Re: A reply to a question

[prabhu.guptara@ny.ubs.com]

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Postings not related to the writing of the Manifesto or policy chapters
are likely to be summarily rejected. Thanks for your understanding. IPI
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     SEveral things drive stock prices, INCLUDING expectations of future

     earnings yes, but also demand for stock (not always related,
witness
     technology stocks and Amazon.com etc at present), and so on.

     However, Equity prices cannot in the long run rise much faster than

     corporate profits and the latter cannot forever rise faster than
the
     national income.

     This is why it is unwise to consider expenditure on education and
on
     welfare simply as a negative.  Education might more properly be
     consider an enabler of future earnings, and welfare is best thought
of
     as an insurance premium against anti-economic acts such as theft,
     vandalism, violence, smuggling, drug-taking and so on.  These are
not
     only harmful in themselves but also vitiate the whole environment
in
     which productive economic activity takes place.


     Professor Prabhu Guptara
     Director, Executive and Organisational Development
     Wolfsberg Executive Development Centre
     (a subsidiary of UBS AG)
     CH-8272 Ermatingen
     Switzerland
     Tel: +41.71.663.5605
     Fax: +41.71.663.5594
     e-mail: prabhu.guptara@ubs.com
     INTERNET: http://www.wolfsberg.com




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