Posted by: Dr Churchill | February 27, 2018

The State of the American Dream today…

Thank God, today, the American Dream is still doing quite well, same as our Union, because both appear to be strong and resilient in the face of blistering attacks from outside, and seditious internal bickering from within.

Sadly the huff of desperation and the shrill cries of harpies, emanate from all those collectors of grievances, and the pitiful souls pining for yesteryear’s cultural norms and their hobby horses of corrupt representation. These devastated & mentally weak folks that are suffering through some perverse Daddy issues — now condemn their lives in total, because of the heavy angst generated from the serialized version of the mass media fake news about imminent teleological dissolution of our Presidency and Nation.

Like the smelly old fool walking about on Broadway with the sandwich clapboard sign promising the “End is Nigh” this new breed of clan bearing and CNN idea wearing smelly fools are now everywhere in Academia, in Society and beyond, and we have to shift our feet lest we step on their toes perpetually exposed for another one to step on their causes and calluses, and thus wake their resolute cries for some deluded form of social justice that is to be delivered at the foot of the bedwetting individual of an undefined, unrefined, and largely unsatisfied sexuality…

Even the old man of psychology, Sigmund Freud would have been lost here without the benefit of his “smack” to lighten his tooth aches and take away the cares of this weird and queer people that are so plentiful like selfish zombies out of the machine taking selfies before they bleed their victims out of life’s juices.

Indeed at times it seems as if the inmates have escaped the asylum, and instead of running away — they are hanging around wanting to run the joint, and ruining it for the rest of us too…

You’ve got to admit here, that regardless of your political persuasion, that at times if you listen to CNN for any length of time, invariably the constant cry of Russia, Russia, Russia, from the likes of her “superior ugliness” Rachel Maddow, and gay-boy Anderson Cooper — you are bound to think that these folks belong to a psychiatric asylum that specializes in Red Scare conversion therapy…

It’s a zoo out there…

But saying this — I realize belatedly that it is such a politically incorrect statement, that the voices of the assorted snowflakes will rise up and demand my sequestration to a re-eduaction camp of their liking in North Korea or deep in communist China.

Sometimes I think that I would gladly oblige them, if I were to escape the vagaries of living in ultra leftist, angrily selfish, and gender fluid Seattle, where Democratic pedophiles like ex Mayor Murray, and his erstwhile auntie, corrupt Senator Murray  rule the  roost…

Suffice to say that our suffering is massive but we are bearing the cross well…

Same as the rest of you, who work hard to fight off our enemies — we have to keep working hard to protect our friends. And our friends’ friends, simultaneously with having to watch our backs for those backstabbing internal fools, and also protect our Republic from the foolish & self hating inimical deeds of the leftist guerrillas and the Democratic party apparatchiks, and self loathing party cadres.

And the thing is that we ought to do this constantly, lest they steer us off our path, and cause our country to suicide off the cliff-face.

Ww should also stay on guard, lest we respond too harshly, and perhaps lose our composure, and our compass pointing to true North, and maybe led to take an awfully wrong turn, that might compromise our values, our progress, and our integrity.

We’ve chosen to remain steadfast for ever, and resolute as can be, in order to preserve our Union in the face of strife — and also to protect those fools from themselves…

And I am speaking here from personal experience, because same as our President — I am under constant assault and attack from the enemies of our Peace and Freedom. And while we are getting stronger every day, we still have to blossom in solidarity with the positive thinking person firmly leading the country as the current White House administrator, steadily handling the wheel of the ship of state, through the storm, and winning victories for all of us, as the current resident Chief of the White House and of this nation.

God Bless, Donald J Trump.

And God Bless America.

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Thank God our prayers were answered.

Thank God that we dodged the bullet called crooked Hillary, in these past presidential elections.

Thank God, that victory of REASON, a winsome electorate that saw through the fake news deceptions, and our constant FAITH, manifested the much needed change for America.

The New America that comes in the face and the wings of the one person that will stop our dismal slide downhill, from the fifty years of back sliding down the garden path. A downhill journey, that somehow all of the preceding administrations have taken us down a few pegs, starting from the 1970s when real wages for most of us began to stagnate (as adjusted for inflation and worker age) and going terribly wrong during the Carter, Clinton, Bush, and Obama/Clinton, years of division and rancor.

Evils that have perplexed our nation since the dawn of time demand now their instant removal, and thank God — we’ve got the man to do the job.

