Since the pandemic began, many American billionaires have gotten even richer despite one of the country's worst recessions. NPR explores the reasons why and the implications for the future.
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What if one day Jeff Bezos woke up in his $23 million Washington, D.C. home...
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UNIDENTIFIED REPORTER #1: The 34,000 square foot mansion includes 11 enormous bedrooms.
CORNISH: ...Or his $80 million New York penthouse...
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UNIDENTIFIED REPORTER #2: All combined, you have four floors totaling more than 17,000 square feet.
UNIDENTIFIED REPORTER #3: Please, Mr. Bezos, invite us over.
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CORNISH: ...Or in his $165 million LA mansion...
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UNIDENTIFIED REPORTER #4: The purchase is reportedly the highest paid for residential real estate in the LA area.
CORNISH: Wherever he woke up, say he decided that morning he was feeling generous.
ANAND GIRIDHARADAS: So Jeff Bezos, founder and CEO of Amazon, has 876,000 employees around the world.
CORNISH: Writer Anand Giridharadas told us about this hypothetical. And we should note, Amazon is among the sponsors of NPR.
GIRIDHARADAS: And if Jeff Bezos were to wake up feeling incredibly generous for everything they have done to help him become the world's richest person, he could give each of them a $105,000 bonus.
CORNISH: Now, that's if he'd calculate using Bezos' net worth as of August this year. Giridharadas, who wrote the book "Winners Take All: The Elite Charade Of Changing The World," says you might be thinking, sure, OK, a nice thought, but no one in a position like Jeff Bezos would simply give away all that money.
GIRIDHARADAS: And your listeners should be reassured that if he were to do that, he would have exactly as much money as he had at the beginning of this year, before the pandemic.
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CORNISH: Jeff Bezos, along with the rest of the country's billionaire class, has gotten richer during a pandemic that has wiped out economic opportunity for millions of Americans. Here's Chuck Collins with the Institute for Policy Studies.
CHUCK COLLINS: So we're seeing, you know, an overall increase in wealth among the billionaires. But then some of those are seeing their wealth go up double or 40, 50% increases in less than a year.
CORNISH: Collins says, in the decade that included the Great Recession, billionaires lost 6% of their wealth. But over the last 10 years, it grew 85%. In the next few minutes, we'll take some time to explore why some of the country's wealthiest people have continued to do so well in spite of the pandemic and whether the system that made that possible is fair.
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CORNISH: First, we should point out that billionaires always take a hit during any economic downturn.
COLLINS: Billionaire wealth during the Great Recession went down, just like everyone else's economic prospects. And it took 2 1/2 years for the Forbes 400 billionaires to recover the wealth collectively that they had in 2007.
CORNISH: Two-and-a-half years of recovery. Chuck Collins expected to see that kind of trajectory when he began analyzing billionaire wealth during the pandemic.
COLLINS: So I was sort of expecting U.S. billionaires were going to take a hit, just like the rest of society, and they did for a little while in February. But then this other dynamic kicked in, which was kind of surging wealth. Elon Musk - his wealth has tripled from, like, $27 billion to $90 billion. Jeff Bezos' wealth is up $72 billion since the beginning of the year.
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CORNISH: And this year, more people joined the same club Musk and Bezos belong to. During a period of time in which 55 million people lost their jobs, America managed to create 29 new billionaires, many of them in sectors like technology, health supplies or e-commerce. That's at a time when taxes for the richest Americans are the lowest they've been in decades. Chuck Collins says when you look at other times in American history, when the country has faced a massive crisis that required huge collective action, the richest Americans have been asked to do more.
COLLINS: You know, coming out of World War I, that was sort of the cap point of a period of progressively concentrating wealth and power. And that's what really led to the passage of the Sixteenth Amendment and the creation of the income tax.
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COLLINS: And during World War II, where everybody's supposed to pull together and...
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UNIDENTIFIED PERSON: We've got to follow a new way of life, a war way of life.
COLLINS: ...You're supposed to donate your aluminum and scrap metal and...
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UNIDENTIFIED PERSON: You'll give us the scrap. We'll turn it into tanks. We'll turn it into planes.
COLLINS: ...There was tremendous concern about war profiteering
CORNISH: Back then, at the same time Americans were making so many sacrifices, defense contractors were making huge profits. So a Democratic senator from Missouri made a national issue out of it.
COLLINS: Harry Truman really built his career by chairing the Truman Commission, which investigated and drew scrutiny to the war industries that were making, you know, excessive profits during the war.
CORNISH: That led to what was called an excess profits tax, enacted for a period of years around both world wars, designed to curb wartime windfalls.
