This April, Federal Reserve chair Jerome Powell tried to quell recent sell-offs by downplaying adverse market conditions, saying that the markets were “doing what they’re supposed to do.” Whatever his own intentions, his statement might be truer than he imagined. As 2024 ended, retail trading volume spiked in the lead-up to Donald Trump’s return to office, and not just among the demographics who believed that his victory would bolster the market. Now as pain, fear, and tariffs dictate economic outlooks, the megacompanies losing billions in market cap will someday, and maybe even soon, recover. Yet the millions of small investment accounts that were tied to them may not.

An online survey of over 1,500 American women last year found that 71 percent of them were invested in the market — meaning they own stocks outside of their retirement plan. This number is up from 44 percent in 2018. Much of the meme stock reportage misled the public into thinking that the retail trading phenomena was limited to young men who’d moved back into their mothers’ basements. “They are, most of them, sitting in a dark room, eating Cheetos,” Forbes’s John Egan editorialized in 2021, “trying to figure out how life (and their wife’s boyfriend) passed them by and if there’s any way to get it back.”

That same year, 2021, Robinhood saw a 369 percent increase in the number of women using the platform. Today their user gender breakdown is about 65–35 men to women.

A paradox seemingly exists now for the Left, broadly speaking: many of the nation’s progressive youth want socialism and investment accounts too. And why not? With stagnant wages, nontransitory inflation, and rising costs for everything from homes and cars to health care, young people have, on the whole, been dealt a raw hand in economic terms.

But there’s a major issue here. Entering into the financial markets can, at times, help people to stabilize their futures. The problem isn’t this conclusion — it’s that it comes at the cost of creating other, collective solutions to people’s financial precarity. As has been the case in the past, overheated markets will attract new investors. The last time retail investment participation was this high was 2008. Prior to that, the dot-com bubble saw a cohort of new investors attempting to capitalize.

By most measures, the stock market is overvalued; the extent to which it is is up for debate. The most popular metric to prove this is the cyclically adjusted price-to-earnings ratio (CAPE). CAPE takes the share price and divides it by the average inflation-adjusted earnings over a ten-year period to smooth out distortions caused by the business cycle. That ratio for the US stock market has only exceeded 32 during three periods: the month prior to the Great Depression (32.6), the lead-up to the dot-com crash (44.2), the Meme Stock Mania (38.3), and for the month of May, it sat at 35. For context, it was 27.4 on July 31, 2007. Historically the median CAPE ratio is 16.

The takeaway, despite the details, is simple. The movement of middle-income Americans into the stock market came, not by accident, at one of its historic pricing peaks. Historically more than any other asset, stocks are something we’ve tended to “buy high and sell low,” not the reverse. So much so that ultrabillionaire investor Warren Buffett put it plainly (though not accurately) when he said, “The stock market is a device for transferring money from the impatient to the patient.” The truth is more brutal: the stock market transfers money from those who cannot afford to wait to those who can.

President Trump seems hellbent on injecting turbulence into the markets. In so doing, he’s creating opportunities for both losses and newfound upsides. Recessions like the one we seem to be entering — or may already have entered into — are double-down opportunities for capitalists and the upper strata of income earners. They tend to be fire sales for the rest of us, attempting to cash out whatever is left of a losing investment. This is one way generational wealth transfers occur, not so dissimilar from the way real estate changed hands from working-class families to private equity firms for pennies on the dollar during the foreclosure crisis.

Why does the stock market matter to the Left?

Even many of us left-wingers have dabbled with the idea of investing as a way of combating rising living costs. There is, surely, a contradiction between advocating for climate action and anti-capitalism while investing in an index fund that includes ExxonMobil. But there’s not much point in shunning or shaming people for this, when we could be asking how to use this contradiction politically.

Economic precarity played a role in both Bernie Sanders’s movement and the retail investing boom. Fully capitalizing on the former means paying more attention to the latter. One can, for example, imagine a counterfactual past where Sanders won the 2020 election and ask whether the stock craze of the following years would have taken hold in the same way. Politicians considered to be economically destabilizing could beget both short-term, frenzied risk-taking and preemptive safety measures to weather future storms; and each option can find an outlet in financial market participation.

While the market is still in disarray, the Left could build, or rebuild, political platforms to prepare for a future crisis bigger than the one that was narrowly avoided this spring. Occupy Wall Street provided a lasting foundation for what this could entail; but when movement demands lag the crisis by too long, opportunities for real change are foreclosed. Milton Friedman may have been wrong about most things, but he was right about this: what happens during a crisis depends on the ideas we have already lying around at our disposal.

Bills like the congressional stock trading ban have stalled out in legislative limbo; the Gamestock crash led to discussions around the ethics of payment for order flows (a brokerage practice that exploits the bid-ask spread to skim profits off of retail investors), high-speed trading algorithms used by hedge funds, and other systematic pricing disadvantages faced by average Americans; options contracts volume has continued to reach new highs despite a recent past where it would be unthinkable to allow low-balance accounts to engage in the practice — brokers have traditionally restricted options trading to wealthy investors with a proven track record. Today’s ethos of unbridled access, to all our detriment, deemed the fall of those norms “the democratization of finance.”

Following Occupy, several important and underdiscussed movements took hold. For one, the “Move Your Money” campaign organized some 650,000 people to abandon the Big Six banks for nonprofit credit unions. Local currencies have also been developed and redeveloped in each subsequent financial crisis since at least the Great Depression. The credit rating system for individuals should also come back under question. Occupy activists made a plea in 2011 to reimagine credit scores as a publicly disclosed process where a single rating would be used and conflicts of interest eliminated. In the dog days of his presidency, Joe Biden moved to strike medical debt out of our scores. Neither went far enough. For a measure that traces the Mason-Dixon line like a heat-seeker, credit scoring — if it’s not to be abolished — should at the very least be turned over to a public, profit-free agency to bring about some measure of oversight.

Today, this year, or even the next few years under President Trump may not appear an appropriate time for optimism. We still, however, are living in times of economic discontent where the Federal Reserve, the big banks, and the military-industrial complex are seen by people across the political divide as common enemies.

That alone remains a meaningful opening for the Left, and hardly a guaranteed one in the future.