To those who believe there is a profound disconnect between Wall Street and Main Street in America, that there is something rotten afoot in our financial markets, just take a look at what’s happening today, and what’s been going on for the past 6 weeks or so in America and on Wall Street. The Dow Jones Industrial Average is currently up about 380 points on the day, or about 1.6%. Why this represents a major disconnect is because it was just reported that 3.2 million Americans filed for Unemployment Insurance this past week. You would think that would be bad news to the stock market, but on the contrary, the market just keeps humming along. How can this be?
If you move out a bit in time, the picture is even more stark than that. In the past six weeks, over 33 million Americans have filed for unemployment. It’s not known how many will actually get the benefits or how many people there are out of work who are not eligible for benefits. What is known is that a vast number of our countrymen, millions and millions of American families are hurting mightily at this moment in time, with no relief in sight. The economy is contracting sharply, state and local governments are broke, and people wait in hours-long lines for food to feed their families.
And in this 6 week period of time, dating back to March 23, 2020, the Dow Jones Industrial Average went from around, 18,500 points to over 24,000, a gain of about 30% in the past 6 weeks! How did this happen?
Think back to the economic bailout that happened at that time. A good part of it was for “small” business (not necessarily too small, as we saw), with funding going through mostly large financial institutions. Another piece went to one-time payments to Americans, which is fine, but how long really will $1,200 last? Also in that piece are payments for enhanced unemployment insurance benefits, which actually will help to keep some people (barely) afloat.
But the major piece of that gargantuan expenditure was a bailout for large corporate interests, which is being doled out at the discretion of the Trump Administration, with no real oversight. And it isn’t just the money in the legislation that is bailing Wall Street out, it’s the trillions c coming from the Federal Reserve quietly assuring the big boys that they have no real worries in all of this.
Am I saying the system is rigged? You betcha! How else is the nation on the verge of a Great Depression with off the charts unemployment numbers, a huge swath of the American People facing real and profound misery and despair economically, and Wall Street is having a great old time?
This is a situation that is only going to get worse in coming months as the economy contracts and parts of it atrophy, or just whither away and die. And the Republicans are unlikely to do anything more to help as Wall Street is covered nicely.
This makes the next election even more important than it already is because action will be needed to begin to clean up this disaster, and only a change in direction will allow for that to happen.