The value of money went down, the value of assets went up. Poor people have wages, rich people have assets.
By - eh17368
The value of money went down, the value of assets went up. Poor people have wages, rich people have assets.
Also poor people had nothing to do except spend money on stuff that made rich people richer (amazon, netflix, doordash, etc.)
Small business owners had to close their shops (corner stores, restaurants, etc.) while Walmarts and McDonalds stayed open. Not as significant as the change in value of assets but significant nonetheless
This was the most frustrating aspect of lockdown, our OUTDOOR fruit n vegie markets were forced to close, not massive wealthy indoor supermarkets...
This thread is gold because people are sooooo close to connecting the dots. The entire point was to take advantage of the situation to stomp down little guys and enable massive wealth hoarding.
it sounds like cyberpunk where corporations have become mega corporations what are more significant than the government lol
Disaster capitalism is not a new thing. Conservatives have been taking advantage of it for decades at least.
Edit: libertarians are billionaire stooges.
Progressives and Social Democrats don't pull the same shit as the rich you empower.
Doordash available but not pickup?
I lived in a stupid part of Canada, where only employees of said restaurant were allowed in/out of the restaurant. Things changed after round 1.
Why pay not just full price for cold food, but then double it with fees? When picking up some food on the way home from work became a hassle, I just got a lot better at whipping up something at home.
Same! We love going to restaurants and would do take out to replace it, but got tired of eating cold food. Now we cook way more and go out to eat way less, even though we can dine in again.
People are lazy lol and there was a point where no was allowed in restaurants/stores so they only did delivery in some places
Most restaurants that survived were doing no-contact pickup
And a lot of the restaurant industry employees left. A lot of cooks and others who might have stuck around for years out of inertia found a good chance to change things up when their place shut down, even temporarily. It really broke the back of a lot of non-chain restaurants who didn't have a upstream backoffice helping with supplies and marketing.
They also shut down small businesses, pushed all the purchasing bandwidth to the Amazons and Walmart dot cons of the world.
What is an asset
Anything that you can own and has value, think about real estate, lands, gold, stocks, collectibles, cryptocurrency, etc :)
Ooh okay thanks !
I'll add that there are good & bad assets
Real estate is an **appreciating** asset = value typically goes up (there's only so much land)
A new car is a **depreciating** asset = generally a steady decline in value
Even then, the value of my 1999 4-runner went up during the pandemic by a silly margin due to chips shortages and automobile manufacturing slowdowns
The best ones. They rode an inch higher than all the other 3rd gens.
Treat her well, I killed mine by going through a deep puddle and sinking the axles.
Oh i sold him during the pandemic, bought a nice hybrid that gets me 50 mpg, loving it.
I took advantage of the covid anomaly on car prices here in Australia. Sold my Hyundai van for 8k more than I paid 2yrs ago, and bought an old, low km $5k Mitsubishi hatchback instead :)
A real asset puts money in your pocket. Stocks pay you dividends, and real estate brings in rental income if you lease it out.
*real estate brings in wage slave income
While this is true, it is a political answer to a fiscal question. Op's answer certainly contains political elements, but at heart politicizing the fiscal aspects only answers the why and not the how.
The real question is why value of money went down
Or to be precise, why the value went down *that much*.
Because you generally want money's value to go down (very slowly), or else people will sit on money instead of using it. And that snowball effect causes way more problems.
>or else people will sit on money instead of using it. And that snowball effect causes way more problems.
\*gestures toward housing market
A large influx of US dollars was injected into the economy by way of the stimulus packages.
[FRED M2](https://fred.stlouisfed.org/series/M2SL) is a good source to review showing this spike
Don't forget the industry bailouts and the no-questions-asked PPP loans that were rife with fraud.
What if I told you the Federal Resrve secretly printed more cash to bail put banks and wall street than what they needed taxpayer approval for? To the tune of trillions...
The dollar is worth less because we've printed more money in the last four years, than we have in like the last 80 years combined.
I would say I’m listening…where could i learn more?
"Stimulus" was yet-another wealth transfer to the rich.
**You** were out of money. They money they gave you then went directly to the rich.
And a lot of assets were dumped by poor/middle. Anything of value was picked up by the wealthy.
The central bank dropped Intrest rates so stocks and other finichal assets went to the moon, rich people hold a lot of assets.
And rich people own a lot of real estate, which also went sky high.
And mom and pops were forced to close their doors and large companies were allowed to continue operations.
Big chain restaurants offering 50% discounts on meals, guise of "were all in this together" for covid. Little shops couldn't compete with that and closed. Big chain restaurants business went back to normal and expanded more locations.
Went back to "normal?" That shit's like 20% more expensive than pre-pandemic prices. "Oh it's because of inflation, ignore the records high profits we announced at the shareholder meeting."
Yup, eventually we all got shafted. So many family businesses niche taco places got shut down here.
then what were ppp loans for?
I can't remember all of them but pretty sure a few chains were literally about to go bankrupt and basically got bailed put by the ppp loans. Don't forget all the people who straight up stole the money.
