Tag: Capitalism

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One of the most remarkable accomplishments of modern marketing is the one the Rich have pulled on the American Middle Class. They have managed to make Americans more afraid of taxing wealthy people in the unlikely event that these members of the Middle Class become billionaires than the much more likely event that they will need, at some point in their life, available social services that will help them weather a financial storm.

It is peculiarly American trait which turns its full power against the Poor for being poor and fuels fear in the Middle Class that if they tax too much the whole money machine we have come to depend upon will come crashing down around them and, then, everybody will be poor. Is that what you want? Everyone being poor. How this message continues to attract believers is beyond me but lets face it, it somehow continues to hold a large segment of the American population in it’s thrall.

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The Trump Administration began raising tariffs back in April. Since then some have been lowered and some have been raised mostly based on the feelings Trump has towards the particular countries involved. In a remarkable display of peevishness, he raised tariffs on Canada based solely on the behavior of one Canadian citizen who deigned to remind Trump of Ronald Reagan’s Free Market philosophy. One Canadian playfully reminds Trump of one of the base tenants of market capitalism and all of Canada must suffer.

There is no explaining Trump at this point so I won’t even try but it is interesting how business people and libertarians continue to support Trump when his actions are contrary to their philosophy. Trump clearly believes that government can be used to interfere in the market and help individual players he likes. This isn’t laissez faire capitalism.

Raise tariffs to protect American businesses. Lower tariffs because Americans need cheaper beef. Raise tariffs because someone was mean to me. How are businesses supposed to rationally price their products in a global economy based on the capricious actions of one man is beyond me. But then, and this is the real lesson here, American Business has never been a big supporter of laissez faire capitalism. No matter what they say.

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I am amazed when I see posts like the one above. People who want to do away with taxes and regulations have this idea that once they are free from taxes and regulation that they will have all this extra money to spend and lead a glorious government free life. Unfortunately the tax free, regulation free past was miserable. It is only with the expansion of government which regulated the market economy and the taxes paid by the public for these changes did this general misery end.

Once you remove taxation and regulation, people will be presented with an array of new bills which have to be paid. Things like nuclear weapons, the army, the navy, the air force, the justice system, police protection, fire protection, road repair, street lights — all these things and so much more will need to be paid for. Then people will have to figure out if their restaurants meet health standards, buildings are being built so that they will stay up during earthquakes, stopping people from dumping toxins into rivers, checking to see if every household is disposing of human waste properly, to name just a few. Who will do it? How will they be paid?

Is Government perfect? Absolutely not. Could it be done better? Of course. Is this a reason to do away with it completely. No. No more than a Market Economy can’t do everything to meet all of our needs, at least, not without the help of government.

Here is the bottom line — the vast majority of people in this country want a market economy. This isn’t going to change in the near future. In order to make this market economy work, we also need a strong government presence to ensure that the rich, people who have power and money, don’t abuse this power and money to take advantage of people who do not have power and money. This also isn’t going to change in the near future.

This means that we have to figure out a way to make these two, sometimes, antagonistic systems work together. Is this perfect? No but then no system is perfect. Ever. This is our common challenge — how to make an imperfect world work for as many people as humanly possible. It will always be imperfect and we will always be working to make it better. But, given the present interlocking structures that is our system, eliminating Government is absurd and unworkable.

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I managed people who held low level jobs and limited opportunities for advancement. They are, by and large, an unmotivated bunch. They did their work adequately and left on time. They weren’t there for more than a paycheck. Good for them, I say.

One of the things my managers frequently tasked me with is how to motivate these people. And before I could say more money they then added the painful restriction without offering them more money. More money was always the hitch. The companies wanted to motivate the employees without paying them more. Needless to say, nothing we ever came up with worked.

The problem here is that the highly compensated people who run companies have convinced themselves that more money only works to motivate high level people. Low level people want something else. I attended seminars where I was told countless times that employees actually want other things than more money. They want respect. They want autonomy. They want acknowledgment. Notice that all of these things are free for the company. They are also vague and difficult to deliver for the direct managers. How much autonomy can you give to a person who has a highly structured job with expectations of coming in on budget and on time? If you didn’t deliver, you were encouraged to do better; if you did well, you got a pat on the back.

