From a narrower perspective—overall business profits—reducing income inequality improves profits while improving demand for products based upon their popularity. I may not live long enough to realize it, but in a few years TSLA will, indeed, reach $1000 or multiples thereof. Then I would sell considerably richer than now and invest much, much more conservatively, like the rich. I would want a considerable buffer in safer, renter like stocks, or bonds with lower yield and less contribution to investment in the economy. Our wealth manager already anticipates this need but for different reasons—a preternaturally high market.
One of the best ways to stimulate overall demand is raising the minimum wage and/or investing in education, particularly at the Community College and K-12 levels. Those are longer term investments, not an immediate fix or sugar high as our wealth manager puts it. How backward looking is Congress with the recent tax bill? Now it is looking for ways to reduce benefits like Social Security and Medicare to pay for it. Already the cola for Social Security has been reduced and recently the cola for non-defense government employees has been axed by the White House. Will that increase demand for cars, etc.? At the same time it increases the inequality gap by lowering the bottom. A twofold fix—like heroin. Better than sugar!
Business thinking first principles: Stick with a good product, improve or change it constantly, tap into new markets or grow the existing one as much as possible. The opposite is achieved by bribing Congress for a short term fix. A great economy like China's, Korea's, Taiwan's, pays attention to the future. Can you get more backward looking than pushing subsidy for coal?
In the fifties when I was a freshman at MIT my roommate was from Iran. His family was super wealthy. Dad had the Mercedes dealership for all of the country, a minor investment, but really major holdings in rug manufacturing, etc. A truly cultured man, along with other foreign business leaders, he spoke ill of his U.S. counterparts, not only because they had very short term thinking, but they were dull at conversation—so narrowly focused on money and money ways of making money. This was 30 years prior to the Harvard Business Review's, "Managing our way to decline."
MAGA is a great campaign slogan. Therefore by fooling voters, like most, it was a fake campaign. Campaigning is different from governing, so blame the messenger as fake news when your promise is actualized as MADA. Make America decline again.
