The poisonous fruit of Trump’s kakistocracy—a government run by the worst human beings possible----was on full display this Christmas Eve as the Dow Jones Industrial average crashed and burned, capping several months of staggering market losses which have collectively sent tens of millions’ of Americans’ retirement hopes and accumulated wealth up in smoke for the foreseeable future.
A broad consensus was quickly confirmed on the cause of this, the latest collapse for American stocks already sunken to “bear market levels”: the eye-popping stupidity of Trump’s Treasury Secretary, former Goldman Sachs investment banker Steven Mnuchin.
Mnuchin--an ardent proponent of repealing the Dodd-Frank law that Congress passed under President Obama to rein in the excesses of banks and investment firms like Goldman Sachs that had caused the worst economic downturn since the great Depression—made a colossally idiotic move on Sunday. In an extraordinary act—likely prompted by Trump’s unhinged attacks last week on the Federal Reserve—he recklessly cast doubt on the solvency and creditworthiness of the most important lending institutions in the United States.
Panic was shown in Treasury Secretary Mnuchin's statement last night that he had spoken with CEOs of six of the major bulge bracket banks and they assured him their institutions "have ample liquidity available for lending to consumer, business markets, and all other market operations." Why on Earth issue such a statement? Mnuchin is better known for his Hollywood days producing such box office classics as Get Hard and Fist Fight than being an actual rainmaker on Wall Street, but his decision to hit the panic button was chilling
If there was no question about the creditworthiness or solvency of such institutions as JP Morgan, Morgan Stanley, Wells Fargo and Citigroup before Mnuchin’s antics, by Monday morning when the markets re-opened there was a full-fledged panic. In a mercifully truncated half-day session, the Dow plunged another 650 points.
Mnuchin's comments seem to have been meant to assuage investors, economists and traders that there would not be a run on banks, which precipitated the last crisis.
However, the message may have had the opposite effect since it was not a concern of market watchers until his tweet.
“If this weren’t the end of December, I would have thought it was April Fools,” Jared Bernstein, former chief economist to Vice President Joe Biden, told The Washington Post. “The markets are already nervous enough. It’s like sending out a message saying our space shields can intercept incoming asteroids. Uh, I didn’t know there were any coming our way.”
Market watchers who were generally upbeat about the economy expressed concern over the panic that Mnuchin's comments, coupled with the overall instability at the White House, could inflame.
Of course, Mnuchin’s recklessness was not committed in a vacuum. It meshed perfectly with that of his boss, Donald Trump, who wondered publicly last week whether he had the power to fire Fed Chairman Jerome Powell. Together these economic buffoons have, over the past month wiped out not only all the stock market’s gains for 2018 but all of its gains that had incurred since the Obama Administration gingerly and painstakingly brought the economy back from the brink of total disaster that Mnuchin’s cronies had created, back in 2008.
Mnuchin’s astonishingly tone-deaf, tweeted statement was issued from his vacation spa in Cabo San Lucas, Mexico, where he is presumably celebrating the holidays with his wife, the actress Louise Linton. Linton hasn’t yet weighed in on the market crash, which is probably wise given her past behavior.
In August 2017, Linton was criticised for posting a photo on Instagram of herself accompanying her husband on a trip to Fort Knox on a United States government plane, using hashtags to highlight the designer clothing and accessories she wore. In her reply, she called the critic "adorably out of touch", and suggested that she contributed more to the US economy and paid more in taxes than the woman criticising her.
This is just the latest in a months-long display of economic incompetence and malfeasance that clearly shows why Donald Trump should never have been placed anywhere near this country’s levers of power. But that could not have been accomplished without the willing complicity of millions of Americans. So as we all gather around the table tomorrow to celebrate Christmas, please be sure to thank your Trump-voting brother-in-law for putting all of our futures at risk.
The day’s debacle was covered extensively by Jen Hayden here.
Bonddad has the good technical analysis here.