William K. Black
February 21, 2016 Bloomington, MN
Wall Street CEOs are very upset with young adults. They believe you are “clueless” and “voting against [your] own interests” when you support Bernie Sanders. A Wall Street CEO took to the pages of the Wall Street Journal to decry the fact that “Millennials are flocking to Sanders.” It would be cruel to note that one has to be clueless to believe that writing an op ed in the WSJ was a good way to reach millennials supporting Bernie. But at least we can gain an insight into Wall Street’s theory of why Bernie is bad for young adults. It turns out that Wall Street is worried that Bernie is pushing Hillary Clinton to take inequality seriously because younger Americans take inequality seriously. Wall Street, of course, loves and exists to produce staggering inequality.
These young voters appear to be falling headlong for the Vermont senator’s plaintive narrative of economic “unfairness.” His throwaway prescriptions for redistributing income and wealth are being echoed by an increasingly nervous Mrs. Clinton—despite such policies’ having been jettisoned during her husband’s administration in the 1990s.
Notice the devastating nature of the Wall Street critique – Bernie’s discussion of inequality is “plaintive” (which means “sad” and “mournful”). Human beings are sad about the severe inequality in America – and have concluded that the Clintons’ “New Democrat” policies were a major part of the problem. Given what has happened to middle and working class Americans’ incomes under the neoliberal economic agendas of the Clintons and Bushes, the reaction of those supporting Bernie means that they are voting in favor of their economic interests. The Wall Street CEO inadvertently admits this fact, and comes to his real complaint – the public is furious that Wall Street elites made a fortune by leading the three most destructive financial fraud epidemics in history – and did so with impunity. How dare the American people no longer worship Wall Street?
Both Democrats and some Republicans keep blaming it all on “Wall Street” (Bernie Sanders’s all-purpose boogeyman) for “getting away with murder” (Donald Trump on hedge funds). Don’t they realize that the financial markets are the lubricant of the entire economy—that Wall Street’s capacity to provide liquidity and to broker capital is the lifeblood of American companies? History will probably judge the misguided post-crisis regulations like Dodd-Frank and retribution against Wall Street to have sown the seeds of the next financial crisis. For now, the vilification of Wall Street in the presidential campaign is irresponsible.
No, we don’t “realize” that Wall Street is “the lifeblood” of America. We do agree that “lubricant” comes closer – greasing politicians’ hands certainly is part of the problem. Wall Street is vastly too large and it primarily moves capital to uneconomic uses because it is led by frauds and functions largely as a parasite. Wall Street shrinks the “pie” (the overall size of the economy) and takes an astonishingly large share of that diminished pie. The author complains that “governments lack the incentives and resources to effectively allocate and manage capital in the microeconomy.” He apparently was out of town when Wall Street did exactly the same thing for exactly the same reasons – Wall Street’s executive compensation schemes create perverse incentives that Wall Street spreads throughout “Main Street.”
The Wall Street CEO admitted that his goal is to eliminate the already critically weak Dodd-Frank Act and return to an era when there was only a pretense of financial regulation. What “retributions against Wall Street” – not a single leader of the three epidemics has been prosecuted. We agree that this destruction of the rule of law on Wall Street has “sown the seeds of the next financial crisis.” Wall Street is not being vilified – its elites have acted as villains. The business model of far too much of Wall Street is fraud. The author is so desperate that he claims that Bernie wants to recreate the Soviet Union in the United States. Unsurprisingly, the author, who co-founded an “astro-turf” operation in DC purportedly dedicated to “bi-partisan” approaches ends with a partisan plea in favor of Republican candidates.
In an amazing admission, the Wall Street CEO predicts that what Wall Street is about to bring America and Europe is a massive destruction of employment and a staggering surge in inequality that will destroy the American dream. His “solution” is be among the tiny number of winners at the peak of the towering inequality.
[The economy soon] will be displacing service professionals and Ph.Ds just as they have factory workers. The Bank of England projects that 45% of jobs done by people in the U.K. will eventually be performed by robots. ArkInvest expects the U.S. to shed 75 million jobs in the next two decades.
Yep, I can’t think of any reason why a young adult American would not embrace the prospect of shedding 75 million often good jobs and flushing those 75 million Americans into a desperate struggle against each other in the emerging “gig” economy to secure enough scraps to survive. Wall Street CEOs aren’t “clueless” – they plan to get rich by getting paid huge fees to destroy those 75 million American jobs. Wall Street CEOs think that the prospect of them becoming even wealthier by destroying those 75 million jobs should cause “Millennials” to praise them because Wall Street exists “to effectively allocate and manage capital in the microeconomy.” It is, after all, all about “capital,” not people. The Wall Street CEOs think the young should cheer Wall Street’s “effective[ness]” in destroying the middle and working classes in America.