back to article Billionaires showered with wealth as experts say global economy set for long and deep recession

The word “unprecedented” is getting banded about so much these days that it is losing its meaning. It is worth remembering, then, that even seasoned commentators have been left slack-jawed by the continuing economic poo-narmi. As one financial journalist said on Twitter earlier this week: "That scene in Event Horizon where Sam …

  1. osakajin

    And now we all know why governments around the world have devestated the economies. Welcome to perpetual severe austerity and exponential income inequality.

    1. TheMeerkat

      Stupid lefty drivel spreading hatred.

      1. NeilPost Bronze badge

        Not really - the old adage ‘“it’s easy to make money if you have money” comes to the fore here.

        Billionaires - who unlike my fucking pension fund who got out to cash early with inside information from their government pals - will be hoovering up cheap stocks, oil futures and your property on ‘Homes under the Hammer’ to flip when your mortgage provider turfs you out as a CV19 bankrupt.

        Donald Trump is a case study here in inherited wealth.

      2. Justanotherpawn

        I suppose you agree to govts like the UK paying obscene private interest on public borrowing after they gave away the powers to print their own money interest free?

        1. NeilPost Bronze badge

          Yes but borrowed money is real as opposed to printing it Germany pre-WW2 and Zimbabwe style.

    2. LucreLout Silver badge

      Welcome to perpetual severe austerity and exponential income inequality.

      The austerity part of your argument is likely to be correct in the short and medium term. Longer term I'd be astounded if it continued, so I think perpetual is stretching things a bit.

      Income inequality isn't actually a bad thing, its a very good thing. There's no good reason why someone who works longer or harder than someone else should have the same income, or why someone smarter shouldn't be able to earn more than someone less smart, or someone more qualified more than someone less qualified.

      If I spend 5 years getting a BSc, and an MSc in some STEM subject and you hang out with your mates for those 5 years and work at McDonalds, then there's really no sensible expectation that our incomes would be equal. It would be an outrage if they were.

      If I'm newly qualified in the field and you have 2 decades of experience, again, there's no sensible expectation that our salaries would be equal. Again, it would be an outrage if they were.

      That my annual income is less than Bill Gates makes in an hour isn't his fault and he doesn't need to be punished for it. That my income is multiples of the national average is again no reason to seek to punish me.

      Success brings rewards, financial as well as non-financial, and it will ever be thus. There's no wrong in that, and rather an awful lot of good.

      1. noboard

        "That my annual income is less than Bill Gates makes in an hour isn't his fault and he doesn't need to be punished for it. That my income is multiples of the national average is again no reason to seek to punish me."

        Bill Gates made his money with illegal business practices and that's the issue with billionaires. They're not making money because they are geniuses, they're making it by exploiting people and governments are doing nothing about it, as they're on the gravy train.

        While people should be able to make money and be well off, no one has contributed anywhere near $2 billion dollars of worth to anything in the last few months, yet they're being rewarded. Bezos earned his money by forcing his employees to work in unhealthy conditions, for no extra money, not because he worked hard, or came up with some amazing new thing. Most of the billionaires are in the same boat, I expect that ability to exploit people/get away with crime, is what separates billionaires from millionaires.

        Almost all heads of large companies earn multiple millions these days, despite having no experience within that companies core competency, they just know the right handshake. The fact is these days the people sticking things in pigs and knowing little else of value are earning all the money. The ones studying hard are earning less and less as the years go by.

        Oh and people with no qualifications but doing jobs no one else wants to, should also be able to earn a decent wage. Horrendous jobs, or unsociable hours should bring more pay, but this has been all but wiped out as the people at the top need their millions for doing jack.

        1. LucreLout Silver badge

          I expect that ability to exploit people/get away with crime, is what separates billionaires from millionaires.

          I don't know any billionaires, though I do know quite a lot of millionaires (from work). All are self made, very very few had any family connections or wealth and those that do haven't inherited the wealth yet, they've just made their own. Most peoples experience of millionaires is watching the Kardashiwests on telly or pwediponce on yootube.

          What separates most millionaires from most other people is a greater drive to succeed, an increased focus on achieving an outcome rather than simply putting in the effort without the focus, and a greatly increased sense of personal responsibility - they succeed or fail from wherever they started and by whatever definition of success they hold, they don't expect "society" to deliver it to them by taxing those who have already succeeded.

