Gone to socialists, every one.
In our media saturated society anyone might think we are going through a major revival of free market capitalism. It is the Tea Party and Republican Party verbal remedy for all that ails American society.
Socialism and even just ordinary good government are anathema. You would think the government owns Walmart or General Electric, or the entire S&P 500, given the way the political candidates carry on. Even government regulations, like not selling poisoned food, are decried as socialistic.
The entire business community of America, and the workers who follow their leadership, claims to be against socialism. The capitalist spirit remains unbroken and ready to rumble despite decades of New Deal stimulus, Great Society redistributions and even ObamaCare.
Then there is reality. You remember reality. It is what videos are sometimes made from. It is what you have to drive through to get to work in the morning, if you have a job.
There is a litmus test. There is a way to see whether people with money, which is too say capitalists large and capitalists small, stand by their rhetoric.
Real capitalists put capital to work in business. On a large scale this is easy to quantify: most of America's capital at work in business can be measured in the stock market. Every public stock has a value called its market capitalization, and you can add all that capital up to see what the free market capitalists are doing business with.
Phony capitalists put their capital in government bonds. There really is nothing in our society more socialistic that a Treasury bill or bond. To buy a bond is to turn ones back on capitalism and free markets. To buy a bond is to believe that the federal government's ability to tax is sounder economics than a bet on a business making profits.
In case you have not been following the stock and bond markets, let me catch you up to date.
The stock market has been largely abandoned by investors. That happened in late 2008. There are still a few brave capitalists out there, and even some individual investors, but the market has been kept afloat, to the extent that it is afloat, by stock buy backs. That is, the companies are, by and large, quite profitable, and they use much of the cash they generate to buy their own stock, allowing the socialists to get out of their investment in capitalism.
The bond market, on the other hand, is stuffed to the gills with the money accumulated by socialist investors, mainly from selling stocks. These former capitalists love the taxing power of the government, which guarantees the safety of their "investment." They are happy to lend money to a money-losing government rather than risk it on money-making public companies.
It is time for capitalists to put a stop to this hypocritical behavior.
It is time for all Republican candidates to take a new pledge:
"I pledge all of my capital is invested in the stock market or private investments, and I have no capital invested in the socialist government bond market, and never will."
In fact, all Republicans should make that pledge and take action that aligns their investments with their capitalist rhetoric.
When will they ever learn?
Disclaimer: William P. Meyers has a retirement fund that is 100% in stocks and owns no government bonds.
Showing posts with label stock market. Show all posts
Showing posts with label stock market. Show all posts
Sunday, September 4, 2011
Thursday, August 27, 2009
Capitalists Announce Five Year Plan
The new capitalist five year plan for the economy of the United States of America (including its empire of affiliated nations) was announced August 26, 2009, in a secret underground bunker in Manhattan. The plan covers the years 2010 through 2014.
The usual report on the prior five year plan was handed out in advance. Although there were some minor glitches in 2008 and 2009, the plan was deemed to be highly successful. The political baton was successfully handed off between the two parties without any real change in policy. Large numbers of workers were impoverished, which will ensure their loyalty and hard work during the coming years, if they are rehired. Almost all value was squeezed out of the economy and into a much smaller number of individual capitalists and banking institutions than had been necessary in the past. The heroin supply from Afghanistan was assured, military spending increased, and China and India got in lockstep with the plan for global development.
The key components of the new five year plan can be summarized as: maintain a stable trajectory. Military spending is to grow, but not so much as to jeopardize other segments of the economy. Unemployment is to recover, as its primary purpose of indebting large numbers of people and insuring their future loyalty has been largely accomplished. Stock market and housing price booms are designed in towards the end of the plan, to be facilitated by easy credit from the Federal Reserve. New regulations are planned to minimize competition, and new loopholes have already been worked into them that can be used to advantage only by the largest corporations.
The health care system in the United States is to remain mainly as it is, with only the most minor of reforms. Sick people are an economic liability once their wallets have been drained, but using tax dollars extracted from workers, high prices for drugs, insurance, and doctor services will be maintained.
The view on global warming has changed since the last five year plan. Super profits will be made by reluctantly accepting government and private dollars for "clean energy" projects. Meanwhile, heavy equipment manufacturing plans will be laid for the vast system of dikes that will be needed to protect sea coasts from flooding.
"Above all," said Michael Milkem, this year's chairperson, "we must remember to not try to micromanage the situation. Our strength is in sticking to fundamentals. Don't sweat the small stuff. Control the politicians, interest rates, and bank lending policies and the small stuff will take care of itself."
The usual report on the prior five year plan was handed out in advance. Although there were some minor glitches in 2008 and 2009, the plan was deemed to be highly successful. The political baton was successfully handed off between the two parties without any real change in policy. Large numbers of workers were impoverished, which will ensure their loyalty and hard work during the coming years, if they are rehired. Almost all value was squeezed out of the economy and into a much smaller number of individual capitalists and banking institutions than had been necessary in the past. The heroin supply from Afghanistan was assured, military spending increased, and China and India got in lockstep with the plan for global development.
The key components of the new five year plan can be summarized as: maintain a stable trajectory. Military spending is to grow, but not so much as to jeopardize other segments of the economy. Unemployment is to recover, as its primary purpose of indebting large numbers of people and insuring their future loyalty has been largely accomplished. Stock market and housing price booms are designed in towards the end of the plan, to be facilitated by easy credit from the Federal Reserve. New regulations are planned to minimize competition, and new loopholes have already been worked into them that can be used to advantage only by the largest corporations.
