Economic expert Werner Vontobel classifies
War profiteers as far as the eye can see!
Energy producers, vaccine manufacturers, real estate companies: the “scarcity” argument explains almost nothing. But it obscures everything, writes economics expert Werner Vontobel.
Published: 06/11/2022 at 11:41 am
The scarcity drives up the prices. say. But that is only the smaller part of the truth. We have known this since biblical times: After a bad harvest, food prices rise. And that’s right: even in normal times, the farmers barely make ends meet. If half of the harvest fails, they have to double the prices. This is the only way they can buy the necessary seed and fill the tractor’s tank so that they can till the field for the next harvest. This is also in the interests of consumers.
The current situation is a little different. Although Russian energy supplies are largely canceled, the corresponding damage only occurs in Russia. The costs of the other energy suppliers do not increase, or only insofar as they have to exploit less productive oil and gas deposits. The fact that the world’s 28 largest energy producers raked in profits of $93.3 billion in the first quarter of this year alone, a good three times more than in the same period last year, shows that rising production costs are not the main reason for rising energy prices.
Vaccine manufacturers cash in
The other “war”, the one once morest the corona virus, has also produced its war profiteers. The three vaccine manufacturers Pfizer, Biontech and Moderna have made a combined profit of around 35 billion dollars. The profit margin is likely to be over 75 percent. That’s according to Moderna’s financial statements, which show spending at $4.6 billion and revenue at $18.5 billion. This also includes state research grants of 735 million.
Overall, the state coffers have supported research into the Covid vaccines with around 8 billion dollars. Moderna boss Stephane Bancel made 408 million last year just from the sale of shares. His net worth is estimated at $5.1 billion by CNBC. According to this source, however, he is only one of five new corona billionaires with a total fortune of 35 billion.
Shortage of building land – landowners benefit
That’s a lot of money, but it’s just peanuts compared to the profits that location competition makes possible. This “war” is won – or Switzerland – by luring wealthy people and successful companies to Switzerland with low taxes and good framework conditions. The rich reside and expats can also pay high rents. Then there are the refugees, whose space requirements per capita are significantly lower. All of this leads to a shortage of building land.
This comparison illustrates how much the landowners benefit from this: according to the statistics of the net capital stock, the building stock has “only” increased by CHF 147 billion in the last ten years. At the same time, however, the total value of real estate (land and buildings) has increased by 859 billion according to the National Bank. The land alone has thus been revalued by a good 700 billion. With the net return of 3.5 percent reported by the real estate consultant Wuest Partner, this results in a pure ground rent of around 25 billion francs annually. For many households, this means additional monthly costs of CHF 1,000 and more. The higher fuel prices and health insurance costs are then just the straw that breaks the camel’s back.
The “scarcity” argument explains almost nothing. But it obscures everything.
