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DEMOCRACY AND WALL STREET

November 28, 2016

  1. DEMOCRACY AND WALL STREET

    A lady professor today posed the question on the internet of whether we who voted against Trump should “just get over it” and accept the electoral (though not popular vote) outcome. She wants to continue to resist what such a minority president brings to the table and I agree with her. I have expanded on her topic a bit with my slightly edited response as follows.

    We cannot abandon the trenches if our democracy or what is left of it is to survive, to be sure, but we should be aware of what is going on today before the Orange One actually takes office. The Dow has surpassed 19,000 and is climbing even before Don the Con assumes the throne.

    Ordinarily that would be a good omen, but not these days. Donald’s talk of less taxes and less regulation of the rich and corporate class is partly responsible for the Dow’s jump to historic 19,000-plus highs. The increase in capital value of corporate stock measured by the Dow depends not upon corporate performance as touted by text books in business school; it depends upon lower taxes and less regulation and most of all the continuing authority to take the lion’s share of the income of the economy away from corporate workers and others whose contributions to our economic performance have been hijacked by Wall Street into the mix constituting what is known as “shareholder value,” the holy grail of CEOs which has found its way even into court decisions holding that increasing shareholder value has arisen to the high plane of fiduciary duty of corporate managers, and, I might add, a measure of how much corporate managers peel off the top to fund their own salaries, bonuses, and most importantly, their stock options.

    Wage inequality, in my opinion, is the biggest single domestic issue our country faces today, and Trump’s promise to bring good wages back to America is just another impossible claim designed to garner votes since it is not congruent with his simultaneous policy plan to make the already rich richer via “shareholder value.” Continuing theft of wages into the capital column is a necessity if the Dow is to be strengthened, and it has now strengthened to historic proportion, which provides a strong clue as to not only continuation but acceleration of wage inequality.

    Those who voted for Trump and await those good-paying jobs that are coming back to America are going to be disappointed when they finally learn that the wizard behind the curtain at the end of the yellow brick road whose policies favor a continuing and even accelerated reduction in their share of the economic pie cannot simultaneously in fantasy-like fashion raise their take home share while raising shareholder value. It’s a matter of arithmetic.

    Fellow billionaire Mark Cuban predicts not a recession but a depression with Trump’s election. I disagree. I think it will be the latter, though which if not corrected quickly, could fulfill Cuban’s prediction. Such a correction would require New Deal Keynesian thinking and action, qualities not much in evidence in these days of Republican adoption of austerity economics. Like Hoover, they think “free markets” are self-correcting even though a cursory reading of economic history repeatedly demonstrates otherwise. Apparently “free trading” Republicans prefer a depression over violation of this their cherished thesis/myth.

    Meanwhile, yes, to the ramparts! We have to somehow keep the country and our social cohesion (or what is left of it) intact so that we (the majority) can have a say in our future and that of our progeny and theirs, and tyranny must be resisted in any event if we are to rescue our tattered democracy for ourselves and future generations. We saw what happened in Germany when tyranny was not resisted during the 1930s, so let’s listen up to lessons of history and react accordingly.     GERALD       E

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