Friday morning, November 4, 2016, CNBC’s Fred published an article “Stocks open mostly flat following jobs report; election concerns remain” to remind you that Wall Street is paying for a Clinton win and, damn it, it expects to get what it paid for. I’ve no intent on critiquing the entire worthless article. So, I’m going to highlight Fred’s opening statement and then go on a rant to make a point. Rather than admit the truth that Clinton is in the pockets of big Wall Street firms, Fred took a more subtle approach, reminding Americans that the stock market is the economy and a vote for Trump is a vote for economic collapse. Well, to be honest, Fred didn’t exactly say that directly. He just hinted at it:
“U.S. equities kicked off Friday trading near breakeven after the release of employment data while investors looked out for new developments from the presidential election.”
Yes, because investors are the Lord to which we pray, don’t you know. US Dollars grow on rich people and stuff. Everyone who has taken Economics 101 knows that the federal government has no money of its own, that US Dollars are a private sector phenomenon, that the rich invest their dollars which then creates jobs and then consumers demand what is produced. Much of this “investing” is done through the stock market, you see. So, the stock market is the economy and we owe our very existence to rich people who buy and sell stocks, and who trade in commodities futures. Don’t be stupid and upset rich people by voting for a rich person like Trump. You will upset the market and we will all die. It would be better for all of us if you vote for Clinton. Hey, even the great Paul Krugman agrees.
Can I have a word about Fred here?
It’s really, really, interesting that financial media outlets and a casino called Wall Street, which are usually gung-ho Republican, suddenly prefer what many conservatives refer to as a “socialist, commie, Marxist-loving” Democrat in pant suits. Now why would that be?
Liberal political pundits on the TV will spin a lie or two and tell you that the reason why Wall Street would want to elect a Democrat like Clinton, is because the Republican Party has gone insane. For the market to fear a Republican win shows you just how far down the rabbit hole of madness that the GOP has gone.
That’s nonsense. More correctly said, it’s a lie. It’s true that the GOP has gone mad, but it has zero to do with why Wall Street wants a Clinton win.
The truth is that Hillary Clinton is in the pockets of Wall Street big wigs and they are paying her to win, because she will begin privatizing Social Security, which will please people like Pete Peterson, and she will continue the neo-liberal economic policies of her husband, Arkansas Bill.
Conservatives, please note: Wall Street wants a Clinton win, because Clinton is not a “socialist, commie, Marxist-loving” Democrat; she is a free market solutions, deregulating, financial industry-loving neo-liberal Democrat.
Progressives, please note: Clinton does not care about the abuse of Native Americans who are standing their ground against what amounts to an illegal pipeline that has no business being on Native American soil. Clinton does not care about the wages of working people. Clinton does not care about protecting Social Security. Clinton does not care about full employment. Clinton only cares about what Wall Street cares about.
Conservatives and progressives, please note: Hillary Clinton cares about perpetuating a speculation economy.
Put it this way: In the dark underworld of street crime, various criminals will pay people with influence not to interfere with their operations, and to make things easier for them to operate criminal enterprises. In the exact same way, Wall Street criminals pay Hillary Clinton not to interfere with their operations, and to make things easier for these entities to continue operations and expand those operations through more deregulation – operations which, in all reality, need to be considered criminal activities and banned by the federal government.
To boil it down for you, a speculation economy is one driven by non-productive gambling (mainly) that has meaning only to the speculator’s wallet and none for the real economy. There are many areas of speculation within the economy, but consider just one: the futures market. Over here you have Mike Farmer. Mike invests in his farm for the production of corn, and later, reinvests some of his profits back into that production. But then Ken Speculator comes along. Ken isn’t interested in Mike’s farm. He isn’t interested in the production of corn, nor is he interested in buying Mike’s corn. Ken is only interested in making money trading contracts on Mike’s corn. This means that Ken hopes to drive up the price of Mike’s corn, take the profit and run.
Of course, I’m using Ken as an example for ease of understanding. Commodities speculation is quite complex for the average person to digest. Wall Street entities (investment banks, etc.) created index funds in the wake of deregulation and speculators bet on food. Entities such as Goldman-Sachs have added a few more slot machines and black jack tables to their casino. In the end, the speculator profits immensely and you pay artificially high prices for food. The most extreme result of this behavior is an increase in world hunger and starvation.
I could, and, frankly, would love to go on and on about commodities speculation because I loathe it. I absolutely hate it. When people ask me questions about it, I go on a half-hour rant. I could do a five-part series on the subject, eviscerating these activities and the vulgar little parasites who participate in it, but that’s beyond the scope of this discussion. See there? I’m getting better at restraining myself. Actually, no I’m not.
These vicious little blood suckers would have at one time been considered white collar criminals. Today, largely thanks to Arkansas Bill Clinton, they’re allowed to mask themselves under the guise of “investors”, bilking farmers and consumers for all they’re worth. They contribute nothing to the real economy. They’re a pox on the economic house that is the United States, as well as any other country that they operate in. Their profits are 100% dependent on inflicting harm. If nobody is harmed, then these cretins are losing money. So, if their pay is going up, then you know somebody, somewhere is either struggling or they’ve bit the dust. You’ve got what amounts to thousands of little Gordon Gekkos meddling in food prices and the supply of food for profits. In the film “Wall Street”, Bud asks Gekko why he wants to wreck Bluestar Airlines and Gekko replies, “Because it’s wreckable!” It is the exact same situation here, only it’s not limited to one area like food speculation: it’s economy-wide.
