The Dow is up

Who cares if everything else is down?

By Joyce McGreevy
Published June 16, 2003 7:30PM (EDT)

This June a funny thing happened on the way to hell in a handbasket. The Dow industrials passed the 9,000 mark.

Whatever else, June 5 was a great day to be an action verb. Depending on which news report you saw, the Dow bounced, rallied, climbed, soared, sailed, or shot out of a circus cannon to close up at 9,041 points, the first time the markets had been that high since August 2002 when a trader named Ernie sold his old couch and found leftover cocaine from the very last IPO party. At the end of trading on Friday, despite a sudden tumble, the Dow was still holding strong at 9117

So that's good, right? You betcha. According to United Press International (UPI), the market had been "lifted by favorable economic reports."

And which reports were those? The UPI didn't say. But there were several to choose from that same day. Was it the one about the rise in unemployment claims? The one about the decrease in factory orders? Or could UPI have been referring to news of the dollar getting snatched, trussed up and tossed out of a speeding Citroen by the euro, now at $1.17 with a bullet?

Actually, the pound, the Swiss franc, even the loonie of Canada are all looking pretty fat these days. And maybe that's good news, too, in a weird way, since the U.S. needs to attract $500 billion or more a year in foreign investment to fund its deficit account. (And you thought the $290 billion deficit achieved under Bush senior was impressive.)

Not that anyone should get too worried about boring old things like trade deficits when our president keeps promising growth at home. Sure enough, under the new tax law, the public debt will grow to $7.38 trillion.

But let's not go there. Let's just keep our tired eyes on the little green arrow in one corner of the TV screen. It's pointing up, by golly, and that means consumer confidence is up too.

There's just one little problem with all these confident consumers -- robustly confident, according to BBC World News. They aren't spending any money.

So where is all this confidence coming from? Apparently from investors, the handful of people who still have something left to put into stocks and haven't yet been indicted. And why wouldn't they invest? The wealthiest ones, who live mostly on stock dividends and capital gains, as opposed to money earned by, you know, working, just got a big boost from the same tax cut that shafted regular Joes and the poor.

Why, if your tax rate on easy money had just dropped a whompin' 20 percent and a bunch of good old boys had handed you and your accounting and legal teams a new game plan for evading taxes anyway, you'd be feeling rather confident too. Perhaps even robustly so.

You might, for example, be able to ignore the fact that demand for cars is down. Because it wouldn't be your '97 Dodge that just got repo'd. You wouldn't need a car to, say, use as a domicile with your four kids while Mommy and Daddy looked for jobs. You wouldn't be carpooling to make up for a monthly pay cut in an already pitiful teacher's salary.

Not, you, babe. You'd be among the folks who can now deduct up to 100 grand for your car, provided it's a gas-guzzling hunk of metal that weighs in at 6,000 pounds or more. So crank up the Clear Channel radio, rock along with Rush, and try not hit too many homeless people as you speed through the next underpass.

These are happy days, my friend. According to market analysts, the gains in productivity are high as an elephant's eye. No, really.

Of course, if you pull back the camera from that one perky little statistic, you'll see that "increased productivity" actually means that this year businesses cut more than half a million jobs and still met customers' needs.

And one reason they met the so-called need is because "customers" -- we the people, one nation without cashola -- know that just one more trip to the store to buy a new pair of underpants or a can of SpaghettiOs could grease the wheels of our already runaway household debt and send us and our families into oblivion.

So a lot of us have decided that we don't, um, need anything. As in, I really don't need shelter, groceries, clothing, an adequate education, or prescription medicines.

Another aspect of this "productivity" is the big increase in exports. Oh, not goods or anything, just jobs. An impressive 3 million or more service jobs are expected to ship out of this country over the next 15 years. It's the ultimate business trip, no return ticket needed! So if you do have a job (for now) make the most of your less-than-2-percent wage growth, because you never know when you might need it.

According to the latest Federal Reserve report, household debt grew at a 10 percent rate in the first quarter. Now that's robust. And that's the good news, because household debt was growing at an even faster rate in the previous quarter. So, sure, we're all still heading for the falls in a heavily mortgaged, overcrowded raft that could deflate on us at any moment -- but at least now we have time to admire the rocks.

So, don't let's worry our pretty little overdrawn, underpaid, increasingly unemployed heads about all the tedious little details that would clutter up more comprehensive reports of what's happening to the U.S. economy. The Dow arrow is pointing up, and that's good enough for us.

Joyce McGreevy

Joyce McGreevy is a writer in Portland, Ore.

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