Worse yet is the reason for the market's rise. At a time when interest rates are rising, stock prices should be under pressure. Yet we've seen outsized gains because the market expects that corporate profits will go up under the Trump administration. And they probably will
But where will these extra profits come from? They are unlikely to be the result of improved productivity, technological innovation or increased capital investment. Trump has no coherent policies on these issues.
What seems far more likely is that the additional profits are just the extra money that corporations will be allowed to extract from the American people under the Trump administration. An extraction that is particularly objectionable since corporate profits are already at an all-time high
(as a percentage of GDP) and the money will be taken from those who can least afford it: subprime borrowers (Goldman and the banks are up), young people (for-profit education organizations are up), future generations (if corporate taxes go down now, taxes will have to go up later), those living in climate-exposed areas (oil stocks are up) and other vulnerable citizens (for-profit prisons are up).
So to me, my post-Election Day profits are just the present value of other people's future misery. How can I rid myself of these ill-gotten gains? There are four options:
Convert: "The market is usually right. It likes Trump. So I've changed my mind about the incoming administration, and I'll keep the money."
Deny: "The money might not be tainted, or it might prove illusory. To be on the safe side, I'll keep it."
Hoard: "The incoming administration is so bad that I'll need all the money I can get. Winter is coming."
Repudiate: "The money makes me sick. I'm giving it back."
Conversion and denial are the easy options for any moderate Trump opponent. And they probably would have been good enough for me were Trump a "normal" pro-business Republican. But Trump's extremism makes conversion impossible. And while I generally believe in the "wisdom of the market," I am opposed to Trump for reasons that don't show up in market prices. The market does not respond
to the increased possibility of nuclear or climate catastrophe, disregards the past (including a history of Russian hacking), largely ignores the poor (who are reliant on nonprofits, government and other nonmarket actors), and takes no position on the important social issues: immigration, criminal justice, racism, sexism, LGBT equality, reproductive rights, gun control, etc.
And for the same reasons, hoarding is impossible to justify. Anyone affluent enough to have meaningful stock market investments won't need extra money under a Trump administration. Our taxes will go down, and we don't need the things -- affordable health insurance, reproductive health services, Medicaid, fair treatment by the police -- that are poised to get very tough over the next four years.
So that leaves only one option: Give the money back. But since that's easier said than done even for the most generous among us, I've created "Giving Pledge 2.0
" to help. While less glamorous than Warren Buffett and Bill Gates' nonpartisan, billionaire-focused original
, it allows opponents of Trump to dispose of their ill-gotten gains and
fight him at the same time.
Giving Pledge 2.0 simply requires that you commit to spend the majority of any stock market gains earned from Election Day to the inauguration fighting those policies of the Trump administration that are most antithetical to your values. And there will be plenty to choose from.
And it's easy to do. One way is to set up a donor-advised fund at your broker or community foundation (e.g., the "Keep America Decent Fund"). After the inauguration, simply donate 50% (or more) of gains you've made since Election Day to the fund and then spend it down over the next four years by supporting nonprofits most aligned with your values.
Will even the wealthiest and most ardent Trump opponents take my pledge
? I don't know. But with the stock market up $2 trillion since Election Day, Democrats in the "top 1%" alone are probably sitting on $400 billion in gains. We can hardly sit on our hands bemoaning what is to come while enjoying the spoils of his victory. The adversary has given us the money we'll need for the fight if we only have the courage to spend it.