The last week has seen the media focus almost obsessively on the coronavirus and one aspect of its coverage has been its supposed negative effect on the stock market. I have been railing about the absurd obsession in the US with stock market prices, to the extent that the Federal Reserve of the US, supposed to deal with the fundamentals of the economy, cut interest rates by a huge amount, seemingly in response to the fall in stock prices before it was clear that the epidemic had any impact on those fundamentals. Not that it helped, since the stock market continued to fall anyway. We know that Donald Trump cares deeply about stock prices, the only thing really matters to him.
Jon Schwarz explains the fetish that the elites of US society have with the stock market and why that fous is so bad for most of us.
A huge fraction of America’s mental energy, and definitely the Trump administration’s attention, are consumed by the stock market’s gyrations. This in itself has been debilitating for us, no matter the direction in which it’s gyrated.
Now the coronavirus may be about to teach us a harsh lesson in what this fixation has done to us. The glare of the stock market’s imaginary wealth has blinded us to what real wealth actually is.
To be alive in America is to be assaulted by endless high-decibel blather about the critical importance of the stock market. There are entire TV channels devoted to it, new highs are always celebrated on network news, it’s on the front page of newspapers, it’s on an app that comes preinstalled on your iPhone, and the president is constantly yelling at you about it.
Yet the stock market has little direct relevance for regular people. By some estimates, the richest 10 percent of U.S. households account for over 80 percent of American stock ownership. The richest 1 percent by themselves own half of that, or 40 percent of stock. Half of Americans own no stock at all.
Once you understand this, the media’s stock market mania is maddeningly hilarious. It’s as though half of the national news was yammering about the weather in Greenwich, Connecticut. (“Our top story on ABC World News Tonight: This afternoon Greenwich was unseasonably warm.”) And no one notices how bizarre this is.
That’s not to say that great news for the stock market never matters for regular Americans. But when it does, it can be bad for most of us. The economic journalist Doug Henwood explains it straightforwardly: “The reason the stock market has done so well for all these years is precisely because the working class hasn’t.”
The stock market is the class enemy for most of us, not our friend. Schwarz argues that most ordinary, non-wealthy people have the wrong kind of anxiety about the stock market’s gyrations.
All that should be reassuring for anyone with standard anxiety about the stock market. But everyone should be feeling a deep, non-standard anxiety about it, a kind of anxiety that’s never on TV.
The problem with the stock market is not it going up, down, or sideways. It’s what our obsession with it has done to us. It’s that paying attention to capitalism has made us think like capitalists. It exerts a gravitational-like pull on our psyches, nudging us psychologically to the right and shredding our instincts for social solidarity.
He argues that the stock market obsession leads us to value phantom wealth that drives up stock prices at whatever cost as opposed to the real wealth that comes with investing to create a society that provides everyone with good health care, a clean environment, and a secure climate future. The coronavirus and the response (or lack of it) is a warning sign of where that kind of thinking is leading us.
If the stock market keeps going down precipitously, I don’t know what crazy idea Trump might come up with to try and make it go up again.