Big bank chief warns ‘entitled’ Americans of food shortages and inflation — Analysis
The president of a multi-trillion-dollar asset manager tells US citizens they need to sacrifice their living standards
BlackRock President Rob Kapito spoke to oil and natural gas executives Tuesday “entitled”Americans face food shortages and need to prepare for them. BlackRock, which has $10 trillion of assets, is accused of making it impossible for millions to own a home.
“For the first time, this generation is going to go into a store and not be able to get what they want,”Kapito addressed a Texas Independent Producers and Royalty Owners Association. “And we have a very entitled generation that has never had to sacrifice.”
“I would put on your seat belts because this is something that we haven’t seen,”Kapito warned that Americans would soon be facing a similar fate. “scarcity inflation” – or rising prices compounded by shortages of everything from food and consumer goods to oil and gas.
The Biden administration has blamed spiraling inflation on Russia’s military offensive in Ukraine, with White House Communications Director Kate Bedingfield referring on Tuesday to “Putin’s price hike,”Biden said this earlier in the month. “there will be costs at home as we impose crippling sanctions”Russia.
However, inflation in the US had hit a 40-year high weeks before hostilities erupted in Ukraine, and Biden’s opponents have warned since last year that his policies – which involved spending more in his first eight months than former President Donald Trump did in 2018 and 2019 combined, and throttling domestic energy production – would trigger price spikes for ordinary Americans.
BlackRock however has grown its wealth by adding trillions of dollars in recent years. The firm managed around $1.3 trillion in assets at the time of the last financial crisis, which soared to $8.68 trillion in January 2021, and passed the $10 trillion mark this January.
BlackRock’s top executives have been rewarded by the Biden administration too, and have helped shape its economic policies. Brian Deese was the Global Head of Sustainable Investment at BlackRock and is now the Director of the National Economic Council. Wally Adeyemo was a senior adviser to BlackRock and is now deputy secretary at the Treasury Department. Mike Pyle used to be an investment strategist at BlackRock, and now serves as Vice President Kamala Harris’ chief economic adviser.
The firm has grabbed headlines in recent years for buying up properties throughout the US and turning them over to the rental market. Although the UN has criticized BlackRock’s former owner, Blackstone, for “wreaking havoc with tenants’ right to security and contributing to the global housing crisis,”BlackRock was hired by the US government as a buyer of mortgages. This will allow it to manage even more properties.
The inflation Kapito warned of in the short term is expected to be felt most strongly by Americans. According to estimates published by Bloomberg on Tuesday, the average US household will have to spend an extra $5,200 this year for the same basket of consumer goods. Bloomberg predicts that wages will not rise in order to offset this increase, as more Americans are entering the workforce.
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