What does it mean when #RIPCapitalism is the number one hashtag on Twitter? Is that bullish? Granted, Twitter is not the center of all public discourse in this country, perhaps despite the best efforts of the President of the United States. Even so, anti-capitalist sentiment is undeniably on the rise in this country and perhaps around the world.
It’s perhaps no surprise that that the system responsible for generating trillions of dollars in wealth around the world come under such criticism at this particular time. COVID-19, while said to be an equal opportunity killer, is having a particularly vicious impact on the poor and middle class. That’s because the job losses are at least at this point mainly a phenomenon of these groups. In this way, the economic impact of the coronavirus tears at our society differently from the economic hardships that came with the Great Financial Crisis. Then, Wall Street shenanigans were close to the heart of the problem, and wealthy people suffered steep economic losses.
This is the opposite.
The Fed has stepped in, along with Congress, to provide more than $6 trillion in backstops and aid to the financial system. We can debate the effects and unintended side effects all we want, but that’s what has happened, and there appear to be more aid packages on the way. The aim is to preserve capital to stave off an even direr economic calamity. However, what it feels like to many is a bailout of the entrenched and well-connected ruling class. So while tens of millions of workers lose their jobs, their bosses go on a two-month vacation.
I wholeheartedly agree with the most of the steps taken by the federal government to ease financial conditions to support the economy. But there is no denying that critics of the system are getting all the ammunition they need to start taking pot shots at capitalism.
Political winds are changing, and the drumbeat for changes that will be adverse to asset prices will grow stronger. One doesn’t need a particularly vivid imagination to come up with unfortunate scenarios. Let’s hope cooler heads prevail.
Any opinions are those of Burke Koonce and not necessarily those of Raymond James. This information is not intended as a solicitation to buy or sell any security referred to herein. Burke Koonce is a financial advisor at Raymond James & Associates, Inc., member New York Stock Exchange, member SIPC. www.raymondjames.com/burkekoonce