Chuck Collins is the director of the Program on Inequality and the Common Good at the Institute for Policy Studies, where he co-edits Inequality.org. He is the author of more than ten books and dozens of reports about inequality, climate disruption, philanthropy, the racial wealth divide, affordable housing, and billionaire wealth dynasties. His 2021 book, The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions, unmasks the industry of professional enablers that assist the ultra-wealthy in hiding wealth and dodging taxes.
He is also a founding member of the Patriotic Millionaires. We spoke by telephone in early September.
Q: There’s no question that economics are a key issue in this electoral campaign. The everyday people that are going to the polls are also the people that are going into their grocery stores and seeing the prices of things stay high. So when these elected officials come to them and say, ‘The economy is doing great,’ they say, ‘Well, not in the town where I’m living.’ How did we get to this place where we have high food prices, high rents, high insurance costs, and yet we no longer have the supply chain disruptions that we had in 2020 and 2021?
Chuck Collins: First of all, in the United States, I think we can break things down between people who have wealth and they see the stock market grow up and they see their retirement accounts or home equity grow. And then there are what the British call the precariat, the 70 percent of the population that is pretty much depending on their earnings and money goes in and money goes out. And for that bottom 70 percent, first of all, they’re not in the stock market. As booming as it is, 93 percent of the assets in the stock market are owned by the top 10 percent. The top 1 percent have 54 percent of the stock market wealth. The bottom 90 percent has 7 percent, the bottom half has only 1 percent of the stock market wealth. So there’s a lot of nice chatter about the democratization of the stock market, but the reality is most of the gains flow to the top.
Coming out of the pandemic, I think there were supply chain issues that affected prices: The cost of building materials, the cost of groceries, the cost of everything pretty much went up. But because we have a food and grocery system dominated now by just a handful of huge mega corporations, they are happy to see prices go up and keep them up. Groceries count for like 8 percent of people’s budgets and for lower income households, it’s like 11 percent. So that’s a big bite. So I think there is an affordability crisis. People feel squeezed, whether it’s rent, or food, or insurance, or other basic expenses, that’s very real.
Q: One of the things that Kamala Harris talked about in her economic plan was that price gouging is going on. It seems to me that she is touching on an essential point: The prices went up because of supply chain, but when those issues went away, the prices did not go back down.
Collins: Yes, there is price gouging. There are suppliers who, because they have monopoly control over the supply chain, they’re not lowering prices. In the last year, grocery prices have started to come down, but there’s still a perception that we’re still paying more. Getting at the consumer rights point of view is one thing; the other is getting at monopoly power in the food and grocery sector. Back fifty years ago, A&P had 16 percent of the grocery stores, and there was a populist rebellion of antitrust legislation at the state level. Now Walmart controls 25 percent of the grocery market, and you don’t really hear a peep about that. So looking at monopoly ownership, monopoly control over food and groceries is probably the most important thing we could do.
Q: There is also a legitimate shortage of housing. A lot of stuff wasn’t getting built because of supply chain issues during the COVID-19 pandemic. But also you have people buying up big chunks of residential housing that could be either small family homes or rental units and they end up being owned by hedge funds.
Collins: Yes, it’s actually a multi-decade failure to keep up with demand. We don’t have a federal housing program that’s encouraging production. I see four invisible disrupting forces in our communities. One is what I would call hyper gentrification. It’s rich people with more money bidding up the cost of land and housing. That’s classic gentrification, except the rich are richer. So the billionaires are displacing the millionaires and the millionaires are buying up the thousandaires housing, and so on. There’s the short-term rental dynamic, which is more and more the housing in the market is being removed from the rental market by investors, not mom and pops, but the bigger corporate buyers are moving into that space. They’re even creating real estate investment trusts just to own short-term rental properties.
We should be looking at ways to tax high incomes in wealth and invest it in things that expand opportunity and create more affordable opportunities for everybody in housing.
Third is the growth of corporate ownership. Hedge funds, private equity funds moving in, buying up rental housing, buying up single-family housing because they know that more and more people can’t afford to own a home. They’re going to be stuck in rental housing. Middle-income, higher-income households are going to be paying rent. And they see that as a market opportunity.
Then there’s the fourth dynamic, which is global wealth parking. There’s just so much wealth in the hands of these billionaires that they’re buying up land and housing in multiple markets just to spread their assets around and protect their wealth. So you put all those forces together along with insufficient housing, and you have a huge gap. You have more people, shelter burdened, paying 30 to 50 percent of their income to live in housing. You have people who a generation ago would’ve bought a house, but the gap between the median income and the median house price is now six to one nationally. In some markets like California, it’s ten to one. All of that is fueled by these somewhat invisible forces. But I trace it back to the concentration of wealth and power. The billionaire problem is fueling the housing crisis at all levels.
