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    KBL Celebrates 100 years of existence by Awarding Consumers.

    KBL Celebrates 100 years of existence by Awarding Consumers.

    Auditor General raises red flag over Education ministry’s Sh10 million per day perdiem

    Auditor General raises red flag over Education ministry’s Sh10 million per day perdiem

    IEBC begins enlisting voters in the diaspora

    IEBC picks Greek firm Lykos to print ballot papers

    Exposed: How Police are Running Illegal Trade Cartels in Kenya

    Exposed: How Police are Running Illegal Trade Cartels in Kenya

    Portugal settles on Kenya as its gateway for investments in Africa

    Portugal settles on Kenya as its gateway for investments in Africa

    Africa Avant-Garde explores the art of filmmaking on the continent

    Africa Avant-Garde explores the art of filmmaking on the continent

    Good news for Kenyans as fuel prices drop

    Hope for Cheap Fuel as Kenya Looks to the Middle East

    Epson Scanners Shine at the Seven Data Master Lab Awards

    Epson Scanners Shine at the Seven Data Master Lab Awards

    CBC Headache: KNUT pushes to have learners use primary schools for Junior Secondary Education

    CBC Headache: KNUT pushes to have learners use primary schools for Junior Secondary Education

  • Markets
    Naivas Opens its 83rd Store in Kiambu

    Government Subsidizes Maize Flour by Sh 2

    Showmax slashes subscriptions paid for via M-PESA

    Showmax slashes subscriptions paid for via M-PESA

    Epson Scanners Shine at the Seven Data Master Lab Awards

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    DCI arrests COVID-19 scammers

    Mobile Loan: Telkom Kenya set to launch M-shwari competitor

    Emirates Takes Triple Gold For The Third Year In a Row For Safety

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    IBL Group acquires Amethis stake in Naivas International

    IBL Group acquires Amethis stake in Naivas International

    Revealed: The number of Kenyans with over Sh100 million in their account

    The raging debate on Twitter over the lack of US dollar in Kenya and the downplaying of the issue by the Central Bank of Kenya

    Agricultural subsidies unfair – Kenya tells WTO

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    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

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  • Real Estate
    National Construction Authority Suspends Licences of 18 Contractors

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    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

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    NEMA Re-Introduces Another Tax for Developers

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    Centum Digitalizes Real Estate Sector

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    Superior Homes Launches Reward Program for Investors

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    Report: High Demand for Luxury Houses in Nairobi Fueling  Increase in Prices

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    Regional property summit kicks off in Nairobi

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    Optiven Foundation Launches TVET Sponsorship Program

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  • Tech
    Africa Avant-Garde explores the art of filmmaking on the continent

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    DCI arrests COVID-19 scammers

    Mobile Loan: Telkom Kenya set to launch M-shwari competitor

    Tecno Kenya Announces Launch Of Camon 19 Series & Spark 9 Series

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    Nairobi Women to start offering online outpatient services

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    OPPO Launches its Flagship Device Find X5 in Kenya to Retail for Sh100,000

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  • World Business
    Why Mercedes Benz is Recalling Their Old Models

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    Cold comfort awaits a springtime Davos

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    Meet The Richest Man Who Can Fund Kenya’s Budget Alone for 10years

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    EA Sports End 29 Years of Video Game Partnership With FIFA

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    Central African Republic Adopts Bitcoin as an Official Currency

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    Netflix Stock Collapses After Losing 200,000 Subscribers

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    How new regulations are shaking up the world’s fastest sport

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    President Uhuru Urges International Community to Lift Sanctions on Zimbabwe

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    Naivas Opens its 83rd Store in Kiambu

    Government Subsidizes Maize Flour by Sh 2

    Showmax slashes subscriptions paid for via M-PESA

    Showmax slashes subscriptions paid for via M-PESA

    Exposed: How Police are Running Illegal Trade Cartels in Kenya

    Exposed: How Police are Running Illegal Trade Cartels in Kenya

    CIC urges Kenyans to Invest in Last Expense Covers to Cushion From Financial Instability

    CIC urges Kenyans to Invest in Last Expense Covers to Cushion From Financial Instability

