let me give you several examples of what i mean by perception. let's start with a basic one that everyone uses...food and gas. if people think the price of food and gas will go up, they go buy more now while the price is cheap. that extra demand coming from others who think the same thing about food and gas prices going up and then purchasing...makes the prices go up.
this becomes a self-fulfilling prophecy. the same thing applies in the stock market. if people think a lot of variables are favorable for business growth and thus many company's shares will increase..people who buy those shares will jump into the market to make money. as more people think the market is going to go up and they buy more...as as they buy, those who sell will charge more for them. thus, the prices go up and people make more when it's their turn to sell.
that is self-fulling prophecy, perspective and free market capitalism at work. when the government steps in to regulate this (usually, they want to get their hands on some of the money, but end up mucking things up in the process) it slows down growth. that perception of growth turns to fear of the government stepping in and interfering with the buying and selling that's going on...and this is why obama has extended our recession.
he has put into place a very costly healthcare system that will cost businesses a lot extra in taxes. how much? no one is sure and that is another thing that stops businesses from growing...uncertainty. they don't want to spend a certain amount on growing and then be hit with taxes that makes them go negative. an individual may go negative from time to time, but if a company does...people get fired.
besides obamacare, businesses face the recession itself. although interest rates are at historic lows, they're thinking why should we borrow money if no customers are walking through the doors. no customers, no profit and no way to pay the loan back regardless of how low the interest rate is. that is the stupidity of obama and government regulators on display.
they are thinking that if they keep interest rates low, it will spur growth...wrong. they think that if they throw money at the problem it will spur growth...wrong. throwing money at it does not increase the confidence of businesses and consumers if they think the government is going to continue to make the wrong decisions.
finally, the perception of the country is down because the obama administration is making decisions to "excessively" regulate energy, banking, credit, real estate, the auto industry, travel and others. by implementing a major overhaul of our entire free market system businesses and consumers who know anything at all about business know that this is not normal.
this would not be normal for a small state to try to accomplish in four years. the obama administration has attempted to do it in four years in a nation the size and complexity of ours...without studying how by changing this, it affect growth and other factors. they didn't consider unintended consequences. businesses and consumers see the amateurishness of this administration and for those who know anything about business it scares them to death and they're perception right now is at an all time low.
businesses and consumers will continue to sit on their money because with this administration...who knows what tomorrow may bring and people are just not going to take any chances in losing even more money with them. as long as business' and consumer's perception is low...we will have a recession and president obama doesn't seem to get that because nowhere in any of his speeches is he saying, "i went too far, let me pull back". no, he's saying, "i didn't do enough...give me four more years, i need to do to do more." is that really what you want... four more years of nothing or even worse?
the type of government that president obama is creating is one that works best with a system of socialism or communism. it destroys the free market through excessive governmental regulations that cripple and eventually halt growth altogether as perceptions continue to plummet and fear of government intervention grows. this is why people who understand anything at all about business see the changes with great clarity that liberals in power are making and is the reason why they are calling this rush to regulate, an intentional move towards extreme socialism or full communism...it has nothing to do with his race.
it has to do with his upbringing and very close ties to communist who are close friends or mentors as he said in his autobiography. if it was his intention to move us away from capitalism and into communism, he should have been honest about this before his election and not lied about it, not win the election and then just do it. if voters then with the full understanding of what he planned on doing, wanted communism then communism it is, but he didn't do that. he won and then without telling us...did it without the consent of u.s citizens. if president obama wins, don't expect a brighter future coming from this administration...expect more of the same or worse.
darryl b. petitt has a degree in finance/economics and has owned a professional consulting company for 22 years, that specializes in commercial real estate consulting and valuation.
We have a two tiered population these days. Those who are old enough to have seen several business cycles, and those who have not. Business cycles are the aggregate result of all segments of the market showing either their confidence, or reluctance, in going forward with expansion or acquisitions. Government does not "purchase" confidence via tax revenues or printing press money. It does not produce sustainable demand (and thus market confidence) by giving temporary tax rebates. It certainly does not create confidence by creating new regulatory agencies with their draconian laws.
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