Posts Tagged Is business good?

Occupy Chicago

So I finally got a chance to check out the Occupy movement firsthand.

Two years ago, I heard media outlets first ignore, then report various contradictory and often denigrating stories about Tea Party gatherings. I made it a point to withhold judgment until I could go see one in person. So when I saw similar patterns in the reporting of OWS, I tried to do the same. Here, in somewhat random order, are my thoughts now that I’ve seen it up close.

First of all, I need to be completely up front about the fact that I didn’t have time to really get a good picture of what was going on. I walked through the Occupy Chicago headquarters on Jackson and LaSalle at around 4pm on Monday, and only had about 20 minutes before I had to be on my way for greedy capitalist purposes.

There were around 50 protesters (if you include the drum circle and those asleep on the sidewalk). They consisted of around 20 people lining the street with signs, another 20 or so sitting in small groups on the sidewalk or taking part in the drum circle, and maybe 10 people wandering around distributing flyers. And yeah, two people asleep in a pile of coats and assorted protesty folderol (signs, guitars, blankets, bikes, etc).

I’m not sure how representative this picture is of Occupy Chicago as a whole. I realize this was just a random point in the day, there was no General Assembly scheduled for another several hours, and there was no march that day. According to their website (occupychi.org), their marches consist of “thousands,” and as a matter of public record, there have been multiple arrests of between 100-200 for refusing to leave Grant Park after the park is closed.

A couple of differences struck me between this and the Tea Party rally I attended last year.

One was the signs. I took notes at the TP rally and wrote down every sign I saw. It was easy because they were simple. Things like “Taxed Enough Already” and “Obama Is Bankrupting Our Grandkids” are easy to read from across the park and write down quickly. This protest had a few like that–“Need $$$ To Buy a Congressman, Please Help” was one of my favorites. A few of the signs held by the people pictured to the right were short and sweet, things like “Honk If You Are The 99%”. But most of the signs were half a book, and frankly, I didn’t have time. I wrote down the first one (“Distrusting unregulated capitalism is not treason. Exporting trillions of American dollars in bad loans, ‘Free Trade,’ and outsourcing sound much more traitorous to me!”) before realizing I would not be able to write down everything and keep the use of my hand. Signs like that were not only being carried, but were posted all over the police barricades that had been put up–as it turned out, I didn’t even have time to walk through and take pictures of each sign.

There was also a clear difference in organization. The Tea Party, love it or hate it, quickly became very good at setting up events and getting out a message. TP rally at X time and Y place. A thousand people show up, speeches are given, everybody cheers, everybody goes home. Message distributed.

This was disappointing. The instructions on their website consist of the following: “There is someone in front of the Federal Reserve Bank building at Jackson and LaSalle 24/7. Come out and join us.” I did, and found a few people playing drums, holding long-winded signs, and basically blocking foot traffic in a public place. Message not distributed.

No, I didn’t attend a General Assembly. If it’s anything like what was recorded in Atlanta, I want nothing to do with it. At first I wondered why, since they actually had a megaphone there, they were still using the “human microphone” technique. The poster of that video, however, put it best: “People abandoned their individuality and liberty to be absorbed into a hypnotizing collective.” The short repetitive chanting eliminates individual thought. It’s a tool for fostering and enforcing groupthink. You say not what you’re thinking–you say what they say, literally. Count me out.

I didn’t see any evidence of cleanliness or public health issues here, besides simply being in the way and sleeping in public. There were rules posted concerning keeping the place looking nice, and I did witness a couple of protesters running up to stop another sign-toting protester that had a dog with her, when the dog looked like it was getting ready to express its feelings for Wall Street right there on the sidewalk.

As for the recent arrests, here’s what I told a good friend I was debating recently. It’s not a first amendment issue. Constitutional rights have boundaries. Just like free speech doesn’t allow you to shout “fire” in a crowded theater, freedom of assembly doesn’t allow you to take over public land and live there. It’s perfectly proper for the police to kick people out of a park when the park closes. If you’re trying to set up a semi-permanent camp in a public park, it’s no longer the public’s park–you’re trying to make it YOUR park. I can’t go pitch a tent on the tennis courts down the street either.

Of course, I understand that most of the arrests are sought out on purpose. Much the better to get media attention, and who doesn’t love to be a martyr when you get to go home in the morning? Chicks dig guys that are willing to sacrifice for a cause they’re passionate about.

