# Stock Markets, Tariffs, Coronavirus **URL:** \ **Category:** Great Debates\ **Created:** [February 24, 2020, 9:02pm UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451 "2020-02-24T21:02:39Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [February 29, 2020, 2:03pm UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/61 "2020-02-29T14:03:02Z")
Regarding how poor people do during a recession, food insecurity spiked last time. But has been declining. Slowly. It’s only recently back near the stubborn baseline. See USDA ERS. ---
**Author:** ![Left\_Hand\_of\_Dorkness](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/left_hand_of_dorkness/32/7156_2.png) [@Left\_Hand\_of\_Dorkness](https://boards.straightdope.com/u/Left_Hand_of_Dorkness)\ **Post date:** [February 29, 2020, 2:12pm UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/62 "2020-02-29T14:12:49Z")
> [@Ruken](#): > > The “impact” of income inequality is low. My well-being is not lessened when someone else gets a raise. Obviously this is off-topic, but there’s some interesting research showing that [income inequality DOES affect your well-being](https://www.psychologytoday.com/us/blog/hormones-and-the-brain/201811/the-scandal-inequality-and-its-effect-mental-health): > [@](#): > > Every study on the health of a country shows that one of the strongest prediction of longevity, good health, and quality of life is socio-economic status (SES): how rich or poor you are. Interestingly, this is the same in the UK, which has a universal high-quality health service that is free to all, as in the USA, which does not. So all the effect of poverty on health is not easily explained by access to health services. And there’s more. If we compare health across countries, there is one expected finding: all the measures of health are worse in poorer countries than richer ones. Not surprising. But here’s another finding that may surprise you: about half the difference between health in the top and bottom of the SES scale is not due to absolute levels of poverty but to the gap between the richest and poorest: in other words, the degree of inequality, not its level. > … > Inequality has a direct impact on mental health. Sweden, a rich country with an excellent and accessible health service, but low inequality, has much less social and mental health problems than the UK, with an equally good health service but much higher inequality. The USA has an even worse health score. Men seem particularly liable to mental disorders as their income declines. Depression is strongly associated with lower income and greater inequality, though this has only really been studied adequately in high-income countries. > > What is the mechanism linking financial inequality to mental illness, particularly depression? Since we do not know the ‘cause’ of depression at either social, genetic or neurobiological levels, any suggestions must be speculative. Poverty is related to feelings of social defeat and inferiority, as well as social isolation, alienation, and loneliness. These are accentuated if poorer people live in a society that allows them to compare themselves to much richer ones. Robert Sapolsky, in a recent Scientific American article (well worth reading) suggests that relative poverty generates stress, and stress generates overactivity of the hormonal and neural responses to stress which include secretion of cortisol, the stress hormone. Lower SES is associated with greater levels of stress (sometimes called ‘allostatic load’). We know that higher cortisol is a risk factor for depression. There are other links, but I’m going for the one I know isn’t behind a paywall. If folks wanna talk about this further, though, I’d be happy to start a new thread. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [February 29, 2020, 2:36pm UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/63 "2020-02-29T14:36:00Z")
I’ll participate if you do. It keeps coming up in other threads. ---
**Author:** ![Dr\_Paprika](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr_paprika/32/3042_2.png) [@Dr\_Paprika](https://boards.straightdope.com/u/Dr_Paprika)\ **Post date:** [February 29, 2020, 3:39pm UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/64 "2020-02-29T15:39:19Z")
Going back to the OP, it surprises me Trump’s China policy did not have a more immediate effect on the market. Many companies - Apple, Walmart, etc. have extensive business in China which would be expensive to relocate. One assumes that economists felt Trump was speaking loudly and carrying a small twig. Since both the US and China are interdependent and something needs be done about protecting intellectual property. In my view, the market failed to fully account for volatility from trade policy, increasing nationalism (including the Brexit disaster) and related isolation, protectionism and belligerence. The president impact on the economy is often exaggerated. Trump has a larger effect than most, though, since his comments are public, unfiltered and various shades of hyperbole. Coronavirus is pretty concerning, but this has been amplified by the media. It will have an economic hit, which will be temporary and harsh. Some of the correction is due to overvalue and much is due to fear. It would make sense to “fear the unknown” of Brexit or hardened attitudes to trade policy or Chinese tariffs. Coronavirus is an easier excuse. The whole economy is unknowns- a virus is no different apart from hysterical value. Trump’s fault? He didn’t cause the virus. He can be blamed for the wisdom of putting Pence in charge. This is not a comment on Pence, but the markets perception on how effective his interventions may be. The market didn’t react earlier to China because of jobs numbers and wilful blindness. Now it is. The economy is not the president though. He didn’t deserve full credit for its rise, and doesn’t for the correction. I hope the Dems pick a candidate that can challenge him. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [February 29, 2020, 7:03pm UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/65 "2020-02-29T19:03:08Z")
> [@Ruken](#): > > The “impact” of income inequality is low. My well-being is not lessened when someone else gets a raise. > > If we’re worried about how the average person or a poor person is doing, and I think we should be, then let’s look at how they’re actually doing. Not how some billionaire is doing. It does if that person’s raise is at the expense of yours, or if the person got a raise due to him laying off a bunch of the workforce to improve short term profitability. Or if the raise allows him to buy in your neighborhood and price you out of the market. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [March 1, 2020, 3:44am UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/66 "2020-03-01T03:44:41Z")
> [@RickJay](#): > > I’m not sure you’re as good with the math as you claim to be. > > The way the poor lose is that stock market collapses worsen economic downturns. Economic downturns result in unemployment, and unemployment disproportionately hurts the working class. A stock market shock will not be limited to the Dow Jones number. (If it did, that would prove the stock market is total bullshit.) > > A little more math for you, with some economics; the impact of a loss on a person is correctly measured not by the raw number of dollars they lose, but by the marginal impact of the dollars they lose. If a billionaire loses $1 million, that has no real impact on the utility they enjoy from their wealth. If a person just hanging on loses their $600/week job for a few months that could cause them tremendous pain and misery. > > The idea that Jeff Bezos losing a few million dollars somehow being worse off than a single mom losing her job because the single mom doesn’t make a million dollars a week is… I mean, learn the math. You can look at value as just being total numbers or you can look at it on the margin but you have to pick one. I agree that for most an extended period of unemployment because of a recession is more impactful than a billionaire losing a 10% of their wealth. However if you concede that then you have to also believe that a long period of steady employment is worth more than a billionaire adding a couple hundred million in paper gains. Thus the current economy where the 2010s were the only decade since records were kept without a recession is the best economy for the poor maybe ever and that inequality is no big deal. You can say that only the numbers matter in which case prosperity is better for the rich than the poor and recessions are harder on the rich than the poor. Or you can say that what matters is marginal utility and so prosperity is better for the poor than the rich and recessions are harder on the poor than the rich. But what I object to is to say that the numbers matter during good times and marginal utility means more than the bad times, because that is picking metrics to suit a predefined narrative. For those determined to bad mouth the economy, we played you a jig and you wouldn’t dance, we played you a dirge and you wouldn’t cry. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [March 1, 2020, 3:55am UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/67 "2020-03-01T03:55:11Z")
> [@Left\_Hand\_of\_Dorkness](#): > > Obviously this is off-topic, but there’s some interesting research showing that [income inequality DOES affect your well-being](https://www.psychologytoday.com/us/blog/hormones-and-the-brain/201811/the-scandal-inequality-and-its-effect-mental-health): > > There are other links, but I’m going for the one I know isn’t behind a paywall. > > If folks wanna talk about this further, though, I’d be happy to start a new thread. This is not true. If you look at GINI coefficient and prevalence of mental health disorders there is [no correlation.](https://1.bp.blogspot.com/-j8CgtIOEdPc/XIPCagaUTmI/AAAAAAAAGwI/BlW--qr25xMU-q-sYioq8VpAON1gAHkMwCLcBGAs/s1600/mental%2Bhealth%2BSl%2Bcountries.png) Not only that but countries with[more inequality h](https://spiritleveldelusion.blogspot.com/2019/03/the-spirit-level-ten-years-on.html)ave longer life expectancies than countries with lower inequality. Studies that show otherwise are because of selection bias. ---
**Author:** ![GIGObuster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gigobuster/32/421_2.png) [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)\ **Post date:** [March 1, 2020, 5:22am UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/68 "2020-03-01T05:22:39Z")
> [@puddleglum](#): > > This is not true. If you look at GINI coefficient and prevalence of mental health disorders there is [no correlation.](https://1.bp.blogspot.com/-j8CgtIOEdPc/XIPCagaUTmI/AAAAAAAAGwI/BlW--qr25xMU-q-sYioq8VpAON1gAHkMwCLcBGAs/s1600/mental%2Bhealth%2BSl%2Bcountries.png) > Not only that but countries with[more inequality h](https://spiritleveldelusion.blogspot.com/2019/03/the-spirit-level-ten-years-on.html)ave longer life expectancies than countries with lower inequality. Studies that show otherwise are because of selection bias. Speaking of bias, one can notice that the critic there is a writer countering a book… books seem to be the way to go when there is no hurry to deal with peer review. > **[Christopher Snowdon](https://en.wikipedia.org/wiki/Christopher_Snowdon)** > > Christopher John Snowdon is a British author and freelance journalist. He is particularly known as a vocal opponent of government intervention in areas such as tobacco, alcohol, and obesity. > Snowdon was born in North Yorkshire in 1976 and studied history at Lancaster University, graduating in 1998. > He has written for the Spiked website, The Daily Telegraph and The Spectator, as well as the Conservative Home website. Incidentally, I could just have stoped to check when a lot of the glowing reviews for that critic are coming from very biased right wing sources. But, the issue here is that the author cited by **Left Hand of Dorkness** who you are replying to, was Joe Herbert M.B, Ph.D. Not the ones that made that likely flawed “The Spirit Level”. Nowhere in the Joe Herbert article does he cites The Spirit Level or their authors. I looked then at the background and supporters of Snowdon and I had to agree with this review of one of the books: > **[The Spirit Level Delusion: Fact-checking the Left's New Theory of Everything...](https://www.amazon.co.uk/Spirit-Level-Delusion-Fact-checking-Everything-ebook/dp/B005JUPV6O)** > > The Spirit Level Delusion: Fact-checking the Left's New Theory of Everything eBook : Snowdon, Christopher: Amazon.co.uk: Kindle Store > [@](#): > > If you want to know exactly where this book is coming from just look at the publishers. The Democracy Institute are a pro-capitalist think-tank with connections to the Cato Institute (who publish obviously impartial studies such as ‘In Defence of Global Capitalism’), and who have strong links to big business, particularly the tobacco industry. This might ever-so-slightly undermine Mr Snowdon’s position and also explain other anomalies such as why he isn’t convinced by the overwhelming evidence against smoking for example (as long as it’s only the unwashed masses who are killing themselves for the sake of profits). To paraphrase an earlier reviewer, when the man who introduces a book (Patrick Basham) has spent decades denying that smoking is bad for you, take everything thereafter with a pinch of salt. > > So, do not be fooled by who can manipulate statistics more effectively, and bear in mind that they can be used to prove or disprove almost anything. Richard Wilkinson and Kate Pickett, the authors of The Spirit Level, might be left-wing but at least the genesis of their argument is a rational and proactive desire for change. This book is a self-serving series of negatives - a rebuttal compiled to protect the interests of the very rich, who think capitalism needs to be left to run unchecked towards its inevitable endgame of extreme inequality, huge health divides, and a ruined environment. > > What you think of this book will largely depend upon which side you are on. No prizes for guessing where I stand. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [March 1, 2020, 10:36am UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/69 "2020-03-01T10:36:19Z")
> [@Left\_Hand\_of\_Dorkness](#): > > If folks wanna talk about this further, though, I’d be happy to start a new thread. Perhaps you should. It is an important and interesting topic, on which there is much ignorance. But … > [@puddleglum](#): > > This is not true. If you look at GINI coefficient and prevalence of mental health disorders there is [no correlation.](https://1.bp.blogspot.com/-j8CgtIOEdPc/XIPCagaUTmI/AAAAAAAAGwI/BlW--qr25xMU-q-sYioq8VpAON1gAHkMwCLcBGAs/s1600/mental%2Bhealth%2BSl%2Bcountries.png) … maybe you’d better start the thread in the Pit. 🙂 I snipped **Mr. Glum** ’s post before realizing the only cite I’d left was to a random Blogspot graph. :smack: But [the authors of _The Spirit Level_ do refute their critics’ claims.](https://web.archive.org/web/20111016151445/https://www.equalitytrust.org.uk/docs/responses-to-all-critics.pdf) (Or is that pdf unscholarly because it wasn’t published in … _Blogspot ?_) ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [March 1, 2020, 2:10pm UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/70 "2020-03-01T14:10:59Z")
> [@puddleglum](#): > > You can look at value as just being total numbers or you can look at it on the margin but you have to pick one. > > I agree that for most an extended period of unemployment because of a recession is more impactful than a billionaire losing a 10% of their wealth. However if you concede that then you have to also believe that a long period of steady employment is worth more than a billionaire adding a couple hundred million in paper gains. But the billionaire already has material security. Steady employment only gets a person to some degree of parity in terms of fundamental security, and in a country where people go bankrupt just because they get sick, there’s a limit to that comparison; once employment is lost, a person’s life can quickly fall apart. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [March 1, 2020, 2:18pm UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/71 "2020-03-01T14:18:20Z")
> [@Voyager](#): > > It does if that person’s raise is at the expense of yours, or if the person got a raise due to him laying off a bunch of the workforce to improve short term profitability. > Or if the raise allows him to buy in your neighborhood and price you out of the market. And thus low. ---
**Author:** ![asahi](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asahi/32/8693_2.png) [@asahi](https://boards.straightdope.com/u/asahi)\ **Post date:** [March 1, 2020, 3:29pm UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/72 "2020-03-01T15:29:24Z")
> [@Corry\_El](#): > > There’s some truth to those points, but puddlegum’s statement was still pretty much accurate for the expressions of wealth inequality usually quoted. Which is what % owns what %, where the upper %-tiles both own a lot and own a lot of riskier assets. Stuff like bank accounts and home equity tend to be a bigger % of net worth for median-ish people; houses aren’t riskless but not generally as volatile in value as stocks, particularly not in financial upsets originating in the stock market and/or overseas (as opposed to a housing crisis per se). > > So the fact is that wealth is noticeably (not hugely) less unevenly distributed today than a week ago. That is pretty much ‘just the math’. Technically true, but not really valid in the context of this discussion. Yes, people who hold onto investments may lose wealth and in the near term, the data graphics might show a slighter degree of relative parity, but that’s owing more to the losses sustained by the wealthy. What that kind of analysis fails to acknowledge is the aftermath, the ability to withstand the effects of a recession and recover from it. When some investment guru loses millions in his portfolio, he can wait out the downturn - he can go on living. Maybe he sheds some of his properties for the sake of liquidity. OTOH\< people who are just barely getting by get sucker-punched by an economic downturn, and they have no such ability to recover other than standing in an unemployment line, or maybe filing for bankruptcy. Moreover, when the economy recovers, they are less likely to go back to where they were pre-recession, which is different from those with excessive wealth. If you look at this graph on income inequality, for instance, you’ll see a slight dip during the recessionary period, but look at what happened post-recession. Income inequality is now as high as ever. [![](https://cdn.vox-cdn.com/thumbor/46mHRi5gVgVLYJ1LGDkPaIMRd9s=/0x37:551x313/fit-in/1200x600/cdn.vox-cdn.com/uploads/chorus_asset/file/11839467/Screen_Shot_2018_07_29_at_10.27.09_AM.png) ](https://cdn.vox-cdn.com/thumbor/46mHRi5gVgVLYJ1LGDkPaIMRd9s=/0x37:551x313/fit-in/1200x600/cdn.vox-cdn.com/uploads/chorus_asset/file/11839467/Screen_Shot_2018_07_29_at_10.27.09_AM.png) ---
**Author:** ![asahi](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asahi/32/8693_2.png) [@asahi](https://boards.straightdope.com/u/asahi)\ **Post date:** [March 1, 2020, 3:36pm UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/73 "2020-03-01T15:36:13Z")
> [@puddleglum](#): > > This is not true. If you look at GINI coefficient and prevalence of mental health disorders there is [no correlation.](https://1.bp.blogspot.com/-j8CgtIOEdPc/XIPCagaUTmI/AAAAAAAAGwI/BlW--qr25xMU-q-sYioq8VpAON1gAHkMwCLcBGAs/s1600/mental%2Bhealth%2BSl%2Bcountries.png) > Not only that but countries with[more inequality h](https://spiritleveldelusion.blogspot.com/2019/03/the-spirit-level-ten-years-on.html)ave longer life expectancies than countries with lower inequality. Studies that show otherwise are because of selection bias. Yeah and when you open your graph one immediately notices that two of the countries with the lowest income inequality have the highest life expectancies. Of course correlation isn’t causation one way or the other - your post is merely throwing spaghetti at the wall. ---
