TAP reprints my Sunday LA Times op-ed on the conflation between the stock market and the broader economy, and the ways in which that creates economic reportage tilted towards the rich. An excerpt:
People say that economics is complicated. But it sure looks simple to me. After all, what's so complicated about a sector that can be represented in a single arrow? Up for good, down for bad. And if that weren't easy enough, we've got green for good, and red for bad. It's child's play. It even looks like a toy I played with as a child. The green arrow made a cow moo, as I remember.
Looks, however, can be deceiving. And so it is with the ubiquitous stock ticker arrow that increasingly serves as a stand-in for broad economic data. More and more, the arrow is all that's discussed -- did stocks rise or did they fall? -- as if the movement of the market were synonymous with the fortunes of the economy.
This approach is perhaps best demonstrated by CNBC commentator Larry Kudlow, who routinely writes and says things like, "The stock market actually rose in August, and opened higher in the first day of September trading earlier this morning. If stocks are optimistic, then so am I."
But Wall Street is not Main Street. Its fluctuations may demonstrate economic health and distress, but they may not.
