So often economy and politics converge. It is political system that makes money, the blood of economy, possible; without a stable system of governing a country, no paper would be able to assume a value beyond its production cost. And it is politician who can make policies that affect the economy through laws, taxes, regulation, levies.
Now, the US have a Democrat president, what will this mean to the economy? Specifically, how will this effect the perceive balance in Wallstreet’s mind between Vocational money and Computer money? And what is the real shift between computer money and vocational money? Click here to understand more about vocational and computer money
If market sentiments could be a guide, this is an estimation on the perception of how such balance will shift:
The amount of computer money will increase immediately. Wall street traders and investor assume (and rightly so) that the Republican president will release policies that favors corporation and wealthy individuals (those with capital and sophistication to play freely with computer money). Through policies that reduce the corporation burden on so many aspects (labor relation, environment, taxes), corporation’s profits are expected to rise further in the President’s term.
Vocational money will be stagnant or even dwindle. Through the same policies that favors corporation or other policies that are less favorable to everyone who are not the upper class, the amount of vocational money will remain stagnant at best. Almost everyone who are not part of the upper class don’t have enough skill, education, or capital to actively gain income from computer money, they rely almost exclusively on income of vocational money. With a republican president, one can almost expect a stagnation of wage (in the name of inflation control) and harsher employment terms, this brings bad news for the middle and lower class.
So in the beginning of a Republican president, there will be more computer money and same amount vocational money. And as we can see from what happens in September 2008 (after 2 terms of republican president), the amount of computer money has grown to bursting point, and the economy gets a free fall when it was discovered that there amount of vocational money is multiples below the computer money
Computer money will decrease. Traders and investors assumes that the president will give unfavorable policies to corporations and wealthy individuals, restricting both the space on which computer money can move (those estimated earning and PE ratios) and the amount of computer money that can be played.
Vocational money will slowly but surely increase. Through policies that favors long term results, better working condition, better environmental protection, the democrat president is increasing the amount of money receive and can be held by the middle and lower class, the vocational money.
We see this happens in Bill Clinton’s term, when the dotcom bubble burst at the end of his term, what vanishes is the computer money, but since there’s a solid foundation of vocational money, we don’t see the global chaos that took place in September 2008. In 2001, those who play with computer money get burned, in 2008, those who never touch computer money also get burned.
Now, Wallstreet types, businessman, and high paid professionals (usually Republicans) holds that Democrat government is bad for computer money.
But history indicates that during a democrat presidency, the vocational money indeed grows, but the computer money also grows. Why? Because in the end, as vocational money grows, computer money has more base to leverage upon, allowing more computer money to be created in spreadsheets.
So, a Democrat President is good for vocational money and computer money
While a Republican President make policies that support unsustainable growth of computer money, which in the end destroy the value of both computer and vocational money