Michael Maiello's picture

    Anthropomorphic Corp. and Mitt

    I see from Talking Points Memo that Mitt Romney has now rehearsed and mastered a response to questions about why he referred to corporations as "people."  Talking about some mega corporation, or even a small one, the way we talk about the neighbor next door might sound like a faux pas to us but I think that a lot of people are going to find Romney's explanation rather compelling and even convincing.

    You know how when you're at the company holiday party, some of the people there are not just being polite when they agree with the boss about the collective "shared mission," and even collective "shared sacrifices?"  Those people vote.  You know the guy at work who stays in a job he only kinds of likes, "because of the people?"  You know, the lady who's been there 20 years and looks around and says, "this is my family?"  These people are all sincere and they all vote and they all think, on some level, that corporations are people.

    Hell, I'm a cynical bastard and I love my colleagues.  Catch me in a good mood and I'll give you a hundred reasons why the corporation I work for isn't like the others.  You know, when it comes to work, just showing up every day is bound to breed some loyalty towards the place and some pride in it, too.  It takes a special kind of masochist to keep going somewhere and not develop some sort of personal connection.  There are a dozen places in New York City that I have deep personal connections to that I don't even get to once a year.  But I'm always there for work when it's required.  The mind naturally protects itself by forming a connection to the places, tasks and people that its exposed to repeatedly.

    I'm off in metaphysical land, of course.  Romney just means that a corporation is an assembly of people who have willingly banded together in pursuit of a common goal.  It is, as he says, "more than just buildings," which is an answer that will resonate even as it purposefully misses the point about why corporations don't deserve the consideration that people get.

    For one thing, everyone is not there willingly.  In life, you can only pick from the jobs that are offered to you.  You might not even get your preferred field or industry.  Your preferred industry could be rendered obsolete and replaced by something you don't like.

    It's funny, because in some instances, we completely recognize that workers are not all at work willingly.  If we did accept that premise, we would say that sexual harassment is not a problem.  Some companies just have that kind of culture!  If you don't like it, find a company where people aren't allowed to get grabby.  We would not restrict smoking in the work place.  Go find a smoke free company if that's what you want.  We would not even require safety standards or minimum wages.  We have a whole set of laws having to do with dignity and fairness in the work place because the system has learned, over time, that without at least some minimal standards, people would either wind up horribly exploited or would refuse to play altogether.

    The other Romney argument, which sounds nice, is that everyone at the corporation shares a common goal.  This would imply that the employees of Ford Motor Company could decide, en masse, to try to make an airplane one day instead of cars.  Of course, they can't.  Management decides on the goal and management's decisions will have a lot to do with what they think shareholders will accept.  Or, in the case of a private company, well, an employee at Facebook may or may not share Mark Zuckerberg's goals, but that's what they're working towards.

    But, again, I think that people will ultimately buy the Romney argument.  We do, after all, get paid to sublimate all of our needs and goals for the day in favor of the needs and goals of the people paying us.  Worse arrangements have been made in life.

    I guess I'd like to ask Romney if he believes that all organizations are people.  Would he say, for example, that government agencies, which also employ people in pursuit of a common goals (often a goal written by Congress and thus approved by the representatives of people both inside and outside of the agency) are people?  Because he wants to cut those.  Is the CIA people?  Is the National Endowment for the Arts people?

    But there's this little bit of something I read in a Clive Crook column today... Even 48% of Democrats believe that big government is a bigger threat to America than big corporations.  I just don't think that in the face of that, it will be so easy to hang Romney with the "corporations are people" line.  As wrong as it is, a lot of people buy into the notion.

    I think the key with Romney, if he's our opponent next time, will be to accept that he thinks that corporations are people and then to point out that as President of Bain Capital, Mitt treated a whole lot of people very poorly, often to profit himself and his people at the expense of others.  His answer to that, which is, "not every business works out," will probably need some work since the obvious retort is, "that's true, especially if you slash their resources while leveraging them to the hilt."

