Market Manipulation in the 2016 Election

in Finance & Business/Opinion by

sp-at-2016-electionAs the United States election drew to  an end, the Stock Market’s overnight trading grew wild, the DOW dropping nearly 5 percent overnight. Before falling, speculation of a democratic victory had the markets up roughly 100 points before a Trump victory in Ohio. The day before, the market ran upwards as the FBI cleared Hillary Clinton of the second round of charges for emails. This is indicative of a bias in the market, illustrating that the viewed as pure and logical stock market is anything but, serving a grander political and economic cause, consolidating power through the influence of money.

Market’s are a place that are supposed to run based on the actions of the firms which compose said market, but these motions are controlled almost entirely by individuals. There has always been inequality, as there always will be, but since 1970, this inequality has been growing. From a conflict perspective, the control of the market and political system allow those in a position of power to maintain it through the use of the markets, while individuals make their own positions worse through the ready employment of emotion, perpetuating their own position as proletariat. Thus, a conflict lens will examine how inequality is perpetuated through the bias in market movement and the resulting perpetuation of this inequality through individual choices, making their impact not on the market, but upon the individual.

Growing inequality has led to disproportionate ownership of stocks through control of the banking system and the stock market by the people at the top of the payscale ladder, as the top one percent owns 50.9 percent of the securities in America. To own stocks is to own power over the inherent structure of America, where money is power. By seizing such a higher percentage of the market, it is possible for the choice of an individual, or a small, elite group of individuals to have a structured selling off or buying of stocks, shifting the market outlook in a single moment. Having this capacity, it is then possible to buy low and sell high every time, as the market responds to these choices. What then happens to those who are not market movers? The bottom 90 percent of people by income have less than 10 percent of the wealth. Without financial representation, there is a continuation of wealth of the rich, while the average proletariat is required to work indefinitely, seeing none of the added benefit.

Politics is supposed to represent the people, and upon the news of the FBI Clinton acquittal, the fully unpredictable market has once again taken a turn which only benefits those at the top, but this is not entirely the fault of those with money. As the market fluctuates in natural cycles, though quite probably controlled, the majority of people lose trust in the markets which for some, guarantee success. Rather than take advantage of the system, which remains the greatest social equalizer, half of all Americans have no funds secured in investments. But, is this an individual problem or a structural one?

It is assumed that those with control have every intention of maintaining it, which would then mean that it would be required as a legal standard to be well versed in the basic life skills associated with financial literacy. Yet, there is currently no educational standard for which people must comply; only 60 percent of people are considered to be passably financially literate, in a test for which passing only requires 53 percent of the questions to be correct.

Regardless of political party or affiliation, the market would have risen as it has because the elite want it too. Upon news hillary was cleared, the market rose; upon news Trump was the president elect, the market rose. Historically, the neither the party in control of the executive branch, nor cooperation/gridlock in congress has led to any statistically relevant change in market’s percent change. Therefore, this bias is based not in politics, rather in the economics of oppression.

Individuals have the capacity to change this, but without economic diligence and a change in personal consumption habits, the exploitation of the consumer will continue. The stock market is supposed to represent all available information to act in a pure system to help facilitate investment, but intolerable levels of income inequality have shifted the balance of information, of the playing field to only represent the wishes of the top of the earning ladder. Market developments during the 2016 election have once again shown that despite the potential of the people, monetary control is being perpetuated through a surge of buying.

Sources:

  • https://thinkprogress.org/how-unequal-we-are-the-top-5-facts-you-should-know-about-the-wealthiest-one-percent-of-americans-a1d36a0f10f6#.jx08nmyqs
  • http://www.businessinsider.com/why-so-few-millennials-invest-in-the-stock-market-2016-7
  • http://www.kiplinger.com/article/investing/T043-C008-S003-how-presidential-elections-affect-the-stock-market.html

 

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