Why Is the Stock Market Doing So Well While I’m Doing So Badly?
By Brett Weiss, Maryland Bankruptcy Attorney on Apr 19, 2008 in Bankruptcy Myths, General Bankruptcy Information, Maryland
Jobs are bring cut. Housing prices have fallen off a cliff. Wages are stagnant. The “R Word”–Recession–now seems to be accepted by economists as what the economy’s in, and even the “D Word”–Depression–is being tossed about.
In other words, the economy’s in a mess.
So why is the stock market doing so well?
The answer lies in the fiscal disparity between the super-wealthy and the rest of us. According to “Pulling Apart: A State by State Analysis of Income Trends” by the Center on Budget and Policy Priorities and Economic Policy Institute, since the late 1990’s average incomes have declined 2.5 percent for families on the bottom fifth of the country’s economic ladder, while incomes have increased 9.1 percent for families on the top fifth. The result is that the average incomes of the top five percent of families are 12 times the average incomes of the bottom 20 percent. Middle class incomes have remained stagnant during this time, growing by just 1.3 percent in nearly eight years.
What does this have to do with the stock market? The market involves large corporations owned and funded by the people at the very top of the income scale. So long as these companies and individuals are doing well, so will the stock market, regardless of how normal folks do.
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