What Business Are You REALLY In?

[TygrBright]

My husband and I were having a conversation the other day, and he said something that went right by me at the time, but it's been haunting me ever since. I think it might be a big part of What's Wrong with the economy-- and hence, it might offer an interesting clue on a direction for change.

My husband has been creating ways for people to recover from addiction for more than thirty years. He's published a number of books that are highly respected in the field. He's developed more than a few facilities and programs targeted at particular needs of particular kinds of people. He's very good at what he does, even if it's me you're hearing it from.

A few years ago, a colleague he'd worked with some years back asked him to take on a tough project: The company his colleague worked for (I'll call him 'Jim,' not his real name) had purchased a facility in New Mexico that treated people with multiple mental health and addiction diagnoses. The facility was running in the black but ARS (not the company's real name, either) felt that its clinical program had problems, the physical plant was in bad shape, and that with good leadership it could be even more profitable. Jim recommended my husband for the job and we moved to New Mexico.

The facility, which I shall call Transformational Healing Center, or THC (not it's real name, of course) had plenty of problems, all right, but as Jim had suspected, they were the kind of problems my husband had encountered many times before. With modest support and some capital investment from ARS, he could sort things out. THC ran in the black the entire time he was there and he maintained its margin of revenues over expenses in the twenty-five to thirty percent range. The staff started coming together as a team, the administrative problems were working out, and progress was made on the physical plant in spite of an on-again/off-again commitment from ARS.

Jim, who's in recovery himself, knew that the facility was making solid improvements. But he kept telling us that "Corporate" wasn't satisfied-- they needed even more revenue growth and better EBITDA, because ARS was being bought by Moroni Capital (no, not its real name either,) for nearly a billion dollars and there would be an IPO soon if they could manage to do enough additional acquisitions and show enough additional growth.

So for two years, my husband worked his ass off to create a solid clinical program, a safe physical plant, a smooth administrative infrastructure, and a large revenue over expense margin at THC. He did extremely well at all those things, but it was never good enough for "Corporate." ARS management, under the gun from the new Moroni board members, was doing everything they could to pump up "growth" figures-- acquiring more facilities (including some real dogs), demanding that facilities add more beds, increase daily census, demonstrate GROWTH!

In spite of higher revenue-to-expense ratios than ever in THC history, fewer incidents and problems, decreases in seasonal census fluctuation, new marketing strategies that diversified referral sources and produced steadier admissions figures, it just wasn't good enough for ARS. The management style from "Corporate" was becoming increasingly hostile, demanding, and unrealistic. When it was time for his contract to be renegotiated, my husband and ARS decided that the relationship was over.

That was a first for my husband, who has previously had nothing but respect from those who employed him. He left a wake of highly successful programs designed and established, troubled programs turned around, new revenue sources, better facilities, and satisfied customers-- until ARS came along. It was hard on him to feel as though he hadn't reached the goals, even though he knew that the goals had been wildly unrealistic. He went through a lot of soul-searching and some depression. He's still not happy with the whole experience, and it left us with some real financial and career issues to resolve. New Mexico is not a great job market for any field, much less his.

He's currently working on a new short-term consulting contract, and we were discussing it over dinner the other night. I referred to ARS, and he remarked, "But they weren't in the recovery business. They were in the acquisition and growth business," and went on to respond to my point.

And I've been thinking about that ever since. ARS owns dozens of treatment facilities. Everything from methadone maintenance clinics in inner city neighborhoods to posh spa-type spreads for the self-paying elite. They're in more than a dozen states. They have hundreds and hundreds of employees whose job is to help people recover.

But they're not in the recovery business.

He's right. They didn't give a rat's ass about people who need to recover from addiction and mental illness, except as success stories for marketers to generate more business to promote GROWTH! so they could make that IPO and Moroni Capital could get their billion dollar investment back and everyone's stock options would make them rich.

There is something fundamentally flawed about the whole model. It's NOT CAPITALISM. At least, not as Adam Smith envisioned it. It's not about creating a product or service people want or need, doing it superbly well, competing successfully against others who offer similar products or services. It has nothing at all do do with creating satisfied customers in order to compete more successfully. It's about creating the appearance of a certain type of success that impresses, not the "customers"-- people who need to recover and their families, insurance companies, physicians, and other referral sources-- but other financial manipulators who want to fill a niche in a portfolio of assets to increase the value of the holding company.

