My wife is a Republican. I'm not. She has an investment counselor. I don't.
Recently, I accompanied my wife when she met with her investment counselor. He's a die-hard Republican. He's also a very good investment counselor. Despite this country's current economic situation, my wife's investments have grown thanks to his guidance. My wife's happy about that. I'm happy about that too!
During the course of the meeting, the investment counselor reviewed my wife's financial holdings with her and explained how each investment was doing in the marketplace. He reviewed the profits, dividends, increases and decreases in stock share price and his company's current view on the likely future rate of return for each of my wife's holdings. The counselor indicated that a few of my wife's stocks were under-performing and he recommended that she sell those securities and move her money elsewhere. All in all, it was a very productive meeting, and I'm very confident that my wife's investments are in very good hands. She is too.
I bring up the topic of my wife's investments not to boast about her good financial situation, but to comment on an observation I made with respect to the stocks and mutual funds recommended to my wife by her investment counselor. My wife's goal is to increase the value of her financial portfolio. I presume that's a pretty standard goal, and my wife's financial adviser tailored his advice toward achieving that objective. Like I said, he's a very good investment counselor.
My observation was this: only one of the twenty-two companies that my wife was advised to purchase or retain in her portfolio were companies seeking to add employees. Ten of those companies have laid off at least 10,000 employees over the past year.
The fact that a company has to lay off workers is not an indictment on a company. In fact, it's frequently an absolutely necessary step to insure that a company remains viable during an economic downturn. Sometimes, trimming payroll is the only way for a company to turn a profit. That's basic economics and I have no beef with that situation. After all, it's helped boost the value of my wife's portfolio.
My beef is with another situation – the refusal of Republicans in Congress to raise taxes on the wealthy (coupled with spending cuts) to bring our national debt under control. Their steadfast opposition to making the wealthy share in our national sacrifice is maddening. It's also based on a bold-faced lie.
The lie goes like this: "We can't tax the wealthy because that money is needed to create jobs."
Bullshit!
The wealthy handle their investment portfolios in the same manner as my wife does. My wife's goal is not to create jobs. She invests her money to create a profit. Wealthy people act in the same manner. My wife invests in companies that turn a profit and pay dividends. The same goes for the wealthy. In bad economic times such as these, the companies that are turning a profit are the ones that are laying-off employees, not the ones hiring them. If you handed a wealthy man a million dollars, he wouldn't invest it in a company that was not turning a profit. He'd pour the money into a company that was profitable. It's a lie to say otherwise.
The truth is the wealthy do not create jobs. They create more profit for their own benefit. That's called capitalism.
Jobs are created by demand for a good or service which are not currently available. When large sectors of the population are unemployed or have no money to pay for a good or service, there is no demand to fill and wealthy individuals will not invest to create a job where there is no demand, and hence, no profit to be made. That's capitalism too.
The only national strategy for job creation that has ever worked has been a government-funded job creation program wherein the government itself has hired millions of individuals to work on our nation's infra-structure. The demand for products and services created by millions of those new working individuals then fueled the potential for profits that lured the wealthy into investing in companies that would hire more workers.
With Congress unwilling to increase the debt ceiling or tax the wealthy to enable the government to create more jobs, America is further miring itself in the mud, and wealthy investors won't be offering a shovel anytime soon.
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