Before the recent sudden drop in the stock market, President Donald J. Trump liked to link what he described as the “booming economy” to record stock earnings.
“The stock market has smashed one record after another, gaining $8 trillion and more in value in just this short period of time,” Trump said in his State of the Union speech in January. “The great news for Americans — 401(k), retirement, pension and college savings accounts have gone through the roof.” (Two months later, Trump had egg on his face when the Stock Market plummeted after Trump announced his intention to implement trade tariffs.)
Helped by Trump’s pro-market hype, Wall Street financiers want to profit by convincing ordinary people on Main Street to invest and feel they have a major stake in the stock market.
But the notion that our nation is made up of savvy small investors dedicated to the market philosophy of “accumulate, accumulate, accumulate” is a myth.
The stock market accounts for much of our country’s inequality. The 1 percent own a third of all shares. The top 10 percent of the country account for 92 percent.
More than half of Americans don’t have stock portfolios.
The investments and savings of most middle class people are in their homes and their pension and 401(k) accounts. Millions have zero net worth — even a negative net worth.
We are fortunate to have traditional pensions, which, based on our salaries and years of service, guarantee a retirement income pegged to the cost of living. Defined benefit pensions like ours are able to do this because they can count on steady contributions and follow a long-term investment strategy designed to avoid the volatility of the stock market.
Encouraging ordinary people to view themselves as investors masks the true purpose of Wall Street, which is to serve as a financial playground enabling the rich and powerful to accumulate wealth.
Most working families can’t afford to devote a part of their paycheck to investing, so Wall Street is less a source of wealth for all than a reflection of the obscene economic divide in the nation.
This editorial appeared in the April 2018 issue of Public Employee Press, the official publication of District Council 37, AFSCME, which represents 125,000 municipal workers in New York City.