Why Is The Stock Market Doing So Well In A Bad Recession?

Hello Concart,

Concart said:
Yep. If trickle down actually worked, you would not have seen a change in the percentage of wealth held by each quintile. But that isn't the case. This is like one of those fountains that circulates water from the bottom to the top and it flows back down. If it doesn't flow back down as fast as it's pumped up, eventually the bottom becomes dry. Since the bottom in this case drives consumer spending, if it's dry, everyone is screwed. The answer if you are on the top? Pour more water in the bottom via consumer debt. But that eventually runs (ran) out too. The outcome is completely predictable. The only way to fix it is to adjust the flow AND take a bunch of water from the top and move it to the bottom in a one time correction. Pretty simple analogy.
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That is an excellent analogy.

And a multi-level fountain in which all the water accumulates at the top becomes quite top-heavy and is likely to collapse.
 
Concart said:
False. The greater the income, the less of that income by percentage goes to consumer spending. That's why the increasing wealth gap is so destructive. It is anti growth.

Lots of evidence of this, but here is one that is easily illustrated. The bottom 20% spend 100% of their income, the top 20% spend 53.3% of their income.

https://www.visualcapitalist.com/how-americans-make-spend-money/

The wage/wealth gap is slowly eroding growth. It is unsustainable.
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You are not reading clearly. I said nothing about the percentage of a persons' wages that go to consumer spending. I said 60% of all consumer spending in the U. S. is spent by the top 20%. Since consumer spending drives the economy that means the top 20% are driving the economy--so the claim they are "hoarding" their money is erroneous.

Others claimed the wealthy were not investing their money and then claimed they are making all the gains in the stock market.

As long as people simplistically blame economic problems on "the wealthy" will never understand how the system works. Wealthy account for most consumer spending, most of the stock market investments, and pay almost all federal income taxes.
 
Flash said:
You are not reading clearly. I said nothing about the percentage of a persons' wages that go to consumer spending. I said 60% of all consumer spending in the U. S. is spent by the top 20%. Since consumer spending drives the economy that means the top 20% are driving the economy--so the claim they are "hoarding" their money is erroneous.

Others claimed the wealthy were not investing their money and then claimed they are making all the gains in the stock market.

As long as people simplistically blame economic problems on "the wealthy" will never understand how the system works. Wealthy account for most consumer spending, most of the stock market investments, and pay almost all federal income taxes.
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Your statistic is meaningless. I don't care. Of course they spend more, but the percentage is the important factor. If you have a million dollars, and half of it went to the top 20% and half to the bottom 20%, consumer spending would be 770,000 dollars. If 90% went to the bottom 20% and 10% went to the top 20%, consumer spending would be around 950,000 dollars. That's a huge difference. If you want to stimulate the economy, you don't give money to rich guys or corporations, because they will not use it in a manner that stimulates the economy. Give it to the poor, and they will spend it all. That's why unemployment is the best stimulus dollar out there.

I don't place any blame here at all, except on those that set the tax policies. When those policies give more money to people who are less likely to spend it, growth will slow. It's that simple.
 
Flash said:
You are not reading clearly. I said nothing about the percentage of a persons' wages that go to consumer spending. I said 60% of all consumer spending in the U. S. is spent by the top 20%. Since consumer spending drives the economy that means the top 20% are driving the economy--so the claim they are "hoarding" their money is erroneous.

Others claimed the wealthy were not investing their money and then claimed they are making all the gains in the stock market.

As long as people simplistically blame economic problems on "the wealthy" will never understand how the system works. Wealthy account for most consumer spending, most of the stock market investments, and pay almost all federal income taxes.
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Second point, investing in the stock market does nothing for growth. It's just moving money from one party to another. It creates no jobs. It builds no factories. It's just gambling.
 
Concart said:
Second point, investing in the stock market does nothing for growth. It's just moving money from one party to another. It creates no jobs. It builds no factories. It's just gambling.
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And you are supposed to be an economist? LMAO! Holy shit what a dumb fuck.
 
I could explain it to the OP but the OP is

a) too stupid to understand
b) sad that the stock market is going up

Don't worry, it will go down again and then you can scream bloody murder and rejoice, unless of course it goes down under a democrat
 
Concart said:
When those policies give more money to people who are less likely to spend it, growth will slow. It's that simple.
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If you give all the money to rich people, they will invent the interweb and GPS and microwave cooking devices and supermodel robot wives for ugly dudes.

If you give the money to poor people you are just throwing it into a hole. May as well hand treasury plates, paper and dye to a crack addict!

Oh shit I forgot to switch sock puppets! Quick delete this post!
 
Micawber said:
If you give all the money to rich people, they will invent the interweb and GPS and microwave cooking devices and supermodel robot wives for ugly dudes.

