FOMO – the fear of missing out – infects insatiable, wishful delusions
Whatever the curious “investor logic,” a surging stock market during an appalling, avertable jobs, health, racial and earnings pandemic is a slap-in-your-face putdown to the non-stock-owning super-majority. At worst this ill-timed stock boom exposes (again) awful, systemic, democracy-killing inequality. At best, though, with ideal election year timing, such bitter anomalies feed healthy voter resentments that can purge reactionaries for progressive reformers.
Whether this upsurge is just unseemly greed, or dreaded Fear of Missing Out, the lesson is that crisis capitalism can leverage any disaster. While the top 10% party on (because they alone have expendable assets) everyone else falls among the marginal, survival or miserable line. Nothing like brash wealth-production during the worst economic calamity in 90 years to dramatize just how dominant is today’s pernicious crony capitalism.
As if endlessly rampaging Trump pandemics (all of them) weren’t bad enough, the 90% of minuscule or zero-stock owning citizens face a double pounding – spreading threats of disease and sudden impoverishment – and nary relief in sight when pump-priming ends. This collective message is what’s doing in this president: how is it that “making America great again” meant plunging living standards for the many to benefit the few?
A separate reality
When does the stock market connect with “outside” Main St. realities? Or get fully the mortality machine that is this White House? When does rushed recovery get reversed – how great must be the spike in illness and deaths? When family members of all ages start dropping in the tens of thousands, hard-nosed rightwing governors will get deserved, career-ending pink slips: the rah-rah “business at any price” goons don’t get to feed profits for the 10% by jeopardizing the lives of 90%.
How can overall stock prices – the backbone of U.S. corporate value – go up day after day, even make new highs? In March, a sudden (understandable) 35% plunge by the top 500 (or 15% of) public companies alerted the world this pandemic was virulent, widespread, unpredictable, and perilous to all. The other 85% (or 4000) of smaller market companies – especially Covid-vulnerable industries – plummeted, losing over half their value.
And yet now, while the pandemic rages across this backward country, stocks act as if this was and is “only a flu,” as the Deluder-in-chief boasts. Obviously money today is chasing money, without fundamental backup like sales and revenue. And there’s zero trickle-down anything for the bottom 50%, owning less than 1% of all stocks. The top 10% own 85%, the 1% about 50% of U.S. equities.
Ambush Times Two
Before Covid-19 ambushed an unprepared country, and exposed history’s most negligent White House, stock prices were humming along. Then pandemic fearfulness (the offset drive to greed) wiped out stocks in a month. But stop, now a mere 90 days later, despite bad news on both disease and jobs front, we’ve almost retrenched to February highs. Where’s any good news driver? Is the pandemic under control? Is the Brawler-in-chief any less deranged? Hardly. Are investors blind to a busted presidency, a wash-out for vulnerable industries, long-overdue, racial protests – even that 15 million (from a high of over 20) are unemployed, even unemployable.
Did the stop-gap government subsidies mandate one systemic program to improve job, education, health or productivity? And when bailouts end, then what? The stock surge is all the more exceptional since entrenched market makers favor Trumponomics (low taxation, anti-government deregulation plus laissez-faire incompetence) and distrust frontrunner Biden and reform Democrats. That prospect should depress prices, since the worst of Trump assaults on America would then be reversed. Nope, not that, not even unforced Trump stupidities, a one-man wrecking crew towards unelectability, impedes this weird buying spree. Could some marginally conscious fat cats finally be relieved Trump is toast, despite the payoffs? Could the ruination of our overseas reputation cut into their global wheeling and dealing? Hard to unpack everything at work.
Tomorrow belongs to . . . ?
Okay, conventional wisdom frames stock buying as a forward-looking mechanism. Higher prices say things will normalize, capitalism will survive, and February’s status quo was just peachy. Also spurring higher-risk but higher-return stocks are abysmally low interest rates, lowering bond dividends. But today’s unjustified upturn only tracks with Trumpian delusions for a V shape recovery (down fast, up fast). Smarter veterans brace for U shaped (steady upturn), an L shaped recovery (months of stagnation, maybe years), even the high-volatility “shark-tooth” pattern (lurching up and down, dooming market-loving predictability). And “bearish” pessimists see no the light at the end of the ever darkening Trump tunnel. They bet today’s bubble will burst, not expand.
Mass uncertainty breeds CEO caution, thus delayed rehiring, more depressed earnings (except for Covid-helped firms, serving those working at home), and near zero Fed rates: no great news for old folks’ savings accounts and no guarantee high inflation won’t strike, after three trillion dollars of pump-priming without productivity gains. For Covid smashed industries, like airlines, travel, leisure/tourism, sports, movie and entertainment venues, retail mall outlets, hotels, restaurants, bars and sports clubs, the world will never be the same. And not better.
On the horizons more bankruptcies, foreclosures and evictions. Safety-net pump-priming is no permanent cure-all for depression – and the worst consumer industries (above) are large chunks of the whole economy. Diseased Americans are banned from Europe – and who’s rushing into cruise ships or theaters, sit-down restaurants or stadiums? Except benighted Trumpers suffering from sneering denial – who’ll pay high prices for taking very bad bad medical advice from the snake-oil salesman deluxe.
More telling news: since March five million Americans (added to millions already uninsured) lost their health coverage. The bottom 50% have no savings, crippled by any new $1000 charge. What we all need are serious, massive infrastructure programs – or radical, job-producing climate offsets. Aside from masks and distancing everywhere, we need a New New Deal – alas, in vision and execution a million light years beyond Trump on a coherent day. Biden, despite nice-sounding promises in the last two weeks, is no FDR.
Prove me wrong, please!
In short, I don’t see the economic upturn, even the relative stability implied by stock surges. Maybe decent numbers by 2022. Add in election mayhem, with the ever destructive, community blasting rightwing wedge/blame game, plus disease denial – and who knows what racial progress is doable. The stock market always fluctuates between fear and greed, but six more months of the most ignorant, reckless presidency doesn’t promise much prosperity around any corner. Au contraire.
I’d love for evidence-driven commenters to prove me wrong, that a jobs depression however different from the 1930’s, won’t outstay its welcome. Everything moves faster than 90 years ago, but when a highly-contagious disease confronts an ill-prepared, belligerently profit-driven recovery model, run by a willful moron, I’d say the more dynamic, more adept pandemic has the big edge.
Hell, miracles can happen and a November insurgency might shake up the unequal status quo. Six evolved billionaires will finally conclude chronic wealth inequalities are bad for their business. Tens of millions may join progressives, learning from that reform-minded champion, Jim Hightower, “Everybody does better when everybody does better.” Amen.