What's the Left's Position on the Stock Market? Investments or Gambling?

[ulTRAX]

Anyone hear the Cato guy on NPR's The Connection yesterday? He was selling the idea that stock ownership was democratizing wealth. There WAS a free lunch... we could all can become millionaires... as long as the government doesn't get in the way.

While I'd prefer more restrictions on charters, I don't have a problem if people pool resources to create corporations. To do so they have to sell stock. That seems to be the original intent of the stock market. OK... sometimes corporations need to sell of more stock to raise money and they'd prefer a higher price. These are what I believe are called primary transactions... direct between a corporation and an "investor".

But the vast majority of stock transactions... and maybe someone has the breakdown, are secondary transactions... are between
"investors"... individuals, mutual funds etc. A corporation doesn't benefit from the market value unless they sell more stock. It's these sorts of transactions that drive the market. More and more it seems like gambling rather than investing.

Knowing this.... what should be the Left's position on the stock market?

[Tandalayo_Scheisskopf]

1. He's on glue.

He is shilling the biggest gambling con on the planet. The market chews up and spits out the little guy. The best player I know, smart and knowledgeble, is a net loser.

Right now, the only place I would say is possibly a money-maker is gold, and that market is a minefield too.

[ulTRAX]

6. who's on glue?

I raised some questions. I haven't told anyone what I really believe... have I?

[giasangria]

2. michael moore says:

I dont know much about this subject but I remember in one of his books he mentioned that the rich tried to get the middle class to think they could become one of the upper class one day too, and encouraged them to get in the stock market once it had kinda peaked at the end of the 80s..then in the 90's they started to do it and 401ks and stuff were popular. Supposedly it benefitted the wealthy cause all the new money pouring in the market let them start making money again. Then 9/11, Enron, etc happened and a lot of the middle class got burned bad. I really don't know much about the stock market but I am just summerizing what I recall reading in the book. I think the point was the idea that people who should be democrats are voting republican since they have the idea that they will someday be part of the "in crowd" too. I think it is interesting considering the popularity of MLM, real estate investment, and similar books right now.

[STL_Social_Democrat]

5. drumrole.........enter Elliott Spitzer

If for some godforsaken reason * and his cronies force their SS privatization agenda through, an opening will be created. The Democratic Party will immediately have an officer of the law who has made a career out of slapping around Wall Street criminals. Elliott Spitzer would be the new Ralph Nader in terms of enforcing corporate accountability. If every american were involved in the market,(a horrible idea I might add) the bubba voters out there may start thinking about things other than gaybashing. Even republicans will tell you that they don't trust their own party to regulate Wall Street.

[blondeatlast]

20. Welcome to DU, but:

Please state that you are paraphrasing what you believe he said.

It's all too easy for us to look up, all you really have to do is source it, and paraphrase.

:toast:

[giasangria]

29. ?

I'm sorry I don't really understand what you want me to do.

[K-W]

30. He wants you to make it clearer

that it is a paraphrasing, not a quote.

Also, that you should include a source if possible before citing anyones published opinions.

[giasangria]

31. michael moore post

I can't edit it now...I was paraphrasing him, and I think I read it in Dude, Where's My Country. Sorry for the confusion.

[Ann Arbor Dem]

32. Welcome giasangria!

I remember reading this too, but for the life of me, I can't remember which of MM's books it was in. Gives one food for thought, doesn't it?


:hi:

[TwentyFive]

3. I'm not sure there is an 'offical' position - however, philosophically

most people left of center are fine with capitalism and making money...heck, it's even cool to make a ton of money.

However, capitalism becomes a problem when corporations get so big, they start in with the anti-social behavior, namely:
-running competitors out of business
-polluting the environment
-busting unions
-bribing the media to hide bad news, or other activities to artifically boost their stock price.

The list goes on, but you get the idea. On the investor side, Democrats favor taxation of capital gains and dividend income.

