Boing Boing has the article Candid Wall Street barons worry that GOP tax plan will lead to literal euthanasia of the rentier.
Executives know there’s no mechanism in the G.O.P. tax plan to reward them for passing those savings along to their employees, who Paul Ryan has estimated would get an average $4,000 raise (over a decade) as a result of corporate largesse. The labor market has tightened considerably—the unemployment rate is at a 15-year low—and the stock market is starting to level off. The word on the street, though, isn’t that higher corporate profits will lead to higher wages; rather, it’s all about buybacks: Goldman says stock buybacks will hit $590 billion in 2018, while Merrill Lynch predicts half of all repatriated cash would go to buybacks or acquisitions. It’s a sugar high that might extend the market rally temporarily, but will deepen the rot in our economic cavity.
The analysis of the stock market that I subscribe to is that the stock market is currently in bubble territory. That does not mean we know when the bubble will burst, but it does mean we know it will burst. The Republican tax plan will inflate the bubble some more. If it passes, we still won’t know when it will burst, but it does seem rather foolish to add to the risk that already seems pretty high. Of course, there is always the possibility that the oligarchs will come to their senses, and adopt policies that will deflate the bubble slowly.