Inequality and the 1%

Funny thing how humans work.  And even funnier to hear about monkey’s behaving like humans.  I love this short video which explains the complaint of the Occupy Wall Street movement.  Apparently it’s not just human’s who are upset about not being paid fairly.Wealth Inequality in America The actual distributions of money in the US in a video infographic

It’s funny because I just heard about a TED Talk (first story) that explains in more detail the research on how monkey’s can understand the concept of money and the consequences of treating them unequally.  The rest of the show covers other talks about money which are just as fascinating.  Especially the third story, Does Money Make You Mean? which studies the effects that wealth has on changing people.  Really it just points out how self-centered we can be, and how ignorant of the factors contributing to our success we might be.  If you think for a moment this may not be true, then listed to the third story in this episode of the NPR Ted Radio Hour.  It’s fascinating, and it’s important to understand how money affects our perception, and our compassion.

I’m not in favor of handouts, but decent pay for decent work just makes sense to me.

When you buy an iPhone, where does the money go?

Where people expect the money goes

Where people expect the money goes

Where the money actually goes

Where the money actually goes

I find this pretty surprising myself.  For the 5 minute explanation from Robert Reich, see this video on Upworthy.com. It’s funny that he talks about the economy and the decrease of unions being linked to income inequality.  Today I saw another video explanation, also by Robert Reich, on the rising gap in the U.S. economy, talking about the number of unions rising after WWI.  It’s part of a series of videos called Inequality for All.  Another in the series talks to some people working at an energy plant, and really brings home the question about corporate profits and what is the value of the work people do.  Productivity has been increasing and stress is so high.  I support the recent discussion to raise minimum wage.  It’s not a simple answer, and it may not fix the problems as John Green explains here.   Personally, I can’t believe Walmart can use the catch phrase “Save Money, Live Better” in their ads, as it turns out, we pay $6,000 or more per Walmart Employees due to their low wages.  The government is busy chasing their own tail in elections, they will never fix the problem, because corporations have no incentive.  But someone out there has the answer, and collectively we have the ability to make things better.  That’s why I have increased my spending at stores offering a decent wage and benefits to their employees.  If it means I have to eat out less to save money, that is fine.  If it means I buy more second hand, no problem.  We have more than any other country in the world, we will not suffer. Personally I love the work Mike Rowe (former Dirty Jobs TV show host) is doing.  His promotion of skilled labor is idea for getting people into decent jobs, and improving the situation in the US.  It’s time we stop doing crappy work because we’re being treated like crap.  Personally, when I go on a construction site, I want to see the work being done well.  Check out his website Profoundly Disconnected.

One last tidbit, how does this relate to health care costs in the US.  Yep, saw a John Green video on that today too.  Because we don’t have bargaining power with the providers of medical devices and medications… sounds a lot like the problem of not having bargaining power for salaries due to the lack of unions.  I wonder…

We should have ONE day without shopping

Good old New England, it’s illegal for many store to open Thanksgiving Day in 3 of our states! People have three other days to shop, we don’t need Thursday. For the chains that open elsewhere on T-day, I’m boycotting them for the rest of the year.

BAD LIST:
Open in Morning: Best Buy, Kmart, Lord & Taylor
Not open til evening: Walmart, Target, Macy’s, Toys “R” Us, JC Penny, Kohls, Old Navy, Gap, Banana Republic, Sears, Office Depot, Office Max, Michaels

GOOD LIST:
Pier One, Nordstorm’s, TJ Maxx, Marshalls, Sam’s Club, Burlington Coat Factory, Costco, Ross Stores, Lowe’s, Von Maur and Cabela’s, Barnes & Noble, Home Depot, Radio Shack

http://www.huffingtonpost.com/2013/11/26/thanksgiving-shopping-ban_n_4346023.html

On the Verge of Revolution…

This is not about Syria, or Egypt, or the European Union, or any other countries experiencing unrest due to political and economic issues.  I expect this revolution is occurring in the United States of America (U.S.).  And I think the upcoming Millennial Generation (a.k.a. Generation Y) will provide the innovation needed for this revolution to prosper.

Unfortunately, the fractionated nature of the Occupy Wall Street protests (OWS), prevented the protests from initiating real change.  OWS’s general complaint is that a small group of the population (the 1%) controls and benefits from the current capitalistic social model.   Before we get into the details of this problem, let’s go back to the Millennials.   Full disclosure: although I am at the cusp of the divide between generations X and Y, I consider myself part of gen X based on the characteristic descriptions and the typical  calendar cut-offs.

Although each generation complains about the group that follows, stereotyping the group based on their phase of life instead of their unique traits.  We all develop and grow with life experience, and so looking at the generations that follows, it’s natural to view the less experienced generation as self-centered.  But when you really look at the Millennial generation, they are already doing profound things.  The second TED Talk featured in this NPR program describes how young people are having a significant impact and are already getting involved with important issues.  It appears the supposed narcissistic generation which only does something for instant gratification, is having to deal with some pretty tough circumstances and is using their confidence to do work beyond themselves.   I see significant social benefits to the Millennial Generation.