GIRIDHARADAS: And the issue is not that some businesses do better in hard times; the issue is what choices do we make as a society to moderate that?
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CORNISH: To Anand Giridharadas, the country is at a similar moment. Instead of the war profiteers of last century, he says we now have pandemic profiteers. And their extreme wealth, also generated during a time of national crisis, should be treated differently.
GIRIDHARADAS: Do we redistribute it on the back end through things like a wealth tax? Do we crack down on lawful and unlawful tax avoidance and tax evasion? There is a very large number of Americans, left and right, who fundamentally agree that the country doesn't feel like it's working for them or anyone they know.
CORNISH: Can we talk about the term profiteer? And why do you think it applies here in the pandemic, where people didn't go out seeking to take advantage of the rest of us, right? They're existing businesses that have benefited from what's going on in the economy.
GIRIDHARADAS: Well, just because you can't foresee the specific situation of a pandemic does not mean you have not been laying the groundwork for years to take advantage of, frankly, any kind of social condition that may come.
If you are busting unions constantly, it's going to be really easy for you to lay off people at will or use flexible employment or contractors, which helps you take advantage of something like a pandemic in a way that a company with a strong union is going to find it harder to do. If you have not been paying proper taxes or using the Caribbean islands to hide your money, you're going to be in a really great place when a pandemic strikes to make rapid, nimble investments 'cause you got a bunch more cash, you know, sitting in your reserves than you would have if you'd been paying your damn taxes.
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ALAN MURRAY: Look, I may not be completely opposite him on this particular topic, but where Anand and I really disagree is on the role of business.
CORNISH: Alan Murray's got a different take on this. He's the CEO of Fortune Media, which publishes a business magazine by the same name. He actually agrees that today's billionaires could and should pay more in taxes. But he also says they are different from business leaders in years past because they spend their money and time on more than just their business.
MURRAY: One of the interesting things of the last four or five years - I actually think it's been going on for a decade - is that more and more business leaders have stepped out and said, we have to take responsibility for inequality. We have to take responsibility for climate change. We have to take responsibility for social disparities and racial justice.
These are all things that, a decade or two or three ago, would have been considered government responsibilities. That's not our job. Businesses are starting to step up and address these problems. Are they doing enough? Probably not. Can they solve the problems alone? Probably not. But business is changing.
CORNISH: To your mind, is profiteers the right word to use for the people who have benefited in this particular moment?
MURRAY: Well, it depends on who you're talking about. But I wouldn't apply it to any company that makes a profit. Let's take Bezos as an example. The man is ridiculously wealthy, right? We know that. But he became ridiculously wealthy by creating a business that has made lots of lives better during this pandemic. So is that a good thing or a bad thing? The No. 1 question that I would ask is how have they dealt with their employees.
CORNISH: In what ways? What do you mean? Just wages or giving additional benefits to accommodate because of the pandemic?
MURRAY: Well, safety, wages, additional benefits. And if you have to do layoffs, do you do it in a humane way? I mean, take the...
CORNISH: It's worth mentioning here that these are the kinds of questions that were asked during those wartime periods as well. Excess wealth taxes were usually repealed after a few years. Conservatives criticized the taxes as being hard to apply fairly. I mean, what's an excess profit versus a normal one? And in the words of the Treasury secretary in 1919, Carter Glass, a penalty on brains, energy and enterprise.
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CORNISH: Today, in public opinion polls, a majority of Americans, including many Republicans, do support more taxes on billionaires, which brings us back to Chuck Collins at the Institute for Policy Studies, who says, yeah, a lot of billionaires have become more socially conscious and philanthropic during the pandemic.
COLLINS: But philanthropy is not a substitute for a fair tax system and adequately funded public services. In fact, most wealthy people don't give directly to charities; they give to their own private foundations and donor-advised funds. So even during a pandemic, we're seeing these extreme inequalities of income and wealth were the preexisting condition that we entered the pandemic with and that the wealthy are getting wealthier and everyone else is becoming more insecure.
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CORNISH: One last thing fueling billionaire growth we haven't mentioned yet - the stock market. America's billionaires make a lot of their money from it. By one estimate, 84% of stocks owned by U.S. households are held by the richest 10% of Americans.
And as the president frequently points out, the stock market is doing well. It's one of the reasons he gave earlier this week for ordering Republicans to walk away from the negotiating table in talks with Democrats over more coronavirus relief. In the meantime, on Thursday morning, a new round of unemployment numbers revealed more than 1.3 million people filed for state and expanded federal unemployment benefits last week.
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