The Elizabeth Warren Express And the Nightmarish Political Legacy Of Keynesian Central Banking, Part 1

The Elizabeth Warren Express continues to gather momentum. Last week’s lunatic outbreak of UkraineGate is turning out to be a double whammy wherein the congressional Dems bloody the Donald—even as his Twitter account and GOP attacks dogs deliver the coup d’grace to the already tattered remains of Joe Biden’s 2020 candidacy.

Talk about a thin red line. If the third great Wall Street bubble of this century collapses and takes the main street economy down with it before November 2020, America will have its first woman (and crypto-socialist) president. And it will also tumble into a nightmare of vengeful redistributionist policy and statist economics which will end capitalist prosperity and democratic self-government as we have known it.

On the evidence of the last several decades there should be no doubt that the battered, debt-ridden main street economy can stand a lot of punishment. But what it can’t stand is another eruption of C-suite slash-and-burn “restructuring”  maneuvers in response to plunging share prices and evaporating stock option values.

As we have demonstrated elsewhere, in the age of Bubble Finance causation has been reversed. Recessions are now triggered by crashing Wall Street bubbles, not the main street credit crunches of your grandfather’s economy.

In essence, the Great Recession was the result of injecting monetary heroin straight into the financial veins of the American economy. At Peak Debt, the consumer borrowing channel of monetary transmission gets clogged, while the proceeds of business borrowing are magnetically sucked back into the casino by the petulant speculators—both carbon- and silicon-based—who demand endless stock buybacks and other financial engineering feedfests, world without end.

So central bank stimulus never escapes the canyons of Wall Street: It inexorably fuels the asset bubbles until they finally collapse under their own ludicrous excesses. For instance, WeWork at $47 billion, Beyond Meat Inc. at 85X sales and Netflix at 104X net income–even as it is being flooded with a tsunami of streaming competition from every one of the big boys in the space.

So should a market precariously perched in the nosebleed section of history loose its lunch again during the next 13 months, there is no doubt as to what would come next. To wit, the main street economy would be monkey-hammered into a sudden, unexpected recession by corporate executives earning 800X the average wage (mostly via stock option gains) of the employees they will be tossing overboard.



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