In the strapline of my blog I claim that I’ll write about money, markets, people and power – so it’s high time to write somethig about a rich man, dominating the hivemind of the markets – driving people’s sentiments without purpose, and thereby exercising incredible power. I don’t need to tell you about the Donald Trump’s manifest unsuitability for any kind of elected office. His crassness , contempt for women and sexual boorishness, inability to run his businesses, and thin skinned temprament are well documented. What I do need to tell you about is how the men and women of the financial sector have welcomed the donald into their lives.
You see, when pressed for an answer as to where markets would go if he were elected – most people, including me, would say that it was impossible and that he would be a disaster for stock prices. Well, the first part is true of me. But as a Socialist I recognise that fundamentally, the value of finanical assets is determined by the confidence of market participants in the ability of those assets to generate cashflows – ideally in a currency people want to have – and that this is effectively done by creating systems of property rights, laws, norms and values that entrench the interests of the powerful and wealthy. Whilst I couldn’t have and didn’t predict the magnitude of the move in equities or interest rates, the direction was and remains obvious.
It is a phenomenal thing to see the formerly impossible become accepted and normalised by intelligent people. The human mind is a rationalising engine – capable of accomadating anything and everything in order to get on with the job of self preservation. Things decried as impossible become the new normal – and narratives are spun. Before Trump’s ascendancy – the atlanta Fed’s wage growth tracker had been telling us quite inescapably that wages were going up. But no one was clicking that link prior to the narrative kick provided by what I’m going to unabashadly call “Trumpenomics” because why not – it’ll be retrospectively applied anyway to whatever garbled mix of “pro business” policies emerge from the eclectic mix of individuals comprise his regime. I put pro business in inverted commas not because I think that Trump is bad for businesses, but because I think that “bad for business” is a nonsense statement. Businesses – companies -corporations – are abstractions, legal vehicles of convenience for the accomplishment of things that people need. “Pro Business” actually means “Pro Profits” – or rather, pro a bigger slice of purchasing power left over for the owners of capital to enjoy after labour has been paid. I suspect that – quite by accident – Trumps administration will prove enormously succcessful at increasing the profit share of american companies. In this sense, I am as invested in the narrative machine as anyone else. Trumpenomics FTW!
But in many important senses I am not and neither should you be. Policies and institutions that are “pro business” are not neccesarily “pro wealth”. Increasing the slice of the purchasing power pie that capital gets is only good for the holders of capital if the pie is made of something tasty – and hasn’t gone off. To extend the metaphor arguably too far – leavnig the pie outside of the refridgerator to make it easier to grab slices will shorten its lifespan. Decreasing the workforce, entering into trade wars, wasting resources on preventing imaginary threats, increasing wasteful subsidies for fossil fuels etc constitute things that fit that stretched metaphor well. For now I’ve moved a portion of my meagre savings into US Equities because I believe there’s a lot of ruin in a nation (as an economist once said) and the power of the narrative machine is in full swing. But it won’t stay there long. As soon as “Trumpenomics” becomes widespread in popular culture and imagination I’ll take my position off as at that point, the narrative will have been spun – but behind the scenes, an ignorant, self serving, venal man will have been destroying the very basiss of wealth in the US and world economy. No narrative will be able to overcome the fact of that.