Stock Market Meltdown? The Morbidly Rich Call It "Happy Hour"!

While working families struggle, Trump and his billionaire cronies are cashing in big time…

When the stock market crashes and working families lose everything, the morbidly rich don’t panic — they pour a drink. For them, a financial meltdown isn’t a crisis, it’s Happy Hour; a golden opportunity to buy up the world at fire-sale prices while the rest of us struggle to survive.

Recessions are also great opportunities for neoNazi recruiters, Russian social media trolls, and people who want to destroy our country. Billionaire lovers of neofascist strongman government are licking their lips and rubbing their hands in Bond-villain glee. For them, it’s a great time to be alive. Here’s why.

The stock market has been crashing in response to Trump’s tariffs, trade war threats, and embrace of Vladimir Putin and the possibility of a wider war in Europe. Back last December 18th, you’ll recall, the nonpartisan Congressional Budget Office (CBO) predicted this exact scenario.

Keep in mind that “reduce the size of the economy” is econ-speak for “recession” or, in a worse case situation, “depression,” and making goods “more expensive” is another way of saying “get ready for some serious inflation”:

“CBO expects that the increases in tariffs on U.S. imports and matching tariffs imposed by trading partners on U.S. exports in retaliation would reduce the size of the economy in relation to CBO’s baseline projections. CBO further expects that the increases in tariffs would make consumer goods and capital goods (physical assets that businesses use to produce goods and services) more expensive.” (emphasis added)

To make things even more precarious, yesterday the administration of Canada’s brand new Prime Minister, Mark Carney, announced that he’s issuing US Dollar-denominated bonds this week, which will directly compete with US Treasuries, thus probably driving up American interest rates.

The Financial Times noted in an article by the paper’s entire Editorial Board that Canada’s new prime minister won’t be playing nice; the headline was: “Mark Carney takes on Trump’s America.”

Carney, the former Governor of the Bank of England and the Bank of Canada knows exactly what he’s doing, and is essentially saying, “Take that, Trump! FAFO!!”

Meanwhile, it appears that Trump, Musk, and perhaps a few of the other 13 billionaires in Trump’s cabinet may be using Trump’s tariff war rhetoric to run a classic pump-and-dump scheme over the short-term.

Here’s how it could work:

— 1. Trump and his buddies (and sons?) buy puts — bets that a stock will fall — against a handful of volatile stocks. Puts can be highly leveraged; you ante up a little bit of money and make a huge return if the stock does go down. Jacob Mintz over at Cabot Wealth Network tells the story of a time he made a 320% return (for example, put up $100 million, walk away with $420 million just a few days later) buying puts against Chrysler (and that was a small return, compared to some that big-time traders like Jeff Yass have done, according to legend).
— 2. Trump then announces a huge, belligerent tariff that will strike at the stocks purchased, driving down their price overnight. As the stock bottoms out, they exercise the puts and then use the huge cash return to buy “calls” (essentially, leveraged bets a stock will rise) on the very stock they just bet against.
— 3. He then announces that the tariff is off, at least for a while, so the stock rises back up; Trump and friends again triple their money or more.
— 4. Rinse, repeat the following week.

The scam only works if you know in advance what actions the president is going to take to drive up or down stock prices; it requires insider information, and if you or I were to do this, it would be a felony.

But Trump was granted immunity by six corrupt Republicans on the Supreme Court, and — even if they hadn’t — does anybody really believe Kristi Noem or “Ka$h” Patel are going to investigate Donald, his cabinet members, his sons, or maybe even themselves?

Skeptical that Trump would be that brash, criminal, and crass? According to Peter Schiff, Chief Economist and Global Strategist at Euro Pacific Capital, he apparently already has, just recently.

Shiff speculates that just a month or two ago Trump ran a huge pump-and-dump scheme involving his digital meme coins, $Trump and $Melania, that may have yielded him and his wife hundreds of millions or even billions. As The Economic Times noted:

“Schiff argues that the rapid rise and fall in crypto prices suggest market manipulation, with those privy to Trump’s announcement potentially making significant gains before the crash. He demanded that Congress must investigate whether individuals close to Trump or his campaign benefited from advance knowledge of the announcement.”

Good luck getting Mike Johnson or John Thune to investigate Trump.

But how do recessions and depressions work out for the rest of us who can’t manipulate markets like Trump can?

To the average person, the idea of a recession or even a crash like we saw under Trump in 2020, Bush in 2008, Reagan in 1981/82, Ford in 1975, Nixon in 1973, or Hoover in 1929 seems grim.

Millions are laid off work, small businesses are in crisis as bankruptcies erupt across the nation, and poverty explodes during a time when more than half of American families already live paycheck-to-paycheck.

To understand why a billionaire like Trump — and the billionaires who put and keep him in office — might be not just willing but enthusiastic about creating an economic crisis, you first must view it from a the point of view of radical conservatives who want to replace our democracy with a strongman autocracy and, as a bonus, get massively richer themselves in the process.

It helps explain why 10 out of the last 11 recessions were started by Republican presidents.

— First, a time of economic disaster is a great excuse to gut government programs and reduce taxes for the rich with the excuse that federal tax revenues have cratered along with the economy. Both Reagan and George W. Bush used recessions as an excuse to “stimulate the economy” by cutting trillions from the taxes of billionaires and big corporations.

Reagan’s Omnibus Budget Reconciliation Act of 1981 also used that year’s severe tax-cut-driven recession as an excuse to reduce funding for social programs including food stamps, Medicaid, and Aid to Families with Dependent Children (AFDC). George W. Bush used the recession he provoked with a massive billionaire tax cut as the justification to try to cut Social Security, although that plan died in the face of widespread public opposition.

