Wall Street Meets George Orwell

Of course the stock market is flagrantly rigged and astonishingly inane reasons are given for why it keeps going up, irrespective of what’s happening in the real economy. My favorite inanity just now is what’s given as the reason it’s going up when pretty much everyone says the fed is going to raise rates starting next month.

Near zero rates is the reason the market has supposedly soared in recent years. Now, since rates are going up, expected higher rates is the reason given for why the market keeps soaring.

It has me thinking of George Orwell’s 1984. Here’s a quote from that book: “Oceania was at war with Eurasia and in alliance with Eastasia. In no public or private utterance was it ever admitted that the three powers had at any time been grouped along different lines. Actually, as Winston well knew, it was only four years since Oceania had been at war with Eastasia and in alliance with Eurasia. But that was merely a piece of furtive knowledge, which he happened to possess because his memory was not satisfactorily under control. Officially the change of partners had never happened. Oceania was at war with Eurasia: therefore Oceania had always been at war with Eurasia.”

Present stock market reasoning is Orwell 1984 reasoning. If expected higher rates are now the reason stocks soar, they must always have been expected to rise shortly.

If you don’t know that, it’s only because your memory has not yet been satisfactorily put under control. Best get with it. Believe and obey.

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How To Reanimate The U.S. Economy

These days you often hear that our politics have become “monetized.” That with all the money pouring into elections, especially since the Supreme Court’s Citizens United decision, government is being distorted in ways that work only for deep pocket special interests and not the interests of the American people generally.

Yes, that’s a negative. But perhaps we should also focus more on the upside. Focus on the way all this election spending helps give our moribund economy a positive jolt. From this perspective, the problem is not that too much money is fouling the system, but that too little is going toward buying public office.

Soaring spending on elections is in fact one of the economy’s major growth sectors. And while a lot of this spending gets no further than the sticky palms of a few contribution bundlers, a lot more tickles down to a fast expanding network of middle class and even poor staffers who do campaign field work, and have other fundraising, soliciting, technical, legal and communication employment.

Based on these profound insights, the question then becomes how to further grow election-based spending. A few obvious answers quickly come to mind.

First, of course, we could start at the top. Almost half of the $6.3 billion spent on electing people to office in 2012 went into the Obama-Romney campaigns. Presidential elections now take place every four years. With a simple constitutional amendment, however, we can have them every two years and double presidential election spending with all its attendant economic benefits.

And why not do this, after all? There would be no loss in the quality of governance from the White House from such a change. The last two years of a sitting president’s first term are totally geared to getting reelected. In the last two years of a second term a sitting president is a lame duck. We drop the last two years of each term and lose nothing of political consequence while gaining billions in economy-animating spending.

Competitive congressional races are now another spending cash cow. Candidates may now need to raise $19 million or more for a competitive Senate race and more than $9 million in a competitive race for a House seat. Again, just a small constitutional tweak that makes election for a House seat every year and a Senate seat every two years would double House election spending and triple (yes, triple!) spending on Senate races.

The economic boost here could be expanded even further by lowering the bar to get on the ballot in every state, thereby allowing anyone with a few extra bucks and some time on their hands to run for national office. This would confuse voters even more than they are presently confused and thus make even more races for Congress competitive.

Elections for national office are just the tip of this economy-enhancing iceberg. The Census bureau reported that in 2012 there are more than 89,000 local governments in this country — state, county, municipal, town and township, special and school districts. Within these local governments there are often a fair number of positions that are elective. No national constitution and relatively few state constitutional amendments would be needed to change the length of time between elections for most of these hundreds of thousands of elected offices. Reduce times between all these local races, the potential growth of overall campaign spending is mind boggling.

The flood of money that now goes into getting elected to so many public offices has soured many Americans on our politics. Do I have a solution for this sad political reality? No. All I’m saying is that since we’re stuck with political lemons, let’s make more economic lemonade. And since we don’t even have the best government money can buy, let’s spend some more and maybe its quality will improve.

Michael Silverstein’s newest book, available from Amazon. Is The Devil’s Dictionary Of Wall Street.

