Tag Archives: money

On GAAP

For those not in the know GAAP is known by some as generally accepted accounting principles, it’s basically the rules that public (and most private) companies use to report their financial data, and it’s use is required by law in most western countries (Europe uses IFRS) I’ll skip the specifics and just say GAAP is CRAP because of how it treats payroll.

According to GAAP payroll is an expense, the antithesis to profit, something to be minimized. While it is true that monies paid in payroll are not available for other uses by the business, they are in effect a part measure of how much that company is supporting the public good. While a board room may simile upon paying the least to people and maximizing their profits, that mentality is a force for inequality. How can businesses determine a fair rate of pay? Clearly there is not enough money to pay everyone CEO rates, how can we (more) fairly determine how much money a person gets?

Time! By and large we are all equal in the # of hours we have in a day. All non-government pay should be based on hrs. Service and little or nothing else. This ensures that the person in the mail room or the executives in the board room are on an even playing field. They both have 24 hrs. in a day, and should be compensated for the # they spend working.  Ideally, the hr. rate (how much money 1 hr. earns) would be level across all enterprises and industries, but (especially during the transition) indristires that the government would like more people in can have their hr. rate given a premium.  (NOTE: this is counter intuitive as a main advantage to the universal hr. rate would be compensation would NOT be a consideration in selection of work. People would work where they want to.)

Now to address the naysayers who would undoubtedly claim that the most skilled among us would not work (or at least not be utilized to their max benefit) in such a system. Good! Humanity as a whole has seldom if ever needed the best, the best is overrated, it’s costly, transient and on the whole hard to re-produce. We need good happy people doing good work. Anyone who’s main motivation is $$ will never do as good a job as someone who cares about what they are doing directly, not merely as a means to an end.

Getting back to GAAP, it’s an example of institutional, government required economic inequality. It is a set of rules that treat income as an externality, a cost, something to be minimized (and the people it applies to likewise marginalized). A better accounting system would require tracking the # of hours and how equitably the value earned from those hours are distributed in society. Instead we have GAAP, forcing all business to report payroll as a cost, with no mention of the hours involved. The human cost that each employee pays to keep the enterprise alive. Its codified repression, entrenched economic discrimination, part of the body of law that implies it’s ok to buy and sell people, as long as you call them “jobs”.

On Equality of access

The impact of access (or lack thereof) is immense. Being able to directly interact, command the time and attention of an individual can be a catalyst for change, a source of information or even a life line. It’s importance is hard to understate, to illustrate take an example of building a fence:

A fairly simple process as far as land development activities go. Like everything else money comes first, then finding a contractor, then building. Every step of that process can be eased by access to the right people:

Money: Anyone who knows me has access to 1$ (that’s about all I’m good for most days), but there are a select few who know people with FAR greater amounts of money, and far greater complicity to dole it out. Not that people are usually appreciate of being hit up for cash, but it happens all the time. People who have access to billionaires don’t go to the bank for 10k loans, indeed people who know the .001% are usually others in the .001%. For those of us who don’t have access to someone like that, the next step would be a bank (or community organization). Even there access is key, I assure you meeting the owner of a bank for a loan (when the meeting was setup by your billionaire friend) is a decided different experience that meeting with the loan officer at the local branch. Who you deal with is as important as what is being dealt.

Contractor: The CEO of a major company generally do not take orders or work with a single customer (when there are millions of customers there is not enough time). Major clients can usually get face time with the PIC though. The difference is service is staggering (think call center customer service vs concierge)

From getting a zoning variance to getting a transplant, who you have access to is critical, and (took a while, but getting to the point) in government we need to have equal access! All our public officials’ time should be handled by a lottery type system, having the .001 % and those they hire command the attention of our most powerful leaders is detrimental to a fair democratic process. What we get is just another facet of corruption.  (Spending time with the ultra-rich to the determent of the rest of us is a corrupt practice in my opinion)  Should our officials be free to spend their time with whoever they like? NO! Hell no!  They are given power by the masses for the betterment of the masses, in accepting power far beyond that of a normal citizen they should likewise accept limitations on their freedom far in excess of a normal person.

There are some simple things we can do to turn the tide: Make all communication of elected officials public, have all campaigns publicly funded, Prohibit political ads.  Looking further out: Rework entire legal system to eliminate legalese, have easy to understand laws (and just a few of them), add a boat load of government employees.

The old adage “it’s not what you know, but who you know” is as true today as when it was first uttered. Sadly with the common practice of “closed door” meetings, the insanely disproportionate involvement of the super wealthy in government and a few thousand years of history, I don’t think this is an issue that will resolve itself.

On elected officials: Why we just cannot get it right…

It will surprise no one that at the time of this writhing Congress is sitting at a 16% approval rating. Now any explanation of such strong disapproval would be incomplete without reference to gerrymandering, however while that is part of the mix, I believe the root is far more basic, and prevalent. Most of our major political offices are filled by people who win elections, and ( most ) of the rest are filled by direct appointment of the winners, so my main focus here is that our system rewards people who are good at winning elections, not people that are good at governance. These groups are not mutually exclusive, but I am going to argue that the overlap is small, and the difference ( over MANY MANY elections over time) has had and will continue to have a huge impact.

So what do I mean that being good at winning elections and being good at governance are different things? To start just look at the skill sets, what makes a good governor, or leader? Honesty, integrity, concern for others, there are many more, but I’m keeping it basic. Now what traits make a good politician? Access to money, appearance, ability to speak well. Notice the lists are not the same, sure there is some overlap, intelligence would apply to both, but my point is our elections are kind of like holding MMA tournament to appoint a police chief, there is no reason someone good at MMA will not make a great chief, but really that system will ( especially over time) will turn out more good MMA fighters than good chiefs.

So our ( or really any ) election system is a ( hopefully) cleverly devised means of narrowing down everyone who wants to do the job to just one person, I argue that it should output ( ideally) the best person for the job or at least a good person for the job. Given the approval ratting I started with I argue this is NOT the case with our current system, and here is why: The single largest means of narrowing down the pool in an election is money, ask any one you know who would make a good leader, who has potential why they do not run for office. This eliminates an un-told amount of EXCELLENT people from the running, AND gives those with access to money a free pass from the largest cut to the pool. I cannot stress this enough, access to money does NOT equal a good leader! These are two VERY different things but by the time the ballots are printed this is what has in effect decided our candidates. This is why our government has such poor results, our entire election system skews not towards good leaders, but toward the wealthy.

So how would an election that is designed to elect good leaders look? Well we start out with a big pool and then eliminate people based on our criteria for good leaders. So start with everyone interested in the position as a potential candidate, then have the first round eliminate who simply cannot do the job, a BASIC civil service exam would suffice . Of those remaining ( which would be a HUGE pool of people) hold conferences of a few hundred each, maybe 8-12 hrs each where the pool will narrow its self down, remember we are looking for people who can build consensus and work together, I think that we record everything and that process will replace the campaign, just put 100 people in a room and ask them nicely to come up with 5 or so people who would be best for the job, Record EVERYTHING! And have the 4 or so people named form the next 100 or so person carcass, so on and so forth until we have the desired amount of candidates. When a caucus fails to produce 4 ( or any ) names the recording will be INVALUABLE in showing exactly who said what and who was not working towards consensus. There would also have to be a STRONG prohibition on “outside” political activity, IE: campaigns as we know them. Ideally this system would produce one person who all agree is the best ( or at least good) for the job, it would assuredly produce FAR better leaders than our current reward the best at winning elections system, not that 14% is a very high bar…