Search This Blog

Friday, May 3, 2013

Economic Profit via Containment rather than Cure

Weekend is just upon us so let's get right into it...

Two big questions always asked around the proverbial water cooler by those who care about the state of the US economy is why doesn't government do anything to improve the situation, and why is this evil stock market continuing to rise.

We've explained the reasons before but sometimes its better to get the truth from a different source..
The truth is.. well, CNBC's headline says it best:

'Markets Don't Want Strong Economy'

Oh Wow.. please explain...

"Stock markets don't want a strong economy, since a resurgence in growth would mean the end of cheap money and heighten worries about inflation , said Bob Doll, chief equity strategist at Nuveen Asset Management."

Re-read that... let it sink in.
The closest thing to genuinely honest, blunt truth you'll read or hear from a mainstream finance news site..  Continuing..

"(Doll says) So many people want a strong economy. Beware of what you ask for... A strong one will bring the questions, 'When is the Fed done? When is inflation coming back? When is the end of the cycle?...

If your objective is to find jobs for our kids, absolutely you want a strong economy," he added. "But if you want a strong stock market, at least in the near term, you want a good but not great economy"...

Uncertainty is causing companies to hold on to cash or return it to shareholders via buybacks and dividends, but Doll noted, "It's not great for the economy, but great for the stock market.""
And that is why Nothing.. and we mean Absolutely Nothing is done to truly improve the US economy.

Our politicians, Dem and Rep are bought off by Wall Street and they do not want Congress or the President to do Anything to cause those QE spigots to even remotely close up.

And as long as there's just a modicum of growth.. some teensy weensy movement in the direction of improvement, people will be overall content.

Remember the example we often use...
You're standing in a very long line for a very long period of time and it seems like its not moving, so it causes feelings of anger and impatience.  When you see the front of the line move a couple inches, it gives hope of eventual continual progress even though the line didn't move way, way back where you're standing.

Just the glimmer of hope and slight improvement is enough to keep most people waiting in that line....

Same with this economy-- show a stock market go up, unemployment figures go down and a populace kept in the dark as to how statistics are manipulated and you have a lot of people struggling with nothing more than mere belief of things getting better as solace.

Its no different than with medical disease and cancer...
Wonder why there is no cure for cancer and AIDS?

There's really no financial motivation to eradicate the menace.  The corporate profits come from the containment.

All those supposed scientists tirelessly working around the clock... The nonstop cocktails of drugs one ingests simply to control their ailments..  The tens of billions of dollars these charities take in based on public's good intentions... All the profit that comes from Oncology and radiation treatments and hospice,etc...

The last disease which was eradicated was polio-- 50-60 years ago or thereabouts.  And why?   How did this happen?  Simple-- Dr Jonas Salk came up with cure then gave it to the medical community for FREE!
And that's why polio in the western world is pretty much non-existent and why scientists currently can't even cure a common cold!

It all comes down to the profit motive.   Zero incentive.

If we were running this nation, we would punish Investors like there was no tomorrow. Dramatically increase their stock dividend taxes and compel state governments to charge sales tax on stock buy/sell transaction.

We'd also actually enact legislation to get people working and punishing businesses that refuse to hire..  Corps would also have to legally provide medical and dental benefits to temp workers, so to force businesses to stop using them as an escape from hiring real employees and providing living wages and benefits for their workforce...
We'd also establish what we call the 'Nike Tax'- so named because we despise that corporation more than any other.  The 'tax' would be 20% on all goods and services provided by American corporations which did not produce at least 20% of all product on US soil.

In other words, if Nike for instance wants to continue selling $150 shoes to US inner-city children, it better hire American men and women to produce 20% of the shoes and apparel it puts its 'Swoosh' onto, or that pair of shoes now will cost $180 -- the 20% going into the greater unemployment fund.

If they didn't like it, we'd close the US market entirely to that corporation.
If we're good enough to buy the shit, we're good enough to make it...

The status quo would not continue..

There's just no motivation for anyone in a position of power to do anything to truly make our lives better or safer, and too few understand this for there to be the proper groundswell public reaction and response
~ Happy Cinco de Mayo (May 5th)