The Washington PostDemocracy Dies in Darkness

The stock market is soaring to new heights. But most Americans aren’t along for the ride.

Many Americans are still hurting. Giving them the help they need could have greater value for the economy — and the country — than the Dow hitting new heights

U.S. stocks are ticking higher and heading back toward record highs on Friday, despite discouraging data detailing how much damage the deepening pandemic is doing to the job market. (Seth Wenig/AP)

There are times when numbers tell a story, and this is one of them. And sometimes, as in this case, those numbers can have both social and investment significance.

Let’s start with two numbers: $4.3 trillion and $908 billion. The first represents how much the stock market rose in November, according to Wilshire Associates, an investment management firm whose Wilshire 5000 Total Market index measures the value of the entire U.S. stock market in dollars, not in points like the Dow industrials or S&P 500.

The second is the size of a proposed economic stimulus package to help the needy that was floated by a bipartisan group of senators and is being negotiated in Congress.

Watching the Dow is fun but it's not the whole story

Let me show you two more numbers that you’d be unlikely to compare with each other: $5.2 trillion and 5 million.

The first number is how much the U.S. stock market rose for the first 11 months of the year, according to Wilshire. The second is the increase in the number of unemployed people over the same period, according to the Bureau of Labor Statistics. And that BLS number, while down an encouraging 12.4 million from its April peak, is probably understated because it doesn’t include people who are staying home to care for family members but would otherwise be seeking employment.

I’m not trying to play bleeding heart here. I’m just trying to show you the numbers that illustrate the contrast between people (including me) who own lots of stock and have seen their wealth increase substantially this year despite the coronavirus, and the people who own little or nothing in the way of stocks and are suffering economically for pandemic-related reasons.

These numbers have investment implications as well as social implications. I think that many of the problems in our country stem from the division between the kind of people who benefit from government policies that support financial markets and stock prices, and the people short on financial assets who are left on their own to try to make a decent living and provide for their families at a time when inflation-adjusted wages have been eroding.

The November jobs report has no silver lining. Americans need help — now.

Because of the economic impact of the coronavirus, many more people than usual are worrying about putting food on the table. Many of them also worry about losing their homes through eviction (if they rent) or foreclosure (if they own) once various amnesty programs expire.

This is not only bad for them, but it’s bad for the economy because it reduces consumption and makes millions of people far less productive. In the long run, it’s probably bad for the stock market, too, because a lower-consumption, less-productive economy tends to make corporate profits — and therefore stock prices — lower than they would otherwise be.

The number of coronavirus cases, as we all know, is rising sharply. The White House has left states on their own, unfortunately, and parts of the economy are starting to shut down again. California’s governor has issued limited shutdown orders, and there’s a chance that similar orders will be issued in additional states.

So unless Congress and the White House start sending economic help quickly to needy people, small businesses and state and local governments, we could well end up with unemployment starting to rise sharply again.

Wealthy retirees got a tax break from the coronavirus relief bill

We’ve already seen that show, and it wasn’t pretty. Remember earlier this year that as the coronavirus began to spread, the economy slowed and unemployment rose, sending stocks down more than 30 percent for the year on March 23.

Stocks subsequently rocketed upward thanks to programs enacted by the Federal Reserve, Congress and the White House that got trillions of dollars to needy people and struggling businesses. Since their low point, stocks have risen about $16.6 trillion as of Thursday — more than 70 percent — according to Wilshire.

I’m a little uncomfortable about certain aspects of the market. Almost three-fourths of the return of the S&P 500 index for the year’s first 11 months is attributable to a mere six stocks: Apple, Amazon, Microsoft, Facebook and the two share classes of Alphabet, which owns Google. The Big Six, as I call them, accounted for 10.2 percent of the S&P’s 14 percent total return — price rises plus reinvested dividends — through November.

But what makes me really uncomfortable is watching nothing emerge from Our Nation’s Capital to help people clobbered by covid-19 while those of us fortunate enough to have substantial stock holdings have seen the value of our portfolios rise sharply since March.

There are signs of movement — finally — in Congress, but it’s taken a lot longer to get talks started than it should have. And who knows what, if anything, President Trump might or might not sign off on.

Providing serious help to people who — through no fault of their own — need serious help would certainly benefit the economy and probably help the stock market, too. Or at least keep it from being harmed.

And who knows? Providing generous help and offering hope to people who went to bed hungry after watching other people celebrate the Dow hitting 30,000 for the first time might give us a start on healing some of the divisiveness wracking our country.

The value of that would dwarf any gains that any of us could ever hope to see from the stock market.