BECAUSE INVESTORS ARE CONFIDENT PRES.TRUMP WILL GET THINGS BOOMING......AGAIN, OBVIOUSLY.
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Why Is The Stock Market Doing So Well In A Bad Recession?
- Thread starter PoliTalker
- Start date
BECAUSE INVESTORS ARE CONFIDENT PRES.TRUMP WILL GET THINGS BOOMING......AGAIN, OBVIOUSLY.
Minister of Truth
Practically Perfect
Because there are two different economies.
BTW - since the start of the Russia Tax Cut on 1/2/18, the DJIA has grown at its slowest pace since the last Conservative Recession.
DJIA 1/2/18: 24,824
DJIA 8/13/20: 27,845
+3,021 in over 31 months of tax cuts
+12%
That's not even 1% growth a month.
The Russia Tax Cut that was supposed to lead to growth of at least 3% and wage increases of at least $4K has turned out to be the biggest domestic policy blunder since the Bush Tax Cuts 19 years ago. And like those shitty tax cuts from 2001-3, these tax cuts plunged us into a recession even before COVID.
BTW - since the start of the Russia Tax Cut on 1/2/18, the DJIA has grown at its slowest pace since the last Conservative Recession.
DJIA 1/2/18: 24,824
DJIA 8/13/20: 27,845
+3,021 in over 31 months of tax cuts
+12%
That's not even 1% growth a month.
The Russia Tax Cut that was supposed to lead to growth of at least 3% and wage increases of at least $4K has turned out to be the biggest domestic policy blunder since the Bush Tax Cuts 19 years ago. And like those shitty tax cuts from 2001-3, these tax cuts plunged us into a recession even before COVID.
PoliTalker
Diversity Makes Greatness
Hello Micawber,
If their market is saturated they are more likely to do stock buy backs, executive bonuses and dividends. This all does little for job growth.
If their market is saturated they are more likely to do stock buy backs, executive bonuses and dividends. This all does little for job growth.
Neoclitorus
Best
first stimulus bill, and general fiat currency hyperinflationary fascism.
all our money is fake. fiat currency is the lynchpin in the burgeoning system of human technocratic tyranny.
research fiat currency to get up to speed.
Taxation policy. Social programs.
Yes, without a fiat currency, our GDP would be 10% of what it is now. Yeah, let's do that.
Neoclitorus
Best
keep sucking banker cock, it suits you.
Brilliant comeback, as usual.
Neoclitorus
Best
good videos.
all wars are bankers wars
the world plus 5%
all wars are bankers wars
the world plus 5%
Neoclitorus
Best
thanks, banker cock sucker.
T. A. Gardner
Thread Killer
On the other hand, taxing the rich more, or even worse raising corporate taxes on large corporations will definitely hurt economic growth. These are the big spenders in the economy.
I was just considering an example using the commercial side work I do for a general contractor. Setting aside using a wholesaler, I often go into a Home Depot or Lowe's and spend $1000 to $5000 on materials at a shot, say $10,000 to $20,000 in a month. I'm not some rich guy I'm solidly middle class, even if positioned above the center of that group. How many individual consumers does it take to match the commercial buying I do for materials at one of those stores? If your average individual consumer spends $100 in a month in such a store, then that takes 100 to 200 customers to match what I buy for commercial work.
Who is having a greater impact on sales, me or some individual consumer? I actually get recognized by sight at the pro desk at three Home Depots now, along with two Lowe's. I get better service because I'm a serious customer and they know it. I have one job sitting on my desk right now for a re-wire of a small apartment complex priced for $15,000 in materials alone. We're waiting on the owner to okay the work. The guy's stalling because he's a cheap assed "slum lord" (only a slight exaggeration) who doesn't want to spend the money I'm quoting to get things done right--and I'm well below hiring a firm trying to actually make a business profit since I don't have to--my quack of a physician says I need more exercise and I definitely need beer money. Aside from that, it'd go in part to my buying a Lotus Elise.
None of that trickles down to the little guy working schulb who's a rent-a-cop or warehouse worker for Amazon, but that's not my problem.
Only the initial investment. The value of a stock does not reflect the value of the company. The stockmarket is totally overvaluing these companies. It's all speculation. They definitely have access to more stockholder investment. I've made a living on preferred stock offerings
Still, only the initial offering goes to the company as capital.
cawacko
Well-known member
Actually the OP is on record rooting for the stock market to crash so maybe not the best time to break out that accusation.
And for a financial novice asking why the stock market is booming during a recession/pandemic is a legitimate question.
