Tuesday, February 2, 2016

REAL Populism COULD Offer Real Solutions

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IF I were to make a Populist argumentTHIS would be it:

While it’s long been mathematically proven that the Command Economy CANNOT work (1974) and today, Cuba, Venezuela, Haiti and Zimbabwe are testaments to that fact, the unbridled market doesn’t work either.

Just as the Command Economy discounts the most critical aspect of an economy – the CONSUMER and slavishly catering to delivering what the consumer WANTS, the market economy doesn’t understand who its primary investors are.

Any entity's primary investors are also its “TALENT,” that is, its WORKERS.

Take, for instance, Uber. A great idea, sketched out by its so-called “founders,” but shaped, molded and made workable by its primary investors, or workers.

What Uber has successfully, albeit accidentally highlighted is the pernicious effects of PUBLIC SECTOR GREED. Cities, like New York sell “Taxi Medallions,” for huge sums of money and then allow the owners to fashion abusive contracts with its workers.

A person spends $500,000 on a New York City Taxi Medallion and they want/require a return, so maybe they “rent out” their cab with that Medallion for what amounts to 60%, 70% or more of a driver’s take during a 12-hour period.

That is wrong on every level.

Taxi Medallions MUST come with strict rules about driver/owner splits (something along the lines of a minimum 60% to the driver). YES, that would greatly reduce the value of such Medallions and drive the market price for them down, perhaps way down to $25,000 to $30,000...or less.

Likewise, Uber’s “founders” don’t seem to understand whom their primary investors and co-creators are. Bottom line, Uber, like ALL other such entities, was granted access to the people’s marketplace by its representatives in government. You can’t have drivers earning $60,000/year when “founders” are raking in BILLIONS.

That money simply doesn’t belong to those organizers/managers.

So, what should be done?

The overwhelming bulk of those profits should go to pay for shoring up and greatly improving Social Security, expanding Medicare & Medicaid programs, thereby improving the lives and health of ALL citizens.

You may well ask, "Under WHAT premise exactly, do we take such freely earned profits and make them a public trust?"

The answer, is that in truth BOTH the so-called "owners"/founders are co-creators of this entity and as such BOTH hold inviolate property rights to those profits. The workers/primary investors have agreed to a limited, or set amount of compensation for their services/work...and so must the "owners"/managers. The rest must be entrusted to "The people's pottage."

The canard is often repeated that, “Absent these unbridled profits producers won’t produce, innovators won’t innovate.” That’s a flat out LIE.

Such people aren’t motivated primarily by money, but the NEED to create...they’ll innovate, create and produce anyway, even if the bulk of those BILLIONS go into a public trough.

That leaves the question of “ownership,” or PROPERTY RIGHTS.

Doesn’t the basic idea of Uber belong to Travis Kalanick and Garrett Camp?

No, not when you consider that it is the workers (drivers) who’ve perfected the idea and made it workable. It’s the workers/drivers who breathe life into those ideas and make the entity work. Those workers are Uber’s PRIMARY investors. In a very real sense, they too hold viable PROPERTY RIGHTS over this idea.

So, just as the workers/drivers agree to take a set amount of compensation for their work, so must its managers and/or “owners.” Of course that would require capping ALL such compensation (in ALL forms) to ALL CEOs, COOs and CFOs. That wouldn’t be a bad thing at all, in fact, it would be a HUGE improvement all around.

Executive pay SHOULD be directly tied to how well a company does during the tenure of those executives...yes, theoretically, an Executive Team COULD owe money should they preside over a catastrophic failure of an outfit. As draconian as that might sound, AGAIN, some of the very best, will always rise to the challenge, even when the stakes are so high. The primary motivator is the CHALLENGE and NOT the COMPENSATION, which would STILL remain quite high for successful “owners”/managers.

Once that is established, the only question left is, “What to do with bulk of those profits.”

The answer SHOULD BE, “Invest them back into the people,” in the form of increased Social Security benefits, into Medicare, Medicaid, shoring up worker pension programs, etc. so that more people will have access to better lives and truly viable health care.

This form of populism is neither Capitalist, nor Socialist. It is a true hybrid. It’s sad that today’s populists, like Bernie Sanders seem unable to articulate this at all, probably because such people foolishly refuse to accept that PROPERTY RIGHTS are inviolate and that ONLY the market can work. That’s a HUGE problem for them.

On the other side, those like Ted Cruz, even Ben Carson and Donald Trump just don’t seem to believe in the limits of ownership. They don’t seem to understand that the innovators, or “founders” are NOT the only ones with viable property rights over an entity. Especially when those entities were primarily created by their primary investors/WORKERS.

There is a path from where we are, to where we want to go, but it requires greater connectivity and inter-dependence between worker/investors and owner/managers and BOTH their dependence upon the proper role of government...which is NOT merely protecting one side’s short-sighted “property rights,” while ignoring those of the primary investors/workers.

The PROBLEM with this is that we can no more trust government to, "Do the right thing," any more than we can trust Corporate entities to do the same. Human nature makes clear that humans ALWAYS press their advantage when they have one...ALL humans. Worse still, generally, it's the weakest and most pathological humans who are drawn into government. Just an inconvenient fact.

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