I've been hearing all day about how the current stock market rout is all China's fault. As usual, this baloney is coming from Republicans. And, as usual, Trump started it. Scott Walker is even demanding that President Obama cancel Chinese President Xi Jinping’s upcoming visit (see below).
The truth is Wall Street has played as large if not larger role than China -- speculating in currencies, commodities, and derivatives, and artificially driving up stock prices. Meanwhile, American corporations have artificially pumped up the value of their stocks by borrowing money to buy back their shares.
Note also that the shrinking American middle class doesn't have the purchasing power to keep American corporations profitable. And the rich, who have raked in almost all the economic gains during this recovery, inevitably save a large portion of those rakings.
So between Wall Street's speculating, corporate America's pumping, and the middle class's decline, a so-called "correction" was bound to happen.
But, of course, Republicans and their moneyed patrons would rather we blame China.
Robert Reich
The truth is Wall Street has played as large if not larger role than China -- speculating in currencies, commodities, and derivatives, and artificially driving up stock prices. Meanwhile, American corporations have artificially pumped up the value of their stocks by borrowing money to buy back their shares.
Note also that the shrinking American middle class doesn't have the purchasing power to keep American corporations profitable. And the rich, who have raked in almost all the economic gains during this recovery, inevitably save a large portion of those rakings.
So between Wall Street's speculating, corporate America's pumping, and the middle class's decline, a so-called "correction" was bound to happen.
But, of course, Republicans and their moneyed patrons would rather we blame China.
Robert Reich
