What Is Wrong With Capitalism?

Sure capitalism is not perfect.  Is anything?  Let’s examine the problems.

pickpocket

THE FIRST PROBLEM

As long as the minimum wage is below the poverty level, our society will be amoral.

The poverty level is defined as annual wages below $28,450 for a family of 4.  Divided by 2,000 hours in a year, you get a poverty level hourly wage of $14.225 per hour (or less) for a family of 4.

Currently the national minimum wage is $7.25 and has not changed since 2009.

People trying to claw their way out of poverty will become pickpockets, blame co-workers for mistakes, cheat on time cards and steal supplies at work.  Is that the kind of society we want to live in?

THE FIRST SOLUTION

Raising the minimum wage would help $27.8 million people.

Here is why we should raise the minimum wage according to a small business owner.

http://www.slate.com/articles/business/moneybox/2014/04/a_small_business_owner_s_case_for_raising_the_minimum_wage_better_living.html

Spoiler alert:  He thinks it will grow his business.

THE SECOND PROBLEM

This problem involves cheating on taxes and tax loopholes. In other words, giving priority to me, myself and I.  As long as the tax system is overly complicated, humans are going to try to get away with something to get ahead of their neighbors.  This mess, of course, was created by Congress.

THE SECOND SOLUTION

What can we do?  We can plug the tax loopholes as proposed by Eric Schmidt. Google’s Chairman told angry British politicians last year: “plug the holes if you want more tax revenues”.

The result will be a reduction of our $18 trillion national debt.

THE THIRD PROBLEM

As long as you allow average national CEO pay to increase many times faster than inflation, you will have an amoral society.  Average national CEO pay increased to $15.2 million in 2013.

The CEO to worker compensation ratio is 296 to 1 today versus 20 to 1 in 1965.

pickpocket_wealthy

The result is the current wage inequality.

In order to keep up their fast rising salaries, CEOs and executives of financial institutions and other companies are taking huge risks with company and customer stock under the guise of pro-growth mergers and acquisitions using huge sums of leveraged loans.

Richard Baker, chief executive, along with his investment firm, NRDC Equity Partners, relied heavily on borrowed money. Of the $1.2 billion that it paid for Lord & Taylor, only $25 million came in the form of equity [2%], with the remainder made up of debt financing, secured by the department store estate. [The New York Times]

When was the last time you bought something with only a 2% down payment?

THE THIRD SOLUTION

Create annual Top Ten lists of Most Narcissistic CEOs and Highest Paid CEOs.

Maybe this will get us back to a more equitable ratio.  1965 was a pretty good year even though the ratio was only 20 to 1.

CONCLUSION

Capitalism is fraught with greed but it doesn’t have to be.

As the Google IPO started out saying, “Don’t be evil.”  Better than that, let’s not be amoral.  Thus reform needs to start with each of us.

We should be thinking more about the people around us or, even better, the world around us.  The Mormons pledge 10% of their income.  So why shouldn’t everyone, that can afford it, give just 1%? 

Google stated in its “Letter from the Founders” as part of its original IPO paperwork, “We intend to contribute significant resources to the [Google] foundation, including employee time and approximately 1% of Google’s equity and profits in some form.”

In addition, let’s raise the minimum wage and try to close the gap between workers and CEOs.

Here are 7 suggestions to close the gap.

http://www.marketwatch.com/story/7-ways-to-help-the-middle-class-without-soaking-the-rich-2015-02-05?page=1.

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WHAT IS AMORALITY

Here is a great article about Silicon Valley Amorality.  But amorality can be found everywhere there is capitalism.

https://www.linkedin.com/today/post/article/20141123194522-529261-silicon-valley-s-culture-of-amorality-water-will-find-its-way

AMORAL APP

There is an app to see how corrupt aka amoral you are. At least in Indonesia.

http://www.usatoday.com/story/tech/2014/11/25/corruption-indonesia-app/70086430/?csp=tech

LEVERAGED LOANS COULD CAUSE CRASH

https://michaelekelley.com/2014/12/20/leveraged-loans-predict-crash/

Thanks.  Have a great day.

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Who’s Been Messin’ With My Workstation?

We all love our workstations.  Even if our employer bought them and put a label on them.  We would hate to have someone move or change it.  Here is one such story.

post-it-notes

Upon visiting a customer site to perform a software upgrade, the three of us engineers couldn’t help but notice the Post-it notes all over the edge of the console.  There was so many notes that there was little room for one more.

The main operator’s name was Mike just like mine.  He was a really big guy like a former football player who had retired from the game and put on a few pounds.

When Mike went to lunch, one of our engineers decided to put one more Post-it note on his workstation. He wrote “Call your mother” on one and stuck it near the center top rim amongst the many others.  We all wondered if Mike would notice the new note with so many others covering the edge.

When Mike came back from lunch, a mere 5 minutes went by when Mike asked in a deep angry voice, “Who’s been messin’ with my workstation?”

The three of us engineers cracked up and laughed hysterically.  When we finally calmed down, the engineer that put the last Post-it-note on the workstation confessed.

Mike too had calmed down and understood it was a simple joke.

But this simple joke could have gone seriously wrong.  What if Mike’s mother had passed away?  Then the joke would have been a tragic reminder of a missed loved one.

So the moral of this story is always watch what you say. Anything you say may come back to haunt you.