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The Rich Are Playing Hot Potato With Your Retirement

Just hope you don’t get burned when the music stops

Have you heard? The bells are ringing on Wall Street. The pixels on graphs and charts all point up. The stock market is back, and so is America’s winning streak after taking a few too many Ls because of a little fluctuation called the COVID-19 pandemic. 

At the head of the parade is Donald Trump, a big-boy businessman who snatched the American presidency thanks to his illusory bona fides as a dealmaker and money guy. If there was ever going to be a cheerleader for the stock market sitting in the Oval Office, it’s Trump — and he’s lusting after every jump of the NASDAQ index, hoping it proves something fundamental about his value to American history. 

It’s hard to say what the rest of us should be thinking as the numbers roll upward. Trump is crowing about unemployment being down to 13.3 percent — a stunning about-face, especially given economists’ doom and gloom predictions. But the number glosses over how nearly 2 million Americans applied for jobless aid last week, or that one of the country’s biggest payroll processors reported a loss of 2.8 million jobs in the private sector last month. Economists can’t even discern whether the sunny jobs report Trump is championing has long-term merit. 

Those of us who have retirement savings accounts are supposed to be cheering right now. But what the fuck are we actually staring at? 

Analysts have suggested that much of the stock rally reflects excitement around continued growth for brands like Amazon and Zoom during the pandemic and mass protests. As dark as that is, it’s even more frustrating to know the rally is the result of “unprecedented” government and central-bank support of major corporations. Whatever the case, major banks can’t even agree whether the stock bump represents meaningful recovery or just some breathing room before the crash resumes. We learned in school that the invisible hand kept the market in balance, even through times of crisis. 

Meanwhile, back in reality, experts are warning that stocks are only booming because the U.S. dollar is sliding, with long-term ramifications looming as a result of the Federal Reserve pumping cash into international markets. It’s even got infamous stonks nut Jim Cramer crying from the rafters about “one of the greatest transfers of wealth” to corporations in modern American history. 

Amid all this, we remember how the Great Recession disproportionately hurt minority households, which lost value on financial assets at far higher rates than their white counterparts. We know that there are major inequities in who has a 401k account and who doesn’t; we know that it’s gotten worse in the last decade, with black and brown participation in 401ks decreasing in dispiriting ways. So no wonder the notion that a booming Wall Street could be a win for working-class America rings more hollow each day. Reopening America is a pyramid scheme built on the backs of vulnerable essential workers, and Trump is proving that point whether he agrees or not. 

Could the stock market crater again? 

At least some big brains think it’s inevitable. That’s one of the big reasons why people are thinking of a world where our life savings aren’t tied to the volatility of the stock market. The 401k era was borne of a long win streak in a bull market that helped disguise tumbles in savings and pension values, and some are turning to investment routes like bonds, CDs and peer-to-peer lending as more attractive outlets. But in terms of the sheer ability to grow your cash, nothing appears as simple and valuable as the reliable 401k — which is how we end up right back here, with some people getting utterly screwed and others doing just fine. 

Secure-looking investments have turned into a literal gamble for so many people, and the emotional disconnect between market performance and real life isn’t going away. It may even get worse if the pandemic booms again in the fall. Trump waves around the numbers as a symbol of success, regardless of how reality treats his actual record on market impact. And the people who buy into those numbers think the stock market rebound is some great evidence of normalcy again. 

It’s not, of course. It’s just another stop on the long crawl out of the hellscape. Trump may have the gall to invoke George Floyd as part of the economic good news, as if the culture is buying into his elation. But too many people see right through the illusion of victory. It’s too hard to ignore 21 million people without jobs, and all those bank accounts tumbling toward zero.