Saturday, December 28, 2013

Wall Street Is Not Main Street

The stock market has reached record levels.   This is happening because most major companies are doing fine as a result of cheap money, cost cutting and the lay off of thousands of people during the financial crisis.  Those jobs are never coming back because of mergers and acquisitions, technological efficiencies, robotics and off shoring.  The fact is that it takes fewer people today to get the job done.  The stock market is certainly not up because of economic growth that has been tepid during the Obama Presidency.   Further, returns on CD's or bonds are so low that investors have very few other places to put their money so this drives up stock prices.   All should beware.  What goes up, often goes down and pretty dramatically.   This Blogger has seen three stock market crashes during my life time and it will happen again. 

In any case, Wall Street is not Main Street.  Small and Mid-Sized companies that often sell to larger companies on the stock exchange have  been negatively impacted by their cost cutting, which often results in fewer purchases and or a squeeze on margins.  More important, the Middle Class has suffered pretty dramatically because wages have actually gone down in real terms over the years and especially during the Obama Presidency.   We have the lowest Labor Participation Rate at about 63% and the highest level of poverty in the US in three decades.   Big Business is not responsible for this calamity.  These factors are the result of Obama's Socialist Schemes that have retarded economic growth. 

Clearly, Obama's SwindleUS Plans, spending more than a Trillion Dollars to stimulate the economy have not worked because they have been accompanied by higher taxes and thousands of new regulations by Executive Order that are all job killers.  Well dah!  So whatever stimulative impact pumping all this money into the system may have had along with lower interest rates provided by the Federal Reserve was negated by other government actions that have been anti-stimulative.   Go figure!  It is just Economics 101 and anyone who just got a C in the class would know it. 

And, then there is ObamaCare that hangs over the American people and economy like an anvil to our heads.  Aside from making a mess of our health care system, ObamaCare, if not repealed, is a job killer.  Companies will push more jobs overseas and or make jobs 29 hour positions to avoid paying for ObamaCare.  It is inevitable.   Even so, the economy is finally starting to look a little better despite Obama's Socialist policies and certainly not because of them.  This speaks to the resilience of Free Market Capitalism as the private sector adjusts to Socialist Schemes.  Of course, things could be better and growth much higher if we had a pro-growth federal government in place instead of Socialists running the economy.   We will have to wait until 2014 and 2016 to make that happen.  If the voters don't wise up and it does not happen, look for more of the same retarded economic growth.  In the mean time, it is important to recognize that Wall Street is definitely not Main Street.   

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