WashingtonAmericans, and the rest of the world’s population, know the major American companies with whom they deal directly and use their various products and applications. They also know the richest people in the world, and how rich they are.
However, the vast majority of Americans do not know the three largest companies (investment funds) in the United States and the world, despite the huge size of their assets and the intensity of their activities around them.
A warning cry
Months ago, Bernie Sanders, the progressive leftist senator from Vermont, shouted, warning of the danger of the incursion into the wealth of the three largest companies on Wall Street, whose assets are valued at close to the national product of the United States, which last year amounted to an estimated $26.7 trillion (the trillion). equals one thousand billion).
Sanders said that the large size of these companies and their increasing influence may threaten to eliminate American democracy, and he added – in a tweet on the X platform – “Today, in America, only 3 companies run on Wall Street, namely BlackRock and Vanguard.” (Vanguard) and State Street, with assets worth $22 trillion. These three companies are the main contributors to more than 96% of the companies in the “SP” index. (S&P) for the 500 largest companies on the stock exchange! This is obscene!
Today, in America, just three Wall Street firms – BlackRock, Vanguard and State Street – manage $22 trillion in assets. These three firms are major shareholders in more than 96 percent of S&P 500 companies. Obscene.
— Bernie Sanders (@SenSanders) July 11, 2022
These three companies manage assets worth approximately $24.3 trillion, and Sanders asserts that they are “present in almost every sector of our (American) economy, and that is what oligarchy is about. Democracy will not survive with this concentration of economic and political power.”
With Donald Trump reaching a second term in office, and seeking the help of many of his billionaire friends who have direct relationships with these funds, and others, fears are increasing about the impact of this on the strength and solidity of American democracy.
The 5 richest people in America:
- Elon Musk: He is at the top of the richest people in America and the world, with a fortune exceeding $200 billion.
- Jeff Bezos: founder of Amazon, owner of the Washington Post, and his fortune reached $195 billion.
- Mark Zuckerberg: Owner of Meta, which owns the Facebook platform, and his net worth is about $180 billion.
- Larry Ellison: Founder and CEO of Oracle, with a net worth of approximately $140 billion.
- Warren Buffett: Chairman and CEO of Berkshire Hathaway, his fortune is approximately $133 billion.
The 5 largest traditional companies in America
Americans, as a whole, also know the names of the major American companies they deal with directly, such as Apple, Microsoft, Alphabet (which owns Google), Amazon, and the technology giant Nvidia.
- Apple: $3.9 trillion.
- Nvidia: $3.4 trillion.
- Microsoft: $3.2 trillion.
- Google: $2.4 trillion.
- Amazon: $2.4 trillion.
Not traditional companies
These three major companies are not considered traditional companies in the conventional sense. They are American investment funds that manage assets, in which many traditional companies invest their financial surpluses, and in which the world’s rich people and the sovereign funds of many countries put their money.
These giant funds are expected to control 40% of the shareholder votes in the Wall Street BS 500 index by 2030, which would concentrate too much power in the hands of a small handful of investors.
With such a large share of the market, these funds have the ability to push any agenda they want on the companies in which they invest.
For example, a few years ago, all American companies witnessed a tendency to pay attention to what was known for short as “environmental, social, and governance policy” (ESG), and suddenly it became a top priority for the 500 largest companies in America! Why? Because the Big Three were able to direct their CEOs in the direction they wanted.
A Wall Street Journal report indicated that the funds of these companies bought one in every 7 homes sold in the United States last year, and that by 2030 these funds will control approximately 40% of the homes and apartments available for rent in America.
These funds also believe in the trend of mergers and acquisitions policies, which facilitates control over the markets of specific resorts or specific raw materials.
These funds and their managers exploit the ignorance of most Americans about their existence, the nature of their activities, and their power to extend more influence in political, social, and economic life.
Who rules America?
There are often debates about who has the greatest influence on the American economy, or who owns America? There are dozens of opinions, counter-opinions and conspiracy theories.
