Dominant Social Theme: Invest wisely and well.
Free-Market Analysis: Can one "invest" one's way to prosperity? Some people are very good at stock picking and others can use Austrian business cycle analysis to generally figure out what side of the market to be on during its great turnings (gold and silver would seem to be appropriate for now). But most people have no more success picking stocks or generally investing than they do with other parts of regulatory capitalism.
Let's try to put this long-running power elite promotion into perspective. We don't agree with the LA Time's perspective (see article excerpt above). It's not nest-egg versus Social Security (which the US cannot afford, especially because there are no SS funds, only fancy IOUs). There is a third way, which is to get rid of central banking entirely and let tortured Western economies gradually deflate.
As economies undistort without the endless goad of monetary stimulation, people would gradually begin to be self-sufficient again. Nuclear families would collapse and extended families would reappear; this is the logical solution to old age, not frantic investing leading to the selection of an old-age home where one is likely to be abused before dying.
Before there was financial planning or even "investing" there were stock drummers – so-called customers' men. It is in America, predictably enough, where the idea of putting money into stocks became most popular. It never really caught on in Europe or Britain, where social class stratified opportunity. But in America, a large, freewheeling democracy, the idea of participative capitalism was welcomed.
It started out slowly, under a Buttonwood tree in New York where brokers gathered to trade securities in an auction-like setting that mimicked a French bourse. When brokers went indoors, others gathered at the curb outside to trade smaller lots. Thus the "curb" exchange was born, which later became the American Stock Exchange.
Stock trading didn't really take off until after the Civil War. It was then that the backers of the New York Stock Exchange, presumably the big New York banks themselves (with their European ties), went on a buying spree, purchasing numerous other auction-like exchanges throughout the city and consolidating stock trading downtown.
We have already recited in these pages the evolution of stock trading, from an auction once or twice a day to all-day dealing. The "uptown" boys had developed the new system and the NYSE was so desperate to merge with them that they offered them lucrative franchises in certain stocks if they would agree to a partnership. Thus the specialist system was born.
We've spent time, as well, analyzing what this amounted to. We still remember an Economist article in the late 1980s that solemnly proclaimed the system had emerged naturally as a result of a broken leg that one floor-trader had suffered. Supposedly he couldn't walk around and thus began to "specialize" in a single stock. Others gathered round finding his exclusivity to be both liquid and efficient, and thus was history made.
In fact, as we've just pointed out, the system was a bribe to effectuate a merger. As soon as the merger was made, the NYSE, too, switched to continuous trading, which was far more lucrative for the broker. It was also enormously lucrative for the specialist, who was exposed to the volume and liquidity of his assigned companies in far more detail than anyone else.
Over time, the specialist's advantage was whittled away by various rules and regulations, but the advantages remained nonetheless. Even in the late 20th century, just before the system was basically abolished, specialists still had an advantage, especially in the morning when they had to set the opening price – and could do so based on the volume of trades and indications of interest from the day before. It was like shooting fish in a barrel and it was LEGAL. Specialists were OBLIGED to make trades (basically front-run their own book) to keep an "orderly market."
Of course it was never exactly clear how small Mom-and-Pop specialist shops with limited capital were supposed to keep such a market in hugely capitalized stocks like IBM or Exxon. The buying and selling would inevitably overwhelm even the most courageous small-time specialist during times of crisis. But logic never mattered on the NYSE; the larger, intricate presentation was set up to take advantage of the buying public and to sell a concept of wealth and potential riches that could not be obtained anywhere else except in a casino or lottery.
It was built deliberately in America bit by bit. The consolidation of the NYSE was buttressed in the late 1800s by the advent of the first, great "wirehouses" – so called because they allowed customers to buy and sell stock via telegraph. The advent of the Federal Reserve, which could – by printing endless amounts of fiat money – create great capital surges that could send American equity markets soaring.
The 1929 Crash shattered the system and it took until the 1950s for Wall Street to get it back on track. Eventually the braintrust at the NYSE grew so desperate it mounted a series of road shows around the country to convince Depression-scarred, war weary Americans that stocks could be a profitable adjunct to bonds. The road shows and America's growing prosperity fueled stock trading once again.
Federal Reserve money-printing and the post-war strength of the dollar began to drive marts upward, ever upward. There was a glitch in 1963 and then a major crash in 1969, but the combination of Fed money printing and consolidated stock trading continued to carry the day, especially after the US went off the gold standard and the Fed was freed to print money at will.
The 1970s were an up and down time for stocks in America, but in the 1980s the Fed/NYSE combination drove stocks up to lofty valuations. The 1987 crash derailed things for a while, but the 1990s and the tech-boom put stock trading back on track. The system worked well until later in the first decade of the 2000s when the incessant money stimulation finally caught up to both the markets and the larger economy. As we have long pointed out, the dollar-reserve system died in 2008, along with the popular belief that one could count on "investing" for retirement.
It was never a reality; it was fiction. Stock markets go up because of the way the system has been built. Central banks and modern stock markets are the two halves of an efficient, middle-class money-extraction mechanism. Prompted by money stimulation markets run up and – in America anyway – suck consumers' money into "opportunities." Then the market crashes, the valuations are diminished, jobs are lost and the contraction begins. Many who cannot stand the losses, psychologically or otherwise, sell out at the bottom – much as they have bought at the top – and the contraction of the middle classes continues apace. Lives are destroyed and families' hopes and dreams are ruined.
The late 20th century saw myriad elaborations on the "invest your way to wealth" dominant social theme, especially in the States. Cable news programs incessantly propounded buying opportunities, as did dozens of magazines and newspapers. Stock picking gurus became national heroes and various kinds of strategies were offered to the general public, from technical investing to financial planning. All of this was merely froth on the waves of systemic money stimulation; but it is hard to remain cool and uninvolved when your neighbor has just purchased an expensive car with some of his winnings.
Conclusion: And yet ... it was a Dreamtime, a fantasy propounded deliberately by the elite to continue the process of centralizing Western economies without being too obvious. This is not to say that "investing" and stock manias are going to go away. The latest round of exchange mergers shows us clearly that the game is still afoot and that those behind it have ever-larger plans. But something has changed in our opinion. The certainties of the 20th century have given way to the skepticism of the Internet era and it will take an enormous reliquification of global markets to spark another mania worldwide or even in America. It may even take a new monetary system.
By Roger Choudhury and the Investment Underground editors 