    Good news for Kenyans as fuel prices drop

    Hope for Cheap Fuel as Kenya Looks to the Middle East

    NBK partners with Kodris Africa to enable easy payments for new coding programme

    NBK partners with Kodris Africa to enable easy payments for new coding programme

    Johan ICT Kenya launched to offer data protection for firms

    Johan ICT Kenya launched to offer data protection for firms

    Winfall For Tea Farmers as Bonus Set to Increase

    Winfall For Tea Farmers as Bonus Set to Increase

    St John Ambulance Seeking Sh12 million to Train Bodaboda Operators

    St John Ambulance Seeking Sh12 million to Train Bodaboda Operators

    • Agribusiness
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      NBK partners with Kodris Africa to enable easy payments for new coding programme

      NBK partners with Kodris Africa to enable easy payments for new coding programme

      Procedure for funding your Metropolitan National Sacco account through MPESA

      Procedure for funding your Metropolitan National Sacco account through MPESA

      KCB Group Shareholders Approve Sh9.64B in Dividend Payout

      KCB Group Shareholders Approve Sh9.64B in Dividend Payout

      DIB Bank Opens Its 6th Branch

      DIB Bank Opens Its 6th Branch

      10 Kenyan SACCOs you should consider investing in for high returns

      How’s your savings so far this year?

      Bank of Kigali Profits Rise to Sh1.8 Billion

      Bank of Kigali Profits Rise to Sh1.8 Billion

      KCB Sustainability Efforts Win Global Award

      Russo Replaces Joshua Oigara as KCB CEO

      Absa Earns Global Recognition for its energy and water efficiency investments

      Absa Earns Global Recognition for its energy and water efficiency investments

      LAW: Sacco members will soon use household goods as security for loans

      10 SACCOs in Kenya you should consider investing in for high returns

    • Insurance
      Zamara Feted as the Overall Best Insurance Broker of the Year

      Zamara Feted as the Overall Best Insurance Broker of the Year

      How Rot in The Insurance Sector is Exposing Kenyans to Lose Funds

      How Rot in The Insurance Sector is Exposing Kenyans to Lose Funds

      APA Life Assurance Partners With Craydel To Financially Empower Students

      APA Life Assurance Partners With Craydel To Financially Empower Students

      Kenya Orient Life Assurance Bags ‘Pension Marketing Campaign of The Year’ Award

      Kenya Orient Life Assurance Bags ‘Pension Marketing Campaign of The Year’ Award

      Jubilee Acquires Additional Stake in SEACOM

      Jubilee Acquires Additional Stake in SEACOM

      Over 1000 Women Benefit From Absa, KNCCI Financial Training

      Over 1000 Women Benefit From Absa, KNCCI Financial Training

      Family Bank is The Best in Customer Satisfaction-Survey

      Family Bank is The Best in Customer Satisfaction-Survey

      New Platform to Help Kenyans Save From as Little as Ksh5 bob

      New Platform to Help Kenyans Save From as Little as Ksh5 bob

      Stanbic Bank Ink Deal To Champion Women Empowerment Iniatives

      Stanbic Bank Ink Deal To Champion Women Empowerment Iniatives

    • Manufacturing
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      Opinion: Deploying contemporary Information Technology solutions for Academic Delivery

      Opinion: Deploying contemporary Information Technology solutions for Academic Delivery

      How COVID-19 Impacted the Adoption of Digital Health Technology

      How COVID-19 Impacted the Adoption of Digital Health Technology

      Why Kenyan economy is headed Pakistan direction

      Why Kenyan Economy is headed Pakistan direction

      Opinion: Create favorable conditions for increased value add in manufacturing

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      Lifestyle innovation is making home-life healthier for families

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      Car Loans Offering Convenient Mobility To Middle And Low-Income Families

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      OPINION: Africa’s War to Secure the Internet  

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Kenyan Business Feed
  • Home
  • News
    KBL Celebrates 100 years of existence by Awarding Consumers.

    KBL Celebrates 100 years of existence by Awarding Consumers.