          The fact is these days the people sticking things in pigs and knowing little else of value are earning all the money. The ones studying hard are earning less and less as the years go by.

          My universities were the least "pig sticky" places you could imagine. I like pigs, to eat, not to mate with. The fact is that its too easy to blame what "you" feel is a lack of personal success on them rather than "yourself". Not you personally, hence the "" thingy's - for all I know you are Elon Musk, or Baroness MiLF or more successful than either.

          Oh and people with no qualifications but doing jobs no one else wants to, should also be able to earn a decent wage.

          Unlike most people reading this, I have been one of the people doing the jobs "no one else wants to". You earn the rate at which your employer can find someone else who is capable of doing the job. That's how life works, and it works the same way in all fields save those with either a union baron strangling the life out of the employer or where you're the CxO. The former always go bust in time.

          Horrendous jobs, or unsociable hours should bring more pay

          It's called overtime. Usually 1.5 x base through the week and on Saturday, and 2 x base on a Sunday. Or it was when I used to do it. Swing shift was always the worst - can't have a drink before because of dangerous machines and chemicals, and can't drink after because clocking off time was the same time as closing time.

          but this has been all but wiped out as the people at the top need their millions for doing jack

          I'm at the point in my career where its realistically possible to take aim at a job in the bank where I could earn very high 6 figure pay, however, literally everyone I know doing those roles works bloody hard and very very long hours. Frankly, I just don't see the return. I'll take the easier life for less money, so I can spend time raising my kids rather than just looking at their photo on my desktop.

  2. SWCD

    "And now we all know why governments around the world have devestated the economies. Welcome to perpetual severe austerity and exponential income inequality"

    Certainly, if it wasn't the intention this time around, a lot of people will have noticed how we've meekly hidden ourselves away, begged for more even, and aren't in the slightest concerned about long term pain. The "financial crisis" emptied our pockets but created a wee bit of hate towards banks and governments. A pandemic every decade or so... hmmm... they don't seem to mind that. Chuck some of their wages at them for a month, do it in the nice weather... Bread and circuses.

  3. bombastic bob Silver badge
    Unhappy

    whenever governments grab MORE control...

    whenever governments grab MORE control, such as due to COVID-19 responses by these governments, the RICH get RICHER, and the POOR get POORER.

    The only time the lower and middle class benefit is when government LOSES a chunk of that power... i.e. lower taxes, less regulation, and so forth.

    Just sayin'. It is SO predictable by those who understand what I just said. And so is the SOLUTION!!!

    SO - ask yourself THIS question: WHO is benefiting from these shutdowns??? WHO is being hurt by them???

    Answer: hedge funders and politicians and governments (in general) benefit. THE REST OF US are hurt.

    1. Version 1.0 Silver badge

      Re: whenever governments grab MORE control...

      And the rest of us are going to have to find the money to pay for all of this - everywhere governments that have bitched about the opposition spending too much money and failing to balance their budgets are now giving money out to their friends with nobody ever suggesting how we're going to pay for it.

      Those poor billionaires will probably end up being just millionaires while the rest of us eat our cats and dogs and start cooking bat soup ... now where did this virus come from?

    2. rcxb Silver badge

      Re: whenever governments grab MORE control...

      As the Chinese government has grown in power over the recent decades, many of the poor have moved up to middle-class. As power in the UK moved to Parliament and away from the King and aristocracy, the political power and weath of commoners drastically increased.

      Go back to the "Gilded Age" to see what a weak government means... "Robber Barons" monopolizing entire segments of the economy, easily able to prevent others from entering those markets, and holding state-like control.

      You know what helps the lower and middle-class? Unions. And Unions only work when the government has enough power to stop private corporations from firing anyone and everyone who votes to unionize. Much like Wal-Mart immediately shutting down any stores where it looks like employees might vote to Unionize.

      1. Phil O'Sophical Silver badge

        Re: whenever governments grab MORE control...

        You know what helps the lower and middle-class? Unions.

        Only when they, too, are kept under reasonable control. The biggest boost to the middle class in the past 50 years was during the Thatcher era, when the government firmly stamped on union abuses of power and gave power back to ordinary people.

