Since the start of the pandemic, U.S billionaires have increased their collective fortunes by more than 70% in just 19 months. From a combined worth of $3 trillion in March of 2020 to an astonishing $5 trillion in October 2021, according to Americans for Tax Fairness (ATF) and the Institute for Policy Studies Program on Inequality (IPS) who analyzed data from Forbes. The Federal Reserve Board also estimates the current wealth held by U.S. billionaires to be two-thirds more than the $3 trillion in wealth held by the bottom 50% of U.S. households.
At the other end of the spectrum lies poverty which many relentlessly remind us has been cut in half – a statement that will only hold true if the economic benefits during the pandemic are made permanent. Various studies using a diversity of processes concur that poverty reduction during the Coronavirus was temporary. The United States began to see increases in poverty higher than pre-pandemic numbers almost immediately after benefits were distributed, according to a number of surveys.
Economically speaking, the outbreak of COVID-19 proved that eliminating poverty can be as simple as putting more cash in people’s hands. Despite the wide-ranging reviews on the topic of such programs, the negative impacts of cash benefits are minimal. Studies have concluded that providing monetary benefits to all but the wealthiest is far more beneficial to anti-poverty efforts than the trivial adverse impact of one less hour of work per week such programs could potentially create[1]. The results of programs such as those afforded to the poor during the pandemic could easily lift millions out of poverty if they were made permanent.[2]
So why then are the rich getting all the breaks and the poor are still, well, poor?
The answer to that is both simple and complicated.
Take Elon Musk. He likes to jump on Twitter and taunt the people’s will in the United States. You know, that democracy people live by where they’re demanding that the wealthy pay their fair share of taxes? Yeah, that one. Musk enjoys mocking how society in the U.S. operates. From market manipulation to acting as if he is somehow the victim of the people who simply want him and others like him to pay his fair share.
Elon Musk is but a jester among elites who enjoys his position at the top.
Armed with a battalion of lobbyists fighting for him at every turn, Musk’s wealth grants him a level of power afforded only to the richest in the U.S. Jeff Bezos, Mark Zuckerberg, Bill Gates, former politicians, defense contractors, and but a few others all benefit from the same privileges of being subsidized by taxpayers. Corporate lobbies hand out money like candy on Halloween in an effort to convince representative lawmakers to implement policies that benefit only them.
American Oligarchs
An oligarchy is defined as “a small group of people having control of a country, organization, or institution,” which by all accounts defines the United States. If the U.S. is an oligarchy, then that makes the wealthy elite, oligarchs; “rulers in an oligarchy,” as defined by Oxford Languages. In addition, while these companies are technically not monopolies, they do fall under the category of oligopolies. An oligopoly is when you have “a state of limited competition, in which a market is shared by a small number of producers or sellers.” Think Walmart and Target. Oil companies, big media, car manufacturers, and mega-corporations – conglomerates controlling multiple markets.
You may also define the U.S. as a plutocracy since it became “a government by the wealthy” when the Supreme Court ruled in 2010 that corporations can spend unlimited amounts of money on elections. In what is known as Citizens United, the Court declared that limiting “independent political spending” through campaign finance rules was a violation of free speech, thus, allowing the unfettered flow of money into politics from outside groups.
“The United States is an oligarchy. There’s no better way to describe it.”
It could be argued that one led to the other or it could be debated that outside influence over U.S. politics grew during the Reagan era (it did). The actor and corporate spokesperson took his reality-TV-styled marketing skills to the White House enlisting former bosses to help advise him on domestic policy. Regardless of where it began, political influence with truckloads of cash is how the rich get richer via social programs by different names: subsidies.
For example, farmer subsidies benefit corporate-owned farms more than they assist the small farmer. Small farmers are then forced to operate under the rules of the oppressive oligopolies that control nearly all industrialized agriculture in the U.S. They not only control what the farmer feeds their livestock, how much farmers are paid, and how small farms operate, but they control the logistics as well – leading to lower pay for truck drivers.
It’s also worth noting that many of the corporations holding dominion over small U.S. farmers are foreign-owned. Yes, foreign-owned companies receive billions each year from taxpayers.
In addition to the benefits, big corporations also make it harder to achieve the American Dream by overvaluing markets such as housing, energy, fuel, and food. Making it more difficult for the average American to get by. Mega-corporations are conglomerates that have ownership interests across various markets leading us to a society that subsidizes the wealthy with every purchase. We then subsidize those same corporate stakeholders with taxpayer dollars.
While fiscal conservatives convince you poor people and social programs are the problem, the real “welfare queens” are the Elon Musks, the Jeff Bezos’, and the Brazilian meat companies of the world. It’s not just corporations either, there are approximately 745 billionaires in the U.S. today that benefit at a great cost to taxpayers on multiple fronts due to the rich-people-friendly U.S. tax code Elon Musk likes to mock so often. The U.S. tax code is, in fact, a mockery.
