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May 14, 2021
20:00
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During the corona pandemic, the very rich on this globe became inordinately richer. It is a detrimental side effect of the constant pumping of money from the central banks.
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A selection from the world of the 1 percent of the 1 percent this week. With great zeal, the Dutch of Oceanco are putting the finishing touches on a toy by Jeff Bezos, a 127m yacht of about half a billion dollars. Or better: on one of his many toys. The luxury yacht sector is booming like never before, in the upper upper segment.
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Turbo
The corona pandemic has, in many parts of the world, calculated Financial Times in a detailed study Friday, made the super rich much richer. The top ten gained in one year a capital that, until recently, was not even achieved in a lifetime for that category of super rich. The turbo on the super-rich capabilities had been around for a while, but was greatly strengthened in the corona crisis by the many free money. Starring Russian oligarchs, but also for say the Frenchman Bernard Arnault. Especially when you compare the growth of their assets against the gross domestic product of their country.
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The exuberant growth of wealth among the extremely few is causing a colère among those who are struggling in this crisis: workers with insufficient purchasing power, middle class workers who see half of their income flow away from taxes, locally-rooted entrepreneurs and the self-employed.
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This exuberant growth among the extremely few causes a colère among those who are struggling in this crisis: workers with too little purchasing power, middle class employees who see half of their income lost to taxes, a lot of large and medium-sized companies, locally-rooted entrepreneurs and the self-employed. Peter Wouters (Beweging. Net) put it this way in this newspaper in response to Rerum Novarum this week: “Not the 0.4 percent was the problem in the wage negotiations, but the anger about the Amazons.”
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Populist
The problem is that wage negotiations are a struggle at the level of a country, but that colère refers to something that is not happening at the national level. Moreover, Belgium is one of the most equal countries in the world, where slogans such as ‘let the rich pay for the crisis’ sound populist good, but do not apply in practice.
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Capabilities are volatile and escape power tax even before the ink of a new tax is dry. A minimum tax for multinationals will only be effective if it is introduced worldwide. The support of US President Joe Biden creates opportunities. Europe must speak with one voice to speed things up. But even then, an awful lot of water will flow into the sea before such a thing is introduced on a global scale. Yet it is a track that deserves to be followed.
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As long as the central bankers keep pumping money, the super rich will become disproportionately richer. It is not an accidental side effect, but simply the result of what they do.
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Certainly, entrepreneurs who take risks with their capital can and must be generously rewarded for this. But the ever-growing skew by a few multi-billionaires is an aberration.
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The polarized debate barely mentions one of the root causes of that aberration: the central banks throwing money. Since the beginning of the crisis, they have been pumping more than $ 9,000 billion into the financial system, supposedly to support the real economy. But the cheap money mainly feeds the financial markets in all their forms. Capital flows largely to those who already have large capitals.
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Remedy
As long as the central bankers keep pumping, the super rich will become disproportionately richer. It’s not an accidental side effect, but just the result of what they do. Who needs an argument to gradually curtail the stimulus policy? We have come to the point where the cure threatens to become worse than the disease.
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