End the duopoly

Byron Williams: The stock market is not the economy

NYPD officers walk along a sparsely populated Wall Street in the Manhattan borough of New York on May 1. On the same day American unemployment rose to levels not seen since the Great Depression, the stock market experienced modest gains. In fact, the NASDAQ closed with a high for 2020. Some offered that Wall Street had already factored the bad economic news. But is it that simple? Could it be the relationship between the stock market and the overall health of the economy is at best tangential — cousins two or three times removed? From financial writers to the nightly news, the stock market is portrayed as the most persuasive barometer determining America’s overall economic health. Presidents of both parties fortify this notion by running on the strength of the stock market. A portion of the president’s job performance is based on the health of the economy that is measured in part by the stock market. But it is difficult to reconcile the Standard & Poor’s index being roughly 16% away from its all-time high when 26 million jobs have been lost because of the pandemic. Because stocks are held by a relative few (the bottom 90% own 16% […]

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