I am a pro business liberal. I think most of the laws passed by the democrats actually help the ecomomy. Left unfettered, capitalism eventually destroys the middle class....since workers are viewed strictly as 'resources' in pure capitalism, and the objective of capitalism is to ruthlessly beat down the cost of resources. This same concept goes for the environment.

[blondeatlast]

19. Nice framing, IMHO.

I'm going to reference this in the "Frame the Debate Group" if you don't mind (and well, even if you do!)!

[annabanana]

4. I don't know about "the Left's" official position..........

But I never thought that you should put any money in there that you couldn't afford to lose. I figured that the whole game is knowing something that the rest of us don't know.....They call "insider trading" illegal, but that's the only kind of trading that makes sense. So it's all winks and nudges and who knows who.

[Toucano]

7. And further more...

the people who make the "rules" about how it should work, what's fair, etc. are the upper class.

They set the rules that benefit them and create the appearance of fairness.

Sort of like a Carnival game. ;)

[unblock]

8. the stock market is fine, IF properly regulated

as long as there's good information and honest accounting, then people can make prudent investment decisions and then the stock market serves a useful purpose, and the little guy actually can participate in a bit of ownership.

of course, anyone could gamble on the stock market by making trading decisions that ignore prudent investment principals, but that doesn't make the market itself bad. buy and hold for the long term isn't gambling, it's taking an honest investment risk and, on average, getting a fair reward for it.


just like capitalism itself. it's a good idea, IF properly regulated.

[ulTRAX]

14. regulation is important.... but I'm wondering about government promotion

My greatest fear is that that government will start promoting the stock market.

If the prime way in which people make money in the equities market is not though dividends but gambling that other "investors" will pump up the stock price then the stock market is little different than the market in old baseball cards. The market is dynamic, but what does the nation get for all the churn of countless billions?

What bothers me most is that the current run-up in stock prices seems to have begun right about the same time Congress passed private retirement accounts... when was that 79? 80? I see the run up in stock prices entirely due to too much money chasing too few stocks... and Bush's SS privatization scam will only add fuel to that fire. At times, especially during stock bubbles the market acts like the worlds biggest Ponzie scheme. It's provides the perfect illusion that everyone is wealthy when all they are holding are pieces of paper. In reality we know that stock price is based only on a tiny percentage of a company's stock being traded. That percentage goes up... prices plummet. Since stock inflation benefits those who were in the market early, it's a giant mechanism for redistributing money... upward.

[blondeatlast]

21. I had the same thought and it scares me. nt

[K-W]

16. We cant expect an economy that grows indefinately.

One of these days it is going to become impossible to grow our economy any further for some reason or another. Shouldnt we try and reduce our economies dependency on growth before then?

Not to mention that weve only kept this growth going by violating population after population domestically and abroad.

[unblock]

25. our economy needs to grow in proportion to the population

there are efficiencies to be had, sure, but at least the economy needs to grow when the population does. if the population shrinks, the economy shrinking with it is not a bad thing.

but as long as the population grows, it's very hard to feed the new mouths without the economy growing as well.

[K-W]

26. That would be a VERY slow growth.

If we reduced our growth to that appropriate for population our entire economy would collapse.

[SeveneightyWhoa]

9. I invest in companies that I'm comfortable investing in.

Right now I have stocks of a company involved in hydrogen power, which any liberal won't have a problem with. And I have invested in a company solely centered around wind power in British Columbia.

If an analyst could guarantee me that an investment in a company like General Electric, Halliburton, or Time-Warner would reap enormous guaranteed profits, I wouldn't do it, based on principle.

If I was American, I'd invest in companies like Costco.

That's how "the left" should play the stock market. There's nothing wrong with taking part in a little capitalism.

[sandnsea]

10. Profit, exploitation, or money manipulation

I think it depends on the company's business plan. More and more, it seems to me corporations make money in a variety of ways that have little to do with old-fashioned fair profit on a good product. I think the CATO guy is talking about the "Ownership Society", where Americans "own" the money gained from the exploitation of the rest of the world. It's fine I guess, as long as you don't mind turning the US into a giant gated community to keep the other 95% out or keep them from blowing you up.

