‘We all want to believe in Santa Claus, the Tooth Fairy and Bernie Madoff,’ said Jordan Belfort, the real-life Wolf of Wall Street, last month.
He was speaking to the New York Times for a piece about the current renewed hysteria for the kind of dodgy unscrupulous speculative penny stock trading that launched Belfort’s career.
The Times revealed there were 1.9 trillion transactions last month on the over-the-counter markets where such stocks trade, according to the industry regulator Finra – up by over 2,000 per cent from a year ago.
This has been partly driven by the general frenzy for get-rich-quick fads like Bitcoin, SPACs, meme stocks such as GameStop and non-fungible tokens (NFTs).
But it’s also indicative of many Americans’ desperation to gamble their way out of the coronavirus pandemic that has ravaged the country, causing tremendous economic hardship and record unemployment with rock-bottom interest rates which mean money in the bank might as well by stuffed under the mattress.
President Joe Biden (pictured in the House Chamber at the US Capitol in Washington DC yesterday) seems to have appointed himself as the nation’s chief croupier
And the problem with penny stocks is that they’re prone to being exploited by all manner of swindlers.
‘It’s all just a pool filled with sharks,’ said Urska Velikonja, a law professor at Georgetown. ‘It’s where the unwary go to get eaten.’
The dramatic rise in penny stock trading is also a worrying portent for may be coming round the corner.
The last time America saw frenzied amateur trading on this scale was immediately before the Great Depression.
So, you would imagine that the President of the United States would be doing everything in his power right now to stem this dangerous descent into casino mentality – right?
In fact, President Biden seems to have appointed himself as the nation’s chief croupier – dishing out free chips to everyone, on the (White) House!
He’s only been in power for 100 days but has so far pledged to give away $20,000 for every single American citizen – a commitment of $60 billion for each day in office.
Last night, he gave his first address to a joint session of Congress and enthusiastically pitched his $2.3 trillion ‘blue-collar blueprint’ American Jobs Plan and $1.8 trillion investment into ‘human infrastructure’.
Last night, President Biden enthusiastically pitched his $2.3 trillion ‘blue-collar blueprint’ American Jobs Plan and $1.8 trillion investment into ‘human infrastructure’
Biden insisted he wasn’t going to ‘punish’ anyone to pay for all this – well, apart from the rich – and definitely wasn’t going to add to the tax burden for the middle class.
But as he spoke, he looked and sounded more and more like Santa Claus – a benign, smiling old man announcing he was giving away free gifts to everyone.
And the problem with Santa Claus, as Jordan Belfort pointed out, is that we all want to believe in him, but he doesn’t exist.
He’s a figment of our imagination – a wonderfully inspiring, romantic, feel-good figment, but a figment all the same.
And the cold, snow-encrusted reality about Santa Claus and his incredibly generous ‘free ‘gifts is that the bill for them actually gets paid by the people he ‘gives’ them to, as America’s parents all know when their January credit card charges come in.
In other words, Santa’s really not that generous at all.
In fact, he’s the least generous person in the world. He just talks a good game.
Joe Biden also talks a good game.
He knows all the right buttons to push to make people feel good about his economic plans: the greedy billionaires are getting richer, he said, the gap with the poor is getting wider, working class Americans are the ones to suffer most, and ‘trickle down’ economics is a myth.
‘The IRS will crack down on millionaires and billionaires who cheat on their taxes!’ Biden declared, briefly morphing from Santa into Robin Hood.
I’m sure this all went down very well with blue collar families, especially when he then morphed from Robin Hood into Rocky Balboa: ‘We all know life can knock us down. But in America, we never ever stay down!’
The overarching theme of the President’s address was this: ‘America is ready for a takeoff.’
And I think that optimism is entirely justified given how well the country’s vaccine programme rollout is going, far better than most other places in the world.
A jabbed-up USA should be able to properly open up its economy again within a few months and unleash a ferocious consumer spending spree from people locked up for a year unable to enjoy themselves and with savings in the bank to burn.
BUT, and I think it’s a massive ‘but’, the roaring 2020s may crash and burn as fast as the roaring post-war 1920s did if Biden’s not very careful.
‘Go woke, go broke’ is a familiar refrain these days, because it’s a very real thing.
Just look at this year’s Oscars which collapsed to historic, perhaps terminally low ratings because the organisers swallowed the woke pill and choked on their own self-righteous preaching bullsh*t.
Or what’s happening at The Talk, which got rid of Sharon Osbourne for defending my right to have an opinion – and has also seen its viewership crash as a result.
If the same ludicrously self-harming woke mentality displayed by the Academy of Motion Picture Arts and Sciences and CBS is allowed to prevail in the US Government, then America could easily propel itself into another economic disaster.
This year’s Oscars collapsed to historic, perhaps terminally low ratings because the organisers swallowed the woke pill and choked on their own self-righteous preaching bullsh*t
And all the warning signs are here: the US national debt is currently sitting at $28trillion. This is a staggering, eye-watering sum of money of the scale which if left unchecked could imperil the US economy and the country’s ability to borrow money.
Yet President Biden seems totally oblivious to this danger and intent on increasing the debt exponentially.
It’s true that the US economy has powered ahead in the first quarter of 2021 but only because of the vast amount of Government financial support in the form of Covid-19 relief money.
Now Biden’s chucking yet more trillions at his heavily woke influenced infrastructure plan, much of which has nothing to do with conventional infrastructure and everything to do with the ultra-liberal green agenda like electric cars and climate change, along with childcare facilities, science research and care for the elderly and disabled.
In fact, only 5 per cent is dedicated to repairing roads, bridges, highways, train tracks and streets.
And economists are growing increasingly worried that the taxes he needs to introduce to pay for it all will lead to a surge in consumer costs and inevitable inflation.
And that inflation, if it rises quickly, could send the US economy right back into another devastating slump just when it’s come kicking and screaming out of it – and that could trigger a global depression.
The Talk got rid of Sharon Osbourne for defending my right to have an opinion – and has also seen its viewership crash as a result
The reality of Biden’s rant about billionaires and the urgent need for the rich to pay more taxes is that those targets would barely notice the impact on their bulging wallets because they will simply pass it onto their customers as they always do. And if inflation soars, It will be the working and middle classes who will end up paying even more for all their products and ultimately losing out from the very plans Biden insists are designed to save them from being financially penalised. Ultimately, they will be punished in the way he insists they won’t.
To continue the Rocky theme, it would be like the scene in Rocky IV where Ivan Drago doesn’t just knock out Apollo Creed, he kills him.
Biden has persistently painted his predecessor Donald Trump as the Devil, but for all his many faults, it’s worth remembering that Trump got the economy purring until the pandemic struck, with a very different strategy based on large tax cuts.
And for all the sniping about him only doing that to benefit his rich friends, the truth is that he also delivered a substantial rise in the incomes of working-and-middle class Americans.
As Glenn Harlan Reynolds, a law professor at the University of Tennessee, warned: ‘U.S. incomes increased more in 2018 than the previous 20 years combined. Will President Joe Biden match that record? Time will tell, but his hasty efforts to undo much of former President Donald Trump’s economic policy suggest that he intends to return to the approach of the three previous administrations. That approach was good for Silicon Valley and Wall Street but devastating for the American working and middle class. A return to the policies of previous decades is likely to produce the results of previous decades: Wage stagnation or worse.’
That’s the risk that Biden is taking, and it’s a big one.
I don’t want to a party pooper, but I fear that for all his cheery ‘Ho! Ho! Ho!’ bluster and apparent generosity, when the bills for all this extraordinary largesse come in, Americans will be left screaming ‘No! No! No!’