People like my husband are in the business of creating real value: Services and products. They take pride in the quality of what they produce and strive to do it better and better. They try to innovate, to make their services and products available to more and more people who might need or want them.

But the people who control the financial machinery that is supposed to facilitate all that don't give a rat's ass about it. They are in the business of creating, not value, but the perception of value. In order to sustain a vast, complex network of intangible products and paper instruments that theoretically relate to real value, but actually IMPEDE the creation of services and products.

No wonder things are falling apart so fast. People who can create products and services, WANT to create products and services, care about what they do, care about the quality, care about the satisfaction of the customer, the end user... they don't matter. They don't have any power in the marketplace. And now that the house of cards has come tumbling down, they have no means of doing what they can do, what they want to do, what the rest of us need.

However we end up re-creating the economy, we have got to ensure that never again does it get so far removed from the fundamental principles of REAL capitalism.

determinedly,
Bright

[Barack_America]

1. My mother used to work for a company who did similar things with nursing homes.

Evil fuckers.

They used to make her travel from state to state doing their books and charge everything to her credit cards to get reimbursed later. Well they eventually went bankrupt and, of course, stuck her with a hefty bill that eventually forced her to declare bankruptcy.

IMO, there is a special place in hell for corporations who get involved in industries such as mental health/addiction and nursing homes solely for "profit potential".

[Vincardog]

2. I could tell the same story about IT. The whole system is shewed in favor of Parasitic financial

companies who destroy jobs and create nothing.

[ayeshahaqqiqa]

3. Helping mankind was my business!

So said Jacob Marley to Scrooge in "A Christmas Carol" (or words to that effect). Your husband made a very good point. We need to refocus the meaning of business--acquisition is not a reason for maintaining a business. Helping others and society in general should be the focus of business, not profit. Even Dickens realized this more than a century ago.

[sandnsea]

4. Exactly. It's balloon economics

"Well, first of all, I don't think it's accurate to say that consumer spending got us into this mess. What got us into this mess initially were banks taking exorbitant, wild risks with other people's monies based on shaky assets. And because of the enormous leverage where they had $1 worth of assets and they were betting $30 on that $1, what we had was a crisis in the financial system."

People betting on making money, instead of operating business with the purpose of providing quality goods or services.

[rosesaylavee]

5. Recommended.

This is too common. First step - recognize it and name it. Thanks for posting.

[Tsiyu]

6. These companies only want to be the middle man

Someone else provides the spending money so someone else can do all the work. These folks want to stand in the middle and skim as much off that passing $$$ as they can without actually doing anything.

Business has been image over substance for a long time : from toys laced with lead that "look" safe, to banks collapsing from too much debt yet advertising their solidity, to the cheapest, least nutritious food packaged with the most expensive paint and cardboard and ad budgets money can buy.

Humans seem like suckers extraordinaire. We've all been had.

[Still Sensible]

7. To Wall St growth is everything

That's why the bankers, mortgage companies and credit card companies wanted deregulation so badly. They were running out of ways to maintain significant growth [which would make their stock prices/company value rise). Once the chains were off, they were free to invent ways to make money--most egregious were the derivatives schemes that allowed them to trade mountains of paper and generate "profits" out of thin air!

[Gregorian]

8. My dad had an idea.

He was preparing to retire from Applied Materials as an engineer. And of course, had nothing. Someone approached him at work and asked him if he could help develop a way of automating the vents to the tomato growing sheds at a farm. This lead him to another idea, and he started a business in his home as he phased out of retirement. Eventually he needed help. Here's the story-

With humility and a lot of sweat, he created an electronic switch that was unique and new. When it came time to hire help, he found a Vietnamese girl who he taught. And together they started producing these switches. But there was something similar to your story going on. His eye wasn't on the final profits. He deferred that kind of thinking to the future. If things were to go well, then they would. But he was very careful with his helper. He treated her well. They worked out of the house, and lunchtime was wonderful. They all ate at the table like one family. And they paid her far better than anywhere else that she could have worked. I later came to work with them. And at the time I was fairly bigoted against the Vietnamese due to their huge influx in the San Francisco area. I was already traumatized by what had happened to my beautiful Bay Area. But as we worked together, and as I heard the stories of what the Vietnamese went through, I quickly turned around. I began to empathize and learn about what they had gone through. And still go through, having had to leave their home. It's hard to remain angry at someone when you hear that at 14 years old, they were clinging to a sinking ship while trying to fire an M-16 at pirates.

