carey_jim

Markets Overly Optimistic About Obama's Infrastructure Plans - JP Morgan

The best way to stimulate the economy is to get more money into the hands of the consumer.

The majority of workers' wages have been kept low and falling by weak unions and illegal immigration.

The higher salaries of management and the very wealthy don't stimulate enough spending because there are only so many cell phones, computers, ipods, SUVs, boats ..... they can buy.

Higher taxes don't help because, as J.P. Morgan said when he was Secretary of the Treasury in the 1920s and cut taxes for the rich, "the rich wont pay higher taxes. They will find loopholes."

How do we get around the problem of falling wages and unwillingness of the very rich to pay more taxes and, basically, to give more of their money to the poor to spend?

Raising wages seems to be a better solution than taking money from the rich through taxation, even if it is in the form of government work programs for the working class. Henry Ford recognized that in the 1920s even without being prompted by unions. He needed someone to buy his cars!

But bringing illegal immigration under control and resuscitating the unions will take time.

In the "mean" time we'll probably have inefficient changes brought through social unrest and confiscatory policies.

Unless someone can find a better way that most Americans agree with.

[Curtain rises. Obama enters, stage left, accompanied by Pretorian Guard.]