This mini-post comprises thoughts inspired by radio station WBAI and Wall Street, two distinctly New York phenomena. To even mention them in the same breath is unusual, since they are diametrically opposed. I doubt if Wall Street pays WBAI much attention, but WBAI, ever the rebel and champion of progressive causes, sees Wall Street as a cesspool of lucre and a nest of greed. When, ironically, the station was lodged there prior to Hurricane Sandy, it referred to itself as being “in the belly of the beast.” So let’s have look at the rebel and the beast.
|This is what Gary says we should hoard.|
WBAI is the natural home of Prophets of Doom. Even in its current and never-ending crisis, as programs disappear and others replace them, while the station pleads desperately for donations from listeners, its prophecies of doom persist. Veteran nutritionist Gary Null, who has been with the station for years, predicts an imminent financial crisis that will dwarf the one we have just survived. He foresees the dollar no longer the world’s preferred currency and advises us to get into silver and gold, actually taking possession, as the only safe investment. Since he correctly predicted the bursting of the real estate bubble that provoked the last crisis, he is not to be cavalierly dismissed. So should we make room somewhere for those ingots and coins and start piling them up?
|Greed, one of the seven deadly sins, as|
portrayed in a portal of the Gothic cathedral
of Metz. Was he expecting a crash?
Another Prophet of Doom is Thom Hartmann, a radio and TV talk show host and author now heard on WBAI from 5 to 6 p.m. weekdays, a newcomer to WBAI whose nationwide following the station probably hopes to recruit. He is not shy about promoting his book The Crash of 2016: The Plot to Destroy America – and What We Can Do to Stop It, in which he argues passionately that this country, corrupted by corporate greed and the doings of the very rich, is headed for another Great Crash, a catastrophic repeat of the crashes of the 1760s, 1856, and 1929, crises that come, he insists, every four generations and are followed by an armed conflict: the Revolution, the Civil War, and World War II. This grim scenario can be prevented, if ordinary citizens – the 99% -- see to it that major reforms are enacted and moral choices made.
I haven’t read Mr. Hartmann’s book, so I cannot review it. Though tempted to have a look, I held off. He is very knowledgeable about current events, but I find his grasp of history a bit shaky. His view of our history as cyclical, with a major crisis every four generations, seems a bit too schematic, too forced. I know nothing about financial crises in the 1760s, but his choice of one in 1856 – an error for 1857 – strikes me as arbitrary. There was indeed a crash in 1857, but it left the agricultural South untouched, and the resulting recession in the North lasted only a year and half, following which the economy recovered. Far more serious were the Panics of 1837 and 1873, each of which produced a severe recession – you could even say depression – that lasted many years. If Mr. Hartmann ignores these panics, it’s surely because no great war came in their wake, and they wouldn’t fit into his cyclical theory of a crisis every four generations. Nor would World War I, though it was hardly a minor affair. Mr. Hartmann’s heart (no pun intended) is in the right place, but his facts don’t always add up.
|The run on the Seamen's Savings Bank during the Panic of 1857. The ragpicker to the |
left in the gutter seems to be ignoring the whole brouhaha.
So what do I conclude? Certainly the stock market now is very high, and the bull market that began in March 2009 is now one of the longest ever and ripe for a correction, if not a full-fledged bear market. Just when such a downturn might come, and what might trigger it, I wouldn’t presume to predict, but come it will. Will it be as catastrophic as the Prophets of Doom insist? In its winter 2014 report my mutual fund company, T. Rowe Price, comments on the stock market’s remarkable recovery from its March 2009 low, and insists that our financial system today is in much better shape than it was in 2006-2008, when banks were burdened with risky debt and the housing bubble was at its peak. Yes, banks are still too big to fail, Price concedes, and high-speed trading poses risks, but corporate balance sheets and risk controls have improved, rendering a crisis like the last one unlikely. So speaks a moderate and experienced voice from the financial sector, one not given to political pronouncements but rather to analysis of things as they are – political, social, economic -- and how they affect investing. But that same voice adds a note of caution: stock prices are very high now, and the impressive gains of 2013 are not likely to be repeated in 2014.
One of the T. Rowe Price fund managers refers to the 2008 collapse as a “once-in-a-lifetime career event.” There were Prophets of Doom back then too – I remember bold captions DON’T BUY STOCKS -- but those who bought stocks at the time have been richly rewarded. Veteran investors have chorused this advice over time: Buy low, sell high. Or, put another way: Buy when everyone is selling, and sell when everyone is buying. Easier said than done, since it means ignoring the hysteria or euphoria all around you; you have to be a resolute contrarian. But if you do buy when things look bleak, the result will be what I term Profits of Doom. Though maybe the best advice of all would be this: If you have made good investment choices, stick with them long-term and ignore the ups and downs.
Is it obscene to be talking about investment profits and strategies, when vast numbers of people are out of work, and many more are working part-time only or in jobs far below their skill level? And when students are burdened with debt, and people are losing their homes? Yes, it is. But we live in a capitalist society where money rules, and we have to take care of ourselves. Will the Prophets of Doom be proven right? To judge by the past, probably not, or at least, they’ll be proven only partly right. If another crisis comes, moderate or severe (probably severe, in my opinion), those who tough it out and take advantage will realize Profits of Doom. Those who profit won’t be exclusively the super rich; small investors can take advantage too, and I hope they will, because they’re just trying to survive. Someday we may have a more ideal society where things are handled better, but that’s a long way off. Meanwhile, we cope as best we can. As for WBAI vs. Wall Street, the one lacking money and the other up to its ears in it, I must sadly note that Wall Street’s future is, alas, assured, whereas that of WBAI is not. So it goes.
Note: Is Browder a greed creep? Those who know me as a longtime listener (and critic) of WBAI may be surprised by the above and indeed ask if I am. My answer: A greed creep? Of course! Who isn’t? In this society we have to be concerned about money. And greed is as American as apple pie.
Even so, I'm not just a greed creep. I’m many things, and so are we all. I’ve even done a very unpublished poem, “Jokers Wild,” that catalogues my at least nine selves. I am
o a raunchy bisexual stud
o a juicy little nitwit fruit
o a seeker who ignores the first two, being eager to renounce blind lust
o a sour-tongued critic who denounces all three as depraved and inane
o a blathering poet
o a greed creep
o a health nut
o a weepy, self-pitying suicide
o and a detached observer who views them all with amused tolerance, who is eyed by an observer eyed in turn by an observer through a mirror maze of infinite regression, while all the others, oblivious of him or them, pursue their antic ways.
And I’ve probably left some out.
Schizoid? Not at all. We all harbor a host of selves who constantly compete with one another, some dominating at one moment, and others at another. And in my case, the greed creep is just one of the many. Indeed, there is room for all. A mere one or two selves would be boring. Having multiple selves, some of them at war with others, is much more interesting and much more fun. So count up your many selves, spank the bad ones, and cheer on the others.
Coming soon: How New Yorkers Have Fun. Quiet fun, noisy fun, genteel fun, naughty fun, dark or bloody fun, and crazy, wild, madcap fun. Which should be fun.
© 2014 Clifford Browder