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I'd like to rehash something from my last blog: Finally, we have the external cause, the belief that we have to have a job. No, economies work better when households have their own businesses. . . . When people have jobs, working for someone else, that's the cause of inequality. We saw it during the slave period, and after slavery was abolished, the corporations took up the slack by offering "good" -=cough=- jobs to workers. At first, they were. Then, "Reaganomics" (aka "trickle-down economics" or, as economists call it, "supply side economics") came along, and the economy immediately favored big business over the prosperity of the common man. The result was that small businesses were forced to become just the same to survive, and people started thinking money was the solution (which I'll talk about in my next blog). With that, corporations stopped promoting people for their work, but for their behavior. If you didn't suck up to the boss, you weren't rewarded And over time, people adopted the same mentality because it's what worked. The reason why corporate executives make so much is simple: The cash flow is there. And when the people are held to low wages, the excess cash flow creates profits that become dividends. Since executives receive stock as bonuses, they receive the greatest benefit from those dividends. This is often not reported by most sources. This is because of the mass nature of corporations. By "mass nature", I mean the fact that they have multiple locations or serve several businesses with multiple locations. It's not the business, itself, that creates the problem. It's the fact that the sum total of profit among all the different locations totals to a lot more than a business with just one location. Let's say there are two different businesses. The first business is a sole proprietorship. It turns a net profit of $3,000 per year after owner expenses. The second has three locations. Location A turns a profit of $2,000 in that same year. Meanwhile, location B turns $1,500 and location C loses$500. The overall net profit for the business is $3,000, just like the first business. But since location C is losing money, it's shut down. The next year, the two locations make more than the one location of the proprietorship. Now, extend that to thousands of locations. This is how the corporations are able to undercut the "little guy". The result is that the owner of the first business drops in profit because of the undercut. That's the goal. By putting the competition out of business, the owners are forced to work for big businesses. And each competitor gone means the corporations turn a bigger profit by increased revenue--and bigger cash flow. Increased profit means either opening another location (risk) or bigger dividends (certainty). And bigger businesses are more willing to take bigger risks. This is why many Boards of Directors will give raises to the executives while fighting minimum wage, making the "little guy" more and more dependent on a job. Now do you understand why I said I believe each household should have its own business? So, how did people start thinking money was the solution? Well, the truth is that this is largely an American phenomenon, which got its start in old-time plantations. Cotton and tobacco were more abundant in the Colonial South than anywhere else. Since the land was newly occupied by the European settlers and there were problems with the native tribes, the only solution to maintain the size of the plantation was slaves. (American slavery has its roots in misinterpretations of Scripture, but that's not important to this discussion.) Slaves were paid in food and a place to live. Much like the American worker was treated before unions appeared. When unions arrived, so did minimum wage, the 40-hour work week, overtime, and more. And that hurt profits, so the business owners went nuts. But there was another factor: The "Great Depression". It wasn't the worst depression America had; it was called that because it was the first time the effects were described on radio. By adding emotion to description, the people understood how bad it was. But they also described how the rich--movie makers, corporate owners, and the like--were still living it up like nothing was going on. This is when Americans (erroneously) decided that money was the solution, not realizing that money was the very reason for what was happening. Specifically, what Matthew 6:24 calls "the want of money". (This is almost always mistranslated.) What happened is one of the worst sayings that was ever invented: "If you can't beat 'em, join 'em." Instead of evening the playing field, people left those with the same problems behind, compounding the problem. Then . . . Reaganomics. Until then, we had demand-side economics, which focused on the people. Everything was readily available, from food to supplies to jobs. Reagan's pro-corporate agenda changed everything to supply-side economics, which focuses on profit. What have I been saying in this blog is the problem? Profit. With the arrival of supply-side economics (called Reaganomics by liberals, while called "trickle-down theory" by conservatives to hide its economic meaning), everything changed. Labor was limited. Shelves would be empty. Some products not only had to be ordered ahead of time, but also paid in advance or in payments. And so, small businesses collapsed, shifting demand to big business. And with the increase in demand, comes an increase in price. In the last forty years, corporate marketing strategies have defended this. The main claim is that if they have the money, then everybody should be doing well. And to enforce it, anyone who won't agree is kept at the lowest possible position, if kept at all. But the effects of a money-based mentality are lost on the American people. The problems of wealth and income inequality continue, while the average worker thinks they'll get rich. In truth, very few ever do, and--according to two of my instructors in getting my business degree--the only way to do so, today, is to break the law. And they have the best lawyers on retainer all year around. Now, go back to the top and read what I reposted again. Depressing, isn't it? I'm getting away from politics and economics in my next blog, whenever that turns out to be. Until next time . . .

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