Henry Ford, Bill Hewlett & Dave Packard, Steve Jobs & Steve Wozniak, Howard Schultz, Ray Kroc and Richard Branson

Posted by PITHOCRATES - February 25th, 2014

 History 101

(Originally published May 8th, 2012)

Capitalism allows Entrepreneurs to bring their Great Ideas to Life

Entrepreneurs start with an idea.  Of how to do something better.  Or to create something we must have that we don’t yet know about.  They think.  They create.  They have boundless creative energies.  And the economic system that best taps that energy is capitalism.  The efficient use of capital.  Using capital to make profits.  And then using those profits to make capital.  So these ideas of genius that flicker in someone’s head can take root.  And grow.  Creating jobs.  And taxable economic activity.  Creating wealth for investors and workers.  Improving the general economy.  Pulling us out of recessions.  Improving our standard of living.  And making the world a better place.  Because of an idea.  That capitalism brought to life.

Entrepreneurs Risked Capital to bring Great Things to Market and to Create Jobs

Henry Ford established the Detroit Automobile Company in 1899.  Which failed.  He reorganized it into the Henry Ford Company in 1901.  Ford had a fight with his financial backers.  And quit.  Taking the Ford name with him.  And $900.  The Henry Ford Company was renamed Cadillac and went on to great success.  Ford tried again and partnered with Alexander Malcomson.  After running short of funds they reorganized and incorporated Ford Motor Company in 1903 with 12 investors.  The company was successful.  Some internal friction and an unexpected death of the president put Ford in charge.  Ford Motor built the Model A, the Model K and the Model S.  Then came the Model T.  And the moving assembly line.  Mass production greatly increased the number of cars he could build.  But it was monotonous work for the assembly line worker.  Turnover was high.  So to keep good workers he doubled pay in 1914 and reduced the 9-hour shift to 8 hours.  This increased productivity and lowered the cost per Model T.  Allowing those who built the cars to buy what they built.  In 2011 the Ford Motor Company employed approximately 164,000 people worldwide.

Bill Hewlett and Dave Packard established Hewlett-Packard (HP) in 1939.  In a garage.  They raised $538 in start-up capital.  In that garage they created their first successful commercial product.  A precision audio oscillator.  Used in electronic testing.  It was better and cheaper than the competition.  Walt Disney Productions bought this oscillator to certify Fantasound surround sound systems in theaters playing the Disney movie Fantasia.  From this garage HP grew and gave us calculators, desktop and laptop computers, inkjet and laser printers, all-in-one multifunction printer/scanner/faxes, digital cameras, etc.  In 2010 HP employed approximately 324,600 employees worldwide.  (Steve Wozniak was working for HP when he designed the Apple I.  Which he helped fund by selling his HP calculator.  Wozniak offered his design to HP.  They passed.)

Steve Jobs had an idea to sell a computer.  He convinced his friend since high school, Steve Wozniak, to join him.  They sold some of their things to raise some capital.  Jobs sold his Volkswagen van.  Wozniak sold his HP scientific calculator.  They raised about $1,300.  And formed Apple.  They created the Apple I home computer in 1976 in Steve Jobs’ garage.  From these humble beginnings Apple gave us the iPad, iPhone, iPod, iMac, MacBook, Mac Pro and iTunes.  In 2011 Apple had approximately 60,400 full time employees.

Jerry Baldwin, Zev Siegl, and Gordon Bowker opened the first Starbucks in 1971 in Seattle, Washington.  About 10 years later Howard Schultz drank his first cup of Starbucks coffee.  And he liked it.  Within a year he joined Starbucks.  Within another year while traveling in Italy he experienced the Italian coffeehouse.  He loved it.  And had an idea.  Bring the Italian coffeehouse to America.  A place to meet people in the community and converse.  Sort of like a bar.  Only where the people stayed sober.  Soon millions of people were enjoying these tasty and expensive coffee beverages at Starbucks throughout the world.  In 2011 Starbucks employed approximately 149,000 people.

Ray Kroc sold Prince Castle Multi-Mixer milk shakes mixers to a couple of brothers who owned a restaurant.  Who made hamburgers fast.  Richard and Maurice McDonald had implemented the Speedee Service System.  It was the dawn of fast food.  Kroc was impressed.  Facing tough competition in the mixer business he opened a McDonald’s franchise in 1955.  Bringing the grand total of McDonald’s restaurants to 9.  He would go on to buy out the McDonald brothers (some would say unscrupulously).  Today there are over 30,000 stores worldwide.  In 2010 McDonald’s employed approximately 400,000 people.

Richard Branson started a magazine at 16.  He then sold records out of a church crypt at discount prices.  The beginning of Virgin Records.  In 1971 he opened a record store.  He launched a record label in 1972.  And a recording studio.  Signing the Sex Pistols.  And Culture Club.  In 1984 he formed an airline.  Virgin Atlantic Airways.  In 1999 he went into the cellular phone business.  Virgin Mobile.  In 2004 he founded Virgin Galactic.  To enter the space tourism business.  His Virgin Group now totals some 400 companies.  And employs about 50,000 people.

