Monday, April 27, 2009

Realizing the Economic Cost of Losing Common Thought


Many can recall a time in the United States when an American could count on his fellow citizen to look out for what was right. Americans left their doors open, shared, belonged to a neighborhood and looked after one another's children. Americans went to Church and bought war bonds. For simplicity sake, Americans took responsibility for themselves, their family and their community. They acted in a manner that was not only beneficial individually, but also for the benefit of the common good of each other and the Nation as a whole. There was a definition of what it meant to be American.


Environmentalists argue that a Nation must force a company that pollutes to pay for its down stream effects, or the costs bore by the population in dealing with such pollution. While I can't say that I agree completely with this theory when we are discussing environmental issues, it is an interesting framework when conceptualizing our short falls as a Nation.



While I believe Americans, whether Democrat, Republican or Independent legitimately would prefer less government, they believe, albeit in different respects, government is necessary to fill the gaps. Government has grown progressively under every party's government over the last thirty years, yet our problems seem to be greater than ever. Why?



I would suggest it is our failure to take responsibility as a whole that has created the shortfall. Our decision to legislate the problems away have created resentment and hostility towards such legislation. As the intervening third party, the government, becomes the arbitrator and enforcer of disputes. It is this third party validation or disapproval that creates entitlement and angst among Americans who feel like "right" is being jammed upon them. That said, the argument for whether government should enforce these social shortfalls is not productive in addressing the true issue, which is of substance over procedure.



When Americans fail to buy American they harm Americans by undermining the working class of America. When Americans cannot sustain meaningful work because they compete with currency manipulated government subsidized slave labor from abroad. Two incomes become necessary to manage an American household. With no parent at home, schools are burdened with the costs of teaching children how to be adults as well as math and science. The cost of education increases because schools are dealing with under prepared children who need to be taught things that are not meant to be taught on the tax payers dime. Taxes get raised to subsidize the lack of parenting, and families get squeezed even further creating resent. That resent is communicated to the children in the form of teaching them to be tough and to look out for themselves least they be left in the situation of their parents. The children serve no master, but themselves, and are without a sense of right and wrong. Church is cast aside, and the race to compete for the now creates an aggressive environment where fellow countrymen are willing to tear each other limb from limb to pacify their desires for earthly pleasures. What can you make of this rant?



Action of pure self interest without consideration for its "down stream effect" shall carry certain unintended consequences over time. While I am not suggesting that Americans legislate the International 4-Point Test of Rotarians; and in fact, I suggest legislation shall not solve a bit of these ills, I will say that failure to change our actions shall invariably lead to greater social costs and greater regulation. Not allowed to censure the profane, no prayer in school, uninterested in a solution for the sick and the meek, not willing to tithe 10% of one's income, disallowing a neighbor to discipline one's children, no greater sense of right and wrong, forging income on a home loan, selling irresponsibly, buying irresponsibly and forgetting that Americans are responsible to maintain the health of our whole economy are just a few of the items on the table in this discussion.


Serving the dollar as thy master without consequence ensures that no individual shall enjoy financial security in the long run. Similar to the old adage, "live by the sword, die by the sword," live selfishly and thy shall receive the same in kind. There is plenty of room for profit, morality, patriotism and an obligation to act in a manner which is best for all involved. The cry that these concepts are mutually exclusive is lazy, and the underlying belief that "right" depends on one's perspective is untrue and sarcastic.


In closing, saving $2 on a tee shirt or $45 on a laptop through the purchasing of imports is not worth creating an economy where no one has enough money to purchase anything from you in return. The downstream effects of acting without consideration is the desecration of a community. Just as one can shear the wool from a sheep for his or her lifetime, he or she can only kill it once. Be good to Americans, so they can be good to you- Lord knows you shouldn't need the government to tell you to provide for one another.



Friday, April 10, 2009

The Conversation We Need to Have


Wage disparity, the slimming of the American middle class, the strengthening of the multinational corporation and the record breaking bonuses of CEOs are all occurring simultaneously in the United States. The threat of wealth redistribution and government intervention are topics that have become common place. Divergence in the media where Americans can choose their slant by switching the channel, but never get a straight answer is all that is available. Finally, a growing majority of America's youth who believe they shall not be able to achieve the socioeconomic status of their parents is significant.

How did this Country who banned together to win: two world wars, a four decade cold war for global supremacy, and the race to the moon become so demoralized? Where did the tough- nosed honest gumption of this population go? It wasn't long ago when an experiment comprised of an enmeshment of immigrants found a common purpose in the burgeoning of an industrial revolution and understood that together they could conquer any challenge. It was against this backdrop Henry Ford declared he "paid his workers well so they could afford to buy one of his cars." Every neighborhood was adorned by a corner market where a family could make a living serving their block as a local grocer. These were the days when doctors would make a house call, and one paid the bill with what he or she had in his or her wallet. Americans left their doors unlocked and finding work was attainable for those who were willing to work.

In these golden days, buying local and buying American was the standard, and foreign labor and outsiders were viewed with skepticism. These Americans believed in honesty, family and Country. This was the era where the boy with a work ethic and a dream could move from the mail room of a company to becoming the CEO. People believed that hard work would lead to upward mobility in society. In these days, bankers let borrowers meet with them face to face, a worker knew the owner, and neighborhoods policed themselves.

