Not only is it obviously stupid for political commentators to be assessing the quality of economic policy by tracking the ups-and-downs of the stock market but the fact that the commentators who want to do this keep wanting to specifically use the Dow Jones Industrial Average just highlights their ignorance. Not only is there no particular significance to the stock market as such, but there’s no particular significance to this index. It just happens to be the thing that cable networks have chosen to highlight most prominently in their on-screen data. But it’s only 30 companies! Admittedly, they’re large and widely held companies.
But why not use the S&P 500? Or the Wilshire 5000?
To be clear, that wouldn’t make this idea any less dumb on the merits. But if we’re going to have stock-based punditry then it could at least be informed stock-based punditry. Back in the real world, the key issues are the trajectory of employment and income. Right now, they’re heading down. The hope is for that trend to turn around. First, employment starts trending up. Then incomes start treading up. And with incomes and employment moving upward, asset prices increase. But to expect the White House to pull a stock boom out of its ass in the midst of falling employment doesn’t even begin to make sense.