One of the few silver linings of this deadly pandemic will hopefully be the final death of the myth that the stock market is, in any way, a barometer of national prosperity. The S&P 500 has been booming, even with over half a million COVID-19 deaths, alongside record unemployment and a stagnant economy. Our stock market is instead the physical manifestation of America’s inequality.
The entire purpose of creating the stock market in the first place was to provide a way for businesses to raise money needed to grow their venture and improve their products. Investors were truly “vested in” the company: If it failed, they lost money, but if it succeeded, they shared in the prosperity. It was a noble concept, but one that doesn’t much reflect today’s realities. Now, companies have obscene valuations that often have no connection to company performance, most recently propped up by Donald Trump’s trillion-dollar bailouts. Instead of profit through dividends, many of these companies expect people to make money off of the stock price, which is a dangerous game.
The Robinhood/GameStop scandal exposed just how the market is being massively manipulated by a few overly leveraged, wealthy players. The stock market today is more akin to a casino, except casino owners aren’t as shady and have stronger regulation. As such, the market could be headed for a disaster, and it’s long past time we did something about it.