The Lemonade Stand

Ever since mailing off my daughters’ applications for US citizenship, I have been tracking the package in my mind. On Saturday I thought, “OK, now it is in motion.” On Tuesday I figured it had left European soil. Friday was the first time I thought, “It must be there by now.” Meanwhile, my mind has shifted to what comes next. I’ve been (uncharacteristically) checking my mailbox and email inbox more frequently. I’ve started answering the landline when it rings.

Experience should have taught me by now to be prepared for more obstacles and bureaucratic hassles coming my way – maybe even a big disappointment. Instead, I find myself thinking positively, wondering what preparations we should make for their interviews in summer. Will they be asked questions about the US government and history? Should I make them memorize the Pledge of Allegiance?  What qualifications and experience are necessary for applying to be American?

In a way I have been preparing them their entire lives.

We have been incredibly lucky to be able to travel to the States every other year and to spend basically the whole summer there – thanks to my generous sister, her equally gracious husband, and their roomy house. That means my younger daughter, Lily, has spent over 6 months there all together and the elder, Mitzi, about 9. In all of those trips, it was important to me that they have some of the same quintessentially American childhood experiences that I had growing up. Little stuff like running through sprinklers and drinking from bubblers. Wandering the Streets of old Milwaukee and pushing the rattlesnake button at the museum. Going to festivals and watching airshows. Bike rides through the park and trips to the mall. The taste of custard, the clickety-clack of the Zoo train, the song of the Ice Cream Truck, the smell of brewery yeast, the flash and bang of fireworks.

One summer, my sister discovered that they had never heard of lemonade stands. She was appalled. Such a gap in their cultural education had to be addressed! Brother-in-law put up the starting capital for cookie dough and lemonade concentrate and Sister helped them with the signs and the baking – right down to the fork prints on the peanut butter cookies. Brother helped in setting up the stand at the edge of the park across the street from the house. Sister took on the photo-documentation of the enterprise.

 

 

      

Business got off to a booming start. Within a half hour they were already running back to the house to replenish their stock. Later, though, things slowed a bit. Sister suggested they offer “free Cheetos with every purchase” and made them a new sign. Later, Mitzi started a delivery service. She walked up to people on benches and blankets in the park and made her pitch. Meanwhile, Lily held down the fort.

 

The girls’ supplies of both lemonade and patience were almost depleted, but not quite gone, when some nice neighbors came (to the rescue) with their bulk orders, bringing about an abrupt and successful close of the business day. The girls came rushing back to the house with wads of cash in their box. The next step was working out how much they needed to reimburse their start-up investors. Once all debts were repaid, their eyes shone with excitement about their 500% ROI and Mitzi proclaimed that she had a new favorite English phrase: “Keep the change.”

 

They were officially American kids now, fully initiated into the wondrous rewards of free market capitalism. The way to have cookies and sugary drinks while still making easy money! I confess little bubbles of my own skepticism of this system rose to the surface.

“Can we do this again?” one of the girls asked excitedly.

“Sure,” I answered.

And when that time comes, I thought, maybe I should throw in a few new elements. For instance, sales tax, advertising costs, rental fees for equipment and furniture, trading license, health inspectors, insurance, maybe even arrange for a policeman to come by and fine them for selling in the park. And if any money is left over, I can confiscate half of it for the IRS.  We can call it “Capitalism – Lesson 2”. It will be good for them.

 

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Twickle-Down Twumpcare

It is 8 pm Austrian time. If new reports are correct, about one hour from now, the House of Representatives will vote on their health care insurance accessibility plan.

As I have occasionally mentioned on this blog, our messed up free(d) enterprise(r) system, tweaked into dysfunction by years of corporate lobbying and legislation written at Round Tables and then conveyed by the hand of some bought and paid for politician to the floor of Congress and voted unread into law (pause . .  to take a breath), has made sure that American money now acts like a gas floating upwards rather than a liquid trickling down. Not that I ever really bought into that particular theory either. But Republicans clearly cling to it with an almost religious conviction. In order to sell it to their minions, they coin neat phrases like “job creators” or “makers and takers” or conjure up economic evil-doers like “welfare queens” or “deadbeat dads”. They opine incessantly that “Obamacare” is merely a “disaster” in a “death spiral”, a weapon in the big hand of government wielded to enslave the once-free . . . And now they have their chance – the new tiny hand of government will be more than happy to sign a law designed to bring back the invisible hand. Supply and Demand. Those market forces will make everything healthcare great again.

