By now, you’ve almost certainly heard about the fiasco surrounding GameStop’s stock prices. A group of hedge fund managers decided to short the company’s stock in order to capitalize on its diminishing value. In response, a group of small-time investors decided to collectively invest in GameStop, thereby raising its stock price and costing the hedge funds millions of dollars. In retaliation, investing apps like Robinhood halted trading on GameStop stocks. This quickly escalated into a large-scale financial battle between small-time investors and the hedge funds. While, from the outside, this just seems like a bunch of kids on the internet conspiring to mess with stockbrokers on Wall Street, I believe that it is a symptom of the rampant income inequality in the United States and an act of class warfare.
Even before the pandemic, income inequality was unfathomably high and showed no signs of stopping. In fact, inequality in the United States today is among the highest in its recorded history. This problem has only been exacerbated by the pandemic. While millions of Americans have lost their jobs and closed their businesses, billionaires grew their net worth by nearly $1 trillion dollars. Furthermore, Americans have barely received stimulus payments from the government, even when 25% of households suffered job loss due to the pandemic. While the Biden administration is working to fulfill its $2,000 stimulus promise and raise the minimum wage to $15/hr, it’s insufficient to ameliorate the effects of the pandemic. More than ever, Americans are aware of the staggering inequality that exists within their nation.
In addition to all this, the political situation of the past few years has made it evident that wealthy individuals are treated favorably by those in power. In late April of 2020, Congress passed a COVID-19 relief bill aimed to provide financial support to businesses struggling during the pandemic. However, the bill primarily gave tax breaks to individuals making over $500,000 and large corporations. There was no clause in the bill that directly targeted small businesses or low-income individuals. This slight was further exacerbated later in 2020 when Mitch McConnell blocked legislation that would provide $2,000 stimulus checks to Americans struggling during the pandemic. In their pandemic response, the government has shown a clear pattern by which they will only support the wealthiest Americans.
This is all to say that the relationship between the lower and upper classes of American society has been pushed to its breaking point. The fiasco with GameStop and Robinhood is indicative of general unhappiness surrounding income inequality. It is clear from the events of the past few years that something must be done to lower the vast disparity of wealth in this country. Not only is maintaining this inequality morally dubious at best, it’s also bad for the general well-being of our economy; the concentration of wealth by the upper class leads to lower wages and less productivity. Higher taxes on the wealthy and splitting up monopolies could go a long way to fix these problems. But, as long as this doesn’t happen, people will continue to engage in acts of class warfare, and this country will continue to suffer.