The shocking disconnect between a thriving U.S. investor economy and its millions of unemployed as a recipe for even worse social unrest.
Don’t blame Lisa Scott, a 43-year-old certified nursing assistant who lives in the Oxford Circle section of Philadelphia, for not celebrating this week as the Standard & Poor’s 500 index soared to yet another record high
On Wednesday afternoon, as the Dow was rising yet another 454 points, Scott — who hasn’t worked since the coronavirus turned her world upside down in March — was far too busy worrying why Pennsylvania still hasn’t processed her unemployment claim, whether her landlord will keep allowing her to pay whatever rent she can, and how she’d be able to seek new work with her 12-year-old at home for virtual schooling.
“I think it’s all bull——, pardon my language,” Scott told me when I asked her about the stock market soaring even as nearly 30 million Americans, that’s one-in-every five workers, continues to receive the unemployment benefits she’s still struggling to obtain. Like many in her shoes, the mother of six is losing faith in the system.
“I am an essential worker — I am needed, and look how they’re doing me,” Scott told me.
What’s so mind-boggling is that the increasingly desperate plight of America’s jobless, a crisis that’s approached the unthinkable levels of the Great Depression of the 1930s, isn’t the biggest story on the news. Instead, it’s squeezed out by a debate over so-called “law and order,” with a president who’d rather marshal the vast power of the federal government to send troops to arrest graffiti artists than enact a massive jobs-and-relief program.
Seriously? You’re worried about social unrest now? Just imagine the chaos in a few months, when homeless people sleep on park benches under a blanket of newspaper headlines that Jeff Bezos is the world’s first $300-billion man, or when the food lines begin to resemble “Hands Across America.” Personally, I don’t play the stock market but if I did, I’d be investing heavily in pitchfork manufacturers.
This isn’t a new problem, of course. Ever since 1980, when Ronald Reagan’s initial “Make America Great Again” platform” was cover (just as it would be for Donald Trump) for slashing taxes on the wealthy, the background noise of income inequality has gone from a whisper to the scream of “We are the 99 Percent!”
But the cataclysm of 2020′s pandemic and related shutdowns has taken America’s wealth gap from tragedy to farce. After a steep dip in the spring — shuttered stores and factories and millions of jobless claims will do that, at least briefly — Wall Street bounced back and kept going. Why? Some of the daily spikes have shown that America’s supposedly sharp-eyed stock traders — like the president they admire — are far too susceptible to dubious rumors and scammy press releases about imminent vaccines.
But that’s only part of the dark underbelly of Wall Street’s daily highs. The pandemic has played out in a cruel way that’s caused beloved small businesses like one-of-a-kind boutiques and funky restaurants to close, while big corporations like Amazon with their global logistics have flourished. America has become even more cruel and less fun to live in at the same time.
But public corporations are also booming because we’ve created a system that can pump in literally trillions of dollars to prop up stocks — led by a Federal Reserve whose chairman was appointed by a president who uses the sky-high Dow to argue for his re-election — but gridlocks over the idea of helping families pay their $500 monthly rent.
And so the billionaires who run these public corporations have seen their private wealth explode. Amazon’s Bezos became Planet Earth’s first $200 billion man (even after his divorce!) but other billionaires like Elon Musk, Bill Gates and Mark Zuckerberg have also become obscenely rich during the worst year of many people’s lifetimes.
Meanwhile, it was hailed as a warped victory on Thursday morning when ”only” 833,000 Americans filed new state unemployment claims. But that still dwarfs any week from the painful Great Recession only a decade ago, and it also fails to include a second class of emergency pandemic benefits that elevates the total number seeking new aid this week to 1.6 million. And yet somehow this massive societal shakeup continues to get lost amid a president’s increasingly delusional tweets or public comments, or dramatic video of small courthouse fires.
John Dodds, the activist who heads the Philadelphia Unemployment Project (PUP), in a city where the jobless rate is still at the near-Depression level of 17.7%, the priority remains trying to convince Washington to reinstate the $600 weekly unemployment-compensation boost that arguably prevented a total meltdown but expired at the end of July. Congress, which stayed in recess for most of August, didn’t have the same sense of urgency.
The stories of America’s unemployed are as diverse as the nation itself. Rebecca Ansel, an unemployed violinist and musicians’ union member, recently rallied with other PUP members in Philadelphia to extend the $600 benefit. Unlike Lisa Scott, she’d gotten her jobless claim processed quickly, and owning her own home in Collingswood has helped her get by. But she worried things will change with Philadelphia’s arts’ venues likely to remain dark for months, and not being able to do what she loves has already exacted an emotional toll. “Everything is taking a hit — it’s hard,” Ansel told me. She said “I feel a piece of myself is missing.”
For Scott, as for many, economic worries are front and center. She lost her nursing assistant job in March when — concerned about her six kids, including a 4-year-old — she declined to volunteer for a COVID unit. The setback, and her inability to get Pennsylvania to process her unemployment claim, is causing her to lose hope in the system. “I don’t think they’re handling it too good,” she said. “Look at me, a hard-working woman and for the first time in 15 years I’m on food stamps.”