**Author:** ![asahi](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asahi/32/8693_2.png) [@asahi](https://boards.straightdope.com/u/asahi)\ **Post date:** [March 1, 2020, 3:43pm UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/74 "2020-03-01T15:43:44Z")
> [@puddleglum](#): > > For those determined to bad mouth the economy, we played you a jig and you wouldn’t dance, we played you a dirge and you wouldn’t cry. Right, let’s dance to the tune of income inequality the highest it’s been since the 1920s. I think you remember the song that played soon thereafter. Herbert Hoover was the conductor. [![](https://en.wikipedia.org/wiki/Causes_of_income_inequality_in_the_United_States#/media/File:2008_Top1percentUSA.png) ](https://en.wikipedia.org/wiki/Causes_of_income_inequality_in_the_United_States#/media/File:2008_Top1percentUSA.png) ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [March 1, 2020, 5:40pm UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/75 "2020-03-01T17:40:45Z")
[Stephen Colbert filmed a mini-documentary on the Coronavirus.](https://www.youtube.com/watch?v=tvmX4a4UiyM) (Look at how fast-food restaurants are operating in China.) ---
**Author:** ![D\_Anconia](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@D\_Anconia](https://boards.straightdope.com/u/D_Anconia)\ **Post date:** [March 1, 2020, 7:11pm UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/76 "2020-03-01T19:11:55Z")
> [@septimus](#): > > [Stephen Colbert filmed a mini-documentary on the Coronavirus.](https://www.youtube.com/watch?v=tvmX4a4UiyM) (Look at how fast-food restaurants are operating in China.) I really hope I’ve just been whooshed. ---
**Author:** ![GIGObuster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gigobuster/32/421_2.png) [@GIGObuster](https://boards.straightdope.com/u/GIGObuster)\ **Post date:** [March 1, 2020, 7:18pm UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/77 "2020-03-01T19:18:22Z")
> [@septimus](#): > > I snipped **Mr. Glum** ’s post before realizing the only cite I’d left was to a random Blogspot graph. :smack: But [the authors of _The Spirit Level_ do refute their critics’ claims.](https://web.archive.org/web/20111016151445/https://www.equalitytrust.org.uk/docs/responses-to-all-critics.pdf) (Or is that pdf unscholarly because it wasn’t published in … _Blogspot ?_) Thanks for that, I was willing to even toss a bone to \*\*puddleglum \*\*by assuming the debate that took place then, but that reply from the authors of the research and book is a very good one; as serious researchers always say, more research was needed, and that took place in the research referred in the latest article linked by \*\*Left Hand of Dorkness \*\*. What the references in the article show is that it is not only thanks to Meta-analisis that one can say that the research from Richard Wilkinson and Kate Pickett, authors of The Spirit Level, has support; and also robust evidence that supports it coming from others. > **[Income inequality and depression: a systematic review and meta‐analysis of...](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5775138/#wps20492-bib-0004)** > > Most countries have witnessed a dramatic increase of income inequality in the past three decades. This paper addresses the question of whether income inequality is associated with the population prevalence of depression and, if so, the potential... > **[Income inequality widens the existing income-related disparity in depression...](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5438466/)** > > Income inequality (II) and poverty are major challenges in South Africa (SA) yet little is known about their interaction on population mental health. We explored relationships between district II, household income (HHI) and depressive symptoms in... > **[How Economic Inequality Inflicts Real Biological Harm](https://www.scientificamerican.com/article/how-economic-inequality-inflicts-real-biological-harm/)** > > The growing gulf between rich and poor inflicts biological damage on bodies and brains ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [March 2, 2020, 12:44am UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/78 "2020-03-02T00:44:02Z")
> [@asahi](#): > > Technically true, but not really valid in the context of this discussion. Yes, people who hold onto investments may lose wealth and in the near term, the data graphics might show a slighter degree of relative parity, but that’s owing more to the losses sustained by the wealthy. > > What that kind of analysis fails to acknowledge is the aftermath, the ability to withstand the effects of a recession and recover from it. When some investment guru loses millions in his portfolio, he can wait out the downturn - he can go on living. Maybe he sheds some of his properties for the sake of liquidity. OTOH\< people who are just barely getting by get sucker-punched by an economic downturn, and they have no such ability to recover other than standing in an unemployment