The Decline of Capitalism and the Rise of the Welfare State caused the European Sovereign Debt Crisis

And we could go on.  For every big corporation out there will have a similar beginning.  Corporations that use capital efficiently.  Bringing great things to market.  Introducing us to new things.  Always making our lives better.  And more comfortable.  One thing you will not find is a great success story like this starting in the Soviet Union.  The People’s Republic of China (back in the days of Mao Zedong).  East Germany (before the Berlin Wall fell).  North Korea.  Or Cuba.  No.  The command economies of communist countries basically froze in time.  Where there was no innovation.  No ideas brought to life.  Because the government kind of frowned on that sort of thing.

There is a reason why the West won the Cold War.  And why we won that war without the Warsaw Pack and NATO forces fighting World War III.  And why was this?  Because we didn’t need to.  For the communist world simply could not withstand the forces of living well in the West.  Whenever they could their people escaped to the West.  To escape their nasty, short and brutish lives.  In the command economies of their communist states.  Where the state planners failed to provide for their people.  Even failing to feed their people.  The Soviet Union, the People’s Republic of China and North Korea all suffered population reducing famines.  But not in the West.  Where we are not only well fed.  But our poor suffer from obesity.  Which is not a good thing.  But it sure beats dying in a famine.

Sadly, though, the West is moving towards the state planning of their one time communist foes.  Social democracies are pushing nations in the European Union to bankruptcy.  Japan’s generous welfare state is about to implode as an aging population begins to retire.  Even in the United States there has been a growth of government into the private sector economy like never before.  Which is causing the Great Recession to linger on.  As it caused Japan’s lost decade to become two decades.  And counting.  As it is prolonging the European sovereign debt crisis.  With no end in sight.  The cause of all their problems?  The decline of capitalism.  And the rise of the welfare state.  Which just kills the entrepreneurial spirit.  And the creation of jobs.  Which is one cure for all that ails these countries.  And the only one.  For only robust economic activity can pull a country out of recession.  And for that you need new jobs.  And the entrepreneurial spirit.  In short, you need capitalism.

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Ashton Kutcher didn’t ask for a ‘Living Wage’ when he was Working Entry-Level Jobs

Posted by PITHOCRATES - August 18th, 2013

Week in Review

Ashton Kutcher made a speech the other day everyone is talking about.  Conservatives.  And liberals.  It’s become very political.  Especially for this part (see Ashton Kutcher Channels Steve Jobs In The Best ‘Teen Choice Awards’ Acceptance Speech Ever by Kyle Russell posted 8/12/2013 on Business Insider).

“I believe that opportunity looks a lot like work,” he began. He goes on to describe his first jobs: helping his dad carry shingles to the roof, washing dishes at a restaurant, working in a grocery store deli, and sweeping in a factory.

I never had a job in my life that I was better than. I was always just lucky to have a job. Every job I had was a stepping stone to my next job and I never quit my job before I had my next job.”

Could the repeating of the word ‘job’ have anything to do with his new movie “Jobs?”  Perhaps.  It’s something Greg Gutfeld pointed out on one of his umpteen television shows.  I think this comment was from The Five.  Funny guy.  And poignant.  In a warm, festering canker-sore of a way.  (Yes, you respect him.  Then you insult him).  One of my favorite libertarians.  But I digress.

Some on the left who reported this left out those earlier jobs he had.  Suggesting to the unaware reader he was talking about his acting jobs only.  And not those minimum wage jobs he was “lucky to have.”  That were merely a stepping stone to his next job.  These entry-level jobs gave him important work skills for his next job.  That’s what these jobs do.  They are not supposed to provide for a family of four.

The fast-food workers are striking to double their pay.  So they can remain in these entry-level jobs forever.  Which is not the point of these jobs.  These jobs are for kids entering the workforce.  Like Ashton Kutcher when he was a kid.  If they are unhappy they aren’t earning a ‘living wage’ in an entry level job then they should complain about the economic policies of the Obama administration that has left them behind in an entry-level job.

Anti-business policies like Obamacare have frozen new hiring.  And pushed people from full-time to part-time.  Or out of a job completely.  Leaving only entry-level jobs for many.  Who work one or two to replace the better and higher paying job the anti-business policies of the Obama administration destroyed.  This is what these people should be fighting for.  Repealing Obamacare.  And undoing all of President Obama’s anti-business policies that have left so many people working in entry-level jobs because they’re the only jobs available in the Obama economy.