The Battle Hymn Of The Stock Trader

Defying common sense, logic, real world economics, and increasing its own traditional reasons for rising and falling, the stock market of late has been irrationally exuberant to an unusually irrational extent. One can thus easily imagine that traders in this fun house now begin each day with their own fight song — one that goes like this:

The Battle Hymn Of The Stock Trader

Mine eyes once saw a NASDAQ to 5,000 did soar,
And it stayed there for an instant before plunging to the floor
If I live but long enough, it will rise to that once more,
The stock market marches on.

I have read of callow know-it-alls stampeding frothing buyers,
And listened as the talking heads joined in their upbeat choirs,
Then watched with growing horror as good analysts turned liars,
The stock market marches on.

Let the pessimists go soggy my resolve will never fail,
O’er the long term I know losers are the ones who just turn tail.
I will brush my teeth with champagne and eat lobster by the pail
The stock market marches on.

Glory, glory trading profits,
Glory, glory unearned profits,
Glory, glory cap gain profits.
And the market marches on.

Michael Silverstein’s latest book is The Devil’s Dictionary Of Wall Street.

Selig Cartwright, Goldman Sachs Washroom Attendant, Solves The Income Inequality Puzzle

(Mr. B. enters the washroom, obviously seeking relief.)

Is my personal Stall #8 ready, Selig? Ready for immediate use?

It’s ready, sir. Though still locked. I thought first I’d discuss an idea with you. About income inequality.

Love to chat with you about that, Selig. First the stall.

But sir, you’re always saying that hearing from little people like me is the most important part of any great leader’s job.

Yes, usually it is. Just now, however…

It’s a very simple idea, Mr. B.

Dear God! Tell me your idea for heavens sake, Selig, then unlock the door to my personal stall.

I knew you’d be interested, sir. Here it is: Income inequality in and of itself is not a bad thing. Hard work, talent, and initiative should be compensated generously. Big earners also have enough money above their own needs to invest, which builds the economy.

Obviously, Selig. Can I get into my personal Stall #8 now?

Not yet, sir. Too much income inequality, however, that doesn’t trickle down enough to the middle class, the group that buys the most goods and services This not only makes them poorer, but doesn’t provide the wherewithal to animate an economy based largely in consumption. It also keeps potential investors from investing in job-producing new economic activities.

Wonderful, Selig. You’ve been reading Paul Krugman in the New York Times. I’ll pay to renew your subscription if you unlock Stall #8 very, very quickly.

I will, sir. But I’ve only described the problem. Do you want to hear my solution?

I’m dying to hear it, Selig. Really, really dying. Get on with it man.

Here’s the solution. Raise the top tax rate from 39.6 percent, paid only by top earners, to 44 or 45 percent. Then use all the new revenue generated, ALL of it, sir, to lower tax rates paid by middle class workers. This will allow them to spend a lot more, animating the economy in the process, reduce poverty because the biggest cause of new poverty today is people falling into it from the middle class. It would also spur investment because investment flows into areas that promise the most profits, and the most profits would now be where an enriched middle class does its increased spending.

Good, but no cigar, Selig. First, because it’s a tax increase and that’s a no-no.

It’s not a tax increase, Mr. B. The total tax bite remains the same, it’s just reallocated from the under-taxed top to the over-taxed middle.

It’s class warfare, Selig.

No, sir. Every class of earners benefits. Top earners pay more in taxes, but those top earners who supply goods and services to the middle class more than make that up in extra profit.

Then who loses, Selig?

Economists who work for conservative think tanks, CEOs who pad their own bank accounts by pushing up their company share prices with Fed-funded stock buy backs, and Wall Street derivative peddlers.

Let’s not forget one other category of losers, Selig.

Sir?

Washroom attendants who would rather philosophize than provide keys to bathroom stalls.

I’ll open yours immediately, sir.

Very wise, Selig. And one other thing.

Sir?

Leave the economic policy-making to people who have paid their representatives in Washington to make it in an appropriately top-favored manner. Because, my friend, no matter how you vote and how sensible your ideas, this is the way it’s going to be.

(Michael Silverstein’s new Book, The Devil’s Dictionary Of Wall Street, is now available from Amazon as both an ebook and in print form)

Selig Cartwright’s No Inflation Vision — A Goldman Sachs Washroom Attendant’s Adventure

(Entering the Goldman Sachs washroom, Mr. B. finds washroom attendant Selig Cartwright looking different than usual.)

