Taking stock of Wall Street’s boom (1)

there’s always somebody earning money with our jobs…the problem in the so called “free-market”, economies completly controlled by corporations like in USA, the people earning money is never us, never the workers

Real-World Economics Review Blog

from Steve Keen

If the US economy was performing as well as the US stockmarket, even Walmart workers would be breaking out the champagne.

Since 2009, the S&P has risen over 250 per cent in nominal terms, and almost 230 per cent in inflation adjusted terms. In nominal figures, it is at its highest value ever, though when you adjust for inflation, it is still 10 per cent below its peak in 2000 (see Figure 1).

The $64 question is: will it keep on going up?

Figure 1: The S&P 500 before and after inflation
Graph for Taking stock of Wall Street's boom

There are good reasons for the stockmarket index rising over time in inflation-adjusted terms. These include sound ones like the reinvestment of earnings (think Berkshire Hathaway),  but also misleading ones like survivor bias.

View original post 1,379 more words

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