Yes, things are changing. And things are changing fast and furious through the storm that has been unleashed like a gale force Nor’Easter, named Donald J Trump, and through his pragmatic and realistic cabinet.

Just look at the economy…

You can feel the change in your tax returns too.

I suspect that this year’s tax returns show the same for you as they show for me — as this 2017 is scheduled to be my best financial year. A year of solid success, and winnings at the crooked table with the loaded dice, that Wall Street often resembled during the past fifty years of favorite sons’ returns.

Yet today, this whole thing changes, when all the markets and all the issues, were buoyed and uplifted by this positivity tide of an optimistic and winning man at the helm of the American Dream. A man simply termed “The Trumpster” who makes it safe to assume that this will be the best stock-market investors’ year for all of us too. Whether you have a 401k, or you are a private trader, or even an investor with a manned portfolio and a computerized bot transacting on your behalf, or a mutual fund person — it doesn’t matter. It doesn’t matter, because we’ve all been elevated economically and spiritually as this all too American economic tide lifts everybody’s boat. And the latest Trump tax cuts are also helping to add more bandwidth to our paychecks as well.

This much windfall, isn’t a matter of productivity, either: workers were more productive every year since the 1970’s, yet we just stopped rewarding them for it. And in the face of growing economic indicators in good and bad times — we have to face this sad fact, and the ways that it came to be, as I am sure it’s a problem with many fathers, and quite a few Mothers, amidst the severe causes of it, and most of them are political.

Yes. Politicking rises it’s ugly head all over again…. as newspapers, mass media channels, and internet social media barons — all over the land — are constantly lying and pandering to the lowest instincts, and the cheapest passions of party and class interests, of the men & women of the ruling class, who are dominated more often than not, by their love of money and power, as they seek to destroy the one man that sacrificed everything for You, the American President Donald J Trump.

These devil’s errants are run by the same kind of fools from New York Times that demand the President’s impeachment or resignation for imaginary wrongs and crimes of thought and fantasy…

These are the same satan worshipers of yesterday’s year like the fake news journalists of the powerful newspaper, the New York Herald that upon the ascension of Abraham Lincoln to the Presidency, demanded in an editorial, that “he resign in favor of a more “acceptable” man, otherwise “he would totter into a dishonored grave” … leaving behind him, a memory more execrable than that of Benedict Arnold.

Imagine that and compare their sad treatment of Abraham Lincoln, the Great Emancipator to the treatment of Donald J Trump by the New grok Times today.

Methinks that I know who is going to have the last laugh here, and it’s not going to be the New grok Times, anymore than it was going to be the New York Herald back in the days of Abraham Lincoln.

Still, we have to remain on guard because…

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But this post concerns only one factor that generally isn’t touched on by labor statistics, economists, or by political pundits and polemicists. This subject I am about to speak for is a serious taboo, and its what I gamely, namely, and starkly refer to as what we “The People” call: “Wall Street Greed.”

Much like lawyers arguing in court present legal theories, and spin their ideas of how the world and the law intersect, and why this should mean that their client is right, and the other side is wrong — I offer here the two sides of the argument for the American Dream today and yesterday.

In legal circles and in parliamentary debates, the roof of one legal theory trumping over another, comes in the form of a verdict, or a court decision. But what we “The people” say, is that the proof is in the pudding, and as a culture we have many theories about how institutions and behaviors that aren’t so clear-cut in their validity tests, without a courtroom, without a jury, without a parliament, to agree or disagree, and to debate the merits of the issues — we cling to these erroneous theories, in order to feel better about ourselves and about the ways we have chosen to live our lives.

Similarly, in American business, one key theory (Shareholder Value maximization) is that the purpose of corporate enterprise is to “maximize shareholder value.” Some corporates, take this claim even further, and position themselves, that such value maximization is the “only reason” a corporation exists.

The “Raison D’Etre” of any corporations existence is to maximize shareholder value…

Just turn on the stupid box and watch CNN (the Business channel), or MSNBC, CNBC or NBC, ABC, and even Fox Business News long enough, and you’ll begin to believe this is God’s truth.

But I am here to tell you that it’s not.

It’s just a theory.

It’s not even a very old theory.

In fact is a newish theory since it only sprung into existence in the year 1976 because that’s when Michael Jensen and William Meckling of the University of Rochester published a paper titled: “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure.”

