Anybody else seriously bummed by this latest stock market run-up? Because I am.
Remember when we could enjoy a good market ride into the stratosphere, the days when we were confident there was no place to go but up? But now, after living through the dot-com bust and the Wall Street shenanigans that destroyed our economy, we know that the only thing a soaring market means is trouble.
Speaking for myself, I can't say the market disasters of the 2000s have left me more sophisticated. They have, however, left me a lot more wary. So when I look at all the excitement over the Dow closing at record highs seven times in a row and notching its most consecutive positive sessions (nine) since 1996, I don't feel butterflies in my stomach. I feel a pit.
First, let's consider why the market is shooting up like Mentos-infused Diet Coke. One reason is that companies are doing great. They are hauling in money hand over fist. Many are sitting on piles of cash that would make Scrooge McDuck blush. When companies look good, their stocks look good.
And up the Dow goes, soaring past 14,000, to heights never reached (well, if you don't fool with adjusting for inflation and such). But happy days aren't here again -- not for most of us. Unemployment, while improving, remains troublingly high. Workers' wages remain stalled, while corporate profits continue to rise radically.
It's no wonder this run-up feels nothing like the irrational exuberance of the late 1990s, says Josh Bevins, research and policy director of the Economic Policy Institute, a think tank that studies the needs of low- and middle-income workers. In the 1990s, even workers who didn't own stock were energized by rising indexes.
"I think people felt, even if I don't own a lot of stock -- and most people don't own a lot of stock -- they heard the stock market was going up every day," he says. "They felt pretty secure in their jobs, and they were actually seeing some wage increases. This time, it's going up while wages are stagnant and employment feels very precarious."
So this time, instead of being filled with the wonder that we are on some sort of economic power run, looking at Dow 14,000-plus has me thinking again about what a bunch of chumps most of us are.
We do the work that powers corporate profits. In fact, U.S. productivity continues to increase, meaning American workers are getting more done than ever before. That's one reason companies don't have to hire anyone, which is one reason unemployment is barely budging.
And even though we're the ones who are stoking the boiler of the corporate profit gravy train, we're not sharing in the rewards. The New York Times reports that corporate profits make up a bigger slice of national income than they have since 1950. And workers' pay? It's at its lowest percentage of national income since 1966.
"It is clearly the case that corporate profits, as a share of the overall economy are either very high, or the highest ever, depending on how you measure it," Bevins says.
Sure, our stock portfolios should be getting fatter with all this froth -- well, if we had stock portfolios. It turns out, Gallup says, only about half of American households are stock owners, including through 401(k)s and the like.
Dow 14,000 to me is a taunt; it's a reminder that most Americans are working harder (or more efficiently) for essentially no more money, while the companies they work for prosper wildly (without sharing or hiring) and while investors in those companies watch their wealth balloon.
All the while, the plight of the American worker is treated as little more than a political piñata. The right says the problem is that the left requires companies to pay taxes to do business in the country. If only taxes could go away or be reduced, companies would start hiring madly and peace and prosperity would wash over the land.
The left says the problem is that the right is strangling government spending, restricting rivers of cash that would flow out of Washington, efficiently sweeping up the unemployed and depositing them into productive well-paying jobs.
Perhaps I exaggerate, but you get the point. We're left to look either to big business and the free market, or to big government and fiscal stimulus for our survival.
Not much of a choice when you consider that in the past big business has taken tax breaks meant to spur hiring (American Jobs Creation Act of 2004) and used them to pad profits and reward shareholders. And big government? It is the outfit that just decided to disregard the thinking of, well, everyone, and blindly cut federal spending across the board. The move, known as sequestration, could cost the country as many as 700,000 jobs.
In the end, then, the choice between big business and big government appears to be the choice between the untrustworthy and the incompetent.
And you wonder why I'm bummed.
Contact Mike Cassidy at firstname.lastname@example.org or 408-920-5536. Follow him at Twitter.com/mikecassidy.