The Birth Of Capitalism

I first came across this poem over on Nan’s Notebook a week or so ago, and it struck a chord with me. It is short and simple, but a more concise explanation of capitalism has never been written. This is rather the concept of “All for one, and one for all”, only with a twist … think of it as “All for one, and one for himself”. Thank you, Dave Henderson, for your generous permission to share your words!

A Humanist's perspective

By the strangest of circumstances,
A group of ten previously unknown,
Were deserted in a far off sea,
A tropical isle they now commonly owned.

We must work together, said one;
And together erect ten huts.
If we will only cooperate,
Then we won’t find ourselves in a rut.

We must also gather food,
So each one of us can eat.
We will share what we gather,
At an appointed place we will meet.

Most everyone agreed,
Yet as plans were underway,
A certain man stepped forward,
He had something he wished to say.

Everyone was silent,
As this man made his case,
He said equality is wrong,
Then he volunteered to run the place.

He explained that their plan,
As pleasant as it might seem,
Was actually Socialism,
Contrary to the American Dream.

Cooperation is a liberal plot,
And sharing lacks the appeal,
Of good old fashioned competition,
Then…

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The Purpose of Life?

My mind is in a state of rambling and introspection today …

What, for most humans, is the purpose of life?  I’m not asking about the ‘meaning’ of life, for that will be something very unique and personal to each of us … what gives your life or mine meaning is not necessarily universal.  But, what I am asking is the purpose … what justifies me or you taking up space and using valuable resources on this planet?

No, I haven’t lost my bloomin’ mind … I’m just cleaning it out a bit.  Much of the news over the past few weeks/months/years, have led me to ask this question, have taken my mind down a path that needs to be explored.  And no, this isn’t in the least bit a deep philosophical discussion, but rather an ideological one.

Is the purpose of life to gather as much wealth, as many toys and shiny objects as possible during the course of one’s life?  It sure does seem that some people would answer in that way.  Think … here in the U.S., people applauded when the fool-on-the-hill rolled back environmental regulations in order to benefit the fossil fuel industries.  Why?  Well, the robber barons in the coal and oil industries applauded because it extended, albeit briefly, their ability to make money at the expense of the planet, the future.  Other people applauded because they hoped it meant their jobs in those industries would be secure, at least for a few more years, for they know no other trade.  And some applauded simply because it was Barack Obama, an African-American, under whose tutelage the regulations had been established in the first place.

Donald Trump ran in 2016 on the buzz-phrase, “make America great again”, but what does ‘great’ mean?  My vision of a ‘great nation’ is different than that of those who wear the silly red hats and cheer Trump’s slogan.  My vision of what makes the U.S. … or any nation, for that matter … great is diversity, people of all nationalities, all getting along together.  In my vision of a great nation, people help each other just because it’s the right thing, the compassionate thing to do, not because there is something in it for them.  But, in the maga crowd’s view, I think greatness is defined differently.  I think it is defined in terms of relative wealth and of bigotry.  I think the maga crowd wish to turn this into a nation of straight, white, Christians, and in my book, that would be hell on earth.

So, what is the purpose of life?  And please note that I am not coming at this question from any religious viewpoint … that speaks, again, to the ‘meaning’ rather than the purpose.  To me, I would feel I had fulfilled my purpose if I made other people happy, if something I did improved the quality of life on earth for as many as possible.  I’ve no interest in wealth, am quite content with the basic essentials (essentials, of course, includes books!)  Do you think Donald Trump, Mitch McConnell or any other politician in our government today would be satisfied with such?  Or what about the CEOs of Exxon-Mobil, Amazon or Nike?

In my view, the purpose of life should be about making life better for everyone, not just for oneself, or even one’s family.  I fail to understand what pleasure is derived from gathering wealth just for the sake of wealth.  The only purpose I see in wealth is the ability to use such wealth to help others, to help find ways to improve the quality of life for as many people as possible.  But instead, those who value their wealth over humanity are using their wealth to destroy all life on earth.  They are using it to build more factories that spew more chemicals into the earth’s atmosphere.  They are using it to develop harmful products that enable them to grow more food but are killing the bees – bees without whom we will all die sooner than later.  They are using it to build and buy weapons, both for military and civilians, that have the sole purpose of killing.