America today is in transition. The ghosts of Marx and Schumpeter look over us with parsed lips and a wry smile in a gesture of "told you so." Prices and wages diverged throughout the 2000s culminating in a freezing of the credit markets. In the simplest description, trust between the classes seized in a long coming day of reckoning. If one acknowledges that credit is a bridge extended to someone in need of more money by someone, or some entity, that possesses it, than it becomes obvious why the credit markets seized. Those "without" no longer could afford their current course of consumption. Credit was extended to supplement this shortage, but soon, those "without" could no longer afford to service the necessary debt. Frankly speaking, the wages had fallen far too short of the prices of society. The culmination was $4.50/gallon gasoline and median home prices of $300,000 on an average household income with two working parents of under $45,000/year.

Now it is commonly acknowledged as fact that globalization caused the wage deflation, or at a minimum wage stagnation, in the United States (Thomas Friedman, The World is Flat, Alan Greenspan, The Age of Turbulence, Common Cents, The Current Account Deficit and National Security). American companies became part of the "multinational" corporate model where labor was sought in an environment where a competitive advantage existed regardless of nationality. United States labor laws, environmental regulations, labor unions, and high corporate taxation cemented this outsourcing of labor. In addition, failure to enforce Anti-Trust laws allowed Corporations to reach a size that eliminated competition. An example is Walmart, who breaches contract law with suppliers, drives down wages by forcing competitors to close and subsidizes its low costs by paying wages so low that the workers are encouraged to accept Federal and State welfare for health care instead of the Company's group policy. Most intelligent business people refuse to supply, build or service companies of this size because such Goliaths slow pay and renegotiate contracts as a business practice and ultimately drive their business partners into insolvency.

So after all of the above, what conversation needs to take place? A one on one conversation, nationally televised without commercial, commentary or spin between an American CEO and an American worker. No government, no labor union, no chamber of commerce and no company delegates permitted. Like the doctor on a house call when it was time to settle the bill, business leader and worker need to see one another from a perspective of humanity. Just two brothers of Country, who have avoided one another, speaking only through third parties, for a significant period of time and act with malice despite forgetting how their relationship became so strained. The American worker needs to know what they can do to earn the trust of the American upper class. The American upper class needs to understand that regardless of why they have betrayed the trust of their Country when they chose to export the dignity of work overseas, they will be stronger once such a trend is reversed.

In having this conversation their should be no third party interference, as just in a sibling rivalry, such interference shall cause resentment and defensiveness on the party who feels outnumbered. The wealthy need to soften in resolve with the real needs of the worker and the worker needs to understand and respect the pressure facing the business. Picture it. Two people, who have grown to dislike one another and have refused to directly communicate for decades, locked in a room until they come to a mutually agreeable solution. A solution to bring the United States back into alignment. No longer should the youth be conditioned with a fear of being outsourced by fellow countrymen. No longer should the wealthy feel that those without are spoiled and not willing to work and earn their way to a point of financial security.

My suggestion is metaphorical, symbolic and allegorical; but, drives at the core of our current crisis of credit, unemployment, confidence and patriotism. There has been far too much taking in our culture and entirely too little giving. Giving of employment, giving of opportunity, giving of self and giving of dignity. Government cannot solve our situation without the agreement of those who are able to give these things. The cry of the wealthy that "if the government is to redistribute wealth they shall denounce their Country and take their capital and toys elsewhere" is understandable. Forcing a party to act never ends amicably. The cry of the working class of unfairness is counterproductive, for we need no further sleuthing for problems. We need a solution. A dialogue of how these parties can best participate together.

After all, their existence within the borders of this Country is symbiotic. The worker needs the wealthy for wages, the middle class needs the worker for advancement and the wealthy needs the middle class for sustenance of their situation.

Wednesday, April 1, 2009

PROBLEM SOLVED!!!!!


Just a quick note.  Have you ever wondered what happened to the old fashioned problem solving nature of the American public?  The attitude that no mountain was too high and no valley to low.  The resolve that made our country eternally optimistic and willing to believe in the motto: "Work hard and you shall be rewarded."

When was the last time the media dared to declare a problem was solved?  What would you do if the evening news began with a story with the headline "PROBLEM SOLVED!"  Is it possible?  Have the passed thirty years, thirty months, thirty days and thirty minutes been without any success?  Have we turned into whining, snivling, problem finders or are we still ingenuitive problem solvers?

I suggest Americans are worthy of more credit than the media would ever be willing to give them.  Moreover, I believe if one is only looking for problems, that's all they shall find.  That said, the mindless twenty-four hour reporting of actual and potential problems seems counter productive.  In fact, this endless search to uncover problems is even less productive than the endless stream of "news analysts" that are paraded in front of the general public to interpret the facts.  This behavior is literally story telling for adults and permission to create facts out of conjecture.  

Funny as this sounds, CNN created a word cloud to illuminate on the President's speech last week.  Love President Obama or hate him, he is direct, clear and unambiguous when he speaks.  There is no need to interpret.  That said, assuming news sources needed to fill empty time by rewording the speech, a contemporary illustration made up of all the words used in the speech with the words used most frequently appearing in the largest font is simply silly.  The analysts dissecting the word cloud to find the greatest sense of meaning was even more outlandish. Is this productive?  Is it genuine? What happened to simply listening to the source to figure out what they meant? 

With the news transitioning from informative to entertaining, it dangerously borders on being purposely misleading.  The largest worry is that many Americans believe news sources are bound by certain protocols to report facts.  The media has wandered astray and with it so has the focus of America.  The news has created fear in every man, woman and child in a torrent of problems.  They have changed the lending practices of banks and the willingness of people to invest by the constant bombarding of negativity and their endless search for troubling data, potential problems, and what ifs.  While the media is free to write and broadcast as they wish, a greater sense of common good and Country demands the reporting of our numerous achievements in at least equal frequency to our shortcomings.  After all, wasn't America a better place when Mickey Mantle was a hero and  American companies were the envy of the world?