There are a lot of problems in the world. It is my belief that the solutions to the problems of the world revolve around the same principles as a major automobile manufacturer’s mantra. Or around any major manufacturer that survives off repeat business. It is not profitable to produce a product that lasts forever. If this were the case, you might as well market a stick of chewing gum to cost a million dollars. In the poetic words of Chris Rock “They got metal on the space shuttle that can go around the moon and withstand temperatures of up to a million degrees. You mean to tell me you don’t think they can make an Eldorado where the fuckin bumper don’t fall off?” His point here is that there is no money in the cure. If you solve a problem, there is no way for people to profit.
Take wars for example. There are hundreds of companies that employ thousands of people to make Kevlar vests, rifles, claymore mines, reinforced Humvees and Blackhawk helicopters. You can’t market that in Rural Alabama. Detroit maybe, but not every city is a Detroit. Do you think the NATO would get involved if someone took over Greenland? Not unless there is a shortage of ice cubes. Now, I do think this is warranted to an extent. We need the oil. Right now, oil is the blood that pumps rapidly through industry and civilization running a marathon. The only solution is to slow down so we don’t pump the blood so fast, or find a new type of carrier to wean us off our addiction. However, the people who make blood would be kind of pissed off.
Dangerous Thinking
The radical thought here is this - What if the economy works in the same way? Money is what ties cultures together. We trade with each other, and this trade may be in goods, but you don’t always produce the goods someone else wants. Someone decided it would be a good idea to create a good that would be useful to all people. This good is money. Every society may have a different type of money, but money is good everywhere, except for maybe the isolated tribes in South America.
Consider this: all of the money in the world is gathered up and counted. Then the money is distributed to each and every person in existence equally. All is balanced out, and each person is as wealthy as the next, in terms of their ability to spend money. Imagine next that one person creates an amazing new technology that, I don’t know, let’s you levitate, but it requires you to give half of your money to them. You buy this incredible item, but you are now half as wealthy as the person who sold it to you. The amount of money in the world is the same, but there is now imbalance in the system of wealth. More importantly, wealth is created. Wealth was non-existent before, because there was only one level of wealth. There was no need to define it.
Extrapolate this scenario to our current system of wealth. Bill Gates makes an obscene amount of money. His wealth started because people were exchanging money for the goods he was producing. The consumer now has less money, but the wealth isn’t diminished because they now have an asset – a different type of currency that may not be able to sell as easy as money, but it still has value. On a separate level, banks make an obscene amount of money too. This is confusing to me. If I take my money to the bank, and I give them $100, in one year I may withdraw my account and the bank gives me $101. Where did this extra dollar come from? Easily, the answer is interest. The bank took my money, invested it into someone, or something else with the promise that in one year, they will get $102 back, thus making a profit of $2. This goes on through chains of investments, geometrically earning stronger profits each time.
The problem I have is that this profit must come from somewhere. It was easy with Bill Gates. We know that our money went to Bill Gates, in trade for a computer. When you invest, there is no telling where the money came from. I can tell you this: The money was not invented, nor did it appear from a puff of smoke. With a global economy, this money could come from anywhere. I know that when I give money to Bill Gates, I get a computer, he gets money to repay the materials it took to make the computer, to pay someone build it, some to run the business, and a little extra to grow and innovate. The problem with large scale distribution and acquisition of wealth is that the wealthy get wealthier, while the consumer has little to show for it. Even if both parties make a profit, the money is still coming from somewhere. Simply put, the rich get richer, while the poor get poorer. This isn’t anything new, but it surprises me, and may surprise others, at just how quickly this distribution of wealth becomes more and more unstable.
Disparity of Wealth
At this point, someone might hear “distribution” and “wealth” and think I’m a Djembe-playing hippie that has no job and expects to live a lifestyle of a hard working American. I do play a Djembe, but I also work for what I earn. Also, if you were wondering, a Djembe is a hippie hand drum played mostly in hippie drum circles at hippie festivals or in the back yard of a frat house.
