Separation of Economy and State Part Three: Solutions “Not” Problems

The difference between forward thinkers and those that want to keep the status quo is in their delivery.  Those who want to move society forward focus on solutions that will drive innovation and creation.  Those less confident in their abilities to innovate and create focus on the problems at hand in lieu of solutions in order to maintain their position in society.

This leads to the final post in this series and how we can effectively take back what is rightfully the individuals – freedom and the markets.  The swarms of people that are occupying Wall Street and other areas of the country have a right to be angry but unfortunately their efforts are very far off the mark.   For solutions, I think we should turn to a true visionary in the United States as an example, Howard Shultz, CEO of Starbucks.

Howard Shultz is a man who knows how to focus on solutions and ultimately create idea’s for the betterment of society.  His experience in doing this with Starbucks taught him the importance of freedom in the markets.  Mr. Shultz has spent the better part of the year thinking through solutions to break through the barriers in our markets and he hit upon major areas of importance.  See below for examples.

Government: “Government of the people, by the people, for the people.” Abraham Lincoln.  We have come a long way since those words were uttered during a very delicate time in our history.  I do not believe that many United States citizens would resonate with this statement in the days of high powered politicians, lobbyists and special interest groups.  The increase in government has been crippling to the individual and our markets.  In the last forty years the United States has gone from a country that had two manufacturing jobs for every government job to a complete role reversal boasting two government jobs for every one manufacturing job.  This trend of increased government and less accessibility for the individual has woven a web of complex back door deals and power plays.

Corporations: Large Corporations are the very entities that feed the government with special interests and power which has led to the issues listed above.  These same large corporations have also become the very entities that no longer care about customer service and buy and/or litigate companies to ultimately stifle innovation and gain power in the markets.  Being a free markets advocate one would probably not expect me to be calling out the corporations but in many ways these large corporations mirror what we are seeing in government and do much more to prohibit advancement and innovation than support freedom in our markets.

Banking System: As an investment banker I am appalled at what is going on inside the largest banks around the world.  However, I would be the first to admit that some of the brightest people in our society are within the walls of these institutions.  Given that we are dealing with the best and brightest also makes the banks the most difficult to address.  Investment banks have done an incredible job of playing the broker/dealer/middle man role which largely leaves them unaccountable and the ability to shift with opinion, markets and regulation.  The banking system has become the ultimate player in the cat and mouse game which is causing havoc in our markets.

The true question is how do we find solutions and shift the above parties back to working for the people?  Howard Schultz’s first solution towards change in the current environment is spot on with what needs to be done – stop supporting politicians.  No exception!  This ultimately failed as a program from Mr. Schultz which shows how ingrained this has become in our society.  However, since then Mr. Schultz has created and launched an incredible small business micro-loan and equity program supported by the people through Starbucks.  This very program was established to support the organizations and individuals that are not being served by the groups listed above.  This is a great message from a recognized leader and proves that we have the ability to develop solutions without utilizing the power players.  We as individuals have great power to shift the pendulum in the direction of freedom and take back our markets.  Listed below are three ways in which we can send a clear message to the power players.

No Political Donations: Let’s send a message to Washington and all political figures for that matter that we do not need their help in running our country.  If certain individuals truly want to be civil servants and run for office then they should use their own resources to do so.  Whatever happened to politicians going from door to door to get your vote?  We have created political celebrities that believe they walk on water and the track record proves that very few can withstand the temptations of power with true integrity once in office.  It’s time to give Washington and politicians everywhere a wakeup call and take away their celebrity status through eliminating our discretionary donations.

Informed Consumerism: Since our economy is built primarily on consumer spending our greatest power as individual citizens is our consumer dollar.  It is time for all consumers to take a look at what they are spending their hard earned dollars on and how that is affecting our country.  Since most of the large corporations work on razor thin margins an organized spending freeze can make a major impact.  Let’s face it, the big corporations continue to deliver poor service, low product quality and diminish the power and freedom of the individual.  I am a major pro-business advocate but believe in businesses that are built in true American style through hard work and dedication and not leverage and lobbyists.

Regional Economics: Since most of the national banks have found a way to diversify into many different areas and increase risk with no accountability they become the hardest to affect.  Let’s make a shift to supporting regional economies through depositing our money into community banks and using local attorney’s, CPA’s and consultants to grow and expand business organically.  Taking money and the ability to influence markets/transactions away from the banks is the best way to send a message that their model is not what the American people want for our markets.

This is a major undertaking and obviously very idealistic but we the people have to start realizing that we have the power to make change organically.  Politicians will never make the right change for us due to short election cycles.  Corporations will never make the right change for us due to their short term mindset towards earnings.  Investment banks will never make the right change for us due to their ability only to care about the fee income on transactions.  Thus, we have to find solutions that do not include these power players.  We can make a difference purely by a behavioral change in our spending habits.  I only ask that those that read this really think through where their dollars are going and if you believe it is leading to a free market and better world.