Tuesday, June 20, 2017

More is Not Better

More is not necessarily better, sometimes more is just more. People like my gravy. My secret is I put a pinch of mace in it. However, would you think that people would still like it if I put in more mace or lots of mace?

What people do not realize is that before capitalism, we did not have a sizeable middle class. In fact having a middle class is relatively new in history. For most of history there were just the few elites and everyone else.

Having some rules for a capitalistic market makes the market work better. Such things as the rule of law and standard weights and measures were very good for capitalistic markets. Actually these sorts of things are good for all sorts of market systems.

Look at the US. As it expanded government (and taxes) and brought in rules for business (starting in the 1930's) the middle class expanded. So the elected officials brought in more government and more rules were brought in. Sometime in the late 1970's the middle started to get smaller and the wealthy to get wealthier. See chart 2 in this article by John Mauldin at The Market Oracle.

I sometimes wonder if we really any longer have a capitalistic market system. We have governments that profess to want to protect people at all time from all things. Frankly I do not think that is possible. Companies are so heavily regulated that they need to have compliance officers.

This, by the way, works for the big companies that can afford to do this, but works against small companies that cannot. I read that in the US in 2016 was the first year when there were more company's going bankrupt that new companies.

We have very socialistic governments. We are piling on more and more rules trying to make people behave in certain ways and make the economy behave in certain ways. This does not seem to be working.

Somehow we trust our government bureaucrats implicitly, but we have no faith individuals, especially individuals that run companies. We think that they are all greedy, but bureaucrats are pure? (It would seem to be uncaring bureaucrats that lead to the fire in London. See the Associated Press article on CBC News. I bet no bureaucrat would face any consequences but if it was a private company, people would go to jail.)

Do not get me wrong about rules. Capitalism works best under rules. It is just at the present time our economy seems to be suffering because we have far too many rules. We are drowning in rules. Our taxes are so complex that most people cannot do their own taxes. This is stupid.

Maybe rules should get more basic and go more towards "if you sell something that makes people sick, you will be prosecuted and could end up with a fine or jail or both" rather than our current more minutiae rules where small companies need a compliance officer to ensure all rules are followed.

On my other blog I wrote yesterday about CI Financial Corp (TSX-CIX, OTC- CIFAF)... learn more. Tomorrow, I will write about Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF)... learn more on Wednesday, June 21, 2017 around 5 pm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

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