A Meditation on Cool
‘Take away profits; all you have left is cool.’
A perceptive dear reader
So sayeth a group of 100-plus rich people…including Disney heiress Abigail Disney and venture capitalist Nick Hanauer. Huh? Asking to pay more taxes; that’s pretty cool, isn’t it?
But why not simply let Mr Market correct them, by taking away their phony, ill-gotten gains?
Bloomberg: ‘Market sell-off is ultimate test of what it real and what is not’.
The Washington Post: ‘Crypto collapse erases more than $1 trillion in wealth’.
In the modest decline so far, the world’s stock owners are down about US$9 trillion. All they need is another US$40 trillion in losses and the correction will be complete.
Today, in addition to mocking the cool, earnest rich, we explore the whole scammy plot. The financial system has become corrupt…here’s how well-meaning do-gooders make it worse.
We left you yesterday contemplating ‘cool’. We noted that when you have a lot of money, an additional dollar has little value. ‘Declining marginal utility’, it is called. One piece of apple pie for dessert is a delight. By the third piece, the pie loses much of its appeal.
Today, we take the contemplation a little further, by looking at those who say they feel a little sick.
Front-running of the bulls
Profits are the only measurable way of knowing that you are making the world a richer place. You take resources and labour…you work them up into finished products and services…and then sell them for more than you invested to make them. You make a profit. And your customers get something they want. Is there any other reliable gauge of ‘doing good?’.
Of course, there are exceptions. There are phony, contrived, and connived profits as well as honest ones. You can make a lot of money, for example, by selling drugs to people who don’t need them…especially if the feds are picking up the tab.
You can make money by front-running the stock market, as Fed Governor Richard Clarida did…putting in his buy orders just before the Fed made a major announcement.
And, today, we lay the whip — again — on a very dead horse. Yes, as Richard Clarida…Nancy Pelosi…and Larry Fink all illustrate, you can make a lot of stock market gains when the Fed is rigging the market…and you are in on it.
In the last 12 months almost no infirmity — neither financial, moral, or intellectual — prevented a person from getting rich. Speculators sold NFT squiggles for millions. They sold joke cryptos for millions. They sold money-losing, zombie companies for millions. Surely it was the late stage of a very empty-headed market, when the dumber and less experienced you were, the more money you made!
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But cometh now rich people, like Larry Fink and Abigail Disney, whose excess dollars turn their stomachs. They would gladly exchange them for a little street cred. And a little cool. Commondreams.org with the headline, ‘100+ Ultra-Rich People Warn Fellow Elites: “It’s Taxes or Pitchforks”’:
‘A group of more than 100 millionaires and billionaires on Wednesday presented fellow members of the global economic elite with a stark choice: “It’s taxes or pitchforks.”
‘“For all our well-being—rich and poor alike—it’s time to confront inequality and choose to tax the rich,” the letter reads. “Show the people of the world that you deserve their trust.”’
What the queasy millionaires seem most concerned about is holding onto their cool rich status…and protecting the elite’s authority:
‘“How do we work together and restore trust?” the letter reads.
‘Gemma McGough, a British entrepreneur and a founding member of Patriotic Millionaires U.K., reiterated that case in a statement Wednesday.
‘“It’s time we right the wrongs of an unequal world,” McGough added. “It’s time we tax the rich.”’
Fairness, say the millionaires, is what it’s all about. But fairness, like coolness, is a matter of opinion. Is it fair for one group to pay a higher rate than another? It is fair to transfer trillions of dollars to the richest Americans…and then let them impose their agenda on the rest of us?
And what’s fair about printing up trillions of dollars and passing it to them in the first place? Neither Ms Disney, nor Ms McGough, nor Mr Fink mention it.
Gorging on FedFare
In the course of this century, the Fed has created…and spent…approximately US$8 trillion. Its artificially low interest rates spun off trillions more. And the federal government has added US$23 trillion to the ‘national’ debt. What happened to all that money? Did it buy bread from the bakers? Old jalopies from the used car lots? Did it raise the wages of the labouring classes?
No, it did none of those things. Instead, almost the entire wad was funnelled to Wall Street where it increased the prices of stocks and bonds. In the stock market alone, that represented a gain of US$24 trillion. Who owns stocks and bonds? Abigail Disney. Nick Hanauer. And Larry Fink.
Over the course of a whole generation — 40 years — the elite have added about US$1 million in stock market wealth for every man, woman, and child in the top 10%. Since 1978, executive salaries have increased 1,000% — 100 times faster than employee pay. During that same period, in real, inflation-adjusted terms, the typical working stiff has gained just 32 cents per hour.
Is that fair?
And now approaches the grand rip-off finale. The feds ran up US$30 trillion of debt — much of which went, directly or indirectly, to the richest people in the country. Who will pay that debt? How?
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