One fine day in January, 1996, AT&T announced it was cutting 40,000 white-collar jobs from its workforce; in response Wall Street turned cartwheels of joy, sending the company’s price north and personally enriching the company’s CEO by some $5 million. The connection of the two events was impossible to overlook, as was its meaning: What’s bad for workers is good for Wall Street. Within days the company was up to its neck in Old Economy-style vituperation from press and politicians alike. Then a golden voice rang through the din, promoting a simple and “purely capitalist” solution to “this heartless cycle”: “Let Them Eat Stocks,” proclaimed one James Cramer from the cover of The New Republic. “Just give the laid-off employees stock options,” advised Cramer, a hedge fund manager by trade who in his spare time dispensed investment advice on TV and in magazines, and “let them participate in the stock appreciation that their firings caused.” There was, of course, no question as to whether AT&T was in the right in what it had done: “the need to be competitive” justified all. It’s just that such brusque doings opened the door to cranks and naysayers who could potentially make things hot for Wall Street. Buttressing his argument with some neat numbers proving that, given enough options, the downsized could soon be — yes — millionaires, Cramer foresaw huge benefits to all in the form of bitterness abatement and government intervention avoidance. He also noted that no company then offered such a “stock option severance plan.” But the principle was the thing, and in principle one could not hold the stock market responsible; in principle the interests of all parties concerned could be fairly met without recourse to such market-hostile tools as government or unions.

—Thomas Frank
The 1 Percent’s Long Con
Quote from One Market Under God