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Great CEOs make Great Companies that make the World a Better Place

Posted by PITHOCRATES - September 23rd, 2012

Week in Review

Steve Jobs is no longer with us.  God rest his soul.  But the company he built, Apple, that gave us great things carries on.  But has it lost a little of that magic spark?  The genius that was Steve Jobs?  Yes.  Based on the release of Apple Maps in iOS 6.  Which some have called a debacle.  And something that would not have happened under Jobs.  Which shows us how unique a CEO is.  And how this one person can make the difference between success and failure.  Between a great company.  And a good company.  Despite the attacks on CEOs and their compensation (see Tim Cook Continues to Slowly Kill Post-Steve Jobs Apple by Rocco Pendola posted 9/21/2012 on Forbes).

That said, so much of what matters in tech’s big picture has to do with what will happen tomorrow, not all that’s good about what’s happening today…

Former Intel (INTC) chief Andy Grove wrote a timeless book about leadership, Only the Paranoid Survive. He felt in good times, great leaders needed an attitude of “this too shall pass,” using the time to anticipate threats and prepare themselves to respond fast and effectively.

Grove discusses “Strategic Inflection Points,” where something happens — a shift in technology, new regulations, a competitive salvo — that changes a company’s business overnight. In a blurb on Grove’s book, Steve Jobs said, “You must learn about Strategic Inflection Points, because sooner or later you are going to live through one.”

Because it lacks credible competition, Apple faces few external threats that we know of. Of course, that’s the tricky part about external threats; you do not necessarily see them coming. Great CEOs have to act, in part, like Hollywood producers, dreaming up seemingly unthinkable alternative scenarios to the status quo.

It is a singular vision that defines a company.  From a small startup to a Fortune 500 corporation.  And at the helm is a CEO.  Providing that singular vision.  Someone who can see what others cannot.  Who can see what isn’t there.  Someone who makes change.  Who leads the way.  They don’t follow.  These are people that help us understand that the new thing they created is something that we can’t live without.  This was who Steve Jobs was.  And why the world has so few Steve Jobs.

It is the singular vision of a CEO that makes the world a better place.

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Henry Ford, Bill Hewlett & Dave Packard, Steve Jobs & Steve Wozniak, Howard Schultz, Ray Kroc and Richard Branson

Posted by PITHOCRATES - May 8th, 2012

History 101

Capitalism allows Entrepreneurs to bring their Great Ideas to Life

Entrepreneurs start with an idea.  Of how to do something better.  Or to create something we must have that we don’t yet know about.  They think.  They create.  They have boundless creative energies.  And the economic system that best taps that energy is capitalism.  The efficient use of capital.  Using capital to make profits.  And then using those profits to make capital.  So these ideas of genius that flicker in someone’s head can take root.  And grow.  Creating jobs.  And taxable economic activity.  Creating wealth for investors and workers.  Improving the general economy.  Pulling us out of recessions.  Improving our standard of living.  And making the world a better place.  Because of an idea.  That capitalism brought to life.

Entrepreneurs Risked Capital to bring Great Things to Market and to Create Jobs

Henry Ford established the Detroit Automobile Company in 1899.  Which failed.  He reorganized it into the Henry Ford Company in 1901.  Ford had a fight with his financial backers.  And quit.  Taking the Ford name with him.  And $900.  The Henry Ford Company was renamed Cadillac and went on to great success.  Ford tried again and partnered with Alexander Malcomson.  After running short of funds they reorganized and incorporated Ford Motor Company in 1903 with 12 investors.  The company was successful.  Some internal friction and an unexpected death of the president put Ford in charge.  Ford Motor built the Model A, the Model K and the Model S.  Then came the Model T.  And the moving assembly line.  Mass production greatly increased the number of cars he could build.  But it was monotonous work for the assembly line worker.  Turnover was high.  So to keep good workers he doubled pay in 1914 and reduced the 9-hour shift to 8 hours.  This increased productivity and lowered the cost per Model T.  Allowing those who built the cars to buy what they built.  In 2011 the Ford Motor Company employed approximately 164,000 people worldwide.

Bill Hewlett and Dave Packard established Hewlett-Packard (HP) in 1939.  In a garage.  They raised $538 in start-up capital.  In that garage they created their first successful commercial product.  A precision audio oscillator.  Used in electronic testing.  It was better and cheaper than the competition.  Walt Disney Productions bought this oscillator to certify Fantasound surround sound systems in theaters playing the Disney movie Fantasia.  From this garage HP grew and gave us calculators, desktop and laptop computers, inkjet and laser printers, all-in-one multifunction printer/scanner/faxes, digital cameras, etc.  In 2010 HP employed approximately 324,600 employees worldwide.  (Steve Wozniak was working for HP when he designed the Apple I.  Which he helped fund by selling his HP calculator.  Wozniak offered his design to HP.  They passed.)