    Auditor General raises red flag over Education ministry’s Sh10 million per day perdiem

    Auditor General raises red flag over Education ministry’s Sh10 million per day perdiem

    IEBC begins enlisting voters in the diaspora

    IEBC picks Greek firm Lykos to print ballot papers

    Exposed: How Police are Running Illegal Trade Cartels in Kenya

    Exposed: How Police are Running Illegal Trade Cartels in Kenya

    Portugal settles on Kenya as its gateway for investments in Africa

    Portugal settles on Kenya as its gateway for investments in Africa

    Africa Avant-Garde explores the art of filmmaking on the continent

    Africa Avant-Garde explores the art of filmmaking on the continent

    Good news for Kenyans as fuel prices drop

    Hope for Cheap Fuel as Kenya Looks to the Middle East

    Epson Scanners Shine at the Seven Data Master Lab Awards

    Epson Scanners Shine at the Seven Data Master Lab Awards

    CBC Headache: KNUT pushes to have learners use primary schools for Junior Secondary Education

    CBC Headache: KNUT pushes to have learners use primary schools for Junior Secondary Education

  • Markets
    Naivas Opens its 83rd Store in Kiambu

    Government Subsidizes Maize Flour by Sh 2

    Showmax slashes subscriptions paid for via M-PESA

    Showmax slashes subscriptions paid for via M-PESA

    Epson Scanners Shine at the Seven Data Master Lab Awards

    Epson Scanners Shine at the Seven Data Master Lab Awards

    DCI arrests COVID-19 scammers

    Mobile Loan: Telkom Kenya set to launch M-shwari competitor

    Emirates Takes Triple Gold For The Third Year In a Row For Safety

    Emirates Takes Triple Gold For The Third Year In a Row For Safety

    IBL Group acquires Amethis stake in Naivas International

    IBL Group acquires Amethis stake in Naivas International

    Revealed: The number of Kenyans with over Sh100 million in their account

    The raging debate on Twitter over the lack of US dollar in Kenya and the downplaying of the issue by the Central Bank of Kenya

    Agricultural subsidies unfair – Kenya tells WTO

    Agricultural subsidies unfair – Kenya tells WTO

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

  • Real Estate
    National Construction Authority Suspends Licences of 18 Contractors

    National Construction Authority Suspends Licences of 18 Contractors

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    NEMA Re-Introduces Another Tax for Developers

    NEMA Re-Introduces Another Tax for Developers

    Centum Digitalizes Real Estate Sector

    Centum Digitalizes Real Estate Sector

    Superior Homes Launches Reward Program for Investors

    Superior Homes Launches Reward Program for Investors

    Report: High Demand for Luxury Houses in Nairobi Fueling  Increase in Prices

    Report: High Demand for Luxury Houses in Nairobi Fueling Increase in Prices

    Regional property summit kicks off in Nairobi

    Regional property summit kicks off in Nairobi

    Five Reasons Why Real Estate Increases in Value

    Five Reasons Why Real Estate Increases in Value

    Optiven Foundation Launches TVET Sponsorship Program

    Optiven Foundation Launches TVET Sponsorship Program

  • Tech
    Africa Avant-Garde explores the art of filmmaking on the continent

    Africa Avant-Garde explores the art of filmmaking on the continent

    DCI arrests COVID-19 scammers

    Mobile Loan: Telkom Kenya set to launch M-shwari competitor

    Tecno Kenya Announces Launch Of Camon 19 Series & Spark 9 Series

    Tecno Kenya Announces Launch Of Camon 19 Series & Spark 9 Series

    Nairobi Women to start offering online outpatient services

    mTek Secures Sh340m to Accelerate Paperless Insurance in Kenya

    This is the New Way to Share Your Data Bundles , Minutes, Voice and SMSs

    This is the New Way to Share Your Data Bundles , Minutes, Voice and SMSs

    Merchants Challenged to Integrate Payment Gateways to Prevent Online Payment Fraud

    Merchants Challenged to Integrate Payment Gateways to Prevent Online Payment Fraud