Eventually what happened was that the company grew, and the employees were happy. And twenty years later, almost all of them are still there. They are more than just employees. And they fared far better than most. Home ownership. Savings. A good relationship with everyone in the company. To this day that girl still calls my dad to wish him a happy birthday.

There is a spiritual side to running a business that is no different than any relationship. You can force life, but it's not going to bear good fruit. Money is not the goal. But that is very difficult to see.

Somewhere it says that the love of money is the root of all evil. And I believe it. This country has been consumed by greed. We've all been tempted by it. And this is what I think distinguishes Democrats from Republicans mostly. One looks at the end, and tries to get there any way possible, missing the path of experience that contains the spirit of life. The other sees that the end is only part of the whole process. And may be less important than the journey itself.

[Jackpine Radical]

11. Traditional small businesses were like that.

My father built wooden boats for a living He taught quite a few people the craft. He always paid as well as he could. He never got rich. He always prided himself on making the best boats available, and was able to sell as many as he could build, but he never got big. I think, looking back, that he always wanted to personally maintain the quality of each boat that went out, and if his business grew too large, he would lose that.

[eridani]

22. Your father wanted to make a profit in order to continue to build a useful product

Wanting to make a useful product to make a profit switches that around. From there it's a short step to "How can I maximize profit and minimize doing anything useful at all?"

[Jackpine Radical]

9. This replacement of reality with image seems to be at the center of a whole lot of

our societal problems. The Bush people, for example, excelled at providing images. I always think of--maybe Katie Couric--in the Reagan years. She was doing these devastating stories about Iran-Contra, but the image on the screen was of Raygun & flags & blue skies whatnot. It didn't matter what she said; people's impressions of Reagan were totally determined by the visual images. Likewise Busj, flight suits, megaphones, etc.

What business is GM in? Although they're not doing it real well just now, their real business is not making cars. It is making profits. The same might be said for all of American business, most devastatingly the health care business. A For an insurance company, a service denied is a profit made. For a nursing home, a scam that lets you thin out the dierct-care staffing pattern without bringing the state or federal inspectors down on you is a profit made. (You wouldn't believe some of the scams I've seen--hiring temp workers when the IOC team is due is the least of them.)

What we have is a degenerate system. There is no correspondence between the supposed indicants of reality and the reality itself. There is no integrity in the marketplace. Milton Friedman legitimized psychopathic behavior for corporate "persons." Money does not follow excellence, it follows corruption.

I have for years known that this system cannot stand. The only question was how it will fall. I think we are about to find out just how it will fall.

[wolfgangmo]

30. Excellent post

Milton Friedman. IF he were alive, I wouldn't piss on him if he were on fire.

The man is responsible for more death, destruction, and mayhem then any single individual in the past century.

[MinneapolisMatt]

10. Highly Rec'd.

This hits home with me.

[Demeter]

12. And That's Why So Many Productive, Valuable People Are Considered Worthless

and treated accordingly. Because they are the sane adults, and they aren't in charge.

[LiberalEsto]

29. You nailed it

I'm an obsolete former newspaper journalist.

Back in 1997 I refused to write the news the way the right-wing editor ordered me to slant it, because I cared about accuracy, honesty, and presenting both sides of an issue.

[SharonAnn]

86. And, there are sometimes more than two sides to an issue .

[Blue_Tires]

88. former reporter here, too

got out of j-school (m.s.) in 2001 when things were already starting downhill, so i kind of got shortchanged before my career could take off...

ugh...now i'm trying to cut it in PR :eyes: :puke: ...but at least the bills will get paid once i catch on somewhere...

[pmorlan1]

13. Great Post

Thank you for your excellent analysis.

[varelse]

14. This is just too good not to share

I hope you won't mind if I send a link out to a few people.

:kick:

[TygrBright]

15. Don't mind at all! Honored, in fact. n/t

[Wednesdays]

16. kick and rec'd

:kick:

[Usrename]

17. There should always be some other purpose for a corporation.

It does not make any sense at all that corporations are allowed to exist for the sole purpose of making a profit. What good does that do for society as a whole? They should all be forced to have some other reason for existing, or else they should be dissolved and their papers should be pulled.

Greed is not a very good reason for allowing some legal entity to exist. It's wrong.

