US billionaires have become $565 billion richer during the pandemic
The acceleration of wealth for the richest Americans is being driven by the remarkable recovery of the stock market, which has skyrocketed in large part because of unprecedented action from the Federal Reserve.
“The stock market taking off — and decoupling from the real economy — is exacerbating inequality,” said Kristina Hooper, chief global market strategist at Invesco.
Big Tech is thriving
The Fed’s emergency response, including slashing interest rates to zero and promising to buy unlimited amounts of bonds, was designed to make risky assets like stocks look more attractive. Investors have essentially been forced to gamble on equities — and Big Tech in particular is benefiting from that.
Unemployment could soon hit nearly 20%
Meanwhile, the United States has been gripped by mass unemployment caused by social distancing requirements imposed to fight the pandemic.
“Surging billionaire wealth juxtaposed with the suffering and plight of millions undermines the social solidarity required for us to recover together in the years ahead,” Chuck Collins, co-author of the IPI report, said in a statement.
Of course, millions of average Americans are also benefiting from the V-shaped recovery in the stock market. The rebound has lifted the value of investment portfolios, pension funds and retirement accounts. Even just betting on a vanilla fund that tracks the S&P 500 would have given investors a tidy return of nearly 40% since the March 23 lows.
About 52% of families owned stocks directly or indirectly through retirement plans like 401(k)s, according to 2016 stats from the Federal Reserve.
These trends help explain the unrest that has gripped the United States. Although the initial catalyst was police brutality, the protests and riots are taking place in a nati
on divided across racial and economic lines. And those fault lines appear to be growing during the pandemic.
“You’ve got a combustible concoction of lost income and inequality,” said Joe Brusuelas, chief economist at RSM International.