Bessent, Trump, millionaires, and billionaires are beneficiaries of a financialized economy.
Scott Bessent is sick and tired of hearing about your financial hardship. Trump’s Treasury Secretary told CNBC he is “sick of hearing about this K-shaped economy. I can say here definitively, the K-shaped economy is over, and we’re seeing more of a C economy where the lower end of wage earners are finally calling it back, just like they did in President Trump’s first term.” As evidence of this supposed turnaround, the Treasury Secretary cited a 2% wage gain for the bottom 25% of workers.
Bessent, who accumulated $700 million as a hedge fund “macro investor” and worked for the Soros Management Fund, is on the upper arm of the K-shaped economy, while millions of lower-income Americans, working paycheck-to-paycheck, are stranded on the lower arm.
Bessent, Trump, and the millionaires and billionaires (and one trillionaire) are beneficiaries of a financialized economy. “The U.S. is increasingly described as a K-shaped economy, in which higher income households are largely prospering, while lower income households fall behind,” notes financial advisor Edward Jones. “Rising asset prices have further widened the divide, with wealthier clients benefiting most from strong equity markets, while lower income households have participated less in this upside.”
According to the North Carolina Banking Institute, the functioning of the economy is no longer evaluated in terms of the production of employment or rising standards of living. Instead, it is evaluated by the movements of the stock market, the realization of shareholder value, and the profits of the financial sector.
Neoliberal financialization is the systemic expansion of interest-bearing and fictitious capital detached from direct production. Financial motives, markets, and institutions have become the dominant forces in the global economy, shifting the focus away from the production of physical goods towards short-term financial gains.
“This new finance-dominated capitalism is crisis-prone because of its inherent financial instability,” writes Stavros Mavroudeas, a Professor of Political Economy in the Economics Department of the University of Macedonia. In 2008, financialization resulted in a severe global economic downturn triggered by the collapse of the US housing bubble, subprime mortgage lending, and complex, unregulated financial derivatives.
“How did the fates of working people—facing death, hunger, displacement, and joblessness—and small businesses facing permanent closure become so disconnected from the fates of large corporations?” writes Amanda Fischer for the Washington Center for Equitable Growth.
Why isn’t the abundance channeled via U.S. financial markets to those at the top of the wealth and income ladders in the United States translating to security for most individuals and families? The answer is evident most immediately in the policy choices made during the coronavirus recession but also in policies enacted in the decades before the U.S. economy hit this particular shock.
Texas Republican representative Dan Crenshaw, who raised a total of $21,242,753 during his political career, is also sick and tired of hearing about the financial problems of his constituents. “Stop whining, get a job and eat Ramen,” he said. Meanwhile, Fox News contributor and a resident fellow at the American Enterprise Institute, Marc Thiessen (net worth, $5 million), posted a sarcastic retort to college students struggling to afford food. “Cry me a river,” he said.
Since the beginning of his second term, President Trump has argued the US economy is experiencing record prosperity. “When I see polls on the economy, I should have 150% approval, not 100%. This is the golden age of America. And I think people are starting to see it,” he declared during a recent interview. “The economy is the greatest economy we’ve ever had by far. The polls are fake,” he added. “Costs are coming way down. The food, the groceries, it’s all coming down. I think we should be given an A+ on the economy,” Trump told Fox News.
In May, the president said he does not think about inflation and the high price of gas and food. “This is peanuts. I appreciate everybody putting up with it for a little while. But I don’t even think about. What I think about is you can’t let Iran have a nuclear weapon.” Trump insisted, “Grocery prices are way down, used car prices are way down. Look at eggs. Eggs are down by four, even five times.” On August 5, he said gas prices are “at the lowest level in decades.”
Gas prices in the United States have recently reached their highest point in four years, now standing at $4.17 per gallon. This increase is primarily attributed to Trump’s Iran war, which has led to considerable volatility in oil prices. UBS Group, a Swiss multinational investment bank and financial services firm, reports that food inflation will stay elevated for the medium to long term. UBS calls it “the end of cheap food.”
Tone deaf Republicans echo Trump’s obvious lies about the economy. “Right now there are great things happening in our economy,” Tom Emmer, the majority whip in the House of Representatives (net worth, $2.5 million), told Maria Bartiromo of Fox News. “Nobody wants to talk about 78-cent eggs, nobody wants to talk about milk that’s under $2. No no. They want to focus on gas prices.” Mike Johnson, the Speaker of the House, insists Trump has “made everybody’s life better. He has put the economic conditions in place.”
The deceptive propaganda will have its consequences in November. The American people, or those who bother to vote, will oust the Republicans and elect the Democrats. However, significant change is unlikely, and the billionaire economy will persist, albeit under the guise of progressive liberalism. To steer America in the right direction, a powerful grassroots movement must emerge, independent and antagonistic to the uniparty political class and its benefactors.
Article posted with permission from Kurt Nimmo
