Mar 09, 2009 Dow Jones 5647.05
Nov 10, 2009 Dow Jones 10,226.19
So that's a 54.31% gain. I know what some of you are thinking... but Dr. Nichols, the media tells me that things are bad and how scared I should be. They even cite hard numbers like unemployment rates and relate that to the failed Obama plan. How on Earth can you explain these stock prices?
Actually, the same thing that explains the stock prices also indicates that things are bad. If we take a look at the unemployment rates we see a huge jump from April 2008 through June 2009. Companies are cutting jobs, saving money and becoming more profitable. So businesses are getting more profitable, by putting people out of work. So the question becomes: Will the companies be able to keep their gross income up when there are less people employed and thus less people willing and able to buy their products and services? I'd say they're selling things which are necessities, like food, the answer is yes. Likewise, if their markets are in countries that can still afford and desire the products they'll do okay. On the other hand, if they are selling items which are not required and expect the domestic sales to keep coming in, they may be disappointed.
So, although the market turn-around happened only a couple months after Obama took office, I'd say the recovery began (for the businesses) when they started killing jobs. The fact that some of their competition went the way of the dodo is also a factor, because the customers will now come to them.
If the government decides to do something to help people instead of corporations, but given the opposition from the right (Republicans, Joe Lieberman and some others) any attempt to help "Main Street" will surely be shot down for being "big government", a "waste of money", and "fiscally irresponsible" by many. By the extremest, it'll either be hailed as exactly what we need, or socialism and thus a complete government takeover of our lives and freedoms... depending on which extreme you're listening to.
The problem isn't just the politicians, who practically accept bribes* from lobbyist in turn for passing favorable legislation. It's also the self-serving media, which reports on whatever is profitable for them. The more products they can sell for their sponsors, the more money they'll ultimately make. While there were the multi-national monopolies of the late 1800s and into the early 1900s such as standard oil, Carnegie Steel, Bell telephone, and J.P. Morgan's railroad, they didn't do so because people preferred them to their competitors. For the most part, this was before the radio was even invented, let alone a common thing to find in the home. TV, the Internet, the science of psychoanalysis, were all completely non-existent. So I'd argue that even though the companies today might not be as large (in terms of market share) as the ones yore, they're more powerful, both in terms of influencing (or manipulating?) the common people, as well as getting laws passed which will make them more profitable.
So all of this leads to a few questions. How do we fix this? Can we do so or is this just the natural order of things and is ultimately inevitable? Of course there's no one answer. Some things that would help is if America went back to producing things (other than military equipment), as shipping jobs overseas may help other people, but it doesn't help the American economy. We've already seen what happens when the American stock market stumbles and falls, so it's arguably better for more than just Americans. People could buy locally from sustainable businesses. The problem with that is that it's more costly to do, so even in good times many people won't think it's worth that extra money, and justify this rationale by convincing themselves that one person won't make a difference. To them, I say "Be the change you wish to see in the world." If you don't understand that, listen to "Man in the mirror." I'm not sure what "the answer" is, but I think with the technology we have right now, we should be doing much better than we are. We need some incentive for companies to make products that last, rather than cheap junk which sells. If you have better solutions for societies woes, please share them. Even better yet, take the next step and start making them happen!
* Bribery, as defined by the courts, must be more specific than "we like guns... do you like guns? You do? Oh, well here's a bunch of money for your campaign." It need to be more like "Here's a bunch of money for your campaign in return for you promising to pass a law which forces people to buy health insurance whether they can afford it or not."
Some of the sources for the economic data:
http://www.google.com/
http://finance.google.com/
Update:
Here's a map which illustrates the unemployment stats quite well:
http://cohort11.americanobserver.net/latoyaegwuekwe/multimediafinal.html
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