Stock Dump

Well I told you so! The stock market is down. Big time. But then every ‘expert’ claimed this slump was predictable. All I said was that many – too many – ‘experts’ were conjuring up headlines to grab attention. In a jittery market claiming a huge down cycle was imminent gets a lot of attention.

And how.

The next prediction: (and this one is from me, not Jim Cramer!) huge profits on the market are possible if you dump all the cash you have into the market now when it is down. The reason: the market will go up. The only thing we don’t know is how quickly the market will rise. But it will rise.

Yes, folks, what goes up comes down and vice versa. There is little science in this. Besides, the other day I shot down any expectations that economics (that includes the stock market!) is science. It is only a social science, the so called soft sciences, in which no empirical connections can be made unless you tie your mathematical minds into tiny little knots to prove something or other about movements of data having some small relation with economics. Mental gymnastics. That’s all that is. So no; empirical science does not attach to economics, money, market value or anything else.

This means we can talk the market down. You have just witnessed this.

But it also means we can talk the market up. Here’s how.

First of all we have an enormous pent up demand in the American economy. The demand is for innovative housing, innovative transportation and innovative energy sources.

Second, we have an enormous pent up demand for public infrastructure renewal. In many cases the renewal goes well beyond to full replacement and expansion. Besides, with innovative transportation, energy and housing coming around the bend, infrastructure will need innovative responses, too. So you see there is demand just sitting there in front of us.

Third, job growth in the private sector has carried the day in the current economy. Without concomitant growth in the public sector (government), the private sector’s growth is dampened. Public sector employment growth is artificially restricted by congressional inaction and ideological budgeting. Government hasn’t grown with the exception of military and public safety agencies (CIA, NCIS, FBI, Homeland Security, etc.). If we unleashed the pent up demand for public sector growth, the private sector would take off.

Fourth, whole new industries are begging for discovery and expansion. All you have to do to know this is to work with entrepreneurs as they struggle to start new businesses with fresh new ideas. They are boundless in energy and ideas. Hold onto you hats! The whoosh you hear will be the formation of millions of small businesses doing what a lot of people refuse to do: take on risk to do new things.

Fifth, the accumulated knowledge held in archives of universities, colleges and research and development organizations is astounding. Putting these bits and pieces of knowledge together in new synergies will power the economy to new heights.

Sixth, expanding education effectively to everyone who wants it and is capable of it at whatever level, will push the economy over the top in invention and discovery.

Seventh, the global economy has been shackled for generations by antiquated international laws and treaties. If free markets were to prevail within the global community, breathtaking expansion of living standards and quality of life will astonish us.

Eighth, quality of life in general is in need of a fresh re-balancing. What matters most to each of us has nothing to do with money. It has to do with feelings, wellness and attitude. Build positive attitude and watch wondrous things happen. Peace maybe?

The stock dump is really a blessing in disguise. It is our opportunity to get in touch with ourselves, especially our inner selves, and discover what we value the most. The stock market will take care of itself. It will continue to fluctuate. That’s about as scientific as I can get in economics!

So it is up to all of us to deal with what is left. Life. And that’s a very good thing indeed!

August 27, 2015