The Dow’s Record High: What the Media Conceals from the Public

Announcements trumpeting the “Dow’s Record Surge” and that “Stocks Reach New Highs” were all over the media last week, creating the impression of a booming United States economy. But as the leading economic writer for the New York Times pointed out in a little-notice column ("Some Rain On the Parade on Wall St." by David Leonhart, 07/18/07), the assumptions regarding these excited claims are “fundamentally wrong.” Not simply “wrong” in the sense that rising stock prices primarily benefit the wealthy---though this fact, and that stocks rise when workers are laid off, is rarely discussed. The media is engaged in a more fundamental misrepresentation about the “Dow Industrial Average,” one that should cause media outlets to divulge their motives for promoting an index that misleads the public regarding economic facts.

And added to this misinformation is the rarely disclosed fact that the Dow eliminates stocks that under perform over time. So when the media talks about the Dow index rising by a certain percentage, this comparison does not even include the same stocks.

Source, and full story, Beyond Chron, July 23, 2007