Moving on to bigger issues. On one level, I understand the anger and frustration of the protesters. No really, I do. Things are bad out there. 16% real unemployment with no recovery in sight. Record profits but little hiring. I even get on board with a couple of specifics–I do want to see the ratings agencies investigated for their role in the housing collapse. Nobody was forced to take out loans they couldn’t afford, but something’s wonky when S & P looks at that bad loan on an overvalued house and calls it a AAA-safe investment.

That said, I think the protests are deeply misguided. Much of the protests center around income inequality. I see charts tossed around like the one at right. This is from a hot-off-the-presses CBO report looking at peoples’ changes in income, inflation-adjusted, from 1979 to 2007. The top 1% is making a lot more than they used to, and this is one of the things getting the OWS crowd all riled up. I heard Representative Sandy Levin (D-MI) on the radio today claim, based on these numbers, that the rich have gained and the middle class have just been “treading water” for 30 years.

But this all ignores the fact that every bar on that graph is positive. The fact that the most productive and successful people are making a buttload of money has not taken anything away from anyone else. Just the opposite. The lowest quintile, the poorest of the poor in America–their inflation-adjusted income grew by 18% according to this report. The middle class, far from “treading water,” saw their income grow by 40%. [1] The rising tide really lifted all boats. We can all win together. OWS, your own figures betray you. It’s not a zero-sum system. Those 1%ers don’t make anybody poor. Their success breeds our success.

Furthermore, in a free market, you don’t have to support anyone you don’t want to. If you don’t like Bank of America, fine, don’t do business with them. Tell me who you think I should support instead. But as a general rule, success is good. Let’s not protest success.

This is where the Occupy movement is misguided. The 1% aren’t the problem. You’re mad that there’s too much money in politics? I have bad news for you. There will always be rich people trying to influence leaders. So vote for freedom from their influence. Vote for smaller government. The less power the government has, the less it matters who owns what politician. So many conservatives today are rallying for smaller, less powerful government. If you don’t like the influence of the 1%, you should be thrilled to hear the ideas coming from the right. We might not wear cool Guy Fawkes masks [2], but we’ve got real solutions.


[1] http://cboblog.cbo.gov/?p=2909
[2] No violence in OWS? Really? Besides the fact that nearly a third polled said they would support violence to advance their agenda (http://on.wsj.com/oGGhy2), a common symbol of the movement is a mask worn in a graphic novel by a violent anarchist that blew up buildings, tortured and/or murdered hundreds of people? The mask based on a real-life man that attempted to blow up the British House of Lords with the King and the entire nobility and aristocracy inside? That’s your best nonviolent symbol?

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Why Business Is Good For You

or, You Should Hug a CEO Today

One of the foundations of a conservative political ideology, possibly the most critical, is the understanding that businesses create everything that we have and enjoy.  The food in your fridge, the fridge itself, the kitchen it sits in, the lumber and paint and everything that built the structure.  All created for the profit of some business.  The car you drive, the music you listen to, the medicine you take, the website you’re reading right now and the computer you’re reading it on.  The hand-stitched, organic-cotton toe socks you bought from the neat hipster shop directly from the person that made it.  The mass transit you ride.  The public education you enjoy.  The money you donate to charity.  All of it comes from businesses.

“Mass transit?  Public education?  Charity?  What?”  Yes, every last bit.  It’s obvious when you buy something like an iPod, that yes, this was built by Apple, a for-profit business.  And yeah, of course cars, appliances, construction, music, these are all for-profit enterprises.  Less pleasing to some is the fact that even such necessities as farming and distributing food are run for profit, but we all know deep down that they are.  And the handmade artsy stuff you buy directly from the handmaker, okay, they are technically a business of one.  That hippie is one of those CEOs liberals like to complain about.  Fine.

But government programs?  Cops and teachers?

Emphatically yes.  Provided to us and paid for 100% by for-profit businesses.

Not only are all the buses and trains and school buildings built by businesses, but every dollar that the government spends on programs is taken directly or indirectly from, or because of, some business’s profit.  No business; no productivity.  No productivity; no profit, no payroll.  No profit or payroll; no taxes.  No taxes… no government programs.  Condense that, and: no businesses, no government programs.  It really is that simple.  Every service the government provides is, ultimately, provided by businesses.

