Random Thoughts this Summer
This summer especially, my focus has been all over the place, so maybe I could say I have not been focused. With the focus of this website supposedly dedicated to the junction of economics, markets, and politics, it would be easy to say that their is little to juncture these days. Add to this the internet and maybe more importantly, the smart phone and you have a picture of immediate information from all directions with everyone an expert, even me trying to be, on many subjects.
The politics part has been in our face for the past year. In a sense it is probably good that the grassroots on both ends of the political spectrum have been the big disruptive factor. They are angry with the Washington/lobbyist players increasingly calling all the shots. And change is never neat as it goes against the established power structure.
The economics part of the story has become even more embedded in the “Central Bank Philosophy” as this process has gone increasingly global. Forget about free markets where there is a cost of money to guide investment.
And the U.S. stock market continues the seven year slow grind upward as the easiest direction is upward, because that is the de facto policy of the Federal Reserve.
So much for the broad analysis..
Back to the Random thoughts..
- the markets are not as much fun as they were back in the 70’s and 80’s..
- Investing now is on the surface a free lunch, it is mostly artificial, there are no consequences of bad decisions, the central banks step in at the first hint of a problem, this can go on for a long time as it has, but it will not go on forever..
- GDP and consumer income growth remains stagnant..the reasons are so obvious that they are ignored, tax policy, namely capital gains taxes have the money flowing away from the consumer..
- Politicians whether in the U.S. , England, or the world, have been good at identifying the symptoms of the economic problems, but not so good at identifying the causes and for sure not the solutions..
- Poor Bernie, he nailed the symptoms, had no clue about the real causes or solutions..
- For example, you don’t need to break up the big banks, they will break up themselves when the next problem period comes, the solution is not to save them when they go bust..
- Global trade is not a problem, but the trade agreements need to be labor driven, not corporate driven, labor takes all the risk..
- More affordable higher education, not free higher education should be a goal, we will talk soon about what we see in the education area and how things have changed since the start of the higher education thrust in the 1960’s and what we think needs to happen, for sure the need for more education is the primary direction needed in the technology environment..
- And lastly, with the FED in control, Risk Management as a college business major, maybe should be deleted as it is not needed any more..