No, We Are Not Going to Beat Capitalism on the Stock Market

By Nathaniel Flakin

Republished from Left Voice.

Given the news over the past week, you would be forgiven for thinking that Occupy Wall Street had come back with a vengeance. Back in 2011, activists occupied a small park in front of a Lower Manhattan bank — now they seem to be “occupying the stock market” itself. Ten years ago, the bankers and brokers could just get their cops to arrest the pesky occupiers — but now, with the loss of billions of dollars at stake, armed thugs in blue are not going to do the trick.

The stock surge for GameStop has rattled financial markets. A motley horde of Internet users have been giving hedge fund managers a run for their money. Those who bet that shares of the retail chain GameStop would lose value (short sellers) have been thrashed as the stock price surged higher and higher, thanks to the targeted actions of thousands of small investors.

The bankers, who for more than a generation have been praising deregulation and the “invisible hand of the market,” are now calling on the government to protect them from losses. So have “little guys” taken over the stock market? Will the revolution be organized on Reddit?

Of course not. This was never going to take down the hedge fund system. At best, its greatest “hope” was to do some short-term mischief and maybe kill one small fund. Melvin Capital Investment is losing billions and might collapse — but Reuters has reported that Blackrock, the biggest asset management in the world, stands to earn $2.4 billion from the rising stock price. As Derek Thompson has explained in The Atlantic, Melvin Capital Investment was betting on GameStop’s stock to fall — and that was always a risky bet:

[GameStop’s] stock had already fallen from $56 a share in 2013 to about $5 in 2019. GameStop’s short sellers were essentially betting that a company publicly valued as “horrendous” should really be valued at a level commensurate with the notion of “truly horrendous.” They risked billions of dollars on the financial equivalent of a qualifying adverb. It’s really risky to aggressively short a company whose stock, having fallen 95 percent, is floating around $5; there just aren’t a lot of numbers under five.

A Rigged System

The discussion around GameStop has shown that the system is hopelessly rigged: even when small investors manage to exploit the rules to their advantage, those rules are simply changed to prop up the big capitalists.

But that’s only the beginning of how it is rigged. Virtually all stocks are controlled by a tiny minority of capitalists. How are all the working people in the world, even if they invested all their savings into the stock market, supposed to compete with the gargantuan sums owned by the likes of Elon Musk, Jeff Bezos, and their wealthy corporate cronies?

The rumblings have led Democratic Party “progressives” such as Elizabeth Warren to call for new regulations. She wants action to “ensure that markets reflect real value, rather than the highly leveraged bets of wealthy traders or those who seek to inflict financial damage on those traders.” Those “highly leveraged” traders,” by the way, are the hedge funds. Warren is worried about someone inflicting damage on them. 

How Capitalism Works

The entire episode is making lots of people wonder: Is this any way to organize an economic system? After all, as the back-and-forth trading has unfolded through these rather absurd machinations, who has been thinking about the effect on the livelihoods of tens of thousands of GameStop employees?

But this casino is how all decisions are made in the capitalist system. Where is housing built, and who gets to live in it? Which medical breakthroughs get funding? Which wars are waged? The same rules deciding the future of GameStop decide all these questions as well.

The stock market and its fictitious capital which condenses all the absurdities of the capitalist system into one small space. So much of the market is about “fictitious capital” — money lacking any material basis in actual commodities or productive activity. As the Marxist economist Rudolf Hilferding explained:

On the stock exchange, capitalist property appears in its pure form, as a title to the yield, and the relation of exploitation, the appropriation of surplus labour, upon which it rests, becomes conceptually lost. Property ceases to express any specific relation of production and becomes a claim to the yield, apparently unconnected with any particular activity. Property is divorced from any connection with production, with use value. The value of any property seems to be determined by its yield, a purely quantitative relationship. Number is everything; the thing itself is nothing! The number alone is real, and since what is real is not a number, the relationship is more mystical than the doctrine of the Pythagoreans.

A Way Forward

Within this absurd system, thousands of working-class people, investing their stimulus checks, might be able to steal a little something back from Wall Street — with the help of an app cynically named Robinhood. 

