I know that most people don’t have a degree in economics (heck, I don’t even have a degree), but watching all of these presidential transition posts, it amazes me how many people confuse the stock market with the economy. They are two completely different and separate items.
The stock market is booming because Federal Reserves around the globe are printing money as fast as they can. As the only possible place to earn a return is the stock market (interest on savings accounts if effectively 0%) institutions around the planet are borrowing money at 0% and pouring it into our stock market. Older people who would also move their savings into safer and less risky places also have no place to park that cash, so it’s being left in the market.
Our economy is in tatters. The only things holding it together are the Federal stimulus programs. Unemployment is double what it was prior to the pandemic (probably higher as people who have exited the workforce are no longer counted). Evictions and foreclosures are on hold, but behind the scenes they are piling up. Many commercial properties have lost their tenants and won’t be rented back out for a long time. Regional governments have lost considerable amounts of the tax receipts that fund critical infrastructure and services. And global supply chains are currently being held together with duct tape and baling wire.
If everything works well, it could be a few years before we truly exit from the COVID-19 recession, and that’s if our elected leaders make the right decisions. Don’t forget, when given the choice between making hard decisions, or ones that improve their re-election chances, 99% of Congress has a history of taking the easy way out. Weak leadership will extend the recovery cycle.
We will dig our way out of this hole, but it’s going to be a lot of work. Don’t confuse the stock market with the economy.
Here’s one example for those who would like to learn more about the memes you are posting.