Since the election last fall the market has plunged farther and faster than many would have anticipated. About half the country liked the new guy and you would have thought that they at least would have been optimistic enough to put their money where their mouth and votes were and invest in the new administration’s economic proposals. But then the proposals started emerging on an almost daily basis and lots of people decided to remain on the sidelines or sell. More than 55% of American households do have ownership in the stock market. That is millions of people. More than half of all people earning over $50,000.00 a year are invested in the stock market. The slide in values has only accelerated after the inauguration. Does Washington care? From the public responses so far it would appear that they don’t. The more that Wall Street diminshes the greater the power of Washington.
The new guy clearly believes in big government and an ever expanding role of government in every aspect of our lives including the economic affairs of companies and individuals. It is scary that Washington has now become the center of economic policy and investment strategy. Politicians are making the fundamental decisions regarding which industries will thrive or survive and which are to be punished with higher taxes or more onerous regulations. It is daily becoming a centrally planned economy rather than one that is composed of thousands and millions of individual decisions made by employees, employers and investors.
The lack of confidence of investors is palpable at the moment. Why should they be confident? The governemnt is spending without regard to any sense of responsibility and proposing regulations like cap and trade that will cost hundreds of thousands of jobs and impose hidden taxes on all consumers. It is not an exaggeration to say that everyone who uses gasoline, runs the home dryer, buys any product that uses plastic, or buys groceries will see the cost of these and virtually everything else rise dramatically in the very near future if the proposal is passed. You may have cleaner air, maybe, and who knows the temperaturs might cool (unless the Sun has other ideas) but you well could end up living in a hut hauling drinking water from the neighborhood well. But not to worry the Government will pay for the hut and the water will be free.
Many years ago when I had nothing invested in the market I still paid attention to it. I believe most people pay attention to it today whether or not they have money invested in stocks. For years I simply didn’t have any extra money to invest but I knew the health of the economy affected us all and did have a bearing on my life. I wanted the market to do well and for people invested there to make money, lots of money. I think the current administration only wants to see a “weak” Wall Street now and forever. It is a competitor for policy direction of the economy, almost like another political party. Having the people afraid of Wall Street encourages many to look even more to Washington for the solutions to all their troubles rather than to the private market place. That suits the pols in power now just fine. They do want a dependent people. Those types are malleable and make perfect and loyal serfs.
You have noticed how the Washington gang talks every day, rolls out new ideas and budgets, proposes and travels around constantly and the market continues to drop. There has been nothing so far from the new administration that would enthuse investors to believe that private enterprise is going to thrive and be able to create the new jobs we all need. I truly think those pols believe they can strip the so-called rich of all their wealth and redistribute it through their power and dominate the economy and the people for as far as the eye can see. I urge you to take your own serious look at the market. It is not only one segment of the market that is suffering but it is wide spread. Financials are falling off the chart; Citigroup is now under a dollar per share. The oil and gas industry is being clobbered and that is an industry we desperately need to function well for many years to come before alternatives become viable. Coal? Dying, and remember that coal provides roughly a quarter of all electricity power in the country. Health care companies that so many thought might do well under the new guy’s proposals are collapsing, including the pharmacueticals. It is very very expensive to do research and development for new drugs. Soon we will have government bureaucrats in charge of that it seems. Autos will be a government subsidized industry forever to prop up the unions and a drain on the economic health of the country. The list goes on. If you find an area that is doing well or you predict will do well let us all know so we can invest. Millions will appreciate your advice.
The recent budget reveals everything you need to know about the intention of the new guys to dominate American economic life and therefore our very freedoms. It is a clear blueprint of what they want to construct. It doesn’t have anything in it to promote private enterprise, indeed it hampers or punishes private enterprise. That is not good for the bus driver, farmer, doctor, painter or even those pointed headed economists. The debts that will be accumulated under the budget proposal will be so staggering that the argument that only Government can deal with the economic crisis will continue in finitum. The government is creating a problem so it can cure the problem. How long will we let them get by with that?
Many say that the new guys inherited all these problems. True to a great extent. But market decisions are not made on last year’s news. Markets are all about the future, never the past. When the market sees the direction of the gang in Washington, it shudders. The continuing drop in market values is NOT due to past problems. If the market liked the monetary, regulatory and fiscal proposals it would at least hold steady and more likely have been climbing. It doesn’t like the picture of the future and is cratering.
Interesting to note that the head tax cheat at Treasury can’t even get his deputies and top assistants on board and new guy will have to look elsewhere to meet his diversity goals in his administration it seems. Gupta is gone as Surgeon General.