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…The stock market is often touted as a general measure for the economy…but it’s not…[Rather, it’s] a measure for social and economic inequality, and its current instability has more to do with our world’s barbaric inequalities and plutocratic leadership than it does with the coronavirus. In other words, while the virus may have triggered the current crash, it is hardly the root cause of the market’s recent instability.
…By throwing budgetary caution to the wind, lowering taxes on the wealthy to historic lows, and deregulating the U.S. economy, Mr. Trump has ignited a corporate frenzy that has led the stock market to levels few could have predicted and, in doing so, he has helped the world’s wealthiest citizens amass unforeseen fortunes but… everyday citizens have benefited little from the market’s record ascent:
- While 55% of Americans own stock of some sort (including those held in 401(k)s and other retirement accounts),
- the richest 10% of American households own 84% of American-owned stocks.
In other words, a lot of Americans own piggy banks but very few have interest-earning accounts.
In addition,
- the average American wage has been stagnant for the last 50 years while, since the 1980s,
- the cost of education has increased by 213%
- and the cost of health care has gone up by just over 100%.
As a result, social mobility is on the decline and the middle-class is beginning to wane.
Put simply, the historic gains on Wall Street have contributed to an unprecedented accumulation of wealth within the hands of global elites, spurring a massive jump in global inequality. There is chatter about the world entering into a new gilded age, as if it were a debate but facts are facts. We’re not entering into a gilded age, we’re living in one.
It’s true that the sharp drops of the last two weeks are connected to the coronavirus but, even in this case, the financial markets are responding, first and foremost, to the possible lost profits for those top few percent of people.
It’s too early to know whether what we’re seeing is a massive market correction or the beginning of a new recession but what is clear is that both a solution to the coronavirus threat and a road toward economic security for all people will require more than simply regaining the confidence of investors. Rather, it will demand a systemic shift that addresses — much like Franklin D. Roosevelt in the 1930s — the root causes of the crash. It will require a massive reinvestment in public education, health care, and the middle-class.
In short, for the first time in nearly 100 years, leaders will have to come to terms with the pernicious effects of massive inequality on society.
Editor’s Note: The original article by Benjamin Waddell has been edited ([ ]) and abridged (…) above for the sake of clarity and brevity to ensure a fast and easy. The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.