The Number Go Up Rule: Why America Refuses to Fix Anything

In the Booming Twenties, all decision-making is about protecting the value of financial assets held by older people. Therefore, the number must go up. And nothing else matters.

Yesterday, the Wall Street Journal dropped a salacious story involving the relationship between Jeff Epstein and Donald Trump, one that is throwing the political world into a tizzy. And for good reason, it speaks to a two tier system of justice. One class in America is composed of billionaires and elites with super-yachts and no accountability, the other is composed of the rest of us who have to deal with increasingly enshittified goods and services.

Just take a look at another headlines of the Wall Street Journal yesterday, and you’ll notice in this headline the flip side of the Epstein story.

Health care in America is insanely expensive, unpredictable, and often low quality. And yet it’s going to get far pricier next year, largely because a network of monopolistic middlemen are pushing up costs. There’s a gossipy angle here - Diddy apparently had pharmaceutical executives at his creepy events. But it’s the impact on ordinary people that matters. Despite decades of popular anger, we just can’t seem to do anything about health care costs and the people who foist them on us.

Two other headlines from the WSJ yesterday are also worth mentioning. First, rail giant Union Pacific is considering buying Norfolk Southern, a historically important merger would harm farmers and shippers, and push up prices of food, energy, and a whole set of goods on which we rely. And second, Chevron is closing its deal for Hess, completing the consolidation of the oil sector, and they are going to move engineering work to India.

Things in America, in other words, are getting worse, very quickly, for most of us, while a small group does quite well. The Epstein saga is just a gossipy way to convey that narrative. The question I want to ask in this piece is why that is.

I started BIG in 2019 to describe the anti-monopoly movement, to get our thoughts out there. And it’s been an unexpectedly successful journey: I didn’t expect Biden to revive antitrust law, but he did, or for our ideas to be accepted, but they were. There are now monopolization cases against Apple, Amazon, Google, Ticketmaster, Meta, RealPage, John Deere, and so forth. I didn’t think that Lina Khan would become a celebrity, or that millions of people would learn what the Federal Trade Commission is.

And yet, over the past six months, that ascent has paused. The old enemy of equality - cynicism - has hit back, and hit back hard. We accomplished a lot over the last decade, but the basic architecture of American politics remains in place. And that architecture is characterized by one rule involving the stock market. The number must go up. That rule is ironclad, and it explains why things are increasingly enshittified. If you understand it, it will help predict what politicians like Donald Trump and business people like Apple CEO Tim Cook will do.

The reason behind the rule is simple. The biggest generation in American history, the baby boomers, are still in power. Boomers have in aggregate $80-100 trillion in financial assets, far more than any other group. As a result they are culturally and politically dominant. The average American billionaire is a boomer in his early 60s. Donald Trump is a boomer, most of his key advisors are boomers, so is Democratic Senate chief Chuck Schumer. Key business leaders - like Apple CEO Tim Cook and JP Morgan CEO Jamie Dimon - are boomers, as are most CEOs of Hollywood studios, who have traditionally skewed younger. The average S&P 500 CEO is in his late 50s, and the number of young people serving on corporate boards keeps going down.

Asset control and power in America is centered among old people with lots of assets. And they associate protecting the stock market with protecting America.

The “number go up” rule is not a story of greed or economics, it’s a story of how we make decisions as a society. Take the pandemic. Some of you might remember that right before Covid hit in force, I was freaking out. I pay attention to China, and it wasn’t hard to imagine that a contagious disease would come here, and that the U.S. wouldn’t handle it well, given thin supply chains and corrupt institutions. That seems obvious now, but at the time I was considered a little nuts. There was a moment, however, when the panic set in. And it wasn’t when public health experts issued any warnings or when elected leaders spoke. It was when the stock market went down.

Think about what that means. Covid was a giant society altering disease that forced multi-trillion dollar society-altering decisions while in the dark about its severity. And yet, until it became clear that it would affect capitalization of financial markets, it was not worth thinking about. Finance has become the lens through which our elites understand what is and is not a problem. If it affects “number go up,” it’s worth solving. If not, it’s just whining.

Increasing the capitalization of the stock market at all costs has a number of implications about how our society works. Anything hindering short-term increases in profits, whether that’s higher wages, more factory investment, ending tax loopholes, rules to block being able to unsubscribe from Planet Fitness, transitioning to different energy sources, addressing an opioid crisis, or breaking Chinese control over the necessities of life, gets pushed out of the way. American life spans have plateaued or stagnated since 2015, which you’d think would be of concern. But it’s just not. There’s also something that distinguishes standard financial capitalism from ‘number go up.’ Financial capitalism implies risk. But in our era, the government guarantees financial returns with subsidies, regulations and bailouts. It’s a form of statecraft.