Yes, the ruling class is pissed that normal people are disrupting their casino. But the market remains their casino. The experience of this kind of “activism” will lead people to draw the wrong conclusions. We’re already seeing calls for more “democratic” and “fair” rules for the stock market, rather than for toppling the stock market itself.

And what happens if small investors are successful? Then some of them might become big investors. So, this kind of activism may create some new capitalists — but it’s no way to beat the capitalist class. In a fight over stocks, the rulers will always have an advantage.

But you’re in luck: Marxism is a 150-year-old science of how to eliminate the bourgeoisie and its exploitation and oppression. If we pool our money, we shouldn’t invest it in stocks; — we should use it to build up organizations that will fight for our interests —, not by trading stocks, but by organizing our strength in terms of material force.

A Problematic Ally

If you’re not convinced, consider one troubling figure who has been cheering on the small investors against the short sellers: pandemic profiteer and Internet troll Elon Musk. He understands the giant casino that passes for a global economy. After all, he has leveraged a small, almost completely unprofitable car company into a personal fortune of $180 billion. Musk is obviously not trying to bring down the system that is rewarding him with such vast wealth, nor does he have some personal vendetta against short sellers. Instead, Musk understands that this is capitalism at work.

Musk might have several hundreds of billions of dollars, but he’s a small part of the global capitalist system. We don’t need to buy him out, or beat his ilk at the stock market game. We can use our strength to take power and expropriate them. A workers’ government can put all those riches at the service of all humanity. Now that’s a project worth “investing” in.

GameStop and Revolution

By Peter Fousek

It seems that nearly everyone, from major media outlets and economic analysts to folks hopping on Twitter while bored at home or work, has something to say about the recent market activity surrounding a surprising selection of stocks. The securities in question, namely GameStop ($GME), AMC Theatres ($AMC), and BlackBerry ($BB), are unlikely candidates for financial news headlines at a point in time where their respective products and markets have been all but outmoded. Nonetheless, and in fact on account of their perceived antiquation, these companies (and other similarly “obsolete” brands) have become the focus of widespread popular attention.

And yet, only a marginal few of the countless commentaries currently filling up our newsfeeds make note of the most remarkable conclusions to be drawn from these events. This is not to say that the present analyses and examinations are anything short of illuminating: he reaction of regulatory leaders and financial institutions, while largely predictable, are very important for the public to see and process. As in 1987, 2002, 2008, 2020, and any number of other instances of financial distress, we see the powers that be scrambling for means of self-protection while the system that they have constructed for their own benefit temporarily runs the risk of transforming them into its victims.

Of course, market volatility and the resultant risk of financial devastation is an inherent attribute of capitalist economics. But, when the fundamentalist free market works as it is designed, the brunt of that necessary burden is borne almost entirely by the working masses. Whether through exploitative, unjust labor practices during even the best of times, or through the funneling of massive federal funding in the form of bailouts and subsidies to the wealthy while the already minimal safety nets for the workers are further cut during periods of turmoil, we are not hard pressed to find examples of the inequity of capitalism. For proof of the intentional, systemic nature of this injustice, we need only to notice which class it is that takes the risks resulting in frequent crises: the beneficiaries of the system are simultaneously its guarantors, and from their position of power they are able to keep themselves all but invincible to their own carelessness and greed.

While that inherent impenetrability of the capitalist class has not come close to being displaced by the recent events in the market, it has certainly been shaken. Stock market speculators, betting on the failure of a business and doing everything in their power to see it to that end (without concern for the 50,000+ employees who would resultantly lose their jobs) were forced, if only for a moment, to face financial consequences for their profit-seeking irresponsibility. And they were forced to do so not by competitors, peers among the elite, but by members of the working class.

The sad but almost certain outcome of this moment of resistance to the norms of market trends will be the propping up of the hedge funds at risk, and perhaps increased regulation preventing such unprecedented collective action from readily occurring again. We’ve already seen the popular trading platform (ironically named Robinhood) prohibit its users from buying any more of the securities in question—an effort intended to pressure them into selling before the hedge funder’s short positions expire and the elite are forced to pay their dues. And while there is talk of a class action lawsuit against the platform, with reports that Citadel reloaded their short position before instructing Robinhood to block the relevant trades, we cannot expect real justice from a system designed to protect and perpetuate the existing order.