    Samsung Introduces Its 2022 Lineup of Appliances to Dealers

    Fathers Day Deals: Samsung Honors Fathers With Great Discounts

    Samsung Showcases its Premium Consumer Electronics Range

    Samsung Showcases its Premium Consumer Electronics Range

    OPPO Launches its Flagship Device Find X5 in Kenya to Retail for Sh100,000

    OPPO Launches its Flagship Device Find X5 in Kenya to Retail for Sh100,000

  • World Business
    Why Mercedes Benz is Recalling Their Old Models

    Why Mercedes Benz is Recalling Their Old Models

    Cold comfort awaits a springtime Davos

    Cold comfort awaits a springtime Davos

    Meet The Richest Man Who Can Fund Kenya’s Budget Alone for 10years

    Meet The Richest Man Who Can Fund Kenya’s Budget Alone for 10years

    EA Sports End 29 Years of Video Game Partnership With FIFA

    EA Sports End 29 Years of Video Game Partnership With FIFA

    Central African Republic Adopts Bitcoin as an Official Currency

    Central African Republic Adopts Bitcoin as an Official Currency

    Netflix Stock Collapses After Losing 200,000 Subscribers

    Netflix Stock Collapses After Losing 200,000 Subscribers

    Putin spokesman refuses to rule out use of nuclear weapons if Russia faced an ‘existential threat’

    Putin spokesman refuses to rule out use of nuclear weapons if Russia faced an ‘existential threat’

    How new regulations are shaking up the world’s fastest sport

    How new regulations are shaking up the world’s fastest sport

    President Uhuru Urges International Community to Lift Sanctions on Zimbabwe

    President Uhuru Urges International Community to Lift Sanctions on Zimbabwe

  • KBF
    • All
    • Agribusiness
    • Banking
    • Insurance
    • Manufacturing
    • Opinion
    Naivas Opens its 83rd Store in Kiambu

    Government Subsidizes Maize Flour by Sh 2

    Showmax slashes subscriptions paid for via M-PESA

    Showmax slashes subscriptions paid for via M-PESA

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    Exposed: How Police are Running Illegal Trade Cartels in Kenya

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    NBK partners with Kodris Africa to enable easy payments for new coding programme

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    Johan ICT Kenya launched to offer data protection for firms

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    Winfall For Tea Farmers as Bonus Set to Increase

    Winfall For Tea Farmers as Bonus Set to Increase

    St John Ambulance Seeking Sh12 million to Train Bodaboda Operators

    St John Ambulance Seeking Sh12 million to Train Bodaboda Operators

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    • Banking
      NBK partners with Kodris Africa to enable easy payments for new coding programme

      NBK partners with Kodris Africa to enable easy payments for new coding programme

      Procedure for funding your Metropolitan National Sacco account through MPESA

      Procedure for funding your Metropolitan National Sacco account through MPESA

      KCB Group Shareholders Approve Sh9.64B in Dividend Payout

      KCB Group Shareholders Approve Sh9.64B in Dividend Payout

      DIB Bank Opens Its 6th Branch

      DIB Bank Opens Its 6th Branch

      10 Kenyan SACCOs you should consider investing in for high returns

      How’s your savings so far this year?

