Perspectiva económica: Martínez-Solanas

When there is a stock market crash signaling a recession, stagflation, or severe depression, what we are experiencing is a sudden and very large drop in the value of stocks in the markets, causing a hasty sale of stocks and other securities by investors and some institutions. When the underlying value of the companies that issue the shares suddenly collapses, their price also falls proportionally and the resulting situation is the loss of much of the money that people invested and, in extreme cases, as in the Great Depression of last century, the loss of all your invested capital.

The hackneyed argument of the stock market as a capitalist den of speculators and millionaires is false. The indisputable reality is that there are countless small investors who have accumulated their life savings and invested them in stocks and that almost all citizens who have worked in the country have their pension funds invested in mutual funds and securities that pay substantial interest or dividends or in investment programs known as 401(k) that exempt them from taxes.

The serious problem for those who depend on these investments to have an additional income or a decent pension is when a market collapse occurs precisely when they have to sell some of these securities to cover unforeseen expenses or when their pension income is barely enough to cover essential expenses of their monthly budget.

What Causes a Stock Market Crash?

A stock market crash is caused by two circumstances: a dramatic drop in stock prices and the resulting panic. Here's how it works: Each of the shares owned represents a small stake in a company, and the investors who buy them make a profit when the value of their shares increases or when they receive interest or dividends approved by the company's board of directors. The price of these shares depends on the opinion of the majority of investors at that time about the value and future prospects of that company. So if they think the company they're investing in is headed for tough times, they sell those stocks in an attempt to exit before their value falls.

The reality is that panic plays as much (or more) a role in a stock market crash than the actual economic problems that cause it. There is an obsessive reaction that irrationally drives scores of investors to dump their shares at whatever price they can get, and the market plunges into a full-blown crash.

Since the beginning of the industrial age, man has created over 100,000 unnatural chemical compounds, spewing or spilling them into the air we breathe, the soil our plants are grown in, and the water we drink. These chemicals enter the plants and the system of animals who ingested them and when we eat meat or fish, and even some vegetables, it goes into our system.

In addition, man has contributed and is contributing to the disaster with the increased radiation to our environment from all nuclear bomb tests and nuclear plant disasters, with microwave radiation, with thousands of medications which the body recognizes as toxins, with fuel emissions, with pesticides, insecticides and a world of household chemicals and with processed foods containing harmful additives, among other things, plus the humongous use of plastic products.

The October issue of Consumer Reports (CR) reveals the horrendous "plastic legacy" we are leaving to future generations; an inheritance that they will not be able to get rid of due to its insidious characteristics. In addition to the world-wide contamination that is causing, the major problem is that plastic products take vast amounts of time to breakdown. It takes plastics an average of over 500 years to degrade and a huge portion turns into "microplastic" in the process of degradation; that is, it turns into myriads of tons of microscopic particles contaminating our food, the air and water. We eat them, we drink them and we breathe them.

The microplastic polluting the seas and oceans are consumed by plankton which travels up the food chain and eventually is consumed by us. This is extremely harmful to us, as microplastics contain chemicals such as BPA that interfere with our hormonal regulation and DEHP which is carcinogenic. And the body has no way of getting rid of them. In addition, marine life mistakenly consumes plastics for food, which causes these products to stay in their stomach invariably long periods of time as they are not biodegradable or digestible. Consequently, these marine animals starve to death with them being unable to consume enough food with their stomachs full of plastics, reducing fish and other marine food stocks.

According to the CR magazine, we are talking of about 5,000,000,000,000 plastic bags per year (over 5 trillion), over 30 billion plastic bottles that find their way to the ocean per year, some 160 million disposable razors used just in the United States (the overall number for the whole world is not known), etc., etc.

La deuda nacional de Estados Unidos ha sobrepasado ya los 28,7 trillones de dólares (billones en español), lo cual equivale a más de 227 mil dólares por cada contribuyente. Para colmo, el déficit presupuestario superará este año con creces todos los records anteriores (incluso los de tiempos de guerra) por un total de casi 3,2 trillones de dólares, lo cual hará que suba considerablemente el nivel de la deuda. Este déficit representa alrededor del 40% del presupuesto federal, el cual debería reducirse en esa cantidad para equilibrarlo. Por el contrario, se están pasando leyes que añaden gastos por más y más trillones de dólares que el país NO TIENE. Esto significa que el Tesoro deberá expedir más dinero y más instrumentos de deuda, a la vez que idea nuevas fuentes de ingresos impositivos, como ahora se está barajando el de cobrar impuestos a los automóviles según el millaje que recorran cada año.