Selig, your eyes are a’glow. There’s a corona around you head. What’s happened to you, man?

I’ve had a vision, sir.

A vision? Oh, damn. One of our traders slipped you a bit of his get-up-to-speed stimulants again.

No, sir. This wasn’t a chemically-induced vision. It was something that came to me in one of the stalls.

Oh, one of those. But the glow in your eyes. The angelic look on your face. The rainbow colors around your head. My own stall-based visions don’t produce that sort of…

No, sir, this wasn’t one of those visions. It came about watching a broken toilet.

A broken toilet, Selig? Explain.

The toilet, sir. It kept flushing and flushing and flushing, but it never overflowed. I watched and suddenly I understood.

What’s to understand? It didn’t overflow, Selig, because the new water was simply drained off before it could overflow. So what produced a vision?

I finally understood, Mr. B., why there isn’t a huge burst of widespread inflation these days, even though the Fed for months has been pumping billions and billions of new money into the economy.

Actually, Selig, the Fed has been doing this for years, not months, and has pumped trillions in new money into the economy, not billions or even hundreds of billions. What’s this have to do with your vision?

I saw, sir, in a burst of clarity, why all this new money hasn’t overflowed into inflation, the way the toilet didn’t overflow even though it kept flushing.

And why is that, Selig?

Because, sir, all this new money has been scooped up by the top one percent. So the only inflation is limited to soaring incomes for Wall Street heavies and big company CEOs, and the things that only they can afford to buy like certain kinds of art, certain kinds of travel, and homes in Manhattan and the Hamptons.

True, Selig. But please don’t think you have to thank us for this. Thank us just because we have to suffer the pangs of inflation while everyone else is spared the pain by getting nothing that would cause them to have more money to spend, which would lead to the kind of inflation the government measures.

So it doesn’t bother you, Mr. B. that all the new economic growth since the 2008 market crash and subsequent recession has only gone to the top one percent of income earners?

Actually, Selig, according to official numbers, only 95 percent of this economic growth has gone to the top one percent. That bothers me. There’s a five percent leakage somewhere that has to be plugged.

I’m confused here, Mr. B. You really think just the very top income earners should get 95 percent of all economic growth?

Of course, Selig. What is there to be confused about? The fact that we get all — or virtually all — means we deserve to get it all. The fact that the Fed and others in Washington continue to pursue policies that make this happen, that just shows they understand this. We’re the best and brightest. We’re entitled.

But Mr. B., you’re always telling me entitlements are bad.

They are bad, Selig. But some entitlements are worse than others. And ours, unlike those others, aren’t bad at all. They’re deserved. And will never again be challenged.

But aren’t you worried, sir, that in coming elections some party will move to change things?

Grow up, Selig. The big election issues for years to come will be Obamacare, or immigration, or some war we get into for some reason or another, or maybe an environmental crisis we can no longer ignore, try as we might. No major candidate, neither major party, will make a big thing about correcting income inequality. Sure, they’ll whine about a suffering middle class, but their solution to middle class pain will be growing the economy, and as your vision illustrated, we’ve ordered things so the only beneficiaries of that growth will be the very top tier. However…

However, sir?

However there will always be jobs for little people who provide personal services for the best and brightest. Care to keep one of those little people jobs for yourself, Selig? Or would you prefer to have another vision instead?

I’ll get down to giving another polish to your personal Stall #8 immediately, sir.

Very prudent. And always remember, Selig, a man never stands so tall as when he bends to serve his financial betters. That’s what the new American opportunity society is all about.

(Lots more Selig Cartwright commentary can be found in Michael Silverstein’s latest book, The Devil’s Dictionary Of Wall Street.)

Selig Cartwright, Goldman Sachs Washroom Attendant, For Fed Chairman

When Selig Cartwright’s name was first put forward as a replacement for Ben Bernanke as Chairman of the Federal Reserve, questions arose in some quarters about his qualifications for the post.

Merely by virtue of working for Goldman Sachs, of course, one is usually assumed qualified to help run our nation’s economy. This has been the way of things in Washington for a very long time. Indeed, these days it’s hard to find any economic policy-making body there not staffed and generally headed as well by an alumni of Goldman or Citi, or someone who will go to work at one of these two outfits after a stint of Wall Street-friendly public service.