Why do speculators want to wreck the economy for profits? Because it’s wreckable, and there’s quite a bit of money to be made by wrecking it. Wall Street “investment” banks are the mother parasite that attacks the host so her thousands of little baby parasites can suck the blood out of it. The American people tolerate this infestation because CNBC and people like Fred Imbert tell the public that the infestation is “investment” activity. Just remain calm and enjoy your coffee, low wages and high credit card debt, ok? Nothing to worry about. In fact, perhaps I will at some point do a series on it. Bill Mitchell has an excellent write up concerning food speculation which you can read at his blog: Part 1 and Part 2.
People like CNBC’s Fred refer to these parasitic speculators as “investors” which intentionally muddles the truth of what’s really going on. Nobody refers to Wall Street activity as speculation (gambling), because people are made to either think of Wall Street as the economy, or at the very least, as the most crucial element of the economy. People think that real, good old fashioned American investment activity is taking place and such all-important investment activity might slow or even collapse if the wrong person gets into the White House. CNBC thinks that Hillary Clinton is the right person. The truth is that both Trump and Hillary Clinton are the wrong people entirely.
Hillary’s husband Bill Clinton made much of this repugnant behavior possible, and she’s all hot and heavy to continue Billy’s deregulation policies, but who cares right? Wall Street doesn’t care about the economy, because it’s not the economy. These days, Wall Street runs a very large casino and the house isn’t supposed to lose. And as I mentioned, this parasitic activity isn’t limited to just food speculation. Much of the economy today is operating on speculative behavior.
So, we understand that there is very little productive investment in a speculation economy. Banks lend more for the consumption of goods, rather than the production of goods. It means high private debt levels for you and high profits for the financial industry. If there is another financial crisis, don’t worry – All will be well. With Clinton as the Chief Executive, you will be left with foreclosure, unemployment and crushing debt from credit cards and loans that you cannot pay, while Wall Street and the banks will be bailed out, thus “protecting the US economy”. Hey, Obama did it, what makes you think Clinton won’t? Hillary will tell you that federal deficits are dangerous while bank lending is a stable means to ensure that production is sold. Therefore, banks need to be bailed out, not you. In 2009, Barack Obama made the same argument:
“…although there are a lot of Americans who understandably think that government money would be better spent going directly to families and businesses instead of banks, “Where is our bailout?,” they ask, the truth is that a dollar of capital in a bank can actually result in eight or ten dollars of loans to families and businesses, a multiplier effect that can ultimately lead to a faster pace of economic growth.”
In short, Obama was trying to convince the American people that a speculation economy was in their best interests. Full stop. While it is true that credit expansion increases consumer spending and therefore, increases job creation, the truth is that credit expansion is an artificial means that cannot be sustained without the assistance of federal deficits aimed at employment. The method is highly unstable and when consumers and business cannot take on any more private debt from credit expansion efforts, then in absence of federal deficit spending, consumer spending will contract, jobs will be lost and a downturn will occur.
Contrary to popular belief, banks do not issue US dollars, nor do they loan out US dollars from reserves. Bank lending is accomplished through credit money creation, which, quite simply, is an IOU exchange. When you approach a bank for a “loan”, the bank will first determine your creditworthiness. Each bank has its own standard and overall, what constitutes creditworthy is largely determined by the state of the economy. If the economy is booming, standards are relaxed and in a downturn, standards become restrictive. In other words, in an economic boom, consumers with lower credit scores and income generally find it easier to obtain loans and credit cards. In a downturn, consumers with lower credit scores and income generally find it harder to obtain loans and credit cards.
After you have been determined creditworthy, the bank will create a deposit for you. That deposit does not consist of US dollars. The deposit is nothing more than bank IOUs. In order to make the bank’s IOU become “money”, the bank denominates its IOU in the unit of account of whatever nation that bank is issuing the loan. In the US, the unit of account is the US dollar. Essentially, the bank “pegs” its IOU to the US Government’s currency, the US dollar and the bank’s IOU becomes acceptable as payment for goods and services and therefore acts as “money” in the private sector. Consumers then use bank credit to consume production (goods and services produced) and thus, bank credit ensures that when the external sector is in deficit and the federal deficit is being reduced, a condition of low wages can continue, because obviously whatever gap in consumption was created by a lack of federal deficit spending and low wages is now filled.
But it is important to remember that bank credit is not a US dollar and furthermore, for the privilege of using the bank’s IOU to purchase goods and services, the bank charges you a fee called interest. Not only must you pay back the principle, but also the interest. So then, we can now understand that credit creation results in private debt. In a low wage underemployment environment and in absence of federal deficit spending, private debt expansion can be used to fill a spending gap, but it is highly unstable, because clearly, consumers and businesses cannot take on endless amounts of private debt. Rather than encouraging a more stable means of consumption of production through federal deficit spending and better wages, the dominant mainstream neoliberal opinion is to avoid federal deficits and to keep wages down, pushing private debt onto the population to ensure that what is produced gets sold. Speculators can the gamble with that debt.
So, by looking after the needs of Wall Street, by “not adding a penny to the national debt”, by encouraging private debt, Hillary Clinton’s economic agenda will bolster a speculation economy and the result will be a future recession. Hillary Clinton will not fight “deep poverty” because she could care less about poverty, low wages and unemployment. Hillary Clinton will not protect Social Security because she’s already lied to you in the third debate, telling you that Social Security is going broke. She’s ready to hand part of your paychecks to investment firms, so that they can profit from your retirement. Hillary Clinton is paid to protect the interests of Wall Street and to serve its needs, nothing else. Do not think that Donald Trump will save you from a speculation economy. Trump is Gordon Gekko.
I would urge both conservatives and progressives alike to ignore anything economics coming out of CNBC. It’s time that Americans began thinking for themselves, instead of letting the media tell them what to think. It’s time that Americans stop using the media as an educational resource. If they can simply try to do that, then perhaps the next presidential election will see the end of entrusting power to worthless people like Clinton and Trump.