This morning, as with a few other mornings in the past, I have wondered about the stock market while listening to NPR (National Public Radio). A few questions have lingered over the past year.
1) Who controls it/influences it?
2) Does the stock market actually effect the average person/general economy?
And more recently 3) Why would the stock markets rebound more recently since Trump's election?
I really wanted to know, so I went looking at .org, .edu, and news sites for some information.
First, I found out from the University of California at Santa Cruz, that the top 10% of the wealthy in this country controlled 80.8% of the stocks and mutual funds in 2010.
Here we go again. Progressive that I am, this makes me wonder. If the ones pulling most of the punches with stock market gains and falls are the top 10%, does that actually affect the general population? Or you and me? And how or why?
According to The Mises Institute, prices of goods rise when more money goes into the economy, which is ironic as prices keep rising for goods in the USA but wages are stagnate, so is this true?
Investopedia tries to explain how the stock market effects the general market, but it uses words such as "could" and "may" with no real hard evidence. And most of the evidence listed indicates that "trickle down" economics is how the stock market (or Wall Street) effects the average person. But does "trickle down" economics work? Sure, it sounds nice, if the rich are given tax cuts and help, they will help everyone else out, but does it really happen?
As I looked into all of this, I felt like I was going down a rabbit hole, leading from one question to another.
In researching the question about trickle down economics, I found that Fair Economy and the John F. Kennedy Harvard School of Government both explain how trickle down economics does not work and never really has. Cutting taxes for the most wealthy has not led to job growth or wage growth in the past 50 years.
Even though the stock market went down right after the election, the stock market has rebounded. Based upon the evidence that I have outlined above that describe that the rich have control of the stock market (which does not really directly effect the general economy), they want to get rich, stay rich and not pass it on by hiring more at their companies, keeping their companies in the USA and paying higher wages (which would ironically allow people to spend more, so weird.. sarcasm), or spend more on charities. It just does not happen, they hoard it.
Why did the stock market rebound? Because Trump is a rich fat cat (and ALWAYS has been) who is promising less regulation on industry (heaven forbid they do the right thing on their own, because history shows that is what happens), and nice tax cuts for corporations and the rich (sources: Forbes and NYTimes).
So here we have a rich guy in the presidency who is going to help out all his rich buddies (anyone surprised? If you are, you've been duped). The stock market is controlled by the rich, the corporations are controlled by the rich, and the rich just want to get richer. So where does that leave the rest of us?
Screwed. Welcome to the new United States of America.
1) Who controls it/influences it?
2) Does the stock market actually effect the average person/general economy?
And more recently 3) Why would the stock markets rebound more recently since Trump's election?
I really wanted to know, so I went looking at .org, .edu, and news sites for some information.
First, I found out from the University of California at Santa Cruz, that the top 10% of the wealthy in this country controlled 80.8% of the stocks and mutual funds in 2010.
 |
| Chart from University of California at Santa Cruz website. |
Here we go again. Progressive that I am, this makes me wonder. If the ones pulling most of the punches with stock market gains and falls are the top 10%, does that actually affect the general population? Or you and me? And how or why?
According to The Mises Institute, prices of goods rise when more money goes into the economy, which is ironic as prices keep rising for goods in the USA but wages are stagnate, so is this true?
Investopedia tries to explain how the stock market effects the general market, but it uses words such as "could" and "may" with no real hard evidence. And most of the evidence listed indicates that "trickle down" economics is how the stock market (or Wall Street) effects the average person. But does "trickle down" economics work? Sure, it sounds nice, if the rich are given tax cuts and help, they will help everyone else out, but does it really happen?
As I looked into all of this, I felt like I was going down a rabbit hole, leading from one question to another.
In researching the question about trickle down economics, I found that Fair Economy and the John F. Kennedy Harvard School of Government both explain how trickle down economics does not work and never really has. Cutting taxes for the most wealthy has not led to job growth or wage growth in the past 50 years.
Even though the stock market went down right after the election, the stock market has rebounded. Based upon the evidence that I have outlined above that describe that the rich have control of the stock market (which does not really directly effect the general economy), they want to get rich, stay rich and not pass it on by hiring more at their companies, keeping their companies in the USA and paying higher wages (which would ironically allow people to spend more, so weird.. sarcasm), or spend more on charities. It just does not happen, they hoard it.
Why did the stock market rebound? Because Trump is a rich fat cat (and ALWAYS has been) who is promising less regulation on industry (heaven forbid they do the right thing on their own, because history shows that is what happens), and nice tax cuts for corporations and the rich (sources: Forbes and NYTimes).
So here we have a rich guy in the presidency who is going to help out all his rich buddies (anyone surprised? If you are, you've been duped). The stock market is controlled by the rich, the corporations are controlled by the rich, and the rich just want to get richer. So where does that leave the rest of us?
Screwed. Welcome to the new United States of America.
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