I have a solution to the nation's (and world's) economic problem. It is a solution that every person, rich or poor, will benefit from and it is a solution that will boost sales, productivity and morale and help stabilize economic growth. Sadly, there is a catch. You see, this idea, beneficial to all, cannot happen without the support of those that have the financial MEANS to assist. If the history of mankind is any indication, we know that is probably never going to happen. But maybe that can change.
I call it Bonus Day.
You see, the largest problem with the world's economy is that wealth disparity is causing a highly unstable economic marketplace. As you will probably read more and more in the coming months, many are predicting a global recession. The market is adjusting itself, slightly. The problem with this is that, as it adjusts due to abuses of the rich getting richer, only the poor and middle class will truly feel the sting. What's worse is that, once it is corrected, that wealth disparity we all know and love so much is going to widen even further.
Just look at the model below and think of it in terms of a tree. If you look at this tree you will notice that the bottom half is sick and dying because if cannot afford to take care of itself. Further up the tree the trunk becomes more a little more stable and there are even the beginnings of a few tiny limbs, new sprouts desperately trying to gain some of the nourishment they can see above them.
But herein lies the problem, you see, at the tip of this tree, the branches are HUGE, thick and full of foliage designed to not only absorb as much above them as possible, but also to prevent anything but spare drops from falling. Explains "trickle down" economics, doesn't it?
But there is hope. You see, I read an article from an ex-Wall Street exec, Sam Polk, that opened my eyes. It seems Mr. Polk decided early on that he wanted to make a LOT of money during the course of his life, so much money in fact that he took the suggestion of a $3.6 million bonus as an insult. As he so eloquently argued, "when around guys making $10 or $20 million a year, $1 or $2 million doesn't seem like much" (hard to argue with that logic, well, until you stop and realize that $2M a year means a paycheck (after taxes) worth over $100,000 EVERY MONTH). How someone could not be placated with this amount is beyond me, but it seems he soon came to the same realization. He realized that becoming ANGRY at free money was a large symptom of an overall sickness, money had become his addiction. http://www.nytimes.com/2014/01/19/opinion/sunday/for-the-love-of-money.html?_r=0
Like the junkie holding onto his last eight ball, money becomes a drug for these individuals. And, like any drug, being on it can skew not only one's perception of the world around them, but also their importance within it.
If you have ever, personally or through another's pain, witnessed anyone suffer from addiction, you can begin to see how money corrupts. They are like the hoarder who's house is piled floor to ceiling with so much trash that no one but the hoarder can tell garbage from heirloom. The greedy share the same symptomatology as the compulsive shopper, the overeater, the drug and alcohol craver.
Addiction is the filling in or numbing down of something we are afraid of. Every addict CRAVES something to make the pain stop or to make them feel alive. Curing addiction is about tackling head on the things that cause pain (conscious or un, real or perceived) so that you can again see the world for what it actually is and your place within it.
No individual (nay, no FAMILY) needs $400 million to have a carefree lifestyle. In fact, if they had $200 million, I could honestly say I doubt their lives would change in the slightest. I would love to believe that any individual could comfortable live with $2M in the bank. Heck, invest it with a moderate return and you will take home (after taxes) $7,000 per month. Yet, time and time again, those individuals who have the money rarely feel like they have enough. They are so accustomed to taking, taking, taking that wants become needs and the accumulation of money becomes the only goal. Sound familiar?
Why do the rich hoard? Why can't they be more like the poor and middle class and spend money? Would't that influx of cash stabilize the economy and grow jobs? As logical as it seems, there is one HUGE difference, unlike the poor and middle class, they don't HAVE to spend the money. Couple that with the fact that their financial advisors have educated them about compound interest, and that they have the assets to take the risks and patiently wait for the gains, and it makes sense why the rich keep the money to themselves. But how much is too much?
How many of you have dreams? Dreams as simple as a warm meal every night to as complex as putting your creativity and desires to work running your own restaurant?
Welcome to Bonus Day.
You see, what I believe is that corporations and businesses need to start taking care of the people who actually grow the company instead of focusing solely on the ones who do very little work for heavy compensation. So, at the end of the year, when the stockholders and boards decide on bonuses, instead of giving them to those in administration, they need to start with the ground and work up. Call it Tsunami economics.
Using simple productivity numbers, quantify the individual input of each person, every group and compensate them accordingly. Work your way backwards moving upwards towards the CEOs and upper management. This means that the lion's share will go to those who actually need it rather than the ones who want it. For those outside of the corporate world, this simple principle can be put into place through taxation. This principle is not guided by what people want, instead it is about what people can spare.
Believe it or not, this will benefit those poor CEOs more in the long run. You see, it goes back to the simple principle of spending habits. Give the poor and middle class money and they will spend it. This means more production for the companies (individual stability), which necessitates more hiring (market stability) and means greater profitability (more money in the CEOs pocket). Believe me, the rich will STILL stay rich.
With this simple principle, taking care of those who need it while curbing the wanton greed and corruption, the tree will grow more stably. The top will still be thick and lush with more foliage and fruit than any individual can consume, but now there is limited risk of the whole tree toppling. And we don't want that. Do we?
No comments:
Post a Comment