The stock market is on a roll: Last week the Dow-Jones average hit a record high. That's great for big-time investors, but it doesn't mean the overall economy has recovered. This breaking news headline from today's New York Times -- so new it doesn't even link to a story yet -- says it all:
U.S. Economy Adds 51,000 Jobs in September, Far Fewer Than Expected
And a Times story from October 3 adds more information:
The burden of housing costs in nearly every part of the country grew sharply from 2000 to 2005, according to new Census Bureau data being made public today. The numbers vividly illustrate the impact, often distributed unevenly, of the crushing combination of escalating real estate prices and largely stagnant incomes.
New jobs down, increased housing costs, stagnant incomes: that's the economy for most of us. A booming stock market may help those of us who have 401k plans -- assuming that value holds up until we retire -- but it doesn't do much for working folks right now.
As I wrote back in August:
The rich are getting richer, the workers are losing ground, and the poor remain stuck. 37 million people still live below the poverty line in the US -- that's about 12 percent of the population.
I've always looked at the stock market as legalized gambling -- the odds may be better than the lottery and it does appear that if you put your money in something safe and leave it there, you will have more when it comes time to retire, but essentially you're betting that the stock price will go up when you invest.
I don't look on the stock market as a good way to gauge the overall health of the economy. For example, when companies lay off thousands of workers or export jobs to other countries, their stock goes up. Those may be great decisions for the corporation, but they don't do a thing for all those people they put out of jobs.
And when wages start going up, someone always screams "inflation" and the market tanks.
Maybe what's good for General Motors isn't necessary good for the USA. Oh, wait a minute. GM appears to be crashing, too. We need an updated example.
What's good for Halliburton isn't necessary good for the USA.