Sometimes when I feel like posting on my blog but I don't know what to talk about I just open up a new post and start typing about the first thing that pops into my mind. That is how my last post about 50 things that make America worse off came about. Now after letting the post stew for a couple of days I think that the items that I listed would make good set of topics to post about. So I present to you the first post in a 50 part series called Why America is Worse Off.
1. The Stock Market.
I don't think that the stock market itself is a bad concept. I think that companies that need to get capital are using a viable option when they offer public stocks. I also don't think that it is bad for people to buy stocks. Personally I have a couple of mutual funds. And I bet overall mutual funds make a major component of trading in the stock markets.
The problem I have with the stock market is what happens to a publicly traded company. For the most part people that own stock in a company really don't care personally about the company, besides the fact that it will make money. If it makes burritos or party hats or burrito party hats it doesn't matter. As long as the company continues to grow at a good pace it doesn't really matter what it does. However when there are troubled waters on the horizon the ugly face of the public stocks rears it's head. And a conflict grows.
On one hand the people that run the company want to stay true to their products and their customers, on the other are the shareholders that want to make money. And when push comes to "the stock price is falling" the shareholders win. This means that the company will be forced to cut its workforce, cut corners, and cut ties with their loyal base. The product suffers, the customers who had made the company seem so promising get fed up and the devil does a little jig. The only winners are the shareholders who made the changes that would level off the stock prices enough to be able to jump ship without risk... well I guess the devil wins too, if he like to do jigs.
So what is the solution? I don't think that there is a good and simple one. I guess companies should be very careful when they go public, and shareholders should care about more things than their own bottom line. But that being said I personally would like to see my mutual funds to continue to grow, and if that means that Huffy has to switch to a cheaper brand of bolts, well so be it. I don't really care about what Huffy makes anyway.