So the big news today is that the Dow Jones Industrial Average, which is an index of 30 of the top companies in America, dropped more than 1100 points,, or more than 4% of its total wealth. This is the largest single day point drop in history, and it comes on the heels of a 666 point drop on Friday, which was 2.5% of total wealth. This is a nearly 7% decline over the last two trading sessions, which sounds pretty damn serious. So the questions is, should you be worried?
My answer is, unless you’re rich, you probably don’t need to worry. There are some important factors to take into account here. The top 10% of American households now own 84% of all US stocks. And 94% of the very rich, according to a recent survey, have “significant” stock holdings, which is defined as $10,000 or more in shares. This contrasts with only 27% of the middle class who have the same “significant” stock holdings.
That’s right, only 27% of the middle class, barely ¼, have 10K or more in stock. The fact is, most middle-class wealth is actually tied up in home ownership, and has very little to do with Wall Street, not to mention exotic hedge fund derivatives or any of the other bullshit tools bankers come up with to rape the economy and steal ordinary Americans’ wealth.
Even more shocking, given how heavily Wall Street is covered in the media, fully 50% of Americans have no investment in the markets whatsoever, no stocks, no bonds, no 401(k), no anything.
The reason for the concentration is stock ownership dates to the 2001 and 2008 market crashes, when the middle class was scared off by the huge drops. The very wealthy were then able to march in and grab up all the stocks at record low prices.
So who are these people who own no stocks? They’re the people that Donald Trump claims to care about, the forgotten ones. They are working-class folks, getting by on meager earnings. They’re also the working poor and the plain old poor, just barely making it and living paycheck to paycheck.
Obviously Donald Trump doesn’t actually give a shit about these people. We all know that. Because he just passed a $1.5 trillion tax cut that benefits mainly millionaires and billionaires, to use Bernie’s famous catchphrase.
But wait a minute, won’t a Wall Street crash trickle down to Main Street? The answer is, maybe, maybe not. Certainly a full-blown crash, like in 1987 or 2008, would hurt everyone. Because employers would be hit hard too, and they’d likely slow wage growth, or even initiate layoffs. But we’re not there yet.
Let’s get back to the current Dow crash for a minute. A 2016 Forbes survey revealed that 7 in 10 Americans had less than $1,000 in their savings accounts. And 39% of Americans have zero savings at all. That’s right, zero, nothing, zilch, nada. When the shit hits the fan, when little Timmy breaks his arm, or when a flood damages the roof of their home, these Americans are shit out of luck.
CNN, The New York Times, and virtually every major media outlet in the country are covering every point in the Dow’s recent drop with baited breath. But let’s just remember that unless you’re rich, or really rich, if just doesn’t matter that much to your bottom line. Maybe you lose a few bucks in your 401 (k), but let’s be honest, you weren’t paying that much attention to it anyway. That’s for the future, and you’re living in the now, just trying to get by and get ahead, day by day, like everyone else.
So fuck Wall Street and their Dow drop. I’m happy rich people are losing their money. For two centuries now lawmakers from both parties have been enacting legislation to help make them richer. Is it really such a big deal if they take a little hit every once in a while? For me, and for you, too, I suspect, the answer is no, it’s not a big deal at all.
Let them eat cake.
