r/technology • u/DontFearTheCreaper • 1d ago

Social Media Tech CEOs who grinned behind Trump at inauguration lose billions in wake of tariffs

https://www.independent.co.uk/news/world/americas/us-politics/trump-tariff-bezos-musk-zuckerberg-b2727147.html
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u/princeofzilch 1d ago

I haven't heard that they're upset about it. 

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u/droans 1d ago

As long as the US economy recovers eventually, recessions disproportionately benefit the wealthiest.

The average Joe doesn't have much free money to throw around in a recession. Even if you have savings, you're focused on keeping it available in case something happens.

Meanwhile, almost every stock will drop during a recession. Even quality companies which aren't affected will see their market cap drop because money is leaving the market. The reason for that is two-fold. Some people are scared and pull their funds out of the market. Other people suffered job losses, or pay deductions and are forced to withdraw their retirement savings and investments now.

The UHNW will also see their money drop - perhaps by an even greater percentage then the average Joe. But that doesn't matter simply because they began with so much and have free money to throw around. Same goes for the largest companies - they have more money to start with and can get more and better financing than smaller companies can.

Apple would be a good example of a beneficiary of a recession. They will often acquire startups and small firms just for a single IP they can use in the iPhone or a MacBook. When the economy is healthy, these small companies can demand more. They're able to hold out for better deals as there's more funds available for them to finance their operations. Additionally, Apple might have to compete against other bidders who want the same tech. During a recession, though, they might have a very short runway and know they have to sell. Or Apple might not even bid; if they believe the company is circling the drain, Apple might just wait for them to go bankrupt and buy their IP on the cheap.

Look back at the Global Financial Crisis where hundreds of banks shut their doors. The biggest banks were able to just acquire them and all their deposits – sometimes for just $1. They got even richer while others lost everything.

On top of all that, small businesses suffer the most. Around two million small businesses closed during the GFC. Once the economy recovered, the demand was still there but now customers had to turn to large businesses instead.

Imagine that each company was a tree in a forest. The largest trees will have their growth stunted by the smaller trees competing against them for the same resources in the soil and the same sunlight. So if you cut down 80% of the smaller trees, the biggest ones will grow much more quickly.