Courtesy of Frank Capra

 

Any investor knows you buy low and sell high.  Buying high and selling low makes you a loser. The same goes with a business.  Buying a business doing very well, will leave you no room for growth.  Your pie can only get smaller, as more businesses arrive on your block and begin exploiting the fact you are so busy, by offering similar quality and prices with lower wait-times.  Their profits grow; while both your market share and profitability decline.

This is why people like monopolies so much.  One can consistently almost guarantee one’s income and profitability.

Now because of “math” it is easier to show great gains on low profitability options, more bang for the buck, than on high ones.  The closer one is to zero the higher percent increase one can show their clients.  If you have just one customer sale, it is easy to have a 100% increase by having 2 customer sales; someone just has to walk into your store.  But if you have 1000 customer sales per day, then it is rather hard to jump up to 2000 customer sales per day.  Where are you going to put them?

Understanding this  is critical to growing the economy.

History lesson.  In the summer of 2007 ARM’s started defaulting as the higher rates kicked in, starting a mushrooming effect up and down the securitized mortgage chain.   In 2008 when Lehman Brothers collapsed,  all hell broke loose.  The world financial markets came within 20 minutes of collapsing entirely.  But the US under George W. Bush restored confidence in the dollar, and people decided to leave their investments alone and let them ride.  That is his most defining moment.  That is one memoir I want to read.

Fortunately Ben Bernanke was an expert on the Great Depression.   Bolster the banks, keep money solvent, coddle corporations, and keep the infrastructure intact.   Knowing full well, if it totally collapsed (like a small town losing its factory) there would be no economic driver to hammer the economy back into shape.

For this reason, great pains were taken to assist big business on their bounce-back.

They bounced back very well.  Only this time, they didn’t need as many people to work for them.  Over the last decade, software had become smart enough to replace many jobs people had previously occupied..  Just that before the recession,  it wasn’t that obvious, It was only after one let people go and ran well or better without them, that one realized how just how fat you were beforehand.

So this brings us to the point.  We have invested in corporate bounce-backs as far as we can go. We have hit the ceiling as far as getting a return on our investment.  On the other hand, now on the labor side, we have great opportunity.  Every little investment over there into into putting people to work, will return great dividends very quickly.

We have to realize there as simply some jobs in society that cannot be performed by machines inside  corporate establishments or a banks.   Those jobs, simply put, are ones whose duty is to watch corporate giants and banks to insure that they comply within the law and prosecute them fully when they step out.

We need these jobs.  We really need them now.  After all, people do not work best without any accountability.  In fact the opposite is mostly true.   When you have to personally answer to a boss, you are more productive. Even when  that demanding boss is oneself; they still answer to someone. Consider the opposite.  If you could be paid whether you did work or not,  would you be as productive as you are now, where if you don’t do work, you don’t get paid?  Or would you take advantage of that opportunity, to heck with productivity, and seek to experience some of the quality of life you missed hereto? Our corporate entities and banks need to answer to a boss. That boss should be the American People via their proxies. the government watchdogs.

Those record breaking Corporate profits which are achieved by cheating society, are not really profits towards society’s benefit at all.  Some one has to eventually pay for them.  If you pump toxic chemicals into the ground to avoid paying for their disposal, at some future point when they hit a water table, society will have to pay to remove them and the damage they caused as well.

It is cheaper now to prevent that action while we have tons of money, than it will be to fix it when we simply do not.

The small business method to fix our economy, is to hire more government workers (invest in a brand new business) and pay for them out of the corporate earnings (our business already tapped out) because they can run with less people.

It is really no change from before.  Except for the person writing the check.  Prior to the recession these people worked for a corporation and got paid by their company. Where we need to go, is to have these people work watching over their former corporations,  now getting their pay checks written by the government, which gets its extra funding to cover their pay, from taxing the excessive profits those corporations are making.  Why are the making them?  Because they aren’t working as many people….

This is quite sustainable when viewed from this perspective, as would be readily seen by the owner of a small business.   If we were happy in the nineties, back when everyone was better off each year than they were before,  then we can be happy again, just by keeping all portions similar, just moving labor from the private to the public, and increasing assessments on the private sector to pay for it.

There are those who will scream.  They are selfish. They will be proven wrong.

As our planet becomes more crowded, we need more solutions. Some solutions are not very profitable and for that reason, we need a government capable to grow to meet them.

The old arguments of government being the problem, are long gone.  They weren’t true ever, though a lot of people believed them back in the day.  The opposite is certainly true now.  As a society we need more watchdogs working to make our lives better.  As a society we really don’t need more profits.  We have too many of them now and really, what good are profits really doing for us? None. Instead, we need more people working and buying things..  Nice things that someone’s got to make…

It is time to pivot in how we view the entire American economy.  Let’s hire us some watchdogs and cut the deficit while doing so, by increasing the rate of taxes on all those profits being sucked up in excess because a lot of workers got fired..

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