The Dow Jones Industrial Average dropped more than 1,800 points, nearly 7 percent, as increases in coronavirus cases deflated optimism that the economy could recover quickly from its worst crisis in decades.
Thursday’s retreat comes after the market has been soaring higher for more than two months at a pace that didn’t reflect the actual state of the economy.
Instead, that surge in stock prices was largely fueled by taxpayer money injected into the corporate economy by Congress.
The CARES Act alone appropriated $2.2 trillion but it allowed corporations to leverage another $4 trillion in loans from the Federal Reserve banks.
A day before the stock market crash, the Federal Reserve said the road back to recovery would be long.
President Donald Trump ignored the coronavirus pandemic in its early stages and generally botched the nation’s response to the health crisis.
Consequently, almost 120,000 Americans have died from the disease and 40 million jobless claims have been filed.
Experts say that the nation is in for a prolonged period of desperation that could surpass the Great Depression of the 1930s while corporate bailouts keep the richest one percent of the population living in comfort.
Combined with anger over police brutality and the spaying of unarmed American citizens, the rise of neoNazis and white supremacists, plus growing economic hardship, the nation is headed toward a turbulent future.
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