It’s “one of the greatest wealth transfers in history.” It’s referring to this coronavirus pandemic. And the quotation is from Jim Cramer, the host of “Mad Money,” a favorite stock investment program to the CNBC network. Cramer made the aforementioned statement in a post on the CNBC site on June 4. It’s beginning to seem like he had been perfect.
Even the U.S. stock marketplace is performing well, particularly in contrast with the remainder of the U.S. market. Only last week, the Nasdaq Composite, composed of mostly large technology stocks, such as Apple, Facebook and Amazon, attained an all-time high. The Dow Jones Industrials, that is made up of 30 big businesses, despite a sizable fall in the spring, has come back strong and is really higher than it had been just one year ago.
What about elsewhere in the U.S. market? The unemployment rate this season was approximately 4%. The rate jumped to over 14 percent premature throughout the COVID-19 outbreak. It has come down some to around 11 percent for the month of June, the last month reported. Many small businesses are hurting. Retail bankruptcies are approaching the highest number in a decade, with companies like J)C. Penny and Pier One Imports declaring bankruptcy. While stable at the moment, experts predict personal bankruptcies to increase dramatically as federal unemployment benefits are reduced.
So, as much of the economy suffers, it looks like big business, as a whole, is doing just fine during COVID-19. Cramer, in the article, added, “The bigger the business, the more it moves the major averages, and that matters because this is the first recession where big business is coming through virtually unscathed, if not going for the gold.”
Where is that gold coming from? The biggest chunk is coming directly, or indirectly, from the U.S. treasury. The U.S. debt has increased over three trillion dollars since the coronavirus pandemic began in this country. Congress has approved and additional $3 trillion for programs designed to help those affected financially by the virus. And now they are looking at providing at least another trillion dollars in additional COVID-19 relief.
While the programs, such as the Paycheck Protection Program (PPP) and additional federal unemployment benefits, have provided assistance to the average citizen, big business and corporations have benefited much. Just a look at a few of the amounts received by some corporations through the Paycheck Protection Program will tell you where much of the money is going.
To be honest, many of the corporations that are prospering during this pandemic are being run wisely, and are seizing opportunities. They have learned the oft quoted saying, “Never waste a good crisis.” But they are also benefiting greatly from the U.S. government printing press.
So, according to Jim Cramer, COVID-19 is “one of the greatest wealth transfers in history.” Notice that he said “transfer,” that’s moving wealth from one place to another. We can see who is receiving the wealth, just look at the stock market. But whose wealth is getting moved?
It’s easy to say that it’s you and me, the U.S. taxpayer. That we are the ones who are going to have to eventually pay for these trillions of dollars COVID-19 relief programs. That we are the ones who are going to have to pay for the trillion dollar a year additional debt that the U.S. government has been accumulating the past several years, in apparent prosperous times. That we are the ones that are going to be burdened with paying down the total U.S. debt, which is now over $26.5 trillion.
But it will probably not be from us. We’ll make sure of that by continuing to elect officials who will do little about it, keep on spending, and kick the can down the road. So, it looks including “one of the greatest wealth transfers in history” will end up coming from the next generation. They will be saddled with a crippling U.S. debt, or a devalued, maybe useless, dollar. Let’s don’t tell them about it. They are preoccupied with statues, having to wear a facemask, and TikTok, (whatever that is) so maybe they won’t notice.
Mac McPhail, raised at Sampson County, lives in Clinton also could be reached at [email protected]