    Hopefully, some one is organizing a Swift Boat type group of workers laid off from Bain Capital companies.  Forget what Romney believes about corporations.  Let's concentrate on how he treats people.

    Topics: 

    Comments

    Question for Romney:

    'You have said there are successes and failures with free enterprise. In '92 Bain put up $5 million to take over American Pad and Paper (Ampad). Eight years later the company went bankrupt with employees losing their jobs, and Ampad investors and creditors losing millions.  Over that same period, Bain Capital banked $100 million from Ampad in fees, stock sales and dividends, 20 times what Bain had invested. As Bain CEO at the time, did you consider the Ampad venture a free enterprise success or failure?'

    Ampad financial graphic.


    If corporations are people, then did Bain commit murder?


    I love that.  Awesome bumper sticker or sign for an Obama/Romney contest.

    Bain would also be guilty of kidnapping, extortion and racketeering.  If corporations were people.


    No, Ampad lives on, at least the money Romney drained from it's prostrate corporate body does, in a tax free offshore account in the Caymans. Free enterprise for Romney means he and Bain win, workers and other suckers get shucked.


    That's a fascinating graphic. I love the way they dressed up this pig prior to the public offering, then began borrowing again to keep the thing afloat for a couple of years till they all cashed out (doesn't say how many shares they retained after the offering) and collected fees. 


    Why is this such an odd concept for the liberal left to get.  Under law a corporation has the legal status of a person.  So Romney called them a person.

     

    Why he said that is not rocket science!  It is a simple reference to the end results of the laws surrounding corporations.

     

    I am amused by how liberals think about wealthy business CEO's also; the evil rich.  They seem to pick and choose who the wealthy evil CEO's are and which companies they like to call evil.

     

    Steve Jobs was a billionaire CEO.  Apple computer out sources it's product manufacturing overseas.  So was Steve Jobs an evil, greedy, wealthy CEO?  Job's has cut Apple's work force in the last, he has layed people off in the name of profit, he has out sourced American jobs to foreign countries!  Surely Steve Jobs is an evil, greedy, private jet owing rich person!

    It seems liberals are little vague on why some wealthy people are "good" and others are "bad".  Their iPad and iPhone makes them feel good; so Steve Jobs gets a free pass!  They sprinkle his wealth with liberal fairy dust and he is annointed!

    Look at how close Obama is to Google.  But wait!  The top three Google executives own eight private jets, just for their own use!  Surely billionaires with eight private jets for just three people have to be the evil rich?  But no!  Google gets sprinkled with the same fairy dust the liberals used on Steve Jobs; they get a pass too!


    Mitt Romney is no product innovating, company starting and leading, Steve Jobs or Google. The comparison is absurd. The name of his company is Bain Capital. They game the system to extract money from businesses they buy on the cheap with borrowed money. They produce nothing but money, to line their very deep pockets. Bain Capital has no patents and no products, it exists only to get as big a slice of the pie someone else produced as possible, perhaps they even scoff down the whole pie as in the case of Ampac and KB Toys.


    No, Steve Jobs doesn't get a free pass.  Liberals were among the most Americans concerned that conditions at Foxconn Technology Group, the outsourced manufacturer for some iPad and iPhone parts, have been put in a pressure cooker that's led to a rash of suicides.

    I'd never have voted for Steve Jobs for president and I doubt many other liberals would either.

    No, Google doesn't get a pass.  Liberals remain among the Americans most concerned about Google's anti-competitive activities, its privacy related activities and its dealings with repressive foreign governments.  Only one of Google's founders is eligible to run for President but even if they all were, they would not win liberal support.

    Not sure where you get that Obama is a liberal.

    On the issue of corporate personhood -- the law is not so clear cut as you imply.  It'd be more accurate to say that the law gives corporations some of the privileges and rights that it extends to people.  Corporations can't vote, can they?

     


    Under law a corporation has the legal status of a person.

    Exactly. The important question is, why do they have the legal status of a person?


