It has become apparent that we are ruled by economic sociopaths, more commonly known as hedge funds.
This dynamic has not gone unnoticed. A new survey suggests the GameStop saga has become a very real lightning rod for anti–Wall Street sentiment. In her introduction to the study, Morning Consult reporter Claire Williams was unequivocal: “One of the biggest takeaways of the GameStop Corp. market mayhem so far, according to new Morning Consult polling, is that Wall Street remains the public’s top villain.”
In an amazing new article Matt Taibbi finds that one Reddit investor saw GameStop as a way to send a message to this “villain”.
This is just a small sample but it speaks to a larger truth–Americans increasingly hate Wall Street and especially hedge funds. Millions of Americans have come to correctly recognize that Wall Street is antagonistic to their interests. Of course the pandemic has only poured fuel on this sentiment–the astonishing boom enjoyed by major corporations and financial firms amid widespread poverty and unemployment is highlighting yet again just how severed from the country the Wall Street prosperity really is.
The economic damage is literally incalculable–millions have been plunged into desperate poverty, countless independent businesses crushed, whole industries crippled, as billionaires amassed over $1 trillion in wealth and their vehicles for enrichment–hedge funds–consolidate their dominance over our country.
A recent headline in our local paper–Hedging Bets on Water’s Future–detailed the extent of our subservience to the new financial lords. “Hedge funds and other Wall Street interests want to rewrite the ‘Law of the River’ in the Colorado River Basin and use the free market to solve the problem of scarcity–while potentially raking in immense profits”
I’m sure that letting hedge funds get their hand on our water supply will work out swimmingly. (Pun intended). Perhaps the citizens of Flint Michigan can offer up a lesson or two on such folly?
The financial world we live in is the end result of neoliberalism – a financialized world order that intends to privatize all infrastructure and create monopoly rents for transportation, education, healthcare, and let banks and hedge funds control our economy. Presently our economy is based largely on debt and asset price bubbles.
Heterodox economist Michael Hudson says that, “in the United States the center of economic planning has been shifted from Washington to Wall Street financial institutions.” These financial parasites goal is “to take it over and turn public infrastructure – the education system, healthcare, transportation and communications – into rent extraction devices. The American economy is no longer a productive economy. It is a rent-seeking economy.
All of it was brought about by decisions to favor finance over the real economy, starting with the decision to offshore American manufacturing. Offshoring served the interests of corporate executives and shareholders. The lower labor costs raised profits and, thereby, executive bonuses and the prices of the stocks, resulting in capital gains for shareholders. These benefits accrued to a small percentage of the population. For everyone else these closely held benefits imposed huge external costs many times greater than the rise in profits.
The offshoring of high productivity, high value-added manufacturing jobs reduced American incomes, US aggregate domestic demand was impacted and economic growth fell. The Federal Reserve expanded credit and substituted an increase in consumer debt for the missing growth in consumer income, while the effective zero percent interest rates extended to Wall Street in the wake of the Crash of 2008 blew an enormous asset bubble inhaled by our ruling plutocracy.
As incomes fell for the bulk of the American population, incomes rose for the financial 1%. Income and wealth gains have been concentrated at the top resulting in the United States today having one of the most unequal distributions of income and wealth in the world.
This is the milieu we inhabit. A hedge fund nation, where the well-heeled perpetrators–the ones who crash our economy and invade and destroy countries–fail upwards, while the rest of us sink downwards.
Update: Chris Arnade, who writes of the devastation visited on our country by the economic sociopaths, predicts where this all goes.
“The lesson taken away by those losers, and everyone else not on Wall Street, is more important, insightful, and dangerous though. It will be that there isn’t a meritocracy, or at least a justified one. It will be that everyone is just playing games. Those at the top get to dress up their game, even though it is destructive to everyone else, as legitimate, call playing it a career, and get rewarded mightily for it. Others, like them, have to make it a hobby, and even though it is just harmless fun, get scolded for it.
This will harden a cynicism that already exists in large parts of America. A cynicism that will convince more and more people to play all of their life, recklessly. To do what is known in gaming circles, as Int-ing, or Intentionally dying. Running madly at the boss, unworried if they are going to lose, suffer, or die.
Because if you are not going to be allowed to win a rigged game, you might as well ruin it, and extract just a tiny moment of joy from that.”