A country of publicly traded families could raise standards of living and make life easier. Parents and their kids, for example, would be the board of directors of their own corporations and live the high life to which most top executives are accustomed. Groceries, dinners out and vacations would all be considered business expenses, and therefore tax-deductible. The kids could be spun off as their own “tracking stocks,’’ the high-potential subsidiaries of the “parent’’ corporation. Just think how much easier it would be for parents if schools reflected the performance of students in stock prices. Forget grades and report cards: teachers could simply place a regularly updated value on each student’s stock. Groups of students could merge their stocks and do hostile takeovers of admissions slots at top colleges.
To teach little kids about the ways of the world, parents could dole out allowances in stock options or some other form of incentive pay. The head of the household would be the chief executive officer of the public corporation and would therefore be entitled to an above-average salary (in the world of executive pay, there are no CEOs who are considered worthy of “below average’’ pay). If Wall Street can create Bowie Bonds–financial vehicles that allowed David Bowie to put millions of dollars in his pocket a few years ago by pledging future royalties–there’s no reason that families can’t be turned into public companies.
If everyone truly embraced the stock-market lifestyle, it would create an idyllic world–let’s call it Wallstreetville–that would provide some stiff competition to Garrison Keillor’s Lake Wobegon. Just get in touch with your inner investor, and there would be no bad news anymore. After all, when stocks fall, many people label such movements “corrections’’ and “profit taking.’’ So if misfortune were to befall somebody in Wallstreetville, he could just shrug it off as a “life correction’’ or “luck taking.’’ With the market as guiding light, many day-to-day decisions would be simplified. No need to worry about comparison shopping at the grocery store–simply shop according to the brands of companies whose stocks you own. What to watch on TV? That depends on whether you own shares in Disney (which owns ABC), General Electric (NBC) or CBS. Even loyalties to sports teams could be driven by the market. If you’re invested in one of the few franchises that are publicly traded corporations–the Boston Celtics or the Florida Panthers hockey team, for example–you could be cheering on your portfolio as well as your team. There are precious few stocks anymore that Wall Street analyst types advise investors to sell, so perhaps they should simplify everyone’s life and call every company a “strong buy.’’ Wall Street firms now advertise funds that invest in “pre-emerging markets.’’ What a sunny disposition! In Wallstreetville there would be no problems anymore, just “pre-emerging’’ successes.
Some former bedrock notions about economics may soon be history as well. Given the stock market’s performance over the last couple of decades, people could be forgiven for thinking that there really is such a thing as a free lunch. Perhaps the day will come when you can get a credit card that invests a penny or so for every dollar you spend into a mutual-fund account, so that the more you spend, the more you save (oops, it’s already here. Principal Bank offers just such a card). And don’t feel bad about spending, because Greed is no longer a sin–it’s a game show. No doubt the Greed theme park is already in the works, complete with a stock-market roller-coaster ride that always ends higher than the starting point.
If the market seems as solid as the Washington Monument, then why not let the market take over Washington? The Clinton administration proposed taking a step in that direction earlier this year when it suggested that part of the Social Security trust fund be invested in the stock market. The notion was quickly shot down, but perhaps the step wasn’t bold enough. Washington itself could be made into a stock market, and politicians could turn themselves into publicly traded corporations and track their popularity minute by minute. Legislative proposals could be floated as fictional stocks. The entire polling industry could be wiped out, and much of the lobbying industry, if that more modern form of democracy–the stock market–were to take over.
If government were to be replaced by the market, then the true power elite would be the people who set arcane financial rules into stone. “In the future, every mother will want her son to be an accountant,’’ says Robert A.G. Monks, who has written extensively on the role of corporations in society and the way they will be run in the next century. It was accountants, after all, who wrote the rules governing stock options–most notably, the fact that they do not have to be recorded as an expense on a company’s books (even though they represent a very real expense). In the cafeteria of financial free lunches, accountants are the cooks and cashiers.
But certainly big, bad news is inevitable in the stock market. After all, what’s going to happen down the road when baby boomers try to cash out all their investments, and there’s not enough of a younger generation around to buy them up? Won’t the market crash? Well, maybe. But Wall Street has a remarkable knack for dealing with falling stocks. When companies find their stock is doing poorly and erasing all the value of stock options held by employees, many of them have simply repriced the stock options, thereby lowering the bar for everybody. Voila! In a crazy way, this fairly widespread practice rewards people for doing a lousy job and eliminates any fretting about accountability and responsibility. But those aren’t necessarily pleasant things to think about. After all, in Wallstreetville, there is no such thing as bad news.
