‘Entitled’ generation warned of food shortages and inflation
BlackRock President Rob Kapito told oil and gas executives on Tuesday that “entitled” Americans are about to deal with shortages of food and other goods, and should prepare accordingly. BlackRock, which manages $10 trillion in assets, has been accused of making home ownership unaffordable for millions of citizens.
“For the first time, this generation is going to go into a store and not be able to get what they want,” Kapito told a meeting of the 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 added, warning that Americans will soon face “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,” and Biden himself said earlier this month that “there will be costs at home as we impose crippling sanctions” on 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 added trillions of dollars to its portfolio 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 served as the global head of sustainable investing at BlackRock, and now directs the National Economic Council. Wally Adeyemo is a former senior adviser at BlackRock, and now serves as deputy secretary of 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 has been hired by the US government to buy up mortgages on its behalf, bringing even more properties under its management.
Americans are expected to bear the brunt of the inflation Kapito warned about in the immediate term. 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. Wages are unlikely to rise to compensate for this expenditure, Bloomberg predicted, due to more Americans entering the labor force.