Home > Uncategorized > ST. LOUIS SCHOOL LESSON TO OBAMA ON ECONOMY LET CEOS DO THEIR JOB!

ST. LOUIS SCHOOL LESSON TO OBAMA ON ECONOMY LET CEOS DO THEIR JOB!

The Obama Administration continues to both claim that they have saved the economy from collapse, while also continuously threatening to punish the banks and their CEOs.  His supporters insist that if the economy improves then it means that his policies actually worked, and that independents will return to Obama’s side. This is an insult to intelligence of the independent voter, assuming that they can be so easily fooled.  As has been the case through every recession, people making sound decisions have been the starting point of real recovery.  St. Louis provides a vivid example of this.

The St. Louis Business Journal reports that “two-thirds of St. Louis’ public companies bulked up their cash on hand this year, with a combined $21.8 billion available as a buffer to the volatile economy or to bolster holdings for acquisitions.”   In a weak economy, many firms reduce costs and become more conscious on increasing efficiency.  Companies revamped their business models in the early 1980’s, allowing them to benefit from the Reagan tax cuts.

Huntleigh Securities executive vice president John Snowden explains “when business slows down, companies generate an enormous amount of cash”.   The Austrian School of economics address this phenomenon, holding that during economic downturns people are best to borrow less and pay down debt so they can have the ability to make purchases in the future.  With people not buying as much, firms hold off on starting new projects. 

The natural cycle will allow firms to begin investment in time to sell to a consumer market that can afford the products because they have saved.  But Obama opposes this process.  During his presidential campaign, when asked about his desire to raise taxes on those who make over $250 thousand a year he said “I want to give the tax cuts to the people who actually spend the money.”  This is in reference to the fact that those who are at the higher wealth levels tend to spend a much lower percentage of their income. 

But Barry’s snide response reveals his true objective.  This tendency of “the wealthy” to hold on to their earnings translates into a benefit for the nation.  These savings go into banks who can loan or invest the money. It goes into stocks and bonds which provides capital for industries.  It goes into treasuries for government projects. It goes into venture capital to help entrepeneurs.  It goes into acquisitions or small business.  Even if they stick it under a mattress it strengthens the value of our money  by reducing the currency’s velocity.

The fact is their wealth is our wealth.  The “wealthy” making more money does not cause us to have less.  That is the childish notion that is consistently promoted by Boondoggle Barack and his band of  Statists.  He suggests that if  he taxes these “rich people” more heavily then the money goes back to the people. 

It doesn’t go back to the people. It goes to another coöperation, one that does not care about being cost efficient.  And what’s more, Obama’s massive spending simply takes money from cost competitive firms and gives it to government contractors. These contractors are chosen more by political favor than their ability to satisfy the people.

So in effect, Obama is actually causing more income inequality through his policies.  When times are tough, private companies have to tighten their belt, the government does not. 

And Barry’ answer to this unsound fiscal behavior is to attack those who are doing their job better than he is.  Monsanto increased its cash holdings by $650,000 to $1.95 billion,  up over  45%.   At the Global Industries Conference, CEO Hugh Grant told investors that the firms seeds and genomics divisions are expected to give Monsanto a 100% increase in their gross profit by 2012.

Of course, the Obama Administration is threatening to hit the St. Louis based company with a law suit, claiming that their seeds division is violating anti-trust laws.  

Way to save the economy from collapse.

Advertisements
Categories: Uncategorized
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: