Wealth reform

 

It isn’t laziness that has caused worldwide poverty, it is the disenfranchisement of millions through the perpetuation of corporate greed.  Even the mega-corporation of Ben & Jerry’s, makers of the popular ice cream, once had a 5 to 1 board member ruling that the CEO would be limited to a 5 to 1 ratio of earnings over his lowest paid worker, but the company ditched this practice when they couldn’t find anyone to replace Ben Cohen, the CEO that worked for just $81,000 a year. -- source

 

Idiots!  Any excellent idea, poorly executed, will fail.  That doesn't mean the idea is a failure.

The flaw in this idea is the 5 to 1 ratio.  What ratios will make this idea succeed, and what ratio is optimal for all involved?

If Ben worked for $81K per year, then the lowest paid worker was getting $16.2K per year, or about minimum wage ($8.10/hour).

What if the ratio had been set to 50 to 1?  Then Ben would make $405/hour, or $810K per year.  Can't find a CEO that will work for that?  BS, you can find lots of them.  Even I would do it.  I've run my own company for 27 years, every one of them in the black.

Maybe the CEO you want requires a million dollars a year.  Set the starting salary for the lowest paid employees at $10/hour, and you've got your million dollar CEO, along with some happier employees.

50 to 1 is probably not the optimal ratio, but it clearly works better than 5 to 1.  A much higher ratio is probably as poor a choice as the 5 to 1 ratio.  Google's CEO takes home an obscene $101 million every year.  That's a ratio of 6234 to 1.

So what is the optimal ratio that will satisfy all employees and still allow a business to thrive?  And if humans are so smart, why haven't we solved this very simple economics problem?  And don't give me any of that "free market" BS.  There are no free markets wherever sociopaths are running the show, and that's exactly what we've got.  At the very least, we need to place limits on the people at the top of the hierarchy.  A 100 to 1 ratio seems like a good place to start.  And if those at the top want more money?  They will have to create the rising tide that lifts all boats.  Isn't that really what they are paid to do anyway?

What if the whole world were modeled in the same way, and the richest among us could not be more than 100 times richer than the poorest among us?  Can you imagine the improvements that would bring?

 

Workin hard for da Massah

Slavery has come a long way, Baby.  It used to be that when you were a slave, you knew it.  You were ripped out of your familiar life, chained up, shipped to an unfamiliar land, and put to work under penalty of corporal punishment or death.  Today, things are so much more subtle.

Today, when you are working for the Massah, you don't even know there's a master.  You think you are working by your own free will, to earn money to buy the essentials of life.  What you don't know is that the money is the Massah's script, it's only good at the "company" stores, the prices are rigged, and everything you can choose to buy has been determined for you.

And slavery is no longer an "all or nothing" business.  It's done now in slowly but steadily increasing increments.  In that sneaky way, few ever realize how their time is being stolen from them to serve the Massah.  Allow me to illustrate.

Let's look at the least privileged of the working class, those working for minimum wage.  Even they need shelter, a place to call their own, a home.  How long do they have to work for the Massah's "company" to earn enough to buy the average new home?

In 1956, when I was just a baby, the minimum wage was $1/hour, and the typical new home cost $11,700.  The math is easy in this case.  A new home would cost you 11,700 hours of working for the "company".

In 2006, fifty years later, the minimum wage was $5.15/hour, and the typical new home cost $243,067.  A new home would cost you 47,197 hours of working for the "company".

You can see the trend for yourself below.  Note that unlike the value of money, an hour of work is the same today as it was in 1956.

  Year    Home Price    Min wage    Hours

  1956     $ 11,700      $1.00      11700
  1966     $ 21,400      $1.25      17120
  1976     $ 44,200      $2.10      21048
  1986     $ 92,000      $3.35      27463
  1996     $140,000      $4.75      29474
  2006     $243,067      $5.15      47197

That's a pretty good con-game!  The Massah has slowly gotten the slaves to work four times longer to buy the same stuff.  And most of those people don't even know there's a master or a con-game!

Things have improved some since 2006.  We're in a severe economic depression now, debt is astronomical, inflation is rampant but deliberately under-reported, and housing prices have fallen while the minimum wage has risen.  It's a great time to buy a house at the bargain price of only 30,163 hours of work!

If you can find a job.

One other note – the figures used for these calculations are from the U.S. government, an entity well known for “adjusting” statistics to make itself look good.  That means my calculations are probably the best-case scenario, and the true reality is worse than I have indicated.

Here are the primary sources for home prices and minimum wage that I used.