(By Harley Schlanger) With all signs pointing toward increasing volatility in the Trans-Atlantic financial markets, President Donald Trump must decide in the next weeks whether he will return to his campaign pledge to move against the destructive speculative policies of Wall Street financiers and their neo-liberal theorists, who are urging him instead to “stick with what is working.” They are referring to the run-up of stock markets to record levels, and official dishonest statistics which show a continuing decline of unemployment, which the President is touting as proof that his economic policies are working.
In reality, the record setting closes of the stock market are not the result of improved profitability or productivity of corporations. Instead, they have been fueled by nearly-interest-free credit, which banks and their blue chip clients have been spending on stock buybacks and speculative trading, rather than investing in physical economy. On unemployment, while the latest official unemployment rate is 4.1%, the labor participation rate shows that only 62.7% of the potential workforce is currently employed. Among those encouraging him to stay the course are the Goldman Sachs alumni in the administration, Treasury Secretary Mnuchin, who made huge profits cashing in on foreclosures resulting from the popping of the Mortgage-Backed Securities bubble in 2008, and Gary Cohn, the director of the National Economic Council.
Many of the Wall Street neo-liberals and speculators benefiting most from the increased flow of funds into the stock market not only opposed Trump during his campaign, but have played a leading role in disrupting…Read More