new book shares Rande's views (note last sentence):
community.metamarkets.com
"After completing most of the book, One Market Under God(highly recommend it), by Thomas Frank, I wanted to start a thread which addresses much of what we have witnessed over the past several years...The book, itself, is a scathing indictment on the power that be and their deliberate attempt to juxtapose the "have's" and "have not's" through the numerous media outlets which exist these days...Throughout the book, the author frequently discusses the irony of latter day capitalism, the simple fact that the investing public(electronic herd) somehow became accepting of the wealth polarization since it mistakenly believed it was a part of it...Employees traded salaries for stock options;workers cheered the triumph of their stocks CEO as it moved into the stratosphere; organized labor and the old guard were seen as the "enemy" because, god forbid, they might actually produce inflation, which,in turn, would erode the value of their cherised stock portfolios...
Here is a sample quote from the book, I think it summarizes the investment climate very nicely...:
"For the hustlers of ideology the bull market worked similar wonders. While "we" never quite "joined the money class" in terms of wages or security, everywhere one turned in the nineties there was some parable of regular people coming around to the money class's way of understanding the world: Grandmothers in Illinois realizing that the market was the true path to social secruty all along; regular joes in Detroit figuring out that the union was the wrong way to go; workers everywhere counting on tomorrow's fluctuations to make up for the fact that their boss was such an a!@#$%^ about wages, that their market driven health care plan was worthless, that under no circumstances could they afford to send their kid to college. We were learning that past performance was never, ever, a guarantee of future anything; that if the market insisted it was time to burn our factories and sew microchips into our collars we would just have to do it. We were learning to accept the market as the arbiter of all things: To bow before what it chose to do to our cities, our industries, our lives-so long as that little lift continued in our 401(k)s. In our great patriotic auto-da-fe we were sending the work of decades up in smoke-send the jobs south! put our neighbor on a twelve our shift! smash the downtown merchants!-whatever it took to keep the market smiling...."(One Market Under God, p 169).
The truth is that investors traded in their freedoms, their rights in a sense for the "collective good" of market democracy...The fact that investors now had a "collective stake" in the prosperity of the financial system made it possible for corporations to take drastic measures-to lay off thousands, to compensate workers via employee stock options, to employ temp workers with little or no benefits...All of this was done in the spirit of market democracy...People accepted this at face value with little or no moral outrage simply because now THEY were the shareholders, now THEY had a stake in the profitability of the company, now THEY could care less if thousands lost their jobs to some sweatshop in Indonesia...As long as THEY could benefit from the added cost savings, which in turn would pass through to the bottomline of the company, it was THEIR benefit, THEIR wealth accumulation...
What strikes me as even more fascinating and insidious at the same time, is the simple fact that throughout the eighties, these same corporate strategies backfired...They created an incredible stir, a PR nightmare...Many will remember the movie, "Roger and Me", which was a scathing indictment of the corporate culture...The movie blasted the management of Chrysler Corp for its decision to close down many plants in Detroit and featured the concommitant backlash-the poverty, the joblessness, the erosion of communities...This movie was critically acclaimed..Why?, why did this film receive so much praise, when a movie that featured a similar theme in 1999 would not even make it to box office...The answer is simple...In 1999, as opposed to 1989, the market was not a place of democracy, it was still a playground for the rich, the priviledged, for the wealthy few...It was a place where corporate insiders made fortunes off of the labor and the production of the blue collar masses...In 1999, the fact that the majority of people had easy access to markets, had been brainwashed into believing that corporate instability no longer applied to them, that THEY were now a part of the priviledged few was hammered into their heads day and night, day and night, until before long, THEY viewed the world of labor vs management as simply an misfortunate reality of capitalism...So long as they, with their freshly funded brokerage accounts, could profit from the layoffs or from an outsourcing of labors, it was o.k...
The ingenuity of this type of spin by the "machine" turned what was once an "us" vs "them" culture of working class vs aristocracy into a new culture of "us" and "us"...As Frank often mentions, the spirit of market populism reached such insane popularity, that the collective "we" was subverted often into the language of the movement...What the "we" were a part of was a revolution of culture, of capitalism, of the old guard, the status-quo...What the "we" did not realize was that they were simply pawns, simply capital to support the massive insider selling, the "we" represented liquidity to the massive appetites of stock option rich employees who needed the "we" to unload their massive capital gains on an unsuspecting public...The "we" did not even for a moment think that it was at all unfair that the corporate insiders themselves were selling shares accumulated for pennies; that the venture capitalists were raking in huge fees for the financing; that the investment bankers were flipping these shares the same day they went public; that the "we" were in fact taking on the entire market risk for the benefit of the "newly minted" working class heroes...the ordinary folk who just "happen" to be billionaires...After all they were just like the "us" only they had come up with some new innovation, some new scheme that would make "us" better off, make "our" lives easier, and in turn make "us" richer if we invested "our" hard earned money in their company...
The brilliance of this movement can easily be seen in every single advertisement related to the "New Economy"...The language, the emotion, the music, it all makes it seem like a grand party, like a cultural revolution akin to the 1960's...The "we" has identified the enemy, the old guard, the government, the status quo...The "we" is familiar with these stalwarts, as they fought them in the 1960's...The "we" champions the guys who fight for "our" collective freedoms by allowing the "we" to bypass the former capitalistic structure, the former standard corporate culture, for the new, "do as you please" culture of rebellious capitalism...The "machine" makes it all so appealing, so carefree...The idea that you can simply "Go West" for fame and fortune...The messages are clear, that the "we" is in charge this time and nothing, no one could stop "them"
The sad, inevitable conclusion to all of this is the simple fact that in 2000, corporate insider transactions reached unprecedented heights...In November, I researched and found that the two main culprits of insider selling were the founders of Microsoft who combined had sold over 80,000,000 shares alone in 2000...The pundits will say,"this is a classic diversification technique"...In fact I have often heard Meg Whitman, CEO of EBAY, when asked about this say, "well my advisors have always instructed me to diversify my wealth"...For every question, they have an answer...They have all been trained well by the propoganda machine to make it seem like everything is done in the spirit of championing the "everyman" against the power and bureaucracy of the system...This mentality is so embedded in our culture now, that even as I speak, I can read message after message blaming the failures of this market on the "old guard", the government, the Fed, etc, etc...The actual "concept" that stocks serve only one purpose..which is to increase the wealth of the corporate insiders is seen as scandalous as blasphemy in this culture of market democracy...CNBC goes to great lengths to assuage the worries of investors...Any event which suggests that corporate insiders may, in fact, be the ones who are responsible for much of this current decline does not reach popular acceptance...Instead, all of this is blamed on external effects, the common foes of the "everyman"
At what point does the collective consciousness of the market whole wake up to the fact that the stock market, in every real sense, is a giant scam...For people such as myself, I trade the markets, I rarely, if ever invest in stocks or companies...The concept that we, as a collective whole of outsiders, can outsmart the shrewd and calculating moves of corporate insiders over the LONG TERM seems preposterous to me...The charts are all we have...The actual belief that somehow, in some way, these stocks are created to promote and even engineer wealth for the millions of investors is a giant hoax that is being played out before our very eyes... |
