Karl Marx had an occasional valid point. He was big on criticizing fetishism as a form of idol-worship. This was intelligent. God was ready to nuke Moses and his migrant caravan when they threw a tantrum and got Aaron to make them a Golden Calf. Unfortunately, as we read in The Book of Judges, people are NPC morons and never get the point. Today we don’t worship infant or adolescent livestock. Today, many of us worship the statue of the bull you can see in New York City at a famous intersection of Wall Street.
Now while Marx was correct about fetishism, he was also an SJW who always projects. Marx worshiped a system rather than a graven image. When Marx is at his worst and most iniquitous, the bastard always seems to win. Like Karl Marx, we seem to now worship at the altar of our economic system. You can’t go get on the treadmill at your local gym without a television screen bombarding you with the economic ignorance of an unmitigated idiot as stock prices and index levels scroll across the chyron underneath the screen.
This is a screw up. A screw up that Amerika has engaged in for many generations. The principal index that people discuss with an awed voice and baited breath is the Dow Jones Industrial Average. I’ve played this game myself when I felt like trolling Senator Schumer or unelected Senator Zuckerface. This began as a list of the twelve largest corporations which took an average of the stock prices. It was meant to give investors an at-a-glance view of how Amerikan industry was doing.
The Dow is a price-weighted index. This means stocks with higher share prices are given a greater weight in the index. At the Dow’s inception, Charles Dow calculated the average by adding the prices of the 12 Dow component stocks and dividing by 12. Over time, there have been additions and subtractions to the index, such as mergers and stock splits that had to be accounted for in the index. When one of these events occurs, the divisor for the Dow gets adjusted so the index’s value does not become affected. This is why the Dow can stand at 17,000 while the sum total of the components’ stock prices is nowhere near that number.
On the surface, this is just harmless nuttery. If you are not a geekish Sabermatrician, you don’t watch a baseball game to stare at Batting Averages and Earned Run Averages. That doesn’t hurt anyone, but it ruins the entire joy of watching the game. On the surface, investing based only the DJIA doesn’t hurt anyone other than the sucker losing his money. But this isn’t just an Atlanta Braves game. More is at stake here, and equating our whole economy to investment returns obsures why we have an economy in the first place and who perhaps should receive emphasis.
Get past the first six or so pages of the Gnu Yawk Times, and people actually are allowed to publish useful news pieces. In fact, I’ll even remark that NYT Journalist Neil Irwin has done us a remarkable solid in helping to spread understanding of exactly what might happen if Donald Trump really does “Make Amerika Great Again.”
Earlier in the expansion, there might have been lots of workers on the sidelines, and companies had leverage with their suppliers. But there are signs that is changing, like recent comments by 3M and Caterpillar that their input costs were rising, which helped kick off the recent bout of market weakness. This is bad news for stocks and for the bottom lines of the largest companies, but good news for American workers. When you hear a phrase on a corporate call like “input costs are rising,” keep in mind that the wages you receive are one of those costs.
So Mr. Irwin effectively reminds us that the rest of our economy is not just attached to be a digestive system and large intestine for Wall Street and its investment community. It also helps to keep in mind that despite President Trump’s twitter grouching on the subject, the US Federal Reserve is not screwing over Joe Six-Pack by tightening liquidity. They are returning value to debt securities of the sort that lots of blue collar workers and municipal employees have socked away in their 401Ks.
This also powers up passbook savings accounts. Someone who works as a janitor at the local elementary school and has no idea who Jamie Dimon is probably knows where the Wells Fargo is down the street. Let that savings account be worth something and all of the troubles this guy has keeping his car running or affording a decent diet can start getting a bit smaller and more manageable. We here about how millions of Amerikans can’t scrape up $400 to handle an emergency. If the passbook savings accounts would grow at a rate commensurate with inflation, you’d have a nice, easy, safe place to stack up $500 in case of emergency.
Amerika will not be great again until the lives of very simple and average people who do boring, mundane, and necessary jobs are made manageable again. When GDP grows by 3.5% somebody is making some pretty good money. If stocks are going down, than the Warren Buffets and George Soroses aren’t the ones raking in the clams.
Maybe, just maybe the guy getting paid is somebody a lot more like you and me. Isn’t that what we should be wanting our economy to do? If so, then the stock market will take care of itself. Be glad our economy is shifting in favor of higher worker salaries so that you and I can do the same. We reject Karl Marx as a nation when we stop worshiping empty symbols of our economy and do something useful with it like rebuild our damaged fortunes instead.