Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Keep CounterPunch ad free. Support our annual fund drive today!

Dow 13,000 Disconnect


You read and hear the same news we do. Yesterday, on a day the Dow Jones Industrial Average closed above 13,000 for the first time, a new Wall Street Journal/NBC News poll disclosed that only 22 percent believe the nation is headed in the right direction.

How to account for the disconnect?

Wall Street apparently believes that the consumer economy is strong. But is consumer confidence really so different from what people feel about the war in Iraq and the collapse of the housing markets and sharply tightening credit across the nation?

It is true that Wall Street has always tended to view gridlock in Washington as good for business, and business is generally good in a time of war.

We look, though, at the disparity in wages, between the economic elite and the mass of Americans (“Income inequality grew significantly in 2005, with the top 1 percent of Americans–those with incomes that year of more than $348,000–receiving their largest share of national income since 1928, analysis of newly released tax data shows.” NY Times, March 29, 2007) and believe that something else is going on.

The earth has been “flattened” by globalization. Americans have benefited from high quality goods manufactured in low wage nations, but those benefits are diminishing. People are very anxious, and with good reason.

A dollar of US labor no longer towers over our neighbors or trading partners. We are not educating and training American workers fast enough to compete for higher paying jobs in the new global economy. Hungrier workers are getting those jobs.

It doesn’t mean we aren’t working hard. We are. In urban areas where housing costs have skyrocketed, two wage-earner families are on a fast treadmill just to keep pace with a single wage earner family, a few decades ago. And businesses are finding out that the last dollar of productivity squeezed by technological efficiencies is not necessarily protecting the higher paying jobs that remain.

The stock market is agnostic to the difficulties ordinary Americans are experiencing. The stock market likes what globalization is doing for large multinational corporations, whose executives are part of a new economic elite, defined by the highest wage differential with ordinary workers since the Great Depression.

The markets are glad. Americans are sad and increasingly irrelevant to the operation of the world economy.

In Nation this week, William Greider interviews economist Ralph Gomory who explains, “America… becomes increasingly dependent, buying from abroad more and more of what its citizens consume and producing relatively less at home. US incomes stagnate as the high-wage jobs disappear and US exports become a smaller share of the world total.”

Greider writes, “The conventional win-win assurances … are facile generalizations … some nations, in other words, do indeed become ‘losers’.”

What seems to be driving both foreign and domestic policy in the United States is the urgency of ‘winners’ to separate themselves from the afflicted losers of the global economy. It is not just the issue of wage disparity: that the “the top 1 percent (of income earners) recieved 21.8 percent of all reported income in 2005, up significantly from the 19.8 percent the year before and more than double their share of income in 1980. The peak was in 1928, when the top 1 percent reported 23.9 percent of all income.” We all know what happened in 1928.

No, there are more subtle effects, like the fact that so many Americans are driving gas-guzzling SUV’s while Exxon coasts from one record profit to the next, a promise sold to consumers by a domestic auto industry that claimed it could not afford high gas mileage standards, leaving Toyota to dismantle US jobs on the basis of better engineered and more fuel efficient products that US auto suppliers couldn’t build then but apparently will have to build now, now that they have lost that war, and, American jobs.

We could be wrong. Every government bean counter and statistician for the government wants to find good news in the numbers and even will ‘cook the books’ (ie. how inflation is measured) when reality cuts too close to the bone.

We noted, yesterday, how the good news on manufacturing and exports highlighted the contribution of a single company, Boeing Aircraft.

It seems inevitable to us that the collapse of housing markets will drag the economy downward. We look at the cranes busily moving over the Miami skyline, hurrying massive condominiums toward certificates of occupancy, we watch our local county commission doing back flips to satisfy the greed of the development lobby, built on the back of liar loans, mortgage fraud, and incestuous relationships between builders and lenders, and shake our heads.

But we may not be wrong. We may just be early.

ALAN FARAGO lives in Coral Gables. He can be reached at

Alan Farago is president of Friends of the Everglades and can be reached at

More articles by:

2016 Fund Drive
Smart. Fierce. Uncompromised. Support CounterPunch Now!

  • cp-store
  • donate paypal

CounterPunch Magazine


Weekend Edition
October 21, 2016
Friday - Sunday
John Wight
Hillary Clinton and the Brutal Murder of Gaddafi
Diana Johnstone
Hillary Clinton’s Strategic Ambition in a Nutshell
Jeffrey St. Clair
Roaming Charges: Trump’s Naked and Hillary’s Dead
John W. Whitehead
American Psycho: Sex, Lies and Politics Add Up to a Terrifying Election Season
Stephen Cooper
Hell on Earth in Alabama: Inside Holman Prison
Patrick Cockburn
13 Years of War: Mosul’s Frightening and Uncertain Future
Rob Urie
Name the Dangerous Candidate
Pepe Escobar
The Aleppo / Mosul Riddle
David Rosen
The War on Drugs is a Racket
Sami Siegelbaum
Once More, the Value of the Humanities
Cathy Breen
“Today Is One of the Heaviest Days of My Life”
Neve Gordon
Israel’s Boycott Hypocrisy
Mark Hand
Of Pipelines and Protest Pens: When the Press Loses Its Shield
Victor Wallis
On the Stealing of U.S. Elections
Michael Hudson
The Return of the Repressed Critique of Rentiers: Veblen in the 21st century Rentier Capitalism
Brian Cloughley
Drumbeats of Anti-Russia Confrontation From Washington to London
Howard Lisnoff
Still Licking Our Wounds and Hoping for Change
Brian Gruber
Iraq: There Is No State
Peter Lee
Trump: We Wish the Problem Was Fascism
Stanley L. Cohen
Equality and Justice for All, It Seems, But Palestinians
Steve Early
In Bay Area Refinery Town: Berniecrats & Clintonites Clash Over Rent Control
Kristine Mattis
All Solutions are Inadequate: Why It Doesn’t Matter If Politicians Mention Climate Change
Peter Linebaugh
Ron Suny and the Marxist Commune: a Note
Andre Vltchek
Sudan, Africa and the Mosaic of Horrors
Keith Binkly
The Russians Have Been Hacking Us For Years, Why Is It a Crisis Now?
Jonathan Cook
Adam Curtis: Another Manager of Perceptions
Ted Dace
The Fall
Sheldon Richman
Come and See the Anarchy Inherent in the System
Susana Hurlich
Hurricane Matthew: an Overview of the Damages in Cuba
Dave Lindorff
Screwing With and Screwing the Elderly and Disabled
Chandra Muzaffar
Cuba: Rejecting Sanctions, Sending a Message
Dennis Kucinich
War or Peace?
Joseph Natoli
Seething Anger in the Post-2016 Election Season
Jack Rasmus
Behind The 3rd US Presidential Debate—What’s Coming in 2017
Ron Jacobs
A Theory of Despair?
Gilbert Mercier
Globalist Clinton: Clear and Present Danger to World Peace
James A Haught
Many Struggles Won Religious Freedom
Kollibri terre Sonnenblume
Dear Fellow Gen Xers: Let’s Step Aside for the Millennials
Tom Clifford
Duterte’s Gambit: the Philippines’s Pivot to China
Uri Avnery
The Peres Funeral Ruckus
Reyes Mata III
Scaling Camelot’s Walls: an Essay Regarding Donald Trump
Raouf Halaby
Away from the Fray: From Election Frenzy to an Interlude in Paradise
James McEnteer
Art of the Feel
David Yearsley
Trump and Hitchcock in the Age of Conspiracies
Charles R. Larson
Review: Sjón’s “Moonstone: the Boy Who Never Was”