Monopoly Money: an amateur tries to explain what’s wrong with the economy

This post is a slight detour from the usual. I’ve been thinking about the economy a lot recently, so this is my best attempt at a Michael Lewis type explainer of what’s going on. Remember I’m not an economist and not the most well-versed in some of these topics. I may be speaking out of my ass on some of this, but that’s ok. Think of this more as what a bystander has witnessed for the past decade and how they’d try to explain to someone wondering about how we got here. It may not land well, but again that’s what this blog is about, experimenting. I want to take a chance at writing about something that I’m not an expert on, and take a chance to fail. This might be a breakdown, it might be a breakthrough or it might be a little of both.

When I was in 10th grade I wrote an essay about wealth inequality. It was a super weird topic for someone who didn’t even have a job to write about. It wasn’t something that people in my right-of-center hometown thought about let alone discussed. The mentality around the town was definitely “pull yourself up by the bootstraps”. What they didn’t realize was that those bootstraps were slowly disappearing, if they even existed in the first place. I was anxious about what the future held, and could see we were moving into a world where there was no middle class, and I wanted to speak about it. Now almost a decade later those predictions are closer than ever which is why I’m revisiting it. Money is one of the biggest factors in many of our breakdowns. It’s affecting all of our mental health and with all the talk of inflation and a recession, now is the perfect time to look at how we got here. 

Before I go start on the ills of our economy I would be remiss not to point out that our system has always been unfair. Modern-day capitalism was built out of a legacy of unfairness. We stole massive amounts of land and committed genocide on every continent but Antarctica. People across the Americas were brutalized all in the name of resources. We then created a labor market of enslaved people from Africa to turn those resources into the goods that fueled the industrial revolution. That and the ensuing economic revolution were formed out of atrocity. Even after people were “freed” they were still oppressed and exploited by our economic system. Throughout our history economic progress has been built on the back of these people, and we all owe them a debt. In a way that’s what makes what’s happening today worse. They risked their lives to try to join the middle class and right when they were on the cusp of getting there, that middle class started to slip away. 

While our economy had been headed in this direction since Reagan, the first large-scale indicator of our economic future was the Great Recession. In 2008, our economy took its largest hit since the great depression. It was called the housing crisis because the main culprit in the recession was the management of subprime mortgages. Essentially banking institutions were targeting poor people with mortgages they knew most wouldn’t be able to pay back. Then they bundled these mortgages together with more safe investments so that the real risk was hidden. These bundles were then passed around from institution to institution. Eventually, a large portion of our economy was tied up in these shady investments. There was real money being made off this debt and it worked for a while but then the bill came due. The defaults started coming in and once they did, everything crashed. This is not as apt a description as an economist would write, but the how isn’t as important as the why. Why our economy crashed was because the institutions we trust to handle our money were gambling with the very assets we entrusted them with. Not only that but they preyed on those that were most vulnerable to keep their game going. There was no fiduciary duty being practiced. Just a blind chase for profits. Due to that chase, millions of people in this country lost their homes and their jobs. It handicapped Millenials who had just graduated college, many of whom are still economically insecure to this day. What happened to these degenerate gamblers masquerading as professionals? Nothing. Not a single person went to jail, and only one of the institutions failed. The rest were bailed out. They were labeled too big to fail. An idea that seems comical since they did fail and it cost the country an unfathomable amount. All of these institutions continued about their business as if nothing happened. While this incident is the most widely known, it isn’t an isolated one. It’s all part of the trend of financialization, where instead of creating new value, institutions just make money by moving money around and essentially play a giant game of monopoly. A game of monopoly using all of us as the game pieces. The difference with the great recession was just that it caused enough damage that we couldn’t help but notice. 