    But, also, they don't really have personhood status.  Had Arthur Andersen been a person and not a Big Five accounting firm, this would not have happened:

    http://en.wikipedia.org/wiki/Arthur_Andersen_LLP_v._United_States


    Heather,

    Your post mis-characterizes the liberal position.

    • First, the billionaires are, well, billionaires and yet they scream bloody murder when they're asked to pay even a little bit more in taxes. They want to "broaden" the tax base so that the poor and lower middle class who "pay no taxes" will pay more. Tax the poor is their motto, it seems.

    • So what Obama is against is not "billionaires," but billionaires who cry poor when they're asked to pay 3¢ more on every dollar earned above $250K.

    • Forgetting billionaires per se, society is hurt--in ways we can discuss if you want-- when there is a yawning gap between the wealthy and everyone else. It's not good for the country, and it shows that something is tilted, whether by design or by virtue of how the economy has evolved. This needs to be fixed for everyone's sake.

    As for the passes and fairy dust...your points, such as they are, are nonsense.


    The Corporation: "When you cut me, do I not bleed..."

    Well no, as a corporation, you do not bleed. You don't go hungry. You don't need shelter. You don't even need people working for you.


    These people are all sincere and they all vote

    Nod nod.

    One of the main reasons I often feel its worthwhile to check out your blogs, destor,is that in them, you often seem to be trying to figure out "those other people," the ones outside the blogosphere bubbles. The bubbles where certain memes take hold and flourish, and through some kind of process I haven't figured out yet, everyone within them thinks everyone outside of them is thinking the same way. To the point where if "the MSM" isn't covering the meme a lot, or presents contrary anecdotals, they must be in on some plot.

    (Proof that you do this is that this blog inspired "Heather" to comment here. She saw you giving her an opportunity to give her two cents without being considered an enemy of the bubble.)

    I was just struck hard by this in a dejas-allover-again kinda way (i.e., 2004 blogosphere "why didn't John Kerry win? everyone I knew was going to vote for him, it must be fraud") reading Benjy Sarlin @ TPM yesterday, reporting from New Hampshire:

    [....] At a Manchester high school, Romney entered the stage for a town hall with new supporter John McCain, [....]

    Wandering around the event, Romney supporters were surprisingly difficult to find in the crowd, even among those sporting campaign stickers and signs. Outside the event, a small group of backers politely argued with a group of unidentified protestors dressed in animal costumes, including a dolphin mocking Romney’s “flip flops.”

    “We loved him as governor,” Amanda Stradling, who moved to the state from Massachusetts, told TPM, holding a nine-month old baby wearing a Romney sticker.

    But for every Romney, there seemed to be plenty of undecideds, independents, and even Democrats. One group of three friends, two of whom said they plan on voting for Obama, came up from New York, New Jersey, and Connecticut as “political tourists” just to check out the candidates.

    “It’s just too early to decide,” one twenty-something in a Boston Red Sox hat said.

    Simona Amiet, a homemaker who immigrated from Switzerland 20 years earlier, said she was leaning Romney because he was “knowledgeable with enterprise,” but had yet to decide. A Hillary Clinton supporter in 2008, she said she knew she wouldn’t be voting Democrat again in the general election, upset with both deficits and how he treated her favorite candidate four years ago.

    Al Plass, 57, said as an independent he was still not sold on Romney, and that he was beginning to even warm up to Rick Santorum. But he was still holding out hope that his dream candidate would run: Donald Trump.


    “He has way more business experience than Romney,” he said. “He’s straightforward, he’s a patriot, he loves this country.”

    These are examples of politically active people I don't see represented much in the blogosphere, including the kind of people labeled "independent" or "swing voter" that end up deciding presidential elections of recent decades.

    More specifically on topic, I am not convinced the "corporations = evil, the majority population outside the 1/3 conservative are ready to go back to big government" is the lesson to take away from initial support in polls of the OWS movement.  I have a hunch that was more about a mysterious entity called "Wall Street," one that is seen as very much tied in with the another entity often "Washington," which I think means big Federal government and its institutions, like the Fed, giving "Wall Street" breaks that ordinary people, and also that other "corporations," don't get. Saying that a majority are in agreement that "corporations" are considered the enemy might be taking it a bit too far.

