
CATEGORY: ECONOMY (5 MIN)
Most Americans, upon hearing of a drastic change in the Dow Jones, will immediately think of their retirement accounts and perhaps pull them up to see the damage or gain. Of course, recessions and good economic times have deep impacts on the overall system if they persist, but humans by nature are more apt to ask: what does this mean for me today?
For this week’s article from the Modern Age website, Gene Callahan and Robert P. Murphy ask whether the recent drop in the stock market has actually harmed American wealth. They both say no, basing their answer on the definition of “wealth” and the practical impact of market losses. The authors believe Americans are often confused about the difference between prices and actual wealth.
“The stock market decline has not leveled any buildings or rendered any machines inoperable,” Callahan and Murphy write. “America is just as full of farms, warehouses, railroads, and oil wells as it was when the stock market was at its peak.”
That being said, the authors are not sure about the future results of this “market decline.” In one future, trade wars might cripple the world economic system, which would eventually hurt U.S. wealth. But Callahan and Murphy could also see a world where American tariffs lead to lower across-the-board tariffs or at least help average Americans.
Read more of the authors’ article here on the Modern Age website.
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