If you give the money to poor people you are just throwing it into a hole. May as well hand treasury plates, paper and dye to a crack addict!
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Supermodel robot wives? When are they gonna be available? Can I be a beta tester?
 
Concart said:
Second point, investing in the stock market does nothing for growth. It's just moving money from one party to another. It creates no jobs. It builds no factories. It's just gambling.
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I think a company that gets invested in has more capital to grow. Are you saying that companies have no access to new stockholder investment?
 
There is nothing funnier than two financial illiterates, Micabwer and Concart, trying to impress themselves with zero knowledge of a subject.
 
Concart said:
Your statistic is meaningless. I don't care. Of course they spend more, but the percentage is the important factor.
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Not if we are talking about the effect on the economy. If we have high consumer spending it provides more jobs to everyone regardless of who is doing that spending.

If we are talking about individual well-being, then the percent of income spent on essentials is relevant. But those people do not have jobs unless consumer spending is healthy.

Compared to the past, American workers spend a smaller percent of their income on almost every consumer category than in the past--food, clothing, transportation, etc. The only thing we spend more on is housing but that spending is for a much larger number of square feet than earlier years when we spent less.
 
PoliTalker said:
Seems a bit baffling.

It's like nobody told Wall Street there is a serious recession going on.

There is lots of bad economic news out there, but investors don't seem to care.

Is it only a recession for vulnerable disadvantaged people?

Have the big corporations they invest in figured out how to make money no matter what happens to the powerless?

How long can that go on?

Are we inching closer to a big crash when the human support mechanisms for all this wealth extraction begin to crack and fail?

Will there be an 'October Surprise?'

Please explain, thanks.
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fake money. fiat currency is being pumped into the fascist establishment to keep the businesses on the side of the bankers and not the people.
 
Hello T. A. Gardner,

T. A. Gardner said:
Because it's really not a bad recession? It's a temporary halting of the economy in part due to government fiat. Once that is lifted, the economy will return to what it was previously doing most likely with a roar.

On a political note, the Democrats definitely would not want that to happen until after the election as they would perceive keeping things clamped down will aid Biden in getting elected.
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Regardless of what conditions favor which side how does the economy come 'roaring back' after so many businesses have gone belly-up, their workers not being rehired?

How do governments account for all the expense of 'keeping things afloat' without raising taxes on the rich?

Nobody else can pay for it.

Deficits DO matter.
 
PoliTalker said:
Hello T. A. Gardner,



Regardless of what conditions favor which side how does the economy come 'roaring back' after so many businesses have gone belly-up, their workers not being rehired?

How do governments account for all the expense of 'keeping things afloat' without raising taxes on the rich?

Nobody else can pay for it.

Deficits DO matter.
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If you expand and grow the economy the tax base expands with it and revenues to the government increase. No need to change the tax code or increase taxes on anyone. If you couple that with reduced government spending, then the deficit is reduced.
 
Ssshhhhhhh.....we can't talk about the market without jumpy conservatives accusing us of "rooting" for a down market & job losses. Because we just HAVE to be, ya know.
 
Flash said:
Not if we are talking about the effect on the economy. If we have high consumer spending it provides more jobs to everyone regardless of who is doing that spending.

If we are talking about individual well-being, then the percent of income spent on essentials is relevant. But those people do not have jobs unless consumer spending is healthy.

Compared to the past, American workers spend a smaller percent of their income on almost every consumer category than in the past--food, clothing, transportation, etc. The only thing we spend more on is housing but that spending is for a much larger number of square feet than earlier years when we spent less.
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Nope, you are missing the point completely. The top 20% contributes a substantially smaller percentage of their income to consumer spending. This is a zero sum game. Given that the number of dollars is fixed, the more that goes to the higher quintiiles, the lower consumer spending will be.
 
Hello Flash,

Flash said:
You are not reading clearly. I said nothing about the percentage of a persons' wages that go to consumer spending. I said 60% of all consumer spending in the U. S. is spent by the top 20%. Since consumer spending drives the economy that means the top 20% are driving the economy--so the claim they are "hoarding" their money is erroneous.

Others claimed the wealthy were not investing their money and then claimed they are making all the gains in the stock market.

As long as people simplistically blame economic problems on "the wealthy" will never understand how the system works. Wealthy account for most consumer spending, most of the stock market investments, and pay almost all federal income taxes.
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That runs counter to what I've understood.

60% of the consumer economy is the top 20%?

Can you support that claim with a link?
 
T. A. Gardner said:
If you expand and grow the economy the tax base expands with it and revenues to the government increase. No need to change the tax code or increase taxes on anyone. If you couple that with reduced government spending, then the deficit is reduced.
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Mostly correct, we can agree to disagree about the government spending piece. However expanding and growing the economy is not accomplished by giving more money to upper incomes in hopes it trickles down to the lower incomes, who will spend it. That has proven to be false.
 
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