Steve Jobs had an idea to sell a computer.  He convinced his friend since high school, Steve Wozniak, to join him.  They sold some of their things to raise some capital.  Jobs sold his Volkswagen van.  Wozniak sold his HP scientific calculator.  They raised about $1,300.  And formed Apple.  They created the Apple I home computer in 1976 in Steve Jobs’ garage.  From these humble beginnings Apple gave us the iPad, iPhone, iPod, iMac, MacBook, Mac Pro and iTunes.  In 2011 Apple had approximately 60,400 full time employees.

Jerry Baldwin, Zev Siegl, and Gordon Bowker opened the first Starbucks in 1971 in Seattle, Washington.  About 10 years later Howard Schultz drank his first cup of Starbucks coffee.  And he liked it.  Within a year he joined Starbucks.  Within another year while traveling in Italy he experienced the Italian coffeehouse.  He loved it.  And had an idea.  Bring the Italian coffeehouse to America.  A place to meet people in the community and converse.  Sort of like a bar.  Only where the people stayed sober.  Soon millions of people were enjoying these tasty and expensive coffee beverages at Starbucks throughout the world.  In 2011 Starbucks employed approximately 149,000 people.

Ray Kroc sold Prince Castle Multi-Mixer milk shakes mixers to a couple of brothers who owned a restaurant.  Who made hamburgers fast.  Richard and Maurice McDonald had implemented the Speedee Service System.  It was the dawn of fast food.  Kroc was impressed.  Facing tough competition in the mixer business he opened a McDonald’s franchise in 1955.  Bringing the grand total of McDonald’s restaurants to 9.  He would go on to buy out the McDonald brothers (some would say unscrupulously).  Today there are over 30,000 stores worldwide.  In 2010 McDonald’s employed approximately 400,000 people.

Richard Branson started a magazine at 16.  He then sold records out of a church crypt at discount prices.  The beginning of Virgin Records.  In 1971 he opened a record store.  He launched a record label in 1972.  And a recording studio.  Signing the Sex Pistols.  And Culture Club.  In 1984 he formed an airline.  Virgin Atlantic Airways.  In 1999 he went into the cellular phone business.  Virgin Mobile.  In 2004 he founded Virgin Galactic.  To enter the space tourism business.  His Virgin Group now totals some 400 companies.  And employs about 50,000 people.

The Decline of Capitalism and the Rise of the Welfare State caused the European Sovereign Debt Crisis

And we could go on.  For every big corporation out there will have a similar beginning.  Corporations that use capital efficiently.  Bringing great things to market.  Introducing us to new things.  Always making our lives better.  And more comfortable.  One thing you will not find is a great success story like this starting in the Soviet Union.  The People’s Republic of China (back in the days of Mao Zedong).  East Germany (before the Berlin Wall fell).  North Korea.  Or Cuba.  No.  The command economies of communist countries basically froze in time.  Where there was no innovation.  No ideas brought to life.  Because the government kind of frowned on that sort of thing.

There is a reason why the West won the Cold War.  And why we won that war without the Warsaw Pack and NATO forces fighting World War III.  And why was this?  Because we didn’t need to.  For the communist world simply could not withstand the forces of living well in the West.  Whenever they could their people escaped to the West.  To escape their nasty, short and brutish lives.  In the command economies of their communist states.  Where the state planners failed to provide for their people.  Even failing to feed their people.  The Soviet Union, the People’s Republic of China and North Korea all suffered population reducing famines.  But not in the West.  Where we are not only well fed.  But our poor suffer from obesity.  Which is not a good thing.  But it sure beats dying in a famine.

Sadly, though, the West is moving towards the state planning of their one time communist foes.  Social democracies are pushing nations in the European Union to bankruptcy.  Japan’s generous welfare state is about to implode as an aging population begins to retire.  Even in the United States there has been a growth of government into the private sector economy like never before.  Which is causing the Great Recession to linger on.  As it caused Japan’s lost decade to become two decades.  And counting.  As it is prolonging the European sovereign debt crisis.  With no end in sight.  The cause of all their problems?  The decline of capitalism.  And the rise of the welfare state.  Which just kills the entrepreneurial spirit.  And the creation of jobs.  Which is one cure for all that ails these countries.  And the only one.  For only robust economic activity can pull a country out of recession.  And for that you need new jobs.  And the entrepreneurial spirit.  In short, you need capitalism.

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Apple Suspends Retail Sales of their iPhone 4S in China due to Crushing Mobs at Retail Stores

Posted by PITHOCRATES - January 14th, 2012

Week in Review

Here is a economics lesson in supply and demand and the role of prices as people in China try to buy the new Apple iPhone 4S (see Apple to halt sales of latest iPhone in China retail stores by Terril Yue Jones and Lucy Hornby posted 1/13/2012 on Reuters).

“We’re suffering from cold and hunger,” a man in his 20s shouted to Reuters Television. “They said they’re not going to sell to us. Why? Why?”

“I got in line around 11 p.m., and beyond the line, the plaza was chock full with people,” said Huang Xiantong, 26, from northeastern Liaoning province.

