One cannot say no one saw this coming. The headlines, however, were alarmist as ever. The source of their doomsday tone: on Monday of this week, the DOW Jones index tumbled over 1,100 points in the United States’ biggest one-day stock fall since 2011. After weeks of boasting stock markets that were “smashing one record after another” and adding “more than seven trillion [dollars] in new wealth since [his] election,” Donald Trump will most certainly face ridicule for the DJIA’s poor performance just days afterwards. This ridicule, as most things emanating from the superficially fierce Resistance™ and general centrist discourse, will in large part be for the wrong reasons.
Hammering Trump on stock performance might be a cute short-term point-scoring gimmick, but it has serious long-term effects, not least of which being legitimizing stock markets performance as an objectively sound economic indicator.
The DJIA, or the Dow Jones Industrial Average, is “a price-weighted average of 30 significant stocks traded on the New York Stock Exchange (NYSE) and the NASDAQ,” and is usually the index referred to when making general comments on the markets. In fact, Trump is far from the only public figure to allude to “the markets” in times of success and hardship. Even back in 2002, major media organizations were responsible for spoon-feeding collective discourse on the economy with the notion that stocks were good indicators for economic performance when there could be no worst ones.
Stocks, as explained by Dean Baker in a 2015 piece for Fairness and Accuracy in Reporting (FAIR), “represent the present value of future profits,” and are strictly limited to the fantasy world of paper money. But it is when qualifying the correlation between market performance and economy performance that it becomes increasingly clear: the “money on paper” so revered in the intoxicating atmospheres of Wall Street is about as useful, or even accessible, to everyday Americans as the ever colourful and rage-inducing Monopoly money found on Toys“R” Us shelves.
The idea of abandoning stock projections could be interpreted as a rejection of reality itself, a hopeless hippy pipe dream disregarding the very essence structure of the world economy. Many partisans of the centre would be inclined to take offence, as there is no worst insult to a centrist than an accusation of being unrealistic. This was made evident in the 2016 Democratic primary, where Clinton supporters and even the candidate herself questioned the reality fabric of Sanders’s proposed single-payer plan, regardless of its success in every other developed nation. However, if there’s one thing that’s become increasingly clear over the past few years, especially since Trump’s election shattered the protective discourse bubbles of a somewhat complacent American centre-left, is that reality doesn’t necessarily coincide with sense.
No sense can be found in a world where Amazon, the Goliath to our collective David, hired paramedics to wheel collapsed employees out of a boiling hot warehouse during a hot 2011 summer. Amazon, of course, has proven to be a NASDAQ juggernaut, with shares going for nearly 1400 at the time of this writing. No moral foundation could support Tim Hortons franchisees who, after a minimum wage increase in the Canadian province of Ontario, cut employee “incentives,” which ended up being paid breaks and their tips, and even, in another case, cut benefits while encouraging to vote a certain way to avoid similar cuts in the future. Tim Hortons has the advantage of being considered an icon of Canadian culture, ubiquitous in the nominally generous country. No justification can be made for a system that simultaneously boasted both booming markets and a rising homeless population in 2017.
The juxtaposition of shiny rising numbers and ever-widening gaps between the rich and poor and between productivity and compensation do raise questions. How could “the economy” and those whose labor drive it be faring differently? How could numbers on a screen indicate that all is A-OK when an estimated 43.1 million Americans lived in poverty in 2017? Furthermore, when moving beyond the relatively small scope of the interior American economic ecosystem, the number of poor grows exponentially: 67 million people lived on less than $1.90-a-day in 2013. That metric, of course, is lower than its US counterpart, which pins the poverty threshold to $12,486 yearly for a single individual under age 65. This disparity underlines the importance of acknowledging the fundamentally exploitative quality of our industries and economic system, which sees an absurd imbalance of capital flow between the Global South and Global North.
The list of contradictions is long, both on a national and international scale, but most aren’t as flagrantly mind-boggling as an Oxfam report published on January 22 of this year. Aptly titled “Reward Work, Not Wealth,” the report details how over 82 percent of wealth created in 2017 was earned by the world’s richest 1 percent. For good measure, the report also underscores the hardly fathomable fact that “it would cost $2.2bn a year to increase the wages of all 2.5 million Vietnamese garment workers from the average wage to a living wage. This is the equivalent of a third of the amount paid out to shareholders by the top five companies in the garment sector.” In the United States’ present political context, the mere suggestion of such an idea would be brushed aside as radical or encroaching upon freedoms and liberties. Whose fundamental freedoms would be really be encroached upon remains an unanswered question, but one assumes that the 2.5 million Vietnamese garment workers were most probably excluded from that “freedom cost-base analysis.”
It’s time for America and the Western world to stop revering “the markets” as sacrosanct. The production, or rather conjuring, of more paper wealth with preexisting paper wealth works fine in Monopoly but has repeatedly proven to be an unsustainable activity in the pursuit of a moral, sensical economic system. If left uncorrected, as in most Monopoly games, our economy’s perpetual losers will lose their patience and, quite correctly, decide to flip the table and end the game.