Are we, or have we been, moving into a trend in which capital surpasses labor as the economic engine?
New York Times columnist and Pulitzer Prize-winning economist Paul Krugman thinks so.
From the working person’s viewpoint, the economy is still quite depressed. But economic figures are improving and corporations are making record profits. Many of these companies are holding on to their cash for dear life, fearing the investment and regulatory climate now and to come.
Krugman points out that manufacturing is moving back to the U.S. from overseas. He uses the example of manufacturing computer mother boards. They are made largely by robots, so the cheap, Asian labor is no longer needed. Perhaps that’s why we hear that China’s economy is contracting.
But let’s look at the way things are, from where you sit. Chances are, if you are still working, you have at least some fear that your job is going to go away before you want it to. Perhaps you are saving your pennies, and not spending frivolously, in anticipation of being shown the door at work. The U.S. savings rate needed a shot in the arm, for sure, but how it is getting it is quite disconcerting.
Perhaps you are out of work, and have been for a while. You scratch your head because the job you had, which you had thought, or even had been told, was vital to your company just went away. It’s not as if you had done a lousy job at it and were replaced. Your job just went away, and it’s not coming back.
Meanwhile, you hear about record profits for companies and wonder why they are not putting some of that money back into their operations, i.e. in creating new jobs. Well, they probably don’t have to. Technology has improved to the point at which machines replace people in big numbers. No matter how much money they have, companies will not create jobs they don’t think they need. Some will actually cut jobs they should maintain.
This phenomenon is detrimental to what we know as the middle class. Because those with the capital have political benefactors, they may be creating a political system that lets them get richer at others’ expense. When the successful are protected in this way, the less successful become more vulnerable. As Krugman says, we’re not talking about a gap between the educated work force and the less educated. In this milieu, EVERYONE gets paid less. When the less successful become more vulnerable, they not only get paid less for what they do. They pay more for what they need.
INHERITANCE TAXES CAN HURT
Krugman says that the rich also are fighting to eliminate inheritance taxes. He may find some disagreement here, because inheritance taxes can prevent family businesses from being given to future generations of that family. Sometimes, families have to sell their businesses to cover the tax bill, and there is something wrong with that. On the other hand, there could be large amounts of wealth being easily transferred to people who are already wealthy, without adding to the economic engine.
If this trend of forced idleness continues, it bodes ill. Look at what is happening in other countries, where young, often educated people can’t find work. Such free time among a disgruntled group can lead to all sorts of bad things.
However, in all this, there is good news. There are lots of ways out there to make money, without worrying about having a traditional job. To check out one of the best, visit www.bign.com/pbilodeau. Hear and see the stories of how average people are making above-average incomes, and helping others do the same. It also attacks the notion of paying more for what one needs.
So if you are working, think about your plan B. Savings will certainly help you, but they may not cover all your bills without a paycheck. If you are not working, don’t be discouraged. Check out one of the many opportunities there are, through which average people, regardless of education, are prospering. Sometimes, becoming successful just requires being open to looking at something different.
It has been said that the best way to help the poor is to not be one of them. The best way to fight the capital vs. labor battle that Krugman illustrates is to find ways to generate more real capital. Kurgman calls the capital guys robber barons. If you help people prosper with you, that’s makes you a benefactor.
Peter
Tag Archives: The New York Times
TOUGH PERSONALITIES, EGOS ? WE NEED THEM!
Have you ever worked for someone who was so driven to accomplish what he wanted, he didn’t care who might get hurt – physically or otherwise – in the process?
Have you ever dated someone that was so driven with ambition of one sort or another, that you were an afterthought to him?
As difficult as these people are to be around, we need them.
They usually accomplish great things. We need to be a society that allows them to do their thing, as obnoxious as they may be, New York Times columnist David Brooks says in an October 2012 column.
Prosperity is often driven by small enclaves of extraordinary individuals that build new industries, and amass large fortunes, says Brooks. These folks often are unpleasant to be around.
He uses Elon Musk as an example. Musk, 41, grew up in South Africa, migrated to Canada at 15, worked on farms and at a lumber mill until going to Queens University in Ontario. He transferred to the University of Pennsylvania to major in physics and economics.
He believes the Internet, sustainable energy and the space program will be the future prosperity drivers. He dropped out of Stanford’s graduate physics program to start Zip2, an Internet map and directory company. He sold that to Compaq for more than $300 billion.
He helped create PayPal, then SpaceX, a space exploration company. He also helped create Telsa, an electric car company, SolarCity, a solar power company and Everdream, a data-center software firm.
He’s found success in everything he does, but, though many employees love him, there has been at least one blog set up to catalog his mistreatment of those he deems mediocre, Brooks says.
He’s been through two marriages, and one of his ex-wifes took him to task brutally in an article in Marie Claire, according to Brooks.
DO YOUHAVE TO BE SO OBNOXIOUS?
The lesson here is that we need people who think big, who are brutally focused on their visions and don’t stop until they accomplish them. The question is: do they have to be so, well, obnoxious, if they don’t think you are as good as they are? Is all that success really worth being a difficult husband or employer? Does a path to success have to be completely non-stop, or involve trampling others in the process? Many say it’s not the success that’s most rewarding, it’s the journey. And, it’s the people you meet, and help, along the way that matter.
Are you a person who prefers the leisurely drive or the quick flight? Would you rather take a walk through the park or the ride around the block to a destination? Is money, power and wealth your be all and end all? Are you getting richer, at the expense or off the backs of others, just because you can, and you think you are entitled to? Are the folks who may have tried to help you on the way insignificant?
It takes many kinds of people to make a world. It takes many kinds to create a world in which we all benefit. It’s great to be bottom-line focused, but you are probably missing something if you pay no attention of how you got there, whom you helped along the way and whom you’ve hurt.
If you are a driven person, take stock of who you really are. Choose relationships carefully. It would be wrong to have the person who loves you the most be unable to hang with you. A few pleasant stops on the way to the top never hurt anyone – and may have helped many.
Ideally, driven people also are nice people. They don’t expect everyone to be like them, and they love those near them for exactly who they are. They work around the “stops” with pleasure, even if they get to the top later than they’d planned. If you are that kind of person, or would like to be, visit www.bign.com/pbilodeau. Most successful people you will see never let success get in the way of the journey.
If you’re like Elon Musk, check out the site as well. You may be surprised at how pleasantly a fortune can be made. You might even learn how helping others can help you.
Peter
WHO BUILT ME
“You didn’t build that.”
That quote, by U.S. President Barack Obama in the summer of 2012, implied that entrepreneurs had plenty of help building their businesses. It was taken wildly out of context.
Related to that, New York Times columnist David Brooks, in August 2012, fielded this question from Confused in Columbus: “How much of my success is me, and how much of my success comes from forces outside of me?” In other words, “who built me?”
Brooks answers by saying: “As you go through life, you should pass through different phases in thinking about how much credit you deserve.”
He basically says that younger folks have full control to build their lives as they see fit. Some call that sowing wild oats. But it’s more than having a good time, and doing things you might regret later. It’s a sense of starting fresh to build “you.”
As you reach middle age, Brooks says, you are more governed by circumstances. Your part in your life may be more navigational through those circumstances, than creative. As you hit your 50s and 60s, says Brooks, you start to see relationships as more important than individuals. Who influenced you through your life? Who helped you? Steve Jobs’ greatest accomplishment was building a company, not a product, Brooks says.
In your elder years, you are struck by how you got there. You are struck by the astonishing importance of luck – whom you met, where you worked, Brooks says.
Brooks concludes that you should start life in complete control of what you do, and will be, and you should finish life recognizing that you probably got better than you deserved.
The latter statement probably refers to humility, not that you “didn’t deserve” to be where you are.
WE ALL DESERVE GREATNESS
We all deserve greatness, but it must be achieved, not just received. Some obstacles will befall us on the road to greatness. Those who go around, climb over or go through — take your pick – those obstacles will eventually see greatness. Hopefully, you will go through those obstacles without hurting others – in fact, you will help others. The process of becoming great is as important as the greatness itself.
Also, greatness comes in many forms. As you progress through life, you will find not only the type of greatness you wish to achieve, but also how you wish to achieve it.
You will learn that you cannot do it alone. Help others as others have helped you. Parents, teachers, mentors, spouses and others who become part of your life will play a large part in building you. Be grateful to them, long before your elder years.
You play a big part in building you. Other people and things help along the way. Sometimes we have control of those people and things. Sometimes we don’t. We come to realize that people, working alone, can only do so much. We realize that this is not meant to discourage us, it’s meant to motivate us, and instill gratitude within us.
Don’t let circumstances discourage you. Let them show you what you need to do to achieve greatness. Have faith that you can achieve what you want to achieve, but will need and want help along the way.
In fact, you deserve to see potentially a great life for you. Visit www.bign.com/pbilodeau.
You may start as the architect to build you, but will use many subcontractors as you mature. The entrepreneur in you knows he can’t do everything alone. You can HELP build you, but you need the proper context for the complete you to emerge.
Peter
SMILE, SWEAT AND GET
Smile when you talk.
Sweat the small stuff.
Get your hopes up.
Andy Andrews, a New York Times best-selling author, discussed these simple ideas at a presentation Aug. 3, 2012, at the Team National convention in Orlando, Fla.
Let’s take them one at a time. Have you ever talked to people who always seem to have a scowl when they speak? Life has gotten them so down, and they are so miserable, that they – at least subconsciously – want to drag you down with them.
There are others who are so angry much of the time that you can hear their anger, even if they are not angry at you. They have that look about them. You could be talking about something funny, and they would still have that anger about them.
Then, there are those who smile when they talk. They just seem to exude a persona that you would gravitate to. To a few folks, smiling while talking comes naturally. Most, however, have to work at it. Andrews, who wrote “The Butterfly Effect,” among other books, believes smiling while talking is the key to health and wealth. If people want to be around you, they are more than likely to do business with you, or otherwise want to work with you.
Smiling does not mean a big, toothy grin. It means always having a happy look as your mouth moves. It’s OK that it may not come naturally. But if you work at it, it may become more natural with time. Of course, the key is to always be happy, even when things are not going as you would like them. People want to be around happy people. Good things will come to those who smile while talking.
Smiling while talking may seem like a little thing, but Andrews, and others, have said that we need to be concerned about little things. When someone says to you, “don’t sweat the small stuff,” think about how successful they are at whatever they are doing. Successful people sweat the small stuff. They watch what they eat. They watch what they do. They watch what they say. It’s the small stuff that people see. If they see attention to the small stuff, like always showing up for appointments on time, they will believe you’ll be a great performer on the bigger things.
Even things like buying – or not buying – that candy bar can make a difference. The extra calories will require some effort to work off. It’s likely overpriced — $1 or more. So the buck you spend is a buck that you don’t have any more to use again. Multiply those bucks over weeks, months and years, and you see why Andrews says to sweat the small stuff.
When you start a job, project or something for which there is a long-term commitment, has someone ever told you not to get your hopes up? When you apply for a job, has someone ever told you not to get your hopes up, because if you don’t get it, you’ll take the rejection better?
Most successful people are optimists. They ALWAYS have hope. They approach everything they do anticipating, even expecting, good outcomes. They know not every outcome is going to work out, but they also know that expecting failure begets failure. If you expect success, you’ll see success. If you expect good things in the future, they will come. So, go ahead. Get your hopes up!
Incidently, if you are the optimist who watches the little things and smiles when he talks, visit www.bign.com/pbilodeau. It will enhance your hope, make you sweat less and encourage you to smile!
Peter
INSECURITY BEGETS A SAVINGS MENTALITY
Imagine living with such fear that a recession, an illness or bad weather could bankrupt you.
Some Americans live that way now, as do many around the world. But a few decades ago, nearly every American felt that insecurity.
New York Times columnist David Brooks, in a June 2012 column, says although the nation needs to reduce its deficit, Americans don’t really want to. Despite the political bluster, Brooks says, solving the real problem of reducing debt is fraught with political peril.
The current generation of Americans has been led to believe that debt is not a problem. They live on borrowed money, via credit cards, all the time, and think nothing of it. There is always insurance to take care of the big expenditures. Buy now, pay later. Or, pay a small premium and live without fear.
Before the plethora of insurance products, before credit cards became actual currency, Americans always lived in fear of that big event that would either kill them, or leave them penniless. The only way to postpone the inevitable was to save their money. That meant giving up a lot of things one might want, and even some things they need. People would die because they could not afford the treatment that would save them. Secure families were wiped out by drought, tornado or hurricane. There was no insurance, only self-insurance.
Even the staunchest deficit hawks don’t want to see EVERYONE, except for the very rich, living on the edge through no fault of their own. They even want room to save the irresponsible from themselves. But to do that costs money. Hence, we have a debate about government spending vs. over-taxation.
GOVERNMENT SPENDING IS DROPPING
Let’s frame the debate in reality. First, as economist and New York Times columnist Paul Krugman preaches, government spending IS decreasing, mostly at the local and state levels. Those budgets are getting balanced off the backs of teachers, firefighters, police officers and other government workers who are losing jobs at a rapid rate nationwide.
As we try to get more people back to work, every teacher, firefighter, police officer and other public worker who gets laid off ADDS to the unemployment problem. Think of what bigger cuts in government spending will do to unemployment. Would such cuts enhance the private sector to the degree that it could absorb all those government workers – plus a good number of those public and private employees already out of work? Common sense would say, probably not. That’s not even considering the PRIVATE businesses that might close as GOVERNMENT cuts more spending.
We do need to get government spending under control. We do need to get our national debt down. We need NOT to be indebted to foreign creditors, even though many of those creditors NEED a vibrant and free-spending U.S. to prosper themselves.
We see what Brooks was talking about when he referred to debt solutions as politically unpalatable. Many Americans love the idea of debt reduction, until it hits their own lives. Generations past were willing to risk everything – or at least they were FORCED to risk everything.
Today, there are things in place to cushion such risks. No one wants those cushions to be taken away, but we still have to reduce our national debt.
As individuals, we need to get our own houses in order FIRST. Eliminate, or reduce, unnecessary debt. The first rule: if you are buying something that will last years, it’s OK to borrow and pay back over time. If you are buying something to consume quickly, or in a short time, pay cash or don’t buy it at all.
The second rule: if you are a government worker, or have a private-sector job you feel will not last you as long as you want it, make sure you save as much of what you earn as possible. Then, establish a Plan B for income, so when your job disappears, you can walk out with a smile. For a great Plan B, visit www.bign.com/pbilodeau.
As for national debt, it didn’t happen overnight, and it will take time to eliminate. We have to do it in a way that hurts the fewest people. Everyone won’t escape unscathed. We will all pay for it in some way. But some ways are less painful, overall, than others. Let’s find those ways. Let’s not go back to the days when we were one uncontrollable disaster away from bankruptcy.
Peter