Evictions, Billionaires, and Venmo
By: Shayna Englin
Tags: Covid 19, Inequality, Billionaires, Charity, Homeless

America’s billionaires could avert the eviction crisis looming in January. Together they could pay every single overdue rent bill for every person through January and most would still be billionaires after that expenditure. That would be an extraordinary act of mercy and they should do it. BUT, if they don’t also engage in the politics of systemic relief, the need for another extraordinary act of mercy will just arise again in March.

Millions of Americans will go without healthcare and millions will be bankrupted by healthcare expenses this year and next (and for the foreseeable future, absent major changes in policy). America’s billionaires could avert this healthcare crisis — they could pay insurance premiums for every person who lost their job and their healthcare coverage with it due to the pandemic. They could cover that through January, and copays, too. They could do that and most would still be billionaires on the other side. And that would be an extraordinary act of humanitarian mercy.

I could add a parallel paragraph here for any number of other crises non-billionaire America is facing down right now. Homelessness, public education, retrofitting public spaces for COVID safety, infrastructure, student loan debt, etc. all come down to how to pay for what’s needed.

America’s billionaires could distribute some of their extreme wealth back to the people who have made it possible — without workers and customers, today's or those of a generation ago that made their ancestors rich, none of these billionaires would be billionaires.

They could do give through the auspices of a nonprofit and write it off of their taxes as a charitable contribution.

And there’s the rub. If the billionaires give, and do so in a way that takes advantage of the systems that benefit them, all while not changing the answers to the big political questions that got us here —government relief that overwhelmingly benefitted those who least needed it, healthcare tied to disappearing jobs, city and local governments starved of resources to provide basic services, etc. — then relief will be short lived.

We’ve got a very small number of billionaires that control a massively disproportionate percentage of our national wealth as a result of policy choices in alignment with our political decisions to maximize America as a platform for profit, and make risk largely public while reward is largely private.

The array of federal policies that enforce these decisions is too vast for a single article, but to dig into perhaps the most consequential: inequality is a consequence of diminishing progressivity in taxation. Per one of many recent studies documenting this reality:

We find that the significant drop in tax progressivity starting in the late 1970s is the most important driver of the increase in wealth inequality since then. The sharp observed increases in earnings inequality and the falling labor share over the recent decades fall far short of accounting for the data. The model can also account for the dynamics of wealth inequality over the period — -in particular the observed U-shape — -and here the observed variations in asset returns are key. Returns on assets matter because portfolios of households differ systematically both across and within wealth groups, a feature in our model that also helps us to match, quantitatively, a key long-run feature of wealth and earnings distributions: the former is much more highly concentrated than the latter.

-via Sources of US Wealth Inequality: Past, Present, and Future | NBER

Put simply: we have systematically made it so the wealthy get wealthier and their wealth is protected, without doing anything to systematically protect people who are not wealthy in any of the same ways. We have provided the wealthy a floor, while stripping away the net for the poor.

So, at the same time that philanthropy is veering away from systemic solutions — and away from investing in any sort of infrastructure for engaging the politics that create our conditions — extreme wealth is shoring up the systemic bulwarks against change.