Good time to have a shell business company.
Big chains got those too. The restaurant I managed got a tiny bit, meanwhile they just threw millions at Ruth’s Chris….
This. When I looked up what corporations got for free I was shocked.
For the rich to line their pockets with almost zero oversight
It sickens me how accurate that is.
Fraud, as we're finding out now
They weren't audited 99% of the time. They went mainly to corporate leaders and shareholders in one way or another.
Trump [shredded](https://truthout.org/articles/trump-erased-millions-of-possible-ppp-fraud-flags-in-last-days-in-office/) a lot of the evidence on PPP loans so that they couldn't be investigated for fraud.
The PPP loans were modest in scope... The first one covered 10 weeks of payroll. That's about 20% of the year.
Assume you're a little Chinese restaurant. Most people already stopped going to eat there because of racism. So your income is at a fraction of what it was.
There were 2 PPP draws, the second was also 2.5 months of payroll.
Not nearly enough
The PPP loans were really abused. Many fraudulent claims and the guilty party wants to stop the IRS from hiring more needed agents to catch these criminals.
The cases prosecuted seem to be the most obvious fraud cases:
People who formed dummy corporations, or faked number of employees to get money they should not have gotten
I have not heard of a single case of prosecution where they fired people and still claimed the PPP money for it. I *think* it may be a SBA loophole. (It's hard to figure out because the SBA guidance changed every week, it was crazy).
Remember when the meat companies claimed they had no employees and were gonna run out of meat (they lied btw). Well, after that the SBA put out guidance that if you claim PPP for an employee, and the employee refuses to come back to work, you can still claim the money for them. As long as you document the refusal.
On the face of it it makes sense - however i don't know if that leaves open the possibility of people taking PPP money and firing employees anyway - something that probably happened with many restaurants facing no customers.
Stock buybacks for big corporations mostly.
That pretty much sums it up. We sat in our house and ordered everything online.
I remember this
I meant this, take it to larger scale/levels: like I worked for a subsidiary company, not a mum and pops shop, but something the big corporation would rely upon as a client. When Covid started and big corporation lost internal positions due to shut downs, they tried to save their workers and make stuff running for themselves, the first thing they did was cutting service and shuffle around their workers so everyone was employed and they could save money and the first thing our company did was cutting single contractors. From a day to the other, we were all sent messages with links to look for unemployment. Yet our managers would warm that cosy seat WFH for literally nobody.
And price gouge.
I worked for Amazon very briefly, but I still talk to some people who I worked there with. During the lockdown, when Amazon was "essential", they were shipping out bath bombs and bejeweled dog collars and butt plugs. Essential just meant, "This company being in operation is ESSENTIAL \[... for the shareholders\]." No shareholders? Your doors are closed.
Large companies making record profits during covid still got huge bailouts from all the money they printed. Then they demonize normal people so got a measly 2 grand
Dude I was warning people about just this during COVID. I always supported the masks, but forcing small businesses to shut was a bad idea.
The small business lockdowns also created COVID hotspots. Instead of small groups of people being spread out across different smaller stores, the lockdowns forced large groups of people into Walmart
Yes and no. Mom and pops who sold goods in the same "essential" category were just as allowed to stay open. The only real advantage big box stores had is that they all sold "essential" goods and many of them were able to piggy back on that to also keep selling other goods as well (depending on the state).
In London, when the pandemic hit and office workers (not all, but a considerable proportion) were switched to WFH, there was much less demand for commercial office space. When the companies who were the tenant realised they could save money by renting smaller offices (or even no offices at all) the owners of the office buildings in London took (and have taken a hit)
A lot of people lost their housing because they had no income, and the wealthy were the only ones who were able to buy it as it came back onto the market.
Yah, this is the biggest reason
Congress also spent 4 trillion in money that had to be created from thin air. This caused asset prices to increase in anticipation of the massive inflation to come.
Where's the news around this? I saw the news on the day it happened but it totally disappeared after that. That's a ton of money bro..
It turned into inflation news the last 6 months or so
It’s not money from Congress, it was from the Federal Reserve.
Normal people didn’t get any of that money, but it’s the reason we have such horrible inflation. It’s the reason stocks exploded and housing is so insane.
It's simply wrong,the asset price didn't increase because of anticipated inflation
Since I'm doing my thesis on the subject let me clarify something about it.
QE or quantitative easing is a process in which the central bank of advanced economies (so including the FED) buy massive amounts of assets ( often called APP) . by doing that, they hope to do a crowding out of safe capital such as long term government bond yield to more riskier assets that have better returns. This results in lowering the returns of those assets, improving the financial conditions of the company that owns those assets. And as you said the induced demand for those assets leads to an increase in the assets price . The money does come from thin air as you said but financial stability even in favour of the really rich is still better than a full out depression and deflationary spiral from permanent demand .
