As Devilstower took note here and Jed Lewison did here, various Republicans and the right-wing pundithuggery were all gleeful about the possibility of President Obama failing when the stock market was cruising around 6600 last March. But they've found themselves a bit tongue-tied now that it's hit 10,000 for the first time in a year. Calling them hypocrites became redundant a long time ago.
While we justifiably sneer at the usual suspects playing their usual little games, however, the reality of 10,000 needs attention. The New York Times gives it some in an editorial today:
So why is the Dow doing so well while the rest of the country is struggling? ...
The fiscal stimulus headed off an even worse disaster, and investors — who have no place else to put their money with interest rates so low — are elated that things weren’t as bad as they had feared. Not only are banks still around, many have posted stellar profits.
In six of the eight months since March, which is when the Dow started rising, the best-performing stock in the index has been a bank. Many of these banks are doing so well by trading the same sort of financial products that originally drove the system to ruin.
JPMorgan Chase’s otherworldly second-quarter profits, which sent the Dow vaulting over 10,000 on Wednesday, came mostly from investment banking, notably trading in bonds and other fixed-income securities. At the same time, the bank has curtailed consumer and business lending. ...
[In June, Ben Bernanke, said]: "We care about Wall Street for one reason and one reason only — because what happens on Wall Street matters to Main Street.” We can say with no hesitation that there are no Champagne corks being popped on Main Street.
Precisely.
Robert Reich punched the right keys, too, in asking how the Dow broke 10,000 while "the rest of the economy is in the toilet":
...this is all temporary fluff, folks. Anyone who hasn't learned by now that there's almost no relationship between the Dow and the real economy deserves to lose his or her shirt in the Wall Street casino.
As economist Thomas Palley wrote earlier this week:
That rosy scenario thinking has returned to Wall Street should be no surprise. Wall Street profits from rising asset prices on which it charges a management fee, from deal-making on which it earns advisory fees, and from encouraging retail investors to buy stock, which boosts transaction fees. Such earnings are far larger when stock markets are rising, which explains Wall Street’s genetic propensity to pump the economy.
While many economic indicators have trended positive, the overall picture continues to be grim for many millions of Americans. And while a Dow average of 10,000 is certainly better than a jab in the eye with a sharp stick, assuming that it signals a shimmering future is a wager on what may very well be a mirage.