Saturday, June 4, 2011

Less Wall Street, More Main Street

I want to share a post by airmechild who captures much of what is wrong with the American economic model. I quote at length:
There is a show on one of the major networks, ABC I think, called the Shark Tank. Basically the show is about entrepreneurs looking for investment capital to start or expand their business. They pitch their ideas to a group of likely investors hopping to get at least one of them to invest money in their business.

In one show a business woman asked for an investment to expand her line of shoes into the next lower class of stores. Her shoes sold well in very upscale boutiques and she wanted to sell in stores like Nordstrom’s and Macys. All of which would require expanding her manufacturing and distribution base.

One of the “sharks” asked where she had her shoes manufactured. She replied Florida and Mass. His response was that she should moved it (manufacturing) to China. The show includes several minutes of bantering between investors and the client until a deal is reached. After all “you have to respect the money.” One of the investors will say during the deal making processes.

Simply, it’s all about the money. Wall Street, the unofficial indicator of “profitability” of Americas companies, has dictated it to be so. Over and over since Reagan came along we have heard the mantra “Wall Street says…” or “the Street…” as the gospel of business or the economy.

Remember this, if you learn nothing more about economics, Wall Street does not represent the American worker, businessman or America. It only represents the greed of the investors. In recent years many a business decision, work force cuts or outsourcing was made simply at the behest of Wall Street. Not one of these decisions bettered America, the economy or a worker (blue or white color.)

It has had just the opposite effect. Wall Street made pitting a company and its tax structure against communities and states for “competitive” tax rates. Another moniker for improved wealth to the investors. The next step was to pit American workers against Foreign workers. After all according to the “Street” our wages are to high.
So the contestant should move production to China? That's our investor class talking; if it can juice up profit margins, they are all for it. Lost jobs? Not my problem.

This infatuation with giving what the investor class wants is seriously undermining this country. They have convinced themselves, and apparently many others, that individual greed is all we need and the less one cares about others, the better off we will be. It is all about me and my profits. Labor is just an abstract, a necessity. The lower management can lower labor costs, the better investors like it.  

No wonder other countries are doing better than the US. Germans, for example, are in utter disbelief and think we are insane

Hat tip to airmechild. There is more at the original.

No comments:

Post a Comment