Thursday, May 26, 2016

The Man in the Arena

Most of the money in the financial markets are not creating anything 'new'--like jobs, capital expenditures or any other stimulus to the economy. Since the 1970's, the financial markets have focused on shuffling the paper around. 85 percent of money in the capital markets is buying and selling stocks of public companies. Those are stocks that were already sold by corporations to raise funds to invest in new equipment, research and development, new facilities, expand a market, etc. Public corporations get very little benefit from the sale of the outstanding shares of their stock. The economy doesn't grow with this activity--except when the money is pulled out of the market and used to buy some goods.

Yet those 'investments' get the same tax rate as investments made to start new businesses, expand businesses that hire employees and buy short investments that actually grow the economy. Congress sees all investments the same. They really should put a higher tax rate on gains made from trading stocks, whether short-term or long-term. If they want to reward someone who's really taking a risk, they should reward the man or woman who, according to Teddy Roosevelt, is the one who is in the fight to grow his/her business, to make the economy stronger...

The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat. --Theodore Roosevelt, at the Sorbonne in Paris, 23 April 1910.

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