[roody]

18. We need to start revoking charters.

[Usrename]

19. Exactly.

Thank you for your support. Some kind of periodic review would be nice.

[BanzaiBonnie]

31. If a corporation is not serving the public good

revoke their charter!

[Dora]

67. I agree. But instead of revoking them....

I think corporate charters should be issued like licenses - they expire after a certain amount of time and can be renewed.

[Mithreal]

20. Excellent post. K&R. nt

[Iwillnevergiveup]

21. Your husband

sounds like a very wise man. And a gem. Luckily, you have each other.

K&R

[TygrBright]

41. Thank you. We consider ourselves the luckiest people we know! n/t

[eridani]

23. This looks like a potential guest editorial.

Why not send it around?

[pmorlan1]

24. This would make an excellent op-ed

eridani (1000+ posts) Wed Feb-11-09 12:20 AM
Response to Original message
23. This looks like a potential guest editorial.

Why not send it around?

I second that thought!

[elleng]

25. DITTO

and maybe send to the White House?

[TygrBright]

42. Thanks! It's a little long for most outlets though, isn't it?

Unless you know a place that would take 1200 words from an anonymous contributor.

wryly,
Bright

[BR_Parkway]

48. Start with HuffPo - this seems right up their alley. Excellent article

you totally summed up the differences that have gotten us to this point.

[glitch]

69. second this. nt

[Zodiak]

78. Buzzflash

They post a lot of stuff like this, and it gets a lot of reads.

Not as an "instead of", but an "in addition to"

[truthrocks]

26. I have never seen this concept articulated so succinctly and accurately

This, right here, is the absolute kernal of truth in your article:

"They are in the business of creating, not value, but the perception of value. In order to sustain a vast, complex network of intangible products and paper instruments that theoretically relate to real value, but actually IMPEDE the creation of services and products."

Beautifully done! Absolutely needs to get out to a WIDE audience.

Thanks!

[barbtries]

27. this is really terrific

i second the comments that say this needs a much wider audience and boils down what is happening as well or better than any other article i have read. i'd love to get a copy with your real name on it but at any rate will print at work to share.

you just nailed it. brilliant.

[tomreedtoon]

28. Business is not capitalism. It is RELIGION.

And not even a pagan religion. It's a primitive religion.

You atheist slackers out there think that mainstream religion is ludicrous? Why don't you pay attention to a cult that has even greater irrationality than any existing official religion? And greater potential for destroying lives and nations?

Watch any of the "business TV" shows that have run for years. It's all about totemism. It isn't about what you make; the big principle of "business" is that it doesn't matter what your business does. A man who makes cars one day can bring the saving, profitable grace of Big JuJu to fast food or home decoration or any other kind of business. Because it's not about making or doing things, it's about how you follow the commandments of Big JuJu.

In the 70's, when the current business class was coming to power, it was all cookie-cutter. Wear a dark suit with a subtle pinstripe. Never be seen out of that Suit of Power. Women should reject their emotions and their sexuality and try to act, dress and dominate as much like men as possible. Anyone who doesn't wear a tie or a pinstripe suit, who doesn't own a fax machine or a computer with Microsoft Office, is not a true believer in Big JuJu and is a potential sacrifice.

The wave of unemployment and firings and outsourcings are not a natural result of of flawed economics. It is the high priests of Big JuJu seeking His approval with human sacrifice. They're even sacrificing their lesser minions and acolytes to win JuJu's favor.

The corporate philosophy of American Business (borrowed from Jack Kirby): Die for Big JuJu, and Big JuJu will live for you!

[fasttense]

32. To put it simply, ARS was in the business of making money not in the business

of recovery. That is the problem with most businesses that are run today. Their primary function is to make a profit, Not to do the function that supports the profit.

Instead of putting their efforts into making a better product and more efficient business, they put all their efforts into making a profit instead.

You explained it quite well.

[bongbong]

33. It's called capitalism

Unfortunately, what you experienced is the core essence of capitalism. Business ideals trump product every time. Whether that product is widgets or services.

The more that MBAs run companies, the more you'll see this kind of thing. In the "old days" people who owned or ran companies were satisfied, largely, with a decent profit and being comfortable. Now the bosses want billions and are, largely, wannabe kings.

Japanese and German car companies often have a PhD in engineering as the CEO. Contrast this to America, where the car companies have pretty much only business majors at the VP and above level. This phenomena, or some version of it, carries on throughout America.