Still, Selig Cartwright’s own suggested nomination to head the Fed raised eyebrows because he cleans washrooms. Jokes were made about “mopping up markets,” “flushing the banksters,” and a candidate who really knows “The Street’s inner workings.”

All such cavils, however, miss the real point of a Selig Cartwright chairmanship of the Fed. In fact, miss the larger point of what’s wrong with economic policy in this country generally, and why someone like Selig might actually bring needed insights to the policy-making.

The median income in this country is about $51,000 a year. Half of Americans make more, half make less. And not a single person in an economic policy-making position, NOT ONE, is in the lower half, which is to say not a single person making economic policies feels personally the effects of these policies on the bottom half.

It gets worse.

Only 19 percent of Americans have incomes of more than $100,000 a year. Eighty-one percent have lesser incomes. And not a single person in an economic policy-making position in Washington, NOT ONE, is in that lower 81 percent income range, which is to say not one of them feels personally the effects of their policy-making on four-fifths of their fellow Americans.

It gets even worse.

To be in the top 10 percent of income in this country, you need an income of $140,000 or more. Ninety percent of Americans have lesser incomes. And not a single person in an economic policy-making position in Washington, NOT ONE, is in that lower 90 percent category – NOT ONE in Congress, in the Administration. or among the lobbyists in Washington experience on a first-hand basis what 90 percent of Americans experience by virtue of the policies they churn out.

Which brings us back to Selig Cartwright as a possible Fed Chairman. No, he can’t sling around those fancy economic terms like the big boys and girls inside the Beltway and on The Street — the way doctors who prescribed bleeding and purging as cure-alls for illnesses once slung around Greek and Latin phrases to justify their nostrums.

But in debates about helping the middle class — you know, those how-do-we-help-the-middle-class debates supposedly held in Washington by our highly compensated economic policy setters — Selig, or someone in the same economic situation as Selig, would be there to say: “Hey, that’s only helping rich people. Let’s try something different this time.”

Economic policy in this country is currently made by hirings of the rich, or by economic technocrats who view reality through statistical lenses divorced from real middle class life. Selig Cartwright is not one of these best and brightest. Rather, like you and me, he’s a victim of these best and brightest.

As Fed Chairman Selig could give the victim’s point of view: This view: Hey, that’s only helping rich people. Let’s try something different this time.”

And wouldn’t that be nice.

Michael Silverstein is a former senior editor with Bloomberg News. His latest book is The Devil’s Dictionary Of Wall Street.

Think You Have It All? You Don’t! Not Without A Personal Poet On Retainer

Sure you made a billion. Made it with a social media triumph that allows hordes of vacuous people to spend their days sharing pictures of their cats with millions of friends online. Or maybe with a brilliant derivative that destroyed the economic future of a small country in Europe.

You earned your billions. And you bought all the boy toys that were supposed to make you happy. You’ve even begun the laundering process of this money by giving bits of it to environmental and cultural organizations, thereby earning the right to be endlessly surrounded by chirping Gaian groupies and anorexic graduates with fine arts degrees and meaningless titles at large museums, all seeking to glom even more from your bottomless pile.

But it’s not enough. Why? Because every Tom, Dick and Jane billionaire is doing the same — except Jane who bought a lot of girlie goodies instead of boy toys.

So now you’re thinking: Mike, how do I set myself apart from the billionaire herd? Here’s my answer: With a personal poet on retainer. Someone to elevate just another multi-million dollar wedding, christening or bas mitzvah into an event that will ring down the ages. And not only bring you this singular joy to which only great wealth is entitled, but memorable rhyming discomfort to your enemies as well. For the poet’s quill can sting like an arrow as well as happily tenderize like a good stool softener.

Interested? You betcha. But you’d best get in touch with me promptly. Before someone who hates you and has even more money gets to me first.

Serious inquiries only.

And in he interim,. check my The Devil’s Dictionary Of Wall Street book.

All Important Economic Questions Answered Here

Q: Why are there such huge protests in countries around the world?

