To make it short but precise and easy to read, I split this article into a sequence of short pieces describing how things work and what happened and how the stock market could be repaired to work for all of us rather than constantly rob most of us:
1. Stock Market
Capitalism was accepted as an improvement from feudalism. Big things would no longer depend on stiff lords born at the top society’s hierarchy but could instead be started by anyone, if it could be financed. However, people born rich might not finance it. Big money lenders might neither. Nor governments if they even had money to spend. Stock markets were invented as a kind of crowd funding in a capitalist market, not as free benign donations but potentially profitable investments by which investors could own a share of the business they co-founded. Theoretically making us all profit earning members of the economy if we could all manage to buy shares. In reality, however, only rich and well off people can, while the rest of us must toil and struggle to survive in underpaid labor, with neither time nor money to dive into the stock market which soon became a kind of casino for the upper class, the shares of companies usually called stocks rather than casino chips.
2. Hedge Funds
On stock markets gambling is possible. When many stocks of a company are getting sold in a short time, their price drops. Rich gamblers can do this to lower stocks’ prices and then buy those stocks back making profits from selling high and buying low. It’s money swiped away from other investors, money coming from the less rich, like pension fund payers. Likewise, stocks can be rapidly massively bought to raise their price, which in turn nowadays gives CEOs higher bonuses and a wealth raise of the company’s stocks given to them, so they love wasting company profits on stock buy-backs rather than reinvesting into the company they run in order to maintain it healthy or even grow it and pay the workers well. The invention of hedge funding may have been argued for as a means to reduce this latter kind of the casino game. At least some people argue for them this way today.
Hedge funds can potentially reverse the stock price growth by working in the opposite direction, namely by not having to buy the stocks first and sell them afterwards. Instead, hedge funds can BORROW stocks to sell them and only later pay for them. So, if they can sell the borrowed stocks at – say – 10 bucks per stock, and after a massive sale of them those stocks’ prices go down to 1 buck each, they must only buy them back from the stock market for $1 each to then return them to the prior owners while keeping the nine dollars of difference on each stock as a profit. This is called a “short sale”. So, yes, it’s true that hedge funds do not finance businesses and are therefore seen by most of us as harmful parasites. In theory, they can still be seen as a guard against insane stock price boosts performed by other gamblers. But on the whole, the entire stock market is only partially an instrument for funding new or growing companies nowadays, while for a large part it’s become a casino for rich folks to siphon more and more money away from the rest of us (the money has to come from somewhere, after all); money which they can use again for gambling with stocks or for buying up real estate that impoverished people are kicked out of and thus turn us all into tenants having to pay these rich money lords rent for the planet we all stand on, just like the serfs had to pay and/or freely serve their feudal lords.
So, yes, hedge funds have theoretically a role to play for reducing certain stock market gambling; but they do so by their own gambling which never finances companies, only makes profits for the gamblers, and often seriously harms or even destroys companies in the process. Companies whose stocks have lost all value can’t sell any of them to come up with money they must come up with to pay for something. Nor are they likely to get loans when they are being seen as crumbling or dead already. Hence hedge funds are widely feared and hated for good reasons. And, yes, buying and selling of stocks is only part of changing their prices. There are also insider deals and media misinformations to enhance the gambling wins for some and rob the many while increasingly destroying companies that in our wage slavery world so many of us depend on for paid employment and health insurance or mere gig contracts.
3. The GameStop Event
Not only can many jobs be lost when companies are destroyed on the stock market. The disappearance of products or shops can also diminish the quality of our lives. This, plus the option of making money on the stock market themselves, were probably the motivations for a large number of not so utterly rich people (even truly non-rich ones, I guess) to buy lots of GameStop stocks (especially with the Robinhood app) after a hedge fund had targeted GameStop. GameStop stores were surely seen by the hedge fund manager(s?) as being at natural survival risk due to the growing online drop shipping trade. Heck, how can any local stores survive if we buy everything from big corporations like Amazon?
Anyway, the idea of the many smaller buyers of these stocks was to reverse the hedge fund’s price lowering of the GameStop stocks. Buying lots of them quickly would raise these stocks’ prices possibly even making profit for these many smaller investors (when selling them again later before they lose their boosted value, or by keeping them for dividend payments) while hurting the hedge fund that now would no longer be able to pay lowered prices to buy back the stocks it had sold at higher prices. The hedge fund could even go bankrupt from the reversal of the money theft (which it essentially did, only to be “bailed out”, more exactly bought and taken over, by another rich company related to a Joe Biden buddy).
