Sunday, August 09, 2020

No sharing of wealth

 The richest 1% of Americans own half the value of all shares of stock held by American households.

The richest 10% owns 92%.

For years now, stock prices have risen largely because profits have been siphoned from the wages of ordinary workers.

 Stock prices are almost back to where they were before the pandemic began. Big corporations and major investors are doing fine. Billionaires are doing better than ever. But most Americans are sinking fast.

Drug company CEOs and their major investors are doing nicely, too. Since the start of the pandemic, Big Pharma has raised prices on over 250 prescription drugs, 61 of which are being used to treat Covid-19.
As more than 50 million Americans filed for unemployment insurance, billionaires became $637bn richer

Facebook’s Mark Zuckerberg’s wealth has ballooned 59%. Amazon’s Jeff Bezos’s, 39%. Walmart’s Walton family has added $25bn.

Apologists say this is the “free market” responding to supply and demand – the barons of Big Tech and Big Pharma merely providing what consumers desperately need during the pandemic.

The White House is distributing billions in subsidies and loans to select corporations – enabling CEOs and boards to load up on stocks and stock options just before deals are announced, then rake in fat profits after stock prices surge.

Insiders from at least 11 companies have sold shares worth over $1bn after such announcements, according to an analysis by the New York Times.

In late June, a San Francisco company called Vaxart announced that the Trump administration had selected it to develop a coronavirus vaccine. Presto. The value of stock options distributed to company insiders just weeks before increased six-fold. Stock options held by Vaxart’s CEO went from $4.3m to more than $28m.

Moderna has never brought a vaccine to market, but company insiders have sold some $248m of shares – most of them after the company was selected in April to receive Trump funding. Moderna plans to sell its vaccine for profit although taxpayers have footed its research and development.

On 28 July, Trump announced a $765m deal with the The old camera and film-maker, Kodak, to bring drug production back to the United States. He called it “one of the most important deals in the history of the US pharmaceutical industries.” 

Kodak isn’t even a pharmaceutical company.

Before the announcement, Kodak had handed its board of directors 240,000 stock options, and just the day before had given its CEO 1.75m stock options

After Trump’s announcement, Kodak shares shot up more than 2,757%. Suddenly, the board’s stock options were worth about $4m, and the CEO’s, about $50m.

The Securities and Exchange Commission co-director of enforcement, Steven Peikin, who had been investigating several of the deals involving the White House and corporate insiders – including Kodak – resigned last week, without explanation.

Trump and  the Republicans won’t provide $600 per week to tens of millions of Americans. Yet Trump has no problem letting billionaires profit off the pandemic.

No comments: