Saturday, October 8, 2011

Occupy wall street

I was happily ignoring the recent political banter until I realized the OWS movement had tea-party like resilience.  I went hunting for what these folks actually want, and unfortunately, all I could find was a ridiculous list that I have to imagine do not represent the actual movement's desires.

From what I could find, this nebulous movement essentially claims that the 99% poorest people are frustrated at the 1% richest people, and wants those people to somehow alleviate those frustrations, though no one has said how.  Sub-issues include large CEO salaries for failing companies, "Corporate greed" (whatever that is) and re-unionizing america, etc.

What I do not understand is there is no better avenue for wealth building then a corporation.  I do not mean wealth building for the 1%, which happens to be true, but corporations are the best option for wealth building for the 99%.  A corporation exists to make money for its shareholders.  There is no greater accountability model than a publicly owned company making money for shareholders.  In OWS terms, the 99% work for the company which is run by a 1% person whose entire goal in life is to make the 99% more money.

The problem is, as always, one of education.  Our school system does not teach investing.  It does not teach the masses how to use the system to build wealth.  It says, go to work, pay into a 401k and don't worry about it.  Then, after years of realizing others are getting rich, and they are not, they revolt saying, "You should give up your money to me."  Because no one understands how the system works, corporations are left to run amok.  Everyone wants to blame the housing crisis on greedy bankers, because hundreds of thousands of people believed the bank had their best interest at heart.  You should never expect a corporation to make a decision that benefits you, unless you are a stockholder.  Knowing that is empowering.

Here is an example.  McDonald's goal is not to sell you a healthy meal.  Its goal is to build wealth for its shareholders.  It has determined through market forces what products will sell the most, and it sells it.  There are people who are well paid to determine which fries the people will buy, and how to do so profitably.    If you are invested in McDonald's, you want McDonald's leadership to make the very best decision that will build wealth since that is its goal. As consumers, our goal is (should be) to be healthy. If everyone decided McDonald's hamburgers were terrible for you, and stopped buying them, McDonald's would stop selling them.

So to the OWS folks, I would say stop trying to force others to make good decisions for you.  It is not the corporation's job to keep you healthy, or wealthy. They have done nothing wrong by building wealth. Learn the system so you can benefit from it. Focus on educating the consumer instead of simply placing blame on executives who are doing exactly what they have been asked to do, make money.

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Now that that is said, there should be a question as to whether wealth building should be the primary focus of a company. In a corporation who answers to its investors, this is the goal by definition. In a small business, without the accountability to the shareholders, the owner/operator have the freedom to pursue whatever goal they want. That could be wealth, status, human equality, feeding the poor, whatever. I believe that companies should be driven by a higher purpose then just wealth building, but that is not what the corporation model is for.

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