Except that we all know they won’t. Because as we saw before the ACA, with a health insurance industry orientated toward profit, the demand was universal (we ALL get sick and need care) and the supply was based on ability to pay.  These companies did not magically rise up to meet the needs of the consumers. They found ways to avoid paying the bills of the sick (e.g. “pre-existing conditions”) in order to keep the premiums of the wealthier and healthier lower.

Maybe, just maybe, the health care concerns of our nation cannot be addressed only through insurance industry products being bought and sold. Maybe, this is one of those economic sectors where cooperation is just as necessary – or more so – than competition. Maybe, merely “everyone having access” to health care isn’t enough. I mean, I “have access” to a Rolls Royce. That doesn’t mean I can afford to buy one.

I am in no danger of being financially ruined because I don’t own a Rolls Royce.

Not having a Rolls Royce does not put me at risk of dying or losing a loved one earlier than necessary.

 

While defending the proposed budget, Twump’s spokesperson feigned social consciousness by asking can we really continue to ask a coal miner in West Virginia or a single mom in Detroit to pay for these programs?”  He wasn’t talking about the ACA specifically, but about all larger government actions. My answer to him: “YES! Yes, we can!”

It is certainly better than asking that coal miner or single mom to contribute to the next insurance company CEO’s obscene bonus.

Is this all really so hard to understand?

 

It is now 9 pm Austrian time. I just checked the news and heard that the vote will not happen after all.

Rainmaker Riposte

First – a re-blast from the past . . .

Metaphorical Money

March 6, 2015

Over the years of listening to hundreds of business student discussions, it started to occur to me that the way we talk about money –– the idioms and metaphors we use –– have changed over the decades. I started collecting those idioms and metaphors and discovered that they generally fell into three distinct groups. One for each of the three physical states any substance can take: solid, liquid, and gaseous. Let me explain.

A hundred or so years ago, money had the physical properties of solids. It was dough or bread. You could hold a big wad of cold hard cash in your hand or jingle the coins in your pocket. You could stockpile money, put it where your mouth is, throw it around, or stuff it in your mattress. Like Scrooge, you could stack up your wealth against someone else’s or squirrel it away. You could pinch pennies, hold the purse strings, have money to burn or have money burn a hole in your pocket. Money talked.

Then something changed –– maybe it was abandoning the gold standard or deregulation. Who knows? But it seemed that the revved up economic motor got hot and money melted. Liquidity was born and savings turned into cash flow and liquid assets. Companies no longer went broke, they became insolvent. They didn’t fuse, they merged. A small amount of money was a drop in the bucket. More and you were awash in it. See a good investment? Then dive in! Some of the money evaporated. Some of it trickled down.  But even in its liquid form, there were still some natural barriers to keep money contained; you could pool it, but not for too long, because then it would go stagnant. Money had to keep circulating. And some of those pools had bubbles in them.

The economy heated up a little more and then, in 2008, came the “Great Economic Meltdown” which strikes me as a misnomer. The economy had been melting for a good long while. This was more like the ”Great Economic Vaporization”. We suddenly discovered that money had become a gaseous substance somewhere along the way. At first it had seemed to be everywhere and limitless; you could just breathe it in. You could make money out of thin air. No need to produce anything or do actual work –– let the Chinese do that. We could just buy and resell stuff to make money because it was not connected to anything on the ground anymore. The FIRE economy (Finance, Insurance, Real Estate – in which nothing is actually produced) ascended, while roads, bridges and schools crumbled. But in money’s new form, it started, like most gases, to rise upward, collecting in the stratosphere. For the 95% of us down here on earth, huge portions of it simply floated away; there was suddenly no financial oxygen around anymore, no cash flowing or trickling, nothing solid or tangible to put in your pocket. Poof. Gone.

What now? As I admitted at the start, I am a language teacher, not an economist –– or a chemist for that matter – but it seems to me there is no way to get all those escaped gasses back. And simply printing more money as some have suggested won’t do anything to reverse the chemical processes that have been set in motion. I think we have to start building things again. Let’s start with things that keep the planet cool. Like wind turbines. And solar panels. And schools.

I generally don’t like re-blogging stuff (even when it was written at the start when I had a readership of one), but I have found myself returning to this old idea lately because it still seems completely relevant to what is going on today, and more particularly in how economic issues have been dealt with in this election. One hears continually that decades of increasing financial frustrations turned into rage (with some help from a well-meaning socialist senator and a de-meaning wannabe strongman), leading us into our current political quagmire. Now we are being asked to choose between the classic medicines of the political left and right. Put her in office and she will try to push through her hundred ideas of how the government can help us. Give him the chance and he will wield the magical powers of money to save us.

Although I definitely fall in the camp that sees government as a useful and necessary institution, I believe now that old ways of thinking are no longer valid. For over thirty years of deregulation, wealth has slowly consolidated upward as the lion’s share of the tax burden shifted consistently downward to lower earners. All of these developments have made our economy precariously top-heavy and in constant danger of tipping.  Left/right solutions no longer make sense for an up/down problem. The core of our predicament is neither political nor economic – it is chemical . . . and mythological.

Ironically, the arguments behind three decades of deregulation have been disproven by their own implementation.

 

Myth #1: “Job Creators”
Let large companies keep their money and they will reinvest it, creating new opportunities for workers.

In reality, the vast majority of people are employed either by government or by smaller companies. When the large ones have more money, is it their first instinct to think “let’s go hire more people”? Or do they go shopping for smaller competitors, take them over, fire employees with redundant positions and make those remaining take on the extra workload? Seeing as how the prime directive of corporations is now “shareholder value”, the choice seems clear.

 

Myth #2: “Dishwasher to Millionaire”
A person can work their way from nothing to fabulous success.

At some point I learned that a person now needs money to make money. Horatio Alger might disagree, but it seems to me that there are more people working harder and harder just to decrease the rate at which their standard of living is sinking. We have become Gatsby’s, believing “in the green light, the orgastic future that year by year recedes before us . . .So we beat on, boats against the current, borne back ceaselessly into the past.”

 

Myth #3: “Taxation without Representation”
Paying taxes means “the government is taking your money”. You are a much better judge of how your money should be spent than those bureaucrats in Washington.

Really? Personally, I don’t want to have to home school my kids, check the quality of my food, build my own roads, put out my own fires, dig my own well, confront the burglar myself, build my own generator, drive my injured friend to the hospital (on roads I built myself) or pay every individual (home-schooled) doctor out of my own (already empty) pocketbook (-and I haven’t even had lunch yet!) I don’t want to dine on cat food when I am seventy or build my own playground or define and defend my own rights.

And I don’t want others to have to do all that alone either.

Until the day arrives when not only the obscenely rich up there in the stratosphere, but ALL of us, down here at ground level, can afford private daycare, private schools, private transport, private doctors, private libraries, private security forces and private pension funds, I think we are going to have to keep working together. It would help us all a lot if we had more cash flow.

So let’s start by making it rain.

It’s the Quality, Stupid

All throughout my twenty-five years of teaching English to Business students, I raged against their cemented-in, almost purely economic world view. No matter what social issue we discussed, the sighing conclusion was that it all came down to money in the end. Keynes was out and Smith’s invisible hand back in. All those ideas for improving the world sounded well and good, but . . . who was going to pay for them? The purpose of a corporation was not to pool resources of funds, talent and know-how in order to provide necessary goods and services for the people – no, the purpose of a corporation was to make money for shareholders. Built-in-obsolescence was genius because it ensured future customers. Why produce a pot that can be used for 50 years? You will only be able to make one sale per person per lifetime! So now we can wear our jeans for a year before they start tearing and dissolving and we can replace our toasters every five years, our coffeemakers every two. The government, as well, should shift their focus from quality (of life) to the bottom line. No more reckless investing in people or the future – the number one priority must be to balance the budget while reducing taxes. Deficits are the root of all evil.

Donald Trump’s (very presidential! believe me!!) foreign policy speech got me thinking about all this. Almost all of it was economics over diplomacy. Goodbye foreign aid – from now on it is “America First”. Mexico has to fork over cash (because we have had such good experience with countries who build walls to keep their people in.) NATO countries and Allies should pay up, and, if not, they can just go build their own nukes, thank you. And China will have a price to pay for all those jobs they stole. Pay up, dudes, or we might just get . . . unpredictable. So “Let’s Make a Deal!”

How have we allowed money to become such an all-powerful dictator? To become the one element of life, the one concept we shape our world views around. I understand the idea of “It’s the economy, stupid” and that voters care most about economics.  Most of us want a job with decent enough pay to get by on 40 hours of work a week – leaving us the rest of the time for our families, entertainment, travel and other interests. But a lot of us are also sitting around and waiting for those jobs to be “created”, voting Democrat if we believe the government can do it and Republican if we think businesses can.  I don’t believe either of them has this magical power of giving the people something to do from nine to five, or that this should be either’s ultimate purpose. Businesses provide necessary stuff that can be sold for profit. Governments provide necessary stuff that can’t be sold for a profit.  Forcing the straightjacket of purely economic thinking onto the government is a bad idea. It’s the complementary manifestation of stifling over-regulation or expecting corporations to solve the world’s problems. As nice as it sounds, we cannot simply shop our way to a better world.

In my own personal experience, I think I have managed to hold money at bay so far, by which I mean not allowing it to become all-powerful in defining the quality of my life. I have never had a lot, relatively speaking. (Of course, there are about 90 million Ethiopians who would laugh out loud at that last sentence.) But I have always had enough. I find it easy to adjust my consumption to my bank balance rather than working my butt off to get my income up to the level of my desires. I learned to appreciate keeping old possessions in working order rather than replacing them with something shiny and new. I dampen my own shopping spree delight with the question of where I will find room for this new thing in my already overstuffed house – this premature buyer’s remorse often diverts my path away from the checkout line and toward the exit with empty hands. I procrastinate on purchases until they become no longer needed. I buy unflashy economical cars and drive them until they die. A new pair of jeans will never feel as good as the 38 year old ones in my closet that I have had since high school – and they are still in good shape(!), though, maybe, not particularly stylish.

Yesterday, my younger daughter and I were discussing renovating plans for our first floor (which we really have neglected for too long and is getting sort of dingy.) She pointed to an old wooden hutch in the kitchen and said we should get rid of that. She pointed out how the drawers stick and one of the doors doesn’t close properly anymore.

“That hutch is almost 200 years old, honey. And it is still useful!”

potsThat surprised her and we started touring the furniture and estimating the ages of various pieces. I also pointed out the three pots in our kitchen cabinet that we had gotten as (costly!) wedding gifts. Over a quarter of a century old and used daily, they were still in perfect shape and looked better than the more recent additions to the cabinet. Things my daughter had simply seen as sort of ugly or marred started to appear to her in a new light. Born into a consumer’s world where everything is replaceable and the newest thing is always the best, I think it was the first time she started to understand my attachments to my aging possessions. I hope I could plant the idea in her head that we are not only consumers, but also caretakers.

I once wrote a comment on a friend’s blog that Americans now “consume” elections. We look for entertainment value rather than useful information. So it is really no wonder if we end up with representatives who are looking only as far as the next quarter’s returns rather than the longer term good of the country and world. We aren’t interested in holding on to the aging piece of Washington furniture that has been doing its job reliably forever. We are looking for the shiny new object with a flashy brand name and grand promises of a better, more fulfilling life. Let’s chop up all those old things into firewood and burn them. Forget “a chicken in every pot” – let there be a new pot for every chicken! Making a better deal is the way to a better world.

At least until the handle breaks off after just a few months and the buyer’s remorse sets in. Now our only choices are to keep burning our fingers or take that regrettable, yet somehow pre-ordained and long overdue trip to the dump.