About All Those Pandemic Billionaires
By The Editorial Board, 12/8/21, Wall St. Journal

Christmas came early this year for economic progressives with
the publication Tuesday of a fat report on global inequality.
It’s the product of a Parisian think tank founded by economist
Thomas Piketty, and despite praise from the usual suspects
it’s a turkey.

The big conclusion is that 2020 was a great time to be a
billionaire. The World Inequality Lab’s “World Inequality
Report”—you know where this is going—finds that the pandemic
year saw the steepest increase on record in global billionaires’
share of global wealth. The top 0.01%, a club with some 520,000
members worldwide, saw their share of global wealth increase
to 11% from about 10%. The world’s remaining billionaires saw
their share grow to 3.5% of all wealth from about 2% before
the pandemic.

Setting aside data and methodology concerns that plague any
attempt at measuring wealth, there's a lot less here than
meets the eye. For example, the authors note that pandemic
lockdowns weighed on incomes, esp. among poorer households.
Yes, that’s one reason we opposed lockdowns.

But they seem less interested in what triggered the putative
spike in the wealth of the ultrarich. Monetary policies that
have inflated asset prices are an obvious suspect, esp. in
the developed world where financial assets have soared in
value. But lead author Lucas Chancel tells us via email
“it’s too early for us to have a definitive take” on the
impact of monetary or other policies on this trend.

That’s an important point to leave for later, because without
a full understanding of what creates a level of inequality,
it’s impossible to say if that inequality is a problem.
Instead the authors assume any inequality is bad and focus
on longer-term trends that supposedly show a persistence of
colonial or imperialist patterns of wealth distribution, or
something.

Despite the report’s best efforts to conceal it, there are
hints of good news. A graph on page 61 titled “The elephant
curve of global inequality” shows that since 1980 the bottom
50% of the world’s earners saw their incomes rise between
50% and 200%. A graph on page 15 shows that since 1995 the
wealth of the poorest 50% globally has increased 3%-4% a year.

Largely missing from this analysis is any sense of absolute
scale. Were such data included, they would show that the
global pie has grown apace, esp. in recent decades, leaving
most people with a bigger piece. The proportion of people
below the World Bank’s $1.90/day poverty line, at 9.3% in
2017, is the lowest it's ever been.

Instead of examining what causes the pie to expand, Piketty's
building a career out of arguing over how politicians should
slice and redistribute it. Tuesday’s report complains that
govts have become much less “wealthy” lately, which may be
true in net terms in some places as some capitals privatized
state-owned assets and then borrowed during the pandemic.
But privatization has generally been a boon for prosperity,
and trying to reverse it via wealth taxation and more govt
control, as Piketty and the left have in mind, would leave
less global wealth to distribute.

The real inequality news from the pandemic is how govt
policies stoked it. By all means let’s debate that. But
then it’s passing strange to trust that govt will somehow
reverse the inequality it caused. Private economic growth
will have to do that—some of it financed by, wait for it,
billionaires.

https://www.wsj.com/articles/about-all-those-pandemic-billionaires-world-inequality-report-thomas-piketty-11638991033