While a new billionaire emerged every 30 hours during the pandemic period, millions of people faced financial difficulties. Companies that said they were in trouble in every crisis period increased their earnings even more. So what is the reason for this situation?
Whenever a crisis situation arises in Turkey and in the world, names from various sectors appear in front of the cameras and tell them about this crisis. how hard They worry about the situation they are in because the conditions create them, and then they either make layoffs, make a raise, or do both together.
On the other hand, when we look at the numbers, the situation is a little different. Finally in the pandemic Some companies, which explained the problems they constantly experienced and went downsizing, announced record profits at the end of the year. Millions of people became seriously impoverished, their purchasing power decreased. So why can the rich keep getting richer, no matter what?
More money for those who have money!
Fast Company
Bloomberg’s to the Billionaires Index When we look at it, we see that 131 billionaires have doubled their wealth or more during the pandemic process. Bernard Arnault, head of Louis Vuitton, the richest person in the world, has become $60 billion richer since the beginning of the pandemic. Elon Musk just got $50 billion richer. Gautam Adani, on the other hand, increased his fortune from 10 billion dollars to 110 billion dollars in this process.
Let’s look at the other side of the scale. According to the World Bank extreme poverty line It is 1.9 dollars. In other words, anyone who cannot earn 35.6 TL per day at the time of this writing is below the extreme poverty line. In 2020 alone, the number of people falling below this level was 97 million. Worldwide, the poverty rate rose from 7.8% to 9.1%. Moreover, considering global inflation, people now have less purchasing power and the amount of money they can spend decreases.
The burden is on ordinary people to get out of the crisis.
In fact, governments or central banks, “Let’s put the crisis on the people so they can struggle, niohaha” they are not cartoonish villains laughing out loud. What they really want is the least loss. to turn the wheels of the economy is to continue. This situation was no different in previous crises. The problem is that the methods followed make income inequality even more dire.
Since the Great Depression of 1929, one of the first methods used in modern crises money faucets is to open. Thus, the economy is supported, and it makes borrowing and finding debt easier in general. Let’s think about it, is it a company that stays in the industry and continues to pay 10 thousand employees, or pays 10 thousand employees two months’ salary and watches them become unemployed? It is precisely because of this decision that companies – and therefore the rich – are more advantageous.
Can the rich become ever richer and the poor ever poorer?
If enough time passes and the present process continues, the future one person owns everything when everyone is poor must. Scientists also say that wild capitalism can go into a contraction in this way. While there are different external factors that could change this situation, it is unlikely that people who are rich enough will fall into poverty.
Nevertheless, one of the issues discussed in academic circles is middle class whether it is starting to disappear. In many countries the existence of the middle class is gradually disappearing, people are returning to a standard life.
When the money is free, the stocks start to skyrocket.
If you start printing money in the market, you will inevitably balloons or bubbles also to create You can start. For example, the low-interest money given during the pandemic period, the share values of many companies in the US economy, most of which are technology companies, rose significantly. On the other hand, there was hardly an economic production to support this increase in value. A large amount of money entering the market went almost directly to financial assets, which of the rich it was beneficial.
of Oxfam “To Profit from PainAccording to the report ” in the last 24 months billionaires, their wealth as much as they have increased in the last 23 years managed to increase. This has allowed billionaires in general to enjoy greater wealth.
The part up to this point is the part that can be explained by economic indicators and academic studies in general. Let alone low interest rates, government subsidies, and rising stock values, what makes the rich richer in the long run, even chronicizing Let’s take a look at the part.
1- Taking a short position
The very wealthy own the stocks most likely to be affected in the event of a problem. predetermination whether they take a short position accordingly. Taking a short position means short-term borrowing and selling what you believe will depreciate from someone. If you borrow and sell the 10 lira worth of shares today, you will have 3 liras in your pocket if you buy the same share for 7 liras and return it 1 month later. Rich people do this with millions of shares he can. As in the Gamestop incident, things can get messy if there is no stock seller when the time comes, but whatever.
2- Collecting from the bottom/buying a company
Some companies can take serious damage in crises. shares can hit bottom or the company can be sold directly. The rich, who have enough money, can buy these companies or their shares and wish them happiness.
3- Bargaining
The rich are always bargainsEverything is negotiable. Giants such as Apple and Tesla give their suppliers who are in need of them in case of crisis.Don’t make a raise, give this and this additional, give us options, otherwise I won’t buy it haha!” they have the right to say. Because the opposite company will accept to make less profit instead of going bankrupt.
4- To buy whatever the poor man has for three to thirty coins
Many people in a crisis sell their assets may have to. Moreover, houses and other structures produced for the middle class cannot be sold. That’s why the rich come and buy everything cheap and increase their wealth.
5- Taking advantage of tax havens
Some countries with very low taxes and they try to attract foreign investment with very vague laws. These countries become vaults where the rich keep their money. Thus, the taxes do not affect the rich much.
6- Collecting resources cheaply
in crisis iron, oil Demand for resources such as etc. may decrease, so prices may decrease. This is where the rich get involved and buy these resources as they are cheapest. In this way, they can use cheap raw materials for their own projects in the future, and when they want to sell, they make a profit with the normalization in the market.
So the only problem is the system itself?
Actually not. One of the first problems not knowing how to use moneyBecause, especially in our country, acquaintance with money happens at a very late age. Even reaching the level of “Buy a piggy bank and throw your money in” is a level that many children – even young people – cannot reach in our country. Its effects continue into adulthood. Naturally, when money is involved, people are not quite sure how to behave.
The rich and other people may think differently about money. rich people investment oriented While thinking, other people’s goal may be to buy something more. Being able to decide which money to spend now and which later is a very important skill.
“Brother, you wrote too long, could you give us a summary?”
Alright. Economic measures that ensure the functioning of the entire economic system, running the system supports the rich. Losses are nationalized while gains are privatized. He who has money adds to his wealth by buying everything whose price is below its value. People who think short-term or have to think lose their assets at prices below their value. While this enriches the rich, it further increases income inequality.