The budget for employee incentives were such that it was easiest to reward the group instead of the individual. So Donut Fridays and elegant Christmas parties were thought of enticements which never delivered the expected punch. I actually had one employee ask if instead of going to the Christmas party could she instead have the percentage we paid on a per person catering charge in cash. She would rather have the 29.99 than spend time at the party. I had to explain to her that this was a group incentive and her choice was the party or nothing. She, obviously, was being facetious but her point was made — the company was giving her something she didn’t want.

Even more ironical is that when I relayed this information to my boss, she completely understood. This to me, speaks volumes, about corporate culture — everybody knows this won’t work, but since we can’t give more money individually we are stuck we these group benefits that nobody cares about and won’t deliver. In other words, everyone knows these actions are doomed to failure from the start but continue doing them because nobody has a better idea.

I worked for a company that diligently surveyed their employees on how they felt about work. A neutral company took the survey, the results tallied and delivered to the employees. Every year the areas where my department scored lowest would be our focus to improve for the next survey. Except, of course, low pay. Everyone knew we couldn’t change that so low pay was a problem when the first survey was taken and low pay was a problem on the last survey I was there for. I am betting, with almost 100 % chance that I am right and after being away for six years, low pay is still one of the lowest scoring areas for my department.

The higher ups, convinced by seminars they attended where they were told that higher pay is not the major concern for employees, made us middle managers attend these same seminars so that we too can understand that higher pay was not the reason people worked. We learned how to encourage employees, how to discipline employees, how to reward them without giving them any money and, of course, nobody was convinced.

What is so baffling to me is this resistance to giving more money when the higher ups know the way to get people to work harder is to give them more money. This is, after all, the argument for giving rich people more money. We want them to work hard right? These people are the innovators, the entrepreneurs, and the risk takers. They have to be rewarded. If you take away their money, they won’t work very hard. But if you give them money — will the sky is the limit.

Exactly. So why should regular employees be treated differently? It is a blindness to the very economic tenets that Business so enthusiastically embraces. But by all means, continue with the Pizza Parties and Donut Fridays. I am sure one day that it will eventually work.

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So farmers and hotel companies are having trouble finding replacement for immigrants who, fearing for their safety, are leaving these jobs because they are vulnerable targets for ICE raids. Trump, being a hotelier and dependent on this same immigrant labor force, is now being forced to choose between cheap labor or cracking down on illegal immigration.

The whole point of Trump and the Republican’s campaign against illegal of immigrants, as Matt Walsh points out, is Americans now will take these jobs at a higher and more livable wage. Labor will become more dear and thus business will have to pay higher wages in order to fill those jobs.

And it was not some unintended consequence of their actions. Trump and his cronies said as much in their campaign. Immigrants are taking jobs from Americans. Get rid of the illegal immigrant and the Americans would take the jobs. The problem these economic wizards didn’t count on is that Americans would refuse to do these jobs at the immigrant low wage.

You can have low pay jobs with immigrant labor (more workers) or higher paying jobs with American labor (less workers) but you can’t have low wages with just American labor. It is all down to supply and demand.

Trump, being a Wharton School of Economics graduate, should know this. That he continues to have problems with understanding basic Capitalist theory is trouble particularly since he sees Capitalism as the solution to USA’s economic woes. He was wrong about tariffs and he is wrong about immigrant labor. He also gives an inordinate value to bullying people as a method of negotiating.

Adam Smith, Milton Friedman and Ayn Rand would be appalled.

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I had numerous misgivings about Bryan Caplan’s It’s Not Who You Know, It’s Who You Are. Caplan’s bottom line is that there is no advantage to being rich in a capitalist society. The cream always rises to the top and it is because the rich have better genes than the poor and middle class and this is why they always rise to the top.

How did he determine this? Did he give a bunch of poor kids a million dollar trust fund, a financial advisor and entrance into all the best private schools and then compare it to the rich kids who had this advantage already? Or did he force rich kids into resource stretched public schools, make them work three jobs just to meet rent, and made it impossible to talk to Daddy during the length of the study? A little more information is needed here in order for me to buy the bull shit Caplan is selling.

If he is just looking at where people ended up, then he failed to prove his point. Are you telling me that knowing other rich people isn’t helpful to rich kids looking for jobs? Almost every job I have ever gotten was because I knew someone in the company. I knew a job was available and I knew who to talk to in order to be seen. Being seen is half the battle in getting a job. This is a tremendous advantage over someone who knows no one. How does he factor that in to his analysis?

