I’m So Bored With the USA: Greed is Still Good, Apparently! 

 

 

 

“You’re runnin’ at a different speed 

Your heart beats in double time” 

“I think greed is healthy. You can be greedy and still feel good about yourself” 

 

 

This is more commonly associated with the character Gordon Gekko in the film “Wall St”, however it was originally said by the disgraced arbitrageur Ivan Boesky, in a 1986 speech to the University of California, Berkeley business school

 

Not long after, on October 19th 1987, we had Black Monday, when the global stock market crashed, losses were estimated at US$1.71 trillion. As a Fiat executive put it at the time, the Armani suit was the look of “savage capitalism”, with it went the era of the yuppie. 

Far from being the end of Armani, like all great designers understood the change, power suits lost their power. As Armani himself said,  “At this moment of the world, one has to rediscover a little heart, and fashion can help. One has to have the courage to show oneself a little bit as one is inside.” 

We might do well to think the same way today. 

Now, at this point it is likely that readers will wonder what tangent I will next go off on, but there is a point to this beginning. The 1980s may have been the decade of conspicuous consumption, but, rather than it ending it was the beginning. Why? Because economic policies didn’t change. 

In “The Times They Are a Changin’”, I talked about how, from 1980 onwards, consecutive US presidents  followed neoliberal economic theory; high-income tax cuts for the wealthy sold as a benefit to the working class. 

Over this period they performed a conjuring trick, cutting taxes for the wealthy without pursuing correspondingly deep austerity measures. There was no trick only a seething mass of debt. As Dick Cheney said in 2003: “Reagan proved deficits don’t matter”. 

What followed was the greatest upward redistribution in wealth since WW1; the rich got rich while the poor got poorer. 

 

‘the greatest upward redistribution in wealth since WW1; the rich got rich while the poor got poorer’

 

The internal court of President Kennedy was known as “Camelot”, the court of Trump should be known as “Versailles”, such is the gilded wealth that inhabits it. Three of the primes movers, Messrs Musk, Bezos, and Zuckerberg currently top the worlds rich list, with a combined wealth of C.$640bn. 

The above data is sourced from Forbes, who first compiled their rich list in 1982, when the richest man, shipping tycoon Daniel Ludwig, had a net worth of $2 billion. This compares, 22-yrs later, to Elon Musk with $244bn, down from over $400bn.  

 

The OECD calculates that the top-10% of US household own 79% of the overall wealth 

 

Source: https://www.oecd.org/en/publications/society-at-a-glance-2024_918d8db3-en/full-report/income-and-wealth-inequalities_7ac4178f.html 

 

One of the main characteristics of Trump’s MAGA electoral coalition is that they tend to be rural or small town-based and lower-income earners. A million miles away from Trump’s Versailles courtiers. 

All of this makes Trump’s “One Big Beautiful” budget  proposal all the more contrarian; a “shiny populist package hiding a brutal class agenda”, which experts say it could add $3.1tn to the national debt. 

 

“shiny populist package hiding a brutal class agenda”

 

While the tax cuts for the richest are permanent, the parts that impact MAGA voters such as no taxes on tips, bigger child tax credits expire in 2028. This, along with delayed cuts to means-tested welfare, only serve to exacerbate inequality.  

There is a $1.1tn giveaway to those earning > $500,000 a year, funded by pushing poorer families off Medicaid and food assistance. Green energy subsidies are history.  

There is much populist sleight-of-hand disguising trickle-up economics as working‑class salvation, such as  “tax relief for waitresses. This might sounds great, but a third of them earn too little to pay income tax and won’t benefit at all. 

Aside from millionaire tax breaks and increased inequality, there are two other points that merit attention. 

Firstly the bill raises Immigration and Customs Enforcement funding by 365% for detention, 500% for deportations. 

Secondly, and somewhat more insidious, is a provision intended to block the courts from using contempt to enforce its orders. It reads: “No court of the United States may use appropriated funds to enforce a contempt citation for failure to comply with an injunction or temporary restraining order if no security was given when the injunction or order was issued …” 

Basically, this means that no federal court may enforce a contempt citation, a measure that means that most existing injunctions, including antitrust cases, police reform cases, school desegregation cases etc., become unenforceable. 

If this were to become law, neither Congress or the courts could stop Trump.  Were Congress to try it would fail as it lacks the power of the courts to enforce their hearings, investigations, subpoenas and laws. 

Inequality is one thing but this poison pill that neuters the federal courts is something else altogether. Trump would effectively become a dictator and American democracy would be over. 

 

‘Trump would effectively become a dictator and American democracy would be over’

 

 

This should be a wake-up call to all of us. If you want an example of what a hard-right government might do then this look to Trump. 

Yesterday (Tuesday 27th), our own poundshop Trump made his first speech since early May and his party’s success in the local elections. 

In his speech, Nigel Farage,  the Reform leader laid out a series of economic promises designed to take advantage of Labour shortcomings on taxes and benefits. 

But while Farage promised up to £80bn worth of new spending he did not explain exactly how they could be paid for. 

Helen Miller, the deputy director of the Institute for Fiscal Studies, said: “The risk is that we hear much more about sizeable giveaways on tax and benefits while getting nothing like the same amount of specificity about the big cuts to spending on public services that would be needed for the plan to be implementable.” 

One of Farage’s main revenue-raising policies is to scrap the government’s commitment to reaching net zero by 2050, which he said would save £45bn a year, citing calculations by the Institute for Government (IfG). But Jill Rutter, a senior fellow at the IfG, said the Reform leader had used a figure that included both public sector and private sector investment, saying: “The bulk of spending on energy infrastructure is going to come from the private sector – but closing private sector projects won’t generate money for the government.”  

