March 16th, 2009 | Published in general
I’ll just start by saying that i’m not an economist. I don’t even like to balance my checkbook. But it’s increasingly difficult to listen to the endless repetition in the various media using the stock market as some sort of valid economic indicator.
Again, i’m no economist, but it seems pretty safe to say that because it’s inherently a secondary market (trading company shares and futures rather than actual goods and services) that it’s somewhat removed from the reality of the economy. The very nature of the stock market is speculative, and the rise and fall of the market is only in part due to the success or failure of any given company or market sector; the rest is entirely the optimism (or lack thereof) of the people participating in the market.
You’ve probably already seen the video of John Stewart tearing down Jim Cramer on the Daily Show from last week; it was the culmination of many days of public squabbling between Stewart and various folks from MSNBC, the self-proclaimed financial news network that Stewart has rightly been taking to task for its lack of responsible coverage. However, watch this segment again, and pay particular attention to the couple of minutes starting at 1:12, then again at 6:08, based on a 2006 interview of Cramer. Then come back.
He’s talking about manipulating the market (in this case, with Apple Computer stock) by spreading lies – false rumors about upcoming products, here – for personal financial gain. This is a perfect illustration of not only the attitude from these guys that regulations are barely more than suggestions, but the greed and short-sightedness that seems pervasive in the industry. These are the people we’re trusting with our life savings and the very possibility of retirement. It’s really hard to argue with Stewart’s point that we (as the investing public) are capitalizing a game played by people whose sole motivations are personal wealth.
Even at its best, the market system is a house of cards built with confidence and momentum. Regulation can solidify things somewhat, but that also requires an atmosphere of compliance, which doesn’t seem to exist. As an inherently skeptical gen x-er, i’ve long assumed that Social Security would collapse long before i was able to take advantage of it. The solution we’ve all been sold for the last decade and more is to manage our own money, to join with the stock market, and join those rich folks and their annual returns. I can only imagine that kids coming of age now (whatever they’ve been tagged) are going to have the same healthy skepticism of the stock market, and that’s totally ok.
Maybe it’s age, maybe it’s just the times talking, but i’m finding a lot of wisdom in the simplicity of save & pay for it, money in the mattress, and the Muslim aversion to debt. I’m a beneficiary and victim of the new American way, and i’m not all that happy about it. Contraction can be a very good thing, and in our case, it’s overdue.