The Conundrum, Weak GDP and Strong Corporate Earnings

Following up on yesterday comments that pertain to this issue.

Maybe the strong stock market earnings are a key ingredient in the populist political movement.

I am just thinking out loud here as I don’t hear this possible explanation being expressed in blogs or economic news.

This morning Mark Zandi of Moody’s explained on CNBC that the problem with the first quarter GDP was bad weather in the Northeast in the first quarter.  Give me a break.

My Possible Explanation

Maybe Main Street businesses are losing revenue to listed companies.  The rural town where I grew up had a lot of mom and pop retail stores and restaurants in 1960.  All of these local operations allowed people to be there own managers and planners, they could enjoy making things happen.  Today we see the likes of McDonald’s, Applebee’s, Walmart’s, Amazon’s, taking all the business, where the best job a local can get is at most a clerk or stock boy.  That is not an environment that is up lifting to the community.

Bottomline

So maybe the GDP numbers are correct and are showing a significant direction of decreasing consumption as local economies collapse.  With more and more revenue driving to listed companies, the local wealth effect is lost, and people are forced to trade in the stock market against the Wall Street machines. Populism may look desirable in this environment.

 

 

 

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