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<< <Money going into the stock market is not the same as money going into a
mattress. It's used to produce things.>Nice in theory, but only the
money going to purchase IPO's does this. The rest is just shuffled
around between investors and making a little money for the brokers. None
of it gets back to the companies that produce things. >>

This isn't correct. This is only true is you only pay attention to direct consequences and ignore indirect actions and reactions. If nothing else, a secondary market is necessary for the primary market (IPO's) to exist. If those who invest in an IPO were stuck in that investment, few would do so. The existance of the secondary market enables the IPO market to exist. The secondary market is therefore the sine-qua-non of the direct investments to companies. I don't think you would claim that indirect investments are any less "real" than direct investments, would you?

I keep hearing this argument on Usenet. This is the equivalent as saying that the freedom of the press is important to authors, or freedom of speech is only important to public speakers.

<<Most of it is used for one company to take over another, and this does
not, in itself, create new productive capacity. It may permit layoffs of
redundant people and increase one measure of productivity.
Unfortunately, these layed off people cannot create effective demand for
products or services, so that on a global or even national basis, this
is not a real productivity increase.>>

Yah. This is what Europeans (esp. France) thinks. They wonder why they, with all their "worker protection" plans have such poor economies, while the US, with full freedom to layoff, downsize, etc. has a booming economy.

Dallas Federal Reserve Bank, economist (economic historian) W. Michael Cox:
Our economy, he points out, has added 35 million jobs since 1982, a
growth rate almost four times the job growth in Europe. In the last six
and a half years alone, our economy has added 15 million new jobs."And
that's net new jobs," he says. "It's been estimated that 25 million jobs
were destroyed during that period so we really created 40 million new
jobs." 3/29/98

Sorry to go on so long.

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