[Sugarbleus]

11. Not sure about "the left" but I hate the investment movement..

For one to gain, someone else has to lose. In it's present form..investing is legalized GAMBLING.

Furthermore, Buying and selling money ISN'T A REAL JOB!

People should read up on the stock market/investing history..where/how it began. It's not pretty. Think Vanderbilt and robber barons....

Investing/stock market dabbling is a BLIGHT on civilization; has caused MORE poverty/theft, and is the source for driving the cost of living SKY HIGH...... A POX on the whole industry.

[Liberty2001]

35. For one to gain, someone else has to lose?

That assertion is simply not true. Wealth is not a zero sum game.

As long as wealth continues to be created, wealth can increase for all ... here's a simple example ....

2 people in the universe and there's $20 total wealth.

Each person has $10 wealth.

The two people work and create $10 more wealth.

Total wealth in the world is now $30.

Let's say the $10 in new wealth is spread between the two ... each one now has $15 in wealth ... thus, both people win by creating more wealth so that each person has more.

To assume that if one person gains, the other loses, presumes that there is no wealth creation.

A little oversimplified, but hopefully the point is made.

[ulTRAX]

37. are you proposing......

Are your proposing an egalitarian or a more equal sharing of the wealth? Or are you quite content that markets can deal with this issue even if the result is something like this: http://www.lcurve.org/

[ckramer]

12. I think stock market to most average joes only means a gamble

You know 99% of the people walking into the casinos would be losers. Stock market is just another big casino designed to extract hard-earned money from the average joe-six-packs. Bush's "owner society" theory pretty much is a scam.

The policy of Democrats should be sticking with Social Security, and don't be a Bush sucker.

[lostnfound]

13. Interesting Ideas from "The Divine Right of Capital"

Not necessarily the final take on it, but here goes:

Buying stock is less a matter of making investment than a matter of 'wealth extraction'. Or, it can be seen as a form of gambling, with the unique and significant attribute that it is subsidized by earnings of the corporation.

Stockholders are totally extraneous to the activities and operations of the corporation (I would add: other than assuming risk of loss if the debt of the corporation exceeds its assets (really, another form of gambling) and thus it forms a sort of ballast.)

However, almost all money "invested" in the stock market is taken back out by other investors; only in an IPO (or special offerings) do stock purchases actually fund a company's capital investments/infrastructure.

The idea of the 'Divine Right of Kings' was to legally entitle aristocrats to extract wealth from their estates or their 'realm', by virtue of their birth.

The idea of the 'Divine Right of Capital' is to legally entitle stockholders to extract wealth from corporations, by virtue of owning the stock. Thus, when you buy stock, you buy a piece of aristocracy.

Gandhi labelled "wealth without work" as one of the 7 deadly sins.

[K-W]

15. Capitalism is a perpetual motion machine.

We can all just sit back and let the wealth roll in.

Its not like those numbers with $'s next to them represent commodities and labor or anything.

MONEY COMES FROM SOMEWHERE YOU GREEDY REPUBLICAN TWITS

Some large body of people are working very hard for not enough pay so that you can leech off of our elaborate financial system.

My position on stocks is that the stock of all companies should be devided fairly amongst those who are actually involved in the functioning of the company including all employees and that nobody not involved in a company should own stock. That would be true democritization. Anyone who contributes labor to the company should have a say on how it is run and should receive a portion of the profit that they all worked to create.

The problem with the stockmarket is that it creates a blind uncaring mechanical demand for growth and profit. And those are never good.

[w4rma]

17. If you play the stockmarket, do NOT buy into the BS that they sell to the

patsies. The stockmarket is a zero-sum game. In the stockmarket there HAS to be losers for there to be winners. The losers are the patsies that they sucked in with slick marketing tactics who thought they could get rich, like the the insiders did, with very little knowledge about how the system works and very little information, other than what the corporate media tells them.