        Uncontrolled unions are just as bad as uncontrolled companies.

        1. jospanner

          Re: whenever governments grab MORE control...

          Bring democracy to the workplace. We should own our workplaces. We work there, we make the wealth.

          1. Anonymous Coward
            Anonymous Coward

            Re: whenever governments grab MORE control...

            Nothing to stop you creating your own business if you want to be in control. If you accept employment by someone else, you accept that they have the decision-making power.

          2. Stork Silver badge

            Re: whenever governments grab MORE control...

            It doe exist. John Lewis (still?)

            1. phuzz Silver badge

              Re: whenever governments grab MORE control...

              And Co-op (sort of).

      2. LucreLout Silver badge

        Re: whenever governments grab MORE control...

        You know what helps the lower and middle-class? Unions.

        Utter rot. Students union aside I've never been in a union. Dinosaurs from a bygone age of socialism that nobody ever wants to see again. Strike happy blackmailing immoral buffoons that shouldn't even be trusted to run the school tuck-shop accompanied by an army of useful idiots.

        I'm working class, from a blue collar family, and I attended the local failing state comp.

        Waiting for the state to tax someone hard enough to make me wealthy would simply never have happened. I could never have unionized my way to success (unless I worked FOR the union) or more wealth than I ever imagined I'd see.

        I'm not rich and I probably never will be, but certainly I am manifestly better off that I ever could have been under any system than Thatcherite capitalism. It's the one true great leveler - everyone gets the chance to make the most of their ability, judgement, and effort. It's the only morally acceptable system we've ever known - socialism is morally indefensible, and unions exist only to promote that dead ideology and to enrich their barons.

        1. Stork Silver badge

          Re: whenever governments grab MORE control...

          If you broaden your horizons a bit and think of Netherlands, Germany or Scandinavia, would that still apply? In those places unions and employers had a more cooperative attitude than in the UK. The British experience is not the only one on offer.

          Thatcherism did not work for social mobility generally.

          1. LucreLout Silver badge

            Re: whenever governments grab MORE control...

            The British experience is not the only one on offer.

            It's the only one on offer in Britain. See the few remaining unionised public & ex public sector employers for details.

            Unions here learned nothing from the 70s - they still compete to destroy their employers, because whats good for the union members is subsidiary to whats good for the union. They're quite happy to blow up your employer provided other employers then go softer in pay negotiations, which allows them to hike dues. Blackmail, in all but name.

    3. jmch Silver badge

      Re: whenever governments grab MORE control...

      "the RICH get RICHER, and the POOR get POORER" is a function, by design, of the type of free market capitalism championed by Reaganites and neoliberalism. It works by having LESS government oversight/regulation of big businesses and the ultra-rich. There is a clear correlation of the rich getting richer in the time of the 'robber barons' 100+ years ago, and again from the mid-1980s to now.

      On the other hand, there was more equality and social mobility in the postwar years with higher taxes and more regulation.

      Covid-related government measures are regulating ordinary people, relaxing those measures will not bring more equality. For a more level playing field between poor and rich, what is needed is more regulation of big businesses and less tax loopholes for the ultra-rich

      1. bombastic bob Silver badge
        Pirate

        Re: whenever governments grab MORE control...

        you're welcome to live under an OPPRESSIVE COMMUNIST REGIME that was GOING HOUSE TO HOUSE AND ROUNDING PEOPLE UP for having FEVERS [or speaking out against the Chinese government] if you want to. Buh-bye.

        1. Snake Silver badge

          Re: whenever governments grab MORE control...

          People like you, with those typical knee-jerk responses, are the epitome of irrelevant. All you "Capitalism rules!" reply fools see are 2 answers, black or white, "great capitalism" or "evil communism". You people never understand shades of grey - a middle ground of mixed, practical solutions attained by knowledge, history, trial and error, and lessons learned.

          But that's because you don't WANT to. You always want you paint black and white solutions so that you always are in the right, always the "hero". Since your way is purity and right, and you've only ever presented a dark, seemingly negative option, your's is, obviously, the only apparent choice to anyone and everyone listening.

          "Bombast", indeed.

        2. Anonymous Coward
          Anonymous Coward

          Re: whenever governments grab MORE control...