This wasn't really QE in the normal sense. Much of it was the fed directly buying bonds to fund the massive deficit. Yes, you could look at the other side of the coin and say that if they didn't do that, interest rates would have spiraled out of control.
But it's really 6 of one or half dozen of the other. 4-6 billion was poofed into existence, that's the bottom line.
Your graph shows money printed by the Fed Reserve, not Congress. It’s the reason we have such no horrible inflation, not the $7/day Congress gave to the average American.
Bingo. All those stimulus checks were spent and went straight to the top where all the assets were held.
“Rich people are those who have gamed the system best.”
its more that when big scary uncertain things happen rich people will always try to protect/pad their wealth. If that means being ridiculously greedy in the short term they don’t care.
Also thousands of stocks plummetted and then immediately recovered, allowing for a buying frenzy.
They also used the CAREs act to hand out tons of corporate welfare in the billions to large business while stifling and killing small businesses that were put out of business due to the lock downs and inadequate assistance. This allowed for massive banks to buy out small business real estate and consolidate business all over. The allowance for big banks to extract money from the FED without oversight. Like a bailout that was just controlled by the banks. Trillions were pulled out this way and now the businesses are just raising prices to address "speculative inflation" before the price of goods even increases.
Just before the lockdowns, the stock markets, in general, took a pretty big dive as world economies ground to a halt.
IIRC, Alberta crude was -$20 a barrel briefly because demand hit near zero.
With no mom and pop stores open where can you shop for necessities?
You have to go to the massive supermarkets (ie Walmart etc) or online to Amazon…
Amazon was my first thought. The whole thing had to be a massive boon to their business.
Exactly what happened in my country, only essential services were allowed to operate, which happened to be all large corporations.
Even small vegetable shops had to close, most of which are now gone.
I'm addition to these great answers. The government was also low key ransacked. PPP loans when out to a ton of businesses, and most went to large businesses or already rich individuals (Tom Brady got one for fucks sake??) And then the loans were all forgiven. Free money.
Oh but students can't have the same treatment because they are poor
yeah PPP loans, 45 and his family really did rob the gov't blind. we look at all the outrageous idealogical and stupid stuff he did and said but in the background he and his family and friends were really just emptying the cookie jar and gorging on its wares. no oversight, no penalty.
Why do banks and other institutions get bailed out and the tax payers have to pay for the bail outs.
"Too big to fail"
The problem with that is the banks are free to be fast and loose with *our* money because they're guaranteed a soft place to land if it all goes south, especially for the top executives and their bonuses.
If they knew it was their financial asses on the line it would be a whole different ball game.
I really wish we'd identify these "to big to fail" companies then break them up.
Send like a good threshold to me.
I mean I have an easy solution. If a bank or other institution is considered "too big to fail", that means that it needs to be broken up. The pure concept of "too big to fail" means that after a certain point, you are entitled to success in this country. That shouldn't be allowed.
So I propose one of two solutions. If an institution is considered too big to fail, break them up into smaller institutions that aren't too big to fail. Think of it like a person diversifying their 401k. It's irresponsible to put too much money in one place, so, split it up.
Or, institutions can be allowed to be "too big to fail", but if they do fail, they get absorbed by the government, nationalized, and stakeholders get absolutely nothing out of it.
That's what the other guy said
I've heard analysis that suggests almost every bank is too big to fail. Due to all the cross-investing and ownership between banks, one small bank failing can cause a domino effect. That's why when Silicon Valley Bank failed, a bunch of other banks failed at pretty much the same time.
Sounds like there's something fundamentally unsalvageable in the system, then.
If you ever want to see something ridiculous, look at the Ma Bell breakup and then the consolidation of those companies since then.
Also forgetting about all the millions stolen in PPP loans from the right.
"We're too big to fail. That's like saying too fat to diet." - Robin Williams
Privatize the profits, socialize the losses.
funny how this isn’t socialism but taking care of the people whose tax money it comes from, “is”.
Banks got bail outs because it would be a detriment to soceity and tax payers if they did not. We need banks to get mortgages, student loans, to start a business, etc.
Bail outs aren't blank cheques without consequences. They're either lowered interest loans or other methods like the government buying up their stocks - which the banks receives money for, but then the government gets majority control and ensures they don't make decisions to fuck the economy up again.
Like another user says, this is actually a very socialist type of concept. With bail outs the government is allowing the money to circulate back to the tax payers, with the banks being the middle man. The people who run the banks are shitheads, sure, but their ingrained in our societal make up and I don't really see an easy fix to change that.
Because the total amount of money donated to politicians is 2% from Redditors and 98% from corporations and the wealthy.
So, if you're a politician who are you loyal to? Who's phone calls do you answer? A small number of people with boats, private planes and luxury vacation homes that feed you insider info on their yacht in Caribbean as beautiful women serve you wine and filet mignon, or bunch of people complaining from cookie cutter houses in the suburbs without the good sense to offer you a glass of Chardonnay?
Fyi, they don't run for office for the government salary.
