I am getting a MBA and MS in Marketing and have had the privilege of attending one of the nations finest institution for such an education. In the course of my studies I have read a considerable amount about business as it relates to the interaction between consumers and any entity that is selling stuff. As an undergrad I studied Geography, the study of people and places, why they live where they live and the world around them that shapes them and the environment. Both of these subjects go hand in hand through a vast majority of the topics covered.
Currently I am taking a very interesting class in Emerging Markets and also reading Thomas Piketty’s book “Capital in the 21st Century.” In this book his main topic is the division of wealth or capital between nations from the historical perspective as an economist. He is not just any economist however, he does not go off on long discussions, so far at least, on complex math problems trying to overstate simple ideas, instead he presents his data in a clear concise way that anyone can understand. Although he is French, but I won’t hold that against him…yet. The first part of this book details the historical data we have on markets, their size, how long they have been around, how we have measured them in terms of GDP, GNP and so on. A very intelligent stance is presented on leveling the playing field for determining what is capital or wealth and the differences with exchange rates, setting up the analysis case for what later I am guessing at this point will be demonstrating the inequality of wealth across all nations.
A thought crept into my mind this morning while working out and listening to the book, it centers around Clay Christiansens idea of disruptive innovation in industries. The very basic idea here is that companies hire the best and brightest they can from the best business schools, these men and women take to the business and develop it as much as they can to increase profits for their Stockholders. At the same time their industry in ‘disrupted’ by a new comer, who takes a small portion of market share from the biggest company with all the MBA’s. Then the higher company relinquishes that market share entirely for higher profits in their up chain products, thereby increasing profit margin for their share holders and wasting less on the low grade products that the new comer is now producing. This cycle continues as it did in the steel manufacturing industry until the big company is overtaken by the little company on the last high end product it produces and then goes out of business, all the while profits had been steadily increasing and the company was doing great. They never saw the disruption as the eventual killer because they were blind by the job they were doing, which they had been taught was right, increasing profits, getting rid of waste and leaning out operations.
Combining these two thoughts, one from Picketty that emerging market countries like China have seen such insane GDP and GNP growth and a surge in the size of their middle class, we in the “developed” world are sitting here gaining our own GDP growth by producing more from our american companies who do all of their manufacturing overseas in these emerging markets. This is the same scenario that Christiansen is saying, except that, we are seeing it on a global scale which will lead to cliff when all of the Western European countries and America fall off because we no long produce anything. To add to this madness, our populations are declining, while theirs are increasing. In America we have some 400 million people and of the indigenous population that has been here for 5 or more generations, we are seeing a decline in birth rates due to choices we have to not farm or have a large family to carve out a subsistence living. We are only growing because of the immigrants coming into the country. The same can be said for Western Europe and Japan. When and where is the cliff? How much more can we afford to move overseas? Don’t get me wrong I am not an isolationist from this view point of world economics, but we need to wake up and recapture our own real manufacturing industries. Currently all we are making are financial blunders after financial blunders and kids with ADD.
Our continued voting of more and more social programs is also a major concern not openly addressed. We are voting ourselves into debt and into a false sense of entitlement. We vote in people like Obama who take it upon himself with a few other professional politicians to cram down our throats this idea of universal healthcare. Social welfares of programs of this nature in a capitalist republic cannot coexist wholly. I am speaking from vast experience with living in a communist society, the US Military believe it or not, and it is great to have a free house, free healthcare as much and as often as we need, and to have a retirement for the rest of my life when I retire to go along with healthcare, all paid for by tax dollars. If we were going to a model, that should be it. Many issues arise with this model because from an economic or business sense, it is not profitable. There are some benefits to a great deal of these entitlements. We get preventative healthcare via having to stay in shape, which means we tend not to each huge amounts of junk that would pack on the pounds. We get free smoking cessation classes and drinking and drug counseling to stop any problems we might have had before joining the service. In return for all of these benefits, we have to be willing to give our lives for our countries leaders to have us go out and kill people, places and things. Would all of our countrymen and women want this regimented lifestyle? Hell no! Yet they keep voting for people who are moving us in that direction.
The flip side to the social welfare problem is the right side, who thought that the Patriot Act was a great way to protect America. No it is not, to protect America as the Commander and Chief, you have to actually fucking listen to the agencies who are giving you briefings, and then have actionable items from those briefs to preclude attacks. The Patriot Act singly created the most invasive and overt practices we see today on just about every companies website via their terms and conditions. Via terms and conditions we are essentially wide open for people to use our info anytime they want for whatever purpose they want. All of this was the outcome from the Patriot Act spying program. We need to have that Act repealed and forgotten about. We need online companies to go back to pre9/11 rules for using their websites. Un-trackable and non-correlatable for gathering info on me and my family and friends, that is what I want. There are many examples from the movie that shows the FBI interrogating a 7th grader. Why? Have you lost your goddamned mind FBI? You knew enough about the 7th grader to go to his school and harass him, yet you didn’t know that it would be wrong for you to go there in the first place? What evidence did you use to get permission to execute such a fascist act? Why would anyone or a supervisor in the government authorize you to do that anyway? How could a young man of his age even possibly come close to public enemy number one? I have a better idea for what you can do with your time since you don’t actually want to do the cop research and execute the enforcement of law. You should go down to the border and clean up the shit mess your leaders are allowing to take place for failure to act. Or even better why don’t you track down the hundreds probably thousands of Afghani and Iraqi military members brought here for military training who just walked off the base?! No, but you keep going after the regular citizens of this country who are doing what they are supposed to, yeah this has turned into a fascist state under extreme oppression, through the idea that more invasion is better to track the enemy within. Why don’t you call a spade a spade then, stop wasting our money and time on searching through Facebook and twitter posts from people with last names like Smith. Take every smith off the list until you have clear all of the al-muhammads. Forget PC and equal rights, a Smith never flew a plane into a building or harbored terrorist training camps.
We are heading to a cliff at some point people, you need to wake up and see this. Trading with countries is great, until you have traded all of you real property for fiat currency in hopes of charging more on your credit card, so you can buy the Chinese made laptop. More to follow on this series of topics. As I read more, I will share with you my ideas on this disruptive innovation that we are promoting by moving our businesses overseas.
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