One thing I don’t see discussed enough is how much modern economic “health” seems tied to asset prices rather than wages or productivity.
Equities, housing, and even crypto swings appear to influence consumer confidence, spending, and political decision-making more than traditional indicators like real wage growth or labor participation. When markets rise, we’re told the economy is strong—even if affordability worsens. When assets fall, panic sets in quickly, regardless of whether employment remains stable.
This raises a few questions:
• Has the economy become structurally dependent on asset inflation?
• Are monetary policy tools now implicitly designed to protect asset values?
• What does this mean for younger or lower-asset households trying to build wealth?
Curious to hear perspectives from people looking at this from macro, policy, or labor angles.
Are We Underestimating How Much of the Economy Is Now Asset-Driven?
byu/Raw_Rain ineconomy
Posted by Raw_Rain
2 Comments
Yep. We basically ignored a recession impacting a majority of Americans because asset prices did well.
Very good questions. As a fly on the wall observer and participant in (U.S.)society, it encourages not working to save but rather work to invest. Buy into this capitalist system, save little for yourself and your family and invest a majority of your earnings back into the market.