A; Of course there are many local reasons for these protests. But whether it’s the Arab Spring, the protests around Europe, or our own Occupy Wall Street, one issue is always clearly on view. Young people who lead the protests see their economic futures getting bleaker with no end to the bleakness in sight.

Q: What is the main cause of this economic malaise?

A: The main cause is a new capitalism that has replaced one that spread the benefits of a growing economy to most folks. This new version keeps all the benefits at the top and dribbles down hardly anything.

Q: Why don’t governments do something about this situation?

A: Some governments that tried have gotten rolled over by the big bank, big lender steamroller. Other governments are just in the pockets of the big buck interests. Most governments, however, are simply controlled by people who have bought into the big bank, big lender line that this is the way things have to be done in advanced economies.

Q: Can anything save the U.S. and world economies from the second stage of the twenty-first century’s first double dip depression, brought about by big bank and big lender greed?

A: Don’t know about the world economy. A good start can be made in the U.S., however, through revisions of the tax code. Tax the rich more, and give ALL the extra revenue generated to the middle class in the form of lower taxes for them. This would immediately boost most people’s incomes, and increase spending that would work to reanimate the entire economy.

Q: Will this happen any time soon?

A: Don’t be silly. Of course it won’t happen any time soon. Get real.

Q: So what can be done to lessen the economic pain?

A. Purchase my new book, The Devil’s Dictionary Of Wall Street, which will be available very soon.

NSA’s Surveillance Is The World’s Best Business Plan

Some people are ticked off about the National Security Agency’s surveillance of everyone and everything. They see it as a dangerous invasion of privacy. But that’s silly.

Why should it bother anyone if the government does this? We’ve already sold our right to personal privacy to non-government data miners in return for the right to pay usurious interest on revolving credit and receive personalized ads on our smart phones. These folks know how we votes, where we go and how we get there, our tastes in entertainment, the size underpants we wear and what we use to wash them from data they glean from our laundry soap purchases.

If totally unregulated private data miners can learn virtually everything about us, why begrudge the government the same capacity?

No, it wasn’t government’s intrusion into our private lives that got me so hot under the collar about these NSA shenanigans. It was the cost of this vast computer gaming, and what taxpayers like me have gotten for our money.

Here they are, spending tens of billions of dollars, hundreds of billions (God only knows the real figure because no one else is entitled to know it), and doing it at a time when food stamps that feed children and the indigent elderly are about to be partially defunded, and the treatment for some cancer patients has already been defunded via  sequester. And all this money going to the NSA (and of course to its pricey contractors) is going to spy on all of us on the chance, the incredible long shot, that some useful bits of intelligence might be extracted from this data mountain.

Let us not mince words here. This is the biggest spending boondoggle in U.S. and perhaps world history. The funders (aka taxpayers) don’t know the cost, where the money is going, what it is buying, and what, if anything, has been achieved by this massive program except that the spenders and their enablers in Congress hint that it might actually have been something worthwhile.

This is what got me so angry at first. Until…

Until I thought to myself: Why are you getting angry, dummy? This isn’t just a boondoggle. This is a great business plan. Don’t castigate it. Emulate it!

So attention, everyone. Go immediately to my wallstreetpoet.com website and contribute copiously there to a secret program I am operating that will make the world a better place. Payments accepted in fiat money, Bitcoins, gold bullion, silver dollars minted before 1843, Borgata casino chips, and conch shells.

I won’t tell you what I’m doing with this money. I won’t issue reports on my spending. But you can rest assured that it is all being well spent. The funds already received have saved you from all sorts of terrible consequences I won’t name, and brought you reams of happiness about which I can hint but won’t describe.

Give until it hurts. Hurts you, not me. And above all, trust me. I mean, you trust your government, right? So why not trust the likes of me?

(Coming soon from Michael Silverstein — The Devil’s Dictionary Of Wall Street)

Selig Cartwright, Goldman Sachs Washroom Attendant, Learns The Truth: Big Banks Now A Branch Of Government:

(When Mr. B. enters the Goldman Sachs washroom for his regular morning visit, he finds washroom attendant Selig Cartwright waiting expectantly…)

What is it, Selig? You look pensive. Is there something you want to tell me?

No, sir. Something I want to ask you. Do you vote, Mr. B?

