Lynne Stevens
I am confused.
I hear friends and neighbors talking about how expensive everything is – yet, our government says "all is well" or "it's only for a little while."
All is not well for the average working family – certainly in Graham County and surrounding counties in rural areas of North Carolina.
There is a strong disconnect in reported record highs of the stock market and our lives in the real world. We need answers.
In days past, the stock market was the thermometer of the health of the economy, and better reflected our lived reality.
Corporations were not so big and powerful, and consumers played a big part in the health – or lack of health – in the economy by their willingness to spend. When things were going well, the stock market had increased profits and – when slow – their stocks and profits decreased.
But, things are skewed now. The top 10% of the population that just got big tax cuts now accounts for about 50% of consumer spending in the United States. The rest of us accounts for the other 50% of consumer spending (Rise Wealth Strategies). So half the consumer goods are bought up by that 10%, leaving us to compete for the remaining 50% of consumer goods.
Less-expensive goods seem noticeably higher – even at dollar stores and discount groceries? High competition for anything normally means higher prices.
Case in point: those cute little French pug dogs got very popular – and now are quite expensive. Mama Pug just could not make enough little pugs to meet the demand. War, gas prices and tariffs – which by now everyone knows is an additional federal government tax we now pay – creates pressure on prices for everyday goods; particularly the least expensive.
Not everyone owns stocks, but almost all employee, government and teachers’ retirement accounts do. These facts makes understanding the relationship between stocks and the state of the economy important.
How can Wall Street thrive when a large percent of the middle class struggles? One answer is stock markets do not track our economic well being. They track the profitability of corporations. The more massive and influential the corporations, the more their profitability influences how the overall stock market is doing.
Heavy gains by a few very large corporate powers can – and does – distort the real health of the stock market, and gives a misleading picture of the economy. Using Wall Street solely as a gauge of economic health is incomplete without much more information, which can be hard to decipher and understand.
Wall Street no longer needs to pay as much attention to consumer spending as it once did. Federal Reserve data says 2/3 of the country's wealth is owned by the top 10% – and is increasing.
The favorable government tax policies that nurture the growth of this 10% class can really only be addressed at the ballot box, by knowledgeable, well-informed citizens who take time to understand how these policies affect our families.
Lynne Stevens writes a bi-weekly column for The Graham Star. She can be reached via email, geminga@mailfence.com.