This past Friday, the Dow topped 29,000 for the first time in history. The tone in which the story was reported was breathless and triumphal. It was clear that NBC News writer Lucy Bayly was very impressed by the record.
"The Dow hit 28,000 on Nov. 15 and needed just 48 points Friday to breach the 29,000 mark, having flirted with the number all day Thursday after a de-escalation in the conflict with Iran soothed investor fears, energy prices settled, and Apple posted record gains on higher-than-expected sales in China.
Gains in Apple, Goldman Sachs, and healthcare stocks helped push the index upwards."Notice how specific those reasons are. Energy prices settled, we didn't have a war, and Apple did really well. Gains by Apple, the biggest investment firm in the country, and the healthcare industry pushed us over the top. Great work team!
Except they don't mention that these numbers were purchased with $128B from the Federal Reserve. This was the first time the Fed had taken this kind of action since 2009, when it was done as part of the Obama era financial stimulus package. This time it was done so the Fed could cut interest rates and banks could keep lending.
"Separately on Wednesday, the Fed is expected to announce it will lower interest rates by a quarter of a percentage point as officials look to insulate the economy from a downturn. Though hiring and spending remain solid in the US, investors have grown increasingly jittery about slower global growth and trade tensions."Apparently the September investment by the Fed soothed those investment jitters. Yet this was done solely to enrich stock and bond holders, while keeping banks lending money to corporations. We are not benefiting from this decision in any meaningful way because most of us don't have significant money in the stock market. 10% of the population owns 84% of share value. While many working class Americans "own stock" through their 401k retirement accounts, these shares are part of the remaining 16% of total share value. That's not significant at all and the investment firms that manage those accounts are keeping a lot of the value on profits.
When we can casually drop $128B into the stock market for the benefit of Wall Street bookies and billionaire landlords, it's ridiculous to say that we can't afford policy that would benefit the American people directly instead of indirectly. Especially since we just print money to pay the interest on the bonds held by those billionaires. The right hand holds up the stock market, the second prints money to keep up interest payments on bonds. The federal debt just enriches the same people borrowing the money in the end.
Bring the Pentagon budget under control, end the Forever War, and turn the power of the coinage into a tool for the benefit of the working people of America instead of the landlords. If we can do that then we can issue the money needed for a Green New Deal, Federal Jobs Guarantee and Medicare For All without fear. We're going to pay for it whether we do it or not.
This is really the important part. The federal government will continue to sell bonds and to pay interest to the holders of those bonds with our without a Green New Deal. If we are proceeding with the Green New Deal anyway, then interest payments on debt created along the way will continue to benefit the same billionaires they do now. The only difference is that we will have clean fuel and workplace democracy.
The landlords will be a lot less powerful, however, and that's the real root of opposition to progressive Congressional candidates and Bernie Sanders. If they lose their power then they will again have to provide the federal revenue instead of successfully leaving the working class with the bill. That scares them more than anything else.