15 Feb Speaking Fink: Markets vs. “Markets”
We’ll be brief today, as we are sitting in an airport, trying to write something worth reading before boarding our next flight. We thought this might be more edifying than another stupid gif about how we’re “on the road” again, but…we’ll have to let you be the judges of that.
In any case, this morning, our friend Derek Kriefels, the CEO of the State Financial Officers Foundation tweeted out this golden oldie clip of Larry Fink, the CEO of BlackRock, talking about how markets hate uncertainty and LOVE totalitarian governments (which, we guess, provide certainty).
????VIDEO: @blackrock’s #LarryFink: “Markets don't like uncertainty. Markets like totalitarian governments." His solution to this "problem" is to control funds and economies with "stakeholders" like the UN and China’s CCP. Larry is ushering in pic.twitter.com/fNfxsIZonR… https://t.co/lTaK2MJE3L
— State Financial Officers Foundation (@SFOF_States) February 15, 2023
Our first reaction to this statement was that the good Mr. Fink should maybe spend a little more time studying history and politics and a little less time devising ways to get investors to agree to pay double or even triple commissions to own shares of a specialty fund than they would to own shares of a generic fund that holds the exact same positions. But maybe that’s just us.
Our second reaction was that this guy is worth over a billion dollars, runs the largest asset management firm in the world, is an “honored” guest at financial and market events around the world, but really doesn’t know his backside from a hole in the ground. Markets may not favor chaos, but they do thrive on spontaneity and flexibility. And they are nothing if not adaptable. Totalitarianism is the enemy of spontaneous innovation. It is the destroyer of flexibility and originality. It enhances group think and stifles creativity. Markets don’t love totalitarianism. They just don’t.
This is really basic stuff. At any time over the last 250 years or more, any idiot could have picked up any of dozens of books, studies, or articles, read a few pages, and come to an understanding about the inviolable connections between liberty and markets. But not Fink. He couldn’t do that. He couldn’t learn. He, as it turns out, isn’t as smart as “any idiot.”
Our third thought was that we’re the idiots. We’re the simpletons who are incapable of learning. Fink knows exactly what he ‘s doing, while we’re left studying pictures from geologists and our proctologists, trying to figure out which is which.
You see, when Fink says that markets like totalitarianism, he’s not talking about markets. He’s talking about “markets.” And those scare quotes make all the difference.
Larry Fink us talking about the American capital markets, where the Federal Reserve drove the financialization of the economy for decades, across Chairpeople of all ideological stripes, making billionaires out of middling managers whose greatest talent is/was conning other middling managers into buying what they were selling. He’s talking about the Chinese capital markets, where “relationships” with government matter more than anything, and smart asset managers spent decades cultivating the proper relationships. He’s talking about a system where guys who have $9 trillion in other people’s money are legally permitted to vote the shares that money buys as if they were their own, in accordance with their own personal and political predilections, creating massive market distortions. He’s talking about a system where a guy can insulate himself against federal bureaucratic action by competing for and winning the contract to manage the retirement savings of all federal bureaucrats.
We hate to sound like conspiracy theorists who think that the markets are rigged, but…well…the markets are rigged – which is precisely the way Larry Fink likes it.
We sure hope the next President of the United States is someone who recognizes this.
