Change?

Change, unless it is revolutionary and often entailing violence, happens incrementally.

Today the stock market dropped 274 points on bad employment news. The unemployment rate ticked up a tenth and new hires were down.

Believe it or not, that could actually be a piece of good news. Why, you might well ask? Good question. You, my readers, are very bright people (and not corporations).

The answer requires you to think back to the early go-go G.W. Bush years—and even before. During that time, when unemployment rose, the stock market rose. When hiring went up, it fell. Month after month there was this disconnect.

When Bush took over after Clinton, there was, essentially, full employment. The stock market bubble of the Bush years was built on the back of the employment market. Unemployment rose, and the market skyrocketed. However, this bubble was, as we saw, unsustainable.

It represented a schism between productivity and profit-making, on the one hand, and employment, on the other: productivity and profits rose while employment foundered. Higher unemployment meant, in that bubblicious economic moment, greater profitability for the corporate owners and, Bush's ultimate constituency, the management class.

Workers' higher productivity was not being rewarded; wages fell and unemployment rose. Instead, profits went to corporations—which to this day still have remarkable stores of cash sitting on the sidelines and are still refusing to hire. Rising stock prices resulted. It was the mechanism of the great redistribution of wealth from the working and middle and lower upper classes to the rentiers at the top of the economy.

Today's higher unemployment news created a bad moment for the economy—this drop wasn't about Europe or China. This is significant. It is different from the trend of the 'aughts.

The question now becomes: Is this a tipping point away from the 'supply-side' mythology of trickle down economics wrought by the laughable Laffer curve of Reagonomics? Does this represent a real, though probably politically imperceptible, change? Are we moving to a more Keynesian, demand-driven, egalitarian economy where increases in productivity by workers are rewarded by higher wages and not siphoned off for executive pay and outsized profits? I don't know. I'm no economist. But it does look definitely different.

This sort of trend—if it is one—is worth paying attention to going forward. Guys like this and this, who are economists, might be able to tell us.