Despite these obstacles, despite these odds, and despite the unfortunate likelihood of an unsatisfactory short-term outcome, these events that we are currently witnessing should be a major cause for hope. One prevalent stance on social media right now is the position that the working-class day traders should sell. On one hand, doing so would benefit the hedge funds that shorted the stocks, as they would be given the chance to buy back at a lower price than when their contract fulfilment deadlines expire. On another, many of the people who have taken part in this mass movement run the risk of losing their money in a world that has refused them any safety net. The greatest cause for optimism comes from a common response to this stance, paraphrased here has it has been stated by many of the working-class day traders in question: we will not sell, because we have nothing to lose.

Many of us who have bought into this moment of collective action against the status quo have done so with the full knowledge that we might not win. Nonetheless, we have taken our position and chosen to hold it, to demonstrate our dissatisfaction with a system designed to subjugate us while empowering and enriching its elite. Because the system is designed as such, we are not afraid to make sacrifices to challenge the present order. The possibility of change is easily worth the risk of losing what we have, because what we have now is worth very little. But the power of our collective action is valuable beyond belief.

The calamity of the COVID crisis has made it blatantly clear that the capitalist class is more than happy to grow its wealth at the direct expense of our most basic rights and safety. The recognition of this flawed reality is reflected, in its early stages, in the collective action taken against those hedge funds who got too sloppy for their own good. This day trader rebellion is not some singular event, and it will certainly not break the current system. What makes it such an incredible historical moment is that it demonstrates the initial awakening of working-class consciousness. The willingness to sacrifice for the sake of a greater good requires us to recognize the injustice of the present order; the events of the past few days have demonstrated that we are beginning to adopt a mindset of that recognition.

To effectively challenge the status quo in a substantial way (such as that achieved by a general strike) the people cannot act out of short-term self-interest. Therefore, successful collective action and resultant progressive change is only possible once our reality under the status quo is so blatantly insufferable that we become willing to sacrifice it for the sake of disrupting the extant order. This is only possible once we realize that the existing system is exploiting us unequivocally, and therefore that we have essentially no chance of “making it” within said system. That realization then compels us to take the only other option: of trying to make it without. The popular resistance demonstrated by the GameStop situation should inspire us to action because in it, we’re witnessing the working-class organically arrive at a trade-unionist consciousness. This indicates that the historical conditions of the present moment are becoming ripe for the working class to achieve class consciousness, from which systemic change can come.

What's Good for Tech Stocks is Bad for the Economy

By Contention News

Tech stocks deepened their recent skid this week, and the fear among market watchers right now is the bubble may have already burst. Investments that could do no wrong just last month now look somewhat suspicious.

What these observers don’t know is that things are actually much worse than they think. There is a deep and important connection between these high-flying tech investments and the crappy economy their shareholders hope to escape.

Drawing this out requires a big picture outlook, and connecting some dots in ways that Wall Street can’t.  

How society works

Let’s start as big as we can: all human societies have to constantly reproduce themselves to survive. Our society reproduces itself through a system of market exchanges. Each completed purchase validates the good or service exchanged as necessary for the reproduction of our society.

Investors use their capital to command some portion of society’s existing resources to produce something new they think society also demands. If they’re right, then the product will sell and they’ll get a return on their investment. If the new product isn’t socially necessary — i.e. valuable — it won’t sell, and they lose their investment.

Where investors gain value, and where they don’t

These investors don’t gain any additional value from the inputs they buy for their products. Buying these inputs just validates their necessity. To create new value the investors need to combine the inputs together to create new, value-added products, and this requires human input — labor.

Labor power is an exceptional input because the workers selling it can’t realize its value without the machinery, facilities, and other inputs owned by private businesses. This means those businesses get to buy labor power at a discount, and investors pocket the difference. 

This has an important implication: each enterprise is some combination of produced inputs and labor power. If the enterprise sinks a larger share of its investment dollars into inputs rather than labor, then over time they should return less investment. This is why labor-intensive “emerging markets” can have such extraordinary rates of growth as compared to capital-intensive advanced economies.

Why investors love “operating leverage”

This is the level where this impact emerges — in the aggregate, over time. At the level where equity markets operate — individual firms and sectors over short terms — a different perspective emerges.

There, “valuation” has everything to do with expected future cash flows. Operating income — the money left over after paying out all the costs of production and overhead costs of the business — is the name of the game. The more operating income a company expects, the more valuable its stock should be.

Every company delivers this cash flow differently. Companies with low variable costs (the labor and input costs of each unit produced) and high fixed costs (the administrative expenses necessary to keep the lights on) are said to have a high degree of “operating leverage.” These businesses are efficient at turning their revenue into operating income.

Why tech stocks look so hot

Tech companies tend to have high operating leverage. Each additional unit sold adds very little to their variable costs — Facebook can sell thousands of ads before they have to add any hardware or staff, for example — which means that for every percentage point of revenue growth, they get more than a point of cash flow growth.

So when the economy is growing — the norm for capitalist economies — rising sales mean growing revenue, which means even faster cash flow growth and equity value. Investment gets disproportionately drawn into high fixed-cost, low variable-cost firms.

But produced inputs don’t add value, remember, and yet these high fixed costs — attractive to investors — include only those inputs. Labor power does add value, but that’s covered in the variable costs they seek to minimize.

Bottom line: investments at the firm level favor a capital allocation that produces less value throughout the economy overall.

Where the zombies come from

And it gets worse: when sales drop, these companies’ high overhead costs put them at increased risk of default. Since they are also the ones with disproportionate levels of investment, leaders seek to bail them out, mainly in the form of interest rate suppression by central banks. The companies can borrow and issue bonds more easily, but this debt only adds to their fixed costs.

Soon you have an economy full of companies that make just enough to cover their debt service — so-called “zombie” firms.

So now we can connect the dots: high levels of operating leverage made tech stocks sexy investments for years, but this contributed to a capital-intensive economy with lower aggregate returns on investment. When downturns came, central bank rescues only created more long-term deadweight, hence the slow, sleepy growth of the last “recovery.”

Now that the recent speculative boom has paused, we’re left with a terrifying question: what do we do with an economy founded on a basis that can’t perform for the future, especially in light of all the debt — i.e. future earnings — that we’ve accumulated to build it?

One thing is certain: the leaders that can’t deliver a relief package everybody wants definitely can’t figure this one out either. Watch out for your own bottom line while they try nonetheless. 

Contention News produces original anti-imperialist business news every week. Read more and subscribe here.

Why Do Stocks Rise While the Country Burns?

By Contention News

This is a special edition of Contention News, a new dissident business news publication, shared exclusively at the Hampton Institute. You can read more and subscribe here. 

A reader sent us a brief, important request this week: “would like to see more on why markets are up when the world is on fire.” 

This is, in many ways, the theme of almost every edition of Contention, and we’ve pulled it apart a number of times:

• Dire economic straits can be good for big business as workers are less likely to press for higher wages, and competition goes bankrupt.

• Investment prices are all about expectations, and the big losses businesses keep reporting aren’t as bad as predicted.

• Those forecasts aren’t rational, and investors are arbitrarily assuming the worst can’t happen.

• Central bank action is swelling asset prices — not like a bubble, but like a tumor.

But let’s elaborate the reasons for this disconnect yet again, because new explanations emerge all the time. Multiple phenomena are causing this contradiction, all part of the same basic force: state manipulation of markets to protect concentrated wealth.

First, let’s be clear: “markets” are not up in every sense. The major indexes are up: the S&P 500 and Nasdaq are already back at record levels and the Dow is not far off its all-time-high. But this is a reflection of the exceptional performance of very few components in each index, not broad-based gains. As of last week:

• Half of the stocks that make up the S&P 500 are down for the year still, only 4% of its components are driving all the record gains. 

• The digital oligopoly — Facebook, Apple, Amazon, Alphabet, and Microsoft — are up 37% this year, but without them the S&P 500 is down 6%.

• Fully 64% of S&P 500 components are underperforming the index, and they’re missing it by an average of 22%. 

• All-country stock performance minus the S&P 500 has done nothing this year. 

This international perspective highlights another crucial, largely unreported aspect of the alleged stock rally: pricing the S&P 500 in euros instead of dollars wipes out all of its record performance. 

The bull run is closely associated with the devaluation of the dollar, because inflated liquidity is being blasted directly at equity markets. 

