Working As Designed?

Who are the super wealthy?

How did they become super wealthy?

Do they cause good or harm to our economy?

No big surprise, the personal wealth of 5 of the richest people on the planet is growing exponentially.

Since 2020, their net worth skyrocketed by 114% for a total of $869 billion, according to a report from Oxfam’s annual inequality report, released in Jan 2024.

NOTE: that report is an easy google search away.

In no time at all, we could actually see the world’s first trillionaire – perhaps in less than a decade at the current rate of things.

I hate everything about this – for every billionaire who gets richer, the same data illustrates a negative affect on the world’s middle class and poorest people.

The Point: Nearly 5 billion people globally have become poorer contending with inflation, high interest rates, multiple wars, unemployment, and the world wide political chaos – the data shows it will take (not less than) 230 years to eliminate poverty based on our current trajectory.

NOTE: The report drew the data compiled by Forbes.

The report also argues that businesses are making some of the highest profits ever – which (oh by the way) seems to be only helping fuel the fortunes of the extremely wealthy.

Seven out of ten of the world’s largest public companies have either a billionaire CEO or a billionaire as its principal shareholder – this fact speaks to motive and method for increased
profits.

1% of the population holds 43% of the world’s financial assets, according to the same report.

148 of the world’s largest corporations made nearly $1.8 trillion in profits in the 12 months leading up to June 2023.

That’s 52.5% higher profits than their average was between 2018 to 2021 – the problem might not be just “inflation” – perhaps its also individual and corporate greed.

The same report calls out the oil and gas industry, pharmaceutical companies, insurance industry, goods and services, and the financial institutions for charging higher prices, which lead to higher profits in the last three years – higher than their averages in prior years.

Why does any of this matter? By its very nature the global economy is vulnerable – COVID19 hit the world economy hard which led to an even more unstable and vulnerable economy – so, did the rich take advantage of everything around them for their own personal benefit, at the expense of the middle class and the poor of the world?

Oddly, many inflation indicators have improved over the past 18 month, but not pricing – why not? The implications are pretty damning.

I’m not a fan of govt regulations to govern businesses – free enterprise and capitalism can be great – right?

What part of our economy governs the super wealthy?

Is our economy working as designed?

Without some correction or governance, what’s to curb unqualified high prices?

All good questions – next time, we’ll talk about what’s working (and not working) as industry, consumers, and the law step into this fray – I’ll wager you already know the answer.

More to follow…