[Catchawave]

18. Real Estate...

...I wouldn't put my money anywhere else!

[blondeatlast]

22. Good luck to you when they revoke the mortgage interest deduction.

Which is in the works already.

[Catchawave]

24. They can't do that, can they?

It's part of the equation for qualifying on most mortgages.

[blondeatlast]

33. It's being hinted at, along with doing away with the deduction

businesses can take for providing employees with health insurance.

I can't find the article regarding the mortgage deductions, but this is a good outline of what to expect..it's gonna be a bumpy ride, friends.

To pay for those large tax cuts, the administration is looking at eliminating both the deduction for state and local taxes, and the business tax deduction for employer-sponsored health insurance. That would raise nearly $926 billion over five years, according to White House and congressional documents.

http://www.washingtonpost.com/wp-dyn/articles/A58554-2004Nov17.html

[Catchawave]

34. Thanks for the link to the article, but....

I didn't see a hint about doing away with homeowner's mortgage interest deduction? I did a web search also, nothing hinted there either.

[blondeatlast]

23. Gambling, and with far fewer regulations than Nevada has. nt

[MattWinMO]

27. a risky investment..

I think Stephen Moore was being deceptive. He said 80% of Americans invest in the stock market, which is probably true but the majority of those investors don't own that many shares to get rich off of.

He also said if more people had their pensions invested in the market we could've been a nation of millionaires. Actually if more people had their pensions in stocks in the form of mutual funds then more people would've lost their pensions when Global Crossing, etc. failed.

Moore said if Social Security and pensions were put into stocks the govt would bail people out if their stock went bad. This will likely mean more people on govt assistance in the future.

Stock is a good investment, however it's too risky to depend on to make a living. You shouldn't put what you need to live off of into the market.

Stephen Moore was being way too unrealistic.

[amazona]

28. there is no standard position

Most highly educated, highly compensated people do invest at least something in the market, and those people include a great many progressives, Democrats, or other "leftists."

My feeling is that, because the SEC has failed to protect us from market manipulation, we are not really "investing" in the market. We are gambling. If you don't have good information that you can use to make a decision, you are just guessing.

Nothing wrong with a good gamble but we can't "all" become millionaires unless there is inflation such that being a millionaire is like being a "penny" aire. Probably even a homeless person can find a penny or two rolling around the street, because this amount of money is now quite meaningless. In business, there are winners and losers. Somebody has to get the best of somebody else in a transaction. There is no such thing as a "zero sum" game because money comes out of each game to pay the comssision costs, transaction fees, etc. Active traders end up surrendering more to transaction costs than more passive traders, hence, the paradox where women traders on average end up doing better in the market than men -- because men tend to trade more often!

Gamble if you like. I certainly do. But the market can't replace Social Security, which is a safety net for ALL. The day when all humans are millionaires is the day when a million dollars is about enough to buy a bottle of Night Train.

[jmowreader]

36. Any means of making money is fundamentally a gamble

According to Ohno, creator of the Toyota Production System, there are only four ways to create wealth: mining, forestry, agriculture and manufacturing.

All of these involve some measure of risk and are therefore a gamble. A miner could dig and not find the mineral he dug for. Fires, insects and drought can destroy forests. Crops can die and factories can burn down.

Everything else is mere wealth transferrance. This includes the stock market.

I have nothing against gambling. All of life is a gamble--nothing you do is without some degree of risk. The question is, how risk-averse are you?

If you are almost completely opposed to risk, putting your money in the bank at five percent (or whatever it is these days) may be your best bet. You won't make much, but you probably won't lose it either. At the opposite end of the scale, if you have more balls than brains you might want to go for junk bonds so bad Michael Milken wouldn't touch 'em, penny stocks, short-selling, futures contracts or other really risky investments--some of the richest people in America got that way by going short. These things will make you either Really Rich or Really Broke in a hurry.

Somewhere between passbook savings and junk bonds lies the stock market.