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Why the Rich Prosper from the Stock Market While We Get Screwed
By Les Leopold
On Planet Rand, the stock-market boom is a wonderful thing precisely because it rests upon the recent rise in corporate profits.
This morning I received an email blast form Amazon. It was pushing The Fountainhead and Atlas Shrugged, the old and new testament of the Ayn Rand nation, which includes much of the Tea Party and its Republican allies.
How appropriate to be promoting Ayn Rand books just as the stock market and corporate profits both reached record highs. How appropriate to think of the infamous John Galt withdrawing from society in comfort while the rest of us face high unemployment, oppressive student loans, increasing healthcare costs, upside-down mortgages, and declining real incomes. But, according to Rand’s philosophy, this is as it should be — the wealthy getting all the rewards while the rest of us get nothing.
None of this is accidental. Our two-tiered economic recovery is the direct result of policies, or the lack thereof, that flow directly from Randian principles. If we don’t do something soon, we’ll all be living on Planet Rand.
Who Owns the Stock Market?
Before exploring this Randian policy coup, let’s be clear on who owns how much stock in America, and therefore who is benefiting most from the record rise in the equity markets.
As of 2010, the top 1 percent of households owned 35 percent of all the stocks in America while the bottom 80 percent of us owned only 8 percent. These percentages include both direct ownership of stock shares and indirect ownership through mutual funds, trusts, and IRAs, Keogh plans, 401(k) plans, and other retirement accounts. (See ” Wealth, Income and Power” by G William Domhoff.) So the current market boom is extremely profitable for the well-to-do, especially the super-rich, which is precisely what an Ayn Rand true-believer would cherish. Why is that?
This writer is a fool. Today's wealthy are closer to Rand's villains such as James Taggart or Orren Boyle– wealthy through political pull and not via production. Only a Marxist idiot judges a man by how much he's got and ignores how he got it. Rand is for the wealthy creators, and for the productive poor as well, but against thieves of all classes.
Bull Puckie. In the time of Rand the elite (wealthy) did not and COULD NOT manipulate the market. There were laws which prevented ANYONE from purchasing (Cornering the Market) more than a certain percentage of available stock — as well as laws which prevented them from selling off more than a certain percentage (I think it was 15% during any month), therefore preventing a run or scare in the market.
Today is different. CERTAIN PRIVILEGED personages are given permission by politicians to bypass those laws in return for huge denotations to their campaign coffers.
This opinion is way off, in terms of Ayn Rand's principles, the Tea Party, and the "Republican allies," as you put it.
First, the stock market does not reflect capitalism. It reflects the stock exchange; there are less companies, so their stocks are higher. The less companies we see, the higher the stocks will rise. Ayn Rand calls for less companies?
Second, you made a huge blanket statement about "high unemployment, oppressive student loans, increasing healthcare costs, upside-down mortgages, and declining real incomes." Why would any capitalist think this is a good thing?
Let's break down your concerns:
high unemployment: this is because of over-regulation, and the cronyism that goes on between politicians and large business owners. Why does Walmart endorse a higher minimum wage? To run out smaller businesses. Those kinds of relations between State and Company. High regulation has also ran small manufacturing companies out of the country; no thanks to stupid laws, unions and minimum wage hikes.
oppressive student loans: These are all government loans, and yes, the government is very oppressive to those who owe them money.
upside-down mortgages: Another government problem. These loans were all backed by the U.S. Government. No smart bank would loan money to stupid morons who bought Jet Skis, trips to Disneyland, and supposed "home improvements" on a false equity. Only the government would back such programs. And yes, your ever so smart president is about to endorse another one. Cheer it on, though, the master says it's fine.
Relevant: http://www.frathousephilosophy.com/2013/04/ayn-rand-was-right-about-something.html
Ayn Rand is the definition of a complex life.