Something the United States Government apparently doesn't understand

Banking, Real Estate, Insurance, Brokerage, Retailing, Entertainment, Marketing, consulting, Defense, Health care, the Legal Sector, and Communications produces no real wealth. These are industries that service wealth.

Manufacturing, Mining, Farming, Energy production, Technology, Engineering, Infrastructure (roads, sewage treatment, damns, bridges, etc) are things that create wealth.

Thinking back to a year ago, the United States would have put itself in a better position if it made a 700 billion dollar investment in things that create wealth than make a 700 billion dollar investment in things that are used to service wealth.

You can't have a service based economy if you have no wealth creation industries in which you are servicing.

The can outsource wealth creation and hog it all for themselves.

:sarcasm: We need programs and results, not just rhetoric and vague promises.

FAIL! Read is fundamental

and the two chief economic advisers are Larry Summers and Timmy Geithner.

I'll wait till I see policies that take investment away from the wealth servicing industries and into the wealth creation industries.

Kerry, Boxer Introduce "Clean Energy Jobs and American Power Act"

Maybe the past year of government investment has been focused on banking and health care.

With talks of reform for both and more status quo

You have to have the creation of actual things, be it physical stuff and/or digital information.

As I said in another thread, we have to go back to the engineers running things, not the glorified accountants. Biotechnology, Nanotechnology, Green Manufacturing, Electronic Goods, Software, Renewable Energy, these are the industries for a modern economy, not "Finance". Fuck "Finance".

I'll also so we got to get the accountants back to doing their jobs, and actually accounting for things. Not creating new ways for big business to paper over its enormous debts.

Accountants used to be straight-as-a-ramrod folks that had no use for this BS.

They just don't get promoted or get targeted in the lay-offs. Most end up going back to school for something else or doing people's taxes.

and is the manager of the a rural VFW-owned bar and she told me once that if she tried to do the book-cooking these big businesses did she would have the cops on her rear like that!

The pressure to meet earnings in order to meet Wall Street's expectations make it almost impossible for them to be honest.

Expectations are dictated to them by external rating agencies and they either meet them or face their stock price tumbling. The rating agencies are affiliated with brokers who buy the stocks on these recommendations.

It will be interesting to see what happens this year as demand continues to fall.

I realized that in my teens when the Dot.Com bubble burst. Wall Street is awash with speculative BS instead of real investment.

It is very difficult right now for them to convince foreign investors into giving them money.

I read somewhere that of the $1 trillion that was put into the market to return it from its lows only $300 billion came from movement from money market accounts. One economist I read speculates that the banks are moving money into stocks instead of lending.

...an incentive to keep investment coming in. It eventually consumes the economy, literally.

that dividends were bad and that investors should be paid back in stock appreciation. It was actually being taught in Finance in colleges.

Dividends are how Investors make money on stocks over a long period of time. People got into day trading and away from investing. Our culture moved away from long term appreciation to get rich tomorrow.

That is exactly the casino-thinking I HATE! In a sane world you are supposed to buy a stock for it's dividends, getting a big capital gains return when you sell the stock eventually is the just bonus you get from a growing economy, or at least that's what I learned in high school Economics.

Bunch of damn speculators!

Dividends depreciate capital and therefore it is an investment the company no longer has. The shareholder is rewarded when they sell their stock and for 6 years I believed the nonsense. Till I looked at how stable companies were 30 years ago and how unstable they are now.

That is what I mean by not seeing the forest for the trees, with a broader perspective one would realize that it would encourage speculation over long-term investment.

They make money off of commissions of people buying and selling investments.

This stuff is obscene.

as their marketing tool and all their TV personality experts as their spokes models.

nt

that the banking sector and Wall Street drive the US economy.

I mean, I'm sure China and WalMart want the spending, but if the jobs created/saved are not consumers, how does the spending "prime the pump"?

Even Krugman. I don't think they have taken fully into account the in-balance of what the country produces that creates wealth and the industries that service wealth. Its easy to point out where that in balance lies. It is called the trade deficit.

I think many of these people, even many of the "Neo-Clssical" types like Niall Ferguson, are not intentionally making lies or anything sinister. I just think they are victims of being too narrowly focused (being someone with Asperger's Syndrome, I know all too well the screw-ups from only seeing the trees and not the forest), IMO this is my big problem with Economics right now, too much of a narrow focus with the systemic picture being forgotten.

What happened to the institutional-scale observations of the sociologically-based economists of a century ago like Veblen?

The last time they had a crash and had to understand how a National Economy actually functions and produces wealth was 1930s. Roosevelt allowed them to re-engineer America and we have been living off that dividend for 60 years.

For the past 30 years they have been able to lower interest rates, create a speculative bubble, have a recession, create another bubble. This is the first time in 60 years they are left scratching their head.

When things are going well at any organization, whether it is a social club, small business, corporation, or country it is difficult to get people to move in a different direction.

The Chinese aren't stupid. That is why they have spent the past 30 years building industry and infrastructure.

The people that were young adults during the Depression retired in the 70s and 80s, and when that happened the brakes seemed to have fell off.

The corporate leadership from the 1980s to now has become increasingly and increasingly focused on the short term.

I believe it has a lot to do with our entertainment as well.

In the late 90s people were simply OBSESSED with the stock market, and has since infected the way we view personal finance ever since, just like when people invested in the stock market on margin back in the 20s, it's the same kind of bull. Well now the Bulls are gonna have their asses handed to them.

What most people don't seem to be able to follow is the rise of 401(k) values with Baby Boomers peak earnings. As the baby boomers retire what you will see is that the 401(k) values will decline as more and more leave the market. With less workers in the economy to invest into 401(k) assets what you will have is a slow march to the bottom as retirees and Pension funds liquidate their assets in order to pay for retirement leading the stock market to return to 1980s values adjusted for inflation. The stock market and 90% of the investment firms and insurance companies are going to die a slow death.

Most of the stock market value is actually retirement for the baby boomers.

This is going to be a disaster. a Dow 4000 bottom would not surprise me. This current dead-cat bounce is like the 1930 bounce.

How appropriate, a "W"-shaped recession in honor of the W's failed economic policies.

These hopeful economic analyst think that people who are afraid of losing their job, and people who have already lost their job will spend what little they have left for Christmas. It is almost humorous to see the propaganda being sold in the media that things are turning around right before Christmas.

Credit Card companies are raising rates to 30% on good credit customers. People who have jobs are fearful of losing them. Most people don't think things are turning around.

Translation weak Holiday sales. Many retailers entire years are based on whether they have good sales at Christmas. I predict a wave of retailer bankruptcies followed by a bigger commercial real estate sector collapse.

Everyone I know is being very tight with their money, even though Fargo is doing much better economically than other parts of the country. People are waiting for the other foot to drop, with ideologically-based fears on both Right (Evil Socialist Obama is gonna take your money!!!) and Left.

particularly with the commercial real estate market collapsing. Not to mention they are doing more speculative bullshit than they did in all of 2007 and 2008 with the TARP money. The recent profits are mostly on paper.

There will be calls for another bailout or the release of the rest of the TARP money. We must be prepared to take to the streets against our President and democratic congress if need be to prevent them from being saved a second time. We may have to join forces with the Tea Baggers. However, when (it isn't a matter of if) the banks fail again, we must do all in our power to prevent them from being saved.

This time, we end the fuckers.