The media repeatedly explains why apparently good news for workers, that unemployment is lower, that more jobs are being created, that some workers are getting small raises, results in dramatic sell-offs in the stock market. We are told that investors sell because of apprehension that Alan Greenspan and the Fed will soon raise interest rates in order to head off a dreaded rise in the rate of inflation. Inflation it is feared will be caused by the tight job market -- which might cause wages to go up.
Financial pundits never address the issue of inflation that is caused by rising CEO salaries and bonuses. We never hear of inflation being caused by the continual increase in corporate profits. Likewise, there are no connections made between the increasing prices of stocks and inflation. Why is it that only wage-inflation is seen as negative, and other forms of price increases are benign? Are Alan Greenspan and the Fed merely following the conservative priorities of Reaganomics which restrict opposition to inflation to combatting wage-inflation -- which is seen as "the cruelest tax of all?"