Bubbles

"The United States is broke -- fiscally, morally, intellectually." -- David Stockman, New York Times, 31 March 2013

"The public be damned. My responsibility is to my stockholders." -- William H. Vanderbilt, 1883 railroad executive

"What's good for the country is good for General Motors and vice versa." -- Attributed to GM chief Charles Wilson, 1953.

"Greed is good." -- Gordon Gekko

"Greed is healthy." -- Ivan Boesky, 1986

Exuberance is rarely rational.

News item: Pay for bank board members soars amid staff cutbacks. (New York Times, 1 April 2013)

   Consider this: The competitive nature of capitalism breeds a bigger concern for profit than for customers. It's a common attitude, and was first identified as an economic issue by Adam Smith in 1776. He wrote that people look to their own benefit, and in doing so they benefit society at large. Perhaps. But Smith may have been overly optimistic about what may be called the innate, subconscious altruism of people. Assuming, of course, that altruism exists at all.
   We see the "me first" attitude among drivers in city auto traffic as well as among corporate directors, whose main concern is the stock price of the company, rather than sales and consumer welfare. It's called "increasing shareholder value," and often has nothing to do with benefits to consumers.
   Currently, Wall Street performance indexes are topping new highs, and investors are again joyous. But there are some who are warning of a bubble about to burst. And there are some reports that hint at a downturn. Manufacturing "expanded less that forecast," according to a report in Bloomberg Business News, citing an index from the Institute for Supply Management. The Bureau of Labor Statistics said the average U.S. weekly wage decreased over the year by 1.1 percent during the third quarter of 2012, to $906. And the unemployment rate, according to the BLS, while edging down to 7.7 percent in February, has shown little movement since last September.
   So while business leaders pay their board members big time as stock prices soar, those in the 99 percent see their job prospects and their pay stagnate.
   More numbers come out almost daily, and it's sometimes hard to see a trend in the blizzard of statistics that are often volatile. A couple of sure numbers, however, to take the measure of the nation's economy, are average weekly pay, monthly employment, and quarterly GDP,
   Stay tuned.