They are not the big spenders by percentage. So taking money from the rich and transferring it downward INCREASES consumer spending. Your position is based on the assumption that tax breaks given to the rich or to corporations is reinvested or spent. That assumption is false. I pointed out above that the highest 20% by income spend 53.3% of their income, while the lowest 20% spends 100%. Same with businesses, small business reinvests, corporations buy back stock and pay executive bonuses. That produces nothing, and does not add to consumer spending. The supply side theory is demonstrably false. Wealth has shifted massively to the top 1%. That pattern is not sustainable. As for your last line, that is EVERYONE'S problem. It isn't a question of values, it's a question of practicality. The less they have the less they spend.
T. A. Gardner
Thread Killer
Tax breaks make some difference, but mostly to the corporation getting them. The little guy, little mom and pop businesses just don't spend enough to make a big difference.
If you are a big corporation buying rail car loads of product at a shot for millions and turning out hundreds of millions in product, you completely dwarf the small business spending in the same market. It isn't that the small business spending isn't valuable too, it's just dwarfed by the big company's spending in volume. So, giving a big corporation a tax break can get them to invest more in their operations, maybe hire a few more workers, and turn out a few million more in product. If that in turn equates to the same tax revenue as before it's good for the economy as economic spending increased while the government's cut remained the same.
Idealized, it is the Laffer curve
Raise taxes too high and productivity suffers. Lower taxes too much and government spending takes a hit. The simplistic notion of the Left that you can raise taxes on "The Rich" and Big Corporations into the stratosphere and increase the government's revenues is preposterous. It's an idiotic lunacy of the Left.
So, while "trickle down" really doesn't work well, the whole Tax the rich 'till it hurts doesn't either.
Tax breaks make some difference, but mostly to the corporation getting them. The little guy, little mom and pop businesses just don't spend enough to make a big difference.
If you are a big corporation buying rail car loads of product at a shot for millions and turning out hundreds of millions in product, you completely dwarf the small business spending in the same market. It isn't that the small business spending isn't valuable too, it's just dwarfed by the big company's spending in volume. So, giving a big corporation a tax break can get them to invest more in their operations, maybe hire a few more workers, and turn out a few million more in product. If that in turn equates to the same tax revenue as before it's good for the economy as economic spending increased while the government's cut remained the same.
Idealized, it is the Laffer curve
Raise taxes too high and productivity suffers. Lower taxes too much and government spending takes a hit. The simplistic notion of the Left that you can raise taxes on "The Rich" and Big Corporations into the stratosphere and increase the government's revenues is preposterous. It's an idiotic lunacy of the Left.
So, while "trickle down" really doesn't work well, the whole Tax the rich 'till it hurts doesn't either.
Yes, the Laffer curve has been laughed out of economic circles. It doesn't work. The assumption it was based on is false.
I understand. I have never disputed that, but that was not what my original post was about. It said that 60% of all consumer spending is spent by the top 20%.--not as a percent of their income but as a percent of all consumer spending.
The number of dollars is not fixed. If the top 20% have large investments in stocks and those stocks make 20% this year, it increased their income. It took nothing away from the bottom 80% because the top 20% increased their income.
But that increased income for the top 20% boosted the economy because they account for 60% of consumer spending. Yes, it would have been nice for all quintiles to increase their income by 20%, but if that doesn't happen they have more jobs because of the increased consumer spending by those at the top. If more consumer spending occurs it benefits the economy whether that money is spent by the bottom or the top. None of this relates to the percent of a person's income spent on essentials.
T. A. Gardner
Thread Killer
Wrong. A simple proof is taking the two extremes. We tax at 1% rate, the government takes in little revenue because there's little being taxed. If we tax at a 99% rate, the government takes in little revenue because there is no incentive to make income that will be completely taxed away. The best rate is the one where government revenues are maximized and the economy's profits are likewise maximized.
The idea that government can raise taxes indiscriminately and it will have no repercussions on the economy (the Left's position), is the insane one.
No, not wrong. Tax cuts do not increase tax revenues. There is a long history that demonstrates that this is true.
No one said anything about raising taxes 'indiscriminately'. The idea is to apply a taxation policy that maximizes economic growth while keeping inflation low and unemployment low. A tax that is good today may need to be modified a year from now. This isn't a binary choice. But the fact is that rates on the wealthy have become too low, and loopholes too many to support an efficient and growing economy. The evidence is in the numbers. Wealth has massively shifted from the lower and middle classes to the very richest. They don't produce anything, they simply speculate and increase wealth. They have the biggest bankrolls so they always win.