Don't Be a Crab

If you have ever gone crabbing and thrown your catch into a bucket, you might have noticed a strange phenomenon. If one crab starts to climb up the side of the bucket to escape, others will pull it back. Rather than see one escape, the rest would rather keep it captive with them,

We're seeing something similar with people disparaging recent stock market gains even while small businesses and individuals suffer from the pandemic. This article illustrates what I mean. Reporting on CNBC, Jim Cramer spoke about the Dow's best week since 1938 as a graphic scrolled across the screen giving the news that 163 million Americans have lost jobs in the last six weeks. This prompted outrage, saying the juxtaposition of those two stories illustrates "everything that is wrong" in America. In speaking later about it, Mr. Cramer said he understands the anger and frustration, and predicted it's all directed at Wall Street.

Rather than explain why we should take heart at Wall Street's gains amid such otherwise bad news, Mr. Cramer blamed it on big vs. small business. Big business, he says, with their pristine balance sheets and access to capital, essentially have it made, while small businesses that lack these privileges suffer. He characterized this as a "relentless rally" as if it's a bad thing for the market to go up: “This relentless rally seems unfair, it seems senseless and it seems heartless.” Now, in fairness, Mr. Cramer did say that if big businesses fail there are more layoffs, but calling market increases a "relentless rally" makes it clear where his sentiments lie. Clearly he'd prefer big businesses to be suffering as well as small businesses. We should all be crabs stuck at the bottom of the bucket.

Not all big businesses are profiting. Airlines and cruise lines certainly aren't. Neither are oil companies. Nor are retailers like J.C. Penney, who is now considering bankruptcy. Likewise, not all small businesses are suffering. Blanket characterizations of big or small like this do nothing but promote more class warfare at a time when we need unity more than ever.

But more importantly, the "market" isn't a single business or even a single industry. The market is the collective of all publicly traded companies, and whether the market is up or down is a reflection of investors' confidence (or lack) in the future of the economy. It's the big businesses that make up the market that also make up the portfolios of pension funds, IRAs, and 401(k)s that millions of Americans are now relying on or will someday rely on to survive. And, like it or not, it's most likely going to be big businesses that come up with a vaccine for coronavirus.

So, rather than be a bunch of crabs at the bottom of a bucket, cheer on the market's gains. Quit trying to cast everything as an "us vs. them." We're all in this together.