Mitt Romney, Bain Capital, Staples, and job creation

While it is true that during this presidential election year I have not gotten particularly political in my blog posts, it is not something that I have purposely avoided. My intention for this blog is to post my thoughts on various subjects that I think about and consider insufficiently discussed in the media or in our general public discourse.

That being said, I have watched as the presidential campaigns have made points that favor their positions and accomplishments and have made points that call into question those put forth by their opponent. One particular point that I have not seen questioned in the way that I have considered it is the allegation that Mr. Romney has “created jobs” by virtue of the Bain Capital involvement with Staples. Well, I question it. I believe the reality of the job creation of Staples is misrepresented.

Staples has certainly created a large number of jobs....for Staples employees. In doing so, I believe that a larger number of jobs have been lost by those companies that Staples drove out of the marketplace.

It may be argued that Staples has improved the “productivity” of that sector of the market, and that may be true. But, that type of productivity is part of what I refer to as the “Walmartification” of our economy. Walmartification is the replacement of huge numbers of small businesses with large, multinational corporations that feed on American's obsession with low prices. Not that low prices are a bad thing, but low prices leveraged by the demands of these large corporations over its suppliers to force lower and lower prices are detrimental in a number of ways.

These low price demands degrade the quality of products and force outsourcing of production jobs to low wage markets, which most often means China. We have seen the quality of many, if not most, products decline in the face of these demands. Product longevity is disastrously low. Americans in their lust for low prices, seem content to have this be the case using the justification that the replacement cost for junk products is low. Of course that low price (low quality) is what created the need for replacement in the first place.

So, when Staples comes to town, small office supply stores that provided goods and services to small businesses are priced out of existence by the heavy hand of corporate competition based on these low price models. These local office supply stores, electronics stores, furniture stores, and others that are put out of business are creating job losses that are not put into the calculation of how many jobs are created/lost by the success of Staples. Meanwhile, the quality and longevity of the products declines creating waste that our planet cannot afford.

Another significant effect of Walmartification is the trajectory of the “money trail”. Prior to the “big boxification” of the office supply business, profits in this market were going to the owners of small office supply stores. In the Staples model, corporate profits go to the investors. Local money no longer remains local. Other small businesses which have become Staples customers, save a bit of money on cheaper office goods, so they think it is a good thing. But, there are less small businesses in the community by virtue of the loss of local office supply stores and others driven out by big box competition.

Improved “productivity” is a good thing when measured by the goal of out-competing your rivals. But, it is questionable as a source of net job creation. When more and more production is possible by less and less people, less people are employed as a result. Concurrently, the financial benefits of that increased productivity are shared by fewer and fewer people. This results in a redistribution of wealth towards the top, meaning the investor class. So our collective affinity and demand for low prices creates a downward spiral of prices, quality and employment, while the money trail leads more and more to the wealthy, creating more and more need for low prices for everyone else, leading to a continued downward spiral......

Real job creation is not accomplished by winning market share in an existing market.  Real job creation is creating jobs that provide new goods and services to a willing marketplace that were not being provided before that job creation.

The take-away for this post is that one should consider the realities of Mr. Romney's claims of job creation using Staples as his prime example when that job creation is based on one company's success in creating jobs for that particular company, and that that claim does not necessarily mean that the net effect on jobs, and the quality of products in the marketplace are positive.  So, do you believe Romney's claims that he knows how to create jobs?  Do you think he has created jobs?  Does his model for job creation seem like a good thing to you? 

The greatest challenge humanity has ever faced

Humanity is facing a challenge that is beyond anything it has faced before. This challenge transcends all social, political, cultural, religious, national, and political boundaries. The most daunting aspect of this challenge is that it requires cooperation among all factions of all of these divisive boundaries. Global human overpopulation affects us all. Taking responsibility for addressing this problem is contrary to the interests of many of these factions. Many cultures and religions consider procreation a blessing to be enjoyed to it's fullest. Family values are seen as justification for multiple offspring. In some areas child mortality rates have greatly improved, while historic procreation rates remain high, increasing family size.

All of the diverse reasons to ignore the problem of overpopulation have caused our numbers to soar. Our planet is suffering under the pressures of all of these consumers. We must create a new procreational paradigm. The focus should be on the young, for they are, or will be, the procreators. We must focus their attention on the quality of life that will be available for their child(ren). All procreators are responsible for their own contribution to the problem of overpopulation. Procreators that ignore this new paradigm can have a huge impact when multiplied by potentially billions.