    A reminder too that some politically active people like the kind mentioned in Sarlin's article, might not just have a job in a corporation but also own bits and pieces of other corporations in their IRA's and Keogh accounts.

    This is a good post to reread, Trope's

    Americans Most Aligned With Huntsman

    as well as the Pew poll chart I link to in my comment there, where Socialism is still considered a bad word, both capitalism and liberalism appeal to one half of the population, but progressivism appeals to a majority.

    And more and more I think Genghis seems to have a good bead on what's going on right now by thinking that a book on the Teddy Roosevelt era, and bloggers who think the ideology of the other Roosevelt president is of great interest right now might think about stepping outside their bubble.


    Getting the drift here sort of...

    But could you summarize your main point?


    You caught me, ain't got one, was sort of rambling... smiley (BTW, your comment reminds me that that is how I like to use the blogosphere/forums, to use other's thoughtfulness to think things out further, not to argue my calcified political p.o.v. nor engage in jousting activities.)


    I agree, Double A.  There's so much "trying to stake out an identity," and not enough "messing around with ideas."  The great thing is that we're not being paid for this and we're not (necessarily) building personal brands or whatever.  I kind of hate the phrase personal brand, anyway.  What if I successfully build one?  Does it mean that, like Coca-Cola, I can't change in anyway without people getting angry?

    And I'm glad you mentioned our unverified commenter "Heather," upthread.  I hope she comes back.  If she moves past the "you liberals," line and we move past the gut "you right wingers" reaction, we could actually talk about stuff.

    I think Obama/Romney, if that is indeed in the cars, is going to be rather interesting.  Each is moderate, in his own way.  Lefties will believe Mitt is more right than moderate.  Righties believe Obama is far more left than he is moderate.  But they're both part of that size-changing goop in the middle of American politics.  If that's what we have to deal with for 2012, then we definitely need to take some time to clarify our terms.


    Okay, but I wasn't trying to catch you...just understand better what you were trying to say.


    "...I have a hunch that was more about a mysterious entity called "Wall Street," one that is seen as very much tied in with the another entity often "Washington," which I think means big Federal government and its institutions, like the Fed, giving "Wall Street" breaks that ordinary people, and also that other "corporations," ​don't get."

    So, this election, between a pampered scion of Wall Street and currently unemployed venture capitalist, and a former community organizer turned big government socialist, is just the forum in which to explore those ties, no?

     


    a former community organizer turned big government socialist,

    I'm not entirely convinced many people outside the 1/3 conservative population are buying that characterization, but I am pretty sure that many are buying that Federal spending/deficit/debt is dangerous, and that Obama is not doing enough about that, when in actuality, he is doing enough of it to displease the left mightily.  Many of those are probably also remembering the Clinton years, where this was a big issue, and the budget being balanced and going into surplus coincided with a lot of boats being lifted, and the wealthy only paying a teeny bit more in taxes. And not many are 'splaining well about how the situation is different now. It doesn't help that when they pick up the international news, they see all of Europe concerned about debt, and the difference there is not explained well, either.


    I'm obviously short-handing the basic dynamics of an Obama/Romney contest.  But I do  think most of the low information voters probably view Obama along "government as the solution to all your problems," "tax and spend liberal" lines, no matter the truth of those characterizations.

    Similarly, Romney's going to run as an anti-government, pro-business candidate.  And he's doing so when the reality of pro-business policy has been proven wanting.  I think it sets up a prime opportunity to persuade those low-information voters of the fact that what's good for hyper-capitalists like Mitt Romney hasn't been good for them, and isn't likely to be good for them in the future either. 

      


    Well, I wouldn't characterize people that take time out of their daily lives to go to town hall meetings of presidential candidates as "low information voters." If you're expecting more than that, you're expecting too much from democracy.


