Andersen: And the market soars …
Watching the Dow hit a series of record highs ought to have America cheering with the same verve as shown at the Super Bowl. Our team is winning — every day!
But a lot of America is not cheering. The enormous gains on Wall Street fail to trickle down to Main Street, where there is a huge divide between those few who profit enormously and the many who are hanging on for dear life.
An apt metaphor would be the flood-swollen Colorado River watering the promised land of the American West but never quite reaching Mexico.
The disparity between rich and poor is growing, not shrinking. While many wealthy investors had no direct role in creating a financial system that doles out economic privileges to some while holding it back from many, they and their advisers take full advantage of it.
Imbalanced societies often are corrected by other than civil means, and it would seem prudent for economists to head off that kind of correction before it rocks the entire ship of state.
Is it realistic that the few can forever extract from the many in a skewed economy and still live with peace, harmony and security?
One answer might be gated subdivisions. Another might be to look at how wealth is displayed. When it’s flagrant, as in conspicuous consumption as seen in the grandiose Little Annie wedding issue that riled the local population last week, reactions are often hostile.
In Aspen, where the working class was pushed out starting 40 years ago, there has been a quiet but seething antipathy toward those who supplanted them. It is obvious that Aspen is an economic generator for the valley, but that doesn’t change certain feelings of disdain.
Imagine a person struggling to feed their family who witnesses the queues awaiting entry to the cornucopian Aspen Food & Wine Classic tents. Picture a person who lives in substandard housing observing construction of the latest monster home.
Economic disparity has made national news with ongoing, partisan debates on raising the minimum wage. Talk of antipathy! Minimum wage is slave labor for workers, especially when they are chained to the shackles of debt.
Disparity of wealth has gone international with a recent book, “Capital in the Twenty-First Century.” French economist Thomas Pikkety found that the rate of capital return in developed countries is usually greater than the rate of economic growth. This, he writes, has caused wealth inequality to increase and assures that it will in the future.
Pikkety’s solution? The redistribution of wealth through a global tax on wealth. Now the antipathy comes from conservative wealthy factions that see no problem with social and cultural divisions based on discord between wealth and poverty. It’s free enterprise!
Recent upticks in the stock market are more sobering still when considering that for every spike in economic growth there are parallel spikes in carbon dioxide, climate change, depleted soils, population and pollution.
The growth of capital bears a price on the commons, which is seldom, if ever, calculated as liability on corporate ledger sheets. A soaring Dow is only one barometer of success, not a reflection of the stressed-out life-support systems of our planet or the health and well-being of the people who live on it.
Choosing investments for most consumers is so daunting that they pass on their holdings to portfolio managers who are trained in where the money should go. Returns are the top criteria. Other values — environment, sustainability, social justice — are typically not discussed.
If you dare to question the values of the market and what your money is actually funding, you risk traveling down a perilous road rife with uncertainty and doubt. Most folks don’t take that road, preferring not to know what their money is doing for the world or, rather, to the world.
Stocks rise. Portfolios grow. Investors are happy. But there is a looming shadow behind the bright days of prosperity, a rising mass of global citizens who may one day challenge the engineers of finance and the institutions complicit in engineering and building a top-heavy pyramid resting precariously on an unsettled and dubious foundation.
Paul Andersen’s column appears on Mondays. He can be reached by email at firstname.lastname@example.org.
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We say it like it happens easily and frequently, but time together spent focusing on the people we are with and they on us is rare and cannot occur by effort expended trying to achieve it, writes columnist Roger Marolt.