Yes I can be selfish and short sighted

I was just rereading my last post and I was looking at how the economic 'crisis' would affect me. I neglected to think or comment on how it would affect others. Here are my thoughts on some general groups:

1) Those at or under the poverty line: They have few dollars invested so the loss of money in the investment markets will not affect them...directly. Indirectly the reduction in value of the US dollar in response to the drop in the market will affect this group (as it will all). Food and shelter costs will increase. However, this group is often under some kind of social welfare. Those programs will likely still continue, though potentially pinched by an influx of people from the lower-middle class.

2) Lower-Middle Class: As noted above, some of these individuals could be vulnerable to job layoffs. When most companies start looking for employees to trim in hard times, it can affect the lower wage employees, especially in manufacturing (which is already a hurting industry). These people are then stuck with few job opportunities and have to fall to assistance to make it by. You can certainly understand why this group is looking at the candidates for the next President and asking, what are you going to do to help keep us working?

3) Retirees and those nearing retirement: This is the group that should be most worried. Of course it's also a very large group. The "baby-boom" group is getting close to that age where they want to retire or are already retiring. Their pensions and retirement funds are in dire straights. I suspect that is why the government is passing the bailout package. That's a LOT of people who suddenly might not be able to retire at 65 or would put even greater strain on the already feeble Social Security system.

4) New Yuppies: (I include myself in this group) It'll be a pain in the ass but at the end of the day it's not going to be Armageddon. It'll just suck getting credit for a car or house. We might have to rent more or be more frugal in our major purchases. Oh no, we might not be able to get that 65 inch TV! I had to drop HD and DVR functions to help offset increased costs. It's a pain but really did I NEED those things? Nope.

We yuppies will recover fine but I think we'll have to pay for this mess long term regardless if the big finance firms are bailed out or not. We'd be paying for the social programs to help the retired or the poor or we're paying to keep the market stable. Either way we pay in the end. I'd sure like to think that the post-'baby-boom' generations can do better but I'm not too confident of that either. We like our toys too much.

What's Wrong with Business Today?

What's wrong? Public Investment is what is wrong.

Companies are no longer allowed to be the best at what they do. They have to increase profits quarter after quarter at the expense of employees, quality, integrity, and identity.

What is so wrong with a business growing to a certain size and staying there? If said company is profitable enough to keep everyone paid and happy why be forced to continue growing?

Public investors are only interested in the bottom-line. How much money will they make from investing in these public companies? Is that healthy to anyone but the investor? Nope, not at all.

This situation has crushed smaller companies and left our economy on the brink. Look at how many monopolies or near monopolies we have created in recent years. Public investors did that, at the expense of consumers. And so it creates a nasty feed-back loop, one that feeds on itself.

I'm not suggesting that all investment is bad. I think private investment is a good thing. It allows those individuals or groups to invest and thus help smaller businesses get going. I see this as more of a loan than an on going income for the investors. Once the company is strong and profitable, pay off the investor and move forward. There is plenty of private funding around for businesses to do this.

A positive side effect of this kind of investment is a more hands on approach to investment. Sure the investor is going to want the business to be profitable but they are less likely to be just sitting on the sidelines wanting profit at all costs. They will be more inclined to see the business succeed based on it's business plan. These are the investors that will be mentors as well.

I'm not saying that private investment is perfect either, but we have been destroying our own markets by making them so easily accessible and public. Any Joe with a computer can become a day trader. Does that mean his investments make sense or are somehow helping the economy? No. These kind of traders are only after the pay off, the reward. They are not interested in their investment helping a business grow or become better, only that they are profitable and produce dividends.

So when times are lean, such as now, companies trim the things that make them good companies because we wouldn't want to piss off the investors. You do that, as a CEO, and you risk being tossed out, even if you were the founder.

I'm not anti-capitalism, but something has gone horribly wrong with our investment system. It should be corrected soon before it completely crashes and the 1930s looks like a boom time.