I believe the stock market is a way to reliably estimate what lies ahead for a nation's economy. The stock market is a very basic way to measure the success of large-scale trading in an economy. Generally speaking, the stock market of an individual nation reveals what lies ahead for the economy of that particular nation and its citizens since an economy is based on trade.
Economics is a very complex subject taught in colleges by highly educated professors using well-written textbooks. Economics can be a subject that helps form a plan toward the recovery of a nation if executed properly. But we also need to remember that these complex economic lessons based on intricate mathematics are what helped put our nation in debt. Economics is a subject very vulnerable to random variables such as natural disasters and selfish spending.
I believe we need to look to something far more basic to examine whether or not our economy is on the way to recovery. Mathematics, logic, and science are good subjects to compare to economics. But I believe that making comparison in basic real-world ways is better than making comparisons in theoretical ways that few of us ever experience in the real world.
For example, if you want to do things in a complex way, you can easily show that 2+2=0. All you need to do is show two pieces of matter being added to two pieces of antimatter and you end up with nothing. But in the real world of everyday living, the 300 Million citizens of America don’t face that situation.
The world we live in is based on very basic principles each day. If you catch four fish, you have four fish to either eat, store, or trade for something else. That form of logic really is what the concept of trade, and therefore economics, is based on.
When President Obama took office, the Dow stock market was only at 7,000. Now the Dow stock market is over 12,000. If it wasn't for the fact that the nation of Greece experienced an economic bankruptcy that affected world economy, our Dow stock market probably would be over 13,000 right now.
This means the American economy has definitely come out of its recession and is well on its way to prosperity again. Proof of this is the fact that the number of jobs in America is rising. It is only a matter of time until this initial seed of prosperity grows and starts producing financial fruit that all American citizens will enjoy the taste of.
Even states hurt the worst by the recession, such as Michigan, are now reporting a huge growth in jobs. I was watching TV a couple weeks ago and I saw that analysts had predicted only 6,000 new jobs were going to come to Michigan during that particular time period. Instead, 60,000 new jobs came to Michigan – literally ten times what was predicted!
The only thing that isn’t great in this scenario is that these jobs aren't high-paying jobs. Obviously, having some form of job is better than no job at all. Unfortunately, most of these new jobs aren't the types of jobs that you can raise a family on while living the quality middle class life we have grown to desire in America.
This new wave of jobs tends to be based on low-paying work done by unskilled employees in entry-level positions. These types of jobs are appreciated by college students and adults looking to make extra money on weekends. The good news about these entry-level positions is that there is room for advancement as time goes on and experience is gained. This type of career advancement usually results in an increase in pay, which hard-working employees always value.
These types of entry-level jobs do play a role in the economy; they actually represent what economies are based on. With a larger number of jobs of any kind, a larger sum of money will be circulating in the economy. More people will be purchasing products and services, which will result in a need to hire more employees. This creates an economic cycle that, in theory, should gradually continue to improve the economy.
As a larger number of employees are hired to satisfy production needs and service needs, it will be necessary to hire skilled employees that earn higher wages. Employees will be hired as well-educated supervisors and well-trained managers – roles that usually pay a higher salary. This is when the economy really starts to take off and an even larger number of jobs are created. The only bad thing about this scenario is that it won’t last forever.
Currently, the flood of jobs is helping college students and adults work and spend money on hobbies and food. Things like videogames, electronics, clothes, movies, jewelry, and other items. But these jobs are planting the financial seeds needed to produce a financial harvest in the economy. In other words, these jobs help circulate money around us in our own nation – a crucial factor to achieving a strong national economy in world trade.
Now, rather than watching our government pay unemployment to Americans living in an economy with no jobs, we see that more Americans have the ability to work on their own and make their lives better. We just need to make sure that we continue trading with each other as often as possible; that way, our money remains circulating in our own economy. This is particularly true in the automotive industry.
President Obama literally saved both General Motors and Chrysler from going out of business. Ford would have survived, even without the bailout of President Obama; however, it is obvious that Chrysler and GM would have gone out of business. Companies like Ford and Toyota would not have been able to simply “Eat their share of the market.” The inefficient share of the market held by GM and Chrysler would have been poisonous to Ford and Toyota.
If GM and Chrysler would have gone bankrupt, as they inevitably would have, it would have instantly put hundreds of thousands of workers out of work. But most people fail to realize this negative impact would have continued to affect millions of others. Companies that supply parts to GM and Chrysler have millions of workers all over the country that would have been put out of work.
I believe this economic impact would have produced a domino affect so huge that it proved something for the second time in history. This domino effect would have demonstrated that the concept of exclusive capitalism is always destined to kill itself, just like we saw during the Great Depression. Thankfully, our economy isn’t entirely based on capitalism at this point in time. Our government now runs a slightly modified form of capitalism that has the ability to help companies like Chrysler and GM, which are crucial to the economy.
Now that President Obama has given GM and Chrysler the ability to restore themselves, it is amazing how these two companies have been restored to net profitability so quickly. In fact, these auto companies have already started issuing large profit-sharing checks to entry-level factory workers on production lines! This is something I hadn’t seen in a very long time. Thanks to the auto bailout, it is obvious that the American auto industry appears to be on a long road of success. ;)
It's only a matter of time until we feel this economic recovery in other industries, as well. Quite a few of the industries in America were never affected at all by the recession. I’ve seen quite a few statistics that prove the industries of electronics and videogames have always remained very strong.
For example, Kinect is a product recently released for the Xbox 360. This revolutionary motion-controller device has already sold over 10 Million units. Kinect is now in the Guinness Book of World Records as the fastest selling item in electronics history! This seems to be a great example of how several industries were not affected at all by any form of recession.
I am 100% convinced the economy is well on its way to a recovery. The only question is “when” everyone will feel the blessings of this recovery. This prosperity package has already been ordered, it’s just a matter of time until it arrives. Please share your thoughts by writing a Comment.
