COVID-19 and the Billionaires

Jeff Bezos, Jack Dorsey, Bill Gates
Reading Time: 13 minutes

Americans are struggling. As of today, over 16 million people have filed for unemployment in the US in the past three weeks and millions are slated to lose their health insurance when they need it most. At this time of need, it seems as though some of the richest Americans are coming to the rescue, but are they really? 

Jeff Bezos has given $100 million to food banks, but that’s the equivalent of somebody with $20,000 in the bank donating 20 bucks. There are others with a better track record. Bill Gates has been a symbol of philanthropy directed toward the public good. Oprah has promised millions and Tyler Perry is buying groceries for the elderly in Atlanta.

But should these feel-good stories actually make us feel good? What does it say about a society when billionaires have to fill a void the government can’t — or won’t — especially if the very same billionaires and their companies are often not paying their fair share to begin with? 

In this week’s WhoWhatWhy podcast we talk with Chuck Collins, a longtime writer and activist on the issues of wealth inequality.  

Collins asks important questions: Who elected any of these billionaires? Why should they determine which vaccines to support, where masks and ventilators need to go, and what research is worth funding? Collins explains how the crisis has exposed so many weaknesses in our system.

He also talks about billionaires who are sheltering in place in their third or fourth homes, setting up personal ICUs, and have unlimited access to testing. 

Doing good is great, but what does it say about the US when billionaires are helping Americans with millions while their companies are getting billions in bailouts and tax breaks from the government? 

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Full Text Transcript:

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Jeff Schechtman: Welcome to the WhoWhatWhy podcast. I’m your host Jeff Schechtman.
Jeff Schechtman: As of yesterday, the nation’s unemployment numbers stood at over 16 million, about a 10th of the American workforce. Since the start of the pandemic, Jeff Bezos has given $100 million to food banks. Bill Gates has been a symbol of philanthropy directed towards the public good. Oprah has pledged millions. A couple of days ago Jack Dorsey of Twitter pledged $1 billion to help in the fight against Covid. Basketball stars, team owners and celebrities have all gotten in on the idea of doing good work. On one level, they should all be commended. It’s an improvement over David Geffen Instagramming from the safety of his half billion dollar yacht. But imagine if all of those billionaires had paid their fair share in taxes, might we have a better healthcare system, more PPE, and ventilators and wider testing? Might we have then done as well as Singapore or Hong Kong or South Korea, or maybe not? Do these billionaire contributions come with any additional expertise?
Jeff Schechtman: We know and we see every day that stress either brings out the best or worst in people. It exposes fault lines, and in many ways the stress of this crisis overall does that as well. It may very well be that it will bring into further bold relief those fault lines that define inequality in America. We’re going to talk about that today with my guest, Chuck Collins. Chuck Collins is a senior scholar at the Institute for Policy Studies. He’s the author or co-author of many books, looking at inequality and the wealth divide in America, and it is my pleasure to welcome Chuck Collins here to the program. Chuck, thanks so much for joining us here on WhoWhatWhy.
Chuck Collins: Thanks. Great to be with you Jeff.
Jeff Schechtman: In so many ways this focus on what billionaires are doing right now seems so directly related to the failures of government. Talk about that nexus first.
Chuck Collins: Yeah. I mean, I think we are living through a period where we’ve seen billionaire wealth surging over the last four decades and at the same time, the share of taxes that billionaires pay keeps going down. So we have a report we’re releasing in the coming days showing that the billionaire class tax obligations have gone down 79% since 1980- so that goes to the point you said in the setup, which is these are funds that could have been invested in infrastructure, that could have been invested in building a better durable healthcare system and an emergency preparedness. And instead, we are waiting for the beneficence gifts to trickle down through the charitable system, which is not a substitute for an adequately funded public sector and a fair tax system.
Jeff Schechtman: What has happened, in your view, in the public consciousness with respect to this? Because in a way it becomes this vicious cycle, this self-fulfilling prophecy as less taxes are paid, the government fails more and therefore the actions of these billionaires, particularly in a crisis, becomes more paramount.
Chuck Collins: Yeah. I think that that is the dynamic that we weaken the public sector, we lose trust in the public sector’s ability to solve problems, and then we look to private charity and billionaire philanthropy to be the saviors. And in fact, we should be reversing that.
Chuck Collins: It’s interesting, we just looked at … Forbes came out with their global billionaire issue recently, and even with the enormous losses from the pandemic, half of global billionaires have seen their wealth continue to go up. And US billionaires, the whole group as a class, the billionaire class in the US has seen their wealth only go down like 0.03% from a year ago. And meanwhile, we have five billionaires whose wealth is surging over a billion dollar increase since the beginning of the pandemic situation. Bezos up 3 billion, Eric Yuan, the founder of Zoom, up almost 3 billion, George Sobrato, the Silicon Valley real estate tycoon, up 2 billion. So there are people whose wealth is surging at this moment, even when most households still haven’t recovered the wealth that they had before the 2008 economic meltdown.
Jeff Schechtman: And then of course, you have people like Bill Ackman who are specifically profiting from it.
Chuck Collins: Yeah, I mean, we have what I would just call the pandemic profiteers. And in a different part of our history, in a different point in our history, we’ve been in World Wars and we’ve created commissions to oversee an outlaw war profiteering. Well, we’re seeing a sort of form of pandemic profiteering and we need the same rigorous oversight and cultural sanction against that. It’s just unseemly and wrong that people are making money while millions of people are losing their jobs and feeling incredible vulnerability at this moment.
Jeff Schechtman: How much of this is as a result of it, particularly among the tech billionaires that are making contributions and that are being elevated in the public consciousness, is a result of this? How much of it comes from the fact that it is that technology that their companies represent that has been so beneficial in some respects in this crisis? And maybe Eric Yuan and Zoom may be the penultimate example.
Chuck Collins: Well, yes. I mean, some of that wealth is surging into both sort of the Amazon delivery, but also just, yeah, the sort of emerging technologies, which raises the question of why something like Zoom wouldn’t be more of a public utility. It’s something that’s become a central … It’s like electricity. And during the last depression, we had the rural electrification project that linked in all the regions of the country that had been left behind by electricity. Why wouldn’t we have sort of a broadband and public utility kind of function for this essentially critical service that a private company is providing but also profiteering from?
Jeff Schechtman: The other part of this is the decisions that get made that go with those huge contributions, decisions that have a broad societal impact being made by people that are essentially unelected.