“Around 5 a.m. the crowds in the plaza broke through and the line disappeared entirely. Everyone was fighting, several people were hurt. The police just started hitting people. They were just brawling.”

Clearly Apple created something that people want.  Which has often been the case with Apple.  Building things people have to have.  Even before the people knew what these things were or that they would one day have to have them.  This is supply-side economics.  This economic activity was generated by supply.  Apple’s new product.  Created by creative human capital and the entrepreneurial spirit.  This is what businesses do.  If we let them.  And not burden them with excessive taxes and regulations.

Of course a Keynesian will point out that Apple did exactly that.  Created their products despite excessive taxes and regulations.  True.  They did that.  But Apple is a giant now.  They can hire lawyers and tax accountants to navigate these excessive taxes and regulations.  The new entrepreneur can’t.  Like other Steve Jobs trying to start out now by creating something new that the people will discover that they must have.  Many of who will not get past the excessive taxes and regulations to get where Steve Jobs did.  Falling along the wayside of ingenuity and possibility because of those excessive taxes and regulations.

Of course, others will point out that if it wasn’t for those excessive taxes and regulations corporations would just put profits before people and charge whatever prices they want.  Selling whatever inferior quality they want.  Well, regarding the quality I refer you to the Reuters article about iPhones going on sale in China.  As regard to prices…

Apple’s latest iPhone, with features including responding to commands with its own voice, was introduced in China and 21 other countries on Friday. Prices ranged from 4,988 to 6,788 yuan ($792 to $1,077).

Apple, in a statement, said its other stores had sold out.

Are prices ranging from $792 to $1,077 fair?  Based on the long lines and stores selling out, I believe the people have spoken.  And they say, yes, these prices are fair.  Perhaps even too fair.  If they were a little more expensive those who truly wanted one and were willing to pay a higher price probably would have been able to buy one before the stores sold out.

This is an example of Say’s law.  Supply creates demand.  These ingenious smartphones were not created in response to demand.  Apple created them and explained why people must have them.  Which they did.  This is how you stimulate economic activity.  Supply-side economics.  You make it as easy as possible for people to bring ingenious things to market.  Not the Keynesian way.  Giving more money to people through tax and spend policies.  Which only allows people to buy what’s on the market now.  It doesn’t stimulate the creativity of entrepreneurs.  Who bring the next great things to market.

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The iPhone is Impressive but the Plough is a True Technological Wonder

Posted by PITHOCRATES - October 19th, 2011

Technology 101

The Plough allowed us to Grow more Food in Virtually any Soil giving us more Free Time to Think

The iPhone is an amazing piece of technology.  Whenever a new one comes out lines form with anxious people clamoring to get the new phone.  Steve Jobs was a brilliant entrepreneur.  He knew how to give the people what they wanted.  But he had some help along the way.

What made the iPhone possible?  Was it touch-screen LCD technology?  A little.  Was it the miniaturization of integrated circuits?  Well, that helped no doubt.  How about the transistor?  This was big.  It opened the door to the integrated circuits.  But it took something before that.  Vacuum tubes?  What the transistor replaced?  No.  Was it wireless radio transmission?  Antenna technology?  The development of electromagnetic field and wave theory?  No.  You have to go further back.  Even before the genius of Nikola Tesla (electrical engineer, inventor and father of AC power).  The telephone?  The telegraph?  The printing press?  No.  All necessary steps on the road to the iPhone.  But none of these are the prime mover that set things in motion to make the iPhone possible.  To find this prime mover you have to go way back.  To the dawn of civilization.  To the one piece of technology that changed everything.  The plough.

The first civilizations sprung up on the fertile banks of the great rivers.  The Hwang-Ho.  The Indus.  The Nile.  The Tigris.  And the Euphrates.  Where the flooding of these rivers made the soil nutrient-rich.  And easy to work.  The masses could scratch it with a stick.  Sow their seeds.  And pray to their gods for a bountiful harvest.  The plough changed that.  It let us grow food in virtually any soil.  And the work of a few could do the same of the masses in those river valleys.  This produced two things.  A food surplus.  And spare time.  Everyone in a society no longer had to farm.  They could do other things.  And think.

The Plough gave rise to Artisans, the Free Market Economy and a Middle Class

It all started here.  The plough unleashed the human mind.  It transformed us from working machines at the mercy of our environment.  To masters of our environment.  Where we transformed our environment to better serve us.

This gave rise to artisans.  Blacksmiths.  Tanners.  Cobblers.  Inventors.  Entrepreneurs.  What we call the rise of a middle class.  These people didn’t have to grow food.  Because they could trade for food.  With the things they created.  And like the farmers, they created surpluses.

We traded this surplus of food and artisan goods in markets.  The free market economy was born.  These markets became cities.  As the economy grew capital formation grew.  Banking and finance.  The joint-stock company.  The corporation.  Capitalism.  Which eventually gave us Steve Jobs.  And the iPhone.

