Corporate Greed vs. Political Greed

I honestly am worried about our country as are many others on this site and nationwide. The difference is that the masses are leading us towards more of the same if not worse, while the smart sensible opinions rooted in logic and sound theories that can be applied to real life situations are being ignored, just like all the fundamentals were ignored during the dotcom bubble.

The results of the current crisis will be much worse. The bad news is easy to find, just turn on your TV or read your newspaper’s letters section to see the bad logic flowing from Democrats, Republicans, old, young, black, white, poor, and rich. So many are worried about bankrupting Social Security due to Wall Street “greed,” high gas prices due to corporate “greed,” and on and on. Why don’t we ever mention the real American killer: political greed?

Otherwise smart and logical people get caught in the same trap every day. They are fed the same headlines and spin anywhere they turn. Exxon Mobile reports record profit! No one goes into the details of the situation, such as what was the price of oil? How much demand was there for the product? What was their profit margin? And you could ask hundreds of other questions, but no one even bothers to ask the easiest few. If one does somehow get asked, “greed” is blamed.

However, the fundamentals of economics cannot be altered. Only supply and demand can control prices, not some far-fetched notion of “greed.” So we are not only by and large ignoring the situation’s core lesson but also misunderstanding it whenever we do delve into it a little deeper.

What about politicians’ greed? They run up huge expense accounts, build up their pensions, furnish lavish offices, wear expensive suits and ties (sort of like Palin, right?!), and some (probably more than we suspect) outright steal money to hand it to friends and family in the form of cushy jobs protected by the government run monopoly.

Who pays for this? The taxpayers, of course, else they will be rounded up by the IRS and jailed, so that other taxpayers can then fund their existence.

What is a better example of greed: A company selling its product for a market price, or a politician taking money that he has no real claim to other than “pay up or else” and doling it out as he sees fit?

One option rewards hard work, good ideas, and smart planning, while the other rewards knowing someone higher up, criminal activity, or even sexual favors in some cases. There is a glaring double standard going on right under our noses. Yet we continuously blame the corporations instead of the real culprit, which in turn emboldens the real culprit to ever larger and more glaring offenses.

The key thing to realize is that private individuals or groups, corporations, and small businesses are risking their own capital to serve others. This is the only way a company or individual can make money under a real free market system with no government intervention. You must bring to market something that serves your fellow man, something he finds worthy of allocating some of his scarce capital to so that you might be able to sustain yourself.

If these private individuals fail, which many of them do, they must find other work and might suffer. But they are taking the risk because the payoff can be so great, not only for them individually but for society as a whole.

Government, meanwhile, is risking our capital, without our consent (I never consented to any bailout), even if we oppose what they are doing with it.

Notice there are two things at play here.

  1. They are risking our capital as they see fit, which is immoral, wrong, and outright stealing.
  2. Two, they are doing it even as there is vocal opposition to their plans.

Note that the plans don’t really matter, stealing the money in the first place is wrong, but that just makes it all the worse. You wouldn’t steal a $20 bill from a man if he only had $20 to eat, so why would we steal $20 from someone as a “reward” for being a millionaire?

Stealing is wrong, period. No matter what you are using the money for, and no matter how much wealth the individual or corporation has accumulated.

The government could start small and get our budget balanced, or even run a slight surplus. That would at least stop the bleeding for a bit while we straighten things out. One way to do that would be to bring in more money while holding spending steady. Instead of keeping gambling and marijuana illegal, we could quite easily pass a bill to legalize and tax both, bringing in billions.

Please note that we can also end the warfare state (or at least greatly reduce it) and/or cut spending by slashing the IRS, dept of education, etc. But a small step would be to bring the budget into balance using some of those means.

Again, we see the stark contrast between corporations and politicians. Any corporation with huge debt loads and questionable ability to pay either has to slash costs or increase revenue to stay viable.

A good example is SiriusXM radio. Their stock is in the 25-50 cent range and yet they are in more and more cars and homes every day. The reason is they might not survive long term, and they are drowning in debt.

On the other hand, the government brings in $100b and wants to spend $300b or more, so we will never get out of the hole as long as this is allowed to continue. The reason being that government can simply print up more money to use for their purposes while devaluing our hard earned funds, or they can simply borrow more (at least for now).

Has the federal government become “too big to fail?” It seems like it has, at least to most people. But just like AIG was not in truth too big to fail, there really is no such limit on the size of an entity that determines its success or failure.

Sadly, we are about to find out what happens when a federal government really isn’t too big to fail, only too big to wipe out some or all of the gains of the past 250 years in human history.

I think if even 25% of America could pick up on some of these points, act on them, and then pass along the message, we would go a long long way to cleaning up Washington for real and getting our nation back on track.