Somewhere in Massachusetts this fall, a school committee will sit beneath fluorescent lights and explain why the math no longer works. A few weeks later, their neighbors will vote on whether to raise their own property taxes just to keep their schools where they already are. Not to build something new. Not to shrink class sizes. Just to stand still against inflation.
Since 2020, cumulative inflation has run to roughly 25%, and the cost of running schools has climbed right alongside it. Salaries, health insurance, transportation, utilities, and special education have all become more expensive. For many communities, simply maintaining today’s level of services costs substantially more than it did just a few years ago.
At a time when companies can add billions of dollars in market value in a single trading day and new trillion-dollar valuations have become almost routine, funding one of society’s most essential institutions remains precarious.
Some towns will pass the override. Some won’t. Those that don’t will start cutting.
Figure 1 — The rising floor
U.S. consumer prices are up about 25% since 2020
I work close enough to this to feel it in my chest. I’ve sat through enough budget conversations to recognize the quiet resignation that settles over a room when everyone already knows the numbers before anyone says them aloud.
Teaching is one of the most common professions in America. The country employs roughly 3.8 million teachers across public and private schools, making it one of the nation’s largest professional workforces. Public education is one of the load-bearing walls of nearly every community.
Yet here we are asking homeowners, town by town, to vote simply to preserve what already exists.
That question has become difficult for me to ignore.
How can the richest stock market in history coexist with towns debating whether they can afford teachers?
Everything else I’ve been thinking about is really an attempt to answer that.
Wealth isn’t all the same thing
Part of the answer is that today’s prosperity isn’t as straightforward as it appears.
Some of it reflects genuine technological progress. Some of it reflects how financial markets value that progress. Markets don’t simply price what exists today. They price expectations about tomorrow, sometimes years into the future.
Every great technological revolution has inspired extraordinary optimism.
Railroads.
Electricity.
The internet.
Artificial intelligence belongs in that conversation. The question was never whether AI matters. The question is whether markets are pricing AI itself, or pricing the story we’ve begun telling ourselves about AI.
That distinction matters, because stories can become self-reinforcing.
Take one example. Several large technology companies have extended the estimated useful lives of portions of their AI infrastructure, reducing annual depreciation expense and increasing reported earnings. Others have entered financing arrangements that blur the line between supplier and customer. Critics see circular demand. Defenders see ordinary commercial financing.
Neither observation means the technology isn’t real. It almost certainly is. But it illustrates a broader point: financial results reflect not only innovation itself, but also the accounting assumptions, financing structures, and expectations built around it.
Speculation didn’t disappear. It dispersed.
The speculative impulse never went away. It simply spread across thousands of markets.
Meme stocks.
Cryptocurrency.
Sports betting.
Prediction markets where people wager on elections, weather, and celebrity gossip.
The common ingredient isn’t the assets. It’s human psychology.
Money and narratives now move almost instantly. Booms and busts that once unfolded over years can compress into months as capital races toward the next compelling story.
That matters because a relatively small number of AI-related companies now account for roughly one third of the S&P 500’s total market value — one of the highest concentrations in the index’s history.
Figure 2 — The narrowing top
Seven companies, one third of the index
Anyone with an index fund, pension, or 401(k) owns part of that story whether they intended to or not. Tens of millions of Americans participate in 401(k) plans, while millions more rely on pension systems that also invest heavily in public markets.
Which leads to a strange reality.
The teacher whose district is deciding whether it can afford her job is increasingly depending on those same companies to finance her retirement. She’s squeezed by the budget that pays her today while relying on the market that’s supposed to support her tomorrow.
Housing rises.
Insurance rises.
Childcare rises.
Food rises.
In many parts of the country, those costs have increased faster than wages, leaving households with less room to absorb an unexpected setback.
The tower
The image I keep returning to is a Jenga tower.
The visible wealth sits at the top.
Record valuations.
Massive AI investment.
Trillion-dollar companies.
Underneath is the foundation that rarely makes the front page.
Teachers.
Road crews.
Libraries.
Public employees.
Municipal budgets.
The ordinary institutions that make everyday life possible.
Every override vote removes one of those blocks where everyone can see it. You can keep a tower standing for a surprisingly long time by removing pieces from the bottom.
Until one day you can’t.
Foundations rarely fail from the top down.
The frustrating part is that these two realities can coexist without contradiction. Financial wealth largely accumulates through the ownership of assets. Local schools depend primarily on property taxes, state aid, and municipal budgets. Federal education dollars help, but they are generally targeted toward specific programs rather than day-to-day operating costs.
Those systems are only loosely connected. So a country can become dramatically wealthier on paper while a town still struggles to afford fourth-grade teachers.
Events versus processes
I used to imagine financial crises as events. Now I think they’re usually processes.
A crash announces itself. A decade of stagnant purchasing power, rising living costs, and gradually weakening public institutions doesn’t. It simply feels like ordinary life becoming a little harder every year.
Nobody photographs a fuse burning.
When I look for signs that the fuse may already be lit, three trends keep drawing my attention.
U.S. household debt has climbed to a record $18.8 trillion, while many families report having less emergency savings than they once did.
Figure 3 — Leaning on credit
Household debt at a record $18.8 trillion
Financial stress is increasingly concentrated among lower-income households, allowing headline economic statistics to look healthy even as many families struggle beneath the surface.
Meanwhile, many employers have become more cautious about hiring white-collar workers, even while overall unemployment remains relatively low.
None of those observations prove a crisis is coming. The tower could stand for years. Together, though, they suggest that pressure is already building beneath the surface.
What actually holds
Thinking about all of this can produce a strange kind of vertigo. If markets can manufacture scarcity and headlines can manufacture urgency, eventually every signal begins to feel manipulated.
AI doesn’t solve that problem. It makes thoughtful analysis easier than ever. It also makes convincing misinformation cheaper than ever.
I’ve come to think the answer isn’t finding perfect information. It’s anchoring yourself to the handful of things that don’t change with the narrative.
Your cash flow.
The value of what you actually own.
Your time horizon.
The purpose your money is meant to serve.
Oddly enough, that’s exactly what an override vote asks of a town.
Ignore the spectacle.
Ignore the record highs.
Ignore the latest excitement.
Ask the quieter question underneath it all: can we still afford the things that hold everything else up?
The two headlines
Tomorrow the market may close at another record high. Tomorrow night another town may debate cutting teachers, librarians, or counselors because the budget no longer works.
Those headlines rarely appear beside one another. They should.
One measures the price of financial assets. The other measures the strength of the institutions that make ordinary life possible. They are not separate stories — they are different views of the same economy.
Everyone watches the top of the tower. History suggests we should spend far more time watching the blocks at the bottom.
— The same economy, two ends —
Pull enough from the bottom and the top still stands — right up until it doesn’t.