This morning, Donald Trump stumbled onto a statement that was almost 30 percent correct.
It’s true that often when economic statistics reveal what appears to be good news—such as the fact that around 2014, incomes began to expand slightly and that this effect appears to be continuing—the stock market responds by behaving as if that’s a sign of the apocalypse. After all, sharply increasing productivity and profit without rewarding workers has been the “secret sauce” for American corporations for decades. The idea that workers might get fair treatment genuinely mortifies them. But of course, that’s not going to happen. Especially not under Trump.
And Trump is ridiculously wrong about everything else. First, the stock market has always been this way. It never leaped ahead when getting news that might possibly signal one penny less landing on corporate bottom lines, not even in the “old days.” Idiot. He’s even more wrong in thinking that the stock market was ever a reliable indicator, or even connected, to the economy writ large.
Between 1950 and 1980, the average American’s income more than tripled—and the income for those in the bottom 90 percent showed significantly more increase than those in the top 10 percent. Over that period the Dow Jones industrial average moved from around 200 to around 1,000, representing a gain that may seem to have some connection to an improving economy. But from 1980 to 2018, the average American’s income rose by single digits, with almost all gain going to people in the top 10 percent. Over that period, the Dow has gone up to more than 20 times its 1980 value.
What all of this says is that it’s been a great period for those people who can afford to lay back on a stack of stock and talk about the laziness of the people who are actually doing all the work. And that anyone who ever thought the market is a proxy for the economy—say, someone who has bragged about the stock market numbers 63 times in the last year—is enormously ignorant of … forget the of. Just enormously ignorant.