      Bank of Kigali Profits Rise to Sh1.8 Billion

      Bank of Kigali Profits Rise to Sh1.8 Billion

      KCB Sustainability Efforts Win Global Award

      Russo Replaces Joshua Oigara as KCB CEO

      Absa Earns Global Recognition for its energy and water efficiency investments

      Absa Earns Global Recognition for its energy and water efficiency investments

      LAW: Sacco members will soon use household goods as security for loans

      10 SACCOs in Kenya you should consider investing in for high returns

    • Insurance
      Zamara Feted as the Overall Best Insurance Broker of the Year

      Zamara Feted as the Overall Best Insurance Broker of the Year

      How Rot in The Insurance Sector is Exposing Kenyans to Lose Funds

      How Rot in The Insurance Sector is Exposing Kenyans to Lose Funds

      APA Life Assurance Partners With Craydel To Financially Empower Students

      APA Life Assurance Partners With Craydel To Financially Empower Students

      Kenya Orient Life Assurance Bags ‘Pension Marketing Campaign of The Year’ Award

      Kenya Orient Life Assurance Bags ‘Pension Marketing Campaign of The Year’ Award

      Jubilee Acquires Additional Stake in SEACOM

      Jubilee Acquires Additional Stake in SEACOM

      Over 1000 Women Benefit From Absa, KNCCI Financial Training

      Over 1000 Women Benefit From Absa, KNCCI Financial Training

      Family Bank is The Best in Customer Satisfaction-Survey

      Family Bank is The Best in Customer Satisfaction-Survey

      New Platform to Help Kenyans Save From as Little as Ksh5 bob

      New Platform to Help Kenyans Save From as Little as Ksh5 bob

      Stanbic Bank Ink Deal To Champion Women Empowerment Iniatives

      Stanbic Bank Ink Deal To Champion Women Empowerment Iniatives

    • Manufacturing
    • Opinion
      Opinion: Deploying contemporary Information Technology solutions for Academic Delivery

      Opinion: Deploying contemporary Information Technology solutions for Academic Delivery

      How COVID-19 Impacted the Adoption of Digital Health Technology

      How COVID-19 Impacted the Adoption of Digital Health Technology

      Why Kenyan economy is headed Pakistan direction

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      Opinion: Recovery, growth key to creation of jobs in industries

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      Car Loans Offering Convenient Mobility To Middle And Low-Income Families

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      OPINION: Africa’s War to Secure the Internet  

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      Prioritize long-term energy cost reduction for sustained industry growth

      Opinion: Setting a New Standard for Smartphones in Our Changing World

      Opinion: Setting a New Standard for Smartphones in Our Changing World

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Billionaires Rip $63.7 Trillion During Coronavirus Pandemic

by Neymar
August 17, 2020
in Featured, KBF, Markets, News, Reports & Analysis, World Business
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The articles was extracted from a video conversation

Narrator: This is the unemployment rate during the COVID-19 pandemic. And this is Amazon CEO Jeff Bezos’ net worth during that same time span. From March to June 2020, Amazon founder Jeff Bezos saw his wealth rise by an estimated $48 billion. The founder of the video-conferencing platform Zoom grew his nest egg by over $2.5 billion, and former Microsoft CEO Steve Ballmer’s net worth increased by $15.7 billion.

These kinds of examples might lead you to think that when billionaires profit during a crisis, it’s just a matter of right place, right time. Well, that’s not false, but it’s not entirely true either. Casino magnate Sheldon Adelson saw his wealth increase by $5 billion, while Elon Musk saw an increase of $17.2 billion. When you add up the numbers, billionaires in the United States have increased their total net worth $637 billion during the COVID-19 pandemic so far.

At the same time, more than 40 million Americans filed for unemployment. With tens of millions of Americans out of a paycheck and the stock market plummeting by 37% in March, how is it that the rich have continued getting richer?

This isn’t the first time billionaires have seen gains while a large portion of Americans were feeling losses. When the housing bubble burst in 2007, home prices fell 21% and roughly 3.1 million homes were foreclosed on in the United States. The stock market plummeted by over 50%. And by the end of 2009, 8.8 million Americans had lost their jobs. And the effects lingered. From 2009 to 2012, the incomes of the bottom 99% grew by only 0.4%, but the income of the top 1% grew by a staggering 31.4% in the same time span. And it all ties back to two things.

First, the government disproportionately gave more aid to banks and corporations. In 2008, the Emergency Economic Stabilization Act was signed into law, creating a $700 billion program to purchase devalued assets from banks. This was called the Troubled Asset Relief Program, or TARP. Later, President Obama would direct $75 billion in funds from TARP to help reduce interest payments for homeowners. That means homeowners received around 10% of the direct relief that banks and corporations did.

And this leads to reason No. 2. When the stock market bounced back, the unequal bailouts meant that the wealthy still had money on hand to invest and thus profit, while the middle and lower classes did not. In 2008, the Federal Reserve lowered short-term interest rates to near zero. They would remain that low for nearly a decade. This paved the way for a historic bull market on Wall Street that began in 2009 and lasted until March 2020, when the pandemic hit.

In that time, the S&P 500 gained 462%. That means that a $1,000 investment in the S&P 500 at the low point of the financial crisis could have returned roughly $4,620, while someone who could afford a $1 million investment could have pulled in over $4.6 million.