    This is a total non-sequitur.  Have you ever looked at polling about what most Americans think about most political issues?  They are woefully misinformed.  Hell,  every Romney supporter there probably thinks Obama has raised his taxes.  So, I really don't care how you would characterize it; it's a fact.  


    I think a couple of very natural things are happening with this:

    • There is a big number, $15 trillion, that they just can't beyond. It's like Godzilla, or an army of Godzillas, bearing down on them. They have a visceral, daily feel for their own debt. They feel it weighing on them, threatening to sink them, or it has sunk them in the past. It's scary and overwhelming. Too much of it, and you can't get out from under it. It rules your life.

    So the number scares the bejeesus out of them.

    • The second, related point is that it is easy to think that federal debt is analogous to, even the same as, household debt (or even corporate or state debt). There's an easy, straight, and highly emotion-laden line running from that $15 trillion to the balance showing on their monthly credit card bills or home mortgages. This equation or analogy isn't true in very important ways. But it's much easier to believe, to feel, that debt is debt is debt. Anyone would find it easier.

    The Republicans have capitalized on both these points, and it is, as far as I can see, the only reason why they've been able to rehabilitate their brand after the Bush years. Yeah, Iraq was a mess and I don't like wiretapping or torture--BUT LOOK! GODZILLA AND THE BRIDE OF GODZILLA AND ALL GODZILLA'S KIDS ARE COMING OVER THE HILL!


    Krugman, I believe, recently said that we NEVER paid back the debt from WWII. It just became irrelevant as the economy burgeoned.

    Somewhere else I read that we still have $55,000 in debt left over from the Revolutionary War. I'll have to find that citation.


    Of course we don't "pay back" debt.  Nobody even really wants us to.  They want us to make our timely interest and principal payments, which we do.  But, ultimately, we refinance debt.  This is not only because we want or need to.  Those factors would be irrelevant if there wasn't a public that wants and needs U.S. bonds.

    This is why, when the Treasury stopped issuing 30 years in response to the Clinton surplus and when some were projecting the end of all American bond issuance by 2015 -- people freaked out.  No other economy offers so large, liquid and (in principal) riskless savings vehicle.  The world actually has a great need for that.


    Extremely interesting & highly related campaign news (destor, take note):

    Romney's Alliterative Attack on Obama: 'Crony Capitalist'
    By Ron Fournier, National Journal
    January 5, 2012

    SALEM, N.H.--Ignoring attacks from his GOP rivals, Republican presidential candidate Mitt Romney on Thursday launched an alliterative attack on President Obama's economic philosophy. He called him "a crony capitalist."

    At a town-hall meeting with Sen. John McCain of Arizona, a two-time winner of the New Hampshire primary, Romney went out of his way to cast Obama as a Big-Government Democrat who gives federal favors to donors and unions.

    "The president is engaging in crony capitalism," Romney said in his opening remarks.

    He mentioned Solyndra, a politically connected energy company

    [......]


    Seems to me the Obama's campaigns counter is already laid out right here, with bankers screaming bloody murder....?


    Romney should tread carefully.  When the FDIC took over the Bank of New England after the S&L crisis, one of the things the government agency did was to forgive a $10 million debt that Bain owed to the thrift.  That might sound like a small number now, but without that debt relief, Romney might not have been able to turn Bain around.  He was a crony once, too.


    More specifically on topic, I am not convinced the "corporations = evil, the majority population outside the 1/3 conservative are ready to go back to big government" is the lesson to take away from initial support in polls of the OWS movement.  I have a hunch that was more about a mysterious entity called "Wall Street," one that is seen as very much tied in with the another entity often "Washington," which I think means big Federal government and its institutions, like the Fed, giving "Wall Street" breaks that ordinary people, and also that other "corporations," don't get. Saying that a majority are in agreement that "corporations" are considered the enemy might be taking it a bit too far.

