Coronacrisis Turns Buyback Billionaires into the Trillion-Dollar Dozen

Coronacrisis Turns Buyback Billionaires into the Trillion-Dollar Dozen by David Haggith for The Great Recession

The Coronacrisis has been a boon for America’s wealthiest dozen, taking their aggregate wealth over the top of a trillion dollars. One think tank refers to them as the “Oligarchic Dozen”:

“The rich get richer” doesn’t even begin to tell the story these days. According to the Institute for Policy Studies, the wealth of the top 12 billionaires in the U.S. recently exploded to more than one trillion dollars — yes, 13 digits…. “This is simply too much economic and political power in the hands of twelve people. From the point of view of a democratic self-governing society, this represents an Oligarchic Dozen….”

Since the pandemic first blew up in the U.S. back in March, the “Oligarchic Dozen” has enjoyed a 40% surge in its combined wealth…. “The total wealth of the Oligarchic Dozen is greater than the GDP of Belgium and Austria combined,” said Omar Ocampo, a researcher for IPS’s program on inequality and the common good. “Meanwhile, tens of millions of Americans are unemployed or living paycheck to paycheck….”

And it’s not just Bezos and the bunch who have seen fortune smile upon them lately. CEO compensation, overall, climbed to its highest level in seven years last year, and it is positioned to rise once again in 2020…. In fact, the pay ratio between chief executives and workers at America’s 350 biggest companies has widened to 320-to-1, the researchers found.

MarketWatch

The Buyback Billionaires

These are the Buyback Billionaires, some of the elite whose wealth has been expanded by the deregulation that allowed companies to buy back their own stocks and by the low capital-gains tax that gives the most benefit to those who expand their wealth through stock buybacks — the tax that Trump now wants to lower even more, thus exacerbating the extreme difference between the wealth of the rich and the survival of the rest.

Some billionaires see through it and have spoken out strongly against the buybacks that have made this leap possible and that have, again, been fueled by cheap Fed credit.

Back in March, when the Fed and feds went on their bailout binges, Mark Cuban implored the government not to allow buybacks at any corporation that received this year’s Fed bailouts.

Ostensibly still disgusted from The Great Recession, where zero executives were held accountable and most of the Fed’s TARP money went to line the pockets of executives and widen the inequality gap, Cuban had some choice words – and some good ideas – for what life should be like post-bailouts and after the coronavirus crisis ends….

Cuban lamented bailouts in the past that have ignored the middle class and sought to place accountability on the executives that have put their companies in such precarious positions, mostly through buybacks, that they can’t weather the storm of an economic slowdown on their own.

“”We already know what’s going to happen,” Cuban said. “A year after this plays out, and it will, we’ll look back and say why didn’t we consider the workers? The everyday hourly worker. The people making minimum wage. Why didn’t we reward them as well?”

Zero Hedge

Well, the government did dole out some to the proletariate this time around to cauterize their losses, and it did place some window-dressing restrictions on buybacks. However, the Buyback Billionaires still benefited by far the most, getting rocketed into the new Trillion-Dollar Dozen.

Congress in its infinite trickery pretended to listen to this concern by stating in its various bailout acts that none of the money from the bailouts could go to buybacks. So what? Companies then take that cheap or free money and spend it on what it is meant for so that they can free up other funds to do buybacks, which they would have otherwise had to use just to save themselves.

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David Haggith

Knave Dave — vigilante against the false profits of The Great Recession Too many criminal CEOs still fill their porky bellies with the biggest taxpayer bailouts in the history of the world. These bailouts protect their reputations, saving them from the fall they should have taken. They continue to receive bonuses for having done an unparalleled job of destroying their companies! Many of their companies wouldn’t be making any profit at all if not for the interest they’re making off of nearly free government bailouts. Just this week Hewlett-Packard fired its CEO, but is still paying him a bonus of millions of dollars in exchange for a year of corporate wandering in the wilderness. Netflix’s CEO cost his company hundreds of thousands of subscribers and had to reverse his decision. Bank of America’s CEO launched a debit-card fee plan that was immediately stupid in the eyes of many, but greed an arrogance led him to think he could pass it by his customers, and he lost customers in droves and had to reverse his decision, as did the many major banks that followed him. Since these corporate leaders do things most of us can immediately see as being dumb, why are they rewarded with salaries a thousand times greater than many of us make?