By 2009, the world’s high-net-worth individuals had grown their share of global wealth by 19% to $39 trillion, recouping nearly all of their losses in a single year. That quick recovery and larger share of the world’s wealth enabled them to continue to make money at an exponential rate. In fact, the top 1% captured 95% of the income gains made from 2009 to 2012. And by 2020, the combined wealth of the billionaire class in the United States had increased by over 80%.

Which brings us back to the moment when the coronavirus pandemic rocked the economy. In 2019, the Fed reported that four in 10 Americans didn’t have enough cash in their bank accounts to cover a $400 unexpected expense. And in the first few months of 2020, 40 million Americans found themselves unemployed due to COVID-19. Many small businesses had to close due to lockdowns and social distancing, while others were forced to try to operate with entirely remote staff.

The Small Business Administration made $349 billion available to small businesses with the Paycheck Protection Program. But like in 2008, $243 million of that was snapped up by large, publicly traded corporations, some of which were valued at over $100 million. Even hedge funds submitted claims to try to tap into what they saw as free money.

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On March 16, 2020, just five days after COVID-19 was declared a pandemic, the Dow suffered the worst single-day points drop in its history. But by June 4, seven of the world’s richest people had seen their fortunes increase by over 50%. Part of what made this possible was a stock-market rebound fueled both by the Paycheck Protection Program and actions by the Fed. Again, the Fed lowered short-term interest rates for banks to near 0%, and as before, they have promised to hold those rates low until the economy is on track.

This is a cycle that has happened time and time again. During the earthquake in Haiti in 2010, only 2.5% of the $195 million of relief funds went to Haitian companies. Much of the rest was awarded to DC-based construction companies. And when Hurricane Katrina struck New Orleans in 2005, real-estate developer Joseph Canizaro said the clearing out caused by Katrina represented some “very big opportunities.” Canizaro was selected as part of a panel to develop the Bring New Orleans Back plan, part of which put a stop on reconstruction of low-income neighborhoods until the residents returned. Of course, residents couldn’t return to their destroyed homes, and many were foreclosed on, paving the way for others to buy those properties and develop them.

When the time did come to rebuild New Orleans, the engineering and construction company KBR received no-bid contracts from the federal government for tens of millions of dollars. KBR received $31 billion in contracts from the government between 2001 and 2010. Vice President Dick Cheney served as CEO of KBR’s parent company, Halliburton, for the five years leading up to his two terms in office.

Combined with their immense investing and purchasing power, billionaires have had government resources in addition to their own resources to profit from during economic upheavals. And wealth-friendly tax laws and loopholes then keep those billionaires at the top. Legal structures such as limited liability companies protect personal assets from being repossessed to pay the debts from business downturns. As it’s set up today, IRS rules allowed Amazon to pay $0 in taxes two years in a row. When its bill finally came due in 2019, it paid just $162 million, a measly 1.2% of the company’s income that year.

And it’s not just Amazon. Taxes paid by billionaires have decreased 79% since 1980. And those are just the legal avenues that the wealthy take to avoid paying taxes. In 2017, researchers estimated that about 10% of the world’s GDP was stashed in offshore tax havens. A study in 2012 found that as much as $32 trillion was being held offshore by the world’s wealthiest people.

So, after reviewing all this, what can be done to help level the playing field? A recent report by the Institute for Policy Studies lays out several action items. It suggests forming a pandemic profiteering oversight committee that would go beyond the oversight of federal stimulus money. It also supports the Corporate Transparency Act, which would create stronger regulations to prevent US billionaires from using shell corporations to hide their income. After the House passed the bill in 2019, it was introduced in the Senate but has not been brought to a vote.

Other suggestions include an emergency 10% millionaire income surtax, a stimulus package aimed at funding charities, instituting a wealth tax, and reducing the amount allowed by the gift and estate tax. Last, and perhaps most importantly, the report underscores the need to shut down the global hidden-wealth economy. The US alone is estimated to lose nearly $200 billion in tax revenues to offshore havens each year. That’s roughly three times the amount of all the money budgeted for the Department of Education in 2021.

Changes like the ideas above are global in scale and require political cooperation to become reality. If the relationship between wealth and income inequality are ever going to change, it’s going to require all of us.

Source Business Insider


Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]

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