Remember: stock prices reflect discounted future cash flows. Cash flow means income left over after expenses, so if investors have reason to believe that income will increase or expenses decrease in the future, stock prices move up. Monopoly pricing power means higher income, suppressed wages mean lower expenses, so large-scale bankruptcies and unemployment can actually benefit large firms.

Earnings expectation beats have moved stock prices upwards, but only 1% of that outperformance has come from increased income. The rest has come from cutting expenses, i.e. the very layoffs and cancelled purchases that make the rest of the economy miserable.

Because forecasts around cash flows aren’t certain, prices take into account a risk factor closely associated with interest rates. The larger the risk, the bigger the discount for the future cash flows, and the lower the stock price goes.

The Federal Reserve has taken emergency action this year to suppress interest rates. It dropped the rate it charges banks to near-zero levels, but more importantly it bought up trillions of dollars in bonds — including corporate bonds for the first time. 

Bond prices and their interest rates move inversely to one another, so this single-payer bond market bids up prices and sets a ceiling for rates. This squeezes investment out of safe assets, and makes riskier investments — like stocks — artificially more secure-looking. 

The implicit — sometimes explicit — assumption is that the Fed won’t let markets crash for long. We now have central planning for capital, so why wouldn’t you buy? 

But if the cost cuts that drove earnings beats in the last quarter have now hit bone, if failed fiscal stimulus means a big drop in aggregate demand, or if accelerating political chaos raises volatility too much and markets do drop, what can the Fed do? Their only card left may be to intentionally depreciate the dollar in even more aggressive ways. 

That is to say, the most likely outcomes of our present condition are that things keep burning like they are or the people that started the blaze will throw gasoline on it. Either way Contention will be here to sound the alarm. 

For more anti-imperialist business analysis, subscribe to Contention. 

Gordon Gekko's America

By Sean Posey

On October 19, 1987, a worldwide stock market crash-dubbed Black Monday in the States-interrupted the go-go 1980s. Only weeks after that panic-filled day, Oliver Stone's meditation on the decade of greed, Wall Street, hit the theaters. The story of Bud Fox, a wannabe master of the universe, and his Machiavellian mentor Gordon Gekko, served as a morality tale that America did not want to hear at the time. (The film proved to be far more popular in later years than it was in 1987.) And many who did see the film deeply misunderstood its central lessons.

A generation of future brokers and investment bankers cited the movie as a central influence in their decision to go to work on Wall Street; however, Gordon Gekko, the flashy, glib, and dangerous corporate raider, became a lasting symbol for the economic and moral transition America has undergone over the past few decades. [1] The character's ruthless worldview is now the norm, and not just for Wall Street where the "21st century children of Gordon Gekko," as Australian Prime Minister Kevin Rudd referred to them in 2007, rule, but for society as a whole.[2] Gekko and Gekkoisms have penetrated the political, economic, and cultural fabric of America. The age of Gekko is a terrifying world where the winners "make the rules" and the losers "get slaughtered."[3]

The late 1980s represented an intoxicating time in American life. Larger than life millionaires and billionaires penetrated the popular imagination like never before. Jim and Tammy Faye Bakker, Ivan Boesky (the crooked Wall Street insider), Michael Milken (who partially inspired the Gekko character), Donald Trump (who is bringing the spirit of the 1980s back to the presidential stage), and even John Gotti, who brought a flashy 1980s sensibility to the New York Mafia, all represented the fabulous wealth that accumulated to a lucky few. But the machinations of Wall Street's elite in particular, captured the spirit of the era.

Wall Street emerged as a cautionary tale during a time when caution went right out the window. New economic experiments in the realm of government and finance (supply side economics, the deregulation of thrifts, etc.) led to great crises: rapidly increasing inequality and the savings and loan scandal. Stone's film targeted the exotic world of high finance, complete with well-dressed corporate raiders and fortunes accumulated through the destruction of companies.