This pivotal paper was published in The Journal of Financial Economics, an obscure insider’s journal about Accounting and Financial Economics, but not a mainstream Economics magazine like the Economist or such other issues. And their theory, in a nutshell, is that there exists an inherent conflict in business, between owners (shareholders), and managers, and that this conflict had to be resolved in favor of the owners, who after all owned the business; and the best way to do that was to find a way to align those interests by linking managerial compensation to owner success.

Taking this theory further — you arrive at the syllogism, that by linking executive compensation primarily to the stock price, as the two economists argued, this terrible conflict would be magically and civilly resolved, and it will make all business better.

Yet on the face of it, this idea appears to be more of a solution in search of a problem, rather than a theory of everything in Business growth and compensation relationship.

Because as all of you know, if the CEO of the company, is just out there playing golf, or is taking all the wrong turns, thus driving the corporation into bankruptcy, or his decision tree is overly focused on spending too much money on his own perks — the classic theory of business (and the company bylaws) said that the shareholders could and should vote “the bum” out of the office and replace him with a stronger hand at the wheel to steer the ship right.

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But that empirically correct theory, and practice of Corporate management and leadership, is so mundane, so imprecise, and so impeccable – that economists who see a chance to elegantly align interests, and make the system work smoothly and automatically (in their imagination), opt for something else.

Ergo, the theory of shareholder value maximization.

However with this newfangled theory, the only problem to be solved, is the alignment of interests between management and ownership, as suggested by Jensen and Meckling. Yet that works just as well — maybe even better — if management just cooks the books and lies through their teeth in the old Enron style of Texan cowboy management or Bernie Madoff asset and wealth management system. And so shareholder value maximization gave us companies like Enron (Jeffrey Skilling in prison), Tyco International (Dennis Kozlowski in prison), and WorldCom (Bernie Ebbers has a federal zip code, because he is still residing in prison).

It’s just a theory, remember.

 

 

The Jensen and Meckling paper shook the corporate world because it presented a reason to pay executives more—a lot more—if they made the stock rise. Not if they made a better product, cured a disease, or helped defeat a national enemy. All they had to do was make their stock go up. Through the 1960s and 1970s, average CEO compensation in America per dollar of corporate earnings had gone down 33 percent as companies became more efficient at making money. But now there was a (dubious) reason for compensation to go up, up, up, which it has done consistently for 40+ years, until now when we think this is the way the corporate world is supposed to work—even its raison d’etre.

But in that same time real corporate performance has gone down. The average rate of return on invested capital for public companies in the United States is a quarter of what it was in 1965. Sure, productivity has gone up, but that can be done through automation or by beating more work out of employees (more on that later). Jensen and Meckling created the very problem they purported to solve—a problem that really hadn’t existed in the first place.

Maximizing shareholder return dropped the compounded rate of return on the S&P 500 from 7.5 percent annually from 1933-76, to 6.5 percent annually from 1977 to today. That one percent may not look like much, but from the point of view of the lady at the bank the loss of so much compound interest may well have led to our malaise of today. Profits are high—but are they real? Stocks are high—but few investors, managers, or workers are really happy or secure.

Maximizing shareholder return is bad policy both for public companies and for our society in general. That’s what Jack Welch told the Financial Times in 2009, once Welch was safely out of the day-to-day earnings grind at General Electric: “On the face of it,” said Welch, “shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy… your main constituencies are your employees, your customers, and your products. Managers and investors should not set share-price increases as their overarching goal. … Short-term profits should be allied with an increase in the long-term value of a company.”

Tell that to Sam Palmisano at IBM, who, in 2005, and then again in 2010, set corporate goals for earnings-per-share, which is to say he set a target price for IBM stock based on historical price-to-earnings ratios, as one of his signature goals for the company. And he was applauded for it.

“…the dumbest idea in the world,” is what Jack Welch of General Electric leadership fame has said about that time and again.

Please remember that…

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Even myself, that I built companies on the fly and by the Thousands of StartUps — I never squared-up with this idea that shareholder earnings maximization should be the prime corporate motivator.

I of course knew through my college education  Business, that this false idea, came from the orthodox dogmatic and seemingly illustrious Economics professors. My sentiment was also shared by the brilliant Roger Martin, who was the former dean of the Rotman School of Management at the University of Toronto, a couple of hundred miles from Rochester where this nonsense first began. And it is worth noting that Roger Martin’s very good book “Fixing the Game: Bubbles, Crashes, and What Capitalism Can Learn from the NFL” ought to be read by anyone who is interested in political, economic, and even corporate leadership.

