President Donald Trump and first lady Melania Trump arrive at Las Vegas McCarran International airport to meet with victims and first responders of the mass shooting, Wednesday, Oct. 4, 2017, in Las Vegas. (AP Photo/Evan Vucci)

INTERNATIIONAL - President Trump’s first 9/11 anniversary as president has come and gone without incident. It was, however, a reminder of how things changed dramatically for the country back in 2001 in the blink of an eye.

Under Trump, any comparable catalyst is less likely to be an external attack than the collapse of two domestic houses of cards: The Trump presidency itself and the Wall Street bubble. Donald Trump and Wall Street with its long rally have a lot in common. For all the glitz, both have been erratic in the past – taking their investors for a ride and losing them a lot money.

Two dupesters

Both Trump and Wall Street have risen on a wave of unearned cash. Pre-presidential Trump parlayed his inheritance from his Daddy into taking a long stream of his investment partners for a ride. As president, he is doing the same to supporters. The Dow, for its part, has been on a spectacular run – but that is not the result of any spectacular corporate performances. Rather, it is the logical result of the massive injection of liquidity supplied by the U.S. Federal Reserve.

President Donald Trump and first lady Melania Trump greet military members on the USS Kearsarge off the coast of San Juan, Puerto Rico, Tuesday, Oct. 3, 2017. (AP Photo/Evan Vucci)

NYC-style symbiosis

After Trump’s election, both have entered a symbiotic relationship. Not surprisingly, Trump has been touting records set by the Dow Jones Industrial Average as proof of the great success of his presidency. In part, stock prices have continued setting records on expectations of pro-business policies by the Trump Administration, including the administration’s great eagerness to slash regulations and cut the corporate tax rate.

To be sure, though, the U.S. stock market had already been on a run pre-Trump. It has been rising steadily since 2009, creating the second-longest bull market in history. Since about 2014, analysts and economists (including me) have been warning that stocks are overvalued and that the market is in a bubble stage. As in most bubble cycles, the timing of the end is uncertain, but the ending is certain.

Most recently, a warning came from Yale economist Robert Shiller, a Nobel laureate who correctly called both the dot-com bubble in 2000 and the housing crack-up in 2008.

President Donald Trump and first lady Melania Trump followed by Vice President Mike Pence and his wife Karen walk out for a moment of silence to remember the victims of the mass shooting in Las Vegas, on the South Lawn of the White House in Washington, Monday, Oct. 2, 2017. (AP Photo/Pablo Martinez Monsivais)

No Phoenix

Trump, for his part, also had to contend since day one of his presidential campaign with the suggestion that his political rise was a fluke that represented a weird bubble that would soon correct itself – by him crashing and burning. And yet, the entire world is still waiting for their respective crashes. Instead, both Trump and Wall Street are forging ahead. 

Trump has claimed that his base would stick by him even if he were to shoot someone on Fifth Avenue in broad daylight — and so far he has been very much on target. He hasn’t shot anyone, but he has done plenty of other things that would have sunk a conventional politician. As to the stock market, it too seems unsinkable. It has sagged so many times during the current bull market only to push up to a fresh record that investors now consider any retreat a buying opportunity.

Two forms of disingenuousness

Of course, both Trump and Wall Street are disingenuous in their respective claims. Trump boasts of creating, preserving or bringing back solid manufacturing jobs. In reality, he is slashing social services and egging on the U.S. Congress to deprive ordinary Americans of their health insurance.

His actual policies and promised tax cuts are structured so as to benefit the very wealthy. The mirage is comparable to his brand-oriented business career that created little, in tangible terms, but stuck others with the bill, while still taking credit for whatever people around him salvaged. The U.S. stock market has a similar populist undertow. That line goes like this: Even if you don’t own any stocks outright – less than half of Americans do – almost everyone else is a stock market investor via pension funds or 401ks. (In fact, a third of Americans do not at all).

This exaggerated contention itself also obscures the fact that more than 90percent of all shares are owned by just 20percent of the population. But it nevertheless remains part of the quintessential American narrative of everyone being on the verge of riches. To perfect the seemingly virtuous circle of popular ownership of the stock market, it is said that financial markets are the ones to fund businesses, which create jobs, boost incomes, spearhead technological progress and increase overall prosperity.

It is an attractive story, but in reality Wall Street is mostly eager to serve the needs of the very rich (which are the ones to pay these intermediaries handsome fees). The rest of society is pretty much squeezed like a lemon.

The Trump tower of Babel

Bubbles that defy logic can’t go on forever. Eventually, they turn into pyramid schemes and collapse under their own weight. The problem is that if a pyramid scheme is not closed down in time and is allowed to spread, it can get so big as to drag down the entire economy.

Trump and Wall Street have now become just such bloated bubbles. They will eventually burst — possibly at the same time, one reinforcing the other. If that happens, their collapse will alter the United States in a major way and, quite possibly, deal a severe blow to the entire world.

Alexei Bayer is the Eastern Europe Editor of The Globalist.  This article initially appeared on The Globalist. 

- THE GLOBALIST