“Extemporaneous” – that’s how one media outlet described Donald Trump’s lengthy speech in the Rose Garden on Friday following the US jobs report.
That’s a rather polite description. It was bizarre.
For 45 straight minutes, the president regaled the nation, careening haphazardly from topic to topic with abandon. “People are driving. They’re driving around town. Maybe I’ll drive back to New York with our first lady – in a trailer”, he mused, during an interlude about recreational vehicles.
Describing the drop in the unemployment rate to 13.3% (which, despite being far better than expected, is still unfathomably high), Trump called Friday “the greatest comeback in American history”.
I was careful not to cast aspersions. It would be wholly disingenuous to breathlessly lament the economic and social tragedy that’s befallen America over the past three months, only to downplay the first piece of good news the country has received since February.
But, as protesters prepare to the fill the streets over the weekend to reiterate demands for racial equality, it’s important (crucial) that we don’t lose track of the rather stark reality facing the world’s largest economy and foremost democracy. If we do, we’ll lose them both – the economy and the democracy.
In “We’re All Mad Here“, I highlighted a pair of simple visuals, illustrating two equally simple points. The jobs added in May are a fraction of those lost in March and April, and African American unemployment rose last month to the highest in a decade, pushing the gap with white workers sharply higher.
Stocks surged, of course, and that means the nation became more unequal this week, and especially on Friday.
Some may call that a ridiculous way to think about things, but it’s true. The chart below carries a hyperbolic title (and a deliberately flat subtitle), but it’s important America understands this dynamic.
When stocks surge, it simply doesn’t matter as much to the masses as it does to the rich.
And this situation is not improving. In fact, it’s getting more uneven with each passing quarter.
At 12% as of the fourth quarter of 2019, the bottom 90%’s share of stocks held outright or in mutual funds, has never been so low in Fed data going back more than three decades. That share was as high as 22% (so, bascially double the current level) in 2003. The average over time is more than 16%.
This is why it is maddening when someone like Larry Kudlow goes on television (as he did Friday) to tell voters that the stock market will be “slammed” if Joe Biden wins in November.
Consider the figure below, which shows the value of corporate equities held by the Top 10% versus the middle-class and lower-income Americans.
The fact is, allusions to the stock market by the current administration (or any other administration for that matter), are a red herring – a kind of cruel canard. Most Americans don’t care about the stock market or, if they do, odds are they shouldn’t.
When you break things down by race, the picture is simply egregious.
As you ponder the juxtaposition between, on one hand, protests against pervasive inequality, and, on the other, a stock market that’s poised to recoup all pandemic-related losses, consider that African Americans owned just a 1.4% share of equities held outright or in mutual funds as of December 31, 2019. For Hispanic Americans, the figure is 1.7%.
All of this should be illegal – not literally, but certainly figuratively. That is, the US needs to seriously consider taking dramatic steps to reconfigure American-style capitalism.
“I was told by a journalist talking to me on a… key global issue Thursday [that] no matter how interesting the facts I presented were, the editorial line of what the story was going to be about had been set in stone from the start”, Rabobank’s Michael Every wrote Friday. “They were powerless to change the narrative”.
This narrative – that the current system works – is being pushed to extremes, ironically by the administration of a populist executive, whose cabinet is comprised of the ultra-rich and whose advisors (Kudlow being the quintessential example) are committed to the kinds of policies which will not only preserve the dynamics that create visuals like those shown above, but are in fact destined to make those already stark visuals even more striking.
Note that Kudlow is now speaking about Biden in the same terms that Trump once reserved for Alexandria Ocasio-Cortez. First, it was Ocasio-Cortez and Ilhan Omar who were the “radicals”. Then, it was Bernie Sanders that was the “dangerous socialist”. Then it was Elizabeth Warren who will destroy American prosperity. Now, we’ve reached the point where supply-side stalwarts are telling the public that Joe Biden will destroy American capitalism.
When you think about that, remember that Joe Biden is a man who, exactly one year ago, told rich donors the following:
The truth of the matter is, you all, you all know, you all know in your gut what has to be done. We can disagree in the margins but the truth of the matter is it’s all within our wheelhouse and nobody has to be punished. No one’s standard of living will change, nothing would fundamentally change.
Those comments came at a fundraiser held at the Carlyle Hotel.
The point is simple: According to the current administration, Biden is what now counts as a left-wing extremist who will crash the stock market upon election – the same Biden who literally told rich people that if he’s elected “nothing would fundamentally change”.
America’s choices have thus been narrowed down to 1) the current administration, which is a strange fusion of firebrand populism with starchy GOP orthodoxy and supply-side economic “solutions” proven to perpetuate inequality of all sorts, or 2) an administration run by a Beltway wall fixture, whose (verbatim) promise to the rich is that nothing will change.
It’s not just the financial media that is “powerless to change the narrative”, as Rabobank’s Every put it. Everyone is powerless to change it, apparently.
And that, folks, is why you see people in the streets.
“One would think such simple truths would still be covered by financial market analysts”, Every went on to say. “They aren’t, for the most part. How many have read any Marx or his intellectual protégés?”, he asks, in the same Friday note. “Inequality does not go away by itself”.