          Even if we assume that the Chinese government has under-reported, I suspect a lot of Chinese living under their oppressive "Socialist government led by the Communist Party with Chinese characteristics" will be looking at World of meters, comparing the statistics, and thinking that if the options are Xi or Trump, they might be a lot better off with Xi. The motto of New Hampshire may be "Live free or die", but personally I consider the freedom to be dead is pretty bunk.

          Trump has been talking about easing restrictions even as the new cases per day and death rate are climbing. He doesn't seem unable to take in how the virus spread in other countries. Or how Japan and South Korea, with their social conformity, have been doing so well.

      2. low_resolution_foxxes

        Re: whenever governments grab MORE control...

        With all respect, would you say the 2020 poor are poorer than 1920?

        I know it's a flippant comment. But what you are describing is the nature of people who invest and save regularly, and those who don't. That's not necessarily an evil relationship.

        Otherwise I generally agree.

      3. LucreLout Silver badge

        Re: whenever governments grab MORE control...

        On the other hand, there was more equality and social mobility in the postwar years with higher taxes and more regulation.

        We have exceptional levels of social mobility available now to all. Over the past 25 years I've gone from working in overalls on the factory floor to being in charge of my own (small) division in the investment bank I work for. How is that not social mobility?

        I'd be happy to put it down to Northern Exceptionalism, however, I expect the South might object.....

        My family connections, before anyone brings it up, did get me started in my first factory floor job, but alas there out family network ran dry.

        Only one of my provincial uni cohort had any connections to speak of, yet we've all done various shades of well in our careers. Ironically, those with the least worst family connections seem to have had the highest drop out rate, where they've gone from solid middle class living to very working class. There's nothing wrong in that, it's simply what social mobility means - it has to be a two way street or it isn't real.

        1. Stork Silver badge

          Re: whenever governments grab MORE control...

          I am genuinely happy for you. I have also done "low status" jobs (supermarket, paper round) and if I didn't have it before it taught me respect for people who get up every day to a hard and dull job.

          I am still not sure if social mobility has increased the last decades, do you have any numbers?

          1. LucreLout Silver badge

            Re: whenever governments grab MORE control...

            I am still not sure if social mobility has increased the last decades, do you have any numbers?

            Not to hand, but the same route I use is open to everyone, it was when I used it, and it is most certainly so now.

            Education was key, followed up with a couple of decades of hard graft, continuous professional development, and the balls not to jack in the whole shit show when I had a micromanaging bully for a boss (though I did leave that employer).

            The half of the country to the right of 100 IQ could have done what I did - many of them can and will have done better. To suggest that in an age where anyone can start a business in 5 minutes flat, with the click of a mouse, where education even to post grad level is open to all that seek it, where knowledge is freely available at a key stroke, nobody can credible suggest there's ever been more social mobility or that there could ever be more.

            Social mobility is not achieved by a high tax rate, quite the opposite in fact. Social mobility in the UK is primarily determined by an individuals level of drive, and very little else. If my kids choose not to listen and choose to slack off at school or drift through life getting wasted rather than trying to achieve something for themselves, well, there's actually not much you or I or the government can do to stop that. No level of tax I might be able to pay would alter the outcome of their life.

            At best you can only equalize opportunity, which we mostly have in the UK, you can never equalize outcome. It's always puzzled me why so few on the left have the wits to see it.

    4. Friendly Neighbourhood Coder Dan

      Re: whenever governments grab MORE control...

      "It is SO predictable by those who understand what I just said. And so is the SOLUTION!!!"

      Something tells me your solution includes "sun and disinfectant injections"...

      1. IGotOut Silver badge

        Re: whenever governments grab MORE control...

        Don't forget to inhale the Chlorine gas....

  4. holmegm Bronze badge

    OK, the economy = people making and doing things and getting paid for it.

    You have banned people from making and doing things.

    So, you expected ... what, exactly?

    1. Anomalous Cowshed

      Actually, in countries like the uk, tge lion's share of the economy is not people making things, it is people buying things...so you might be surprised.

      1. Tom 38 Silver badge

        The company I work for makes and sells information; we're classed as services, along with people who make sandwiches and coffee. I think the three sector model of the economy is outdated, and that we should be measuring more the Quaternary sector more rigourously.

