In Matthew Josephson’s amusing history, The Robber Barons, there is a nice story about the young J.P. Morgan. After having done what any man on the move would do in 1861 – paying a substitute to fight for him in the Union army – Young Morgan looked about him for opportunities. One of the knocked on his door, in the person of Simon Stevens. Stevens had stumbled onto a deal, by which he could buy 5,000 Hall carbines and sell them to the Union Army of the West, with which he had a contract. The beauty of the deal was that the carbines had been rejected by the government in Washington on account of the fact that they were defective – when used, they tended to explode, taking the thumb of the shooting soldier with them. “The quartermaster at Washington sold them for $3.50 apiece. “The government had sold one day for $17,486 arms which it had agreed the day before to purchase for $109,912,” comments the historian Gustavus Myers. That young Morgan knew of this situation is plain from the fact that after repudiation of the consignment of guns by General Fremont’s division, he bluntly presented his claim not for the money he had advanced, but for all of $58,175, half of the shipment having been already paid for in good faith.”
Thus began the Morgan tradition of advancing money for products that tend to blow up in the users hands. Evolution and human kindness being what it is, the products are now called credit swaps or meme stocks. But the object is always the same: a quick buck, made with the poker face of propriety, and the compliance of a corrupt government.
Matthew Josephson and, for that matter, Gustavus Meyers, are dead. And so is critical business journalism. Journalism is always a limbo thing, half information, half huckstering. Writing is sales: even when God pitched in, writing on those tablets, he was selling his line: You shall have no other Gods before me. But in biz journalism, you reach the lowest of all sales methods, the bucket shop optimism that persuades the easily persuaded that they are geniuses. Thus you get the inevitable Cramer, popping up like a bad penny, extolling tariffs because they will “bring back small town America”, which I guess is his way of saying gee, Jim Crow was the best thing! And the avalanche is reported by a he said she said approach that is laughable, from suits who are all about how there’s a bright line for certain companies. Those companies, those wonderful domestic manufacturies and small town abattoir, have to sell their products. And guess what? In the domestic sphere, which has depended on cheap for the past fifty years, that demand side does not just magically shift to higher priced goods – it shifts, rather, into unemployment and peeps sleeping in their expensive used cars.
I have to laugh about this weeks rise and fall story: Newsmax. Newsmax is an emblem of the American upper crust in full decay mode. A purveyor of far right fairy tales for the geriatric and dyspeptic, it faces a billion dollar lawsuit from Dominion and the fact that it lost money, it lost fucking money last year. So it IPOs at ten, and in a day it is at 200 or something. A three day blast, and now I believe it is down to fifty and will continue to circle the toilet as it goes on losing money.
But business journalists don’t care. They are not trustworthy. They will not give you an analysis worth having – but will continue to spray their readers with Axe and bad breath until they both keel over. Unearned capital is sweet, but when it ceases to be sweet, it becomes a curse on the land.
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