The stock market has done well since Donald J. Trump’s surprise election, with the Dow Jones Industrial Average rising 8.6 percent between election day and this morning. As the Wall Street Journal helpfully points out, the stock of just one company, banking giant Goldman Sachs, is responsible for roughly a quarter of the Dow’s so-called “Trump bump.”
That might seem odd, because during the course of the campaign Trump had turned Goldman Sachs into a shorthand term for the international global conspiracy that he alleged was wrecking America, and that he promised to unravel. When he ranted that “Hillary Clinton meets in secret with international banks to plot the destruction of U.S. sovereignty in order to enrich these global financial powers, her special interest friends and her donors,” he was referring in part to paid, off-the-record speeches by Clinton to Goldman Sachs. When he railed about a “global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities,” Goldman Sachs was his target.
“Just look at what this corrupt establishment has done to our cities like Detroit; Flint, Michigan; and rural towns in Pennsylvania, Ohio, North Carolina and all across our country,” Trump railed during the campaign. “Take a look at what’s going on. They stripped away these towns bare. And raided the wealth for themselves and taken our jobs away out of our country never to return, unless I’m elected president.”
In fact, when Trump summarized his populist campaign pitch in the final ad of his campaign, the image that flashed on the screen as he complained about the elitists robbing the working class and stuffing their own pockets was that of Goldman Sachs CEO Lloyd Blankfein.
A month later, Trump has nominated Steve Mnuchin, a former partner at Goldman and the son of a Goldman partner, to serve as Treasury secretary, overseeing the nation’s entire financial apparatus. As director of the National Economic Council, his top economics adviser, Trump has turned to Gary Cohn, the president and COO of Goldman. (According to Fortune, Cohn has made more than $50 million off the rise in Goldman stock just since election day. Blankfein has made almost $140 million since Nov. 8.)
Basically, Trump has handed control of the nation’s entire economic system to the very people whom he claimed were raiding it for their own self benefit. Goldman’s stock and that of other big banks is soaring in value — Bank of America is also up 30 percent, for example — because the smart money on Wall Street realizes what Main Street still does not, that Trump has no intention of keeping his promise to “drain the swamp.” They are betting that the swamp will do very nicely indeed.
What really makes that maddening is that at a very basic level, Trump was right. You can argue — and most economists do argue — that globalization, technology and free trade have produced a gain in net wealth both here in the United States and globally. But most economists would also agree that the net growth has come with a significant maldistribution problem. One group of people — Wall Street, banks, corporate executives, investors — has benefited disproportionately from that change, collecting enormous riches in the past 30 years; another group — largely working America — has been forced to bear a disproportionate share of the burden, with stagnant or declining incomes camouflaged in many households only by the entry of many more women into the workforce compared to 40 years ago.
That vastly increased wealth for those in the 1 percent cannot be explained by the fact that Wall Street or corporate executives are working so much harder or smarter now than their predecessors did a generation ago, and thus are morally deserving of a much bigger reward. The same is true for those on the lower end of the scale. Their fortunes have diverged dramatically from that of their parents and grandparents not because of laziness, but because the system in which they operate has changed. And what really makes them angry is the knowledge that it was changed in part with their own permission.
The unequal distribution of benefits and burden has not come as a surprise. It was anticipated from the beginning, and part of the bargain as we entered the era of free-trade agreements and the dismantlement of Depression-era banking rules such as Glass-Steagall was that those left behind would not be abandoned, that education and job training funding would increase and that the social safety net would be adjusted to account for a very different economy in which many would lose through no real fault of their own.
But that social compact was never honored. Instead, many of those who have benefited most from this new economy have embraced a “let them eat cake” attitude, born of the comforting notion that they have fully earned their riches while those struggling to stay above poverty have fully earned that fate as well. Any effort to recalibrate the system to better balance benefit and burden has been met with a howl of outrage, as if the current system had been written in stone and handed down as God handed the Ten Commandments down to Moses.
if you watch a Trump rally, it quickly becomes apparent that our president-elect has a salesman’s knack for knowing what his audience wants to hear, and a salesman’s shamelessness in reflecting it back to them, regardless of whether he means it. But wipe away the populist rhetoric and look at the people whom he is appointing and the policies that they advocate: Tax cuts for the wealthy, the dismantling of consumer, worker and environmental protections, the headlong pursuit of quick profit without regard for impact on living, breathing human beings.
None of it is new; none of it reflects a sudden realization among Republicans that working people deserve a bigger piece of the pie or better protection against a more randomly cruel economy. And certainly, none of it reflects an assault of any kind upon the economic elite. It’s a bait and switch. He promised his followers pitchforks and torches; he’s delivering pate de foie gras and Dom Perignon, but only for those who can afford it.