The observation of ‘number go up’ as a powerful guidepost for America is not original. Odd Lots host Joe Wiesenthal has often made this point, fingering the primacy of finance as the reason why America does not produce more housing or manufactured goods domestically. “A stock market that continues to go up is part of the entire US economic model,” he wrote. “Rising stocks are how we pay for retirement, education, consumption, and so forth… any impulse to abundantly build out less profitable lines of business undoubtedly strikes at the heart of how American capitalism works.” Probably the most popular formulation of the ‘number go up rule’ is a famous New Yorker cartoon from 2012 showing children around a fire in a post-apocalyptic scene, with the caption “Yes, the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders.”

As it turns out, Donald Trump obeys the number go up rule religiously.

I watch CNBC every day, and from 9am to 10am, anchor Jim Cramer goes off on rants about the world. Based on conversations I’ve had with people who know him, Cramer is a corrupt cynic who plays a character on TV. He name drops and talks to an endless number of CEOs, lavishing them publicly with praise, while attacking regulators who won’t be his sources. Big business leaders understand that Cramer is speaking in code, saying publicly what they want out there. He lies, dissembles, makes terrible predictions, but he’s the raw id of capital, and the perfect spokesman for this moment of baby boomer-run high finance dominance.

During the Biden era, Cramer, like his counterparts at the Wall Street Journal editorial page, spent a lot of time attacking FTC Chair Lina Khan, because Khan was terrifying CEOs. It’s not that she was doing much to harm them, she just didn’t treat them differently than she treated anyone else. Big business leaders are used to being buttered up, being believed just because of who they are, having their banal observations taken as gospel. In meetings, Khan had the temerity to actually take them seriously, and ask for evidence or to respond to holes in their arguments. And they reacted with a collective, “Do you know who I am?”

These days, Cramer is practically jumping out of his chair with excitement. He is praising Trump, and explaining that Wall Street bankers tell him privately, off the record, that they think Trump is doing a great job. The most important prop to the stock market, he said, is that mergers are back on. “Anyone can merge with anyone,” he said joyfully. I doubt he knows the names of Trump antitrust enforcers, because they don’t matter, and that’s how things should be.

One irony in Cramer’s hatred of Khan is that Joe Biden obeyed the “number go up” mantra. His bank regulators bailed out Silicon Valley Bank, and the stock markets hit record highs, as Fed Chair Jay Powell and Treasury Secretary Janet Yellen did whatever they could to ensure that number go up. It was only in the corner of the world involving antitrust where that rule seemed to not apply. Still, that rule was poised to smash into antitrust; Kamala Harris was likely to fire Khan had she won the Presidency.

When Trump was running for President in 2024, his framework was to increase tariffs, deport people en masse, all as a way to re-industrialize and hike wages. This model would fail, I believed, unless he was willing to accept that the stock market would have to go down. Someone had to absorb the costs of paying people more and building more factories, and that would have to occur through lower profits. In the first four or five months of his administration, I was surprised that Trump actually seemed serious, empowering advisors like Peter Navarro to engage in real protectionist policies. It was sloppy, but it was real. The markets went down, Wall Street panicked, and Trump seemed to enjoy it. “Sometimes you have to take medicine to fix something,” he said.

Had that attitude continued, the number go up paradigm would have been broken, and a host of problems previously considered just whining - like high health care costs and low quality - would have become solveable. But in April, Trump changed course. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick won an internal fight with Navarro, and ever since then, it’s been Bessent running point on trade and economics, with Lutnick getting closer and closer to eliminating all antitrust action against big tech firms. It’s not just economic policy, either. During the recent fights in the Middle East, the United States, Iran, and Israel were all extremely careful not to disturb financial markets. Today, no one on Wall Street thinks Trump is serious about hindering profits. As Cramer said, privately they note that they love this administration.

Ultimately, number go up is a statement about what we value as a society. For hundreds of years, the key phrase describing value in America was the “fruits of your labor,” meaning that we understood it was from labor, came value. I noted this in my July 4th post, showing the history of American disdain for high finance, precisely because we believed that dignity meant respecting people who work for a living. “Labor is the superior of capital, and deserves much the higher consideration,” said Abraham Lincoln in justifying the Union side in the Civil War.

A key part of that framework was fostering a fair return on capital, which meant that people should make money from investments, but not too much. Too low meant no investment, but too high a return meant that we were allowing extraction from working people, which, if you look around, is exactly what a high stock market is doing. Ticketmaster’s stock price is based on taking more from audience members and artists than it should get, just as UnitedHealth Group extracts from both doctors and patients.

Today, our leaders see market capitalization as good, instead of a sign of weakness. It’s not just Donald Trump, whose policy framework basically seems to be moving as much capital as possible into data centers, in the hopes that will keep number going up. Here’s Silicon Valley Democrat Ro Khanna, bragging about multi-trillion dollar firms in his district.