The Plough put us in Control of our Environment, Reduced Famine and Improved the Quality of Life

None of this would have happened without the plough.  Because before the plough everyone grew food.  And lived at the mercy of their environment.  Where famine would devastate civilizations because of a bad growing season.  But the plough gave us food surpluses.  That let us live through a bad growing season.  And allowed a middle class to continue to grow.  Improving the quality of life for the first time in history.

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LESSONS LEARNED #86: “Smug, all-knowing condescension camouflages a vacuous philosophical basis.” –Old Pithy

Posted by PITHOCRATES - October 6th, 2011

Ronald Reagan had a B.A. in Economics, Served in the Army, was President of SAG and Served Two Terms as California Governor

The Left hated Ronald Reagan.  They belittled him.  Made snarky comments like ‘he’s just an actor’.  That he wasn’t smart enough to be president.  And not qualified.  For all he could do was give a good speech.  Because he was just an actor.

Yes, he was an actor.  But he did go to college.  Had a B.A. in economics and sociology.   Enlisted in the Army and served in the cavalry.  Earned a commission in the Reserve Officer Corps just before World War II.  Served stateside during World War II making training films for the army.  Severely nearsighted, the Army classified him for limited service only.  Which meant he couldn’t serve overseas.  He served 8 years as president of the Screen Actors Guild (SAG).  During the height of the Red Scare.  Which cemented his anti-communist credentials.  (Yes, there were communists in Hollywood.  As well as in the FDR administration.)  Hosted General Electric Theater for 8 years.  He visited General Electric R&D facilities.  About 135.  Saw job creation up close during his tenure with GE.  Helping to hone his economic views.  He served two terms as California governor.  During the peak of the Vietnam anti-war protests.  When he gave his concession speak at the 1976 Republican Convention, delegates mumbled that they had nominated the wrong man (Gerald Ford).  At the age of 69, Reagan became president.  Despite snarky comments like ‘he’s too old to be president’.

So Reagan had the education.  And a long list of experience on his resume.  Experience that took him through some of the most defining moments of American history.  And spent 8 years as governor of the most populous state.  Eight years of solid executive experience.  So he was every bit qualified for office.  The people who attacked him just didn’t like his ideology.  And the fact that he was very good in elected office.  So they used smug, all-knowing condescension to belittle him.  And it worked well.  For they did not like Reagan on American college campuses.  Where kids parroted what they heard in the media.  And on their favorite shows.  But didn’t have an original thought in their heads.

Incidentally, Barack Obama got a B.S. in political science from Columbia.  And a law degree from Harvard.  He served 3 terms as Illinois state senator.  And 2/3 of a term as U.S. senator.  He had no military experience.  No executive experience.  And his only other experience was confined to academe.  Or law.  Yet those who said Ronald Reagan was not qualified to be president had no problem with Barack Obama.  Go figure.

George W. Bush had an M.B.A. from Harvard, served in the Texas ANG, ran businesses and served two terms as Texas Governor

But compared to George W. Bush, they held Ronald Reagan in great esteem.  For the Left just flat out called Bush an idiot.  And simply too stupid to be president.

For being stupid Bush was pretty well educated.  He had an B.A. in history from Yale.  A good thing for presidents to know.  History.  And he earned an M.B.A. from Harvard.  The only president to have one.  He served stateside in the Texas Air National Guard during Vietnam.  He then worked in the oil industry.  Started up some oil exploration companies.  Bush Exploration, for one.   This merged with Spectrum 7.  Where he served as chairman.  The oil glut of the Eighties hit that company hard.  It later merged with Harken Energy.   Where he served on the board.  He helped Dad run for president.  Bought a piece of the Texas Rangers after that.  Spent five years there as the managing general partner.  Built the value of the team so well that when he sold his chunk he got uber rich.  Then he served about one and a half terms as Texas governor.

This is the man the Left said was too stupid to be president.  This man who had an M.B.A. from Harvard.  One of the most pretentious Ivy League schools.  A man who worked in the energy industry.  And understood it.  Who knew how to run a business.  And did.  Even ran a Major League baseball team.  And had some 6 years of solid executive experience as the governor of the second most populous state.  So he, too, was every bit qualified for office.  The people who attacked him just didn’t like his ideology.  And the fact that he was very good in elected office.  And in the business world.  So they used smug, all-knowing condescension to belittle him.  And it worked well.  For they did not like Bush on American college campuses either.  Where kids parroted what they heard in the media.  And on their favorite shows.  But they didn’t have an original thought in their heads.  Some things just never change.

Incidentally, Barack Obama got a B.S. in political science from Columbia.  And a law degree from Harvard.  He served 3 terms as Illinois state senator.  And 2/3 of a term as U.S. senator.  He had no military experience.  No executive experience.  And his only other experience was confined to academe.  Or law.  Yet those who said George W. Bush was not qualified to be president had no problem with Barack Obama.  Go figure.

