Is what’s good for GM good for your members?

by. Henry Meier

Janet Yellen gets it even if the markets don’t.  How much richer do you feel today with the news that the SAP 500 Index reached record highs yesterday? The ostensible reason for the burst in enthusiasm is that with the Fed Chairman, at best, luke warm to the idea of raising rates anytime soon, the stimulus provided by these artificially low rates will keep the economy growing or so the theory goes.

But I would suggest a more cynical reason for the latest burst of enthusiasm: low interest rates delay the moment when the latest stock market rally comes to an end as people find safer places to put their money that provides them yield.

Which brings me to the point of today’s blog.  Increasingly, there is a disconnect between Wall Street and Main Street which is distorting economic incentives and creating a system of haves and have nots where fewer and fewer of your members join in the nation’s economic growth.  Chairman Yellen hints at this when she repeatedly points out that the economy, while improving, isn’t nearly as strong as the traditional indicators say it is.

The simple truth is that corporations aren’t investing the way they should at this point of an economic rebound. Talk to your tellers: are members happier or still fretting about economizing? Look at your mortgages: Are members rushing out to get their piece of the American dream? Not even close.  Why then is there such a disconnect between the stock market and reality?

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