line, or maybe filing for bankruptcy. > > Moreover, when the economy recovers, they are less likely to go back to where they were pre-recession, which is different from those with excessive wealth. If you look at this graph on income inequality, for instance, you’ll see a slight dip during the recessionary period, but look at what happened post-recession. Income inequality is now as high as ever. > > [https://cdn.vox-cdn.com/thumbor/46mHRi5gVgVLYJ1LGDkPaIMRd9s=/0x37:551x313/fit-in/1200x600/cdn.vox-cdn.com/uploads/chorus\_asset/file/11839467/Screen\_Shot\_2018\_07\_29\_at\_10.27.09\_AM.png](https://cdn.vox-cdn.com/thumbor/46mHRi5gVgVLYJ1LGDkPaIMRd9s=/0x37:551x313/fit-in/1200x600/cdn.vox-cdn.com/uploads/chorus_asset/file/11839467/Screen_Shot_2018_07_29_at_10.27.09_AM.png) As your cite says income inequality goes down during recessions. But as you say it is true that recessions hurt the poor more than the rich because they have less to resources to fall back on. Thus the surefire way to shrink income inequality is to hurt the poor more than the rich. This seems to indicate that income inequality is not a good indicator of how the economy is doing. The best measure of how an economy is doing is unemployment, growth, and inflation. Currently unemployment is at near record lows, inflation has not been a problem in over 30 years, and growth is low but steady. Income inequality is a sign of a good economy. ---
**Author:** ![asahi](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asahi/32/8693_2.png) [@asahi](https://boards.straightdope.com/u/asahi)\ **Post date:** [March 2, 2020, 1:56am UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/79 "2020-03-02T01:56:12Z")
> [@puddleglum](#): > > As your cite says income inequality goes down during recessions. But as you say it is true that recessions hurt the poor more than the rich because they have less to resources to fall back on. > > Thus the surefire way to shrink income inequality is to hurt the poor more than the rich. This seems to indicate that income inequality is not a good indicator of how the economy is doing. The best measure of how an economy is doing is unemployment, growth, and inflation. Currently unemployment is at near record lows, inflation has not been a problem in over 30 years, and growth is low but steady. Income inequality is a sign of a **good** economy. So you’re saying that if there’s full employment and most people are earning minimum wages that’s a sign of a good economy? If someone earning $8/hr gets a 20 percent raise but his rents go up by 20 percent, his wage growth is a good barometer of the economy, eh? :rolleyes: There’s a reason why you can’t compare today’s wage growth to that of the past when there were better economic parity. People on the bottom don’t have the same kind of purchasing power, which is why we shouldn’t be happy with our “growth.” When Republicans pointed out that a lot of Americans were hurting under Obama’s tenure, they weren’t wrong - I would have said what I’m saying now. The difference is that Obama wanted a fairer economy and they didn’t. And they don’t want a fair economy now that Trump is president, but they know they need some justification for staying in power and conveniently, at least they can point to “full employment” and wage “growth”. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [March 2, 2020, 6:22pm UTC](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451/80 "2020-03-02T18:22:36Z")
> [@asahi](#): > > So you’re saying that if there’s full employment and most people are earning minimum wages that’s a sign of a good economy? If someone earning $8/hr gets a 20 percent raise but his rents go up by 20 percent, his wage growth is a good barometer of the economy, eh? :rolleyes: There’s a reason why you can’t compare today’s wage growth to that of the past when there were better economic parity. People on the bottom don’t have the same kind of purchasing power, which is why we shouldn’t be happy with our “growth.” When Republicans pointed out that a lot of Americans were hurting under Obama’s tenure, they weren’t wrong - I would have said what I’m saying now. The difference is that Obama wanted a fairer economy and they didn’t. And they don’t want a fair economy now that Trump is president, but they know they need some justification for staying in power and conveniently, at least they can point to “full employment” and wage “growth”. Full employment is the best measure of how an economy is doing for the most people. Wage growth has been higher than inflation for years now, and that is also a sign of a good economy. A lot of Americans were hurting under Obama and a lot are hurting now. It is impossible to have a population of 325 million people where no one is having a bad time. However, all the meaningful data was that before the coronavirus, the economy was doing very well. [Previous page](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451.md?page=3) [Next page](https://boards.straightdope.com/t/stock-markets-tariffs-coronavirus/848451.md?page=5)