Year after year, month after month, sometimes day after day, the Dow-Jones Industrial Average reaches new highs. The war in Iraq gets worse. Afghanistan slips out of control. The gap between rich and poor grows more profound, the trade deficit grows immense, and fears of the future of Medicare grow sharp indeed. Yet up, up, and away goes the stock market.
Why? Well, frankly, no one knows for sure. Yes, profits are great and interest rates are low, but markets don't always go up - even on news as good as that. But here is a clue: Something like 50 percent of all stock is owned by the top 1 percent of Americans in terms of wealth. The top ten per cent own nearly ninety per cent of stock.
For those Americans, far from Fallujah, life is great. The rich in America have never been richer or more numerous. There are long waiting lists for Ferraris and Bentleys. A $10 million house and a $1 million dollar are what life is all about for them.
They're in a great mood. Iraq seems far away. Kabul is remote. Money is pouring in. So, what do they do? They buy cars and houses and mistresses and stock, and as it goes up, they come to believe it will always go up, and they keep buying and so it keeps going up.
Until one day, the dollar collapses and interest rates rise and fear sets in and the rich are suddenly singing the blues. But for now, if you're not on the battlefield, don't know anyone who is, and the company just gave you a $1 million dollar bonus or 10 million times are mighty sweet. Time to buy.