Surely I have some of this wrong but the overall picture may be worth considering. In the early 90s Peter Lynch in his book Beating the Street uncovered in the late 80s that the Japanese stock market was rigged. Last year Michael Lewis was on 60 Minutes pointing out that the US stock market was rigged. We know what happened to Japan, and we are seeing something worse happen in the US. We need to learn from Japan.
Banking & Insurance
In the case of banks reserves are being put at risk, absolutely unnecessarily because they are now tied to the gambling operation though being wedded to investment firms. In insurance which is supposed to reduce risk is actually being undermined by gambling on the stock market due to capital rot arguments.
Removing the intelligent separation between raw gambling (stock market) and the banking incentivized the banks to write a massive amount of predatory loans to prop up the real estate and building industry and stocks. When those home buyers got a 3x increase in their mortgage and defaulted in mass it collapsed the real estate market and the over leveraged banking and investment industry started to collapse because it too had been hollowed out by fraud. This led to more directly mortgaging paid-for public infrastructure and the tax base and to austerity. Now it seems there will be no end to the theft through austerity and the idea that taxes don’t result in useful services. Instead taxes go to pay for tax cuts for extractive businesses that pork the budget and to kind of privatization that can’t work and leads to no services or at best marginal service at radically higher prices.
The Fortune 1000, in order to puff their stock prices, got a tax rule change that allowed any change to count as profit and used that to incentivize CEOs to trigger their own bonuses through stealing the employees pensions, labeling that theft as savings . As a group the Fortune 1000 colluded to steal a couple trillion in private paid for pensions.
In the public sector they’ve been going to defined contribution which is a forced contribution or tribute to the Wall St. stock market. There is no social security for public employees, no access they wouldn’t have to beg for. If the useless stock market crashes these people lose their ability to support themselves in their old age. Some counties are actually engaging in wage reductions, claiming they are refusing to fund their part of the employees pensions, in reality it’s a large pay cut for public employees that actually already make less than their private counterpart.
After stealing the retirements of private employees to prop up the useless stock market, Wall St. then tried to steal the retirements of everyone who was too poor to have a pension. It said that Social security didn’t even pay the zero rate. Wall St. could never sustainable pay even the zero rate.
In the early 70s there were no medical bankruptcies and tunnel scanners and drugs do not explain the cost and the closures of emergency rooms because they are “not profitable.” What explains the elevation of health care costs is an insurance industry that gambles away reserve funds to prevent “capital from rotting” and passing on the costs in terms of ever increasing costs. This in turn suppresses wages further at a time when cost of living increases are non-existent and wages don’t even match inflation.
Auto industry bankruptcy
GM claimed it was paying $2500 more per car because of health care and could not compete.
Under Wall St. a bunch of useless consolidation happened which means less competition and much less in the way of quality. Costs have been going up and quality has been going down.
Education Public & Private
Public education is being hallowed out. Teachers are being asked to purchase the school supplies for class rooms. Public education is being funded at the lowest level 80 years. College education costs are skyrocketing contributing huge unnecessary debt. In the past neither of these was the case and once again its Wall St and the useless stock market behind it.
Every possible good business has a bunch of useless parasitic stock holders in the background whining about the the stock price and dividends. Long and medium term planning becomes impossible because it’s always compromised by these back seat drivers. With regard to larger longer term established firms these so called owners are completely unnecessary they contribute nothing and their money is worse than nothing its absolute drain on real performance or any vision and even the ability to compete and stay in business. It leads to cars designed to fail at a certain point etc. , and it’s at the heart of the reason the US auto industry failed and key to why Jobs was successful the 2nd time around and why Buffet has done well. The US auto industry had a mantra: a car is not an efficient use of capital.
Layers of Mutual Funds
The huge fund must be pretty much the entire index stock wise. They overlap. This means the signals are completely broken. It becomes a pure subsidy underwritten by corrupt tax policy. If a firm can get listed it gets a massive corporate welfare check no matter what it does. It rains money down on these firms.
We have a sponsored media that has allowed much of the political process to be captured by Wall St. appointees. This means the media does everything it can to avoid spreading public awareness of the problem. We had OWS but people at that point were not calling for an end to Wall St. But with regard to the stock market that is what we need, its sucking the energy and future out of society and contributing next to nothing in any case and its overall contribution is highly negative.
They take no risk, absorb the majority of the gain and others cannot discharge losses. Governments are made to socialize the losses at increasing rates and the poor cannot discharge debts or file bankruptcy.
The stock market requires increasing returns and increasing risks or it collapses. The stock market is based on the same game as those adjustable rate mortgages. It is hollowing out every aspect of US society and its mentality is having its effect elsewhere as in Greece. Its model is upside down. It doesn’t understand that development (not mere growth) is based on contribution not on receiving. Its contributing that fulfills us and makes us feel our stay here has been justified and worthwhile. It’s not about what others give us it’s about what we were able to give. And the funny thing is that when we’ve given we hardly need and can generally be satisfied with very little. It is in giving that we receive. It’s taking that bankrupts us.