By: Les Carpenter III
Rational Nation USA
The only thing that creates wealth is the desire for something (demand) and the initiative taken by someone to satisfy the demand (supply). For a capitalist system to work efficiently it must be responsive to changing demand and react accordingly. The capitalist that is able to react the swiftest and provide the best quality with the most competitive price will always be in business. At least that is the way it should work.
Unfortunately in the real world with all of the government subsidies to business, the mentality of "to big to fail", the existence of crony capitalism, where CEO's are making well over 250 times the income of the average worker something is amiss. As a conservative I wish to see the vibrant and prosperous nation I grew up in be the reality for my children and grandchildren.
To create wealth essentially requires two things from the start. First is the demand for a product or service, followed by a supply to fill the demand. To do this obviously requires production of the desired product. Of course this requires people to produce the desired product or service and deliver it to a waiting market.
Here is the rub and the third leg of the stool if you will, the consumer. The people who created the demand in the first place so that somebody had to create a supply to satisfy the demand and in so doing create jobs. And here is the real revelation for some. The guys and gals producing the supply to satisfy the demand must be able to afford the product they are producing.
Check out one of my heroes and giants of the industrial revolution if you will. His name is Henry Ford. A man who realized for himself to become fabulously wealthy he would need to produce cars that his employees could afford to purchase.
Simplistic? Perhaps. But the simplicity rings true and should give CEO's, and the government that supports them cause for pause. If we are to have a hope of remaining a free and truly capitalist society we must support and rebuild the middle class. For it was the hard working dedicated middle class that built the economic engine that made America the most wealthy and influential nations ever known to man.
As the graph in the above link demonstrates we are becoming a nation of two classes, the wealthy and the struggling. Note that in 1965 the average CEO made 24 times what the average worker earned. In 2005 the number was 262 times that of the average worker.
As a firm believer in capitalism (and as a manager most of my adult life) I have no problem with the people that take the risk to build a business that creates jobs for people making a healthy profit. They should. However, when the very people that are responsible for insuring their success are left behind it creates the recipe for unrest and a declining society. If anyone doubts this I suggest a course in "The Comparative Political and Economic Systems of the United States of America and the USSR." If academia even offers such a course any longer. If not do your own research.
Which leads me to my final comments. Representative John Boehner has said he will support extending tax cuts for the middle class even if the tax cuts for the most wealthy are allowed to expire as Obama desires.
The video and following transcript from Politico.
A Senate Democratic leadership aide, meanwhile, sought to use Boehner's remarks to turn the pressure on Minority Leader Mitch McConnell, telling POLITICO, "It's encouraging to see that Boehner is where a majority of the American people are when it comes to extending Bush era tax cuts. The next question is whether Senator McConnell agrees."
“If the only option I have is to vote for those at 250 and below, of course I’m going to do that,” Boehner said. “But I’m going to do everything I can to fight to make sure that we extend the current tax rates for all Americans.”
It is about time conservatives show some common sense. Our founding fathers will be proud.
Cross posted to Rational Nation USA.