Trump’s constant pimping of the stock market numbers is not the same as a sign that the economy has returned to the level of “winning” even before Trump took office. Like voting twice, Trump’s not being a good minimal-state libertarian where all debt resolves itself in a ‘free market’. Instead, the stock market can help measure of inequality and disparity in the economy and while it’s not the economy, it is about power and powerlessness. There will be a vaccine, and it’s not Trump’s panacea and it shouldn’t guarantee a victory. If Trump wins reelection, misery will remain.



The stock market, argue Jonathan Nitzan and Shimshon Bichler, is how capitalists quantify their power. To understand what Nitzan and Bichler are talking about, we’ll unmask the ritual that defines our social order — the ritual of capitalization. 


When it comes to interpreting the stock market, there are two big ideas. Both come from ‘defunct economists’. The first big idea is that rising stocks are good for everybody. I’ll call this the ‘good-for-GM’ worldview (for reasons explained below). This big idea owes not to any single economist, but to an entire defunct school: neoclassical economics.

The second big idea is that the stock market is disconnected from the rest of the economy. I’ll call this the ‘fictitious-capital’ worldview. It’s an idea that dates back to Karl Marx (who had a defunct view of capital).


…the oscillations in the power index are caused by the rat race between stocks and wages. Sometimes stocks win the race, causing the power index to increase. Other times wages win the race, causing the power index to decrease.


I’ve labeled, in Figure 2, some events of interest. It’s notable, for instance, that the power index rose in the late 19th century when Rockefeller was building his Standard Oil empire. And the power index began to fall in the early 20th century when minimum wage legislation first appeared. The power index reached a low after World War II. During this time, the welfare state expanded and the government invested in massive public works like the interstate highway system.

From the Reagan years onward, the power index increased. Ironically, history would be made shortly after Francis Fukuyama proclaimed the end of it. Eight years after his 1992 book The End of History was published, the power index reached new heights. Then Trump took office and all records were smashed.


If you believe capitalist cheerleaders, this stock-market low should have been calamitous. But it was not. Instead, the power-index low coincides with the golden age of capitalism. Lasting roughly from the mid-1940s to the mid-1970s, this era was the most prosperous in US history. It was a time of immense public spending and immense material expansion.

By the 1980s, the power index began to rise. Enter the neoliberal era. Gone were politicians promising government expansion. In came politicians promising austerity. Ronald Reagan got government ‘off of the people’s back’, claiming everyone would benefit. A convenient lie. Under Reagan, wealth didn’t trickle down. It poured upwards … to capitalists. We can see this deluge in the power index, which exploded during the 1980s and 1990s. By 2016, the power index was near an all-time high. Then Trump took office, and all records were shattered.

And that brings us to today. Stocks are up. Wages are down. Here’s what it means: capitalist power is at a pinnacle.


While not yet starving, many Americans are going hungry. And like the Mayan elite before them, American elites are attempting to profit. And they are succeeding.

Still, there is hope. No social order is immutable. The more powerful American capitalists become, the closer they get to a reckoning.…

Figure 3: Eras of capitalism, oscillations of power. The blue line shows Bichler and Nitzan’s power index — the ratio of the S&P 500 price to the average US wage. The red line shows the smoothed trend. Shaded regions show four different eras of capitalism. [Sources and methods]


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