Since it is a complicated scam, people don't understand how it works. The economy is the same way. It is complicated, so people don't understand it. And they cry out for simple solutions to complicated problems. "Lower taxes on the rich!" they cry, "and it will trickle down to us!" Others want other simple solutions. "Give everybody basic guaranteed income!" they say, "And we'll never have to work again!" Both answers are simple and pay and wrong, simply because they address an incredibly complicated financial system and posit that adjusting one factor will change everything. Simple answers to complicated problems are usually the wrong answers.
And by the way, that's one reason why conspiracy theories are always wrong. They are simple, pat answers to a complex world. But I digress.
And the economy recovered. Unfortunately, one of Obama's big ideas was to create something calles a "Regulation A" which allowed people to offer stocks in small companies with few regulations and no oversight. This was part of something called the JOBS Act which was designed to kick start businesses. Nearly a decade later we're discovering that very few if any of the companies offering stock under Regulation A have succeeded, and in fact most have just been abject failures squandering all of their investors money. And more than a few were con-jobs from the beginning, designed to enrich the founders and steal from the shareholders.
But in spite of this, the market has recovered and the economy, although slower than some would like, has had a steady march of progress since the crash of early 2009. And once again we have a Republican President in power, who promises to eliminate unnecessary regulations and free up the market so it can take off like a rocket again. Taxes will be slashed and the debt will increase as a result. Republicans are even up front about how much debt they plan on adding - about 1.5 trillion to the 20 trillion we already have. So we are seeing the market loosen up in terms of regulations and we are seeing an increase in debt load by the government. We are also seeing an increase in personal debt load by American citizens. This is starting to look like an awfully familiar formula.
Most of these companies were taking private by equity investors and then loaded up with debt. These companies, which could have survived without the horrendous debt loads, are finding it impossible to service this debt, and as interest rates increase and these debts become due, it may be harder and harder for many of these companies to survive.
Some new "dot com" company which is all the rage in the marketplace and the darling of the financial prognosticator has a P/E ratio in the hundreds if in fact it is earning any money at all. Some of these companies are so wildly overvalued that they may never earn back the stock price for the shareholders in their lifetimes. They will, however make a lot of money for the founders and insiders who run these companies. The distinction between a fraudulent company and legitimate one is very hard to determine these days.
Is Twitter or Groupon or even Facebook a legitimate company offering a profitable service, or merely a vehicle for early investors and founders to make millions, if not billions, off the backs of small investors? It could play either way.
That to me, is not a good sign.