Within two years of the 2008 meltdown, another incident happened that would alter the course of our collective future. The Citizens United supreme court ruling. Citizens United was a conservative organization that sued the FEC over a law that prohibited corporations and unions to spend money in relation to elections. The goal behind this lawsuit was so that corporations could have a larger influence over elections in this country. Which in turn would help conservatives who as a cohort are much more willing to put corporations’ interests above those of the people. The Supreme Court ruled in Citizens United’s favor. This allowed corporations to essentially give as much money as they wanted to Political Action Committees which in turn would help elect the candidates they handpicked. Our politics were already bought and paid for before this, but the ruling took things to a whole new level. In order to compete in federal elections, you had to play the game of the corporations. If you didn’t your campaign would be no match for the PACs of the competition even within your own party. This sent an influx of dark money into US politics. Politicians were no longer vying for our support they were looking for the support of big business. With the vast majority of politicians playing this game, the economy didn’t stand a chance. There was no longer space for laws meant to curb the growing inequality in this country. Any law that would hurt the most powerful corporations in this country would be killed before anybody even heard about it. 

This new political landscape only served to cement the power of the haves over the have-nots. Their assets were firmly protected by a government that now firmly worked for them. Even in the case of a crisis like 2008, they knew they’d make it out fine. The stock market was their own personal game, and they knew that that game would be protected at all costs. All while average Americans suffered. The stock market is often portrayed as the great equalizer but it’s not. The vast majority of stocks in this country are owned by the ruling class. You and I aren’t becoming billionaires off stocks. It may allow us to retire comfortably or have a little supplemental income but we simply lack the capital needed to take advantage of its full power. Those colloquially labeled as the 1% have that capital and use it. Just look at how Elon Musk plays games using Twitter in order to manipulate the market to his advantage. If you only looked at the stock market you’d think all Americans would be doing great, but they’re not. Middle America is dying, inner cities are dying, and people are dying. That’s why Citizens United was so detrimental. The policies needed to curb the effects of the Great Recession and the greed of corporate America aren’t getting passed. While it’s true that these policies would affect the bottom line, and businesses wouldn’t do as well as they did before America as a whole would do better which in turn would actually create a healthier economy from a holistic perspective. 

I don’t want to demonize every single business and every single financial institution. We actually do need them. Despite all of our transgressions and problems, they are what allowed us to get to the position we’re at now. For a long time, we did lead the world in innovation and prosperity. We were able to lift whole swaths of the country out of poverty. The issue is that not everyone benefited from that prosperity, with less benefiting as time goes on. All while those that did benefit forgot what it was that allowed them to get there. Corporations forgot that without us they wouldn’t have grown into the monoliths they are today. In a strange twist of irony, if there was no middle class they wouldn’t have gotten the power to destroy that middle class. If we continue down this path, then there simply won’t be enough people to sustain any of this growth. There won’t be enough people with disposable income to keep the economy going. It will be a small class of people who own everything and then there will be everyone else. 

We’re not there yet though. We haven’t become Panem and there isn’t a Hunger Games. It’s not too late. Even with the cards stacked, there is a secret weapon. Us. We may not have the money, but we do have the bodies. They still need us to keep the game going. This is why we hold more power than we think. We’re seeing that power revived unionization efforts springing up across the country. After essential workers kept the country going through most of the pandemic they realized just how important they were and decided enough was enough. Whether it’s Tesla, Starbucks, or Amazon workers are taking a stand for a better life. The same goes for all of us. We can all stand up in our own ways whether it’s at the ballot box in the markets. We can organize our own movements to counteract the movements that got us here. Not everyone has the luxury to stand up but that’s exactly why anyone who can should. This economy is no longer working for us, but that doesn’t mean it can’t. Out of the darkest situations is where the greatest solutions come. The great depression spawned the new deal. After WWII, our country decided to invest in the public. Now is no different. We’re in the death throes of late-stage capitalism and that marks another inflection point. It’s time we create new businesses that work for all of us. It’s time we find politicians that work for all of us. It’s time we support each other. We’re the source of value in this country and it’s time we realize it.