An idea to support the U.S economy.

September 14, 2001 7:16 AM

An idea to support the U.S economy. The suggestion is that everyone American should buy 10 or 20 shares in their favourite stock on Monday, and in doing so support their country in the time of crisis. It sounds like a good idea to me. (The story is at the bottom of the page)
posted by Atom Heart Mother (33 comments total)

i'm sorry, but this sounds terrible. if anything it will place an enormous amount of pressure on an exchange still trying to get to its feet.

who came up with this? what a crock.
posted by Frasermoo at 7:21 AM on September 14, 2001

I dunno that it's such a bad idea...but I'm not an economist, and couldn't speak to its feasibility. Does anyone remember/know the economics of the WWII War Bond effort?
posted by Dzolali at 7:26 AM on September 14, 2001

surely this is not the same. The tax rebate is/was an attempt to boost american spending and was about as transparent as it gets.

there is enough money in america to cover this catastrophe. surely.
posted by Frasermoo at 7:28 AM on September 14, 2001

There's been something of an informal agreement among several of the large investing firms to the effect that they won't sell the market short, which is nice of them, but I'm not sure that it will work.
posted by j.edwards at 7:29 AM on September 14, 2001

Hmm, now, do you really think that many Americans know about the stock market? And how many companies have they heard of? Rich, big, very public companies like Microsoft would make a very nice and quick buck, whereas perhaps smaller companies within the same sector would suffer as their stock would devalue as their competitors valuation increased in this way..
posted by Mossy at 7:30 AM on September 14, 2001

The idea that every American could buy twenty shares of anything that costs more than a penny comes from somebody who is far, far lost in fantasyland.
posted by jfuller at 7:32 AM on September 14, 2001

Instead of tearing apart these ideas from people who are merely trying to help, how about being constructive and offering something else that might work instead?
posted by kv at 7:38 AM on September 14, 2001

Thanks, KV. I'm sort of at a loss, right now -- it's unclear what I can do to help, and I'm looking for answers. Would the stock idea work if people went out and bought stock in local businesses?
posted by Dzolali at 7:43 AM on September 14, 2001

I think that would work, Dzoali. What could be more patriotic than investing in America? Let's show those bastards that the US economy is stronger than anything they can throw at it.
posted by JeffK at 7:49 AM on September 14, 2001

local businesses don't generally have stock, do they??

The American economy has been so prosperous recently because of one factor above others: consumer spending.

If the consumer has sufficient confidence in the economy to not hoard all of their savings, and to buy the products these companies provide, this proves benificial to the economy on the whole (time short, need to go - I'm only at A Level economics! Anyone at a higher one to confirm/rubbish this???).

Thus the best thing to do is for the American people not to remain shut up, but to keep on spending - support your local businesses by buying their products, keep your economy going while the mess of the stock market is fixed.
posted by Mossy at 7:49 AM on September 14, 2001

I think that the dire economic projections are overblown. In fact, I think that the mere fact that the NYSE and NASDAQ is going to be down for less than a week after the WTC was completely destroyed is going to be seen as a mark of both innate resiliance and capital integrity.

I predict a 50 to 100 point rise in the Dow in moderate to heavy trading.

Rich, big, very public companies like Microsoft would make a very nice and quick buck...

Doesn't work that way, Mossy. Buying shares in a company is buying ownership in a company, not simply handing money over to a corporation. And remember, for every buyer there must be a seller - that's why it's called trading, not manfacturing. And each company sinks or swims based on their market cap, profits and perceived value - just because Microsoft has a good day doesn't mean Sun has a bad day. The stock market is not a zero sum game.

The BEST thing to do for economic strength is continue to do you best at your job, bringing value to your company, and continue to produce quality goods and services for the marketplace. Save some money, spend the rest wisely. Perhaps, if you're the gung ho type, you could acquire some new short to medium-term debt (like by buying a car). But otherwise, remember that the strength we're looking for here lies in continuity and structural integrity.
posted by UncleFes at 7:50 AM on September 14, 2001

yeah, but what if it all goes to hell in a handbasket? Wouldn't it be more handy to have 500 bucks in savings than a couple of new toaster ovens?
posted by Dzolali at 7:53 AM on September 14, 2001

Kudos to kv!
posted by revbrian at 7:54 AM on September 14, 2001

Otherwise, Mossy, you're right on consumer spending. It's not the ONLY thing, but it's pretty important. But consumers will always spend - what you're asking for here is increased consumer spending short term, and that really won't help much, because it'll take too long for individual spending to filter through the economy to make a difference. Think additional consumer debt - faster and more influential.
posted by UncleFes at 7:58 AM on September 14, 2001

i would guess that americans have already boosted the economy just through the mass purchase of flags and ammo in the last few days.
posted by ggggarret at 8:01 AM on September 14, 2001

