Monday, August 24, 2015

When worker grit falls, the stock market will follow

The Dow's continuing plummet has clearly caught our economists off guard, but no one should find any of this surprising. Eggheads in the ivory tower like to pretend that the American economy is driven by all kinds of complex and somewhat unknowable factors, but at the end of the day, the market is only as good as the workers who make it. Got unemployment? It's because lazy people are hooked on welfare. Productivity problems? Someone's obviously slacking off and taking shortcuts.

The numbers have been telegraphing this for months:


The Grit Index shows a clear drop in American hustle and stick-to-it-edness over the past eight months, dropping nearly 6000 points since the beginning of the year. Now we're just watching the Dow catch up. A closer look makes it pretty clear who's to blame:


The wealthiest Americans, of course, are showing even more hustle than last year, giving it 118% in 2015; and the poorest Americans, of course, can't slack any more than they were already slacking. But we see a significant drop-off in hustle among the middle three groups, with an astonishing 18% plummet among the second quintile.

I haven't bothered to look into this but can only assume we'd see a similar story during most dips and recessions. The laws of capitalism are immutable, and when the economy has problems it's usually pretty obvious who's to blame.