A headline on a business site caught my eye this weekend: a bevy of billionaires saw their net worth increase by half a trillion dollars during 2020 — slap-bang in the middle of the global pandemic.
Almost impossible to believe, isn’t it?
But the Business Insider analysis broke it down for those of us who are still trying to work out exactly what happened on the US stock exchange last week and where it’s likely to lead.
The bare bones, which are easy enough to digest, are that 40 million Americans filed for unemployment during the pandemic, while the rich got richer.
“This isn’t the first time [that] billionaires have seen gains while others dealt with loss, and it tends to tie back to two things.”
These things are: a government that gives disproportionately more aid to larger companies, followed by the stock market bouncing back, leading to unequal bailouts (in layman’s terms, this translates to the wealthy having money to continue investing, while the middle and lower classes — that’s most of us — don’t).
A couple of years ago, I pointed out that it was becoming obvious, even to the most uninformed, that the disparity between rich and poor is an ever-widening, yawning gap.
So it’s not unreasonable, I wrote, to feel puzzled by reports that when food producer prices go down, the decrease isn’t always passed on to consumers by their friendly retail stores.
In fact, you may be paying much more for something that actually costs less now to produce than it did, say, last month.
Something is wrong with this picture.
I quoted an example from an Eastern Cape farmer, who explained how the producer price of lamb went down — but prices hadn’t changed in the shops.
The excuse given was drought; which was “bull”, said the farmer.
Red Meat Producers’ Organisation head Gerhard Schutte said University of the Free State studies found that consumer prices go up when producer prices do.
In turn, consumers should pay less when producer prices go down — though there is a time lag involved.
“This lower price has been in the market for about two weeks now, so it’s time for the trade to play the game,” Schutte said in the TimesLIVE article.
Back then, I was already buying less red meat as it’s too pricey.
I was appalled to see that I’d complained about the “unjustifiable price” of mince at R99 — catapulted from R80 a few months previously. That was just a couple of years ago.
Last week, I paid nearly R120 for the same amount of mince.
When we peel back the layers, beyond consumers, retailers and farmers, we see the shadow players across the globe — all gobbling up profits, year in, year out, no matter the economic season.
It’s the apparent greed that bothers me, rather than the brouhaha over high prices and financial inequality.
An economist explained that the free market is just that — “everybody will increase prices if they get the opportunity”.
And it seems that, when there’s a pandemic in the house, someone’s laughing all the way to the bank.