The Economy

Dan Brown and I have both blogged previously that people are neither inherently good or evil; they are inherently greedy. Nothing proves this point more than the current bad economic times. Cases in point include:

• GM CEO receiving $23 Million to leave his job
• AIG Employees accepting bonuses, despite the bailout funds and negative publicity
• Automotive employees not understanding that excessive wages are contributing (but not the only cause of) the Big 3 Failings
• Corporations quietly outsourcing jobs to India, China, Brazil and Argentina (amongst others)

There are many more. In the end, we have only ourselves to blame. We all want to retire with lots of savings from RSPs. RSPs are often containers for Mutual Funds. Mutual Funds are basically a bunch of financial "experts" gambling on which stocks will go up & down. How does a stock go up? The compnay makes more proffit than last year or makes a better "widget". The common business practice nowdays seems to be to cut costs to raise profits. Great; but that's done by outsourcing jobs; possibly your job or my job But hey, your RSP went up in value right?
A publically traded company must make more proffit than last year. Just making a proffit isn't good enough in "the shareholders' eyes". Privately held companies don't have to do that. They have only to answer to the owner(s) of the company. As my dad used to say, if you go to the bank, they will guarntee you x% return on your money. None of the mutual fund companies, etc. can guarntee a return. You may not make as much as the statistics show you will with stocks, but you have a guarntee and unlike our friends in the US, our banks are nation-wide and far less likely to go bankrupt.