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Addicted to consumerism


Thursday Jan 18, 2007

By Andrew Snyder

Capitalism always finds a way to win. No matter how you try to regulate, squeeze, or artificially manipulate an industry, the greed that fuels capitalism will continuously find a way to dominate.

I ran across an article this morning that perfectly proves my point. Over the last few years, we have all seen anti-smoking advertisements play on our TV screens. Some of them are really quite ingenious ploys to tug at our emotions.

However, the truly sad part is that the companies that sell cigarettes are the ones paying for them. It simply doesn't make sense. It is like forcing Saudi Arabia to pay for solar power initiatives. This kind of artificial market manipulation makes me want to puke.

Fortunately, the greedy capitalists at America's tobacco producers have found a way to fight back. They simply made their cancer sticks even more addictive.

It is official. Cigarettes are no longer as addictive as crack. Now, they are addictive as life itself. Just ask any longtime smoker. How many times have you heard a colleague cry out that they would kill for a cigarette? They aren't exaggerating.

According to the Harvard School of Public Health, nicotine levels in a wide range of cigarette brands has increased by about 11% over the past seven years. Of course, cigarette manufacturers like Altria (MO:NYSE) and R. J. Reynolds will never admit that they are purposely boosting nicotine levels, but it is a perfect way to get back the millions of dollars they have been forced to spend on anti-smoking campaigns.

The reason I am writing about this subject is to help prove to you that a capitalist market will always win, no matter how hard we try to manipulate them.

As I write, I am listening to Ben Bernanke getting grilled by a democratic Congress. There is an obvious anti-business, anti-conservative sentiment, yet the Fed chief doesn't have a drop of sweat on his brow. He knows American businesses will continue to find ways to thrive. The political nitwits asking him questions think their actions will have an impact on the economy. They could not be more wrong.

Over the next two years, this country will be locked in what will likely turn out to be the most heated political debate in its history. Big business, especially Big Oil and Big Pharma, will get some serious heat. Congress is already sharpening its teeth. But does that mean you should take your investment dollars and run? Absolutely not.

The mainstream media loves to portray Washington as the one and only force that controls Wall Street. They tell us a single tax hike will drive the country into depression. Or that cutting farm subsidies will ruin our efforts to wean ourselves off foreign oil. Don't waste your time trying to digest what they are trying to convince you to believe.


Let's face it. The American economy is all about the consumer. And as long as you and I and 96% of this country's citizens all have good, secure jobs, the consumer will continue to rule this economy.

We are what is driving record imports. We are the reason Apple (AAPL:NASDAQ) has sold nearly 100 million iPods in the last five years. And we are the reason China is breaking its back to send us its manufactured goods.

When the consumer backs out of the market, that is when it is time to run for safety. Until then, forget about the politicking on Capitol Hill.

The most important indicator on Wall Street right now, is not what the Fed will do this spring. It is not core inflation rates. And it is certainly not what political party is in control of Washington. The most important indicator is the American consumer's economic sentiment.

As long as consumers are happy and willing to spend their money, capitalism will thrive and the nation's businesses will make record profits.

 


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