    This is a very key consideration when looking out there into the hinterland beyond the blogosphere.  What comes to mind when someone refers to a "corporation" is different from person to person.  There are corporations that employ a few hundred people, are not publicly traded, and are not directly involved in the corruption of our political system.  When these type of companies come to town, most people do not go "oh no! an evil corporation is setting up shop in our neighborhood!"  They instead rejoice because there will be more jobs to be had and more people with disposable income to inject into the local economy, and so on.

    Recently in my community both an American and an European company came to town to set up shop and no one - liberal or conservative - thought this was a bad thing.  If someone said these two corporation were evil, people would look at them either with a bit of confusion and maybe some anger.  They would ask:  What is evil about making windmills to generate electricity or railroad cars?  What is evil about giving good paying jobs to a community who has seen its manufacturing industry implode?

    I doubt a single one of them would believe that the OWS movement, regardless of their opinion of it, had anything to do with keeping such a companies from expanding their operations into our community.  Nor would they believe these companies had anything directly to do with the economic meltdown and housing bubble bursting.

    It becomes difficult to, on the one hand, claim that the current unemployment is at a crisis level and things need to be done to reduce it, and, on the other hand, claim "corporations are evil."

    It is a bit a time-consuming (and sometimes annoying) requirement that one qualify exactly which corporations one is targeting with protests.  It definitely doesn't fit on a prostest sign or bumper sticker very easily.  But if one doesn't, one's points of contention about specific corporations and their activity will fall on deaf ears.


    I spent part of my childhood in a small New Mexico town that had an actual, enthusiastic celebration when the McDonald's opened up there.  So, yeah, it's hard to lecture those people about the evils of corporations.

    Also, as I recall, there are several small business owners here at Dag.  They might have a very different perception of things as many of them are technically corporations.  I tend to view things in terms of big vs. small -- the kind of big government/big corporate collusion represented by the national Chamber of Commerce and its enablers at various government agencies is as damaging to small businesses as it is to individuals.

    But I can also see how many small and mid-sized businesses feel like they have a ton in common with the big players.  They're all corporations, after all, and they were all minnows once, big and small.


    Then there are the "associations" like the Insurance industry association - which happens to be the largest lobbyist organization in DC (or so I am told), but many of the insurance agents are small one or two person shops, not very imposing or threatening, their little office situated between a boutique  and a florist.

     


    Unfortunately, when the conversation boils down to slogans, a lot of detail gets excluded and weird "anomalies" like this pop up.

    • First, I think AA is right in making a distinction between the financial sector and the rest of the corporate/manufacturing/service sector. Many stories need to be written about how the financial sector ate the economy, even the country or, less partisanally, why the former mushroomed and the latter melted.

    • The financial sector makes massive sums, but doesn't employ THAT many people. It also employs HIGHLY trained people, regardless of what you might think of their training or their work. That won't solve the problem of employment for most Americans.

    • So naturally, people like almost ANYONE who comes to town bringing jobs. But when that isn't happening AND you have this small (in numbers) sector that is making a kings ransom and, arguably, has supplanted companies that provide jobs for "ordinary" Americans, you have trouble.

    • Somehow, the financial sector has to return to its role as handmaiden or midwife of industry--as a place where capital is formed to finance companies that DO provide jobs for Americans--and less as a place where money is used just to make more money. Put another way, Wall Street needs to right the balance between investment and trading. Right now, it's all about trading. Betting, really. And if you're in the market at all, you know that buy and hold, unless you're very young, is very dangerous right now. You can lose it all in the blink of an eye unless you know how to hedge, etc. Even then, it's very tough. People have ALMOST been forced to become day traders against their wills.

    • Prior to the 1980s, investing was mostly about collecting dividends and compounding them and also getting some decent growth. Since then, it's been about finding the next Apple or Microsoft. And it's only gotten worse.


