Straight Talk from Al Jacobs

 

 

AS THE ECONOMY SOARS

 

The headline in my local newspaper is favorable – at least a part of it is: “Economy soars …” Unfortunately the rest of it is less than encouraging: “… but 40% of U.S. hardly getting by.” The author, David Lazarus, a business and consumer columnist for the Los Angeles Times wastes no time describing the problem: “By virtually any yardstick the U.S. economy is doing great, with corporate profits at record highs … [yet] a report out this week finds almost half of Americans are having trouble paying for basic needs such as food and housing.”

 

Why are corporations doing so well? It’s because they’re automating their facilities, getting rid of wage-collecting employees, and moving their operations to places with fewer regulations and less oversight. And why are Americans having trouble meeting their living expenses? For exactly the same reasons. Thus, Amazon is doing nicely as an Online company, as it plans to employ Prime Air as its delivery system to get packages to customers in 30 minutes or less using unmanned aerial vehicles. Meanwhile, Sears and J.C. Penney close stores as they dismiss employees. At the same time, Uber and Lyft soon hope to transport fares nationwide with self-driving vehicles while taxis with drivers struggle to compete. Perhaps this helps explain why a recent CNBC poll reports more than half of Americans have seen no change in their paychecks over the past several years.

 

What can be done? Many economists call for a higher minimum wage, a progressive tax system that spreads the nation’s wealth more equitably, and a social safety net to subsidize all those persons who cannot otherwise fend for themselves … though they don’t explain how to enforce this without a full socialization of the economy, in which government dictates how each company shall operate its business down to the most minute detail – all the while preventing sources of capital from fleeing the country.

 

A final comment: Although the economy may be agreeable for a select portion of Americans, it’s far from favorable for the majority of our citizens. The current National Unemployment Rate of 3.9 percent sounds impressive, but the method devised by the Labor Department is contrived – intentionally so. In reality it’s well into the double digits and growing. Where we’re heading economically is uncertain, but I foresee untold misery in the future. I fear that what’s in store for our nation will not be pretty.

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com