Showing posts with label corporation. Show all posts
Showing posts with label corporation. Show all posts

Wednesday, April 6, 2016

You didn't build that



In a recent NPR broadcast on the wonders of the human brain, we learned how researchers have been able to identify particular regions used for specific tasks and emotions. Such as the finding that people who are happy tend to have a larger precuneus, a structure also thought responsible for consciousness.

These are indeed miraculous times, that we can inspect our own brain and determine what makes us self-aware, what makes us feel happy, which regions might cause insomnia, and how we learn language. One scholar exclaimed of the mystery and power of a brain that is able to unlock its own secrets and understand itself.

After all, our brain is but a computer, composed of about 86 billion neurons. The African elephant has three times as many, but we rarely see scholarly articles published by elephants.

The secret, of course, is that we have evolved the ability to communicate, to both exchange and record complex thoughts. And that over time we have developed tools and technologies allowing us to delve into our physical world, to manipulate and understand its workings, including that of our own brain.

When a single researcher is bent on the task of fathoming the human brain, it is not only her brain focused on the task. She is benefiting from billions of fellow human brains that have, over many years, built a corpus of thought and research and tools and recorded knowledge. This is our unique human power.

Robinson Crusoe, stranded alone on his desert island, would have little chance of understanding the operation of his own brain.

In any human endeavor, it is the multiplication effect that makes our race so successful. Libraries full of research, universities training new generations, clever tools and machines and sensors probing our world, computers and networks facilitating communication, we amplify the power of our own measly 86 billion neurons.

In spite of the critical importance of this social infrastructure, individual brilliance is still crucial, cultivated, and revered. Albert Einstein, whose theory of ripples in the fabric of space-time was recently validated, stood on the shoulders of Copernicus and Planck and Maxwell. It’s as if this fabric of human knowledge and abilities forms a trampoline on which a brilliant, young, aspiring thinker might ascend to a new insight, a breakthrough, a flash of genius.

In this we observe the interaction and mutual interdependence of society and the individual.

“You didn’t build that” is a meme that has pervaded our recent politics. It is meant to diminish the significance, and hence the deserved remuneration, of individual contribution. Liberals use it as a justification for increasing the tax on success. Conservatives interpret it as an attack on the value of entrepreneurs and the free market.

In truth, both have a point. Tom Brady would not be fabulously wealthy without the social infrastructure that offers him a field of play. But we (at least those who are fans) would be the poorer for not seeing his brilliance on the field. Tom Brady is wealthy because we value the entertainment he provides.

Examples abound. Steve Jobs (rest his soul), was enormously wealthy but brought us our ubiquitous, dearly loved iPhones. Larry Page and Sergey Brin, each multi-billionaires, founded Google, an indispensable tool to billions of people every day. Mark Zuckerberg, another multi-billionaire, brought us the spectacle of silly cat videos and embarrassing spring break photos on our Facebook feeds. None of these folks “built that.” But “that” wouldn’t have been built, in this way, at this time, without them.

More quotidian examples surround us. For government employee, teacher, police, and fireman pension funds, those are invested in corporate America. The success of those companies, and the CEOs who lead them, is paramount to your retirement. Yet somehow it is fashionable to decry and punish that success.

Just as in science, society has evolved a commercial infrastructure upon which our entrepreneurs and business leaders create and implement their individual visions. It is true that trucking companies couldn’t be successful without public roads. But without trucking companies, the value of public roads would be diminished. And it’s also true that we must all contribute to the public fisc.

But we must never demean nor punish individual achievement, whether an Einstein, Zuckerberg, or Brady. Individuals need society, and the inverse is blindingly obvious. The trampoline is useless without the jumper.


Sunday, January 29, 2012

Corporations that we love to hate

Amadeo Giannini, founder, Bank of America
In 1904, Amadeo Giannini founded the Bank of Italy in San Francisco, California.   At the time, banks catered to the wealthy and couldn’t be bothered with the paltry deposits nor minuscule loans of Italian immigrants.  His bank grew quickly, with deposits totaling $18 million by the end of the first year of operation (2010 dollars).  Giannini’s bank, due to good fortune and arduous effort, survived the San Francisco earthquake of 1906.  He was able to reopen immediately after the quake, whereas other banks were closed for weeks.  His was the only source of loans to individuals and businesses trying to rebuild, and the bank flourished.

Over 100 years later, the Bank of America, directly descended from Giannini’s immigrant-friendly depository, has become the corporation that we love to hate.  In November, Occupy San Francisco protestors stormed a Bank of America branch, pounded on desks, defaced walls, and shouted their message, “make banks pay!”  The Federal Housing Finance Agency sued BoA in September, and the Massachusetts Attorney General joined the fray in December.

The Bank of America is, apparently, greedy, corrupt, evil, and yields no benefit to society.  Let’s put them out of business!

Or, perhaps, sit back first and ponder a few facts.

In 2010 (last year available), BoA employed nearly 300,000 workers to whom they paid over $35 billion in wages, health insurance, Social Security, and Medicare taxes. Those employees all paid federal and state income taxes amounting to billions of dollars on those earnings.  And BoA pays billions more in local property taxes for its thousands of properties across the nation.

The greedy shareholders of the bank are looking only for profit; the more, the better.  Who are these gluttonous capitalists?  One example is the teachers, fireman, police, and state workers of California, where CALPERS owns nearly half a billion dollars in BoA stock and fervently hopes that the investment grows.  Otherwise, pension benefits, and retirements, will be endangered.

All of this is not intended to make you want to remain with BoA if you are an unhappy customer.  But the answer is not new government regulations and politically inspired litigation.  The answer is to exercise some personal initiative. 

If you are unhappy with your bank’s fees, try one of these:
  •       Consolidate and build your accounts in order to attain the amount needed for free checking.
  •       Pay off your credit card balance in full each month.
  •       Don't overdraw your account or make a late payment.
  •       Find a local bank or credit union and move your accounts.  They will welcome you.
  •       Start your own bank.

While that last one may seem whimsical, it is not.  All you need is to sign up shareholders to kick in $4-$10 million (usually 500-1,000 like-minded investors).  Then, incorporate and make a charter application to your state or the federal government.  (Yes, you must become a nasty, corporate capitalist, by law, in order to form a bank).

Once your charter is approved (typically 180 days or more), you are in business and can begin hiring employees, accepting deposits, and making loans.  Remember that the goal of the business is to make a profit and repay the investors.  In addition, as you build your deposits, you may make more loans to worthy individuals and businesses.  If any of those loans are not repaid, you must still ensure that your depositors’ funds are safe and can be refunded on demand, and also retain the faith of your investors.

So while you may sympathize with the Occupy crew, perhaps a whiff of reality will help you see a broader picture.  Corporations in general, and banks in particular, are simply associations of  like-minded people who strive to provide services and earn a profit in return.  In the process of doing so, they create a multitude of jobs and pay a staggering burden of wages and taxes to various jurisdictions.  That can’t be all bad.