Wall Street's disconnect with jobs

BusinessWeek reported in its article Can Main Street Catch Up with Wall Street? that Ed Yardeni said "it's also possible that stock indexes could continue to rise even as U.S. workers continue to suffer. That could unfold if high rates of growth resume in China and the rest of the developing world. In other words, it's feasible that stocks in companies serving those emerging markets would gain value even as the U.S. economy -- and its workers --stagnate." Yardeni almost realized the truth; it is not only feasible, it is assured.

There is one huge reason why we think that jobs and Wall Street are joined at the hip: up until recently, the USA has been the world's economic powerhouse and the bastion of investing. When Wall Street stumbled we lost jobs -- and vice versa -- and so we naturally assumed that the two events were intrinsically related. Wall Street has always been only distantly related to American jobs; Wall Street is directly related to jobs no matter where they are. We used to produce far more than we consumed; today we import twice as much as we export, and most of those exports are low tech and/or agricultural products. Today China and Germany are the two largest exporters and so their jobs situation is more relevant to Wall Street. And now that many corporations have outsourced production, engineering, and customer service, the American angle is becoming far less important. Our media is doing a huge disservice to Americans by connecting them because people will think that because the recession is technically over, jobs will naturally follow.