        1. Steve Davies 3 Silver badge
          Alien

          re: The company I work for makes and sells information

          So you are responsible for all that 'Fake News' then?

          Make information ==== Fake News.

    2. Anonymous Coward
      Anonymous Coward

      "OK, the economy = people making and doing things and getting paid for it.

      You have banned people from making and doing things."

      Funny, I've been working for the last month. Admittedly, my office has changed to my home, but ... (yeah, I know not everyone can do that, but it's false to assume everyone can't ...)

      1. codejunky Silver badge

        @AC

        "Funny, I've been working for the last month. Admittedly, my office has changed to my home, but ... (yeah, I know not everyone can do that, but it's false to assume everyone can't ...)"

        Thats great (absolutely no sarcasm, glad some people can still work) but for a lot of people this lock down and severe reaction to the virus has stopped the majority of economic activity.

        *moving on a tangent now*

        Interestingly with all the people out of work and the damning situation for peoples livelihoods apparently Alexandria Ocasio-Cortez has publicly acknowledged (with pride if I read it right) that this would be life under the green new deal in the US. Over here I have heard some passing comments about it being a free trial of socialism (back when the shelves were empty) but such analysis of similarity seems to have passed us by.

  5. mark l 2 Silver badge

    Where as some business will probably be able to open back up again quite quickly with some social distancing measure brought in to reduce the risk. The tourism, hospitality and entertainment industry will be hit hardest by the social distancing measures. With the chief medical officer is saying it could be next year before social distancing can be relaxed and that’s IF a viable vaccine is ready by then.

    How do all those business that rely on large amounts of people attending to make their money, survive until then? You can't realistically put on a concert or open a bar or nightclub and expect to be able to keep everyone 2 metres apart and also make it financially viable to do so. And that is not mentioning how some countries entire economies are built around tourism and most of their money is made over the summer months so it looks unlikely they will have any revenue in 2020.

  6. IGotOut Silver badge

    Don't forget the hard done by Billionaires....

    Think of that wanker Branson. He wants a loan to bail out his pet money maker.

    Of course he, or his major shareholder Delta, could, you know, sell shares to raise money.

    Nope, give us a loan and if we go bust, we keep our cash and you'll get an island that you don't want.

    1. JohnG Silver badge

      Re: Don't forget the hard done by Billionaires....

      Perhaps he should ask the BVI government for a bailout, where he chooses to be taxed.

    2. LucreLout Silver badge

      Re: Don't forget the hard done by Billionaires....

      Think of that wanker Branson.

      Always good to buy a couple of extra minutes....

      Of course he, or his major shareholder Delta, could, you know, sell shares to raise money.

      Raising capital takes time they don't have; dilutative share sales take months to organize, obtain permission for, and then launch. There would have to be bridge financing in place, which is essentially what he's doing staking his island for it. Its quite legitimate that most of his wealth isn't cash in the bank, because there's no growth there, so he like everyone else isn't flush just now.

      Nope, give us a loan and if we go bust, we keep our cash and you'll get an island that you don't want.

      Factually completely true. That is what he wants. However, Necker Island is effectively a proxy for his name and reputation, it's also his family home, and I rather think those things do matter to him, at least somewhat.

      Is he a "wanker" probably yes, I've never met the man. Is he pulling some sort of vaguely shady fast one, well, possibly, he often does. However, in this case what he's saying is actually plausible to the extent it could be true.

  7. Stuart Halliday

    We also are fully aware that rich people don't count their wealth until it's cashed in.

  8. Jonjonz

    Recent Stock Price Dips - Who do you think was buying it up?

    It went swoosh right past most commentors, but the recent stock price falls were combined with record high transaction numbers, meaning some-one was buying a boat load of blue chip stocks at bargain prices. 3 guesses who those players are. This is not an economic crisis, it is the accelerated concentration of wealth and resources that are the nature of end stage oligarch capitalism.

    1. low_resolution_foxxes

      Re: Recent Stock Price Dips - Who do you think was buying it up?

      Possibly. But the algorithms will probably trade more often during periods of high volatility, it's probably triggered enormous volumes of 'stop losses' and set price buys.

