Sunday, September 12, 2010

Views From an Independent Conservative

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.

Via: Memeorandum

4 comments:

  1. Greed at the top levels has sent many of our jobs overseas. Now our companies wonder why no one is buying their imported products like they used to. I wonder where they think unemployed folks will get the money?

    On the flip side, there are millions of people that honestly believe that a company can stay in business without a profit and that company owners will continue to pump their money into businesses that give them no return.

    I really don't know which side is the most ignorant.

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  2. Greed is a product of lost responsibility. We have so removed people from responsibility of their actions that they only worry about themselves. True responsibility, means you worry about those you have influence over as well.

    The problem with America is too much government regulation and taxes. Throw in environmentalism and you have a recipe that moves business over seas and bleeds cash and creativity from our nation.

    Henry Ford had the right idea but government intervention has ruined it for everyone.

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  3. "Henry Ford had the right idea but government intervention has ruined it for everyone."

    I would only add to this statement... Businessmen have been only to willing to hold their hands out for the subsidies government was willing to hand them. Businessmen have worked hard to gain the governmental favors. They have been complicit in their own undoing.

    And at the taxpayers expense.

    To big to fail is a myth.

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  4. Oh, my...once again, its government.

    It was government DEREGULATION that led to the movement of jobs off shore (NAFTA). The whole concept of FREE TRADE (Milton Friedman anyone or the Austrian School anyone) came up with how much wealth could be created if there were no interfere and no arbitary barriers to trade...ah, national borders and soveriegn boundaries are thus barriers to free trade.

    Ideas have consequences and even conservative ideas have negative consequences. You cannot be for free trade and then cry because your nation is being bled dry....nations are impediments for free trade.

    UPS is a unionized, very regulated company and it is also very profitable. It is so because management does not try to find easy fixes but rather actually manages.

    Ford is a unionized company and plays by the same rules that GM and Crysler did...but Ford is a better run company and it did not need bailouts nor did it have to declare bankruptcy...same union, same workforce, same industry...different results because of management.

    Can't blame unions and can't blame government for everything...

    The problem with America is we have greedy, irresponsible management. Management that believes that buying a politician is cheaper than actually doing the job you were hired to do.

    Where once our issue was unions and their influence our issue today is business lobbyists and the Chamber of Commerce...they have made our management lazy and irresponsible.

    So now everyone is wondering where demand is? Well demand, or the consumer is broke, because they pay has been cut, their benefits have been cut, and they have to compete against third world labor or lose their jobs...

    Why would any capitalist invest in this country if they cannot get a return on their investment...and how can they get a return on their investment when demand has been saddled with debt?

    Better off investing where the money is....China, India, or Brazil....but the reality is, if you have more money than you ever dreamed of why invest at all....just make sure that you are not taxed to death and you can live very well without taking any risk....

    Thus is the reality of capitalism in 2010....thanks to the brillance of Wall Street.

    ReplyDelete

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