— Second, times of economic crisis increase the tolerance for strongman governments. This is why it’s a virtual certainty that Vladimir Putin and his buddies are celebrating Trump and Musk’s actions with champagne over at the Kremlin.

Hitler used the Depression to his advantage when he came to power in 1933, demanding — and receiving — massive emergency powers including the ability to rule by decree and outlaw his political opponents.

Trump could similarly use a severe economic crisis to consolidate his power and ram through a state of emergency to take America down the road to an America First form of neofascism.

— And third, billionaires often make the most money when there’s a crash. They absolutely love market collapses because they are, uniquely, in a position to profit from the same economic downturns that wipe out average working people (who are forced to cheaply sell the stock in their retirement plans to pay the rent and buy groceries). The morbidly rich then snap up those fire-sale stocks on the cheap.

During the Republican Great Depression of the 1930s, for example, some of America’s greatest fortunes were made or massively expanded.

My (late) friend Gloria Swanson once told me over one of our many vegetarian dinners in her apartment how her former manager and lover Joe Kennedy, who’d made a pile of money manipulating the stock market in the 1920s, bailed out as the market began its slide in 1929 and even bought puts to short the market, increasing his wealth. But once it had crashed, when everybody was broke, she said, he bought stock with a vengeance.

“Cash is king” was the phrase of the day for the rich, and Kennedy was well stocked in cash (he even bought a movie studio). By the end of the Depression, he was one of the richest men in the nation.

J. Paul Getty’s favorite phrase was, “Buy when everyone else is selling, and hold on until everyone else is buying.” It’s something you can only do at scale if you’re fabulously rich to begin with.

The afternoon of the Great Crash — October’s Black Tuesday under Republican President Hoover in 1929 — Getty skipped his parents’ golden wedding anniversary to head to Wall Street where he began buying stocks, particularly in small oil companies that were in trouble.

“It is the opportunity of a lifetime to get oil companies for practically nothing,” Getty later wrote. Out of that stock market crash, he became one of the three richest oil barons in the world.

Flash forward to the modern era.

When Wall Street banks — exploiting Republican deregulation of banking and investment rules — crashed the American economy in 2007, home prices (and, thus, homeowner equity) collapsed by 21%. Over 10 million Americans lost their homes to banking predators like “Foreclosure King” Steve Mnuchin, and tens of millions of others were underwater.

The stock market plummeted by over 50% in the last year of Bush’s presidency, as average people cashed out of their 401(k)s just to keep their heads above water. On October 9, 2007 the Dow was at its all-time peak of 14,164 but by March 5, 2009 it had collapsed to 6,594.

While over 8 million Americans lost their jobs and were wiped out as the Bush Crash started today’s homelessness crises, the top 1 percent (and the multimillionaire Bush and Cheney families) saw it as a marvelous buying opportunity.

Working-class people were desperately unloading stocks at a loss just to pay the bills, as wages plummeted in the face of a collapsing labor market.

But the morbidly rich were doing great.

Between 2009 — the bottom of the Bush Crash — and 2012 when the recovery really began under Obama, the top 1 percent of Americans saw their income grow by over 31 percent.

Fully 95 percent of all the income increases in the country were seized by the top 1 percent of Americans during that period.

As the economy recovered, rich people who’d bought stocks at the market bottom rode the S&P 500 up by 462 percent to 2020.

A billion dollars invested in 2009 became $5.62 billion in just 11 years, a period during which the combined wealth of American billionaires went up by over 80 percent.

Then they did it again 10 years later!

The Trump/Covid Crash of 2020 presented America’s morbidly rich with another new and huge opportunity to get richer on top of a crisis brutalizing the rest of America.

Once again the market collapsed, this time under Trump, and working people, now out of work, were selling their stocks at a loss just to pay the mortgage and buy food.

But for the wealthy, it was a gift from God.

Did I mention that billionaires love economic downturns? That might explain why every recession except one since World War II has happened during Republican presidencies.

March 16, 2020 — just after Trump declared a pandemic and lock-down — the Dow sustained the largest single-day crash in its entire history. For the investor class, Trump, and his billionaire buddies, this was an even better opportunity than the Bush crash of 2007!

Fewer than three months later, on June 4th, we learned that the seven richest men in America had seen their fortunes increase by fully 50 percent.

And with Trump’s massive tax cut for his fellow billionaires, they could keep most all of it: by that time the average American billionaire was paying less than 4 percent in income taxes (a situation that persists to this day).

Just during that one single terrible “crash” year of 2020, the Institute for Policy Studies documents, the world’s 2,365 billionaires saw their wealth increase by a full 54%, as America’s billionaires saw their net worth surge 62% by $1.8 trillion. Average billionaire wealth worldwide increased 27% in just that one year alone.

And now it begins anew: The Dow has lost about $5 trillion in value over the past few weeks because of Trump’s seemingly erratic pronouncements and policies. But for Trump and his insider buddies, it’s been a golden opportunity.

And it’ll probably get a hell of a lot worse for us but “bigly” better for them: he has almost four more years to keep running this scam, all the while using the “economic crisis” he has caused as an excuse to privatize Social Security, cut Medicare and Medicaid, gut federal regulatory agencies, crack down on dissent, and push through more tax cuts for billionaires.

While you’re picking up the pieces, they’re picking out their next 400-foot yacht — because in America’s rigged economy, your devastation is just another toast at their never-ending Happy Hour. And Putin’s partying over the ashes of America’s once-great middle class economy like it’s 1939.

A jury and the trial’s judge found that Trump raped E. Jean Carroll, “under common modern parlance.” But that ain’t nothing compared to what he and his billionaire buddies have planned for America.

The song that was inspired by this article is here.
My reading this article as an audio podcast is here.
My new book, The Hidden History of the American Dream, is now available.
You can follow me on Blue Sky here.
The website for my radio/TV program is here.