Q: The other factor that comes into people buying starter homes or moving up from the starter home that they’re in is the mortgage rates, which have been artificially inflated by the Fed raising the interest rates. When people talk about how an interest rate drop is going to affect jobs growth, it’s also going to affect the ability of people to get mortgages.
Collins: Yes, in the thirty or forty years after World War II, we had this huge expansion of homeownership. That was because we had a government that was focused on low interest mortgages, farmer’s home, federal housing loans, veterans loans, etc. Some states have housing finance agencies that are doing sort of lower interest mortgages, but nothing on the scale required. That’s a place where public support for expanding rental housing, permanently affordable rental housing and access to homeownership could lift 20 percent of the population into owning homes. That could make a huge difference and reduce that shelter burden, the cost of rental housing and the fact that people pay too much of their income for housing. Maybe then people could pay a higher percentage of their income for food.
Q: Another factor in all of this is insurance.
Collins: Here’s a place where you see in health care and other places the big private equity players, the billionaire-backed private equity funds, are figuring out how to nickel and dime people at every turn of the road. And this is whether it’s health insurance, and if something bad happens to you, you go to the emergency room, and next thing you know you get six different bills, one from the anesthesiologist, one from the ambulance, and your health insurance isn’t covering those, or it’s not covering all of it. There’s profit-taking happening in that insurance space as well. Maybe if we had a better social safety net, we wouldn’t be so worried about having to insure every potential risk. But insecurity sells. And I think the fact that people feel precarious and insecure and are one job loss, one illness, one divorce away from precariousness or deep insecurity, selling insurance takes advantage of that feeling of insecurity.
Q: As we roll into the election season, what are the possible things that an incoming administration could do to address some of these issues?
Collins: I don’t see anything in a Trump Administration or in Project 2025 that will get at monopoly power, the power of the billionaires to extract money from every little corner of our lives. You need to have a rigorous antimonopoly, antitrust perspective. You need to have consumer protection to protect consumers from all these scams, gouging, and junk fees. You’re starting to see, under the Biden Administration, at least some attention focused on all the ways that working people are getting nickel and dimed and squeezed. It’s a form of taxation. It’s private corporations taxing individuals. It’s that little tax that shows up on your cable bill or your phone bill or all these little fees that when you go to buy something and you see that the advertised price is not what you’re paying. We need to have a government that’s on the side of consumers, not just the corporations. You need a fully backed Lina Khan-type [current Commissioner of the Federal Trade Commission] leadership in that seat. It takes a solid decade of vigilance to begin to turn that monopoly corner. I don’t see a Trump Administration [doing that] and I’m concerned about a Harris Administration. Would they maintain that vigor and back the strong oversight that’s going to be required?
I also think there are public expenditures, particularly in the area of housing, where we can expand the supply and create more permanently affordable social housing, rental housing—affordable rental housing, affordable homeownership—and ensure that it stays permanently affordable. But it will require a significant investment and a commitment to public expenditures, public housing, and nonprofit-owned housing. All those things are expensive, and especially in this market with land values higher. States and localities can only do so much. We need a federal government that’s committed. Frankly, the Republicans are happy to have this housing shortage. People are making a lot of money off of this housing shortage.
Q: What should people be thinking about as they go to the polls? What should people be pressuring their candidates to be thinking about if and when they get into office?
Collins: One thing is that you have to ask who’s going to challenge billionaire power in our society? Who’s going to defend our communities against billionaire wealth extractors, billionaire price gougers? And I think we should be looking at ways to tax high incomes and invest it in things that expand opportunity and create more affordable opportunities for everybody in housing. Defending competition and preventing monopolies in those markets. We need government to be on the side of workers and consumers, not just on the side of the big corporations. So, it is a ‘which side are you on?’ question when you go to the polls. Who is really going to fight for you against the billionaire wealth extractors? Who’s going to look at the role of these private equity companies that are stepping into every corner of our lives? According to a Rand Corporation study, over the last forty-five years [1975-2018], about $50 trillion has been transferred from the bottom 90 percent to the top 1 percent in terms of unpaid wages. That’s the wealth and income that people need to be able to afford the cost of living these days. We should be saying, “Who’s going to stand for workers and consumers in this moment?”