The fierce urgency of now that briefly allowed Congress and the Trump administration to pass relief bills in the first weeks of the coronavirus crisis needs to be rekindled, or the breakdown of American social order will only accelerate. It’s bizarre that we’re playing politics around the recent spike in murder rates in American cities and ignoring the obvious link to the COVID-19 economic despair and disruption. That’s one more reason why the stock market rise matters; it’s a convenient distraction that allows policymakers to pretend that the economy is doing just fine when it’s utterly broken for tens of millions of forgotten Americans.
But we can’t ignore this forever. Last week, about 100 protesters showed up outside Bezos’ $23 million mansion in D.C. (where he owns the Washington Post) and, demanding higher wages and better coronavirus protection for Amazon workers, erected a guillotine. I’m reporting that and not endorsing it — lasting social change will only come through non-violent resistance — but I do think that symbolism should send a cold metal chill down the spine of anyone still buying the fantasies of late-stage capitalism.
85% of the stock market is owned by the Top 10%. It has little to no effect on the lives and well-being of most Americans.
So, it's no surprise that people are giving less of a fuck than usual about it.
... Tragedy is the various studies that say that, like, 60% of Americans don't have $500 bucks of emergency cash, let alone retirement savings
Someone else recently made the comment that the stock market rises on the wealth extracted from the working class. Basically, all of the wages the ultra rich refuse to pay the working class turn into “gains” on Wall Street.
And when the stock market falls the working class gets laid off.
Actually it does have a direct effect on commoners. Money made from stock dividends is money not paid to workers. The more money that is invested in stocks, the higher the expectations on payouts thus more pressure on turning profit by cutting costs, paying lower wages or hiring less workers. Layoffs and downsizing of otherwise profitable companies is often the result of pressure from shareholders to see bigger returns on their investments.
Stocks being a measure of the health of the economy is like measuring one's health by the amount of parasites they have.
But it makes the president look good, so rev up those printers!!!
This is the thing that rides up my crack more than anything else. The guys out there with their MAGA hats talking about his numbers and the ‘conomy probably don’t even have a fucking horse in the race. They are not likely significant stakeholders. How do blue-collar Americans view him as one of their own?
Wall Street is for Wall Street. It always has been. It's never been a true barometer of the economy because, like a lot of ways we talk about the country, the free market is not a magical fairy that fixes shit. The free market is there for the free market.
The Founding Fathers warned us about this. Jefferson even said the Tree of Liberty needs to be watered with the blood of tyrants. Hell, he even said we should update the Constitution every generation or so (20 years) in order to keep it updated and relevant. The biggest thing we as the people are missing is a sweeping Constitutional reform to keep these bastards in check.
If there is a systemic problem then the only way to fix it is to change the system
The writer can't even acknowledge that is a hole that 99% of people would not be able to crawl out of. There's going to be mass unrest in the coming years. Wealth inequality has grown too large.
Not trying to be pessimistic, but at some point this is all going to come crashing down. We are bound to get a "correction," and that is going to affect investor confidence.
Currently there are lots of investors saying "I don't get it. The world is falling apart - and I keep on making money." It might not mirror the 2007-08 financial crisis, but there are plenty of other factors that could affect potentially affect the market.
Prediction. It’ll happen not long after a Democrat gets into office. They’ll have to spend years of their presidency fixing it. Then a Republican will get elected who will spend days of their presidency reversing everything. The market will boom because, of course, it will when you remove years worth of safety regulations. Rinse and repeat every decade or so.
The current prediction is that soon after the unemployment rate drops, investors will feel comfortable putting money into new ventures, right now they’re holding back because everyone’s putting money away in case things get even worse. All that belt tightening leaves investors with a lot of static capital that they want to invest. Once new ventures start up they’ll splash cash on anything that sounds promising, and we’ll see another 90s bubble situation hit. I’m betting this will happen in less than 3 years.
Just wait till everyone starts realizing that the M1 money supply has has increased 34% since January and the M2 money supply has gone up by 19%.
It's like an inflation bomb waiting to go off at any moment.
This is why the "economy is doing fine" argument for Trump is a joke.
And I can already hear the counter argument, "It's only bad because of COVID-19."
COVID-19 is only bad because of Trump.
Tens of millions of Americans lost their healthcare coverage in a pandemic. America is a completely pathetic country.
The epitome of class warfare.
bezos would be worth nearly 300 billion if he hasn't gotten divorced. it's insane
The low interest rates from the FED means investing in bonds is useless and money is cheap, so people are dumping money into the stock market since it's the only investment opportunity at this time, which then artificially raises the value of stocks. That's why we've been seeing it suddenly plummet when it reaches a certain point, because people are selling off to make money before reinvesting. It has nothing to do with the fundamentals of the company or strength of the economy right now.
That’s what happens when the government bailout funnels trillions of dollars to corporations and us worthless proles get 1200 peanuts. What a fucking scam, this whole system needs to be burned to the ground