Socialist?  Yeah, I pretty much lean that way these days.  I would much prefer to see equality among all than the scant 1%, or I believe it is now ½%, living in houses with gold-plated toilets while others go to bed with empty bellies.  I would like to see people getting along rather than the bitter gulf that exists between the political parties and their followers these days.  I would like to see people throw their guns into the sea, deciding that life has more value than the false sense of power the gun gives them.  I would like to see all people caring enough about future generations of all life forms to make the sacrifices necessary to protect and preserve the planet and its resources.

I think that our lives can have purpose, and for many they do, but that purpose isn’t money.  If one’s purpose is to amass great wealth, then I posit that the person truly has no purpose at all.  Thanks for putting up with my rambling thoughts for the day … and now … back to the news of the day.  I see Trump just fired John Bolton. More chaos. Sigh.

The Cuyahoga River fire of 1969 spurred government action. Sadly, it couldn’t happen today.

The Environmental Protection Agency has an important … nay, imperative … job to do, but under the Trump administration it is being stifled … I would even go so far as to say the goal of this administration is to completely dismantle the agency. Blogger friend Jeff at Voters On The Fence has written an excellent post reminding us how and why the EPA came into being, and of the important work it does. Thank you, Jeff, for this insightful post and for letting me share it with my readers.

On The Fence Voters

Democratic 2020 candidates need to explain why government exists. It’s not socialism. It’s a cop on the beat.

On June 22, 1969, The Cuyahoga River caught fire in Cleveland, Ohio. This was nothing new. The polluted river had caught fire 13 times before the 1969 incident dating back to 1868. However, this particular fire was different. It made national news. The city of Cleveland had recently elected the first black mayor of a major American city, so the town was on the radar of many. With the Vietnam War raging and civil unrest everywhere, the newly elected President of the United States had decided to make pollution and the environment one of his main priorities.

The Cuyahoga River fire led to a national outcry and prompted a federal grand jury investigation into the causes. Eventually, it was determined that about 12 companies in Northeastern Ohio were responsible, including several steel…

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Seth Meyers and Papa Duck

Seth Meyers is is an American comedian, writer, actor, and television host. He hosts Late Night with Seth Meyers, a late-night talk show that airs on NBC. Prior to that, he was a head writer for NBC’s Saturday Night Live (2001–2014) and hosted the show’s news parody segment, Weekend Update.  Like John Oliver, Stephen Colbert, Jimmy Kimmel and others, he helps us find comic relief in the day-to-day dramas that inhabit the current administration in our federal government (ie., the government led by he-who-shall-remain-nameless-for-today).

This clip is more than a week old, from February 7th, but is still funny, still relevant, and well worth the eleven minutes it takes to watch the whole thing.  If you are like me, you really, really need a good reason to chuckle, so … give it a watch, okay?  The bonus is really the part toward the end, where Papa Duck (Phil Robertson) of Duck Dynasty was interviewed on Fox regarding his views on healthcare!

Reward For A Job Poorly Done?

richard-smithRichard Smith was the CEO of Equifax … until Tuesday when he stepped down from his position.  Or was asked to step down.  The investigation into what happened in the Equifax security breach that was made public earlier this month is ongoing, and there is no word whether Mr. Smith, and the two others who also stepped down were responsible.  143 million U.S. adults’ personal and credit information was hacked during May thru July.  But now here is what sticks in my craw …