The expanding economic gap between the 1% and the 99% is blamed for just about every problem we can think of in the US.  From low wage jobs, to the increasing cost of everything.  I say this is a consequences of capitalism (RSA Video); capitalism incentivizes people to do more for less, improve efficiency, to cheat and manipulate for profits.   The priority to succeed financially has gone awry, and in the process our value on money has defined our self worth.  Generation Y is trying to determine how to reward doing the right thing, helping others, treating your employees well, building stronger and better communities.  We know the answer, but the current economics and definitions of success have yet to incentivize the social good we now value.

doing-good-for-businessBusiness is slow to change, but some companies are finding new models to motivate their staff and still improve profits.  Going green has been good for business lately; as is developing sustainability, providing human rights to factory workers, etc.  Right now you can find out the business practices for some companies and products, check out the Good Guide website or phone app.  Eventually, doing the right thing will have a higher priority than profits benefiting the 1%.  Personally, I’m looking forward to the next business model.

Additional Content Relevant to this Discussion

Giving stuff Away for Free

Life Is Too Short

I love TED Talks, there are so many inspiring, inquisitive, and informational talks to watch.  From Steve Jobs to Stephen Hawking.  NPR has a radio program where they feature a few of talks that have similar subjects.  It’s super fascinating to me, to get a coordinated presentation of talks.  And it’s FREE, at least it’s no additional charge beyond what you already pay for your internet streaming/downloading device.

This week’s show is about giving things away for free.  It’s funny because today we want everything for free.  And we want it quick, and 100% accurate.  But it takes time and money to get the right answer, to produce the radio/TV program etc., and to make it available to the public.

free-stuffIt’s also funny to me that we don’t want to pay people too much for services, we’ll drive 5 miles away to save $3 at the store, or to have…

View original post 200 more words

Profitable Banking Blunders

Well the sub-prime loans didn’t work out too well, but banks are still rolling in the dough.  They are finding plenty of new opportunities for profits:

  • JP Morgan pays $410m settlement (BBC article) – I have no idea about the legality of JP Morgan’s involvement with manipulating energy markets in the US, but I’m sure they are happy to settle this case and avoid too much publicity in the matter.  Barclays was also fined for similar behavior.
  • Goldman Sacs and others manipulate the aluminum market (Hufington Post article) – I think that people are sympathetic that banks exist to make money.  The outrage comes from literally moving aluminum from one warehouse to another, just to manipulate the price.  This does not provide value to the industry, and this is a waste of time, money, fuel, and pollution.  How many times  a week are you purchasing aluminum products?
  • Did you hear the one about the bank getting a life insurance policy on their staff? (WSJ article) – I’m not witty enough to come up with a punchline for this one.  But I can tell you that this is absolutely true.  I know someone working at a bank, none of the banks listed in the linked article, but apparently the year before he started the bank offered employees $1,000 if they would sign for a life insurance policy that the bank would be the beneficiary of.  Rumor has it, the bank then securitized these policies and sold them off.  It’s bad enough if your employer has financial incentive to end your life, but now it’s some unknown person out there.  I predict a rising demand for professional hit-men.
  • Banks use taxpayer money to pay Lobbyists (Business Week article) – not once but at least twice if you read the whole article. Another case of hidden fees so convoluted, the customer has no idea what they are paying for.  I guess the banks thought our state governments have plenty of wealth to share.
  • And of course, Terrorists need a safe institution to hold their funds (wordpress post of Agence France Presse article)

Earlier this week I was convinced by Charlie Reese’s article that 545 senators and congressmen were to blame for any problem in the US, but now I’m thinking it’s the banks managers.

Soon to be Blunders?

  • Brian M. Lucey points out a WSJ article announcing banks to create securities backed by rental agreements… It’s not illegal yet, what will a sub-prime rental agreement look like?

Economic Growth Paradox

You want population growth so that people buy more cars and toys, to put money in your pocket.

But you can’t afford to hire enough people to do the work at hand, because that will hurt profits.  You rehire people at a reduced salary, without benefits, and if possible without benefits.  Now the people can’t afford new cars and toys; they can’t afford to settle down, buy a house, and have kids.

07aNo problem, you provide a no-interest, sub-prime loan to help people buy a house.  And you take home fat profits, until the recession exposes the instability.  But you can still makes fat profits on higher education, because to get ahead in life we need an education, until we’re so far in debt before we even start a career, that we’ll never get ahead.  So we’re enslaved to the thankless jobs, with meager pay, to support your corporations with stock options, business expenses, golden parachutes,

Of course, you still have extremely cheap labor from immigrants so unfortunate that they work for so little.  They clean your house, watch your kids, care for ailing parents, all of the dirty jobs you can’t bring yourself to perform.  Many pay taxes, but never reap the social security or other benefits a citizen would rely on.

