When I was Vice President of Sales in a public company, the vast majority of our sales was in the final week of the quarter. This was because of the rush to get contracts into our fiscal quarter so we could report it in our quarterly results. Prospects knew exactly how to play the game. The longer they waited, the more discounts or other perks they could earn. There were many cases where we would practically give the sale to get it into the quarter. If we had waited just a few more days, we would have sold it at full price. The artificiality of the system destroyed the natural ebb and flow of buying and selling.
That is exactly what the artificial stimulus of the Obama administration did to the markets. Cash for Clunkers, Cash for Caulkers, Homebuyer Tax Credit, even extending unemployment tax benefits all completely mess up market timing. You get short term spikes that do very little to actually improve economic behavior. Look at the Homebuyer Tax Credit – do you really think that people actually bought a home because of this credit? It may have moved timing up, but simply used taxpayer money to mess up market timing. Every time government interferes with private sector in this way, it does little positive and can actually do a lot of harm.
This administration understands very little about how free enterprise actually works. Could it be because there is not a single representative from the private sector in the Cabinet? We have barely scratched the surface of what harm they can do without that experience.
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