https://theintercept.com/2020/03/06/coronavirus-covid-19-stock-market-economy/
Some perspective as we all see hysterical accounts of the trading stoppage this morning.
CORONAVIRUS MATTERS, THE STOCK MARKET DOESN’T, AND THINKING IT DOES MAY LITERALLY KILL US
Published
Tidewater News and Opinion Forum 
Russel, keep in mind it is not JUST the Coronavirus that is causing this. A deal between the Saudi’s and the Russians fell apart this weekend and the Saudi’s, in retaliation, are INCREASING oil production and driving the price of crude down.
Let’s just say they aren’t being very good neighbors right now.
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That’s not at all what the article is saying. It’s about how market fetishization disincentivizes a competent and life-saving national response to a global pandemic.
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Gotchas. the piece was posted on Friday. And I couldn’t agree more. But …
I’m talking about what happened this morning. The massive drop off at the opening was not only in response to the virus. I am not poo-pooing the piece, I am just pointing out the facts of this morning’s tumble that caused a 15 minute pause right after the opening bell.
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You know where the blame for that thought process lies? A couple of hints. He doesn’t believe science. He lives, temporarily, in Washington DC. He has lined up his scapegoat for coronavirus response. If you need more clues, let me know.
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His hubris and inability to conceive of anything bad happening on his watch are certainly contributing factors, just as was the case in the aftermath of Hurricane Maria. But, I think the mutually exclusive interests of “the market” and working class people are paradigmatic of this country. I think we would see similar trade-offs under a different president; it would just be done in a less hamfisted way.
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I wish more people understood the reality of the Market as accurately described in the article.
Good post.
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It really is frustrating how the vagaries of Wall Street are generally accepted to be an accurate proxy for living standards.
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Real estate is location, location, location.
As we age? Things get a bit more involved.
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The Intercept doesn’t seem to understand the concept of stock markets very well, especially as a mechanism for distributing ownership of the means of production to the common man.
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Please, enlighten us.
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He’s going to spin it to NOT be socialism, but I think that is what he just described. …”distributing ownership of the means of production to the common man.”
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JTR arguing in bad faith? Surely you jest…
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RE: “Please, enlighten us.”
The statement is self-explanatory: Stock markets are a mechanism for distributing ownership of the means of production to the common man.
When you own a share of stock, you are one of the owners of the company that issued it. If you own enough shares of the right stocks, you can live off the income you receive from your ownership. Moreover, because anyone can buy stocks, anyone can become an owner of a productive enterprise.
For much of history, workers had only the option to contract their labor for wages to generate income. Today, buying stocks is an additional option.
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From the article: “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.”
We all understand the concept of stocks. We all also understand actually goes on in the real world. Shares in companies are one small part of the dizzying array of what makes up the financial markets.
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This is conservative brain though: they have internalized and actually believe the myths about America that we’re all taught in school. Of course America is a force for good in the world and our interventions are humanitarian-focused. Of course the stock market is a way for the common man to share in corporate profits, that’s what they taught me in school.
The rest of us, living in the real world, seem like raving lunatics.
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Also, the majority of individuals that do own stock do so them through mutual funds. IRA’s and 401(k)’s are the safest way the common man can own stocks without jeopardizing his/her future.
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RE: “From the article: “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.”
That excerpt caught my attention, as well, primarily for its impertinence. The Intercept seems to think that the half of Americans who own no stock at all is somehow more significant than the other half who do, or that the half of Americans who own stock deserve to be disliked for some reason. But since the observation is of a glass-half-empty/half-full kind, it is hard to tell what the writer means by it.
More troublesome is the Intercept’s depiction of profit as somehow inherently destructive. The writer even trots out Adam Smith to say so, even though Smith does not in fact ever say any such thing. Smith actually argues that those who live by profit (as opposed to those who live by wages or by collecting rents) generate the lion’s share of the wealth of nations. He makes a point to show that profit-seeking operates like an “unseen hand” for the economy at large in that it functions independently of philosphical speculation about social welfare.
I would encourage people to think of stock markets as containing or delivering actual as opposed to “imaginary” wealth (the Intercept’s term). After all, when you own stock and receive a dividend check, you can use it to buy things you want — real goods.
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“That’s not at all what the article is saying. It’s about how market fetishization disincentivizes a competent and life-saving national response to a global pandemic.”
Also, the author quotes Adam Smith directly, and includes a citation.
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RE: “That’s not at all what the article is saying. It’s about how market fetishization disincentivizes a competent and life-saving national response to a global pandemic.”
That’s one of the sillier statements the Intercept writer makes. When half the populations own stocks in some form, and nearly the whole population stands to experience stock market effects directly and personally, it is silly to speak of “fetishization.”
RE: “Also, the author quotes Adam Smith directly, and includes a citation.”
I know, because I looked up the passage in my copy of The Wealth of Nations. The Intercept misinterprets Smith in exactly the way I explained. But you can see the error in the quotation itself: Smith doesn’t blame “the declension of society” on profit-seeking, he merely notes that profits rise and fall independently from social welfare.
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If half of Americans own no stock at all. whose fault, other than their own, is that?
There are lots of good ETFs in which a share cost less than a carton of cigarettes.
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It’s amazing how you two can take an article about perverse incentives and mutually exclusive class interests, and bend over backwards defending the sanctity of Wall Street on the worst day of trading since 2008.
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As far as the worst day is concerned, that is only a problem if you sell.
People are responsible for the choices they make. If they choose instant gratification over building their nest eggs, it is not the fault of those who make the better, long term choices.
And there are only class interests if people choose to stay in the same class all their life.
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On vacation. Drinking a lot of tequila. Buzzed. Will process tomorrow. Tequila prevents corponaviruz. I hope.
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If not, it’s a decent way to go. Except for the hangovers. It’s a tossup on which I’d rather have.
And your post leads to another question. Does Corona, with or without lime, prevent coronavirus? I am willing to be the guinea pig, preferably without the fruit.
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It certainly can’t hurt.
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