The S&P Soars, the Economy Snores

Ben bankrolled stocks to boost demand. But what if the wealth effect doesn't work?

Illustration by Harry Campbell for TIME

The markets hold many mysteries (insert image of Ben Bernanke, brow furrowed, gazing into a smoky crystal ball). Here's the biggest right now: Why the heck is the S&P 500, up by double digits this year, behaving as though we're living large when nearly every piece of real economic data is depressing? Europe is imploding. China is still growing but slowing. Manufacturing is down worldwide, as are exports. In the U.S., the workforce hasn't been this small relative to the population since 1981. Moody's is threatening (again) to downgrade our credit rating if Congress can't avoid the fiscal cliff next year.

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