October 20, 2012
In October, 2007, the stock market peaked above 14,000. By October of 2008, it was below 8,000. The market hit bottom at 6,547 on March 9, 2009. It closed at 13,557 on this Thursday. Construction starts were up 15% last month. Corporate profits have been setting records. Ordinarily, such excess revenue would be reinvested – more people would be hired and more equipment would be added or upgraded – but companies are just sitting on their cash, afraid to invest even in themselves. When exactly is the “trickle down” going to happen?
It won’t. It never has. Like water in Colorado, which flows towards money, money, itself, too often flows towards power and influence. The One-Percenters do share, but they can’t or won’t give or buy enough to jumpstart our entire economy. Hoarded money has no multiplier effect. If money is, instead, earned by or rebated to the middle class and the working poor, it is quickly spent (usually locally),and it multiplies rapidly, effectively supporting overall economic growth. Money controlled by the wealthy few seeks higher returns wherever their financial advisors can find them (usually elsewhere).
I’ve listened for differences, but it certainly appears to me that former Governer Romney’s economic plan doubles down on the same fundamental policies that nearly craterd the global economy in the fall of 2008: reduce or eliminate banking regulations, cut taxes 20%, increase defense spending, cut safety net programs. Déjà vu all over again. Caveat emptor!