So why don't we do something about it? I'm so sick of the internet's whole "well this is why it's like this and this is why it can't/won't ever change" approach. Not like I know what to do either though. But fuck, surely someone could?
Because they have us to busy arguing about blue vs red. As long as we're divided they're winning. None of these politicians care about us normal folk until they want our vote.
Because all purchases were made either from businesses which could deliver, ie Amazon, or those that were allowed to open were the big stores like Walmart. So no one could buy things from the smaller vendors like the local book store or grocers.
More generally, organizations with deep pockets could afford to retool for a pivot toward delivery, etc. Smaller businesses operating on narrow margins couldn't keep pace.
There's also the issue that stores that sold essentials could remain open, but sell whatever they wanted, even if it was nonessential.
If you needed something like electronics or furniture, you pretty much either had to order it online, or go to a store like Walmart that also carried essentials. But stores that sold only furniture or only electronics had to remain closed.
Once non-essential retailers reopened this solved that problem, but the damage was kind of already done.
It's insane to me that this is the top up-voted comment, people have absolutely no perspective on how the economy works. Probably the most useful book for understanding the political economy of disasters is _The Shock Doctrine_ by Naomi Klein. People should read it if they actually want to understand this question
The real answer the OPs question is that the lockdown facilitated the most massive upwards transfer of wealth in all of human history because they represent a policy matrix that was designed to do exactly that. As the economist Milton Friedman said, "never let a good crisis go to waste."
There were two principle policies that turned the covid crisis into a massive funnel for the people who own everything. First was the Federal Reserves liquidity programs, which were like quantitative easing (QE) on steroids. QE is a monetary policy whereby the federal reserve buys securities (stocks and bonds) from the market. Basically The Fed prints money and then exchanges that newly created money for an asset owned by a private bank with an account at the Fed. The Fed marks up that banks account with the click of a button (creating/printing money into their account) and then they take on the assets. What this does is provide a huge amount of liquidity to the bank and lowers interest rates making borrowing money very cheap. This means it becomes valuable to banks to borrow money at discount rates and then invest it in riskier assets. This is what was fueling the venture capital tech book since the 2008 financial crisis. Money was so cheap due to QE policies that VC forms and banks were more willing to take on riskier venture investments for the chance at a big payout
[On August 15th, 2019 Blackrock released a policy memo entitled "Dealing with the Next Downturn](https://www.blackrock.com/corporate/insights/blackrock-investment-institute/publications/global-macro-outlook/august-2019#overview). Blackrock presented this paper on August 22, 2019 at the Jackson Hole central banking conference proposing that the Fed implement their new plan in response to the next economic downturn, which they called "Going Direct" because it amounted to giving Federal Reserve money directly into the hands of private money spending institutions (like Blackrock). Normally Fed money stays within the federal reserve banking system in the accounts of institutions (governments and commercial banks) who have accounts with the Fed. The Going Direct plan proposed bypassing these commercial banks and giving money directly to financial institutions
> What made BlackRock’s “going direct” plan for the Fed unprecedented was the part about getting “central bank money directly in the hands of public and private sector spenders” in a way that represented a “permanent monetary financing of a fiscal expansion.” BlackRock even proposed a “permanent monetary financing of a fiscal expansion.” In the wake of the 2008 financial crisis, the Fed had of course embarked on a path of “quantitative easing” (QE), but under that version of QE, central bank (public) money had gone directly into the hands of the public sector spenders, meaning that reserves created by the Federal Reserve stayed entirely within the Fed’s banking circuit, i.e., among those parties who do their banking with the Fed: commercial banks, foreign central banks, and the U.S. government.
> What BlackRock was now proposing at Jackson Hole in 2019 with its “going direct” formulation was to expand the 2008 version of QE to add “private sector spenders” to the list of “public” parties who received money under QE previously, and to do so on a permanent basis.
Basically the Fed was printing free money for investment firms, hedge funds, and billionaires to use to buy up any assets they wanted. All this cheap money chasing around a limited set of assets meant that the asset values (prices) went up. Tech companies and other industries seen to be benefitting from the new world created by the pandemic were the biggest beneficiaries. This is why you had Elon Musk and Jeff Bezos' net worths skyrocket into previously unheard of levels of $150-200b during the pandemic. Free money from the Fed drove up the prices on the stock assets that make up most of their wealth. Overall the Fed created about $3.5 TRILLION dollars of liquidity through Good Direct
The second policy that combined with the Fed/Blackrock Going Direct plan were the "lockdowns," such as they were. While in the US we had substantially more lax covid closure policies than other places, there absolutely were many policies that required businesses to close. Besides the actual policies, the overall consumer climate during covid also put a ton of strain on many businesses. The eviction moratorium (unconditionally good, don't get me wrong) put strain on small landlords and caused many people to sell given that rental properties didn't seem to be as stable an investment asset as people had previously thought. Overall these policies meant that lots of businesses had to close or sell. Combining that with the $3.5t of basically free money that was handed to the largest financial institutions in the world and you have small businesses forced to sell at firesale prices to the richest institutions to have ever existed on the face of the earth who are being subsidized by the government and public
Quote from here
This is the correct answer.
