Not anymore. Not in America , anyway. The markets are
not free. Neither are elections.
Let me explain these stark statements.
First, markets have not been free for some time. There are
plenty of reporters, pundits and financial TV anchor persons who make raving
remarks on what is a free market and what is not. Truth be told, there are so
many regulations and safeguards protecting the players that the only persons
getting hurt are the buyers and sellers of the stocks, bonds or commodities in
transaction. A lot of hullabaloo surrounds these markets. But all is staging to
make people believe they are entrepreneurs acting on their own free will and
will make a bundle of profit or lose it simply because they had the smarts to
know when to buy and when to sell.
Bosh! That isn’t the truth and hasn’t been for at least a
few decades. And here’s why.
Traders on the floor, and brokers in their offices glued to
their computer screens make money when trades are made. They have no skin in
the game. They just want people to buy and sell. The price does not make a
difference. In past times commissions were a high percentage of the sale price,
but now it is a matter of stocks traded, not the price. And those commissions
or fees are much lower than they once were. So what’s driving the market?
Volume! And what drives volume? Sheer nonsense. Plain and simple hawking by
people who want you to think something is going up or down and now is the time
to buy or sell. Their interest is not in your well being; they are focused on
their own income. I kid you not.
There are still investor firms who coddle major investors
and guide their clients to investment choices that will hold value and grow
over the long term. These people are becoming rare. But notice: they focus on
investors who are growing a significant portfolio. Try and get their attention
if you only have $10,000 to $50,000 to invest. They prefer to spend their time
in the several hundred thousand dollar portfolios, so they can get them into
the millions. But notice again: these are the few clients, not the most.
Thus, Wall Street managers are focused on their own money
and that of wealthy clients. Of course they want safeguards that protect them.
To hell with the smaller investor. Or even the small firms trying to raise
capital to expand their businesses.
The stock market was originally the place you went to sell
stock in your firm. That is called raising capital so a business can be big
enough to have an impact in the chosen markets of products and services. This
is the business that is expanding and hiring employees and making good things
happen in the economy. Instead the market is mostly made up of people and firms
buying pieces of paper – stocks and bonds – and trading them on margins to make
a profit. Not to build a portfolio of growing value and solidity in the
economy. No, the traders are in charge; not you the owner of stocks or firms.
Watch the market indicators: Dow Jones Industrials, NASDAQ,
Standard & Poors. They jump around on rumor, feelings, emotions. Not
fact. I repeat, not fact. And when that
happens, what do you think really drives market prices? Fear and trembling. And who is spreading the
news of such fear and trembling? The stock brokers, stock traders, and news
pundits on radio, TV and cable programs.
Ladies and Gentlemen, this is all smoke and mirrors. It is
stage craft. The newsy folk make lots of money saying outrageous things. Watch
CNBC for a few months and you’ll see what I mean. The ladies and gents doing
serious talking based on facts and trend analysis, often have much more to say
that is important than the opinion people who anchor those TV programs. The
latter opine all day long, and turn their news into political policy pap. And
almost entirely such pap is conservative republican drivel.
And there is a reason for that. They want controls in
‘their’ economy so they can make money with less risk involved. That’s pretty
basic.
Support republican candidates because they will legislate to
protect investors, bankers, insurance companies and investment bankers. Their
taxes will be at lower rates so they have more money to invest. Their dollars
will be protected so they have fewer losses as the US government protects all these
people.
If that were true the Glass-Steagall Act would still be the
law of the land, or a close variation of it. If the markets should be free of
regulation as it was when the latest boom bubble market went bust, then we
would have had a calmer, more sensible investment environment. As it was, AIG
was protected against loss by the Congress. So were the largest banks in the
nation. And too investment brokerages.
Republican politics aside, Wall Street sold the nation down
the river and continues to hide its own culpability by blaming Democrats and
Obama.
Let’s be clear: Obama had nothing to do with creating the
environment that led to the debacle of the home mortgage mess, the banking
mess, the decline of the Euro due to the spreading global mortgage mess, the
failing of huge banking enterprises, and what not.
Obama was responsible for addressing the debacle. TARP and
the stimulus program saved the banking system and the economy from a total melt
down. But republicans whined and blockaded every program to save the economy
until they had assurances that their protected moneyed classes were held whole.
Then, because such policy is rubbish and only adds to the burden of the
economy, they blame Obama.
Economists come in many stripes and colors. But on the whole
they will support the Obama brand of central government policy over the
republican brand any day. Responsible people do that. They are mature enough to
know the score and what needs to be done about it. And we have lots of such
mature policy thinkers and doers.
Romney doesn’t understand foreign policy any better than he
understands economic policy. He is the fox in the hen house watching out for
his own kind, not the good of the nation. And he and his republican cohorts in
Congress are itching to get their hands on the levers of policy making that
will spread the wealth only to their own kind.
The policy that would do this has been proposed over and
over again. But the republicans blocked it every time unless they could wheedle
changes that would protect their special interests. We cannot let that happen
again. It is time to make solid corrections so we can get back to growing both
the economy as well as the nation’s spirit of possibility.
Tell the Tea Party they are empty headed. Demand all
congressmen to act for the good of the nation, not special interests. Monitor
them and their votes closely.
And above all, end private dollar financing of re-election
campaigns. No private donations at all. None. No business donations. No PACs
(political action committees), no private wealth donations. Just ideas. Just
conversations that educate the voters and win the day by persuasion and factual
discourse.
It will take guts to make this happen. There are plenty of
bad guys on both sides of the aisle in congress. But it is up to us to make
sure this horror stops and we get our nation back to a sane course moving
strongly into the future.
Bill Moyers wrote:
“We hold elections knowing they
are unlikely to produce the policies favored by the majority of Americans. We
speak, we write, we advocate – and those in power turn deaf ears and blind eyes
to our deepest aspirations. We petition, plead and even pray – yet the earth
that is our commons, which should be passed on in good condition to coming
generations, continues to be despoiled. The people have occupied Wall Street
because Wall Street has occupied America
Please, let us stop this travesty!
August 5, 2012
No comments:
Post a Comment