Rather than understand excessive returns as extractive, he thinks high finance is good. I don’t mean to pick on Khanna, he’s smart, but it’s precisely because he’s smart that his arguments expose the real values at work. Number must go up.

The number go up model moment reminds me of the archival research I did on the roaring 1920s, with its deep reservoir of fatigue at the idea of do-gooderism, at the prevalence of scams, gambling, liquor, and celebrated immorality, with a backdrop of a financial market moving endlessly higher. Only this time, the 2020s is run by baby boomers who are protecting their financial assets. So we should probably call it the Booming Twenties.

Two other deeply corrupt trends characterize what is turning into a very wicked and evil time. The first is crypto, and the second is the widespread legalization of gambling. I said my piece about crypto in 2021 - it’s a necessary scam, similar to the Florida land value speculation of the 1920s. Crypto is not a useful technology, it’s a bet on disillusionment and corruption, a belief in hustle bro culture. I know lobbyists for crypto, and they are deeply cynical, often full of rage at people who do not accept dirty money and seek to build a moral society based on political equality. I thought crypto would go away after Sam Bankman-Fried went to jail, but Biden SEC Chair Gary Gensler approved a massive inflow of cash into bitcoin, and that was that.

Crypto is a good metaphor for the 2020s, because it is pure speculation. The financial derivatives that led to the 2008 crisis were too far from real business activity, referencing mortgages or corporate bonds. But crypto references nothing at all, just memes. Largely because of hundreds of millions of dollars of campaign contributions, mostly to Republicans, it is now a multi-trillion dollar financial system that will end in tears. Private equity and big tech are bigger and more extractive than crypto, but is floating along the same cultural trend line of “number go up.” “When the capital development of a country becomes a by-product of the activities of a casino,” economist and philosopher John Maynard Keynes once wrote, “the job is likely to be ill-done.” That was true in the 1920s, it’s true today.

Another signpost is the widespread acceptance of corporate “app based” gambling, which is destroying the lives of millions of people. We’re not talking about making a bet with a friend on a game, or playing a round of poker, we’re talking highly extractive sophisticated corporations spending billions of dollars, geo-targeting addicts with advertising. They are preying on teenagers, and financing and corrupting the entire apparatus of what used to be a collective shared cultural commons - sports. And yet, there’s virtually no opposition to systemized gambling, even from the church.

A society under “number go up” tends towards evil. The men and women behind an excessively high rate of return often make deeply sinful and immoral choices, little different than the Confederate plantation owners did in whipping slaves or lords in castles did when abusing serfs. That they do it with spreadsheets doesn’t make it better. (We even use old terminology: I know of several people in a large health insurance conglomerate who set policies to deny care whose nickname is “the three witches.”)

And that’s why Jeff Epstein’s story is so compelling, it expresses this evil in a way that we all understand. On Sunday, I wrote about the oddness of the story, how an elite sex trafficker convicted of procuring children as prostitutes was friends or associates with everyone from Trump to Bill Clinton to Larry Summers to Bill Gates. Epstein represents how elites live in one moral universe where evil bacchanalia is rampant, while the rest of us live in a different more normal one. Every society has elites, and there are always weird things that elites do. But America, and the West, have reached a point where there is increasingly deep resentment and cynicism about this divide.

“Number go up” will end. Everything does. It will likely end in a giant crash or real war, but there are peaceful political offramps, since it is not very popular. In 2006, 2008, 2010, 2014, 2016, 2018, 2020, 2022, and 2024, Americans voted for change. A month ago, young people in New York City elected a Democratic socialist as their mayoral candidate who said billionaires should not exist, which is a very clear revolt against a system where wealth is held by a few people in older generations. High rents and a high cost of living might help market capitalization, but they are, to most people, problems.

We’ve done it before, and recently. Throughout the 20th century, key challenges to equality had to do with racism, or sexism, or homophobia. There were just lots of bad things - like harassing secretaries - that were understood as the way things were. It’s not that all of that behavior is over, any more than we have stopped all theft or murder, but the social norms have changed. In the early 1990s, fewer than half of Americans approved of interracial marriage between blacks and whites. Just a decade later, it was 76%, today it’s 96%. Something similar likely happened with gay marriage, and opposition to sexual harassment in the work place. We overcame our long and horrible lack of belief in social equality, one that bedeviled us since the 1700s.

The new moral challenge we have as a society is, in a sense, a much older one. We have to get back to seeing the vices laid out in most ancient religious traditions - gambling, speculation, greed, and a disdain for those who work for a living. As FDR put it in 1936, “We had to struggle with the old enemies of peace—business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.”

As we organize for that time, building the arguments and the coalitions, understand that the one ironclad rule guiding elite decision-making in the Booming Twenties is number go up. That runs our social order, and that’s what we’re really up against.

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cheers,

Matt Stoller