The health care system in the United States is to remain mainly as it is, with only the most minor of reforms. Sick people are an economic liability once their wallets have been drained, but using tax dollars extracted from workers, high prices for drugs, insurance, and doctor services will be maintained.
The view on global warming has changed since the last five year plan. Super profits will be made by reluctantly accepting government and private dollars for "clean energy" projects. Meanwhile, heavy equipment manufacturing plans will be laid for the vast system of dikes that will be needed to protect sea coasts from flooding.
"Above all," said Michael Milkem, this year's chairperson, "we must remember to not try to micromanage the situation. Our strength is in sticking to fundamentals. Don't sweat the small stuff. Control the politicians, interest rates, and bank lending policies and the small stuff will take care of itself."
Saturday, August 18, 2007
Review of The Black Swan, The Impact of the Highly Improbable Nassim Nicholas Taleb
This week the stock market did poorly. Many people pay no more attention to financial markets than they do to politics. The first inkling they get that something systemic has gone wrong comes only when they are directly impacted. Perhaps they lose their job; perhaps they find their credit has reached its limits. But most Americans have enough education and experience to know that a stock market crash can have a negative impact on their lives.
This would seem to be a vindication of Nassim Nicholas Taleb, who has a life-long relationship with what he calls Black Swans, which are unexpected events. He is also the author of Fooled By Randomness, the Hidden Role of Chance in Life and in the Markets (which I have not yet read).
The funny thing is, what is unexpected to one person can be expected by another. One person prepares for hurricanes, another can't be bothered until it is time to hang onto a tree for dear life. The current market turmoil has been expected by many for years; it was only a question of timing. I warned people not to take out adjustable rate mortgages on houses that were becoming increasingly unaffordable. Even when the Federal Reserve started raising interest rates in 2005 people kept on willfully ignoring the likely future. In 2007 the chickens, who know a hurricane when it starts to rain, have come home: defaults on home loans have led to institutional owners of the mortgages losing money; in turn those who borrowed money to make these investments have had to liquidate perfectly good investments, including blue chip stocks.
In fact true Black Swans, I gather, are not so easy to predict. The destruction of the World Trade Center was a Black Swan even though we knew there were organizations determined to fight what they saw as U.S. tyranny. Intelligence agencies, informed citizens, and maybe even President Bush knew about Al Qaida beforehand. The Trade Center had already been bombed by Islamic extremists. The only thing surprising was the method and timing.
Global warming, even though some scientists saw it coming decades ago, is a Black Swan. A global epidemic that kills more than 5% of the population would be a black swan to economists and financiers, but it probably would not be a big surprise to an epidemiologist. The only surprise would be the specific nature of the disease and the specific class of victims.
The Black Swan is an interesting and worthwhile read, but it is handicapped somewhat by occasionally confusing sentence structures. Taleb is best at narrating interesting stories from his own life, but there is seldom a truly dull moment in the book. It is as much about politics, the human mind, and philosophy as about economics and investing. His thoughts on history are quite engaging. I did not always agree with his analysis, but I found most of it thought provoking.
That said, we do have to plan for the future, and we should count our chickens before they hatch. Otherwise we will not be ready to care for them.
Amazon.com The Black Swan link
This would seem to be a vindication of Nassim Nicholas Taleb, who has a life-long relationship with what he calls Black Swans, which are unexpected events. He is also the author of Fooled By Randomness, the Hidden Role of Chance in Life and in the Markets (which I have not yet read).
The funny thing is, what is unexpected to one person can be expected by another. One person prepares for hurricanes, another can't be bothered until it is time to hang onto a tree for dear life. The current market turmoil has been expected by many for years; it was only a question of timing. I warned people not to take out adjustable rate mortgages on houses that were becoming increasingly unaffordable. Even when the Federal Reserve started raising interest rates in 2005 people kept on willfully ignoring the likely future. In 2007 the chickens, who know a hurricane when it starts to rain, have come home: defaults on home loans have led to institutional owners of the mortgages losing money; in turn those who borrowed money to make these investments have had to liquidate perfectly good investments, including blue chip stocks.
In fact true Black Swans, I gather, are not so easy to predict. The destruction of the World Trade Center was a Black Swan even though we knew there were organizations determined to fight what they saw as U.S. tyranny. Intelligence agencies, informed citizens, and maybe even President Bush knew about Al Qaida beforehand. The Trade Center had already been bombed by Islamic extremists. The only thing surprising was the method and timing.
Global warming, even though some scientists saw it coming decades ago, is a Black Swan. A global epidemic that kills more than 5% of the population would be a black swan to economists and financiers, but it probably would not be a big surprise to an epidemiologist. The only surprise would be the specific nature of the disease and the specific class of victims.
The Black Swan is an interesting and worthwhile read, but it is handicapped somewhat by occasionally confusing sentence structures. Taleb is best at narrating interesting stories from his own life, but there is seldom a truly dull moment in the book. It is as much about politics, the human mind, and philosophy as about economics and investing. His thoughts on history are quite engaging. I did not always agree with his analysis, but I found most of it thought provoking.
That said, we do have to plan for the future, and we should count our chickens before they hatch. Otherwise we will not be ready to care for them.
Amazon.com The Black Swan link
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