It's absolutely no mystery to me what the problem is with business, and why capitalism is really - I mean really - doomed in its present state.

[proud2BlibKansan]

34. I can tell the same story about education and charter schools

They aren't in the education business. They put the economics of education above what's best for kids.

[Time for change]

35. I guess you could call it corrupted capitalism

Some say that this kind of problem is inherent to capitalism itself. But I don't think so. I agree with you, that this is certainly not the way that capitalism should work.

The bottom line question is "How did we ever get to this state?". I suspect that our system of legalized bribery of elected official has a lot to do with it, but I can't go much beyond that.

Thank you for this very interesting and insightful story.

[Javaman]

36. The concept of slow growth and producing quality services has been replaced by

get rich quick at the expense of quality service.

bottom line: greed.

the one thing that the tech boom and but apparently not the bust taught some people in society is this: there is money to be had from producing nothing. So they try to grow a business beyond what it can logically and realistically perform only to dump it before it's about to collapse to some unsuspecting suckers who can't see the brick wall the company is about to hit.

it's hit and run economics.

That's how we got were we are now.

[SnowCritter]

37. You mentioned Adam Smith and

you're correct - Adam Smith didn't envision capitalism in the way that conservatives and/or Republicans do. What the turd-burglar conservatives and/or Republicans who always mention him fail to recognize is that, as John Kenneth Galbraith wrote in "Age of Uncertainty" (near the end of Chapter 1, IIRC), Adam Smith did NOT believe in corporations. Adam Smith's model of capitalism was centered on the individual, not the corporation.

[CubicleGuy]

44. Adam Smith and the corporations

"Adam Smith did NOT believe in corporations. Adam Smith's model of capitalism was centered on the individual, not the corporation."

So, when you're in a business that's just too big for one person to handle, what is one supposed to do?

[RaleighNCDUer]

58. You break up the business.

In any business there is a core premise. If the business builds to a size that outgrows that premise, then it's time to split into separate companies.

[izzybeans]

38. Finance capitalists are parasites with no idea of how to run a business.

[peacetalksforall]

39. I wonder why we never write about the stockholders. If the degreed and groomed

executives are working (scheming) for profits, it's always said they are doing it for stockholders. Why don't we place the stockholders on the same stage with the ceos of bussinesses and banks when we critique. They and fund managers share in this.

It's obvious from what we're learning that there is this caste problem of ceo's whose purpose is to be at the top, to get their name on lists, to be sought for their appearances and speeches, and whose role it is to raise up companies or tear down companies. It's ego and $$$.

Then there is the industry that makes money from following the ceo's in analysis and perpetuating the schemes by media support. They enable the ceo's.

But the stockholders get off without a glance.

Some stockholder employees of companies with 401's have little say. Perhaps some are in a position to request a change.

Thanks to the corporations and fund managers who are 'blue' in honesty, transparency, and in their attitude to the environment. And a special thanks to the stockholders who seek them out for their investments.

(And it should be repeated - the schemers are the ones who think they are so smart to park their money out of the country, to register their businesses outside the country to avoid the laws and regulations that protects citizens from crooked and neglected policies that harm the people who do the work or live around the factories. The blow to this country that hurts the most is stealing our jobs and giving them to people half way around the world.)

[loudsue]

40. You need to post this on the White House web site, or e-mail it to

Geithner. Geithner and Summers are a part of this whole problem.

[sinkingfeeling]

43. Beautifully put.

[lumberjack_jeff]

45. Brilliantly Bright.

The free market, as it is practiced today is a profit stripping machine. The specific trade, product or service is irrelevant (although some have more flesh on the bones than others)

Every business is in the business of aggregating money. The people who work for those businesses think they went to school to be doctors or welders, but in reality they're simply one of any number of skills that can be profitably resold.

Yesterday, Walmart laid off a bunch of people at corporate HQ. Why? Walmart is making a good profit, they simply did it because they could. They'll replace those workers from the more desperate (and cheaper) people lining up at the unemployment office.

[emmadoggy]

46. K & R. Excellent post. nt

[FredStembottom]

47. Thanks, T-Bright

That is an excellent personal history of a very large problem.
Stories like this are very welcome and needed.

[Stalwart]

49. Question Money

In war some die while others make a killing.

