I live in the state of Washington, and I’m hoping others from my home state see this post. The State Legislature has passed a proposed amendment to the State Constitution, Joint Resolution 8212, that I strongly dislike. It is on the ballot in the general election for final approval next month, and I want it voted down.
Currently, the Washington Constitution prohibits the state from investing funds into stocks or other methods of investment, limiting investment capabilities of the state to government and corporate bonds and certificates of deposit. The proposed Constitutional Amendment would allow these funds to be invested in stocks.
Frankly, I don’t like the stock market as an “investment” vehicle. The New York Stock Exchange is nothing but the world’s biggest flea market, where used goods are traded. When stock is purchased, ALL the money from the transaction goes to the prior owner or to the stockbroker – not one red cent goes to the corporation so that they can use the money to invest in a new factory or new products. The only exception is IPOs (Initial Public Offerings), but these are very uncommon. The overwhelming number of stock transactions represent purchases of previously owned stocks from an individual, other companies, Arab Sheiks, etc.
Washington’s current system at least puts money into the hands of someone or an institution that will use the money for something useful. Corporate bond revenues can be used by a company to build new factories or develop new products. Government bonds can build schools, roads, or hospitals. Certificates of deposit give money to a bank to make loans. These are all actual investments in the community. Stock purchases do nothing to put money in the hands of people to actually build something useful. Washingtonians, please vote NO on Joint Resolution 8212.