Today we’ll be covering one of the favorite memes among the left, the notion that business are evil, greedy entities that must be reigned in and controlled by benevolent, uncorruptable government bureaucracy. Links to our previous lessons are at the bottom of the page, with the link to our last lesson on why you don’t create jobs being the most relevant. Today we’re here not to dispel that businesses are greedy but that in the words of the immortal Gordon Gecko, "Blue Horseshoe loves Teldar Paper." No wait, that’s not the quote that I wanted. The phrase I’m looking for is the from a speech best summed up with three simple words – "Greed is Good".
First off, today’s lesson is not to excuse irresponsible or immoral corporate behavior. I’m not here to make excuses for companies that create unsafe products, send their workers into unreasonably unsafe conditions (an example of reasonably unsafe is that fire fighters are aware of the conditions they’ll need to work in when they sign up for the job and every possible safety precaution is made to protect them) or ones who treat their employees unfairly, whether by discriminating in their hiring practices or underpaying their employees. Very few people will advocate any of these practices, and luckily we have a social and legal framework that deals with each of these issues. But we’re not here today to talk about the evils of corporate greed – we’re here to talk about the good of corporate greed!
I see the puzzled looks on your faces. Aren’t businesses just organizations that are supposed to make contributions to your campaigns so that you can reward them with legislation to hurt their potential competition? For you yes, but for the rest of us they provide us with jobs, and we freely trade with them to obtain the goods and services that we want. Fred Thompson said it so well at the 2008 GOP convention when he addressed the prospect of raising taxes on businesses, "Unless you buy something from a business, like groceries, clothes or gasoline, or unless you get a paycheck from a business.. Don’t Worry! It’s not going to affect you!" Ah, but why are they sitting on massive amounts of capital and not investing in new equipment and research and development? Why, after the president proved that this administration is business friendly because he said so are businesses reluctant to hire and why does unemployment remain "unexpectedly" high?
To understand why businesses hire employees you need to first start by taking a few steps backward. A better question is "Why do businesses hire any employees?" The answer is simple. When any business is successful, it’s bound to expand. As it gains more business, whether selling more cars or pizzas or getting more people to sign up for their advisory services it can only ask its employees to do so much extra work to support the new business before the workers burn out and quit. Therefore as any business grows it hires more people to handle all of its extra business. Pretty simple so far, right?
Now things get trickier. Why do businesses expand and grow in the first place? To take on more market share? To do more business? Yes but… what is the incentive for any business to grow? Why take the risk of producing more products that may not get sold, hiring more people to offer services that customers may want or not want, or branching out into new markets where the customer base may not be interested in your product? For that matter why are businesses in business in the first place? Are they around to serve as health care providers? To act as a societal means to promote diversity initiatives? To find ways to give back to its community? Or maybe serve as some entity that can be relied on to cough up some campaign cash for you every few years or so? Wrong on all counts. The answer is as simple as it is misunderstood. You guessed it – greed!
A business is in business to make money. Anyone who has ever run a business knows this. Over the years I’ve run a few small business ventures and have known what it’s like to be an entrepreneur. While I haven’t done anything on a large scale, I have known the fear that goes into sinking a chunk of one’s hard earned money into some merchandise, knowing that all of the hard work that went into earning that money could be gone in an instant if the goods don’t sell. Then there’s that feeling of relief once enough goods are sold to hit the break even point and knowing that at the very worst the only loss that will be incurred is your time, and then that feeling of satisfaction as all of the risk and hard work pays off as the inventory moves and a profit is made. But I’ve never taken the plunge and put everything on the line, left my career, risked my savings and possibly more and gone into a business for myself with the intention of that business becoming my livelihood. I’ve never gone through the trials and tribulations that go with starting a serious business in terms of getting all of the proper licensing, basically mortgaging my future, fighting to gain market share, putting in the long hours needed to make it successful, and going through all of the headaches that go into hiring and managing a staff to handle the operations. And at the end of this, the owner can take satisfaction in being able to provide for himself and his family, building a future for them, not to mention rewarding all of those who also toiled to make the business successful. Yes, there are a number of business owners that make good money for their effort, but they take a significant risk and sacrifice a great deal to become successful.
"Ah yes", you are no doubt thinking. "Just like running a campaign!" Sort of, but not exactly. Yes, you both sacrifice long, hard hours and fight adversity for an outcome that is far from assured. But the differences are as glaring as night and day. Business owners are rewarded for contributing to society, in that they provide a product or service that is so vastly superior to every other possible choice that people can make to spend their hard earned money that they willingly part with it to buy that product. Your accomplishment is doing a better job of telling people what they want to hear than your opponents. You might think that running a successful campaign is the equates leadership, but who would be crazy enough to believe that?
Going back to the point of greed being good, the business owner is not the only one who benefits from a successful enterprise. Let’s revisit my previous points about the good of a successful business in the other direction. A business that makes its owner(s) happy will be profitable. When it becomes more profitable, it wants to do more business to obtain greater profits. When it does more business additional labor hours are required to perform the work necessary to generate this business. Greater labor hours can only be squeezed out of existing employees to a certain extent, and at some point additional ones need to be hired. Hey! Look at what these horrible, evil, greedy corporations just did – what we who are out in the real world call "job creation!" And look at what else all of this additional business has created – more goods sold and profits that you can tax, taxes on payroll, not to mention more people with jobs means fewer people in need of transfer payments from the government! That’s right, greedy businesses not only give you more money to invest in all of the projects that you need to reward the people who elected you, but having fewer people in need of your various forms of welfare leaves even more money for you to dispense favor to the people who you want to vote for you in the next election – everybody wins!