Why would rich people spend upwards to $100,00 a year for private education if this doesn’t give their child some advantage? If their child got the same education in a local public school, they would be a fool not to — it comes with their taxes. Yet these rich people, and Caplan believes smarter people, still spend a lot of money on a private education for their genetically superior kids. There can only be one explanation — expensive private schools make a difference. They are worth the money. If, of course, you have it.

Finally, I thought one of the assumptions of market capitalism is that poor people have to learn to work hard in order to pull themselves up by their own bootstraps. Anyone can make it to the top if they work hard, they too can become rich. But if they are too genetically inferior to make it happen, why needlessly raise their hopes if they are going to end up being poor no matter how hard they work. How sadistic is that.

Genetic superiority is a pernicious and dangerous lie. When people believe they are superior, it opens them up to differentiate between human beings. There are better people who deserve more. To diminish the value of money is equally dangerous. Why have public schools and Head Start if the kids are hopeless. You can’t spend enough money on rich kids and no amount of money will change the results for poor kids. Why waste time and money on lost causes? Nothing personal here. It is all genetic.

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Throughout my work life, I have been told numerous times that my wages were in line with industry standards. For some reason, this bullshit answer actually shuts down any follow up questions regarding increases in workers wages. How can you argue with wages that are in line with industry standards? Every one else is getting the same.

But we should. Start with why is keeping wages in line with the industry standard even the goal. Wouldn’t you want to have the best wages to attract the best workers? Keeping wages in line with a standard wage is unfair to the regular worker particularly if the company is a financial success.

I understand if a company is struggling and needed wage concessions to survive, the employees might agree to those cuts in order to keep the company going. People wouldn’t be saying you have to keep your wages in line with industry standards. The company needs saving, sacrifices have to be made.

Then why would you say that when the company is successful? Shouldn’t the workers share in the success of the company?

The concern is that if one company gives their low wage workers a pay rise, that other companies, within that industry, will have to pay higher wages in order to compete. Yes, exactly, after all isn’t that what market capitalism is all about. The best workers should get best wages. But, no, this isn’t the case. Wage increases at the low end of the scale causes inflation.

This same philosophy, however, does not apply to wages at the high end of the scale. Large increases at the high end of the scale doesn’t cause inflation to the broader economy because fewer people receive them. It does, however, cause wage inflation for those few people who get them. This is why there has been such a dramatic rise in wages for upper management.

This isn’t, however, capitalism because the low wages are artificially low to control inflation which everyone agrees is important except when it comes to prices and executive wages. There is an industry standard for low wage workers and companies want to adhere to this standard to keep wages low across the industry. Inflation, you know.

So whenever I hear people moan about how bad employees are today, I ask — are you paying above market wages in order to get the very best people. If you want good workers, you have to pay for it. Right? Isn’t that the whole spirit of market capitalism. If not, then why exactly do you think your industry standard wages will get you the employees you want? It makes no sense in a capitalist economy. You should expect mediocre employees with little interest in putting in their full effort into the job because they could lose their jobs today and find a comparable job tomorrow.

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The Daily Beast published a story about a gentleman who calls himself the Girth Master. His name should give you a big hint on what he does for a living and it is quite a living. He makes between $40,000 and $80,000 a month. That’s right a month. He makes in one month what most people make in a year.

Admittedly, he is self reporting his income so, in the interest of accurate reporting, I investigated him further at his Instagram site. I, unfortunately, wasn’t able to learn more about his income but he wasn’t lying about being a Girth Master (Let this also serve as a warning. You will definitely learn more about his girth so please no feedback about how you were struck blind by the girth of the Girth Master). What I am saying is if he didn’t lie about his dick size, I am going to give him the benefit of the doubt about the less important matter of income.

Any way, yes, $80,000 in a good month. Listen I don’t blame the man. He seems a bit of a charmer and even sounds a little embarrassed about his success. If people are buying sex and he is able to sell it, more power to him.

The problem, for me at least, is the $80,000 a month. This is close to a million a year. For something he would do for free but because he has a big dick, people are willing to pay him. Talk about loving your work. It also calls into question the morality of the Free Market. What we care about is where we put our money, right? Well, then, as far as I can see, we care about porn sites and billionaire Taylor Swift.

