The Market Is Not The Economy

DONALD TRUMP is fond of pointing out that the stockmarket has reached many record highs under his presidency. It is a capricious measure to boast about, and one that may not fully reflect the concerns of those who voted for him and probably care more about real wage growth. A look at the ratio of stockmarket capitalisation relative to GDP shows that this measure is close to a record high. That led me to reflect on a sentence I wrote a few years ago: we are better at creating new claims on wealth than at creating wealth itself.