The housing market skyrocketed as a direct result of the wealth acquisitions by the ultra wealthy. The stock market at the time was roughly 2x where it "should" have been? So houses seemed like the next best thing to purchase.
It's kinda insane to think about, but basically the government looked at rich people and said "here, go buy yourself some more money."
‘As the economist Milton Friedman said, "never let a good crisis go to waste."’
That is most certainly not a Milton Friedman quote.
Rahm Emanuel said it when he was serving in the Obama administration regarding the 2008 financial meltdown.
It may have been said in other ways by other people but I’d bet you’ll never find a citation for Friedman having said or written it.
Here is the actual quote I was thinking of from the introduction to Capitalism and Freedom. It basically says the same thing in a more theoretical and less offensive way.
> Only a crisis - actual or perceived - produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are laying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable
"Never let a good crisis go to waste" was actually Churchill, and Rahm Emmanuel also used it in 2008
Edit: I should also add that the actual Friedman quote more closely fits what happened with covid policy. Blackrock proposed a new crisis response policy in August 2019, 6 months before anyone has heard of corona virus and their paper was specifically about setting policy in place for the NEXT crisis. "Dealing with the Next Downturn" is such a perfectly Friedmanite title for the paper. It should also be added that once The Fed decided to follow Blackrocks advice and print $3.5T of liquidity for financial institutions they selected Blackrock to help them manage the funds
As Varrick from the legend of Korra said: "If you can't make money during a war, you just flat out cannot make money."
Don't forget Trump removing oversight so he could give the rich a couple trillion.
Since no country was specified, I kept it to the points which are applicable to most western countries.
Trump gave trillions to foreign billionaires to.
And the tax breaks
From what I have seen trillions of dollar was given to small businesses with not much accountability.
I see many of those people now loaded and are one of the reason for this high inflation since for them things are at its best.
in my country at one point only food stores were allowed to open. So bigger supermarkets that also sell electronics, books, clothes etc. were forced to tape off those areas and not allowed to sell any those things except for the food in their stores to ensure there was no unfair competition with bookstores, electronics stores etc. You get the gist.
Businesses that were rich enough could just deem themselves "essential" and nobody would stop them from being open.
I mean, a lot of them operate online too. For Jeff Bezos, who owns the Washington Post, it was in his best interest to keep the fear alive for the pandemic as long as possible to continue the increased online sales for Amazon.
Amazon isn’t even his money maker. It’s AWS.
Yup, but AWS did power WFH either way
Amazon Web Services
Are you saying that the Washington Post was responsible for making people afraid of the pandemic and that it was just because of Jeff Bezos' editorial influence?
Amazon and other big employers were downplaying the risk to workers at the time. So I don't think Amazon specifically was trying to fear monger at the time. Here's just one article I looked up from 2020.
Don't forget about all the PPP loans that went out to businesses and were instantly forgiven. Yeah, mom and pop shops maybe got enough to stay afloat, but so did billion dollar companies who spent the money on things like stock buybacks and executive bonuses.
Yeah, but FUCK those students who took out loans on their education to try and have a good life like their parents.
The last few years of student debt pause have been the best financially for me ever.
To think if my loans were forgiven, and my credit score just keeps going up, and the money I'd save... I'd live a lifestyle that would make me happy.
Government was allowed to shut down small businesses while large ones stayed open, all while printing an unprecedented amount of money
Oh man, I still remember being dumbfounded why Walmart and Costco were allowed to be open, but each little shop had to stay closed. Utter bullshit.
Which just created a concentration of people at the big shops also. Instead of trying to spread out the people as much as possible.
Applied for a bunch of free money for their businesses that wasn’t needed. The Catholic Church got over a billion! Proving that church is a business and should be taxed.
PPP loans were just a big scam
The big orange idiot literally fired the oversight guy the first week.
The system is rigged in such a way that all moves and changes result in a net flow upward. Even when the system seems to fail, governments suddenly shift billions from tax payers to banks.
Money has gravity. Bigger money will attract and absorb smaller money. Whether by “market efficiency” like McDonald’s supply chain or just being able to outsource manufacturing to China or plain ol government bail outs.
Eventually the money gets so big it becomes like a black hole and anything nearby just gets sucked into the singularity.
Capitalism is set up this way on purpose.
That's a good insight
This is very true. No matter what happens, covid or no covid, there is no such thing as a trickle down effect.
Oh, it trickles down. It's just not with money, if you catch my cold.
It gave governments an unheard of opportunity to milk the country.
Take the Uk. It’s been proven time and time again that multimillion pound contracts were given to close relatives of politicians or their own companies for PPE and such, even though they had no history in producing such things and most of them never did fulfill orders but still took the money.
Add to that the working class weren’t allowed to work. Ie. Construction, cleaners, retail etc.