And here’s how Roger Martin puts it succinctly in his above mentioned book: Fixing the Game: Bubbles, Crashes, and What Capitalism Can Learn from the NFL:  “Imagine an NFL coach holding a press conference on Wednesday to announce that he predicts a win by nine points on Sunday, and that bettors should recognize that the current spread of six points is too low. Or picture the team’s quarterback standing up in the post-game press conference and apologizing for having only won by three points when the final betting spread was nine points in his team’s favor. While it’s laughable to imagine coaches or quarterbacks doing so, CEOs are expected to do both of these things.”

Indeed here is where Roger Martin contrasts the two markets that he calls the real market, and the expectations market.

The REAL MARKET is where goods and services are produced, bought and sold, which is to say the real world in which most of us live.

Whereas, the EXPECTATIONS MARKET predicts a certain performance, and then attempts to deliver as closely as possible, on this prediction, through whatever means necessary.

In lay man’s terms — the Real Market is our real life, whereas the Expectations Market is really just gambling, false predicting, and useless prophesizing.

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However, self serving Corporate America embraced the idea that their main purpose was to maximize shareholder value. And once they embraced that false idea, it became the FALSE GOD of the Markets and  it naturally led to major distortions in nearly every part of nearly every business. Imagine the mayhem. All businesses and not just corporates are affected by it daily. And the result of it all, is that anything that could be seen as a drag on earnings, could and should be cut with great impunity and no respect for people’s job security, careers, or livelihoods. This cost cutting policy of course it also included the pension plans, employee pay, and all corporate benefits.

The result is that overall pay stagnated, while pensions and health care, were cut.

This cost cutting of course seemingly “helped” the company meet the largely “fake news” financial predictions — but it really hurt the markets, since every worker is also a consumer while very few are investors in the greedy Wall Street roulette game. Still businesses were forced to move to cheaper places to do business, (like Amazon leaving the high rent city of Seattle, for the wilds of DC, or Oakland and Detroit) and oftentimes the companies migrated completely overseas.

Research and development was cut, and cut again, as if there was no longer a connection between developing new technology, and new products, and the company’s success.

There were exceptions of course.

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Yet the trend continued because it was clear, that although marginalizing workers, hurting the overall economy, and the society it supports, and somehow forgetting the Middle Class that supports all of what we hold dear in our Democratic Republic that is an experimental Startup in the field of governing people and managing societies through honest servant leadership — didn’t matter as long as we maximized shareholder returns.

That small thing we are saying often in America since Abraham Lincoln during the Gettysburg address first enunciated on American soil, the ancient Athenian Democracy’s creed: “Government by the people, from the people, and for the people…” didn’t matter any longer, at least where Corporate Governance was concerned.

And of course today, we’re all quite aware of the gloomy statistics around wage stagnation and income inequality, as all of our vociferous critics of economic growth point at — but we should not be nostalgic for the economy of the 1950s, when jobs were plentiful, grass was greener, and not to be smoked, and the trade unions were strong… and instead we ought to focus on correcting our Corporate and Economic False Idols, and removing false doctrines.

And that is what my work with ESG in corporate activist Leadership centers around at. Treating the Corporation as a helpful and contributing member of our Society, doesn’t;t only involve granting it personhood as far as Free Speech is concerned but also holding it responsible for logical and beneficial multiple bottom lines in our lives and in our communities comprising far more than the simple society of shareholders that are still accounting to no more than 9% of all Americans.

And we should stop pining for the 1950’s because unfortunately back then, in the gorgeous and nostalgic 1950’s a full third of all American children lived in poverty. Sixty percent of seniors had incomes below $1,000 a year. Only half the population had any savings in the bank at all. And less than 5% of all of us, had any money invested in stocks and bonds an manned by the Wall Street sharks…

However, sometime between 1979 and 2014 — the percentage of poor Americans dropped down to 19% from 25%. The percentage of lower-middle-class Americans dropped to 15% from 25%. The percentage of Americans who were upper middle class (earning $100,000 to $350,000) shot upward to 30% from 13%.

There’s also a lot of social mobility, with half of all Americans winding up in the top 10% of all wage earners at least once during their career. One in nine — 1out of 9 people — have spend some time in the top 1% category. Get a hold of that for a moment… and maybe visualize yourself being in that top, occupying the pole position in Society.
Only in America, tha land of the American Dream can that be possible for you and for all of the rest of us as well…
As for poverty, that has been transformed as well by falling prices and rising government support. Because today, when American poverty is defined in terms of what people consume rather than what they earn, we find that the American poverty rate has declined by over 90% since the heady and Love Happy 1960’s.

