The question itself reveals a misunderstanding of how things work for the morbidly rich.
They are, uniquely, in a position to profit from the same economic downturns that wipe out average working people or those who’ve put their money into 401Ks locked into the market or certain stocks.
This is a story as old as capitalism. During the Republican Great Depression of the 1930s, for example, some of America’s greatest fortunes were made or massively expanded.
Joe Kennedy, who’d made a pile of money manipulating the stock market, bailed out as the market began its slide and even shorted the market, increasing his wealth. But once it had crashed, when everybody was broke, he bought stock with a vengeance. “Cash is king” was the phrase of the day, and Kennedy was well stocked in cash (he even bought a movie studio). By the end of the Depression, he was one of the richest men in the nation.
J. Paul Getty’s favorite phrase was, “Buy when everyone else is selling, and hold on until everyone else is buying.” It’s something you can only do at scale if you’re fabulously rich to begin with.
The afternoon of the Great Crash — Black Tuesday — under Republican President Hoover in 1929, Getty skipped his parents’ golden wedding anniversary to head to Wall Street where he began buying stocks, particularly in small oil companies that were in trouble.
Flash forward to the modern era.
When Wall Street banks — exploiting Republican-demanded deregulation of banking and investment rules — crashed the American economy in 2007, home prices (and, thus, homeowner equity) collapsed by 21%. Over 10 million Americans lost their homes to banking predators like “Foreclosure King” Steve Mnuchin, and tens of millions of others were underwater.
The stock market plummeted by over 50%. On October 9, 2007 the Dow was at its all-time peak of 14,164.53 but by March 5, 2009 it had collapsed to 6,594.44.
While over 8 million Americans lost their jobs and were wiped out as the Bush Crash started today’s homelessness crises, the top 1 percent saw it as a buying opportunity.
People were desperately unloading stocks in their 401Ks at a loss just to pay the bills, as wages plummeted in the face of a loose labor market.
But the morbidly rich were doing great.
Between 2009 — the bottom of the Bush Crash — and 2012 when the recovery really began, the top 1 percent of Americans saw their income grow by over 31 percent. Fully 95 percent of all the income increases in the country were seized by the top 1 percent of Americans during that period.
As the economy recovered, rich people who’d used their increased income to buy stocks at the market bottom rode the S&P 500 up by 462 percent to 2020. A billion dollars invested in 2009 became $4.62 billion in just 11 years, a period during which the combined wealth of American billionaires went up by over 80 percent.
The Trump/Covid Crash of 2020 presented America’s morbidly rich with another brand new and huge opportunity to get richer on top of a crisis brutalizing the rest of America.
Once again the market collapsed and working people, now out of work, were selling their stocks at a loss just to pay the mortgage and buy food. But for the wealthy, it was a gift from God.
March 16, 2020 — just after Trump declared a pandemic and lockdown — the Dow sustained the largest single-day crash in its entire history. For the investor class, Trump and his billionaire buddies, this was an even better opportunity than the Bush crash of 2007!
Fewer than three months later, on June 4th, we learned that the seven richest people in America had seen their fortunes increaseby fully 50 percent. And with Trump’s massive tax cut for his fellow billionaires, they could keep most all of it: by that time the average American billionaire was paying less than 3 percent in income taxes (a situation that persists to this day).
Just during that one single terrible pandemic year of 2020, the Institute for Policy Studies documents, the world's 2,365 billionaires saw their wealth increase by a full 54%, as U.S. billionaires saw their net worth surge 62 percent by $1.8 trillion. Average billionaire wealth worldwide increased27% in that one year alone.
Billionaire’s taxes have fallen by a full 79 percent since Reagan’s election in 1980, and a 2012 analysis found that as much as $32 trillion was safely squirreled away in tax-fraud offshore shelters.
This is why Kevin McCarthy’s proposed legislation to raise the debt ceiling would strip $80 billion from the IRS: the morbidly rich tax cheats who own him (with the Supreme Court’s blessing in Citizens United) don’t want to get caught.
They want to hang onto the trillions they made during the last two crashes.
Why the GOP May Actually Want a Second Great Depression
In yesterday’s Daily Take, I laid out a scenario where Kevin McCarthy and congressional Republicans could crash our economy by forcing a default on US debt (unless Biden invokes the 14th Amendment), producing what could easily be a depression as deep...m.dailykos.com
It’s a moot point fortunately. The Republican plan to crash the economy won’t get past the Senate.
If thats the case why are dems ushering in another great depression?