This is clear enough in the case of corporate income taxes.  But I’m talking about everything.  Income taxes work the same way.  Your income occurs because you are being productive for a business.  Even if you’re making and selling your own stuff out of your own home–now you’re a small business owner.  Your income still occurs solely through the mechanism of business.  And if you’re an employee, income taxes mean that your company has to pay you that much more to justify your work.  If taxes drag a company’s employees below a livable wage for the area the company is based in, employees will no longer be interested in taking a job there.  They have to pay you more to make up for it.  One way or another, that tax is coming out of the company’s balance sheet.

Property and sales taxes too–the money you use to pay them found its way into your pocket through business (even if it was redirected through the government first).  No matter how you look at it, business is the ultimate source of every dollar that goes to teachers’ salaries or Social Security or NASA or AIDS programs in Africa or WIC or the paycheck of someone tapping on a calculator at the federal building downtown or whatever else the government decides to do.  Every dollar you give to charity was paid to you, or to someone, by a business, in exchange for productivity.  Whatever it is, businesses provided it.

To visualize the overall concept: the economy is, basically, money in motion—and businesses provide the locomotive force.  Businesses and profit are like the gas in the car.  You can have a really, really snazzy car, but without gas, it’s not going to get you anywhere.

Look at it this way.  If Ford makes 10,000 Mustangs and puts them on the market, obviously they are providing stuff to the economy right there in step 1.  That’s good, we like Mustangs, we’re better off if they exist rather than not.  Look at the rest, though.  The government (making up numbers) taxes their profits and takes a million dollars.  The cars sell, providing a million dollars to the government in sales tax.  Ford pays their employees, and the government taxes their income for another million dollars.  The employees own homes thanks to their work at Ford, and pay property taxes for another million dollars.  So now the government has four million dollars.  The government then spends that four million dollars on Medicaid.  In reality, Ford’s productivity directly and indirectly provided that Medicaid insurance, not the government.  The government was just the middleman.  If Ford wasn’t there doing business, none of this money would be coming in for the government program.  If you take away Ford’s ability to do business or to make a profit, guess what—the government benefits go away too.

One more analogy.  Say Fran owes Irene $100.  Paul has lunch with Fran, and says, “Hey, I’m going to see Irene later, I can take her the money you owe,” which he does.  Nobody would say that Paul paid Irene $100.  Fran did.  It was Fran’s money, Paul just carried it.  In the same way, when the government writes Fran a Social Security check, it’s not the government’s money.  The government is just carrying it from the businesses and people it was taxed from, all made possible solely thanks to the productivity of businesses.  We might all get together and agree that Social Security is a good thing and this is how we want our society to conduct itself, but we must never lose sight of the fact that it’s only thanks to business that any of it can happen.  If we do, we end up despising Fran for being greedy and giving Paul a trophy for his selfless generosity, even though Fran really paid Irene.

So, what’s so magical about businesses, that everything else in society depends on them?  They are productive.  They’re not just hoarding money, they’re using it to build stuff or do stuff for people.  That’s it.  The more stuff they make or do, the more stuff per person there is in the world, the richer everyone is.  Principles of supply and demand say that the more stuff there is, the cheaper it is for anyone to get the stuff–that means, the more and better stuff businesses produce, the more your dollar is worth.  So when a business is rolling in money and making tons of stuff, you as a consumer are reaping the benefits as well.  So to repeat that point (it’s important): the more businesses produce, the richer everyone in the world is.

Before I start getting hate mail, let me include two caveats.

First, sometimes businesses do things that are bad for their employees, for their customers, for the world in general.  Sometimes businesses can do things that are truly evil.  This is often done via a complicit government, and whenever this happens, it needs to be stopped.

And second, of course the government provides goods and services too.  Productivity isn’t restricted to private industry.  There are some things that only a central government can provide effectively, and that’s well and good–in some cases, absolutely necessary for our society to run.  This is a complicated topic deserving of its own discussion.  However, certain facts should be apparent.  Given that the government is by definition a monopoly, and–by popular consensus–only marginally competent and often corrupt, it’s always going to run things less efficiently than a competitive market will.  That being the case, the government’s role is to do the things it has to do, as efficiently as it can manage, and then to do as little else as possible.

Now, with those two issues in mind, the basic framework remains.  Everything in our society, whether it’s obvious or not, whether it masquerades as free or not, no matter who or where you get it from, exists directly or indirectly because of for-profit business.  And the more businesses produce, the more productive and efficient the overall economy is, the more our money is worth.  Therefore, when businesses succeed, we all become richer.

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