Market Psychology Under BO

One of the benefits of working as a doctor is coming across a wide selection of the workforce. This allows me to me to get a decent read of the economic activity of the local and national economy. I see realtors, factory workers, small business owners, Wall Street bankers, UPS workers, local bankers, day workers etc. I often ask them how business is going to get a feel of the general business climate.

This past week I saw a man who works for a fund that invests in real estate. He told me that they are not buying anything now and not expecting to in the foreseeable future. When I asked him why, he explained to me that his investors have been turned off by the current administration’s attitude towards the financial industry. I am sure if there was money to be made these people would find a way to invest but it is interesting how these psychological factors have affected their investment decisions and thus the economy.

The most critical group of people responsible for economic expansion are the entrepreneurs, the risk takers. They are the ones who establish new businesses and create jobs. For multiple reasons they are inactive including fear of federal regulations and taxes, fear of continued economic malaise, and fear of inflation due to overprinting of money by the fed. But most importantly they feel vilified by the current administration. They have been portrayed by the left as the source of all that is wrong and this had led them to respond by inactivity. This is their weapon by which they can respond to such attacks. The irony is that the administration needs these entrepreneurs to become active, to grow the economy, to produce jobs and generate tax revenues to support government expansion.

Market psychology is perhaps the most important factor when it comes to economic trends. As long as the sentiment remains that government is anti-business, the economy will continue to stagnate. The entrepreneurs must feel that the potential reward gained is worth the risk taken. BO thinks the government can replace the private market in expanding the economy. He also believes he can continue to drain private business to support his government expansion while vilifying the golden goose at the same time. Sadly this is only a recipe for further deterioration of the economy which then leads to more safety net expansion of the government. And the cycle continues downward.