Populist Leaders

Thoughtful piece in MarketWatch entitled Populist leaders aren’t likely to make your income great again. I think he hits the correct points and his projected outcome predictions have a good chance of becoming reality. The one quibbling point is that he is part of the elite that those voting for populist leaders are revolting against. I do think it’s worth reading and thinking about what he says.

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Capitalism 4.1

The more capitalism makes the news, the less appealing it looks. If I look at other systems, I see similar problems. It’s not the structure per se, it’s the degree to which greed is tolerated and/or celebrated. Greed is destroying the US economy. The Crisis of Market Fundamentalism makes a similar argument and lays out reforms that are needed to avert the crisis. He notes, however, the current trend is in the opposite direction.  I’m tempted to read his book,  Capitalism 4.0 – The Birth of a New Economy in the Aftermath of Crisis.

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Building in public forces true competitive advantage

Jason Cohen is a local (Austin, TX) entrepreneur. He’s on his second successful startup, though it’s a late to be calling it a startup. It’s over 100 employees and several million in annual revenue. I’ve heard him speak several times and it’s always enlightening. He knows how to push the box in meaningful ways. His recent blog post, Building in public forces true competitive advantage walks its talk on the meta-level, he’s showing his approach to business and business models in public. This is a kind of capitalism I can support, not the Greed is Good kind.

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Right to Organize

Public corporations are capital organizing for increased impact and negotiating power. Unions are labor organizing or banding together for increased negotiating power. The former looks like it is enshrined in our culture and law. The latter is under attack, often successfully (e.g. the anti-union politics of Scott Walker, Wisconsin governor).

However, I’m not sure capital’s power is not being undermined also. C-level management (CEO, CFO, etc.) is taking power and money away from both capital (shareholders) and labor. The millions and sometimes billions paid to the C-level means less for labor and shareholders, directly (dividends) and indirectly (capital gains).

The Board of Directors is theoretically in charge of compensation, but C-level has quietly banded together also. Boards are sometimes appointed by the CEO or President. Boards are often interlocking, the CEO at one company is on the boards of other companies, and vice versa. There are efforts to break up this overly cozy arrangements, but they are piecemeal.

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Funding UBI

One argument against any Unconditional Basic Income (UBI) is how will it be funded? As The Universal Right to Capital Income argues, “If a universal basic income is to be legitimate, it cannot be financed by taxing Jill to pay Jack.” The author proposes funding it with returns on capital. All corporations use public infrastructure, public courts, and the social order. Corporations are dependent on a stable society.

So how should society be compensated? Taxation is the wrong answer. Corporations pay taxes in exchange for services the state provides them, not for capital injections that must yield dividends. There is thus a strong case that the commons have a right to a share of the capital stock, and associated dividends, reflecting society’s investment in corporations’ capital. And, because it is impossible to calculate the size of state and social capital crystalized in any firm, we can decide how much of its capital stock the public should own only by means of a political mechanism.

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How to Increase US Economic Mobility

The United States has ceased to be “Horatio Alger’s America – a country defined by the promise that whoever you are, you have the same chance as anyone else to rise, with pluck, industry, and talent.” Restoring America’s Economic Mobility lays out reasons and results. This is guaranteed to upset almost everyone, for a variety of reasons, mostly dogma or justice.

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Productivity Growth Omega Point

Productivity has been growing for years. Which means fewer and fewer people are needed to produce the amount of stuff that people have been buying. So there are layoffs. Unemployed people don’t spend as much, so demand drops. Some jobs have gone overseas to later return to heavily automated factories. In much of the developed world, there are not going to be enough manufacturing jobs to keep people employed. Europe seems to be catching on to this earlier than the United States. Robert Reich, a former US Secretary of Labor, explains Why We’ll Need a Universal Basic Income.

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Is Financial Security a Right?

The title of Financial Security Should be the Next Human Right puts me off. I’m tired of people who feel entitled to a free ride. What the post is talking about is more in line with a floor or safety net, what is often called Unconditional Basic Income (UBI). As the post points out, Alaska, a solidly Republican state, is already doing a partial UBI with their crude oil revenues.

Most articles on UBI come from democratic socialist countries. This post is from the New America think tank. They put a capitalist spin on it—UBI is seed capital for beginning entrepreneurs. Various UBI pilot programs have found that people frequently use the money to support themselves and their family while they pursue more education. More entrepreneurs and more educated workers is definitely something needed in this world. Depending on a high school education and a manufacturing job doesn’t work in the developed world anymore.

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Command and Control Isn’t Working

Command and control structures where decisions are made at the top and directives flow down to the workers and other people at the bottom of the hierarchy are increasingly not working for large organizations. Predominantly because the distance in time and space from where the decision is made and the environment where the work is carried out leads to a mismatch. What looks a good idea from an air-conditioned office in Washington DC based on satellite photos may not look so good in the forest being managed 300 or 3000 miles away.

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Review of “Emotional Currency”

The subtitle to Emotional Currency is “A woman’s guide to building a healthy relationship with money”. Until someone writes a man’s guide to a healthy relationship with money, this book will do for everyone, or at least every adult. This book is about improving your emotional relationship with money. The author is a therapist. When I talked with her before deciding to buy the book, it became clear that she encountered many people with unhealthy relationships with money, but those willing to work on the emotional aspects were overwhelmingly women.

And the key word is “work”. This is “emotional labor”, hard work that yields sizable results. Most technical improvements yield a couple of bucks, a couple of percent. No longer trying to buy your way to a happy childhood can save a lot of money.

The examples come from the author’s therapy practice, workshops, and support groups. She suggests keeping a journal, a “money memoir”, about memories of money growing up, current difficulties with money, and what comes up when you look at all this. How did the family talk (or not talk) about the family finances?

I was in my forties before my father confided his income to me. Somewhere in my fifties my mother mentioned that they briefly were millionaires on paper, after they weren’t any more. I wasn’t well prepared to deal with their rather large estate when they died. Even though they had done a good job of writing down where it all was, it was a lot more work than I expected. All three children pitched in, took care of their agreed upon parts, and we did not fight about it. The innkeeper where I stayed while settling the estate provided a contrast. Her parents had recently died also and one sister had grabbed all that she could and now the other children were trying split it up more evenly. Probably only the lawyers won.

I’ve found keeping a Money Memoir useful. This is hard work and giving it its own space helps move the work forward.

Because personal finances are generally not a topic of “polite conversation” beyond the occasional bragging, most of us don’t have much idea of what goes on in other people’s purses, wallets, and psyches. The common dynamics of shopaholics are there, but it is the uncommon dynamics that opens up what I think of as the emotional aspects of money. One woman in the book who grew up poor, but was doing okay as an adult, found herself unable to say “no” to an addict sister’s requests for bailouts every time the woman had a little extra to put away. She ended up setting a budget for bailout requests. She was willing to help, but there were limits. I’ve ended up doing something similar for charitable and political requests for money, so much a month. If I don’t spend it, it rolls over. Similar process for requests for time.

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