You also make fat profits by increasing the number of prisons, I do not believe that rehabilitation occurs but rather further degradation of a person’s character leading to continued criminal behavior.  The number of detention centers is also rapidly growing.  As if monetary gain wasn’t enough, these facilities also provide personal pleasures you might enjoy.

How much money and greed do you need to be happy?

The sad part is, you have been duped even more, by the friends and society who told you that happiness is having a domed cathedral ceiling on your foyer.  I don’t think you can ever be happy, or share real happiness with others.  You naively believe that comfort and luxury is happiness, and that you share your happiness by giving your staff a bonus at Christmas.

Save Money … Live Better

I’m jealous of Walmart for capitalizing on this phrase so profitable.  If only it were true, but I’ll spare you my personal views of the company.  Instead, lets talk about ways we can actually save money, and actually live better.

I recently started using Apple Cider Vinegar (ACV) for my skin and hair.  I use it on my hair in the shower, after I wash, rinse, and condition I then pour a mixture of water and ACV on my hair and rinse it out after about 1 minute.  It has really cut down the frizziness in my hair in the summer heat.

On my skin, I use it as a toner for my face.  The smell is awful, I’m not a fan of vinegar, but it rinses away nicely and does not leave a smell.  ACV can also be used to treat athletes foot.  Dilute the ACV with water and wipe onto your skin, then rinse off.

obamacare-save-money-health-careMaybe you already have a product for this purpose.  I’m not telling you ACV is better, how would I know.  It seems that things work differently for everyone.  But here is what I do now.  I try the new option for 1 week, then go back to using my old stuff until the container is gone.  When I go to the store to buy a refill, I can decide if it’s worth the cost, or if the cheaper alternative worked well enough.

We have been tricked into using many products, just to make money for other people.  Some of these products are harmful to the environment, to other animals, or to ourselves.   We don’t know the full effects of these products.  I have used eye cream that makes my eyes water, I guess that’s how it reduces puffy eyes.

I heard a report about testing of medications.  The testing is not required to measure effectiveness compared to similar products, the testing is performed and compared to a “Do Nothing” option.  Well it’s pretty easy to show an improvement compared to “Do Nothing.”  Then the sales teams use those studies to sell the products.  And few people are testing different alternatives compared to each other, wouldn’t it be nice to have a group that is incentivised to take this information and evaluate everything together, running comparison experiments if feasible.

Imagine how many products we trust, when testing has been evaluated in this same way?  What if there are better products, or better items that we already have at home.

Vinegar is also great for cleaning stainless steel.  I cleaned a lot of rust from my trash can using vinegar alone.

What are your tricks for saving  money and living better?

Undoing the Benefits of Specialization

The benefit of specialization is that we can diversify tasks and achieve more as a group.  Ha!  Human nature is not so altruistic.  We are finding that when left unchecked, people will take advantage of others and not perform their duty to operate in the best interest of clients or the public at large.  The less connected we feel toward others, in our communities etc., the more likely we are to take advantage of others.  Dan Ariely has showed in simple experiments the factors that influence our likelihood to cheat.

Take Adjustable Rate mortgages:  It’s likely that in the United States, you or many people you know have a ARM.  I don’t know how much research people do before accepting this type of load, but US government has an info packet to help consumers, that is 40 pages long.  In the document, it states what you should know when considering an ARM.  “To compare two ARMs, or to compare an ARM with a fixed-rate mortgage, you need to know about indexes, margins, discounts, caps on rates and payments, negative amortization,  payment options, and recasting (recalculating) your loan.”  Who understands all of these financial matters?

Sounds like people with money are creating a complicated product (the mortgage) and hoping the general public blindly buys this product without understanding the risk or influencing factors.  That’s essentially the crux of the sub-prime loan issues.  We will never agree on who is to blame, those who create sophisticated products and sell them to people lacking the knowledge to understand the decisions, or people who make these decisions without doing enough research?

Which leads back to diversification.  In western civilization, we are not expected to be an expert on p283-1-jpgeverything.  We take our car to a mechanic, go to financial advisers to invest for retirement,  hire a contractor when repairs or changes are desired on our homes, etc.  We need enough basic information to keep these employees honest, but cannot reasonably master each of these subjects to know when these employees are not working for our best interest.

So what we need is more honesty.  How do we promote altruistic behavior?  It’s challenging to incentivise honest behavior.  Step one is to build a strong sense of community as referenced above in the studies by Dan Ariely.  I’d love to hear your thoughts and experiences on this subject.

 

Well this should not be considered the most reliable study, performed by the makers of Honest Tea.  Check out the results.s-NATIONAL-HONESTY-INDEX-large