It also means that we don’t care particularly much about public education or single mothers or homelessness or drug addiction clinics. We know this to be true because well the Girth Master makes $80,000 in a month showing dic pics. Notice the word we. I can’t tell you the amount of money I have spent on dining out, alcohol, lottery tickets, casino gambling and vacations.

Yes those are fun activities and everyone deserves fun in their life. I also know that if I were to spend less on these activities my life would have pretty close to the same amount of fun. But, if I am given the choice to spend my money on another drink at the bar or the homeless man on the street outside, well, I can tell you the extra drink for me is going to win every time.

In the meantime, we will shower the Girth Master and Taylor Swift with more money than they know what to do with. We also will continue to complain about homelessness, mentally ill people roaming the streets, derelict buildings falling into the streets, and pot holes that swallow whole cars. Somebody should do something about that. Not me. But somebody. Really. Because it is a real problem.

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Shohei Ohtani, Los Angeles Dodgers batting star, was hoodwinked out of about 16 million dollars by his Japanese interpreter. I don’t blame him for being in this mess. His interpreter is a thief and should be punished accordingly.

What also is clear is that until someone brought this to Ohtani’s attention, he was unaware that the 16 million dollars had gone missing.

The whole proposition of this type of capitalism is that the individual is a better steward of the money than the government. But time and again, we see rich people getting ripped off by scoundrels, covering up their crimes, using it on profligate expenditures that help no one including the indulgent individual or, in the best case scenario, putting it away in the bank and collecting interest. We are told that the best way to enrich everyone else is to let the rich spend their money as they wish and a rising tide will lift all boats.

The problem here is that the rich too often are spending money on things that benefit no one other than themselves. Personally, I don’t mind giving a tax break to businesses that reinvest their profits back into the business. There is some hope that this reinvested money will get into the hands of the employees of the company. But, seriously, 16 million gone without noticing it means that the Feds could have taken it in taxation and Ohtani wouldn’t have missed it either. His rich happy life would have continued to be quite happy and still rich.

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Three 16 year old boys died in the past 5 weeks while working with big machinery.

One company explained that “the child ‘should not have been hired’ and that his age and identity were misrepresented on his hiring paperwork with an outside staffing company.” You don’t say. How innocent the company is acting? We were lied to and this poor unfortunate 16 year shouldn’t have been hired, we wouldn’t have hired him if only we had known his correct age.

For some reason I don’t believe it. Every employee has to provide proper documentation in order to work. The company has a responsibility to examine this documentation for validity. This is standard practice in place for some years. I used to do it in the 1980’s. HR departments should have this down. But OK, mistakes happen, perhaps a 16 year old was able to get a hold of a convincing fake document but a quick glance at the prospective employee might have set off some alarms. Somehow these boys with peach fuzz as beards were able to pass themselves off as older. Even if you accept that they are telling the truth, there is a frightening level of incompetence within the management of the company.

But I think this more than just an accident. One of the more illuminating giveaways that this is something more nefarious, is that it happened 3 teenagers at different companies and in different parts of the company met the same fate. This also might explain why Republican governors and legislatures, those champions of the working class, are loosening child labor laws. Companies are complaining that they are having trouble filling their open positions. Something must be done, so teenage labor is the solution to their problem.

Unfortunately, teenagers are banned from hazardous labor. No problem. These companies did a risk assessment about hiring underage employees. They figured out how much potential fines would be and then compared this to the price of raising wages and decided that paying the fines was the better deal. Higher wages are a sure thing while fines need only be paid if they get caught. Now that is a risk worth taking. They would probably have gotten away with it if nothing had gone wrong. This suggests that fines are too low. Fines should discourage companies from breaking the law, not be a factor in whether they are going to break the law or not.

But, saying that they can’t attract workers is misleading. These companies are having problems filling positions at the wage they want to pay. The wage isn’t enough to attract adults to perform an obviously hazardous job. When labor is scarce and the job is hazardous, the company needs to pay wages that attract the best workers. It is basic capitalism. They can’t just expect workers to risk life and limb for nothing. But, of course, these companies do.

What I find particularly irksome here is that these so called Capitalists only like Capitalism when it is to their advantage. When it isn’t, they moan to government for help — make the laws easier so we can hire people who will take the jobs at the rate we want to pay. Let in qualified immigrants who will take the lower wage. Hire teenagers who will take the lower wage. Boo hoo. Whatever they are, they aren’t good Capitalists.