Smith will receive a pension of $18.4 million.  $18.4 MILLION!!!  Plus … he stands to gain an additional $5 million IF he is found guilty of some wrongdoing!!!  As it stands, he is leaving by ‘mutual agreement’, and as such is not eligible for the $5,000 severance payout.  But, if the investigation should provide evidence that Smith was in the wrong in some way, then Equifax would change the status of his departure to ‘terminated’, and then he would be eligible for severance. Chew on that one for a minute or two while I go fix myself another cup of coffee …

wine

Coffee

And in addition to the above, the company is still considering certain other awards that could, potentially, end up with Mr. Smith receiving as much as $90 million.  I think we need look no further than this to figure out at least one of the things that is very, very wrong with capitalism, at least as it is practiced here in the U.S..  $18.4 million is obscene, under any circumstances, but when there is a strong likelihood that this man had at least some role in exposing nearly every adult in this nation to broad theft, he should not be getting a penny, let alone tens of millions of dollars.

I was curious about CEO severance packages in recent years, so I went in search of … and I think your jaw will drop when you see these …

  • Jack Welch, General Electric, 2001 – $417 million
  • Lee Raymond, Exxon Mobil, 2005 – $321 million
  • William McGuire, United Healthcare, 2006 – $286 million
  • Edward Whitacre, AT&T, 2007 – $230 million
  • Bob Nardelli, Home Depot, 2007 – $223 million

Compared to these, Richard Smith must feel like quite the pauper.

money-2Admittedly, I do not know any of these men, so I cannot speak of their character.  But speaking broadly, it is my firm belief that there is no one human being on the face of this earth who is worth that many millions of dollars.  My other point would be that … what the Sam Heck does one do with that much money?  I tried to find out if Jack Welch gives anything … anything at all … to a legitimate charity, but I can find no evidence that he does.  Interestingly, his net worth as of this year is $750 million.

Back to Mr. Smith … if he was in any way responsible for putting almost every adult in this country at risk of financial jeopardy, why should he benefit by a single penny, much less millions of dollars?  There is something very wrong with this picture, at least in my mind.  Apparently living above those ‘glass ceilings’, living in the bubble of wealth, robs a person of his conscience.  It makes me appreciate people like Bill Gates who worked hard to actually earn their money, and then use it to do good things for people less fortunate.

This is the problem I have with capitalism today.  So many have wealth beyond what they could ever use, while so many on the other end of the spectrum barely survive.  I have little, but enough to meet my needs, so I am happy.  I do not wish for millions, although I would wish for the wherewithal to help people more.  My conscience does not tap me awake at night … I wonder if Mr. Smith’s will?

Good People Doing Good Things – Dan Price

“It’s not about making money; it’s about making a difference.” – Dan Price, CEO Gravity Payments

Many times in the past few years, I have commented, snarkily, about the notorious 1% … the group of wealthy magnates who, though they account for only 1% of the population, control more than 90% of the wealth of the nation.  It is what we have come to think of as the ‘income divide’ or the ‘income gap’.  It is a vicious circle.  Rich people buy companies, the companies make money, the rich people who own the companies take that money and use it to buy more companies that make more money … Meanwhile, they balk at raising the federal minimum wage above $7.25 an hour, or about $15,000 per year.

The following came onto my radar through one of the sources I typically troll in search of ‘good people doing good things’, and as soon as I read the first paragraph, I knew I had found my good-person-of-the-week!  I almost backtracked, as I came upon some controversy & critique, but after reading everything I could find, considering the sources of the criticism, I concluded that this guy is the real deal and worthy of this post.  Allow me to introduce you to Mr. Dan Price, the CEO of Gravity Payments, a credit card processing company on the west coast.

Dan-Price-1

In March 2015, Dan Price was hiking with a friend, Valerie Molina, who lamented about being about being able to make ends meet on her $40,000 annual salary.  Listening to her was a bit of a wake-up call for Price, as many of his own 120 employees earned even less than his friend.  Then, he says, he recalled a paper by Nobel prize winners Daniel Kahneman and Angus Deaton, who found that people’s emotional well-being improves as their earnings rise, until their pay reaches about $75,000 a year, beyond which any additional earnings do nothing to increase happiness. Dan’s mind was made up that day, and he told his hiker-friend, “I’m going to pay all my employees minimum $70,000. I’m not sure exactly how I’m going to do it, I need to run the numbers, but I am. Is that crazy?”

