After the fourth straight week of higher stock prices, investors are flying a little high. Several major companies reported earnings during the week of April 30-May 4 and rumors began circulating of major takeovers. One such takeover includes Microsoft and makes them appear to have an “if you can’t beat them, join them” attitude. This perceived attitude follows Yahoo’s recent announcement to purchase Right Media, which coincidentally follows Google’s purchase of Doubleclick. It is rumored that Doubleclick was originally courted by Microsoft before agreeing to Google’s purchase offer. These Microsoft rumors along with other take over news, helped stocks to rise and end on a high note. While investors are enjoying this bounce in the stock market, several economic and earnings reports are due out this week as well as whether or not the Federal Reserve will adjust the interest rate. On May 9, the Federal Reserve will meet to decide whether to lower, raise, or leave the interest rate alone. The present interest rate has stood still since last summer, but some investors are hoping that the Federal Reserve will cut interest rates in order to encourage spending. While there is hope among investors, many experts believe the Federal Reserve will allow the interest rate to remain where it is.

The reports that came out last week did indicate that the economy is growing at a snail’s pace, but investors are still worried about soaring prices. The other economic reports due out this week will help investors and experts alike, paint a more complete picture of the economy and these reports will without a doubt influence the stock market. On Monday, May 7 at 3:00 pm the Federal Reserve is scheduled to release the March consumer credit report. It is predicted that this report will show consumer credit increased by approximately $2.1 billion dollars since February. Aside from the very busy week that the Federal Reserve obviously will be having, the Commerce department will be having an equally busy week. The Commerce department is expected to report on wholesale inventories, import/export prices, and business inventories. All three reports are predicted to have increases from the previous report, especially the import/export pricing report which is predicted to have a $1.6 billion increase.

Not to be left out of the action, the Labor Department is scheduled to release the Producer Price Index (PPI) on Friday, May 11. The PPI is an indicator of wholesale price inflation. The Labor Department will report on the PPI and the core PPI. The PPI is predicted to have a .7% increase in April while the core PPI, which will ignore the price for food as well as energy, is predicted to have a .2% increase.

While all of these economic reports will have a bearing on the stock market for the upcoming week, so will several major companies who are scheduled to give their earnings report. On Tuesday CVS/Caremark Rx Corporation, the Walt Disney Company and Cisco Systems, Incorporated are scheduled to release their earnings. It is believed that both Disney and Cisco will have promising news concerning their previous quarter’s profits. On Wednesday, Toyota Motor Company will take its turn reporting. It too is expected to have good news for their investors. The dawn of Thursday will see some of the nation’s largest retailers release their sales figures for April. Currently there are few predictions as to what these figures will be.

Basically, the long and short of the market prices is that investors need to hold on tight because while the stock market has seen some growth in the last few weeks, the upcoming economic and earnings reports could make some a little uneasy and therefore make the market falter some this week if not into the next few weeks.

One of the main problems being discussed in the US recently is the problem of underfunded pensions and sky rocketing benefit expenses. Old line American companies (the same is true elsewhere is G8 countries) are now burdened with pension costs that their competition does not have, but these cost are higher their obligations have went on longer than these plans had allowed for.

It really doesn’t matter if the companies poorly planned, or the insurance/investment industry mis advised, but there are at least problems that will become painfully obvious in the days ahead. First, old line companies, burdened by benefits are uncompetitive with their newer or less obligated competition. Second, a society that ignores social services and leaves it to business, will either have a failing social systems or failing businesses. Society need to establish government funded safety nets that work to make life in a world of temporary jobs, managable and rewarding to both the worker and investors.

Imagine a US where employers paid only hourly wages or salaries employees, no additional employment taxes or benefits, just a flexible labor force. This is the best way to help business compete against remote nations and their cheaper labor, right here at home. Imagine, a simplified, flat tax on indiduals with household and personal exemptions, generates the money for a social system, that trains and maintains a flexible workforce, for a newly unburdened and engergized business sector.

ah, the dream continues.

What the hell is a “Left Wing” Capitalist? Do you spend too much time listening to talk radio to think on your own? Are you unable to wrap your head around what sounds like an oxymoron? Don’t feel bad, you’ve been brainwashed by the those who use the ideas of capitalism as a justification for greed and selfishness.

Simply put a “Left Wing Capitalist”, is a liberal/social democrat that believes that market forces are the best way for humanity to innovate and generate ecomonic growth. Yes, someone who is pro flat rate taxes, but wants that money that’s collected to help the weakest in society and to provide opportunity to people regardless of class and wealth. How can this work?

Well whether or not a social welfare system exists has no real bearing on how an economic system is run. A welfare system that runs independently of an economy is certainly possible, it can be limited to providing all the benefits, without mandating any requirements on business. The only real issue, is the effect of tax levels and social spending on the economy. So in short, who cares how the taxes are spent, as long as they are low enough to let the econonmy grow. How big of a difference would there be, spending the money on health, education, housing for the poor, instead of military spending.

So now that we want a social welfare system, how do you accomplish it? First, make taxation cheap and efficient. Creating a flat tax rate with only 2 deductions, one per household and one per person living in that house. Changing the tax system to something this simple, combined with the end of corporate taxes and social security could reduce so much friction on the economy, that is could dramatically boost annual GDP growth.

Imagine a USA where ever person has receives a catostrophic coverage medical insurance voucher, from the government to use toward an insurance policy from a lightly regulated free market. No longer are employers burdened with the costs of medical insurance, while their competitors don’t offer any benefits. Suddenly the work world no longer needs to worry about full time or part time, employers assume no additional hourly costs when cash compensation is the only empolyer obligation.

So, that’s the answer to what a Left Wing Capitalist is, over time, you’ll see how it comes out in my posts.