You are currently browsing the daily archive for February 27, 2019.

What Unites People? The Real Moderate Agenda

By   Shlomo Maital

   It has been a long while since I wrote a blog about New York Times columnist David Brooks. Today’s NYT (Feb. 27) has a wonderful column, worth summarizing. The subject: What glues people together? And, based on this – what would a ‘moderate’ political agenda look like, neither extreme right nor extreme left?   In these days of vitriolic polarized toxic politics — moderate agendas seem either bland or non-existent.

   Here are Brooks’ four key elements of a moderate agenda – policies that bring us together.   The four super-glue elements that bind us together are: our children, our work, our communities, and our shared humanity.

  • Our children:   “Make sure children are educated by webs of warm relationships”
  • Our work: “Help people find vocations in which they can serve their communities”.
  • Our communities: “devolve power out of Washington (or your country’s capital city) to the local level”. All politics is local, it is said. But it is not. We can make it so.
  • Our shared humanity:   Let’s care about the elderly, the disabled, migrants, the ill, minorities…. People are basically good. Reject those who think and act otherwise. Reject politicians who seek power by appealing to base motives. Look for those who espouse good.

 

Can ‘left’ and ‘right’ unite under these ideas? Can this ‘center’ bring us together?

   It’s worth a try.

 

Advertisements

Why Rising Stock Market Is Bad News     
      By   Shlomo Maital

   The New York Times reports: “The US stock market is off to its best start (of the year) since 1987”. Good news? And then the bad news….”investors are expected to dump hundreds of billions of dollars of shares this year.” Bad news.

     So what in the world is going on? The article, by Matt Phillips ,has an uncharacteristically clear, simple explanation.

     Remember that Trump tax cut? The one that put billions of dollars into the pockets of the wealthy and the corporations? Well it made the corporaitons cash flush.

     What did they do with the cash?

     Invest it, in infrastructure, R&D, innovation?

     Not exactly.

     They mostly used it to buy back their own shares, massively.

     Why? Simply – to funnel that big tax cut directly into the pockets of shareholders, at low (capital gains) tax rates.

       Share buy back by corporations drove the market up.   Even at a time when armchair investors, funds, etc…. were selling.    Investors aren’t dumb. They will take their profits, before the market crumbles when the buy backs of corporations stop.

       I avoid the stock market. But for those who want to listen, I counsel, don’t hold shares of businesses that buy back their own shares. Why? If the best investment businesses can make, is buying back their own shares, rather than developing new and better products, well —   dump them. Share buy backs are abysmal.  They are caused by CEO’s seeking to look good, in the short years they hold the position, under pressure of myopic shareholders and Boards.

         Share buy backs have now cemented corporations as the leading source of demand for shares – their own. This is a fundamental change in the way the stock market works. It is a change for the worse. When companies STOP buying back their own shares, they will pull the rug out from under the market.

     This will happen, perhaps, when the US enters recession – something most economists expect to happen by 2021.

      

 

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
February 2019
M T W T F S S
« Jan   Mar »
 123
45678910
11121314151617
18192021222324
25262728  

Pages

Archives

Advertisements