Former Secretary of Labor Robert Reich explains why the stock market doesn't reflect the real economy.

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Stock values roughly reflect profits, especially anticipated profits. When profits are expected to rise, stock prices trend upward. 

But that only raises a deeper question: How can profits trend upward when jobs and wages do badly?

Since the late 1980s, the main way to get profits and stock prices up has been to keep payrolls down. Corporations have done whatever they can to increase profits by cutting jobs and wages. They've then used their profits and gone deep into debt to buy back shares of their own stock, thereby pumping up share prices and creating an artificial sugar-high for the stock market.

All this has made the rich even richer, while having the opposite effect for everyone else. More and more of the total economy is going into profits and high stock prices benefiting those at the top, while less and less is going into worker wages and salaries. Today, America's richest 1 percent own half of the stock market, and the richest 10 percent own 92 percent of it.

So the next time you hear someone say the stock market is a reflection of the economy, tell them that’s rubbish! The real economy is jobs and wages.

#Stocks #StockMarket #Trump

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