War of the (Financial) Worlds

War of the (Financial) Worlds BY for Tom Dispatch

Sometimes things only make sense when seen through a magnifying lens. As it happens, I’m thinking about reality, the very American and global reality clearly repeating itself as 2021 begins.

We all know, of course, that we’re living through a once-in-a-century-style pandemic; that millions of people have lost their jobs, a portion of which will never return; that the poorest among us, who can withstand such acute economic hardship the least, have been slammed the hardest; and that the global economy has been kneecapped, thanks to a battery of lockdowns, shutdowns, restrictions of various sorts, and health-related concerns. More sobering than all of this: more than 360,000 Americans (and counting) have already lost their lives as a result of Covid-19 with, according to public health experts, far more to come.

And yet, as if in some galaxy far, far away, there also turns out to be another, so much more upbeat side to this equation. As Covid-19 grew ever worse while 2020 ended, the stock market reached heights that hadn’t been seen before. Ever.

Meanwhile, again in the thoroughly cheery news column, banks in 2021 will be able to resume their march toward billions of dollars in share buybacks, courtesy of the Federal Reserve opting to support such a bank-and-stock-market stimulus. The Fed’s green light for this activity on December 18th will allow mega-banks to return to those share buybacks (which constitute 70% of the capital payout that they provide shareholders). In June 2020, the Fed had banned the practice ostensibly to help them better navigate risks caused by the pandemic.

Those very financial institutions can now pour money into purchasing their own stocks again rather than, say, into loans to struggling small businesses endangered by pandemic-instigated economic disaster. As soon as Wall Street got the good news from the Fed as 2020 ended, JPMorgan Chase, the nation’s biggest bank, wasted no time in announcing its intent to buy a staggering $30 billion of its own shares in the new year. And as if by magic, those shares leapt 5% that very day. Other mega-banks followed suit, as did their share prices.

Now, for reasons you’ll soon understand, take a little trip back in history with me to the eve of Halloween, 1938, when Orson Welles and the Mercury Theatre dramatized his adaptation of H.G. Wells’ 1898 sci-fi-meets-dystopia-meets-imperialism novel, The War of the Worlds, on the radio. As Martians “invaded” New Jersey (it had been London in the novel) with mayhem in mind, panic evidently ensued among some radio listeners who thought they were hearing perfectly real reports about an alien invasion of Planet Earth. Later accounts suggest that the media blew that reaction out of proportion (“fake news,” 1938-style?), yet people who tuned in late and missed the set-up about the fictitious nature of the program did indeed panic.

And it’s not hard to understand why they might have done so at that moment.  There had already been surprises galore. The world, after all, had barely recovered from the aftermath of the 1929 stock market crash and the Great Depression that followed. It was also still reeling from the fiery Hindenburg disaster of 1937 in which a German airship blew up in New Jersey, as well as from the escalation of tensions and hostilities in both Asia and Europe that would lead to World War II.  Perhaps people already equated or conflated the Martian invasion on the radio with fantasies about a potential German invasion of this country. In some papers, after all, reports on the reaction to Welles’s performance were set right next to news of war clouds brewing in Europe and Asia. With or without Welles, people were on edge.

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Tom Dispatch

Tom Engelhardt launched Tomdispatch in November 2001 as an e-mail publication offering commentary and collected articles from the world press. In December 2002, it gained its name, became a project of The Nation Institute, and went online as "a regular antidote to the mainstream media." The site now features Tom Engelhardt's regular commentaries and the original work of authors ranging from Rebecca Solnit, Bill McKibben, and Mike Davis to Chalmers Johnson, Michael Klare, Adam Hochschild, Robert Lipsyte, and Elizabeth de la Vega. Nick Turse, who also writes for the site, is associate editor and research director. Tomdispatch is intended to introduce readers to voices and perspectives from elsewhere (even when the elsewhere is here). Its mission is to connect some of the global dots regularly left unconnected by the mainstream media and to offer a clearer sense of how this imperial globe of ours actually works. contact Tom Dispatch - http://www.tomdispatch.com/about/