    One thing about the financial sector employing "highly trained" people is that pay at financial firms tends to be higher up and down the line than it is in other industries.  So, if you're an IT person and you can choose between doing the job at a media company or doing it at an investment bank -- pick the investment bank, unless you really can't stand the culture.  The bonus culture does apply to those who do the support work.  Same is true for personal assistants, secretaries, office managers and the like.  You can have the same training you would need for the job elsewhere but would make far more money doing the job for a bank or hedge fund than you would, say, working at a hospital.  It's a cultural thing.

    Of course, you will be making thousands more than you would elsewhere but would be surrounded, day in and day out, by people who have made millions.  So you will feel poorer.  Until you go grocery shopping (which is something the people you work for don't do).


    Probably because the people you work for really need the best and most reliable IT in the universe and have infinite amounts of money to pay you.

    But also--and this just occurred to me--I'm not sure the same economic rules apply to the financial sector as apply to other sectors.

    A stock can gap up 100% or more in a minute's worth of trading, or less. Suddenly, if you had $100 before, you now have $200.

    Where else in the economy--gold mining or Las Vegas perhaps excepted--does that sort of money making occur routinely? I'd say...nowhere.

    Yeah, supply and demand are in there in some fashion, but now in any way that a normal businessperson would recognize, except in concept.

    I remember, back when I was a waiter, I was very profligate with my money. I was young and foolish, to be sure--but something else was at play. I worked for tips. Immediate cash which, as a bonus, wasn't taxed.

    If I went out and blew my entire day's earning on booze or books or anything, I knew, the next day, my coffers would be replenished. I was wrong, but I felt I didn't have to plan ahead, and in some ways, I didn't.

    Something similar is at play here, I think. Lots of funny money floating around.

    You know that story about Meriwether and Gutfreund betting $1 million. Lewis tells it in Liar's Poker.


    …if you're in the market at all, you know that buy and hold, unless you're very young, is very dangerous right now. You can lose it all in the blink of an eye unless you know how to hedge, etc. Even then, it's very tough. People have ALMOST been forced to become day traders against their wills.

    That doesn't sound right to me. I'm no economist, but when talking about gambling, the house always wins. I'd say that not buying into the stock market at all is safest in the short term and "buy and hold" is probably still safest in the long run. Day trading is the riskiest thing you can do unless you really know what you're doing (and even then, it ain't exactly safe).


    I think we're saying the same thing actually...

    If you're young and have a long horizon before you'll need your money, you can withstand lots of ups and downs--in the "long run," as you say. You can buy and hold.

    But the shorter your time horizon until retirement, the less time you have to make up for losses. So at a certain point, as they get older, people switch over to safer investments, like bonds.

    This preserves their capital--protects it against losses--and generates an income when they are no longer working or working as much.

    The problem is, now, safer investments are paying pitiful amounts. The super low interest rates we have now really hurt people who are depending on interest-based income.

    So if you're switching over to bonds now, things aren't looking all that good for you.

    On the other hand, if you're staying a good bit in equities, but have a short-ish time horizon, then you end up having to trade to make money and protect your money.

    For example, this year, between the end of August and beginning of September, the market, the S&P 500, lost 17% of its value in just a week or so. For the year, the S&P earned zero.

    For someone who was planning to retire next year or in two years, this is bad news for his 401k.

    So if you're trying to make decent money, you end up in equities and you end up having to watch your stocks closely and trade and hedge to stay out of trouble.

    (This is what I meant by "day trading," and I agree, it's very risky. But if the market is very volatile, then you're forced into trading if only to protect your money when the market suddenly plunges. People who were used to glancing at their portfolios, say, once a month, are now looking at them at least once a day and have trailing stops in place in case the market tanks.)

    This is true, also, if you're in mutual funds, though the volatility--down and up--is much less. So that's a decent way to go, too, though many funds make almost no money at all.


    Romney is just another Obama.  More middle-of-the-road crap, with no real principles, other than the mad acquisition of power.


    Is there any politico that you respect?  Just curious. 


    Let me guess, Richard the Electrician and Joe the Plumber are in synchronous phase, and will take the plunger to flush the middle down the tubes.


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