Judy Loy, Registered Investment Advisor, ChFC®, RCP® and CEO of Nestlerode & Loy, Inc.
In early 2022, a Pew Research survey revealed that 78% of the American population is dissatisfied with the way things are going in our country. In a March 2022 Gallup poll, only 24% of Americans said they were satisfied with the way things are going in the United States right now. The poll’s positive peak was 71% in 1999 when the stock market peaked due to the com bubble and bottomed out at 7% during the 2008 financial crisis, which makes sense since it was the worst economic downturn since the Great Depression. When you look at this data, it shows that the better the economy, the better Americans feel about the country as a whole.
by Judy Loy, Registered Investment Advisor, ChFC®, RICP® and CEO of Nestlerode & Loy, Inc.
In early 2022, a Pew Research survey revealed that 78% of the American population is dissatisfied with the way things are going in our country. In a March 2022 Gallup poll, only 24% of Americans said they were satisfied with the way things are going in the United States right now. The poll’s positive peak was 71% in 1999 when the stock market peaked due to the com bubble and bottomed out at 7% during the 2008 financial crisis, which makes sense since it was the worst economic downturn since the Great Depression. When you look at this data, it shows that the better the economy, the better Americans feel about the country as a whole.
The United States is a capitalist country, that is to say an economy where the means of production are controlled by private companies. It’s a so-called free market. It is not the only capitalist country, as in 2021 the three most capitalist economies, according to World Population Review, were Singapore, New Zealand and Australia. The United States was not in the top 10. Since the United States has regulations, taxes and subsidies (education, roads and health care, for example), America is considered a market economy mixed.
The capitalist part of America created the “American Dream”, which is the “belief that anyone, no matter where they were born or what class they were born into, can achieve their own version of success in a society in which mobility is possible for everyone.” For decades, Americans have been able to climb the economic ladder by earning higher incomes than their parents. In a 2022 ranking of social mobility by the World Population Review, Americans United States ranks 27th with a score of 70.4 Upward mobility in the United States has been declining since the 1940s. why it’s ranked number two in the top 10 happiest countries in the annual World Happiness Report?)
The advantages of capitalism are many; with political freedom, efficiency, innovation (Pfizer [PFE]- BioNTech created the first approved COVID vaccine) and economic growth tends to be the positive by-products of a capitalist economy. In a capitalist society, there are incentives to be efficient and to produce goods that are in demand. Being efficient creates pressure to control costs and avoid waste. Innovation comes from the promise of wealth and the United States is third in the world for entrepreneurship
The disadvantages of capitalism are monopoly power. In 1982, Bell Telephone Company, founded by Alexander Graham Bell, was split into 22 small companies called “Baby Bell”. The current AT&T(T) consists of 10 of the original “Baby Bell” companies. Monopsony power is a scam of capitalism where there is great inequality between the owners of capital and the workers in a company. A
A 2021 study of America’s top 300 companies published by the Institute for Policy Studies (IPS) found that the average pay gap between the CEO and the median worker has grown to 670 to 1 ($670 for every dollar earned by their workers). Another downside of capitalism is inherited wealth and wealth inequality. Much has been made of America’s extreme inequality, with 20% of our nation’s income going to the top 1%. The top 0.1% of American wealth holders hold the same share of wealth as the bottom 90%. Capitalist societies tend to experience cycles of boom and bust. The biggest bubble or boom in my history was the housing bubble of the 2000s. Foreclosures in 2006 and 2007 led to a bust (or bust) in 2008.
Although outclassed in some areas, the United States remains the most dominant economic and military power in the world. The United States ranks first in gross domestic product, creating 24% of global growth in 2021.
Judy Loy is a Registered Investment Advisor, ChFC®, RCP® and CEO of Nestlerode & Loy, Inc.
Any investment is subject to risk, including the possible loss of the money you invest. Nothing in this article should be construed as investment or retirement advice. Always consult a professional adviser and consider your risk tolerance and the time you need to invest when making investment decisions. Review your personal situation with a professional before planning a gift or estate planning.