And that is exactly what he did.  But that, in itself, is not the best part of the story in my view.  The best part is that he did it by reducing his own salary from $1.1 million annually to around $77,000 in order to cover the increases for his employees.  For the remainder, he has committed up to 80% of the company profits. According to Mr. Price, “That was the happiest I’ve ever felt. For me, it was the best money I’ve ever spent.”

But the road was not a smooth one, as he had his share of detractors, some disgruntled employees, and was even sued by his own brother!  Former Idiot of the Week, Rush Limbaugh:

“He is a good liberal, and he’s read that people are happy at 70 grand. What he doesn’t understand is, happiness does not equal productive. Happiness equals comfort. “Seventy grand, well, I can stop working hard,” is what it means.

Anyway, he’s not tying this to anything other than employment. He’s not tying it to performance. He’s not tying it to sales. This is pure, unadulterated socialism, which has never worked. That’s why I hope this company is a case study in MBA programs on how socialism does not work, because it’s gonna fail. My guess is that just like when Solyndra went south, there will not be a story on Gravity Payments succumbing to gravity and going under.”

Limbaugh wrote a very long-winded and critical piece on Mr. Price, the gist of which was that he is a socialist and his employees will become lazy and useless.  He has since been proven wrong, but remember … there is a reason he was Idiot of the Week last August.

Others were critical as well, saying he had an ulterior motive, or was doing it only for publicity.  Other entrepreneurs in the area were not happy, saying Price’s decision made them appear ‘stingy’.  And his brother, Lucas, who owned 30% of the company, filed a lawsuit claiming that Dan had “worked against his brother’s interest as a minority shareholder”.  Last July, a judge ruled in Dan’s favour, but nonetheless there is a rift now between the brothers.

Two employees resigned shortly after the announcement, saying that in their view it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raises. There is some validity to that argument, but I still applaud what Mr. Price did, and perhaps if the employees had stayed, a compromise could have been reached.

The company’s success speaks for itself:  employee turnover is drastically reduced, business is booming, and net profits nearly doubled between 2014 and 2016.  While measuring happiness is not an exact science, the employees appear to be happy … so happy, in fact, that they all pitched in to buy Mr. Price a brand new Tesla automobile!

And perhaps even more important than what Mr. Price did for his own company is the ripple effect it has had, expanding to other companies who followed Price’s example:

  • Josh Ledbetter of Ledbetter, Inc., cut his own salary by 82% and used it to give his three employees substantial raises.

  • Tony Tran of Third and Loom was so inspired by Price that he raised the wages of all his employees in the U.S. and his factory workers in Vietnam to $70,000.

  • Mario Zahariev of Pop’s Pizza saved $7,000 annually in credit card fees when he became a customer of Gravity Payments.  He used it to give raises to all eight of his employees.

  • Andrew Green of Green Solutions gave all his employees raises beteen 35% – 50%, which doubled the pay of his lowest paid workers.

Megan Driscoll, chief executive of biopharmaceutical recruiting firm PharmaLogics Recruiting also took a page from Dan Price’s book after hearing him speak, and increased her employee’s salaries from $37,500 to $50,000 … with commissions they will be earning $70,000 or more.  She says the results are remarkable … employee turnover has reduced, revenue has more than doubled, and the profit margin is steady.

No one person is going to reduce the disparity in incomes in the U.S., but it seems to me that Dan Price has, despite some overwhelming odds, done his fair share.  “Income inequality has been racing in the wrong direction,” he said. “I want to fight for the idea that if someone is intelligent, hard-working and does a good job, then they are entitled to live a middle-class lifestyle.”

Dan Price – a man who cares more about people than money.

If you are interested in reading more about Dan Price, his decision, and his company:

Interview on Today Show

About Gravity Payments

The Gravity of $70k