Dear President Trump: The Stock Market Is Not the Economy

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Donald Trump says the economy is great because the stock market is up. This oversimplified thinking leaves millions of Americans out of the economic equation and leads to policies that serve to exacerbate already striking inequality.

Most Americans do not have a big stake in the market’s growth.

A slight majority of Americans, around 55 percent, own stocks. Only 14 percent of Americans are directly invested in individual stocks, while others have some presence in the market through retirement plans like 401ks.

Those numbers do not tell the whole story. In fact, the top 10 percent of households by net worth control 87.2 percent of the market. And this fact tells a large part of the story of how billionaires got rich during the pandemic while many Americans struggle.

Markets do not always reflect on-the-ground realities.

In the three weeks between March 18 and April 10 over 22 million Americans lost their jobs. A study authored by the Institute for policy studies shows that over the same three weeks, U.S. billionaire wealth increased by $282 billion.

By the beginning of August, 40 million Americans had filed for unemployment, and billionaires had increased their wealth by almost $640 billion.

Across the world, in fact, markets rose significantly in August. This created a jackpot for wealthy investors, even though 14 million fewer Americans were working in July 2020 than in July 2019.

Trump’s focus on the stock market exacerbates inequality.

When you are focused on making markets look good, you advance policies that reward those with the most stake in those markets. And those people are overwhelmingly older white men – and corporations.

This leads, for example, to 2017, when Congress passed the Trump-backed Tax Cuts and Jobs Act, which lowered the corporate tax rate from 35 to 21 percent and brought the top individual rate down from 39.6 to 37 percent.

Even in 2018, when cuts were most evenly distributed, the majority of the benefit was seen by top earners, and that trend only gets worse over time. The only permanent tax cuts contained in the bill are those for corporations. Most other provisions expire in 2025, which effectively raises taxes on individuals in order to pay for corporate cuts.

Rewarding wealth as policy begets more wealth and seeds inequity, which caused America to enter the pandemic with structural deficits that enhanced the suffering of many. Businesses with outsized influence pushed to open the economy, and cash-strapped employees could do little to say no, even at the expense of their safety.

The Trump Economy has left many people behind.

In 2019, as Trump bragged about presiding over the best economy ever, 45 percent of Americans reported having zero dollars in savings and 69 percent reported having less than $1,000 in the bank.

To add insult to injury, Trump’s most recent budget calls for cuts to Social Security — with most cuts going to disability benefits — and Medicaid, which will further the struggle of America’s lowest earners.

This is a symptom of a much larger trend toward inequality. And that trend can be stopped.

A recently released working paper authored by Carter C. Price and Kathryn Edwards of the RAND Corporation lays bare a 45-year trend toward monumental income inequality in America. According to the paper, if equality levels had simply remained steady from 1975 to 2018 (matching rates of equality between 1945 and 1974), the aggregate annual income of the bottom 90 percent of American income earners would have been $2.5 trillion higher in the year 2018 alone. That is enough to more than double median household income. It is enough to pay every single working American not in the top 10 percent of earners an additional $1,144 a month. Every year.

The total transition of wealth from the bottom 90 percent to the top 10 percent of Americans over the past 40 years is equivalent to roughly $50 trillion dollars.

That is $50 trillion that could have gone into growing the economy for all Americans — and into savings that would have allowed every American to enter the pandemic much more financially secure.

Biden wants to raise taxes on the wealthiest one percent of Americans and corporations in order to support infrastructure investment, expand health care and grow jobs. Vote for an economy that rewards work, not wealth.

Facts work the best when shared with friends. ..

Fact Quotes

“Twenty percent of U.S. companies are zombie companies — they only survive because the Federal Reserve is propping them up. You have a safety net for stocks provided by the Fed, but only a limited version of that for people who really need help.”

Broader wealth statistics recently published by the Federal Reserve are not much more encouraging. There is an equally wide gap between what the wealthy own and what the bottom 50% own.


This dramatic redistribution of income from the majority of workers to those at the very top is so complete that even at the 95th percentile, most workers are still earning less than they would have had inequality held constant. It is only at the 99th percentile that we see incomes growing faster than economic growth: at 171 percent of the rate of per capita GDP.


Older white people with high incomes are much more likely to own stock. The Pew Research Center finds 88% of those in households earning $100,000 or more own stocks compared to 19% of those in households earning less than $35,000. Families headed by white adults are more likely than those headed by Black or Hispanic adults to be invested in the stock market.