In the film, Bud Fox (played by Charlie Sheen) comes from blue-collar roots and is looking to leapfrog from the world of a junior broker to the esteemed realm of investment banking. His prospective mentor is Gordon Gekko (portrayed by Michael Douglas), a flashy executive who symbolizes the worst aspects of both Wall Street and American capitalism. Although Gekko is framed as the villain, many audiences responded positively to the charming greenmailer. Both Stone and Douglas later remarked that they met numerous individuals who readily admitted that Gekko inspired them to pursue a career on Wall Street. [4]

Gekko did not just symbolize an era, however; he proved to be a prescient philosopher, introducing America to what would soon be its future. Late in the film, Bud Fox, in a crisis of conscience, begins to turn away from his amoral idol. Gekko, sensing his hesitation, explains to Fox how the world of the 1980s really works:

"It's all about bucks, kid. The rest is conversation… It's not a question of enough. It's a zero-sum game, somebody wins, somebody loses. Money itself isn't lost or gained-it's simply transferred from one perception to another."

"The richest 1 percent of this country owns half our country's wealth, five trillion dollars… You got 90 percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal: the news, war, famine, upheaval, the price of a paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it."

"Now your not naïve enough to think we are living in a democracy, are you, Buddy? It's the free market." [5]

Gekko's speech was far ahead of its time. The share in national income going to the top decile in the U.S., after dropping sharply following the Great Depression, returned to a rate of 50 percent by the turn of the century.[6] In 2005-2006, a leaked series of reports by analysts at Citigroup described an emerging "plutonomy," that is an economy driven by the spending of a small plutocratic class. [7] In many ways, America has returned to the Gilded Age, and it is once again a zero-sum game where those in the oligarchic plutocracy make the rules.

Government played a central role in the transition to a Gekko-esque economy. While Gekko pined for "the days of the free market" in Wall Street, President Reagan proclaimed, "Government is the problem."[8] This approach led to widespread efforts to deregulate the economy at almost every level, which coincided with reducing top tax rates on the wealthy.

Remarkably enough, the Clinton administration in the 1990s echoed Reagan and Gekko's sentiments: "The era of big government is over," Clinton declared. [9] The deregulation of the financial system proceeded apace with the Financial Services Modernization Act of 1999, which repealed part of the New Deal-era Glass-Steagall Act, and the Commodity Futures Modernization Act of 2000, which largely freed OTC derivatives from significant regulation. Economic bubbles began to emerge, and the sordid culture of Wall Street continued to thrive.

The days of the corporate raiders waned after the decade of greed, but with the Stock Market reaching new highs in the 1990s, a new generation of Wall Streeters looked to Gekko as a figure to emulate. Boiler Room, released in 2000, tells the story of a misguided young broker (Giovanni Ribisi) who goes to work for a shady chop shop firm during the height of the market. These young wannabes lack any of the charm of Gekko, but they emulate him all the same. When Ribisi's character goes to the home of the firm's head recruiter (Ben Affleck), he encounters a group watching Wall Street, which several characters recite from heart as it plays. And like down-market versions of Gekko, the employees of J.T. Marlin rip-off their clients with aplomb on their way to obscene riches. "There's no honor in taking that after school job at Mickey Dee's, honor's in the dollar, kid," Ribisi's character intones. "So I went the white boy way of slinging crack-rock: I became a stockbroker."[10]

Wall Street began to be used in ethics classes in business school, but judging by the behavior of the financial industry in the first decade of the 21st century, the moral lessons of the film apparently fell on deaf ears. Journalist Philip Delves Broughton describes how he remembers students at Harvard responding to Gekko's speeches: "At my old business school, Harvard, Gekko's speech electrified a snoozy morning class on leadership. By the time Gekko was done berating the board of Teldar Paper, the entire class was grinning and alert. For most MBA students that speech is less a parody than a guiding philosophy."[11]

"Gekko was merciless, but if he were on the Street today, the hedge fund guys would eat him alive," Fortune joked in a cover story on the old character in 2005.[12] The ruthlessness of the new Wall Street was confirmed by the events of 2007-2008. The children of Gordon Gekko brought the financial industry and indeed the country itself to its knees. Just as newly elected President Obama began bringing Wall Street scions like Lawrence Summers and Timothy Geithner into his new administration during the darkest days of the Great Recession, Oliver Stone readied Gordon Gekko for another appearance on the big screen.