You probably just got so excited over all of the tax dollars flowing your way that you probably overlooked one glaring mistake that was intentionally placed in that last paragraph. The business folk probably spat their coffee and started grinding their teeth s they read it, but you probably skimmed right over it. I even left the word in bold for you to ponder over as we close out for today and you can think about an upcoming lesson in investment. But first our next lesson will be
Lesson Six: – You are Greedy – This is a Bad Thing
Previous Lessons:
Lesson One: It’s Not Your Money
Lesson Two: Intro to Microeconomics, or Why Prices Matter
Lesson Three: Intro to Macroeconomics. or So that’s Where Government Fits In!
Lesson Four: You Don’t Create Jobs – It’s Time to Get Over FDR!
Cross Posted at Brother Bob’s Blog
Bravo, Brother Bob!
Although, I would state that for most business owners, it isn’t exactly Greed that drives them. Most simply want a better life, for themselves and their families. In order to do that, they desire more wealth, and work hard in order to gain it. Greed, according to the common definitions, is an excessive desire for more of something(in our case, wealth). The question becomes, then, one of defining exactly what constitutes excessive. Listing examples is unnecessary. Readers will apply their own line of reasoning to explain what they believe is excessive.
And most people apply their own definitions of excessive while not looking at it from an opposite spectrum or point of view.
For example, I don’t believe someone who desires a 20-acre plot of land with a 5000 sqft home placed on it is greedy, but many in the middle class might feel that it is.
Greed is commonly applied to people who have a desire to better their life through the accumulation of wealth. It is used primarily, in this sense, by people who believe altruism is the highest of social goals. This, of course, belies a desire to chain those who can to those who cannot, or do not, attain higher standards of living.
As is the case of many words bandied about in political discussions, Greed is applied wrongly to people to ascribe reason to action. The funny thing is, that without those people that liberal/progressives have termed “greedy”, many of us wouldn’t have the jobs that we do, or the portfolio of investments that we do, or the ability to purchase goods and services that are available. In that sense, and applying the term “greed” to those who liberal/progressives apply it, greed is good.
Funny, though, how I haven’t heard that word by liberal/progressives applied to people like Al Gore, having two massive houses, flying privately around in jets, and investing in a scheme that, if accepted, would put him in the realm of Billionaires. For me, I’d rather buy something from someone who tells me flat out that he is offering his product, or service, in order to make money, than someone who claims altruistic ideals while condemning those who wish to make money, even as their altruistic ideals would make them money.
A desire for wealth is one thing. To do so by misleading and lying to people is quite another. Solyndra anyone?
John, I think you’ve got me on the semantics there!
Solyndra is going to get a brief mention in a later lesson here, and I’ve got Gore teed up on another post I’m working on. At some point I’m going to need to get serious about Global Warming…
On a side note, props for hanging with Larry for as long as you have on the “Give me Taxes…” post! =8^)
@Brother Bob:
I wasn’t trying to be a pain about it Brother Bob. I just get angry when I think of liberal/progressives acting outraged and angry over companies like the Koch Brothers, who provide, and have provided, hundreds and thousands with jobs and careers, not to mention the investment gains from their stock, calling them “greedy”, and then those same liberal/progressives give passes to people like Gore, or companies like Solyndra, simply because their politics are favored. It ends up being that true “greed” gets a pass while successful companies and business owners are castigated by the term. To me it is outrageous that it even happens, but then again, there are truly some stupid people in this world.
As for Larry, he has labored under the assumption that we conservatives will bite at whatever the most recent editorial or news columnist has to say about taxation. We don’t, though, as my postings in that topic should show him. I don’t care what some egghead intellectual has to say about taxation. Chances are they are wrong, or relying on faulty data, or cherry-picking data to “prove” their point. My challenge to Larry was simply to start thinking for himself, instead of continually linking the eggheads. Common sense has to start playing in there somewhere.
Brother Bob, thanks for another fine lesson.
I have just also read this.
About the author:
Lawrence Meyers is a veteran screenwriter, entrepreneur, communications consultant, author, financial journalist, and blogger.
He has written and/or produced over 60 hours of dramatic television programming, was the first U.S. journalist to comprehensively report on the payday loan sector, and co-founded private-equity venture PDLCapital Inc.,
He writes about investments at SeekingAlpha.com and InvestorPlace.com
His first book, Teacher of the Year: The Mystery and Legacy of Edwin Barlow, was published in 2009.
His newest book, Inside the TV Writer’s Room: Practical Advice for Succeeding in Television has just been published and is available at http://www.TVWRITERSROOM.com
Larry’s expertise extends primarily to consumer credit, communications, entertainment, media, economic and fiscal analysis, science, and Hollywood finance.
Larry does not align himself with any political party or ideology.
He believes in personal responsibility; reason; a common sense approach to issues; and that Americans, not politicians, know what’s best for themselves.
He believes that independent thought is the only real truth, and therefore is a vocal critic of any policy that restrains individual freedom and accountability.
A part of the essay:
We’ve personally seen this happening here in our business.
Do you have an opinion about a way around this OTHER than sitting on our money and waiting until Obama is gone and the damage undone?
(Going Galt.)
How can anyone blame business people for sitting on their money?
If anyone has made it impossible to start up a new business, it has been those on the Left with Obama.