They make their Snarky Little Comments about the Greed of Corporations while Greedily Demanding more Government Benefits

And speaking of these college geniuses, you can hear a lot of them doing what they do best.  Whining.  They’re protesting up on Wall Street.  Cause they hate capitalism.  Because their tens of thousands of dollars in student loan debt hasn’t given them a high paying job.  And because they hate capitalism you know they don’t have a business degree.  Or anything that can be used in the business world.  Further, if they don’t want to be a toady to corporate America, they probably don’t have a degree that would help them gain employment with a corporation.  Like a chemistry degree.  An engineering degree.  Or a physics degree.  No.  These would have been too corporate.  And possibly too harmful to the environment.  Not to mention hard.

These protestors are living the protest life of the Sixties.  Complete with free love.  And drugs.  Which, incidentally, is why they went to college.  Not to sit in some boring-ass lectures and take exams with math on them.  And that’s why they’re so angry.  Because during difficult economic times corporations don’t have the money to waste on wasteful degrees like women’s studies.  Art.  Poetry.  French.  Anthropology.  Or some other liberal art or social science.  No.  The only high paying job opportunities for these are in academe.  Or in government.  When they are flush with taxpayer cash.  Thanks to corporations providing real jobs for taxpayers.  But when there are no real jobs, there are no tax dollars to pay for these phony baloney jobs.

So they make their snarky little comments about the greed of corporations.  About the greed of the bankers.  About the greed of Republicans.  All the while they are greedily demanding more government benefits.  Paid for by the very people they are protesting against.  While enjoying the very things these greedy corporations have given them.  They are using wireless technology to live-tweet their latest list of whines.  All technology created by the very corporations they hate.  Produced under the system they want to purge from America.  Capitalism.

If it wasn’t for Capitalism they’d be Working in a Field Somewhere for Subsistence Right Now

Look at Apple.  And Steve Jobs.  Look at what he created.  And ask yourself this.  Why Steve Jobs and not someone in Cuba?  Someone in North Korea?  Someone in the former Soviet Union?  These are three hardcore socialist regimes these protestors admire.  Who have egalitarian systems of government.  Where there is fair-shared misery.  No one lives better than anyone else.  Except those within the party apparatchik.  Which these protestors naturally assume they would be part of.  Once America became fair.  And they stripped the rich of all their wealth.  For the benefit of mankind.  And by mankind I mean these protestors.

Cuba even has a national health care system that is so impressive that Michael Moore made a movie about it.  While condemning the inferior American system.  Cuba is great.  They care about their people there.  So much so that they don’t let them leave.  For fear of the substandard love they’ll get in another nation.  Still some of these fools try to escape their utopia.  By crossing shark-infested water in some of the most unseaworthy boats.  To get to Florida.  In the USA.  To the country that the Wall Street protestors say is worse than Cuba.  If only they had iPhones in Cuba they could get their live-tweet feed from Wall Street so they would know that things are better there.  So they can stay there.  In their utopia.

Of course, it’s not better there.  And Steve Jobs wasn’t a Cuban.  He wasn’t a North Korean.  He wasn’t a Soviet.  He was an American.  An entrepreneur.  And a capitalist.  Who made Apple a rich corporation by giving us things we can’t live without.  Things we never asked for.  Things we didn’t even know about.  Until after he created them.  And he told us how cool they were.

They can make snarky, all-knowing, condescending remarks all day long about corporate greed and the evil of capitalism.  But if it wasn’t for capitalism they’d be working in a field somewhere for subsistence right now.  And the fact that they don’t know this shows how empty headed and brainwashed they are.  And what a piss-poor job our public schools and colleges are doing.

www.PITHOCRATES.com

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LESSONS LEARNED #11: “Before you condemn capitalism, imagine a world without professional sports, movies, cell phones and tampons.” -Old Pithy

Posted by PITHOCRATES - April 29th, 2010

AT THE END of the American Revolution the world said, “Okay.  Now what?”  We were a joke.  We were broke.  We were weak.  And now that the common enemy was no more, we weren’t very united any more.  Most assumed we would end up back with Great Britain.  And because of that many thought there was no sense rushing in to make treaties that will just have to be unmade.

It was complicated dealing with us.  In a confederacy of strong states, it was not easy making trade or treaties.  Multiple currencies, tariffs, laws, etc.  To enter the world of the European powers, America needed to put on her big boy pants and speak with one voice.  Some Founding Fathers saw this.  That’s why they met in Philadelphia and drafted the Constitution.  And with ratification, we had one voice.

ALEXANDER HAMILTON WAS a capitalist.  Thomas Jefferson was not.  Hamilton understood money and finance.  Jefferson did not.  Hamilton liked manufacturing and commerce.  Jefferson did not.  He thought everyone should be a simple farmer.  Everyone, that is, but him.

