Back to normal

When the stock market was created in the United States its purpose was to raise capital to create new business or enlarge existing ones. The method can be traced back to colonial days when the new government issued bonds to pay for the war. Those who participated could  expect to be paid back with a profit when the fledgling government got on its feet.

The idea caught on and local merchants often organized to pool their money in the creaation of new enterprizes. In 1792  a meeting of 24 leading merchants led to the establishment of the New York Stock Exchange. Within 50 years the country was experiencing rapid growth and the thirst for new money  energized the stock market.
By 1900 millions of dollars were traded on the stock market. During the industrial revolution certain investors realized that profits could be made by selling stocks to others .
This became known as the speculators market, and was more volatile than the stable  stock market. Thus this secondary activity drew away from conventional methods and took on a mind of it's own. In fact, the OPM (other people's money) drew many dishonest people into the arena where they could gamble with a stranger's money and get rich. This valueless participation led to the many "ups and downs" we see today and is no doubt the largest contributor to the current crisis.

Should our new president decide, he could cure the stock market woes in one swift step by eliminating the speculators. This could easily be done by requiring all stocks purchased must be held for at least one year before being resold. Those who aare forced to sell before the maturity date would suffer stiff penalties on any profits (such as a 50% capital gains rax by the IRS).

This country should return to the original intent of the NYSE, which was to provide stable financing for new enterprize. Long term investments would serve as a deterrent to speculators and eliminate the casino-like atmosphere we see today. It would add confidence to the millions of Americans who depend upon the stock market  for their retirement goals, and provide stability for those who invest for long term gains. We should return to the normal function of the market as envisioned by its founders.