As you know, Donald J. Trump and his Republican coconspirators like to justify their existence at the helm of government by citing the Stock Market. They talk about it like it’s the sole indicator of the value and success of an entire nation that everything hinges on its success.
Of course they leave out a few little things regarding the Market, not the least of it being that the crashes of 1929 and 2008 occurred while the Republicans controlled both the White House and Congress and their economic policies were in full swing and that the current rise in the Market began in late 2009 after Barack Obama and a Democratic Controlled Congress implemented (despite obstructions from the Republicans) economic spending and banking regulations that helped the Market recover and expand. In fact the rate of the Market Increase though still rising, is rising slower than it was under Obama. But no matter, here are some bullet points to consider when debating the Market and politics with your Republican friends.
- Only 54% of the nation have any money invested in the stock market, down from 64% in 2008. Though the market is at record highs, only a few Americans benefit directly from it. Most Americans who have money in the Market don’t have enough to impact their financial portfolios to any great extent or are invested via 401K’s or pension plans.
- More Americans are surviving paycheck to paycheck which means they don’t have extra money to invest heavily in the Market when they have to pay for housing, utilities, education, food, medicine, healthcare, etc.
- The value of stock depends on the financial success of the company that is publicly traded on the market. The more successful that company, the more value to that stock. Another way of increasing the value of the publicly traded stock, is for the company to buy back the stock from the public. That is what most of the corporations did after the GOP tax cut plan of which 88% of the benefits went to corporations and the wealthiest Americans. Although stock shares increased in value, fewer of those stocks are available to the general public. In fact, the stock prices are beyond most American’s ability to purchase and invest.
- Conservatives say Americans need to invest what money they have in the Market in order to benefit from an expanding market. Now, if you’re going paycheck to paycheck most extra money that exists, or borrowing you undertake goes to purchasing consumer items such as cell phones, television, computers, tablets, appliances, cars, etc. If instead of borrowing to purchase those items and you invest in the market instead, sales for the corporations dependent on consumer spending begin to fall. If sales fall, then the corporations aren’t doing as well as they did before. Less consumer spending on consumer goods leads to recession and recession leads to Market crashes. Recession and Market crashes are almost a symbiotic phenomenon.
- The Stock Market is not the entire economy, it’s merely a factor of the economy that can and does touch on other factors. The major driving force in an expanding economy is wide spread consumer spending. Increased consumer spending results in more successful corporations which results in high stock share prices. However, higher cost of living for the necessities in life like housing, food, medicine, healthcare, transportation, etc. leads to less consumer spending if wages are stagnant. Wages have been stagnate for middle and working class since before Clinton whereas the wealth of the top 1% has grown exponentially. Too few people are taking in the extra wealth to contribute to the economy. This will result in recession as it has time and time again since the founding of our capitalistic society.
- The Market will crash, it is inevitable due to stagnant wages of the working and middle class which in conjunction of the higher cost of living will result in less consumer spending for the products major corporations sell which will result in stock share values falling despite corporations buying them back from the public resulting in another crash. Problem this time, the massive debt incurred by the United States by passing the GOP Tax Cuts means the United States will not be able to insert money back into the economy as it has in years past to get us out of recession. Our national debt and deficit has passed the point of no return. The only solution to recover would be either major cuts to social programs which the GOP are today pushing for that will actually take more money out of the economy expanding the recession or raising taxes. If taxes are raised, it cannot be on the middle and working class for then they’ll have even less to spend, it must be raised on the wealthiest Americans and the Corporations who have the money to spare, but won’t let their Republican shills in Congress touch. That’s the stand-off.
- It’s not the Market dummy, it’s the financial security of the working and middle-class that drives the economy for everyone rich and poor and that must be the focus. Increase wages, cut costs of the necessities of life like health insurance and rebuilt the middle class like Roosevelt, Truman and Republican Eisenhower did via their taxation of the wealthy and corporations to fund programs to support ordinary Americans and provide jobs. Everyone benefitted from it then and can again now if the greedy rich would just allow their purses to be opened for the public good.