And, yes, since mass media are biased through their alliance with big corporations and their billionaire owners, the media communication making this mass purchase possible happened on a social media platform (Reddit) which is now getting smeared and targeted by the rich establishment (of which the visible figures in the mass media are members), the establishment that loathes a situation where less rich people can also win for a change. A casino is after all designed to make its owners richer and richer while draining money from everybody else. (exactly what Wall Street does)
4. Joy and Happiness
So, why the rich establishment is upset, many of the rest of us who heard about this rare event could feel good for a change, maybe laugh happily and wish the best for the little guys who spun the table around for once. One of the few moments when our rotten lives feel like life.
5. Can Regulations Help?
When the vast majority of us keep getting robbed, cheated, and disenfranchised by the stock market – robbed of retirement payments and homes and wages and jobs and pushed ever deeper into debt and rent slavery and regularly hit with economy crashes that wreck our lives – we might want the stock market to be removed from our lives or (because we may not trust banks and governments to properly fund desirable businesses) have it regulated better. But while helpful regulations were enforced after the infamous Great Depression in the early part of the 20th century, they kept being repealed by the rich “owners” of our inegalitarian economy bribing politicians; the two major parties; and basically our federal, state, and local governments into their pockets; turning officials (and media folks) who should serve the public into their own corrupt henchmen. Somewhat known nowadays is the big Glass-Steagall Act repeal in 1999 that removed the possibly last bit of restrictions. The stock market and banks then went full blow casino gaming and gave us the global economic crash of 2008. A crash quickly followed by a huge bailout of the banksters who had harmed us so much, a bailout with our tax money (sure, the money is first created out of thin air but afterwards taxed away from us; similar to how hedge funds work). This downright out in the open mass theft for the rich ruling class by our government – that the money lords have bought up – has now become standardized and automated, so it took only a few days to do it again at an even larger size when the corona pandemic hit us and was instantly used as an excuse for another economic mass theft of this type. So, regulations worked for a generation of people, but have been thoroughly repealed by now because a system designed as a dungheap pyramid of wealth, income, and power with a billionaire tower on its top reaching into outer space won’t leave regulations in place that reduce the theft from the top.
Also, there seems to be a degree of complexity and obfuscation in the stock market that may make regulations insufficient no matter how sophisticated they are made to be. And even when regulations don’t get repealed; small business owners and even self-employed people redefined by regulations as small businesses of sorts rather than just human beings trying to make a living with their work can assure us that regulations can also be excessive and make life too complicated, crush family businesses, and boost sociopathic large corporations who can handle such chains and hurdles best (besides also altering them for their benefit via political bribery). What could then really help?
6. Change for the Better: Universal Basic Dividend
Interestingly, there exists an astonishingly simple solution that could be used; namely a method to make us all co-owners of the casino. Since the casino always wins, we could then all have stable lives if we all owned it. Rebellious former finance minister of Greece, Yanis Varoufakis, made this proposal some years ago (apparently at least as early as 2017). Here is a previously shared video where he explained it:
And here is my brief Universal Basic Dividend explanation: Have corporations donate a growing percentage of their stocks into a public fund every year in order to gradually shift the economic ownership from a few money aristocrats and sociopathic corporations back into the hands of the entire people. Since all of us fuel our economy and depend on it, we all should be its owners, not a handful of parasitic predatory money aristocrats. It would be a shift without the risky nationalization approach that oversizes governments that may or may not be accountable to their people (like back in the Soviet Union). Gradually, smoothly, without a disastrous economic disruption that radical revolutions can cause, a gradual transfer of corporate stocks into a public fund would create equal dividends for everyone (a guaranteed basic income) and could also pay for social spending like Medicare for All. This would be a very helpful measure for reshaping our predatory pyramid scheme economy into a thriving prosperity-for-all economy with a shrink of desperation and greed for money, a shrink of the power that money has over our lives, and a growing relaxation and refocus on truly human goals. And because of the reduction of money’s power over our lives and by making us all winners no matter where the waves of the economy go, all things would get better.
So, yes, if we – the people – return to our human values and use them plus some insights and creativity to restructure our economy and politics in a healthy way, we can easily turn our current Hell on Earth into a Heaven on Earth and shift our lifelong efforts from constant economic and political tugs of war into repairing our crumbling Earth environment and climate, making lives good again (at ALL ages!). With such measures we can move forward instead of going down the drain.
| Best subscribe and share with others, so the efforts I make can serve enough people. (I lack time for social media) Thanks. 🙂 |
Beanstock's World 