Sunday, August 21, 2011

Tail wagging the dog

Even with all of the S&P sectors showing double digit growth since Obama became President the stock market is determined to take the country down. Major corporations are sitting on 2.5 trillion in cash but as they push wages down they seem shocked to find that demand is falling. Consumers account for 70% of the economy (a link perhaps?) and the government that accounts for 20% of the economy is being cut to the quick by Red State governors and the Tea Bag Terrorists are poised to do the same for the same for the Federal Government (which will also impact the states, especially the red ones).

Wall Street is supposed to reflect the economy, indexes were invented to measure the health of the business sector (at least that's the story they tell) but now they are driving it  into the gorge (click to see video). But don't worry gentle reader, Wall Street is able to make money on the way down even better than on the way up. All those trillions in derivatives that they have been selling start to be activated if things start to fall apart and how could that go bad? (remember the banks and companies that disappeared in 2008?) Those trillions the big corporations have sitting around can be put to work buying up everybody (smaller rivals that don't have huge war chests)  and everything in the public commons for 10 cents on the dollar.


Dave said...

Ownership only means anything if there is rule of law that recognizes that status. Rule of law and the mechanisms for enforcing rule of law only work when there is a social order. Social order needs to have a working social contract in place. Social contracts don't stay in place when people are pushed too far and having nothing left to lose.

prairie2 said...

Chipping the Dog

Rule of law tends to favor the people who make the rules.

There are a lot of technological innovations available to the aspiring neo-feudalistic billionaire that make very appealing the prospect of controlling an ignorant, uneducated and completely propagandized population under control.

Why should they stop, they are winning so far.