Economics must not be allowed to provide an excuse for continuing our population growth. The economic model of each successive generation being larger than the last and propping up the economy of the previous generation is unsustainable. We must change those institutions that rely on this model. This will be a transitional change, so it must start now.

If we as humans do not want procreation limited by laws, as China has done, then we must actively promote the cause of small family size and limited procreation by choice. If this is not accomplished, on a global scale, there will be a need to create legal limits in the future by all countries worldwide. This will create a situation where cultures clash. We must act now to promote limited procreation globally across all cultural and political borders.

In order for this necessary change in our collective attitude towards family size we must add this issue to our social discourse. In doing so, we must “come out of the closet” and be willing to discuss the matter openly.  Breaking the taboo of speaking about family size is important.  While doing so, it is important that we focus on the “unconceived”. Educating the young is the most important goal. It is irrelevant to confront those who already have large families, other than to educate about overpopulation and prevent them from having additional children if they are still in the childbearing years. No one should ever be directly critical of children already born. That's water under the bridge. The focus needs to be on the future.

As we become more vocal about the responsibility of all humans to limit our procreation within our own culture, we are then in a more viable position to spread the discussion to other cultures. Some of these other cultures are increasing their populations at an alarming rate. There is no time to lose in educating these cultures. Educating women has been shown to be the most effective way to decrease reproductive rates.

There must be a international discussion on overpopulation that supercedes any political, economic, or cultural interests.  There are those who consider the choice of family size a human rights issue.  That must change.  The greater human right must become the right to live on a planet that has a sustainable human population.

It's the jobs, stupid

Jobs. It's the jobs, stupid.

No, it's not the economy, as it was when James Carville coined the phrase, it's jobs.

Both parties are telling voters how they are the better party to put unemployed back to work. What I have not heard from either party is how exactly they intend to create the atmosphere necessary to create enough of the right kind of jobs.

The Republicans fall back on their assertion that if we guarantee that the wealthy individuals and the corporations sitting on huge cash reserves get to be even more wealthy and retain ever higher profits without the annoyance of paying reasonable taxes on those financial resources, then they will create jobs. What they do not answer is why, when they are presently vastly wealthy and flush with cash NOW, they are not creating these jobs NOW. Why is it that they are holding the jobs hostage until they get even more?

The Democrats have failed to get support for their incremental vision. They are promoters of reasonable increases in a depleted level of public sector employment, which has been devastated by tax cuts and budgetary polarization. And through the American Jobs Act they have put some proposals out there that look to the future. But through an inadequate effort to gain the support of the American people, and resistance from Republicans, the American Jobs Act was split up and has had mixed results in its implementation.

As someone who tries to look at the big picture in the long term, I would like to put the question not on the supply side, but on the demand side.

We have the opportunity during low employment to guide the market for re-employment. So, what is it that we need?

By that I mean, what goods and services do we as a country, and a planet, need?  I believe we need to take a long hard look at where we want to be as a society in the future and what our needs will be, and take that as a set of goals used to formulate a plan for what types of jobs we need to create to achieve those goals.

While the Democrats have put forth some goals relating to sustainable energy production and the jobs it creates, we need a greater breadth of visualization of the future and a more integrated plan for transitioning from the unemployment of the present to an employment of the future, not a plan to return to the employment of the past.

An example of this visualization of the future is the housing market. I believe that our culture has led to a an unsustainable view of what housing should be. In a country where family size has thankfully diminished, over the last half century, our housing production has concentrated on larger and larger homes. These homes are excessively wasteful and as our energy needs rise, unsustainable. So, to look to the housing market as an engine to boost the economy by building more and more large homes, is as counterproductive to the future we need as drill baby drill is to our energy future.

My proposal regarding this example is to re-train construction workers, especially local independent contractors, to become energy efficiency contractors to update the energy efficiency of our housing infrastructure. We need to come to grips with the fact that our existing housing stock, which it is unrealistic to replace, is inefficient and should be retrofitted for maximal energy efficiency. This effort, when enacted in a widespread national manner, would put many people back to work. The fact that these efficiency efforts pay for themselves over time, unarguably classifies them as investments. Policies should be promoted that allow homeowners to update their homes without having to come up with the initial cost, but rather shares the benefits of the energy savings over time with investors who finance the updates. That investor pool could be public, private, or both.

So my point, merely exemplified by the housing proposal above, is that the jobs issue which is so central to the upcoming elections, is one that should be an issue framed by a progressive demand side vision, as opposed to a regressive supply side trickle down formula.