced 750 percent more social or economic value since March 2020. Bill Gates didn’t work 35 percent harder or invent some new gadget and reap the rewards through sheer moral desert.
A few pandemic profiteers happen to belong to industries that have been able to capitalize on lockdowns or other COVID-era policies. But the single and simplest reason for the massive spike in billionaire wealth over the past nineteen months is that central banks have injected trillions into the global economy. And, as the Financial Times’ Ruchir Sharma writes: “Much of that stimulus has gone into financial markets, and from there into the net worth of the ultra-rich.” While those central bank policies may have been unavoidable, given the abdication of elected governments in the face of economic crisis, it shows once again how little the wealth of the billionaire class — and, correspondingly, its entire existence — is linked to innovation, invention, or broad social value, and how much it is to the vagaries of asset valuation (to say nothing of inheritance, which is the sole reason many millionaires and billionaires are filthy rich).
This matters for intrinsic moral reasons, but it also matters because the billionaire mythos leans so heavily on a fraudulent narrative of individual Prometheans creating wealth and opportunity for all by way of personal grit and exceptional creativity. While this has always been a fiction, the pandemic is a stark reminder that the traditional capitalist formulation of creators and scroungers is, in fact, a precise inversion of reality. Capitalists don’t create wealth, but they do own plenty of it — and that wealth invariably begets even more.