It’s Friday in the Wall Street Daily Nation!
For the newbies in the group, once a week I embrace the adage that a picture is worth a thousand words. And I select a handful of graphics to convey important economic or investment insights.
This week, I’m dishing on the pesky Fiscal Cliff we can’t get away from, the latest dip in stock prices and why Europe isn’t always worse than the United States.
While I can’t promise you’ll walk away from today’s column uplifted, you’ll definitely be more informed. That has to count for something, right?
So let’s get to it…
Soak the Rich and the Poor
Too much press has been given to the Fiscal Cliff already. But I’m going to keep piling it on. Sorry – it’s in the name of truth, so I can’t resist.
You see, most media outlets play up how much more taxes the rich are going to pay if we do, indeed, plummet off of the Cliff. But few, if any, talk about the impact on the poor and middle class.
Guess what? It ain’t pretty, either.
Based on the expected changes in disposable income, the “poor” – people with incomes in the lowest percentile – actually stand to suffer the most.
Bottom line: It’s time for politicians to stop ginning up the class warfare and, instead, figure out a way to overcome our addiction to debt. We the people need a compromise, stat! Otherwise, we’re all going to suffer.
Obama! Or O-Bummer?
As Bespoke Investment Group notes, “By now, stocks have typically started their ascent through year-end during election years.”
Not so much this time around.
Since Election Day, stocks have officially broken out of the historical pattern.
Obama! Or O-bummer? Time will tell (for stocks).
Don’t Worry, Be Happy!
While we bemoan slumping stock prices in the United States, they’re suffering from the same thing on the other side of the pond – as well as an unhealthy youth movement.
More and more young folks in the eurozone simply can’t find a job. In fact, the youth unemployment rate now tops 23%. And in some countries, like Greece and Spain, it’s above 50%.
Youth tend to be rebellious anyway. Give them too much free time – and severe austerity measures – and is it any surprise that riots continue to erupt across the continent? Hardly.
For comparison’s sake, the U.S. youth unemployment rate now stands at 16%. And no riots (yet).
When times are tough, a hand of misery poker seldom fails to brighten one’s spirits. So don’t worry, be happy. We could live in Europe.
Why Are You Always Picking on Me?
Since the Great Recession began, I’ve been fond of comparing conditions in the United States versus conditions in the eurozone (which are generally worse). But please don’t think I have it out for Europe.
I’m well aware that the United States has its own set of unique and ugly problems. Like this one:
According to data from the International Centre for Prison Studies, we incarcerate a higher proportion of our citizens than any other country.
Being a nation of sinners doesn’t come cheap, either. Last year, states spent $52 billion to construct and operate our prisons. That’s more than four times the amount spent in 1987, according to the Pew Center.
That’s it for today. I’m sure I’ve angered or depressed someone.