Chuck Collins: Yeah. And I think this is an important point, Jeff, that when a billionaire gives a dollar to charity, you and I and everyone else are chipping in at least half of that gift in lost tax revenue. So we are subsidizing the private decisions and whims of this billionaire group. And it may be that they are using their money charitably to do really interesting things and useful things to solve the Coronavirus crisis, but there’s nothing to stop them from just buying up more forests around their private compounds and donating them to land conservancies and getting tax breaks or funding private schools where their children go. It’s another form of unaccountable private power, and we should be very, very concerned about that and just keep remembering that we are subsidizing the private charitable decisions of the billionaires.
Jeff Schechtman: One of the examples that is out there is Bill Gates right now, and I know you wrote a book a number of years ago with Bill Gates’ father, and it’s very noble that Bill Gates is putting all of this money, all of these resources into getting a jump on the manufacturing of possible vaccines out there. But in many ways it would have been once upon a time something that government would have done.
Chuck Collins: That’s right, and I mean, a functional government would be leading the way. And that’s not to say that there’s not room for private sector innovation and charitable giving, but again, take the Gates Foundation situation. This is wealth, a hundred billion plus at this point, including now adding into that Warren Buffett’s wealth that’s going into that foundation, probably close to $200 billion of wealth that was never subject to any form of taxation. We’re giving it to a family foundation that essentially has dodged billions and billions of dollars in taxes. So again, back to, yeah, it’s great that Gates is doing that, but it’s a private decision that has no accountability. And his foundation has made other big bets in agriculture and in education that turned out to be fundamentally flawed. Why should we be depending on the whims of billionaires, whether they’re thinking it through or not, to solve our problems? That creates a vulnerability for all of us.
Jeff Schechtman: Will this crisis, by putting a spotlight on this, help or hurt this whole issue?
Chuck Collins: Well, I think in some ways, extreme inequality of wealth is America’s preexisting condition, and so this pandemic is kind of landing, and as you said, sort of supercharging and worsening the economic divide. But I also think it’s a great wake-up call because I think people are seeing the unequal sacrifice, the fact that some people are profiteering, the fact that some people’s conditions are so much different than others, and I think that will lead to a greater awareness around what’s wrong with these inequalities and why we should fix them. And I think coming out of this, as part of the recovery, we will see greater calls for restoring the progressive tax system for taxing huge concentrations of wealth and power, reforming philanthropy so it’s not just an extension of private power. All those are things that I think will be the public response to the growing inequalities coming out of the pandemic.
Jeff Schechtman: Arguably though none of that can be done without some kind of campaign finance reform.
Chuck Collins: Yeah, and I think it’s true. And at the same time, I think that there’s a movement that will both push the campaign finance reform movement forward, but also just the demands of the wider public. People are saying, oh, why do we have a health insurance system that’s linked to jobs and employment? Why don’t we have a farsighted agency that is thinking about preparedness and disaster relief? Why is it that so many people are living so close to the edge financially, unable to sort of have any kind of cushion? Shouldn’t we be thinking about creating a greater system of social security? Not the social security program, but just a safety net, if you will. So I think campaign finance reform is going to be important, be linking the power of money. But the power of the people here is going to really ultimately create the push.
Jeff Schechtman: One of the other things that we’re seeing in this crisis, which relates to this whole issue of inequality, is the ability of those with a great deal of wealth to essentially isolate themselves from the problem, their ability to isolate themselves in very posh surroundings. Stories that have appeared lately about individuals that have set up their own personalized CUs, bought their own ventilators, concierge medicine, all of this is really coming to the surface in this crisis.
Chuck Collins: Yeah, and I think people see that, like how is it that some people are able to get tests and others not? How is it that people who have second, third, or fifth houses are sequestering themselves far from the center of the hotspots and essentially privatizing a response and pulling resources away from the common good, away from the rest of society to create a buffer around themselves? And it’s, it’s unseemly and it’s just unfortunately, a grotesque reflection of just how unequal we have become. And if we want to move forward as a society, we have to reverse these extreme inequalities of wealth and power. Because it is about power and the power to opt out and leave everyone else behind and that’s just not what a democratic, self-governing society should be about.
Jeff Schechtman: Do you think that there’ll be a willingness to talk about this after the dust settles?
Chuck Collins: Well, if you think about after 2008 and the economic meltdown, and the fact that the bankers got the bail outs and a lot of people lost their homes, I think there was a populous moment and some of that went right wing populist, into tea party movements and some of it went toward occupy and other reforms. I think we’re going to see a similar moment. And I think that this national discussion about how  unequal we are and how much inequality can a healthy democratic society sustain, that is right going to be at the center of the American conversation for years to come.