The Climate Change Committee says net zero will require investment of £26bn a year, of which over two-thirds will come from the private sector. That will be offset, however, by about £22bn a year of savings the policy will enable. 

In addition, Farage proposed, reversing the cuts to winter fuel payments and increasing tax breaks for married couples, and ending the two-child benefit cap. 

On the subject of the two-child cap this smells of opportunism as, in 2015 general election, he promising that his Ukip party would introduce such a cap, arguing that doing so for new claimants constituted a “commonsense approach to benefits”. 

Now, perhaps as an acknowledgment of the issues caused by our aging demographics, he said: “We believe lifting the two-child cap is the best thing to do, not because we support a benefits culture but because we believe for lower-paid workers this actually makes having children just a little bit easier for them.” 

One surprising omission was his refusal to guarantee keeping the pensions triple lock, which ensures the state pension rises by the highest of inflation, earnings growth or 2.5% a year. 

Part of his proposed tax breaks promise to increase the threshold at which people start paying income taxes to £20,000. 

The only true statement he made was when he admitted his sums might not add up, but insisted they gave “an idea of direction, policy, of priorities, of what we think is important, of what we think it is going to cost.” 

What the speech did reveal was Farage positioning his party as sympathetic to working-class concerns and fears, little different to Trump and his MAGA coalition. Having seen off the Tories, Farage is now attempting to present himself as a new spokesperson for Labour’s traditional blue-collar voters. 

 

‘Farage positioning his party as sympathetic to working-class concerns and fears, little different to Trump and his MAGA coalition’

 

 

Aside from the lack of substance as to how these polices might be funded,  there is also the apparent contradiction offered by Farage’s conversion to egalitarian politics. This is someone who is, or maybe was, a committed Thatcherite advocating low tax, small state, and privatising the NHS.  

However, this was a contradiction that didn’t seem to trouble voters when Boris Johnson spoke out of both sides of his mouth! As Brexit proved, it is quite feasible to create the most unlikely electoral coalitions. 

Labour needs to find itself, to work out what it stands for. The party was formed to be the great hope of the oppressed, today it has become the oppressor. 

It hasn’t so much disappointed voters as betrayed them: cutting disability benefits and public services; supporting the Israeli government actions in Gaza; channelling Reform and Enoch Powell in maligning immigrants; slashing international aid; rigidly adhering to outdated fiscal rules that create austerity and inequality. 

Labour needs to become Labour, again, with policies such as the public ownership of utilities, and the introduction of wealth taxes to combat inequality. All of which would find broad support both among blue-collar voters and in Labour’s urban strongholds. It has always been possible to deliver a more collectivist and equal society without the need for racism and the social conservatism that defines Farage and Reform. 

 

PM Starmer has told his party that view Reform as their “main rivals for power”, a conclusion that shows he has his eyes wide shut: 

 

• Thinks Insight & Strategy found that 52% of those who voted Labour in the 2024 general election are considering switching to the LibDems or the Greens > twice as many as might migrate to Reform.  

• Persuasion UK estimates that Labour could lose 250 seats to more progressive parties (again, > twice as many as might migrate1 to Reform).  

• The progressive thinktank Compass say that Labour would lose its majority on just a 6% swing. 

 

Labour is a government with a massive majority that won a only 34% vote at the election; today they are polling at 22%! 

Currently, five-parties are polling at 10% or more and, with our first-past-the-post electoral system, a small shift in voter sentiment can cause disproportionate fluctuations in the number of seats won or lost. 

 

‘Labour would lose its majority on just a 6% swing’

 

The rise of the hard-right has been a constant theme throughout these columns. Mainstream parties, in seeking to combat this, have consistently made the same mistake; adopt far-right rhetoric and policies, which makes these parties appear more acceptable, thus increasing their support whilst disenfranchising their own supporters. This was covered in greater depth on “Europe and the New Right.” 

In addition to falling into the same trap, Labour’s advisers appear convinced that electoral victory is impossible with their traditional policies, and have succumbed to dolling out favours in return for “gifts”, making them receptive to the demands of rentiers, oligarchs, non-doms and corporations. 

 

‘can Labour save themselves? Or, are they gift wrapping the country for Reform?’

 

Care is an adjective usually missing from politicians vocabulary, with the exception of self-interest. But, fundamentally governments are elected to care for and about the electorate. 

Care appears to be what is driving the LibDem renaissance under Sir Ed Davey. He seems to be able to look beyond the usual defence of “tough choices”, perhaps because his personal situation has led him to understand that care is, or should be prerequisite of government, rather than a luxury that they may get round to. 

The Tory leader, Kemi Badenoch, sums up politicians misunderstanding of this, when she said the LibDems are just “good at fixing church roofs”. That’s the point, it’s what local politicians do, that’s why constituents love Diane Abbott. 

Our “care system” is an example of underinvestment and tough choices leading to wrong choices. We have 6m unpaid carers, 1.7m work > 50-hours a week. Yet, rather than being helped and supported, they have to negotiate hurdles, appearing to be invisible, despite the fact that the NHS would collapse without them.   

The LibDems proposal to assign every family in need a named carer and social worker is not revolutionary, but it is long overdue. Since 1997, there have been 25 commissions, inquiries and white papers. Now ministers want Louise Casey to take three more years for a review into adult social care. 

I predicted the demise of the Tories in 2016, what I didn’t see coming was Labour making the same mistakes. The old two-party duopoly appears to be history. 

The most immediate question is, can Labour save themselves? Or, are they gift wrapping the country for Reform? Or, will the LibDems and Greens hold the balance of power? 

 

 

“Oh, what’s going on” 

 

 

 

  

 

 

 

 
 

Philip Gilbert is a city-based corporate financier, and former investment banker.

Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s

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