Saturday, October 15, 2011

Greed: A Common Thread...

If you look at the date of my last Post, you would think that I am slacking off in the Blogging Department. But the reality of it is that I have written at least 3 Posts in my head! Working on the 4th one in my head right now.

Two of the Posts that I've been working out in my head have a bit of an overlap, so I'm going to merge them into this one Post today.

In recent news Events, there are two situations that share a common theme: the NBA basketball lockout and the march to Occupy Wall Street.

Not everyone understands the protesters marching on Wall Street (and now across the country).

Opponents say that the protesters are upset that there is too much of a class difference or that they are upset that rich people are rich. That isn't the problem at all. Nobody has a problem with rich people being rich. This is America! One of the great things about this country is that you can be who ever you want to be and make however much money you want to make.

The real issue here is Greed. When everyone benefits from a good economy...things are good. But if the economy starts to go bad and the people at the 'top' eliminate the jobs of people at the 'bottom' in order to make more of a profit... that is a problem.

Sometimes when companies get too big, there is a disconnect between the CEO's and the front line workers. The CEO's and upper management folks don't know these workers personally and so don't feel as much of a need to protect them, especially if it means a smaller paycheck for themselves personally.

You hear about some of these small and medium sized companies sharing the pain when the economy starts to go bad. The owner of these companies understand that families lives will be disrupted if they have to start laying people off. So rather than deciding to lay of 3 of their 10 workers, then make the other seven do more work to compensate, and then keeping his or her own profit high, the owner will do everything to make the operation more efficient and cost effective and possibly (temporarily) lower all wages (including his/her own) and keep everyone working.

In big companies, if the CEO has never been to your house for dinner with your spouse and kids, he probably doesn't have as much of a personal stake in whether you get to keep your job or you get laid off. All he knows is that he gets to keep his big paycheck.

And what's the deal with these Wall Street Hot Shots making a bunch of money selling products that they know damn well will hurt the economy, but they do it anyway... That is a problem! Bankers selling bad loans that will never be repaid or mortgages that they know will go into default. And selling 'shorts'? Come on, that's just a self-fulfilling prophesy.

I understand that everybody wants to make a buck, but please don't do it at the expense of others.

The reason people have taken to the streets isn't because some people are rich and some aren't. No. The reason people are angry is that these people who got rich didn't do it the old fashioned American way (by offering a quality product or service). They offered a product that was not only faulty, but essentially sent our economy into a downward spiral.

Not only did these people not get punished for doing what they did, they got to keep their personal money and We The People BAILED OUT their businesses! Why? Because they were too big to fail? Really?! This is a very bad precedent to set.

To make matters worse, these banks that we bailed out are now sitting on that money, not making affordable loans to other businesses, not offering great rates on CD's, Money Market accounts or other money products.

They have taken no personal responsibility at all. It is totally unacceptable!

It reminds me of when we bailed out the Auto Industry and in a blatant disregard for the money that we gave them, the Auto Executives flew from Detroit to D.C. in three separate corporate jets!! Luckily, some people were bold enough to make a big deal about that and the situation was corrected next time. And since they knew that they were being watched... they cleaned up their Fiscal Act. As it stands now, the Auto Industry seems to be back on its feet, and I believe that some of that money has actually been paid back.

So let's tie in the other Event in the news: the basketball lockout.

Let me start by saying that I am a firm believer that everyone should be paid what they are worth. The better you are at your job, the better you should be paid.

So here's the thing. Basketball players want more money. They see the owners of the teams getting rich and they feel like they deserve a bigger piece of the pie.

The fact is, people buy tickets to the games to see the players, not the owners. Right? So I understand their thinking on this.

On the other hand, it's the owners who are taking all the risk. Putting up the money, making the deals with networks and advertisers, paying the overhead and dealing with other employees (and all the headaches that go along with that). It's a lot of work! I get it.

This is my thought on the dilemma. Right now these elite athletes are making millions of dollars. And on the one hand I'm OK with that. It does irritate me that teachers, military service folks and first responders (police, fire, EMT, etc.) make so much less for what I think most people would agree are much more important jobs, but it is what it is. That can be a Post for another day! Let me get back to my solution.

I think that these elite athletes should cultivate their Public Personas so they can make however much money they can get through endorsements.

The reality of it is this: ask any kid on any basketball court across the country (indoors or outdoors) if he/she would take on a pro basketball career for $100K. He/she would do it. They would probably do it for $50K (especially knowing that they can make more with endorsements)!!

