Predictions for 2014: (1) The federal minimum wage will be raised to $10.50, (2) Congress won’t shut down the federal government, (3) Congress won’t pass anything significant on immigration reform, gun safety, or tax reform, (4) Republican Senate and House primaries starting in March will intensify the GOP civil war, which will grow even more heated throughout the year, (5) Americans will forget how badly the rollout of Obamacare was botched, and by year’s end a majority willsupport it, (6) Hillary Clinton won’t yet declare for president and speculation will increase about Joe Biden and Elizabeth Warren, (7) Democrats will retain control over the Senate and Republicans will retain control over he House in the midterm elections (8) The Dow will close 10 percent lower by year’s end than it was at the start, (9) Wall Street will be rocked by a huge insider-trading scandal, and (10) Both parties will tout strategies to reverse widening inequality, which will have grown worse. Your predictions?
The stock market closed out a record year at an all-time high yesterday, giving stockholders in 2013 their biggest annual gains in almost two decades. But the real news here, that went completely unreported, is that the 2013 bull market widened inequality because (1) the richest 1 percent of Americans own 35 percent of the value of all shares of stock, and the richest 10 percent own over 80 percent, (2) the corporate profits on which these gains were based came largely from keeping the wages of ordinary workers low, (3) the capital gains and dividends these gains generated are taxed at a lower rate than most of the income of the middle class, and (4) the biggest winners are the top executives and Wall Street traders whose year-end bonuses are tied to the stock market, and the hedge-fund and private-equity managers whose “carried interest” loophole allows them to cash in big-time. When will we stop measuring the health of the economy by the Dow Jones Industrial average?