October 12, 1998
Here's a recent quote from a Business Week editorial,
"Remember those fearful stories your parents and grandparents told about the Depression, about how bad it was and how it scarred their lives forever? Remember thinking, how could leaders have allowed such a catastrophe to happen? Well, it's now easier to understand. Look around. A currency crisis in a small country-Thailand-triggers an unexpected global economic crisis, spreading poverty across continents with fearsome speed. A year later, well-meaning policymakers fumble their best chance to stop a tide of deflationary recession. Instead of forging a bold plan to reliquefy the global economy, they demonstrated only timidity at this year's annual International Monetary Fund conference. They failed to put a floor fast enough under a rapidly deteriorating global economy." (Business Week, October 19, 1998)
First of all, the financial news media which Business Week is part of, played a key role in the "spreading" of poverty across continents. I personally think that this is the number one cause of the global economic crisis: the financial news media spread fear to investors who could only look to Wall Street for leadership, but instead of finding leadership, they found sheep. Institutions who claim to mostly be fundamental investors, investing for the long-term, turned out to be mostly momentum investors.
The only thing good about the global economic crisis to Americans is that it has not yet affected the United States that much. This is a perfect time for all Americans to judge the performance of the politicians, Wall Street, and corporate executives.
Ask yourself, as the financial news media spread fear, did you see anybody stepping in to slow it down? Did politicians come together and deal with the problem or were they more concerned with Clinton's sex life? Don't look to others for the answer, but ask yourself.
Ask yourself, as the financial news media spread fear, did you see anybody stepping in to slow it down? Did Wall Street institutions take their own advice and be fundamental investors or did they basically do what they always do when there is uncertainty in the market which is to do what everyone else is doing at the time? Don't look to others for the answer, but ask yourself.
Ask yourself, as the financial news media spread fear, did you see anybody stepping in to slow it down? Did corporate executives who watched some of their stocks lose 80% of their values step in? The only thing corporate executives did was to reset their stock options to a lower strike price to reflect the lower stock prices. After they did that, the only thing they did was to layoff employees. With CEO's making multimillion dollar compensations you would think they could do more for their salaries, bonuses, and stock options than that. Don't look to others for the answer, but ask yourself.
For those of you who don't think you can do anything, think again. You can make a major change in politics this November, not necessarily by voting Republican or Democrat, but by voting in someone new who seems to be more action oriented. (Unlike most of the politicians who seem to be as lost as a duck in the desert when a crisis occurs.)
I never could understand why a politician such as a senator could stay in office for 40 years. The only way this should happen is if everything is getting an "A" (An "A" is not perfect, it's just being in the top 5 quintile). To get an "A" would mean at least the budget, education, healthcare, the infrastructure, and the economy were doing good. Since this has never happened, I would think that voters would want to make a change after giving certain politicians 5-10 years. However, I'm not saying that I don't see other points of view such as, "Hey, things aren't perfect, but they're okay, so I'm going with the incumbent."
After you vote this November, start writing your congressmen and senators. Ask them why they seem to be more concerned about Clinton's sex life than the global economic crisis (I'm not saying that the constitutional issue about sex and purjury is not important, what I'm saying is that at this time, the global economic crisis should be number one on their list.) After you write them, write your mutual fund company and ask them exactly what kind of investors are they, fundamental long-term, or momemtum? If they say fundamental long-term, ask them why they always seem to be selling during a panic? After you write them, write corporate executives and ask them why they seem to be able to only do two things, change their stock option strike prices and layoff employees?
Finally, if the financial news does not want to keep in the best interest of the average American and the overall economy, but wants to continue to sensationalize their stories and aritcles and continues to play along with Wall Street tactics, start to boycott their advertisers. The financial news media must be forced to be more responsible and made to look well beyond only serving in their own best interest.