Whether you own stock or not, it is a good idea for everyone to pay attention to the stockmarket as it is a bellweather in predicting the future of the economy of our country.
An increase in the Dow average stock indicates that the future looks good, and this is a benefit to everyone. A decrease in the market does not bode well for the future and may indicate a recession is coming or even a depression.
The days after the election the stock market has suffered a deep decline, more so than has occurred in any previous time after an election. The reason is that the future does not look good.
Campaign promises made by Senator Obama to increase taxes on capital gains in the stock market and to increase taxes on corporations causes stock owners to not only sell before a tax increase on the sale, but also investors will not buy stock as a poor investment.
Taxing corporations is a bad idea because corporations really do not pay taxes as the tax is passed on to the consumer of the product or service.
Several companies are already going bankrupt, and some are selling out of fear of being taxed in the coming of the new president.
As an example, the owner of the Miami Dolphins pro football team is selling now and saving millions before the term of the new president, who has promised to raise capital gains taxes.
Further, President-elect Obama has promised to spend billions on public works to provide jobs. Past history has proved this does not work.
In the 1930’s Hoover and Roosevelt raised taxes and spent billions on public works and a depression resulted. Unless Obama goes back on his promises, the future is not bright.
His campaign donations were four times that of John McCain, which in effect helped buy the election. He now has to favor the extreme big donors or incur their wrath. Hopefully Obama’s promise of change will be the right change as changes are not always for the better.
