Tag Archive for 'capitalism'

Capitalism and the Stock Market: Speculation vs. Investment

Published on December 2, 2007 in Podcast. 0 Comments Tags: , , , , , , .

If you are concerned about the financial security of America, or if you think the stock market is a place to make a quick profit, or if you don’t understand investing in general, this interview with John C. Bogle may be of benefit to you. Without question, he has earned the right to comment on capitalism. John Bogle was a pioneer in mutual funds. He founded The Vanguard Group in 1954. In 2004 he was named by Time Magazine as one of the 100 most powerful and influential people in the world. A man who has been on the cutting edge for years, he also blogs.

He likes to be called “Jack” and he is the kind of person that gives someone like me, a small-town radio host, the same opportunity as Bill Moyers or CNN. In fact, he may have given me more. To show you what kind of person Jack is, I have to tell you that I started this interview several weeks ago, but 5 minutes into it, the transmitter at the radio station failed and we had to reschedule. Jack was unphased. He was happy to take the time to set it all up again. I was amazed. Still am!

He is also an author. I had seen his interview in September wth Bill Moyers regarding his recent book, “The Battle for the Soul of Capitalism.” He has written another book recently, “The Little Book of Common Sense Investing: The Only Way to Guarantee Your Share of Stock Market Returns.” And, he has written many more.

I do not think this interview does justice to the scope and breadth of Jack Bogle’s wisdom. He understands the good side of capitalism and he captures with clarity and insight where capitalism has gone wrong. Capitalism used to be about markets and products, providing what people needed and selling the best product that money could buy. Somewhere in the past, capitalism sought to benefit the worker and to reward him for his loyalty and industry. Where are these qualities in the capitalism that rules the world today? Gone! Gone with the wind!

Why? Because capitalism has lost its focus and now serves the CEO, the financial managers, the Wall Street stock broker, not the owners, the shareholders. The forcus is on making money by any means and if laying off hundreds of employees to turn a quick buck is necessary, that is all in a days work. CEOs and corporate boards scratch each other’s back with exhorbitant compensation packages that, in reality, create a conflict of interest between those in control of a corporation and those who own it.

I am not an investor. I do not understand the stock market. I do not understand day traders. If I knew that Jack Bogle was handling my investments, I wouldn’t have to worry about whether or not I was being lied to, tricked or sold down the river. I cannot begin to do justice to his comments. I can only be thankful that at least one billionare cares about the security of the common man.

If you want to know his advice for sound investing, you will just have to listen to the interview. And, read the book!

John C. Bogle, Author and Investment Expert [ 30:29 ] Play Now | Play in Popup | Download (719)

Interview with Richard Vedder, Author and Economist, “The Walmart Revolution: How Big Box Stores Benefit Workers, Consumers and the Economy”

Published on September 9, 2007 in Podcast. 0 Comments Tags: , , , , , , , .

Richard Vedder is a Senior Fellow at The Independent Institute and a Professor of Economics at Ohio University. I wanted to talk with Richard because of my new found word “monospony.” In case you haven’t heard of monospony, it is rather like a monopoly, but one controlled by the buyer, not the seller. My concern arose when I heard that Walmart had caused layoffs by Rubbermaid when Rubbermaid refused to lower the quality of its products as demanded by Walmart.

Vedder and I discuss some of the issues surrounding the pros and cons of the ascendency of Walmart as a commercial world power. He fully believes the U. S. and the world is better off with Walmart than without, and I don’t think anyone can realistically argue this is not essentially true. However, even he admits dissatisfaction with Walmart’s current management.

Not everyone would agree!

According to Vedder, Walmart does provide its employees with health insurance, even if it doesn’t cover everything, and pays an average salary of $10 an hour. He is not unaware of the criticisms directed at Walmart, and when he suggested that whatever abuses may exist at Walmart are no different from those of most other corporations, large and small, I realized that most of this discussion is based on different viewpoints that are not easily reconciled.

I think his viewpoint, and that of all Republicans, is that the viability of the corporation is more important than the success of the American middle class. No doubt the two are intimately related, and while I understand the need to be competitive, the real struggle is between shareholders and employees. Shareholders want as much return as possible. Employees want higher wages. Both are dependent on profits.

The philosophy of most of the 20th century was that employees would experience more and more of the American Dream as the economy grew and productivity increased and wages increased. That idea was exported to India, China and Mexico with NAFTA and the out sourceing of globalization. Not only has corporate America exported our jobs, it is has fooled us into believing that it is great to work more, have more responsibility and earn less.

But that is not what they are telling the shareholders. They do everything they can to convince shareholders that they will make more and more. And the shareholder is so far removed from the employees that the shareholder has no understanding that he is also a part of the war on the middle class.

It may take another decade, but something will occur that swings this pendulum in another direction. But it may not swing in the direction of either the shareholder or the middle class. It may swing in something new, something good or bad.

The answer? We missed the boat to resolve or avoid this problem back in the late 80′s and early 90′s. If you want to read a prophecy of 2007, take a look at “The Trap” by Sir James Goldsmith. A gambler and a capitalist, Goldsmith accurately predicted the consequences of globalization at the beginning and urged the industrialized nations to take a more conservative approach by restricting globalization to regional trading alliances that did not have the potential to gut the hard earned living standards of the West. Of course, to do this someone (those in power) would have to actually put considerations other than profit into the mix as to what is in our national interests. Yeah, sure! No one did and here we are!

Richard Vedder, Author and Economist [ 26:22 ] Play Now | Play in Popup | Download (437)

Interview with Peter Navarro, Author, “The Coming China Wars”

Published on August 26, 2007 in Podcast. 0 Comments Tags: , , , , , , , .

If you aren’t concerned about China, you must be a redneck! My words, not Navarro’s. But some people do think China Sucks.

Peter Navarro is an Associate Professor of Economics and Public Policy at the University of California, Irvine and the author of numerous books, the most recent of which is “The Coming China Wars.” I caught a C-Span Book Review featuring Peter and with all the bad publicity China has been getting recently over its sorry products, I thought it would be a good idea to find out more. I also had a personal motivitaion. My youngest son spent 6 weeks in Kunming, China this summer studying Chinese. I expect he will go on to master this most difficult language and according to Peter that will probably be a good career choice.

Take a look at Peter’s YouTube commentary about China and you will see why we ought to be more concerned about China than we are. Not only is China killing Americans (food, toys, products), but it’s killing Chinese, as well. Not only is capitalism alive and well in this great bastion of communism, but it is pure capitalism. Cut-throat, money-is-everything, don’t-care-who-you-hurt, capitalism.

Peter tells the story of how this began so many decades ago, where it is going and what it is going to take to stop the natural progression of these events. Unfortunately, the ultimate remedy may lie in the hands of Washington power feeders who take money from the manufacturers of America who make money on products from China. Don’t expect them to bite the hand that feeds them.

Now, I am as proud of American capitalism as the next entrepreneur, but one of the main differences between Chinese and American capitalism is government regulation. If you are a Republican, if you hate government, if you think there is too much regulation, then take a trip to China and see what America could be without government regulation. Now, this is not an endorsement of government regulation. There may be too much and too many bureaucrats, but I can at least drink the water just about anywhere in America, except maybe after a flood or a hurricane. You can’t in China and you can’t in Mexico.

While I realize the issues of trade are complicated, there is one thing that is pretty simple: China doesn’t care if it sends bad products over here! The real question is why don’t we? We as consumers may care because their sorry products run the risk of killing us, but why, after all that has happened in the last few months, isn’t Congress up in arms? (After all, China killed the same kind of dogs that Vick is alleged to have killed!) Why aren’t they, our leaders, passing laws right and left to make sure that China doesn’t sell or ship substandard products to America?

Why? Because many of those Senators and Congressman are taking money from American businesses and manufacturers who make tons of money trading with China. Free trade to them is money, while to you and me it may be death. Walmart, that store you think you love, is going to kill us and our economy because it prefers cheap, shoddy products from China to well made American goods that would support an American family. It isn’t just cheap labor that China offers, it’s cheap manufacturing. Manufacturing without quality assurance. Manufacturing without the expense of safety precautions. It is exactly the type of manufacturing big business would have down the street in America if it were not for government regulation. (The next time you tell your kid to put on a seatbelt, first, thank the lawyers who sued the car manufacturers hundreds of times, and then liberal Democrats!)

Yes, the Chinese government shares a lot of blame, but everything in China is made possible by an American business. In the name of staying competitive, business convinces us that a few of us, our children and our pets have to die every now and then from lead paint and bad dog food. It is a small price after all! Wait until the cheap Chinese steel we put in our bridges and buildings starts to break and maybe we will decide that free trade and competition just isn’t worth the cost.

Peter Navarro, Teacher and Author [ 29:14 ] Play Now | Play in Popup | Download (968)