Jerry Davis on The Uprising of Communities and Co-Ops: Reclaiming Power Over Markets and Data

Yeah, no, I love that.

It's interesting that we have equipped so much of the population with a mindset that's oriented towards financial markets and the stock markets as this sort of unerring bearer of truth.

So in some sense, like, 60% or more of American families are invested in the stock market.

And there's a lot of evidence, and I've contributed some of this to the idea that when people start like paying close attention to the stock market, if they buy an index fund and actually start checking how they're doing, it starts to influence their behaviors and their worldviews in a sense.

So since I know my sister will never live, will never listen to this, I could share the The story.

So she was widowed pretty young and ended up with a settlement that got invested in the stock market.

And so, you know, she's a widow with three kids and had to take care of herself.

She had to go get a new job, which is, you know, pretty horrific.

But she had this endowment, in a sense, invested in the stock market.

And I said...

It's great, but whatever you do, just don't check it more than a couple of times a year because it will drive you crazy.

And what she did was the opposite.

You know, she went back to work as a school teacher every morning.

She'd come out to the kitchen, put on the coffee, fire up her computer.

look up her Fidelity account and see how much it had changed, you know, from yesterday to today.

And if the market was up, you know, it was red lobster for lunch.

And if the market was down, it was tuna sandwich at her desk.

So this is known as, you know, as the wealth effect.

that one way that you can make decisions about consumption and how you spend your money is based on your wages.

You know, what comes in every week or every month, that's what your budget should look like.

The wealth effect is the idea that people's consumption can also be shaped by their ownership of financial assets.

And so I have to say, Michael, I see that you bought this apartment on the Upper West Side, and when you bought it, it cost, you know, $100,000, and now it's worth $3 million.

And if you're going out every night for caviar and veuve cliquot, that would be the wealth effect.

But it's not based on your meager salary as a college professor, because we're all underpaid, but...

but that it's based on your holdings of real estate or the stock market.