I took a look at some statistics from the sociology department at UCSC. Here is the website:
Sociology.ucsc.edu/whorulesamerica/power/wealth.html
The statistics revolve around the distribution of wealth in the United States. When I mention the word “wealth” I am referring to cash, and investments and assets of positive value. In 1998, it was measured that 10% of the population owned 68.8% of the United States wealth. Almost a decade later, in 2007, 10% of the population owned 70.9% of the wealth. Not a very big increase at first glance, but when you consider there are over 300 million Americans and Trillions of dollars of wealth, it makes a difference. More disturbing is that in 2007 less than 40% of the population, collectively, owned 0.2% of wealth. Furthermore, in 2007 the top 1% owned 34.6% of wealth, up from 31.9% in 1986. This means the rest of the population owned 65.4% of the wealth in 2007, down from 68.1% in 1986. This translates to a 8.46% growth for the top 1%, with a 3.95% decline in the bottom 99%.
These are a lot of statistics, and it took some thinking to figure out what the top 1% and bottom 99% actually represents. What it comes down to is that in 20 years, the rich got richer by 8.46% while the poor got poorer by 3.95%.
We would have to increase the distribution of earners of bottom earners, and subsequently decrease the distribution of top earners in order to keep the % of wealth owned at an equivalent. This clearly shows the disparity between social class – the poor, middle, and rich. The poor give the rich their wealth. If you don’t believe that, then I have one final section you should read.
Historical CEO pay
Chief Executive Officers are the leaders of a company. A company’s goal is to make money. It is the CEO’s job to ensure the company makes money. With all of the cutbacks in labor, investments and innovation in the last decade or two, it is clear that companies are not making money. However, CEO’s are given more and more pay each year. Consumers, which is easily largely held by the poor and middle class, are directly affected by this. If the company pays the CEO more, they have to pay someone else at the company much less, or not at all.
The following data comes from this source:
www.aflcio.org/corporatewatch/paywatch/ceopay.cfm
In 1980, a CEO earned an average of 42 times the average laborer salary. That’s already a lot. I’m sure it hasn’t changed since the economy isn’t any better right? Right?? It will come to no surprise to you that I am, in fact, wrong with that thesis. In 2010, CEO’s averaged 343 times the average salary of a laborer. This means, if you were the average CEO in1980, and still held the position today, congratulations, you have earned a total 816.7% increase in salary during your career. It’s no surprise that CEO’s don’t hold a position for more than a few months or years. With that kind of dough, I would be sitting on a small island I purchased with my sons’ allowance that I kept for that one time he glued Mrs. Klein’s butt to her chair in Home Economics. I know it’s funny, but you have to be a good parent every now and then. Small disclaimer: I don’t have kids, nor am I a gazillionaire.
When you think about it, we have been paying the top earners in this country more money to make us poorer. They control more than just a goods and service market. They have great influence with politicians, which I think everyone can agree screws us over in some way or another. In turn, we are paying them to screw us. Hard. I guess that makes them the highest paid prostitutes in the galaxy.
Many people argue that taxing corporations that make huge sums of our money more than others in lower earning brackets is not ethical. We can’t tax them more. The solution isn’t taxing them more. The solution is actually taxing them.
The following data comes from here:
smbiz.com/sbrl001.html
This will be quick, because this is a really long entry. The following table outlines corporate income tax rates for the last 5 years:
Income (in Thousands) | Tax Rate (%) |
0-50 | 15 |
50-75 | 25 |
75-100 | 34 |
100-335 | 39 |
335-10,000 | 34 |
10,000-15,000 | 35 |
15,000-18,300 | 38 |
18,300 and up | 35 |
Why in Grimace’s good name do we start dropping the tax rate? This is only one measure to help corporations earn more and more money. This aligns with the trickle-down theory that if we increase the revenue of top earners, it will somehow magically funnel towards the poorest class of our society. I think this theory was created by someone who never had to wipe his or her own ass.
TL;DR
I don’t know how to fix the economy. I would say, spend more moderately, live within one’s own means, reduce waste, increase efficiency, and fix taxation. I just sound like another politician without the actual means to an end to support my dreams. We have to take each of these goals and focus on how to accomplish them, using simple logic. If you can’t afford it, don’t buy it. If you make money, you have to give some to your government, or I swear to Cupid if your house burns down the firefighters better not be there to put out the fire. Stop funding ridiculous programs like how to safely dye a lizard pink. Finally, my motto: there must be an easier way. If there is a way to do something, there is a more efficient way to do it out there; we just have to use a little thought and logic.
Finally, the lowest earners have to spend the same or more to keep our economy running, but they are earning less than they did 10 years ago. The rich are getting richer, and they have the power to move the economy in a growing direction. This would, however most likely make them poorer. So the question in their mind might be: Why would we want a cure?
