Capitalism

TIME Magazine this week has an interesting article this week about Capitalism, I suggest you check it out.

At the center of the article is the hypothesis the United States economy - even the world economy - started to change in the 1970s.

It's the time the stock price became the measure of success.

The back-seat quarterback in me knows there is no credit here, but I vividly recall conversations with my Dad during my high school years (1978 - 1981) about prices going up when nothing happened.

Stock prices went up amidst merger talk or the idea companies were good targets, instead of innovation and strong development for the future.

Many of the world's largest companies make money now by lending it - even if their "business" is making cars or some other product.

Just forty years ago, banks and savings and loans made money by making sound lending decisions in loaning money to business owners and entrepreneurs or through home mortgages.  Now it's a fraction of what most lending institutions do - there is more money to be made in more sophisticated ways - ways which make money, but not many jobs.

My dad lost his job in 1992 when the research and development department he worked in was disbanded.  How does a company look to the future without R & D?  It's not a surprise that other firms followed suit - frequently to buy back stock and improve the stock price.

The idea of capitalism is pursuing income and earnings leads to jobs and innovation - with the foundation of that idea eroded by artificial bottom lines - many of us are worse off.  Which is where I'll leave this for now - adjusted for inflation - average hourly pay in 1965 was $19.79, in 2015 it was $21.04.

I believe the tenets of capitalism work - but this thirty year detour indicates it can get off track, too.