America has a pretty big safety net too…

Yet our numbers look bad because so much of our health care spending is funneled through employers, but when you add this private social spending to state social spending — America has the second-highest level of such spending of the 35 nations in the Organization for Economic Cooperation and Development, right after socialist leaning France that leads the European Union and all of the world’s countries in this index.

We can share data like this in sphere after sphere, all day long that shows America marking the progress we’ve made in health, the environment, safety, knowledge and overall happiness.

So our Society is in much better shape than what we’re discussing or even what we are allowing to be discussed in our schools, in our Universities, and in our daily Conversations?

It is our own personal philosophical lens that prevents us from seeing the progress and instead focuses not on where the real problems lie, but in those fictitious areas that cause civil discord and division that only serves the Merchants of Hate, like the Democratic party that represents the Ku-Klux-Klan today. They divide people and then swoop in to pretend to save them form themselves.

Yet we are Americans and can cut through the bullshit, and we should better call ourselves just that — Americans — and we should stop the divisions and the hate that causes is to fall down, and take a knee, to the second rate powers of the world, to the second rate political ideologies, and to the second rate politics of this world.

The very reason that I want to share all these information about the State of the American Dream, is that I believe the key to our country’s progress is citizen information, personal agency, and the value of individual reason — that all together work to make ourselves and our countrymen better informed as individual active citizens.

I do all this world, fully knowing that the key failure in the world is a result of entropy, (the randomness that is built into any system) and political, ideological, or religious faith (the dogma) that clouds reason and obfuscated reality.

Still the big problem with his rationalistic worldview is that while it helps chart the way individuals have benefited over the centuries, we barely spend any time on the quality of the relationships between individuals and their governments.

Indeed we hardly spend any time at all, on the decline of social trust, the breakdown of family life, the polarization of national life, the spread of tribal mentalities, the rise of narcissism, the decline of social capital, the rising alienation from institutions or the decline of citizenship and neighborliness.

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Yet we need to avert our eyes form al, that because it is simply impossible to tell any good news, or even share our positive stories, when looking at the existential data from these moral, social and emotional spheres that have a teleological view towards the end of times and intuitively want to paint a bleak and black picture of our current lives in order to justify ending it all in a ball of fire and Armageddon, only to reach the much ballyhooed Apocalypse and return to their Makers.

What I am interested here is just the kind of intellectual honesty and courage we need to restore conversation and community, and for the people to take heart and move forward as a Untied Nation of Americans and not to harken back for the olden times when the buffalo roamed free in the wide streets of Manhattan.

Because today’s situation reminds us of the weakness of the sort of Cartesian rationalism that we often champion through conscious reason that can get us everywhere and nowhere, when tribal emotions have been aroused, when existential fears rain down, and when narcissistic impulses have been given free rein. Yet I do not harken back to the times, when various spiritual longings had nowhere healthy to go, when social trust had been devastated, and when all the unconscious networks that make up 99 percent of our thinking are aflame and disordered.

Our problems are relational. I don’t know about yours,  but my Twitter feed is always aflame, with two raging warring camps that threaten to subsume, consume and immolate each other.

Yet, if we had an emotionally healthy community, and polity, it would be rather easy to have a positive discourse, and to avoid hurting each other as those assassins tried to snuff our my Life a year ago on February 28th inside Microsoft headquarters where I was giving a civilized speech.

If that was the only indication of mental stability, and if I were a vengeful man —  would have to conclude that our nation is emotionally sick. But I do not dwell on this and I simply have to conclude that our nation is healthy, but it has a few badly rotten apples within, and it tis those rotten people that need to be isolated and excised from our midst.

That’s the only and total cure.

And we tend to forget all of that, for a simple Economic theory of Corporations that are here only for the “Maximization of Shareholder Value”  that is based on an underlying reasoning that isn’t even true.

And we then trash our American Dream for a theory and it’s effects that are not visible for the trees in this vast forest of Greatness.

Digg in on that for now…

Yours,

Dr Churchill

PS:

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In other news Billy Graham the man I’d like to describe as “Divine Lighting In A Human Form”  has passed away and migrated to a better address up in heavens… transported through this celestial airline aptly named “Flights of Angels”

PPS:

Let’s try to keep his flame alive: https://billygraham.org because we are grateful for all that he has given to this nation.

Cheers


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