Posts Tagged ‘purple’

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What’s with Corporate Capitalism?

2008.November.20

Back in grade school, even high school, capitalism seemed like a pretty straightforward concept: If you made a decent product that people needed and sold it at a decent price, you’d make a good living for yourself.

The simplicity seemed to encourage long-term strategy and thoughtful improvements. Specialization was important. You wouldn’t cut back on quality unless you had to, because the name on that product was probably your name or the name of someone whom you respected and you didn’t want to see it tarnished. Customers would know their role in this system.

But that isn’t really how American capitalism works, now, is it?

The rule of the day is corporate capitalism, since those small businesses politicians love to court account for less than half of private payroll in the U.S. (and keep in mind that payroll does not even include investment income).

Corporate capitalism makes money for investors by doing whatever makes the most profit. It doesn’t have to be a product, sometimes it’s not even much of a service. Profit cannot be allowed to level out, it must increase each year, by leaps and bounds, to remain competitive. That means unrestrained, unyielding growth. Specialization means you’re not thinking big. Brand names are frequently exploited to promote something unimpressive, and if you’re not growing fast enough, you use advertising to create the demand. Urgency encourages short-term strategy and artificial innovation to fix what ain’t broke. Good products are lost because the business model is not sound, or they get corrupted by overreach and their quality declines. Market share is more important than customer satisfaction, and if you can’t beat your competitor, you should buy them.

And in case you haven’t picked up on this little nuance yet, for most publicly-traded companies, you are not the customer. Many corporations actually have it in their mission statements that making money for their stockholders is a higher priority than most, if not all, other goals. These guys believe strongly in spending money to make money, so it’s the investors’ money they’re after, not yours. The investor is the customer. You are the product.

Well, what’s wrong with all that? Unhinged growth can’t be all that bad, can it? Well, let’s just ignore the moral ambiguities about how much (money, debt, conspicuous consumption) is too much and ask ourselves, logically, where does it end? How big is too big? If the goal of every company is continuous growth, eventually that company could (in logical extreme) eventually reach every human being on this planet and sell them more than they possibly have time and energy to use. Unless we find extraterrestrial life by that point (and they’re big on bling), where does the market go? Sure, the market will correct itself; businesses will fail, people will lose their jobs, and good products with bad business plans will get lost.

In more realistic terms, every market has a limit (it’s the law of supply and demand), and you can only push it so far artificially before it stalls. The larger any institution becomes, the slower it is to respond to change, even though that’s how growth happens. Business models that depend on new funding get into trouble when the new funding isn’t coming fast enough. An economy based on continuous growth can’t just slow down. Deceleration is negative growth; it’s shrinking your profit margin and maybe even losing money, so your stockholders sell. Deceleration is death.

The reason so many people get angry at corporations is that the people most vulnerable in a situation like bankruptcy will be those who were furthest from the planning. Enron was the exception, not the rule, for sending a couple of executives to jail for clear violations of the law. Our country is usually forgiving to money-masters who can afford a good accountant and twelve good lawyers. They just get a bonus and an offer for another corporate leadership position – it doesn’t even have to be in the same industry! – and the rest are told to pull themselves up by their bootstraps, not ask for unemployment or non-corporate welfare, and get out of the way of those who are still living the American Dream.

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Anti-gnostications

2008.November.5

What can I say? I’m better at asking questions than predicting answers. Because I am too tired from celebrating to write a real entry today, allow me to react to and modify my previous entry:

“Barack Obama wins nationally with a popular vote over 55% and approximately 3/4 of the Electoral College. I wouldn’t call it a landslide, but definitely a solid mandate.”

Right call, wrong numbers. Just a matter of scale, really. I think I meant to say 55% and EV of 3/5, or I was just too lazy to look at the margins. The 55% didn’t happen because the difference was more stark in McCain’s victory states than I had expected, but he still won the highest percentage in twenty years. Anyway, his victory passed 3/5.

“Obama loses Texas by 3-5 points, faring much better than expected. If only he’d spent some cash down here.”

Again, right call, but I forgot where I live. Obama was far from striking distance at 11 points back, but it halved the 23 point spread Bush had over Kerry in 2004.

Sarah Palin tries to run for President in 2012, but drops out before January is half-over. Don’t count her out from the national scene, though. The biggest mistake Democrats made all year (even more than dragging out the Michigan/Florida limbo) has been misjudging her role in the campaign and underestimating the contribution she makes.”

Too early to tell, but you’ll notice that her name is still on the lips of many commentators, and not only to receive blame. Am I the only person who thinks she looked embarrassed at McCain’s concession speech?

Rick Noriega loses by 5-7 points.”

By which, of course, I meant 12. :P

“Senate becomes 59-40-1, after upsets in Georgia and Minnesota.”

Depending on which site you consult, there’s still a chance, but it looks like it will be closer to 57 or 58 (including Lieberman and that other independent liberal I forgot to count). Georgia is probably Republican though, and Minnesota is deep into recount territory.

“Dems are icy to Joe Lieberman but allow him to continue caucusing with them to maintain their supermajority. Liberal policy not the death-knell to business that conservatives prophecy, but social policy progresses less than expected. Foreign relations improve quickly in early months, but plateau halfway through the first year thanks to new tensions around economics and Russian chest-beating. Countrywide, Democrats grow increasingly annoyed with Nancy Pelosi, but Hillary Clinton becomes a more balanced and broadly respected figure in the Senate. Old white men become passe and 2010 sees more nonwhites and women running for office than ever before.”

All pure speculation, and will be years before we know for sure.

“Texas House goes to Dems with a slim majority. Speaker Craddick is replaced by someone I’ve never heard of, someone else I don’t know becomes Minority Leader, and the possibility of a non-partisan commission for redrawing district lines is given serious, state-wide consideration but may not pass in time for the next redistricting.”

Well, no fudging numbers here, I was flat out wrong about the majority. But the rest is still possible, and the Legislature will be almost purple next session.

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