The United States is an oligarchy. There’s no better way to describe it.
Negative Impacts on Society
When you have only four multinational companies in control of your food supply, they can essentially hold a country hostage until they get what they want. They control pricing over food products that allow them to keep prices as low as possible, but that same power can be used for influence over elected lawmakers. Since they own land or have a presence in virtually every district in the country, they can influence many elected officials and many elections as well.
Farms aren’t the only industry that operates this way. Many industries do. Media companies, for example, are structured in a way that gives corporate majority stakeholders control of multiple companies. Yes, the people who bring you outrage on Fox News work for the same people that will speculate you to death on MSNBC. They don’t care what you watch or what your beliefs are. They care only about the value of their investments and to be as profitable as possible.
“From farm subsidies to the Export-Import Bank, special interest feeding frenzies are still the norm throughout government.”
Essentially, three firms own corporate America. Vanguard, BlackRock, and State Street have $11 trillion in assets and are the largest shareholder in 40% of all publicly listed companies in the U.S. That hidden control gives them concentrated power over the population at large while being subsidized by the same people they wield authority over.[3] In 2018, Doug Bandow provided commentary to the Cato Institute saying, “From farm subsidies to the Export-Import Bank, special interest feeding frenzies are still the norm throughout government.”
Bandow’s statement continues to hold true today. Only fewer benefit from it. The rest are left to fend for themselves or die in a society that has only been made more difficult to succeed in – unless you have a trust fund. Everything we need to survive creates wealth for but a few people in society. They control profits by deciding how much we should pay to live. Toll roads, telecom fees, internet access fees, food, fuel, energy to power our homes, and everything else owned by the very few adds to our everyday costs while lining the pockets of the wealthy elite.
Those who control everything have an outsized financial influence over elected officials. We see it happen every day. Even the current infrastructure package stands to benefit the wealthy more than anyone else. Sure, it will help the poor and marginalized some. But, it stands to create more wealth for the already wealthy by using fees and tolls to access the infrastructure we’re already paying to build. It certainly doesn’t seem to do much to stop gentrification.
Meanwhile, we’d be lucky to get a shoveling job on a highway construction project.
Who It Hurts the Most
While it’s clear that subsidizing corporations with lavish gifts as they reap record profits is deeply problematic, it looks much worse when weighed against the positive impacts that money would have if it were better spent on poor communities. But, if money talks in Congress and corporate entities can outspend us, then it’s no wonder popular policies such as single-payer healthcare, free college, and a pathway to citizenship for migrants haven’t become law.
When citizens of the United States make their views and voices heard, politicians ignore them because lobbyists are in their ears every day. Unless citizens did that en masse, we don’t stand a chance at doing democracy right and the poorest will continue to suffer as we creep towards a dystopian future of corporate control of our everyday lives. Their goal is to make us dependent on them so they can continue asking for more money to create jobs. Yet, while they’ve gotten all the tax breaks they’ve asked for. Instead of creating jobs, they use that money to buy back stock.
We’re talking about a process that hasn’t worked since the implementation of trickle-down economics during the Reagan era. While these policies impact poor people as a whole, it should come as no surprise that they affect Black and Latino communities even more. Whether it’s intentional or not, it speaks to the structure of the systems that operate the U.S. government. Those that write the laws control the levers of power. And those that typically write the laws aren’t our lawmakers. They’re lobbyists.
Corporations and special interest groups write many of the laws we see today. At a minimum, it’s clear they have a say and the people are at their mercy. Unless we remove money from politics, lawmakers have little reason to listen to the people when there is so much influence from the Good Ol’ Boys club in Washington D.C. It’s a club that provides access to great wealth and opportunity outside of their jobs as elected representatives.
From speeches for hundreds of thousands of dollars to insider trading that makes them millions of dollars throughout their careers, there are many benefits for lawmakers if they play ball, so to speak. It’s clear that the motivations of most politicians revolve around self-preservation and self-interests. While concern for the nation may be somewhere in the back of their minds, if they don’t see the harm in cavorting with billionaire elitists and pocketing a little cash in the process, what motivations will they have to stop working for them and start working for the country?
So why do the rich keep getting richer?
Simple answer: because lawmakers let them and most Americans just shrug their shoulders.
References:
1. National Academies of Sciences, Engineering, and Medicine. (2019). A Roadmap to Reducing Child Poverty. The National Academies Press. https://doi.org/10.17226/25246.
2. Roosevelt Institute. 2017. No Strings Attached: The Behavioral Effects of U.S. Unconditional Cash Transfer Programs https://rooseveltinstitute.org/publications/no-strings-attached-behavioral-effects-us-unconditional-cash-transfer-ubi/
3. Fichtner, J., Heemskerk, E., & Garcia-Bernardo, J. (2017). Hidden Power of the Big Three? Passive index funds, re-concentration of corporate ownership, and new financial risk. Business and Politics, 19(2), 298-326. https://doi.org/10.1017/bap.2017.6