Wall Street: Money Never Sleeps introduces audiences to an aged Gekko, recently released from prison after a laughable eight years. (Michael Milken only served two years in prison, and no major figures served prison time as a result of the financial meltdown of 2007-2008.) A free man, Gekko goes on a speaking tour in support of his memoirs. Addressing an auditorium of college students, he exclaims that, "Someone reminded me I once said 'Greed is good'. Now it seems it's legal." [13]

Indeed, the extreme views of Gordon Gekko circ. 1987 had been firmly baked into the culture by 2010. The titans of the financial industry knowingly drove their own companies into the ground in the name of short-term (personal) gain. And far from being punished, they were allowed to collect enormous bonuses while millions lost their homes and their livelihoods in a recession that continues to be a haunting reality for much of the country. Once again, a seemingly contrite Gekko plays the prescient sage in the sequel: "The system is insolvent. No one knows what to do next except repeat the insanity until the next bubble blows. That'll be the one, the big one."

Six years after Wall Street: Money Never Sleeps, little has changed. According to economist Emmanuel Saez, the top 1 percent of earners received 95 percent of the income gains between 2009-2012.[14] Conspicuous consumption is back on the rise, and Donald Trump, one of the most well known figures from the era of the original Wall Street, is the Republican candidate for president. In a fitting twist, Trump actually appears in a barbershop scene alongside Gekko in deleted scenes from Wall Street: Money Never Sleeps.

In 2013, Martin Scorsese released The Wolf of Wall Street, another well-timed tale of "greed is good" for post-Great Recession America. The center of the story is Jordan Belfort, one of the most notorious figures in the financial industry during the 1980s and 1990s. Leonardo DiCaprio's portrayal of Belfort represents a 21st century Gordon Gekko reborn as a "financial bro." Belfort, who made a large fortune on the backs of poorly informed blue-collar investors, comes across in an almost glamorous light-one of the chief criticisms of the film. During an advanced screening at the Regal Battery Park Theater in New York City, audiences cheered Belfort's on-screen exploits, including efforts to procure cocaine and prevent the feds from ensnaring criminal members of his own firm.[15]

The blame does not rest solely with Scorsese or the cast of the film, however. Lionizing the lifestyles of the rich and ruthless has become an American pastime. Even though movements like Occupy Wall Street have emerged to challenge the narrative of 'Greed is Good,' the Gekkos of the world continue to remain appealing characters to an American public inculcated into a mantra of success at any cost. Reality television shows are but one of the myriads of ways that a zero-sum society of Hobbesian dimensions is impressed upon us. Considering this, it is no surprise that America appears to be lurching toward accepting a modern day Leviathan, Donald Trump, as president. For a world where the ethics of Gordon Gekko dominate is a world where fear is bred by insecurity, and insecurity followed perhaps by authoritarianism.

Notes

[2] Kevin Rudd, Edited extract of the speech, "The Children of Gordon Gekko," October 6, 2008, The Australian. http://www.theaustralian.com.au/archive/news/the-children-of-gordon-gekko/story-e6frg7b6-1111117670209 (accessed May 24, 2016).

[3] Wall Street , directed by Oliver Stone, 20th Century Fox, 1987.

[4] Philip Delves Broughton, "Gordon's Back," London Evening Standard, September 14, 2009.

[5] Ibid.,

[6] Thomas Piketty, Capital in the Twenty-First Century (Cambridge: Bellknap Press, 2014), 334.

[7] Ajay Apur, Niall Macleod, Narendra Singh, 'The Plutonomy Symposium - Rising Tides Lifting Yachts," Citigroup, Equity Strategy, The Global Investigator, September 29, 2006.

[8] "Inaugural Address," Ronald Reagan, Washington, D.C., January 20, 1981.

[9] "State of the Union Address," Bill Clinton, Washington D.C., January 23, 1996.

[10] Boiler Room , directed by Ben Younger, New Line Cinema, 2000.

[11] Broughton, "Gordon's Back."

[12] Andy Serwer, Fortune, "Is Greed Still Good?" June 2005.

[13] Wall Street: Money Never Sleeps , directed by Oliver Stone, 20th Century Fox, 2010.

[14] Emanuel Saez, "Striking it Richer: The Evolution of Top Incomes in the United States, " UC Berkeley, September 3, 2013.

[15] Steve Perlberg, Business Insider, "We Saw 'Wolf of Wall Street' with a Bunch of Wall Street Dudes and it was Disturbing," December 19, 2013.