Paradoxes

By Randy Alonso Falcón on April 3, 2023

The United States is the realm of paradoxes: the richest country in the world, but with millions in poverty; the nation capable of sending men into space for long months, but unable to ensure rail transit. Recent news reveals many other contradictions in the mighty nation:

Bitter sweet

American diabetes sufferers have the difficult choice of eating properly to cope with their disease or injecting themselves with the routine insulin they need for quality of life.

Although insulin was discovered more than a century ago and costs little to produce, brand-name insulin often sells for about $300 per vial. The high cost has forced many people with diabetes to ration or skip doses of medications, which helps the body control blood sugar, notes La Opinión newspaper.

In the United States, some 30 million people have diabetes and some 7 million need insulin on a daily basis, according to the American Diabetes Association.

Faced with such a situation, California Governor Gavin Newsom has announced that state will manufacture more affordable insulin in partnership with nonprofit generic drug maker Civica Rx. “People should not be forced to go into debt to get life-saving prescriptions,” Newsom said in a statement.

The partnership will provide insulin to Californians at $30 per 10 milliliters, the official said. Production is expected to be available by 2024. Meanwhile.

Oil shareholders partying

Although President Biden repeatedly threatened oil companies over high fuel prices through 2022, amid inflationary pressures facing the U.S. economy, and called for continued investment in renewable energy sources, little heed was paid by fossil fuel hierarchs.

For Big Oil, rejecting direct requests from the U.S. government may never have been more profitable, because the White House is not the real power. Especially when the capital of the world’s largest companies is at stake.

Shareholders in U.S. oil companies made a $128 billion profit in 2022 thanks to a combination of global supply disruptions, such as Russia’s war in Ukraine and intensifying pressure from Wall Street to prioritize returns over finding untapped crude reserves. It is the highest gain since at least 2012.

For the first time in at least a decade, U.S. drillers spent more last year on share buybacks and dividends than on investment projects, according to Bloomberg estimates.

International oil companies are wary of investing in low-emission energy projects because of the rising cost of capital, which erodes their profitability compared with short-cycle oil and gas projects, compounded by commodity uncertainty, warns Marlen Shokhitbayev, head of corporate ratings at Scope Ratings.

Perverse philanthropy

It’s not just oilmen who win. Billionaires in the U.S. saw their fortunes grow in 2022. And the more they earn the less they pay to the taxman, cloaking themselves, among other things, in the mantle of pious philanthropy.

Fidelity Charitable announced that it distributed nearly $1 billion more in donor-advised grants to charities in 2022 than the previous year.

Grant dollars distributed by Fidelity Charitable to nonprofits have increased more than fivefold over the past 10 years, the philanthropic organization rejoiced.

But in truth, so much charity is pure handouts for the wealthy. According to OXFAM’s annual report, the richest 1% (led by US billionaires) have cornered nearly two-thirds of the new wealth generated since 2020 globally (more than $42 trillion). Over the last decade, the richest 1% has captured about 50% of the new wealth.

Since 2020, with the pandemic and the cost-of-living crisis, the richest 1% received $26 trillion (63% of the new wealth generated), while only $16 trillion (37%) went to the remaining 99% of humanity.

For every dollar of new global wealth received by a person belonging to the poorest 90% of humanity, a billionaire pockets 1.7 million dollars. The fortunes of billionaires have grown at a rate of 2.7 billion dollars a day.

As the OXFAM report reveals, 95 major energy and food companies have more than doubled their profits by 2022. They generated extraordinary profits totaling $306 billion, and allocated $257 billion (84%) to remunerate their wealthy shareholders. The Walton family dynasty, which owns 50 % of the multinational Walmart, received 8.5 billion dollars in dividends last year.

A recent study estimates that in the United States, 54% of inflation is due to the increase in these corporate profits.

And to top it off, the more wealth they accumulate, the less taxes they pay (from which they deduct what they supposedly give to charity). Decades of tax cuts and privileges for the wealthy and big business have been complicit in increasing inequality, so that, in practice, in many countries, people with lower incomes end up paying higher effective tax rates than those paid by billionaires.

An investigation by ProPublica reveals that in 2007 and 2011, Jeff Bezos, who became the richest man in the world, did not have to pay any taxes on his earnings. The same happened in 2018 with Elon Musk, the founder of Tesla and current leader of the global ranking of billionaires. George Soros paid no taxes between 2016 and 2018 because he had “lost money on his investments.”

The publication compared how much the 25 richest Americans paid in real taxes between 2013 and 2018 and found that the amount was barely equivalent to 3.4% of the enormous wealth they had accumulated. To do so, the wealthy resorted to numerous methods of chicanery and their army of accountants, lawyers, bankers and secret accounts that serve them to evade taxes, as well as income deductions for charitable donations and for earning investment income rather than income from having a salary.

This is how paradoxical the empire is. It punishes those it should reward and overly rewards those it should punish. As the 18th century English philosopher Mary Wollstonecraft said: “It is justice and not charity that the world needs”.

Source: Cubadebate translation Resumen Latinoamericano – US