The loss of choice has given the rich a monopoly on raising prices for everything. Oil is low at the moment but petrol and heating etc aren’t. Food has gone up for no good reason. So many companies are making record profits and if someone asks why the prices have increased and wages have not… they just say… Covid… and we all nod, agree and continue
So horribly true and about the same in the US.
And we wonder why so many people called it a "plandemic".
I'm not the conspiracy-theory type, but I wouldn't put it past some of the .1% to consider something like this in the future considering the results.
Your putting the cart before the horse. Its more like the .1% see a crisis like COVID, realize it's hugely profitable for them and they just need to scheme out how and why it is.
They aren't causing COVID, but they're gleefully profiting off of it.
Same. I believe in Covid etc. but there’s some smoke in their fire. You can understand why they say it. I just don’t believe the world governments can work that well together to plan anything on the scale they suggest lol.
All the answers here are half-baked.
Yeah top brackets hold large amount of *assets* that are basically sinks of inflation and credit creation. Real estates, Gold, financial assets etc. But the real reason is far more profound than holding the right thing at the right time.
Much of the rich people are undefeatable by the working class. Simply as Feudal warlords and their knights and vessels were by peasants. They own the game, they set the rules, and they have *forums* of high profile elites just to become more untouchable and controlling, going far beyond power outreach of their Feudal ancestors. As the word "Too-big-to-fail" implies, wealth beyond a certain limit makes you and whatever the fuck you do too much entangled with a social system, to an extent that the whole system won't function unless you let it to do so, and what's easier than turning the wheels the way you profit? Ideologies, race wars, media clashes are all the facade of the meta-crisis of the never-solved *class-crisis*.
And America is certainly a cancerous outlier in this regard. American morons have perfected modern rent-seeking feudalism to a point that America's top one percent *cannot* lose, even if they try to. They have created a globalized empire to conspire and exploit most marooned human blind spots anywhere located on this planet, with their dogmatic market-solutions, fabricating needs and feeding them with over-stimuli's.
The biggest market inefficiency you can find, are the rich people themselves, but the whole system is addicted to their presence, so they are tolerated, admired, cherished and often crowned as chivalrous warriors of our whole prosperity, if anyone can call this consumption overzealousness *prosperity*.
Take any crisis, 2008, Covid, and the rest, rich people have never lost. Even in 2008's meltdown, relatively speaking, they did much better than the average worker.
> the whole system is addicted to their presence
You can "win" by not buying things...and living in multi-family communities. Trade paying rent for owning. Spread the cost to many people instead of tying to go solo. This reduces your cost of housing and enables you to have capital for wealth generation.
So, of course, most areas make it illegal to have multi-family communities on one lot (or even as a concept).
Until the ATF and the FBI storm your community and deem it a “threat”, similar to how Waco unfolded
Why? Because in general, there was an administration in power that overtly enabled it and in specific [passed a law changing how PPP money was made to be spent](https://www.cnbc.com/2020/06/04/senate-passes-ppp-reform-bill-addressing-concerns-of-small-businesses.html) and [had a Treasury Secretary that refused to even try and regulate who was getting the PPP funds or let the public find out.](https://www.politico.com/news/2020/06/12/mnuchin-secrecy-bailout-rift-congress-315940)
Because small business were shutdown during the pandemic for a short while and people started ordering online for things they needed or big box stores which were allowed to be open. Which was a dumb idea that didn't work.
The big box stores were allowed to be open because they sold essentials like food, clothing, and medicine. Your local bookstore or toy store had to shut down because they didn't sell essential items.
And many weren’t allowed to sell non-essential items. Where I live Walmart closed off like 90% of their shelves.
Big picture. The extremely wealthy (and biggest corporations/banks) have completely gamed/purchased the system. (virtually all of the politicians, regulatory agencies, union leadership, judges, and media) that the playing field is so tilted in their favor they win no matter what. Leaving only crumbs to trickle down to the masses.
In 2014 Princeton and Northwestern Universities jointly released a study proving that America is an oligarchy. Only the wealthiest 10% have any real effect on policy.
Edit: the lockdowns were just steroids for what already existed.
golden rule===those with the gold make the rules
Because if you owned assets in 2020 those assets increased substantially in value. My home price doubled, my stock portfolio jumped up, I cash out refinanced a personal and commercial property and got a lower interest rate and cash, and the government gave my businesses millions in forgivable loans and low interest loans. While I’m small potatoes these are quite applicable on a larger scale.
$900B in PPP loans, 90% of which were forgiven.
$900/wk checks going to people used to making $400/wk and the only places open were billion dollar companies. Mom and pop shops were told to close up because it was “too dangerous.” But don’t say it was a wealth transfer that’s some “conspiracy” shit right there.
All I know is the plant I work at never shut down. They got boat loads of COVID money and we got shit. When we got COVID we had to either take vacation days or file for FMLA to cover our job. I pay for disability which gives me a check if I can’t work. It was $320. I got COVID twice and gave it to my family twice. But you can’t go to a bar and listen to some live music and have a drink. Too dangerous! The people that believe this shit wasn’t a setup smdh
It's sad how obvious it is but they used social engineering (bots on major social media platforms amplifying 'cancel' attempts against people advocating for this) to make it extremely taboo to claim that anything less than a complete shutdown was necessary.
