I want to illustrate how the ideas that I profess are not just ones that I have an emotional affinity for. I understand there is plenty of skepticism for liberal thought, so let me explain two liberal ideas and how they could entirely change the economy.
This effects you no matter who you are, where you live, or what you do for a living.
The two policy decisions I want to talk about are increasing minimum wages and providing quality health care to everyone.
First I want to talk about wages. Wages and tips are how most people in my country measure success in their career. There is an illusion that education creates opportunity, but anyone with eyes knows that isn't true. Education helps form your mind into something that can grab opportunity, and I want to talk about that more at a later date. What I want to talk about now is what would happen if you raised minimum wages. The answer might surprise you.
Raising minimum wages is controversial because there is a pretty big economic myth out there that raising the wages of the working class will raise the cost of the product, and therefor cost of living will go up. There are those that will tell you raising minimum wage is a zero sum game. If we lived in a world that had fewer than ten thousand people in it that would be true. The economy is more sophisticated than that however. The fact is when you put faith and confidence in the producers the producers get more comfortable. When the producers get more comfortable they start going out and spending money. That money will be back in your pocket before you can say dividends. It requires a large enough view to see that the economy getting better helps every business.
Here is another uncomfortable fact you may not have thought about. There are many products that people want to buy right now but cannot afford. We have been trying drive down costs so that a larger percentage of the population can afford our products. What if we drove up the average budget of households? What sort of effect do you think that would have on sales? Do you think that people would be less afraid and more comfortable buying products? I'm sorry, that was a rhetorical question and I respect you enough to confess that. Happy people spend more money. End of story. This is why people who have had a few drinks generally buy more drinks. When the worry slips away so do the purse strings. If more people had less worry about whether they had enough to pay their house payment, or put gas in their car they would have less stress. Less stressed people spend money much better. This means better products, and this means surprise: higher profits.
Now about health care.
This gets a bit more complicated. Here is the short version of the story: healthier people are better able to pay bills. Medical debt is out of control, at least in america. Most people who face bankruptcy face it due to mounting medical costs. Which may not initially worry you. After all, you aren't eyeballs deep in medical debt. Wrong, debt doesn't disappear. The debts that don't get payed off get passed on to the paying customers. Which means that health care is more expensive than it should be simply because not everyone is paying for it. You are paying for universal healthcare, in fact you're paying way more than such a thing would cost. You're paying for it because poor people go to the emergency room uninsured and never pay. People run up huge lines of credit with hospitals and never pay. This costs YOU money. So why should you want universal healthcare as an investor? Read on and I'll tell you.
If you didn't give away your service for free so much, what do you think that would do to the balance sheet? If you had millions of paying customers willing and able to pay whatever it took to get well, don't you think that would improve the status of medicine? Furthermore assuming you are in a developed nation this would mean you could offer even more expensive and profitable cutting edge techniques. You could offer them to more people and increase your profits. You could change the public opinion of you from penny pinching and uncaring to being the benign business leader you want to be seen as.
The choice is yours, you can make decisions based on short term greed and what you've done before, or you can make decisions based on what the next step for the market is. I shouldn't have to tell you which CEO has his face on the cover of Forbes, it's not the one who did what daddy and everyone else did. He did something new, something bold, something that changed how people thought about the world. This is why the richest man in the world brought us the PC, and the people sliding in after 5th place are the Walmart heirs. Microsoft has changed with the times and even when it has made mistakes like Windows Vista it bounced back. It tries new things and it's a winning company for that. Walmart only stays afloat because it's workers are all on food stamps. They only get new stores because they make sweetheart deals with city governments. If you took away public aid there would be no Walmart. But there would be a Microsoft. End of story.
This effects you no matter who you are, where you live, or what you do for a living.
The two policy decisions I want to talk about are increasing minimum wages and providing quality health care to everyone.
First I want to talk about wages. Wages and tips are how most people in my country measure success in their career. There is an illusion that education creates opportunity, but anyone with eyes knows that isn't true. Education helps form your mind into something that can grab opportunity, and I want to talk about that more at a later date. What I want to talk about now is what would happen if you raised minimum wages. The answer might surprise you.
Raising minimum wages is controversial because there is a pretty big economic myth out there that raising the wages of the working class will raise the cost of the product, and therefor cost of living will go up. There are those that will tell you raising minimum wage is a zero sum game. If we lived in a world that had fewer than ten thousand people in it that would be true. The economy is more sophisticated than that however. The fact is when you put faith and confidence in the producers the producers get more comfortable. When the producers get more comfortable they start going out and spending money. That money will be back in your pocket before you can say dividends. It requires a large enough view to see that the economy getting better helps every business.
Here is another uncomfortable fact you may not have thought about. There are many products that people want to buy right now but cannot afford. We have been trying drive down costs so that a larger percentage of the population can afford our products. What if we drove up the average budget of households? What sort of effect do you think that would have on sales? Do you think that people would be less afraid and more comfortable buying products? I'm sorry, that was a rhetorical question and I respect you enough to confess that. Happy people spend more money. End of story. This is why people who have had a few drinks generally buy more drinks. When the worry slips away so do the purse strings. If more people had less worry about whether they had enough to pay their house payment, or put gas in their car they would have less stress. Less stressed people spend money much better. This means better products, and this means surprise: higher profits.
Now about health care.
This gets a bit more complicated. Here is the short version of the story: healthier people are better able to pay bills. Medical debt is out of control, at least in america. Most people who face bankruptcy face it due to mounting medical costs. Which may not initially worry you. After all, you aren't eyeballs deep in medical debt. Wrong, debt doesn't disappear. The debts that don't get payed off get passed on to the paying customers. Which means that health care is more expensive than it should be simply because not everyone is paying for it. You are paying for universal healthcare, in fact you're paying way more than such a thing would cost. You're paying for it because poor people go to the emergency room uninsured and never pay. People run up huge lines of credit with hospitals and never pay. This costs YOU money. So why should you want universal healthcare as an investor? Read on and I'll tell you.
If you didn't give away your service for free so much, what do you think that would do to the balance sheet? If you had millions of paying customers willing and able to pay whatever it took to get well, don't you think that would improve the status of medicine? Furthermore assuming you are in a developed nation this would mean you could offer even more expensive and profitable cutting edge techniques. You could offer them to more people and increase your profits. You could change the public opinion of you from penny pinching and uncaring to being the benign business leader you want to be seen as.
The choice is yours, you can make decisions based on short term greed and what you've done before, or you can make decisions based on what the next step for the market is. I shouldn't have to tell you which CEO has his face on the cover of Forbes, it's not the one who did what daddy and everyone else did. He did something new, something bold, something that changed how people thought about the world. This is why the richest man in the world brought us the PC, and the people sliding in after 5th place are the Walmart heirs. Microsoft has changed with the times and even when it has made mistakes like Windows Vista it bounced back. It tries new things and it's a winning company for that. Walmart only stays afloat because it's workers are all on food stamps. They only get new stores because they make sweetheart deals with city governments. If you took away public aid there would be no Walmart. But there would be a Microsoft. End of story.
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