Forum Post: How those policy makers think (economist)

Since the start of Adam Smith's era of economics, the world has change to what we know it today. Everything may be bought and sold and a price of agreement. But what about the buying and selling of company ownership? This activity is the underlying action that happens every second in Stock Exchanges worldwide, Buying and Selling companies.

Companies who list themselves, are under law, obligated to perform effective and efficiently every business they do and required to be audited / watched by the public. The "owners" of the company, the people who bought the stock, receives profits from the company's revenue (if the company profits).

But, there is another way to make money in the finance market, that is, buying the stock at a low price and selling it at a higher price or SPOT TRADE. These people (the majority of investors) don't care about the company it self, they just care about the price of stock. These investors, make billions of dollars each day by just doing the same thing over and over again and even you can make money when the price of stock goes down, its called short selling (Its a complex term that means, selling what you don't have and it is legal)

Stock Exchanges around the world has become the judge and jury of the companies / corporations. We the common people in real-time judge whether or not a company has good performance or bad performance. This results in sometimes bankruptcy of a company or even companies and a single moment.

Well in a way, market mechanism insures that companies effectively run / operate themselves. But there is the downside, jobs on the line. Yes, people do get laid of and turn jobless in moments notice. And during economic recession (a technical term meaning the economy going bad) and economic crisis, millions of employees loose there jobs. In a perfect world, where economist always thinks and really doesn't happen in real life, the theory is that the employees will be automatically absorbed to work in the better performing companies.

Of course you and I know that when your company files for bankruptcy you will be off the job for who knows how-long? It could be just a week until you get another job, or weeks, or months, or even years. That problem is never fitted in those over confident economists with a Ph.D who teach at universities and get a good salary all year long or/and work at our central banks. Why don't we put those Economics School and the central banks (The Fed) on the stock exchange and let the people judge their performance and may let them go bankrupt and see how does economist react when their salary goes bye bye, and they start going to the streets and protest.