Capitalism Can Be Our Friend

Capitalism is nothing without its most basic core element: human capital. We must take care of each other, to together succeed on a planet with limited resources.

Numbers change but common sense is forever. I love capitalism. Specifically, because it's so much about the numbers. Very quantifiable. But like the stock market is heavily dependent on the moods of its investors, so is progress dependent on people following common sense.

Poor people and the middle class need more capital. They, we, spend to survive. On needs which are ultimately the businesses of the wealthy. Food, shelter, water. This is a predictable and stable means of capital redistribution. Just focusing on the rich is just trusting the rich to focus on philanthropy, etc.. to save us and this proves an unpredictable and volatile means of capital redistribution. Government does not have a choice but to take care of its people as that is its mission. And the peoples power is in their vote and their involvement.

The rich have a choice. They may spend for philanthropy but you take away any incentive they have tax wise to do so and I think it'd be a safe bet that you'd see their philanthropy dry up. It's volatile because the rich will spend in areas they care about so not all people will benefit in some way, just a few in a big way. And the wealthy, beyond their philanthropy, spend their money where they congregate. This is townships and locations where other rich people live and work. This doesn't help those who live in outlying areas that do not or cannot live or work in those areas.

Some mention faith-based initiatives but they focus on their pet groups or projects. I've heard of people needing help and asked their local churches for help but because they were not part of that church group they was denied. This is all so highly volatile and mood driven. We already have a market for stock, now we need stock in our people. Once the poor have greater capital they can spend on food, etc.. It'll incentivize those who want to become rich to create businesses to feed, etc.. these masses. The 99 percent, as it were.

One may argue that they'll spend it on alcohol or other vices, so even if a percent spend on alcohol, etc.. when the rich spend their money on harder illegal and expensive substances such as heroin and the poor only have money for alcohol (again, one is legal and one is not)-- whose to say the rich are free to access such vices relative to the poor? It comes down to choice but choice is unpredictable. It needs to come down to common sense by covering your base. Which is as a plant grows, you drop the seedlings and the economy is upward bound.

Former President Ronald Reagan himself said, "trust but verify." We must trust those with economic means to do good works but we must verify through some means. How do we do this? We tax proportionately to economic impact. Those of greater economic impact are taxed at a higher rate. We can do this without creating new taxes. We can change the tax system to decrease taxes for the poor/middle class and close tax loopholes. However, I also agree that we need to give breaks to those who invest in California. That includes property and jobs.

 And along with, we can have social programs to protect us when we are down and still have the most powerful capitalist state. I dont want to see people hungry or without proper medical care... neither do you. So we must cooperate. The animal world is all about survival of the fittest but the most evolved societies have learned or must learn that it is about survival of the greater good-- that is, cooperation. A cooperative environment yields not solely economic equality but equality to our basic needs like food and health care. We must take care of eachother, to together succeed on a planet with limited resources. Because ultimately capitalism is nothing without its most core element: human capital.

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Che Hernandez January 11, 2012 at 08:25 AM
RJ, I'm glad you started with "numbers change but common sense is forever" You're right but I'm afraid the various points you make don't support the opening statement. The premise of the capitalist system is based upon Risk/Reward and value of production, services and labor. Capital is earned in trade from value given by people in the market place. Poor and middle class people have access to earning and generating wealth on their own. I shudder at the idea proposed that the "rich" aren't reliable enough in their philanthropy, where the solution is that Government knows better how and when to distribute capital, and to who. Common sense says that in order to give capital to one group, you must first take it from another group? Look at immigrants today versus the past. When my great grandparents came to the US, there were two distinct differences. An open immigration policy and second the US had not yet become a Welfare state. My grandpa's mantra was "no work - no eat." Today, we have an entitlement system where todays immigrants know that food stamps is how you feed your family. Common sense requires more contributors than non-contributors? Why do you think business fled California for Texas? Business can't thrive with the boot of Government on their necks. The best philanthropy for America and it's people would be small government and very low taxes. And you're right "numbers change but common sense is forever."
RJ Hernandez January 18, 2012 at 04:58 AM
Thanks for the comment. As a businessman, I see the premise of the capitalist system as the use of capital, the leveraging of assets, etc..on one hand & motivation: risk/reward & self determination on the other. I posit that anyone in a bad situation would be motivated to get out of it they just need the way (capital). Question: What would you say that the poor and middle class have as far as access to earning and generating wealth? They cant leverage without assets or credit nor can they go to school because they cant afford it. They have no one to rely on. Reliability is a good word. We use it to characterize service but that service will have been consistent and specific to our needs = government. The rich are reliable as businesses. That's a key point in my original post. This is capital redistribution through an exchange. The rich invest in CA through their taxes and they rest on making money off of providing for the poor and middle class through business endeavors, the poor invest in CA through their labor and through being customers of these businesses.
RJ Hernandez January 18, 2012 at 05:00 AM
If you look at other countries, the US is far from a welfare state. My great grandparents and grandparents, who emigrated here too, had a similar work ethic so I commend your family. They worked their way up just to be middle class. Taxation would have killed their ability. So we must rely not on volatility of choice but stability of revenue on those that can be the bedrock of our economy-- the rich. Taxes pay for roads, bridges, etc.. How do we control how money is allocated? We vote. Just as in the free market where we are free to choose. Businesses have left CA well before Texas became en vogue. Delaware, Nevada, to name a few. They left because these other states provided better incentives and had lower taxes. I agree that taxation in CA on businesses is high and I want to see that changed but businesses will come here because this is where people want to live. I say we decrease the income tax on persons and give businesses incentives to see their investments in our state contribute to their long term growth as a company and a choice out there in the market.


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