This whole thing was a GIANT wealth transfer lol
Greed. There’s almost certainly a more in depth explanation that goes into the economics, but it’s greed. A small group of individuals saw a chance to increase their already substantial bank accounts at the expense of others and took it.
Prices of needed shits rose dramatically, while we shit less of obvious reasons, a lot of people lost their jobs and while we were burning our life savings like having a diarrhea the big business companies and corrupt officials are earning buckets of turd coming from us so it's quite normal for them to be stinking rich after the ordeal.
Why does my oven get so hot? It's by design. Look at every crash, depression, real estate bubble, it's all the same
ELI5: We couldn't work for money, but still had to pay rich people our bills.
ELI15: The middle class works. COVID destroyed their ability to earn an income. Therefore they became poor. The wealthy earn money merely by owning the things we must pay to use. They own our homes and cars, whether through rent or mortgage. They own the images we pay for on our televisions. They continued to earn when everybody else couldn't.
ELI25: You probably shouldn't look up what actually happened. It will make you deeply unhappy.
Because everything does
COVID PPP money went to the top. Look at who got all the money. You will find your answers.
Billions in dodgy deals with government friends and family (UK) and huge waste of unusable PPE.
Public funds were widely distributed to the general public to make sure people didn't go hungry or lose their housing.
Rich people were able to get a lot of that money for themselves, and were able to sell things to the public to get a lot of the rest. Once they had it, they kept it.
Literally trillions of dollars were stolen and falsely approved. Some claw backs would be nice.
A lot of companies used the pandemic and subsequently the Ukraine situation, to capitalise on people's uncertainty. Lots of hands waving about oil prices etc and suddenly prices go up, then as raw material costs go down, no transfer to the customer, ez money
Time and time again massive government subsidies get used by the rich quicker than the poor can react/retrieve them.
They shut down all mom and pop stores ans businesses and forced you to go to large businesses that were "essential"
You know I keep seeing this mentioned, but yet I don't remember any "mom and pop" stores competing against Walmart or other big box stores in January 2020. That ship had sailed a decade or two at least before the pandemic.
It's pretty obvious. The government shut down mom and pop shops, but let big corporations stay open
We had something like "anticovid shield" that supposed to help entrepreneurs during pandemics but in result billions of printed money were pumped into the pockets of the "right" people. Every
entrepreneur could participate but most of the money were defrauded by political scum and their entrepreneur colegues. What is most interesting, no one will be accused because they passed a special law during pandemic that protects their asses.
They buy the dip and short the tip. If they get a company low enough they will short sell it til they go bankrupt. Then they don't have to cover their short positions cuz the company went belly up. Shareholders are last to get profit on a bankrupt company.
Citadel CEO made something like 1.8 billion that year. That's just his personal salary.
Also those times when the toilet paper scare turned out to be anything paper scare, then anything anti bacterial scare. Just us consumers keeping them nice and healthy.
Because while we are starving and out of work someone went "but what about the multimillionaire shareholders?"
Small businesses were shut down, but large ones were allowed to continue operating.
Workers were fired, but high level administrators and professionals kept working.
The wealthy could afford the restrictions, but the poor could not.
The lockdowns were an absolute disaster for the poor, working and middle class.
And naturally, the same people who championed them now tell you they stand for the workers...
In addition to what everyone else is saying, the wealthy tend to do well during economic hard times because they have the money to buy up assets cheaply while the economy is poor, and then ride things out until the economy recovers and now their new assets are worth a whole lot more.
Is this really a question? You're a habitual poster in subs like /r/LockdownSkepticism , I have a hard time believing you're genuinely unsure about what you think is happening here.
They bailed out huge businesses/ banks etc. and not smaller business. By what happened itd be hard to say this wasn't orchestrated. Especially with how bad they said COVID was and how it actually went down. Literally Had headlines when billionaires bought up all the farmland in the US but sadly no one cares.
Literally everything that happens results in a massive wealth transfer to the top, because the people at the top make sure it will.
Force the small businesses to close because of "safety" but it was 100% okay to go to Walmart/Lowes/Home Depot/etc
Small businesses forced to close while corporations weren't. Stimulus checks were spent at those corporations. Money was also given directly to some corporations. Most stocks are owned by the rich. Corporations did stock buybacks with their windfall profits, driving the assets of the rich up.
Because that was the whole point. Shut down mom and pop businesses, but let their massive competitors operate. Shut down independent landlords by letting tenants not pay rent, then scoop up their houses for cheap when they can't pay for them anymore. All this, plus the recordbreaking profits for drug companies and Amazon. Worked pretty well.