    2. LucreLout Silver badge

      Re: Recent Stock Price Dips - Who do you think was buying it up?

      meaning some-one was buying a boat load of blue chip stocks at bargain prices. 3 guesses who those players are

      I'm nobody's idea of a "player", but I was buying as much as I could. Near 50% off some great stocks? If that isn't the better time to buy then when is? Admittedly I've disposed of some of it now as I'm guessing that there may well be a secondary deeper slump so I want to pull the same trick twice - even though I'm mostly still invested.

      Capitalism isn't in an "end stage" or anywhere close to one. It's the same junk politics I've heard from lefty voices all my life and its as much garbage now as it was back when the 80's ended. Nobody should still be listening to this, much less making life decisions based on it.

  9. Palpy Silver badge

    Ah, the joys of [mostly] unfettered capitalism.

    Any fule kno that unregulated capitalism is destructive: the capitalist mandate is to make money, no more, no less. If that means working people to death in unsafe, unsanitary, unregulated slaughterhouses (see "The Jungle"), then that's what capitalists will do. If it means disregarding safety during chemical production and gassing people to death (see Bopal), then that's what capitalists will do. If it means dumping cancer-causing waste where people live (see Love Canal), then that's what capitalists will do.

    If it means megacorporations loopholing legislation in order to profit from bailouts meant to help small businesses during a global recession, then that's what megacorp capitalists will do.

    This is a no-brainer. The founding documents of the US state that it is the job of government to safeguard the rights of citizens to life, liberty, and the pursuit of happiness. It is, in fact, the job of government to regulate capitalism in order to minimize the destructive social harms that unfettered capitalism will inevitably cause to citizens.

    There is no known system which is better for creating economic responsiveness to supply-and-demand than capitalism; that's been demonstrated in real time and real events. And the dangers of capitalism have been equally well demonstrated in real time and real events.

    As any ful kno.

  10. low_resolution_foxxes

    The billionaires described are tech billionaires in a relatively small field of companies that are doing well in hard times, as they provide homeworking and home shopping solutions. It's hard to say if the share price rise will be sustainable.

    As most wealthy types will have stock portfolios and real estate, I'd imagine the vast majority of millionaires will have seen their wealth drop by 10-30% over the last few months.

  11. Justanotherpawn

    Do people still really believe...

    ...that the likes of Bezos, Gates, Musk, Zuckerberg etc are the richest people in the world??

    1. LucreLout Silver badge

      Re: Do people still really believe...

      Do people still really believe...

      ...that the likes of Bezos, Gates, Musk, Zuckerberg etc are the richest people in the world??

      Well, sort of. You forgot Slim, some Sheiks or highnesses, and Buffet, but yes, them's the rich folk. Why? What tinfoil-hatted alternative of rich people do you propose?

    2. low_resolution_foxxes

      Re: Do people still really believe...

      Where are you going with this?

      For one reason or another, Buffett owns 18% of Berkshire Hathaway, with a total market cap of $500bn.

      So yes, I am quite happy to believe he is one of the wealthiest people on the planet, with $90bn or so.

      I'm open to debate about the various other wealthy people in the world, but when I read statements like the one you made, I take a deep breath and hope you're not going to say something particularly troubling and silly?

  12. Mr Sceptical
    Coffee/keyboard

    It's not poo-narmi...

    It's poonami, all one word.

    As coined by my sister's friend to describe to contents of nappies everywhere.

    I prefer 'furgatory' to descibe the current mess.

    That is all.

    1. LucreLout Silver badge

      Re: It's not poo-narmi...

      poonami

      Bit too close to poonani* for polite parlance.

      See Full Metal Jacket if you're not familiar with the term, and you also get to enjoy what is still the best war movie ever made.

  13. codejunky Silver badge

    Well done

    Congrats to those people who have done so well as to have such wealth. And good luck to those going through hard times right now.

    We know for those with great wealth that it isnt their actual monetary wealth but valuations of things that have not been cashed in and would probably bring them less. We hear of when some people make lots of money (it is news) but not when they lose a lot of money (as they do during recessions and economic events like this).

    For those on hard times it is a moment to look at their situation and to plan to protect themselves from being in the same situation again. It might be that they are living paycheck to paycheck or that they have debts or maybe they need to make moves to change career.

    It is easy to get all green eyed and try to blame people. But that wont fix the situation. Good luck

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