NPR is the latest media outlet to adopt the Hitchhikers Guide to the Galaxy strategy with regard to the Stock Market: DON'T PANIC! But, in spreading the word (and why are so many stories like this coming out now, hmmm?), NPR lets the secret out: the Stock Market is NOT the Economy. And there's an update below that really gets into the details.
More below the Orange Omnilepticon.
The just over four and a half minute piece on All Things Considered airing 8-27-15 was titled Stock Market's Sudden Correction Might Not Impact Most Americans. The ATC hosts turn to Sonari Glinton to explain why, after they first repeat like a mantra "the stock market is not the economy." Glinton turns to a number of economists to explain the disconnect. The transcript is not available yet, but you can hear it at the link.
Gas prices are down, inflation is way down, employment is picking up, Americans are getting a handle on debt, and so on. Among other things, only half of the families in the U.S. have any holdings in the Stock Market. If you didn't feel anything when the stock market doubled over the last six years, you probably won't feel anything now. Probably.
Amari Jones has the real bombshell: most Americans are ignorant about the Stock Market - and for them that's just as well. It doesn't matter because, as he says, we have decoupled the link between the average American and the Stock Market. How?
Pensions used to be affected by the market - but most of us don't have any pensions any more. When corporate profits would go up, workers could expect to see raises - but that doesn't happen any more either. As Jones puts it, "The stock market is basically the wealth indicator for the 1%, and for most people it doesn't matter any more and they shouldn't pay any attention to it."
emphasis added
So, don't panic - unless you've just seen your retirement investments evaporate, and you were counting on them real soon now. (Advice heard on another NPR show was, as you get near retirement, move your money out of the Stock Market to less volatile assets. Now they tell us.) The Stock Market will go up again. Just be patient and wait. Eventually. Real Soon Now....
And, when they tell us the Stock Market doesn't matter to most of us, there's at least two things wrong with that. 1) IF things get really bad, WE are the ones who are going to be made to prop up the big losers (privatize the gains, socialize the losses) and 2) the government's attentiveness to the needs of the 1% means protecting their interests in the market is going to skew the economy badly for the rest of us.
Remember all this the next time you hear someone talking about Social Security 'reform', or you're wondering why you're not getting a slice of the pie as the economy grows. Remember this the next time you hear we should all be putting money into the Stock Market - where the 1% will take good care of it, you betcha.
And remember, any time you see the media obsessing about the Stock Market, or you see politicians boasting about how they can make it go up, it's all about the 1% - not you..
UPDATE: Alternet picked up a Democracy Now interview that lays it all out in detail: China, the U.S., Europe and Greece, and the turbulence in the global economy.
So, the real problem is that we’re in a nonrecovery in America, and Europe is in an absolute class war of austerity. That’s what the eurozone is, an austerity zone. So that’s not growing. And that’s really what’s happening. And all that you saw on Monday was just sort of like a shift, tectonic shift, is people realizing, "Well, the game is up, it’s time to get out." And once a few people want to get out, everybody sees the game’s up.
Read the whole thing.