Christian Democrats in the United States
Domestic Issues - Jobs and Taxes We demand a living wage for all workers in America and object to attempts to establish a flat tax because of the comparative value of one dollar to one's total capital. We insist on closing tax loopholes for the wealthiest people and corporations, and support tax incentives for corporate programs with substantial public benefit. America must find a way to increase manufacturing exports since service jobs add less to the economy in the long term. We support a shorter, smarter work-week for all Americans. Subscribe to Posts [Atom]
Thursday, November 20, 2008
7:48 AM
Examine with detail the statistics that are presented in the news. Often, instead of a simple presentation of a company's (or country's) profit or loss, financial analysts focus on the "growth" of a company's business in terms of a growth of revenue (regardless of expenditure.) Sometimes, this year's growth is measured as a percentage of last year's growth, last year's growth is measured as a percentage of the year before, etc. For any sane business, that line should be fairly flat, which would indicate that the business was growing its revenue at a successful rate each year. But because we are trained to see upward-moving lines as a measure of success, we think that because a company "grew" more or less this year than it did last year that they are somehow better or worse off. But even "negative growth" in the context of these relative growth graphs still might indicate that a company has increased its revenue.
If a company is expected to always have positive growth relative to the previous year, that leads to an expectation of rapid and extreme exponential growth of revenue. This is impossible, and leads to borrowing decisions that cause companies to go bankrupt, instead of focusing on their long-term stability and viability for the well being of their employees and investors.
It's a propaganda trick that has been accepted by the media but is used to attack the foundations of our economy, and must be rejected by the investor public.
growth versus viability
Always measuring companies' success in terms of increase in growth relative to the previous year leads one to expect an exponential curve in actual growth over the company's lifespan. This is impossible.Examine with detail the statistics that are presented in the news. Often, instead of a simple presentation of a company's (or country's) profit or loss, financial analysts focus on the "growth" of a company's business in terms of a growth of revenue (regardless of expenditure.) Sometimes, this year's growth is measured as a percentage of last year's growth, last year's growth is measured as a percentage of the year before, etc. For any sane business, that line should be fairly flat, which would indicate that the business was growing its revenue at a successful rate each year. But because we are trained to see upward-moving lines as a measure of success, we think that because a company "grew" more or less this year than it did last year that they are somehow better or worse off. But even "negative growth" in the context of these relative growth graphs still might indicate that a company has increased its revenue.
If a company is expected to always have positive growth relative to the previous year, that leads to an expectation of rapid and extreme exponential growth of revenue. This is impossible, and leads to borrowing decisions that cause companies to go bankrupt, instead of focusing on their long-term stability and viability for the well being of their employees and investors.
It's a propaganda trick that has been accepted by the media but is used to attack the foundations of our economy, and must be rejected by the investor public.
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