The share of our national income which goes to corporate profit is
the highest it’s been since they started tracking it in 1929, while the
share going to people – as salary and wages – is the lowest.
And the percentage of that corporate profit which goes to Wall Street is
also the highest on record.
We’re becoming a financialized economy. Never before has the
manipulation of money counted for so much and the real-world economy of
people and consumer goods counted for so little.
And none of it is an accident.
When Wall Street catches a cold …
The Wall Street Journal reported this Thursday that “Stock and bond prices tumbled after stronger-than-expected economic data …”
Why would good news about the economy cause the stock market to fall?
The sentences continues: “… raised investor anxiety about a pullback
next month in central-bank support for financial markets …”
Investors had been relying on the Federal Reserve to keep pumping up
the stock market’s record run, but some mildly favorable economic
reports raised fears were raised that the Fed’s market-friendly
interventions might come to an end.
“We’re getting another knee-jerk reaction to fears of tapering,” a market analyst told the Journal, referring to the Fed’s monthly purchase of $85 billion in bonds. As Reuters reported
last month, “Many on Wall Street believe the Federal Reserve’s monetary
policy is behind record corporate earnings and the stock market’s surge
to all-time highs this year.”