Jeff Schechtman: One of the things that we saw early on, I mean I think we’re still seeing it but maybe not to the same extent. Is the availability of testing for those in wealthier areas versus in some inner city situations?
Chuck Collins: No, I mean I’ve talked to people who would say, “Oh yeah, I got my test”, and I’m like, “Well, how did you do that?” And as you mentioned, it’s concierge medicine, it’s people who can pay are able to get access to tests, access to ventilators, they’re creating a second tier of medicine for the very, very privileged. And we should all be very alarmed and concerned about that.
Jeff Schechtman: There’ve been a number of stories that did look at what’s going on in Russia right now, where the oligarchs have created a similar kind of system with concierge medicine and ventilators and all the things that we’ve been talking about. It’s really been driven to the max there. Very much under the radar in some respects because we’re concerned about so many other things, but we’re seeing the really extreme example of it there.
Chuck Collins: Yeah. And I think what we’re also going to start to see is that the United States, we have our own group of oligarchs. And the definition of an oligarch is somebody who has so much wealth that they’re able to use it in democratic distorting ways and ways to change the rules. And they also can deploy it to hide their money and create a separate system of taxation. And so I think we should anticipate that the oligarchs are going to be hiding their money. They’re going to be moving their money to offshore tax havens. They’re going to be moving it into trusts and shell companies. And as part of our recovery, we should shut down the hidden wealth apparatus, if you will, and ensure that the billionaires pay their fair share of taxes as we move forward. So I think we should realize the United States … We’ve woken up and we have an oligarchy, they are creating a second set of rules for themselves. And if we don’t want to be an oligarchy, we need to take some actions to reverse that.
Jeff Schechtman: How much good will be generated among billionaires by the philanthropic work and contributions that they’re making in the depths of this crisis right now? Will the kind of rhetoric, for example, that we heard from Elizabeth Warren or Bernie Sanders, will that rhetoric fly in the face of what appears to be such good deeds on the part of so many billionaires?
Chuck Collins: I mean, I think that some of the motivations are genuinely humanitarian and generous. It’s interesting you mentioned Jack Dorsey, he’s talking about 28% of his wealth. Well, that raises the bar much higher than a lot of the other billionaires have been talking about. It’s fascinating. Forbes magazine has created a section of the magazine, an online feature billionaire tracker, where they basically are reporting out what these billionaires are doing. When I read it, my reaction was like, this is pathetic. I mean, you’re a billionaire and you’re letting healthcare workers stay in your empty hotel or you’re giving 0.0001% of your treasure to help your fellow human being. That was our not meaningful or sacrificial gifts in any way, and I think that people know that on some level, that this is a little bit of whitewashing or greenwashing, if you will. But it’s defensive. Some of that philanthropy is about “Don’t hold us accountable, we’re good people, we’re going to retrieve ventilators and masks from other countries in our private jets, we’re helping out.”  But it can’t help expose how small those gifts are related to the wealth that those have.
Chuck Collins: I mean, the 614 billionaires in the United States together have $3 trillion of wealth. Three of them together have more wealth than the bottom half of the US population. So let’s not denigrate acts of generosity and charity, but we should be quite skeptical as we look at them in relation to the level of response that’s required and the level of wealth that’s actually being put on the table.
Jeff Schechtman: The very fact that Forbes magazine is doing this billionaire tracker, talking about the actions of the world’s wealthiest as they put it in their headline, is remarkable unto itself. I mean, that says so much.
Chuck Collins: Yeah. I mean, it’s a defensive measure. They put out their issue this week and they said, “Boy, even the billionaires are not immune from rhe devastating impact of the coronavirus and the number of billionaires is dropping”. That was globally. In the United States, the number of billionaires is increasing. Even in the pandemic moment, the concentrations of wealth are rising. So in the end, we need to have a form of wealth taxation. We need to have a more progressive income tax. We need to shut down the offshore system and the wealth escape hatches that enable the rich to hide trillions of dollars. And we probably should explore things like an excess profit tax to discourage a pandemic profiteering by some of these corporations and individuals. And to do that, we just have to wake up and realize we’re living in an oligarchy. We’re living in a society where a very small percentage of people have disproportionate power, and that really is against all of our interests.
Jeff Schechtman: Chuck Collins, thank you so much for spending time with us today here on WhoWhatWhy.
Chuck Collins: Thanks, Jeff, for the conversation.
Jeff Schechtman: Thank you. And thank you for listening and for joining us here on radio WhoWhatWhy. I hope you join us next week for another radio WhoWhatWhy podcast. I’m Jeff Schechtman. If you like this podcast, please feel free to share and help others find it by rating and reviewing it on iTunes. You can also support this podcast and all the work we do by going to whowhatwhy.org/donate.

Related front page panorama photo credit: Adapted by WhoWhatWhy from Sarah Corriher / Flickr (CC BY 2.0).

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