Brad De Long wrote:
Why is this a good unconventional measure? I would prefer the total
market capitalization of the SP 500 divided by the companies' total
annual wage bill...
Conceptually, the SP 500 is the price of a share of blue-chip
corporate America. So, dividing it by the average wage would tell you
how long it would take for the average worker to buy a representative
share of big U.S. capital. It's propagandistically nice for those of
us who remember those charts of how long it would take a Soviet vs. a
U.S. worker to buy a pair shoes. Speaking of which, it'd be
interesting to see a chart of how long it'd take a Nike worker to buy
a pair of Nike shoes.
Doug