I bet that not one would say, "No, if I can't make over a million dollars, I wouldn't waste my time..."

Most of them play because they are Passionate about the game. As are all pro athletes. That's what makes them so good.

Really it's the same with any career. That's why it is important to find what it is you are passionate about and find a way to make that your career.

This is the bottom line: we need to look at these types of situations from all angles. When we are so wrapped into a "What's in it for me?" attitude... that's when we start having problems.

Let's look more closely at the lockout.

I'll start with the Team Owners. They want to make a decent living in their careers. That is great. But when they start to get Greedy, then the players decide that they should be making more.

The Players were probably just happy to have a job that they love, but when they see what appears to be unfairness in the 'Distribution of Wealth', they decide to raise a ruckus.

The Players and Owners do this little dance back and forth over the years until the Players are making millions of dollars. At some point it becomes critical and there is a lockout.

Why is that?

Because while the Players and Owners are doing their dance, both sides have forgotten about the most important factor in the equation: the People who buy the tickets. The fuel that runs this whole machine.

At some point the fans decide that the ticket prices are too high and stop attending the games. What used to be a fun Family activity is now unaffordable to the average Family.

The result is fewer tickets sold. Which means that the price per ticket needs to be higher so the Owners can afford to pay the Players.

Higher prices mean even fewer People can afford to attend the games. Fewer attendees mean less beer and popcorn sales. No need now for all those Ticket Takers and Vendors. No need for so many Security People. Since there are fewer People attending, there isn't as much of a mess, so no need for such a big Clean Up Crew and Property Maintenance Folks.

Also, the lower ticket sales means less taxes paid. That's good right? Nope. That is the money that pays for Police Presence and other First Responders!

Net result? If you look at the Big Picture... one little bit of Greed screwed it up for everybody (including the Greedy ones)!

Let's go back to the beginning. If the Team Owner wasn't Greedy, the Players wouldn't have been inspired to be Greedy as well. Ticket prices would have stayed low, so more People could afford to go to the games (and brought the Family). More kids want more popcorn and soda (both large profit items) and more grown ups want more beer and hot dogs. That means more Vendors. That means more mess and wear and tear on property. That means more Custodial and Maintenance jobs. More People means more Security jobs. And that's OK because with all those ticket sales, comes more taxes. And so there can be better Police Presence and other First Responders for safety! And because all these People have jobs there is less crime. And more People will take more pride in their Community!

The New Bottom Line is that even though the owners make less per ticket; they make more in the long run by selling more tickets. Not to mention the 'Good Will' accumulated by customer loyalty.

Just look at Apple. When Apple came out with the iPod, Steve Jobs could have said, "There is nothing else like this product, I could get a small fortune for this."

Instead, he made it cheaper and more convenient for People to store and listen to their music. He made it affordable for Everyone. So much so, that they became a part of daily life. This product became a part of our culture. And then, when he came out with iPhones and iPads, it was a very short leap for them to become necessary tools as well.

The net result of that type of thinking? Apple has more money than the U.S. Government. And Steve Jobs did pretty well personally, too!

We only need to look at Warren Buffet to know that the same holds true in the Financial Markets.

So now, my Dear Faithful Readers... it is time for me to wrap up and get to the point of this whole Rant.

I am all for standing up for what I believe in, and I think it is great that People protest when they think things have gone awry. Freedom of Speech is one of the things that makes America great!

But my question is this: Why do they always have to do it the HARD WAY?

If you want to make a stance against Corporate Greed, why not hit them where it hurts the most? In the Pocket Book!

Don't buy their products... and tell them why!

Look what just happened with Netflix. Here is a company who shot into the spotlight by creating a product that is cheaper and more convenient for the Consumer. So much so that it single handedly took down a giant like Blockbuster Video.

Netflix recently announced that it would split into two separate entities, one mail order and one streaming. Customers went into an uproar. This would make it LESS convenient and MORE expensive.

See what happened there? Netflix saw that they had a corner on the market and found a way to make some extra money...

But when Customers started canceling their monthly subscriptions, Netflix very quickly announced its plan to stay one united company.

This my Friends is how to AFFECT CHANGE!

Do the right thing. Take a stand. But don't just huff and puff, make your stand meaningful. Gandhi said, "Be the change you want to see in the world."

Peace and Love,