Of course, I vote, Selig. It’s every American’s duty. We need to elect the best possible representatives who will make the best possible laws.

That’s what I’ve always thought too, sir. Except now…now…

Now what, Selig? Speak up man.

It’s some stories I’ve been reading in the New York Times, sir. Hearing elsewhere, too.

That rag. No wonder you’re upset, Selig. What have they been writing now? I’ll wager it’s something nasty about big banks.

Yes, sir. They and other media are saying, well, hinting strongly anyway, that the people we think we’re electing to make the best possible laws don’t really make the laws that affect big banks. That the banks themselves, their lobbyists, their lawyers…

Stop right there, Selig. I know where this is going. They’re saying that after the people in Washington we elect to make laws that are supposed to regulate Wall Street, they pass these laws along to other government officials to make the regulations that actually allow the laws to work, but these other government officials end up negotiating with us, and we make sure these new laws don’t work against our interests. Is that what your reading and hearing, Selig?

That’s exactly what I’m reading and hearing, sir. Is it all lies?

Lies, Selig? Of course it’s not lies. That’s exactly the way things are done these days. What’s the problem?

I guess the problem, Mr. B, at least for some people, is that companies and industries the government think have done things, or might do things, that require regulation to protect the public, shouldn’t write these regulations themselves.

I could tell you a lot of reasons that argument is silly, Selig. Instead, I’ll just say what Dick Cheney said when it was pointed out that the overwhelming majority of Americans didn’t think we should get into a war in Iraq.

What did he say, sir?

Cheney said just one word, Selig. He just said: “So.”

I don’t understand, sir.

What he was saying, Selig, was that no matter what most Americans thought or wanted, he and others in the Bush Administration had the power to start a war if they wanted to start a war. No one could stop them. They had the power and they could use it as they saw fit. And if most Americans disagreed, thought it was stupid, thought it would lead to disastrous consequences, “So.”

You mean, Mr. B., that Washington passed Dodd-Frank to keep Wall Street from operating the way it wants to operate, and people are disappointed because you’re putting the kibosh on its effective enforcement.

“So.”

And Americans are furious because the big banks made a record $40 billion-plus in the first quarter of this year while average wages and benefits for other Americans, even the ones who still have a job, are stagnant or falling.

“So.”

And if Democrats instead of Republicans are in power, when it comes to really keeping Wall Street in check, both end up going along with what Wall Street wants.

“So.”

Which makes present-day politics, at least when it comes to Wall Street, irrelevant. No matter who seems to be in power, you’re in power when it comes to things that involve your own interests.

“So.”

And that in essence, sir, Wall Street has become a fourth branch of government with powers equal to the other three branches on critical economic matters.

An equal branch of government, Selig? Are you trying to be offensive?

No, sir. I just meant…

Selig, Selig, Selig. They’re on the phone every day begging us for money they think they need to get reelected. They’re sucking up to us daily so they can get fat pay goodies after leaving office. We’re funneling money to their family members directly or indirectly if they play along with what we want. All the people who argue our case on legislation, and negotiate regulations, are their ex-employees — or former colleagues. Yes, Selig, we’re a fourth branch of government. But equal? Let’s just say some branches are more equal than others.

Now I understand present-day American politics, Mr. B. I’m still a little confused about something, though. You told me just a few minutes ago how important it is to vote? But if you control so much and you’re not voted into an office, why is voting still so important?

Because, Selig, when the next big crash comes, the blame is going to fall on people who were supposed to make laws to prevent it. It’s elected people who are going to take that hit. And when the next crop of pols replaces them, because we don’t have to be elected, we’ll be free to buy them, too.

An inspiring explanation, Mr. B.

Yes, Selig. And one that should make you very proud. You’re part of the big bank team, after all.

My cup runneth over, Mr. B.

See that it’s the only thing in this washroom that so runneth. You’d be amazed how many job applications we get these days for jobs like yours, jobs cleaning Wall Street bathrooms.

I appreciate the opportunity to serve, sir.

Continue to do so, Selig. Now get my Stall #8 ready for use. Pronto.

(Michael Silverstein’s new comic novel, MURDER AT BERNSTEIN’S, is available from Amazon.)