But simply put, it can be said that voters are the ones who choose the president and Congress, and they in turn set policies and make decisions. However, the reality is more complex, especially in light of a complex capitalist system like the American system.
Americans have a popular saying: “Follow the money” to find out the truth about political mysteries. The rule of these companies allows them to directly and indirectly influence many economic decisions that affect the lives of billions of people in all corners of the planet Earth.
As the size of what these companies manage approaches the total size of the US economy, many observers and analysts are increasingly concerned about the danger of disrupting traditional financial balances.
It is worth noting that the United States’ gross domestic product last year amounted to approximately $26.7 trillion, which makes it the largest economy in the world. The American economy represents approximately 25% of the size of the global economy.
What do you know about the big three companies?
- BlackRock’s total assets are about $11.5 trillion.
- Vanguard’s total assets are approximately $8.6 trillion.
- State Street’s total assets are about $4.2 trillion.
1- Black Rock
- BlackRock is one of the largest asset management companies in the world.
- BlackRock was founded in 1988 and is headquartered in New York City.
- Run by Larry Fink, it provides investment and risk management services to a wide range of clients, including governments, corporations, institutions, and individuals.
- The company is known for its extensive use of technology in asset management, in particular through its proprietary platform called Aladdin (Asset, Liability, Debt and Derivatives Investment Network), which is used for investment portfolio management and risk analysis.
2- Vanguard
- Vanguard is one of the largest and most influential investment management companies in the world.
- It was founded in 1975 by John Bogle in Malvern, Pennsylvania.
- Known for pioneering the concept of low-cost index funds, this revolutionized how individuals and institutions invest.
3- State Street
- State Street, a prominent American financial services and investment management company.
- Founded in 1792 and headquartered in Boston, Massachusetts.
- State Street is one of the oldest financial institutions in the United States.
- It plays a major role in global financial markets and operates in more than 30 countries.
- It serves institutional investors such as pension funds, government endowments, mutual funds, and sovereign wealth funds.
Some thinkers argue that the largeness of these investment funds reduces the market efficiency and accountability of their subsidiaries.
What concerns do these companies pose?
Although there are many differences between the three largest companies, both with regard to the management of their financial portfolios, their investment style, and their organizational structure, this did not prevent the presence of common risks caused by the size of these companies and the nature of their work.
- Firstly: The dangers of allowing excessive concentration of wealth in the hands of a limited number of companies that collectively manage a large portion of global investments, allowing them to possess unlimited powers inside and outside America.
- secondly: Risks of conflicts of interest, as the dual role of these funds, especially in cases where they work as an advisor to governments on the one hand, and on the other hand as a private investor, raises concerns about conflicts of interest.
- Third: The risks of global influence, especially with regard to emerging markets, and these funds contribute to shaping the economic and institutional landscape in many countries of the world in direct or indirect ways.
- Fourth: The risks of influencing international politics, as these funds are able to influence global standards in corporate governance, environmental and social governance practices, the business environment and financial regulation.
Mechanisms of control and influence
These companies have great influence that most citizens may not realize because they do not appear directly to them.
Among the most important of these mechanisms are:
- Corporate governance, through voting power: As major shareholders in thousands of companies around the world, these funds have significant influence over corporate policies through their voting power at periodic shareholder meetings.
- Board of Directors elections: With stakes in many Big 500 companies, these funds can influence decisions regarding executive appointments and board compositions of the world’s largest companies.
- Financial markets: Through market movements, and as the largest asset manager, the decisions of these investment funds can affect the prices and trends of financial market shares. When one of these funds enters or exits certain markets, other investors often follow suit.
- Liquidity providerThrough their wide range of ETFs, these funds provide trading liquidity to many markets, especially in sectors such as fixed income and equities.
- Public policy and government relations: Advisory role, where the leaders of these companies are appointed by governments and central banks to perform advisory roles, especially in times of economic crises.
For example, the US Federal Reserve engaged BlackRock during the 2008 financial crisis to help manage assets affected by the crisis.
