Why do Americans think that our economy is based on “the market”?

Olan Black: Why do Americans think that our economy is based on “the market”?
myself, like lots of normal Americans would have nothing to gain if I found out the market rose 5,000 points. it wouldn’t make me any difference, why do Americans seem to think that our economy is tied directly into whatever the Dow Jones reports everyday. The stock market crashed in 1929. the Depression hit in 1932. 3 years later.
the market produces no consumable goods or services. it is just a rich persons Los Vegas. it can be manipulated, and seems like the people that work there aren’t to bright (they trusted Bernie Madoff, although everybody else was having losses, he didn’t until the truth came out)
the Dow is a poor snapshot of industry, they pick 500 companies, and you are suppose to judge the health of millions of companies off of this. and they try to pick companies that are doing good, so if a specific part of the economy is doing bad, you would never know by the Dow. and if one of the companies they pick starts doing really bad, they replace it with one doing better, now that is crazy
I understand the market, stock market, commodities, bonds, I understand it all. but everybody is crying about the stock market

Answers and Views:

Answer by sweet_home_obama
Cool – that means the Depression wont hit until 2011.

I’ve got plenty of time to stock up!

Answer by Chi Guy
Agreed!

People have been brainwashed into pitying the DOW. The only validity is we have been conned into having our retirement funds fund the Market for the hyper-rich to make money off of.

Answer by firewomen
I agree with you. The media seems to make such a big deal of wall street. What I find interesting is that when really bad news comes along wall street has one of their better days. Interesting

Answer by BIGGLES FLYS UNDONE
the “market” that you may/or may not want to demonize,provides you with everything you want need and desire.

Answer by Hater Police
It is a major factor in our economy. And, yes, people have learned to react to its every move… in a very Pavlovian way.

Answer by Emily Dew
Because the stock market is a snapshot of industry — computers, healthcare, cars, food, clothing, etc. If the stock market isn’t doing well one day, that’s nothing to worry about. If it’s not doing well for weeks and months, that tells you something is wrong in the business sector, which BTW happens to employ millions of people. A company’s stock doesn’t dive to less than half of what it was last week without there being a reason. You think you would have nothing to gain if the market rose a great deal in one day and while that may be true, you would definitely have something to gain if the market rose every day for months and then stayed at those levels. What that would mean is that businesses are doing well and people are being employed and jobs are being created.

It’s like say you have a headache one day. No problem, right? The next day everything is fine again and you’ve suffered no ill effects, so your life goes on. But say you have a headache every day for a month or two. Now you could just keep taking aspirin every single day and deal with it, but most people would want to know why they are experiencing a headache every day. Do they have some kind of brain tumor? Are they having sinus problems, vision problems, high blood pressure? Could they be gearing up for a stroke? In this case, having a headache every day is not the main problem. It’s a SIGN that there is a bigger problem that needs to be diagnosed and treated before it gets worse.

That’s how it is with the stock market. Day after day after day of stocks falling is a SIGN that there is a bigger problem that is not being addressed. Your statement that the Depression actually began three years after the market crashed in 1929 makes perfect sense in that light. Just like with the headache analogy, let’s say you do have a brain tumor that you either don’t know about and/or do nothing about. Do you think that tumor would just stay there, not growing? No. Eventually, you would begin to lose other functions until you died. It wouldn’t happen overnight though. It might take a few years, but it will lead to disaster if left untreated. That’s the same way with the economy.

Answer by Joseph L
The market sets the price for everything we buy.
Oil sells for about 35 dollars a barrel right now.
When it was at 140 dollars a barrel, we paid twice as much at the gas station.
That increased the price of every manufactured item we buy.
If you are not invested in any particular industry, you would only feel the bite when you went to buy the items you use.
We have a market based economy. If the price of gas, water, taxes, or labor increases, we have to make up the difference.

Answer by Thomas D
They are confused I am sorry to say.

When we refer to the market it is not the stock market of the DOW. It is the total value and trade of all the goods in the country. Now if that increased I bet you would notice.

I can make it easy, the stock market sometimes is but is not always a reflection of our whole market economy.

I hope this explains it for you.