Otherwise, Mossy, you're right on consumer spending. It's not the ONLY thing, but it's pretty important. But consumers will always spend - what you're asking for here is increased consumer spending short term, and that really won't help much, because it'll take too long for individual spending to filter through the economy to make a difference. Think additional consumer debt - faster and more influential.
posted by UncleFes at 8:01 AM on September 14, 2001

sorry about the doublepost; my computer had a little spazz, there.
posted by UncleFes at 8:03 AM on September 14, 2001

What not to do when the markets reopen.
posted by espada at 8:05 AM on September 14, 2001

Buy stamps and throw them away.
posted by pracowity at 8:07 AM on September 14, 2001

nice one ggggarret. a cynic after my own heart.
posted by Frasermoo at 8:08 AM on September 14, 2001

Buy a TiVo. Save the economy and save the company that makes a fabulous product at the same time.
posted by luser at 8:10 AM on September 14, 2001

I must admit I'm tightening my wallet a bit. Then again, I do have a $3000 credit card debt to pay off.. but, really, in the past few days I've been scouting for more work, and I plan to work my ass off for the next few months so I can avoid getting burned by any possible recession.
posted by wackybrit at 8:18 AM on September 14, 2001

I agree with Frasermoo. This is the dumbest idea I've ever heard of.
posted by bshort at 8:28 AM on September 14, 2001

Think about it. You will need to buy shares for your retirement anyway. It will be smart to buy the index shares on Monday. I think the exchange will handle the load just fine. Don't you think they are planning for this?
posted by SandeepKrishnamurthy at 8:34 AM on September 14, 2001

An economic primer in a very short space:
Economic strength = how many goods are being made that people want.
How to help that - put capital toward making goods, make goods yourself, support policies that encourage people to make goods.
How to hurt that - take capital out of circulation, stop making goods, support policies that discourage people to make goods.

Further elaboration on request, preferably via email so as not to clog up this thread.
posted by marknau at 8:42 AM on September 14, 2001

Spend Spend Produce Use Energy Spend Produce Throw Away.

It all stinks.

What is the answer? I think we should all take to the forests to eat squirrels and wear their pelts over our knackers.
posted by Frasermoo at 8:50 AM on September 14, 2001

I think we should all take to the forests to eat squirrels and wear their pelts over our knackers.

Don't tell PETA. They have some bad attitudes toward squirrel-eating pelt-wearing forest dwellers with two legs instead of the proper four.

Myself, I'm going to continue to live where I can get ice for my scotch and where my meat comes to me pre-pattied.
posted by UncleFes at 9:22 AM on September 14, 2001

Not too baloney an idea methinks... Before the attack, the economy was pretty fucked up already and I think that , besides more terrorism acts, the last thing people want at this time is to get it fucked up even more and be caught in an upward spiral of recession (which from an economic standpoint, is the REAL war - even if you aren't in the army, there will be a different type of casualty right in your pocket)

Or something.
posted by betobeto at 9:24 AM on September 14, 2001

We don't need abstract feel-good things like "supporting the economy" (which, btw, screw the economy - it's democracy and freedom I want to support) when simple greed will do the trick. If stock prices are down, they will go back up - this crisis won't last forever, after all. Invest now, be rich when it's all over. But, of course, you have to be rich to start with in order to have the money to invest...

-Mars
posted by Mars Saxman at 9:48 AM on September 14, 2001

Spend Spend Produce Use Energy Spend Produce Throw Away.

It all stinks.

It certainly does. Joblessness is higher than its been in years and everyone here is gung-ho about going DEEPER into debt.

I can see two economies, one where peope save and spend and another economy (ours) where everyone spends deep into debt and banks and credit companies are only worth the promise that Joe Blow won't file for bankrupcy while paying credit card interest. Personal debt is still at an all-time high.
posted by skallas at 11:43 AM on September 14, 2001

5% unemployment? 10 years ago that would have been a gift. The economy was bottoming out and ready to recover, I think it will do just that.
posted by Mick at 1:35 PM on September 14, 2001

skallas, while I agree with you that Americans, especially right now, have far too much personal debt, debt in and off itself is not the crazy-bad thing that people make it out to be. Too much? Very bad. A little bit? Actually beneficial. Moderate debt allows for accumulation of assets that draw interest in excess of one's debt service. A good example of that is home mortgage vs. stock investments. Say you get $10K in a chunk - do you buy stocks, or pay off your mortgage? Your first thought might be to pay off your mortgage, but you are better off buying stocks, since those assets will return interest to you (say, 10%) in excess of your mortage debt service (say, 7.5%), and you'll have assets working for you rather than a higher equity position in an "asset" (the house) that you have to service (with routine maintenance) throughout your ownership.

Similarly, never pay cash for cars - they aren't worth it. Get a loan for the whole amount and "rent" it for five years. It's decrease in real value far exceeds the interest cost, especially if you get a low rate (.9% being not unheard of).

Credit card balances are friggin poison, though.
posted by UncleFes at 1:43 PM on September 14, 2001

Goods and services that are essential to you are always good investments. You have to be clothed, eat, bathe and go to the bathroom. I would not think that oil, airline or lodgings stocks are a place to look for any steady returns right now.
posted by bjgeiger at 7:03 PM on September 14, 2001