When everyone trades, no one grows the corn. The Wall Street Journal’s Spencer Jakab has collected a charmingly damning catalogue of the American investor at the top—a dental chair abandoned for a stock tip, a stripper’s rent check that suddenly cleared, a carwash attendant who quit to day-trade two weeks before the crash—and drawn from it precisely the wrong question. The Journal has been running this exercise for more than a week now, framing the anecdotes as a hunt for the legendary “shoeshine boy” whose stock tips signal that the top is in because the last marginal buyer has arrived. The journalism is diligent. The stories are real, and the pattern they describe is genuine. Joseph Kennedy—or whoever actually said it—was right that when the shoeshine boy gives you tips, you get out. Several of Jakab’s readers got out in time precisely because they took the signal seriously. Good for them.
But look at the evidence the readers themselves supplied, and you will see that the anecdotes describe not shoeshine boys but the people who employed them, or dined in restaurants where waiters touted Qualcomm, or listened to a mechanic talk up his “scary” stock positions, or heard their housecleaner recommend two chip-making stocks “this month.” The janitor with the “NAZDAQ” vanity plate is named only by his job; the financial adviser who bought the Lexus gets a full name. The carwash attendant who quit to day-trade never receives a first name; Scott Zodin, the adviser who held the stock, does. The newspaper records the comfortable and erases the precariat. The byline belongs to the man who held the stock, not the man who shined the shoes. The pattern could not be clearer if the readers had drawn it themselves, and it is exactly backward from the framing: the shoeshine boy is never the subject of the anecdote. He is the instrument of the anecdote, and the subject—the man who spotted the top and thought himself clever for it—is a professional, a homeowner, an investor, a reader of this very newspaper, someone who held the stock the shoeshine boy was buying.
The question the Journal is really asking is not “when is the top?” but “how do I get out before the other guy does?”—and every answer it prints is a story about a man who thought he was the other guy. The surgeon selling IBM at the exact bottom. The clinic manager who congratulated himself for outsmarting a surgeon. The marquee reader who yanked a quarter-million dollars out of the market when the chart no longer fit on the page. These are stories told by people with capital, people who could act on a signal because they already owned the assets. They are not the shoeshine boy. And the man who got out in 2000 still held enough to get caught in 2008. Even the sellers remain part of the same exposed class; they just rotated to a different chair on the same deck.
The question Jakab’s round-up does not ask, and what a conservatism that conserved anything would not be able to stop asking, is this: Why is the carwash attendant day-trading in the first place?
The agricultural futures I once traded for a living existed—nominally—to provide price discovery and hedging for the men who grew actual corn and cattle and soybeans. The tail has long since begun wagging the dog: the paper claims on corn now trade at a multiple of the actual crop, and the men at the desks have more influence over the price than the men in the fields. I was one of them. I know exactly how little we thought about the men who grew it. When the janitor is day-trading, when the lawn-care guy is touting internet stocks, when Leonard the carwash king is quitting to play the market—what has happened is not that ordinary people have been included in prosperity. What has happened is that the real economy that once sustained them has been hollowed out so thoroughly that speculation is their best available option. They are doing what the financialized economy taught them to do: stop producing and start speculating, because production no longer pays and extraction does.
A conservatism that had conserved anything would have noticed this forty years ago. The producerist tradition in this country—from Jackson’s war on the Monster Bank through the Populists and the co-ops and the Grange halls—understood something the movement that now calls itself conservative has entirely forgotten: that a republic rests on productive labor, and that a financialized economy is a threat to self-governance. When Andrew Jackson vetoed the re-charter of the Second Bank of the United States, he did not do so because he hated markets. He did it because concentrated financial power, left unchecked, would turn the producing classes into dependents. Belloc named the destination: the Servile State, a condition in which the propertyless trade their freedom for a guaranteed subsistence under capital and the state. He was describing, a century early, the carwash attendant who has no pension, no equity in anything real, no ownership stake in the place he works, and whose only available ladder out is to guess which way a number will move tomorrow.
The financial sector’s share of all corporate profits has roughly quadrupled since the 1960s. The anecdotes the Journal collected are what that inversion looks like at the human level—a country of speculators where there used to be a country of makers and growers. The man who once made a living as a mechanic, a farmer, a carpenter, now looks at the ticker and sees his only shot at a dignified retirement. That is not inclusion. That is abdication. Leonard the carwash king was, by every account, a born salesman. He could sell Armor All to anyone. A country that conserved anything would have had a place for a man like that—a shop, a trade, a cooperative, a stake in something real. Instead it handed him a brokerage account and wished him luck. Two weeks later, the market crashed.
The counter-model is not a theory. It is running, right now, in towns the financial press never visits. The farm cooperative—the one I manage—sells real grain to real buyers at real prices determined by real supply and real demand. The members own it. Nobody extracts a management fee for financializing it. Mondragon, the Basque worker-cooperative federation, employs 70,000 people across manufacturing, retail, finance, and education, with an internal pay ratio of roughly five to one. It does not speculate on its own products. It makes them. Organic Valley, a hundred miles from here, unites more than 1,600 organic family farms and does more than a billion dollars in annual sales without a single share traded on an exchange. Adams-Columbia Electric Cooperative, headquartered right here in Friendship, powers this county and eleven others from an office on Lake Street. The members elect the board. The board answers to the members. Nobody quits to day-trade.
These institutions are not quaint. They are the distributed, member-owned, productive answer to the financialized economy the Journal treats as the weather—something to be observed, charted, and narrated, but never questioned at the root. The co-op keeps the economy rooted in making and growing. The credit union makes real loans to real people on a real Main Street. The mutual insurer pools risk without extracting a shareholder return from the pool. None of them will make anyone a trillionaire. All of them will keep a town alive.
The shoeshine boy is not the signal that the top is near. He is the signal that the bottom fell out a long time ago, and the Journal never saw it. The men whose anecdotes fill the piece are still reading.