Buried in an article on this week’s stock rally, the WSJ does some reasonable political analysis regarding public attitudes towards finance:
“Perhaps the biggest factor of them all is the market rally. The Dow Jones Industrial Average is up 12.7% in the last six months, 17.5% in the last two years and 97% from the crisis-era low in March 2009.
The recovery of wealth, leaving the market roughly where it was at the end of 2007, isn’t insignificant. Seventy-four percent of Americans who have yet to retire expect to tap funds they have in 401(k)s and other savings plans, while 40% will primarily use money invested in stocks and mutual funds. Even among those already retired, 30% draw most of their income from market sources, according to Gallup.
It’s only natural that people are feeling richer and less afraid. Reform Wall Street? Why spoil the party?
Tally all of it up and you have a populace softened by a market rally, distracted by home economics and lawmakers worn down by a record $474.1 million spent last year on lobbying by the insurance, real-estate, banking and securities industries.
Meanwhile, some of the protagonists are gone. Sen. Chris Dodd and Rep. Barney Frank have left the building. They both decided against running for new terms.
With resistance softening, it’s no wonder regulators are backing down and the president plays politics more than practicalities with his oil and tax policy.”
Of course, a 97% recovery of stock market values, and return to 2007 heights, is not reflected in a 97% recovery of anything else. The unemployment rate remains 4% above where it was in 2007, and the upper 1% captured 93% of the growth during this ‘recovery.’ Why persistent high levels of unemployment, alongside stagnant wages and benefits, and and even more unequal ‘growth’ have not produced more social protest is still a mystery. Powerful Wall Street lobbyists can explain some regulatory changes (that’s the WSJ’s view), but not social passivity (very few Occupiers were retirees who had lost their 401(k)s…). It is conceivable that even very modest job gains are enough to give many hope that a recovery for everyone else is on the way. And that kind of hope might make many unwilling to rock the boat. But one suspects it has more to do with desperation mixed with the absence of a party or movement able to represent popular interests in a robust and sustained way.