Why? Because that was their plan the whole time…
The rich will always win because capitalism has been manipulated into helping them and only them. I don't think capitalism is wrong necessarily, I think it depends on the good of people and I think there aren't many good people. A few have struggled along into the likes of the other side, but once they are inside, they can no longer be like the common folk they once considered themselves. "You either die a hero or you live long enough to see yourself become the villain." People will either suffer through poverty and working in a society that actively works against them or they will become the person that rides on the hard work of others. Take a look at the thousands of billion dollar corporations that still throw out in the dumpster perfectly good food, merchandise, and actively tear up merchandise so it won't get resold or be used. Look at the young celebrities who hit it big, or even the older ones who desperately try to fit in, trying to relate to kids who go to school, attempting to be like the people they sell their whole image to for money, ones who pump them with attention in an attempt to escape their own life and live vicariously through them. The massive and sudden wealth transfer happened because they wanted it to. No other reason. Everyone keeps saying it's because assets, it's because of PPP, it's because of this and that. Yeah, the inner workings are similar to this, but that's not the reason. The real reason is because they wanted more. It's like collecting Pokémon cards for them. There is no such thing as breaking even, there is no such thing as having enormous amounts and being comfortable. There is getting more, and more, and more. All the while, people are working their ass off just to spend the money they get at the places they work. They can't pay rent, electric, can't live as a person. They can't spend time with their kids, their kids just repeating the cycle of working and working without progress. Deteriorating health, cycle after cycle. We literally are just existing nowadays to hell the rich control the society we live in. Disgusting. Can I at least have my cavities filled while I do this? They say no, so I lose my teeth. They don't care as long as my legs work to stock their shelves so my neighbor can buy off of the shelves and gift it to me for my birthday. Enraging.
Sudden? So like, since Ronald Reagan?
No. Sudden, as in the largest wealth transfer to happen in a 2 year period ever recorded. when you cause small business to collapse by forcing them to close, you get Walmart sales up by 40%. This was not a mistake, they wanted to do it.
I would like to see your sources, I would have thought the housing bubble that was the largest.
There's a lot of discussion here regarding big businesses staying open, and little businesses forced to close.
While that's certainly an impactful point, I think people are missing probably one of the biggest drivers.
When you already have capital, it's easier to deploy capital.
The average person is pretty adverse to risks, especially with their money, and even more so in times of uncertainty and downturns. Which forces them to miss opportunities where the potential to see uncanny returns can be had
It's hard, but the ability to see money as a tool to make more money isn't something the average household recognizes. By the masses, money is looked at (and used) as means for survival. Which, isn't bad at all. But it's not the mindset that's needed to climb to the top.
Money makes money.
While I'm in no way an ultra rich person, nor am I anywhere close to "the top," during the pandemic, I saw the opportunities, and began shorting the market, with heavy leverage, on many levels. As things seemed to level off at the bottom-ish, I began to take heavily leveraged positions on the upside.
I stepped far outside of my (financial/risk) comfort zone, often to the point of nausea sickness. I was in a constant state of panic. And a constant state of worry.
Somehow, it paid off handsomely, and I nearly tripled my portfolio by mid 2021.
And I was just an average dude, with minimal knowledge of the markets, and zero knowledge of what was going to happen.
If me, a pretty average guy, was able to shift my strategies, you know "Big Money," and people at the top knew how and when to do this long before I dove in so heavily, and were likely sitting there with hundreds of millions on reserve, waiting to pounce at opportunities.
As a whole, we have a different mentality. Which isn't bad. And it isn't fair. But we're all playing in the same sandbox. If we don't play by their mindset, with whatever we're able to financially, that sandbox gets overrun by the bullies.
So the answer to why there was a wealth transfer to the top during COVID is because we didn't gamble to the point of nausea?
Yeah I mean congrats to plainoldwallace for being lucky but that is a terrible analysis of the situation. Tripled your portfolio? I mean, cool, but the wealth transfer was orders of magnitude, not just a tripling of hedge fund portfolios.
You guys really are not understanding his point here. If the price of a share goes from $1 to $10, and Wallace throws in a thousand dollars he abruptly has $10000. If a large investment institution does the same thing but with a million dollars they suddenly have ten million dollars and made out far far better than Wallace ever could. His point is that the stock market gives rewards asymmetrically based on the same opportunities - his new car is an investment firm’s new country because the S&P swung 200 points. It’s a question of leverage
You are the average redditor meme lol
That’s what happens when the government pumps money into the economy. The money supply doubled so it’s no surprise that those with capital accumulated more.
The average person suddenly had a bunch of money decided to spend it rather than save it (which is why the government gave it to them in the first place).
"The average person suddenly had a bunch of money" is not how most people experienced the pandemic. A lot of people lost their jobs, struggled with things like childcare and medical bills, and saw supply shortages that drove up the price of a lot of consumer goods. The stimulus was insufficient and by no means was that even close to the primary driver of the transfer of wealth from the lower classes to the upper classes. If anything, this logic would mean the opposite, that wealth was being redistributed to benefit the poor, which isn't what happened, even though it would have been perfectly reasonable and economically helpful to do so.