By Pam Martens: March 6, 2013

Corporate media was falling over itself yesterday to report new stock market highs for the Dow Jones Industrial Average. At 2 p.m., this is what the New York Times was reporting as a lead story on its web site:

“Despite everything, the stock market is back at a record high…Since a low point in March 2009, the Dow Jones index has more than doubled, stunning even the most seasoned stock market watchers. ‘What’s amazing about this bull market is that people still don’t think it’s real,’ said Richard Bernstein, chief executive of Richard Bernstein Advisors, a money management firm. ‘We think this could be the biggest bull market of our careers.’ ”

The seductive words in this piece are “record,” “stunning,” and “biggest bull market of our careers.” It’s like subliminal interlineations beckoning one to dip one’s toes into the water, even though we know the piranha are under the lily pads. Which is not to say that it couldn’t be the biggest bull market of Richard Bernstein Advisors’ career – the company is just 4 years old.

Before starting his own firm in 2009, Bernstein worked for Merrill Lynch for two decades, reaching the pinnacle of Chief Investment Officer. Merrill succumbed to its own stunning, bullish bets on subprime debt and was taken over by Bank of America in 2008.

But is it even correct to say the Dow Jones Industrial Average is setting new highs? Were one to adjust the Dow for inflation, there has not only been a lost decade for investors, there’s been a lost 13 years. Adjusted for inflation, the Dow is not even back to its level set in the year 2000. Equally noteworthy, the general public would likely take pause to learn that stocks are nimbly plucked out of the Dow Jones Industrial Average when things go sour for the company. Who are the deciders making these closed door decisions? A big, independent accounting or consulting firm you might be thinking; like the folks who hand over the sealed envelope at the Oscars. No, the stocks are picked by editors at the Wall Street Journal, whose revenue stream comes significantly from corporate advertising.

The 30 stocks in the Dow Jones Industrial Average are not the exact same 30 stocks that were in the index prior to the economic collapse. The losers were plucked out and better prospects inserted. So this is not the pre-2008 Dow Jones Industrial Average setting a new high; it’s the shiny new and improved Dow Jones Industrial Average with some serious warts removed.

Think of a star golfer on the 10th hole in the Masters Tournament. He drives a ball smack into a tree; it boomerangs back and knocks him out. Is he allowed to bring in a replacement to finish the game for him and call that a measure of his performance?

Here’s the record of changes in the Dow Jones Industrial Average from September 2008 through June 1, 2009, following the collapse of Lehman Brothers and AIG on September 15, 2008:

Sept. 18, 2008 ? Kraft Foods Inc. replaced American International Group Inc. (AIG) in the Dow Jones Industrial Average, effective with the opening of trading on September 22. AIG was in a swan dive at that point, trading at $2.69 at the close on September 18, down from a high of $66.85 a year earlier. AIG received a bailout from the taxpayer that eventually totaled $182 billion.

June 1, 2009: Dow Jones announces that General Motors Corp. and Citigroup Inc will be removed and replaced by Cisco Systems Inc. and Travelers Cos. GM had just filed for bankruptcy and its shares were trading at 75 cents. Citigroup was insolvent, a ward of the taxpayer, with its shares trading at $3.69. It had lost 90 percent of its shareholders wealth.

Corporate media like the New York Times like to portray the two main stock market indices, the Dow Jones Industrial Average with its 30 stocks and the Standard and Poor’s index of 500 stocks (which did not set a new high yesterday even with plenty of warts removed) as a proxy on the well being of the country; folks everywhere should be fist pumping with each new record high.

In reality, those indices measure price movements of only 530 large companies in America – many of which have found loopholes to avoid the payment of taxes, are undermining our democracy with lobbyists, revolving doors to Washington and outsized campaign financing. Why cheer them on?

According to data from the Small Business Administration, it’s the small companies, most of which do not trade on stock exchanges, that deserve the fist pumps:

23 million small businesses in America account for 54 percent of all U.S. sales;

Small businesses provide 55 percent of all jobs and 66 percent of all net new jobs since the 1970s;

The number of small businesses in the United States has increased 49 percent since 1982;

Since 1990, as big business eliminated 4 million jobs, small businesses added 8 million new jobs.

How might one go about supporting those businesses that are in our backyards as opposed to big businesses trading on Wall Street? Move your checking and money market accounts from the big banks to your local community bank that lends to the small businesses in your area. (Be certain your money is placed in FDIC insured accounts and you stay within the insurance limits.)

There is another reason to hiss when the stock market sets its so-called new highs: only the very rich are getting richer, acquiring more wealth to separate you from representative government. According to the Economic Policy Institute, as of 2010, the top 5 percent of the wealthiest Americans own 67.1 percent of all stocks while the bottom 80 percent own 8.3 percent.