Every time I turn on the financial news, I see that the stock market (on average) has been rising for a record amount of time (3,453 days as of the writing of this piece). Every program trumpets this consistent rise in value as an incredible positive for the American people. But who’s it really helping?
It’s been working for me. I made about $18,000 today just from the increase in the value of my investment portfolio from this morning until now.
How’s it going for you? If you’re the breadwinner of a median US household, you will make around $240 dollars today, but you don’t have any investments in the stock market, so you’re going to have to stay at work for another few hours.
That is the difference between capital and labor. I’m already rich, so I don’t have to do anything, and I get richer. Some people have to work all day, and after all that, they have a smaller fraction of the pie than they did at the beginning of the day. People like me are constantly increasing the size of our slices, leaving less and less left over for everyone else.
Most people not only don’t have enough savings to live off of their investment income, they don’t even have enough savings to be able to keep up with their expenses if they miss two days of work. 40% of Americans can’t even cover a $400 emergency expense!
This setup may work great for people like me in the short run, but I’m worried that the good times can’t last. For me to continue to make money and enjoy my life, I need to live in the greatest country in the world, and for this to remain the kind of country that I want to live in, things need to change.
It’s a common refrain among conservatives that rich people like me are job creators, and that if you give people like me a lot of money that it will trickle down to the rest of the country. Nonsense. Money doesn’t trickle down, it trickles up.
I make money because each time someone streams a song on iTunes or buys an iPhone, a little bit of money trickles up from them to Apple, and I make money (because have hundreds of thousands of dollars invested in Apple stock).
I make money because each time someone pays for someone with their Visa card, a little bit of money trickles up from them to their bank, and to Visa, and I make money (because I have hundreds of thousands of dollars invested in Visa stock).
The only way that rich investors like me can make money is if normal people continue to spend and consume. But at the rate our economy is diverging, with more and more money going to people like me and less and less going to the working people who make up the bulk of consumer spending, we’re going to reach a breaking point. That will be bad for all of us because a significant percentage of the population won’t be able to afford anything more than their most basic needs (and for many, not even that). If we want to build an economy that works for all Americans, rich and poor alike, we need to spend less time talking about the stock market and more time talking about wages.