When elected president, people hailed Jefferson as the people’s president.  Simple, unassuming, the epitome of egalitarian republicanism.  Only thing was, there wasn’t anything simple, unassuming or egalitarian about him.  He attacked the nobility, the corruption of big cities and the evils of commerce and the ‘money’ men.  Yet he indulged in the good life like no other American.  He always lived beyond his means.  He lavished himself in the finest luxuries of the time.  And he absolutely loved Paris though it was everything he said he hated.

Hamilton put America’s financial house in order.  He helped give the new nation legitimacy.  He opened European credit to us.  Problem was that, in Jefferson’s eyes, America was becoming too much like Great Britain.  And worse, it was becoming less Virginian.  So they squared off and fought each other.  Tooth and nail.  They gave birth to America’s first political parties (Federalists and Republicans).  They viciously attacked each other in the press.  Yes, politics were nasty right from the beginning.

Then something happened that caused Jefferson to embrace much of what Hamilton did.  He fell ass-backwards into the Louisiana Purchase.

THERE WERE DREAMS of a French empire in North America.  But the slave uprising in Saint-Domingue (present day Haiti) put the kibosh on that.  With Saint-Domingue lost, there was no point in France keeping New Orleans or the Louisiana territory beyond.  And Napoleon needed money.  He was at war.  And that war was about to expand to include Great Britain.  So he offered it all to the Americans for about 15 million dollars.  Though a steal, 15 million was still a lot of money.  And then Jefferson embraced what that capitalistic bastard (we can call him that for Hamilton was the fruit of unmarried loins) created. 

(This sale was also strategic.  By expanding America’s western border, it kept that land from falling to the British.  America would grow and, in time, a stronger America would challenge Great Britain for all that sea-going commerce in the Atlantic.  If it couldn’t go to the French, better it go to the Americans.  And, in the process, it would really piss off the British.  Like I said, strategic.)

The deal included gold, bonds and some debt assumption.  Jefferson was adamantly opposed to Hamilton’s assumption of states’ debt back in Washington’s administration for it only aggrandized the central government.  And Jefferson absolutely hated banking (probably because he was forever in debt).  And though he was brilliant, he was not so brilliant when you put dollar signs in front of things.  Jefferson made the purchase, but the bond deal put together was pure Hamiltonian. 

France wanted cash.  We didn’t have it.  But we now had established credit in Europe.  We could issue bonds.  Because of our credit worthiness, the Dutch were willing to buy those bonds from France at a discount and give France the cash Napoleon wanted.  And, voilà, Hamilton’s capitalism allowed Jefferson to double the size of the United States while reducing the threat in North America from the competing European powers (Great Britain, France and Spain).  It also enabled Napoleon to cause further mischief in Europe (an unfortunate side affect).  Sorry about that, Europe.  It was an unintended consequence.

THE FREE FLOW of ideas and capital can define capitalism.  Some people have great ideas.  Others have lots of money and are willing to take a risk.  Separately, these two don’t do much to make life better.  But bring them together, though, and let the good times roll.

Venture capitalists are rich.  And they’re looking to get richer.  It’s what they’re good at.  They look for talent.  New start-up companies with a good idea.  An idea that may change the world.  They may not have that creative spark to create something new, but they can recognize that spark when they see it.  And when they see it, they want to finance it.  If they pick a winner, we may get that something that changes the world.  And they may make a dump truck full of money.  Everyone wins.

Venture capitalists bring in money.  And talent.  The entrepreneur spends his or her time creating.  The venture capitalist helps build the business.  Kind of like a mentor.  They can be demanding, though.  And impatient.  They expect a big profit on their investment.  And they don’t want to wait around forever to get it.  When things work, they can work well.  Very well.  The entrepreneurs create something new and remarkable that everyone must have.  They then take their company public.  Their initial public offering brings in gazillions.  And those initial investors (the entrepreneurs and the venture capitalists) get incredibly rich.

IN 1976, THREE guys had an idea.  They made an electronic device in a garage that they thought people would want to buy.  It was crude and ‘some’ assembly was required.  And by ‘some’ I mean a lot.  Initial financing was limited.  A car and a scientific calculator just didn’t sell for a lot.  Two of them (one had since left the company) approached a couple of venture capitalists who introduced them to a man by the name of Armas Clifford (Mike) Markkula Jr.  He, too, was a venture capitalist.  And an engineer to boot.

Markkula joined the company.  He was one of the driving forces behind a new product introduced in 1984.  Their Super Bowl ad was, is, a classic.  That product was the Macintosh computer.  Those two men introduced to Markkula were Steve Jobs and Stephen Wozniak.  That company is, of course, Apple.  Today, Apple’s iPhone dominates the market.  And they’re still innovating.  Thanks to a venture capitalist willing to take a risk.

CAPITALISM CAN DO remarkable things.  It can build a nation.  Or change a world.

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