Some die for a cause, others die as a result. Their cause and its effect make no difference to the ones that profit from the situation.

Your husband gave his best efforts for a cause. A worthy one producing true value. Be as proud of that as we are equally disgusted with the failures of a system that defines and monetizes value. A system in which exists incentives and rewards for value in monetary terms detached from value in more important terms. That system is sub optimized.

One way to look at the system abstractly is the Principal/Agent Problem described here:

http://en.wikipedia.org/wiki/Principal-agent_problem

The direct interest of the Principal to turn need into money would be to create a greater need for the service provided, extend the length of time in treatment in the system, increase the cost to the client as long as it increases profit.

The agent in the system, your husband, had the opposite objectives. He probably worked on community education to prevent the problem. Maybe did it on his own time and dime. He had good metrics for measuring the benefit of his work. They would be reducing time in treatment and improvement at the end based on some measure like rate of client return or client getting a job. His intent to provide his service to more people would be based on expanding the service availability to more in need of it but lacking the ability to pay. Not to socialize the cost and privatize profit but to help those in need.

The Principal probably had some slick public service advertising that presented them or their industry in exactly the same terms to the public as your husband's dedication. The last thing a Principal would want the public to know is their real intent is their own interest, which is making money to make more money and any hiding any conflict that may exist between that and the public objective of the money making enterprise.

We cannot and should not deny self interest as a motivator of system performance. It is my self interest to take the time to write this long winded expression of frustration and ideas knowing that is has a small probability of being of value to anyone but me. The problem is making the economic system of self interest work to support our values.

Making money on money detached from positive or negative social value is wrong. We are in a crises and perhaps in the long run the system should fail, not be bailed out. If that is what it takes to restructure it. There is, however, probably an alternate progression of change to the system that restructures it.

Your story contributes to the change. So did the stories told to President Obama yesterday. Yesterday I wondered about the value is of sad personal stories of economic system failure. The person with a sign on the corner has one. The family that only has memories now of a loved one in a casket arriving home today from Iraq or Afghanistan has one. We should at least see the casket, know the lost or crushed hopes and dreams that are the products of a dysfunctional system. They are the stories that drive change.

The Principal/Agent problem is due to differences in self interest, value and some degree of moral hazard that is unregulated. It operates on asymmetrical information about the situation or, in extreme, a total intentional misrepresentation of the situation to the agent.

Your story points to the problem. Your problem becomes mine, mine becomes someone else's. Spread it around and it becomes a problem of society.

DU is social media. Social media is the way to solve problems with collective intelligence. Long ago the solution to a problem was large numbers of angry people picking up the most available thing, like a cobblestone, a pitchfork or a rope to solve the problem. There was great fear then of an uneducated mob using things available to them to inflict change on the cause of the problem.

We are becoming an educated mob. We are communicating and coalescing. Looking at it from the Principal/Agent Problem standpoint perhaps it is good for a government to fear its people. However, when government is aligned with the people then who has much to fear? Somebody told us once that government was the problem. That is one view, true to the extent we need to improve government. Did we just improve it?

Now government is the solution to the economic problem. Who is it going to solve it for? Change or more of the same? A government that does not fear its people is either the best government in the world or the worst. Determination of best or worst government is the number of people that have reason to fear government and the cause of their fear. A few people making money on money which is other people's money, contrary to other peoples interest and definition of value have much to fear.

Is money our money or their money? Is money debt money? How is money used to create value? How should it be used. Who does it belong to? Why do they have it? What is its relationship to social control of money?

It is time for reset, reboot, rethink. Ask the questions, look for better answers. Who is most fearful of what the answers might be? The people? Our government? The few that have the most to lose in a restructure of the meaning of value and the tokens in the measurement system?

It seems like government is the tipping point in this balance. I think it needs to take control of the mere accounting for tokens of value in the economic system for the purpose of transparency. Public accounting information for the public to make intelligent decisions about what to do and control in their own self interest with their own money is letting the market forces rule. Call it a National Accounting System. Notice that the government is already doing something conceptually similar for its internal money operations at http://usaspending.gov/

The government should own, operate or franchise the fair and impartial money accounting system
that is simply a scoreboard of free market operation. The accounting system is just the record of who owes what to whom. Then let the free market operate on equal information available to all. That is what the information age is all about. It would replace all the independent accounting systems that currently exist and benefit in efficiency from consolidation of a commodity function.

Freedom is the field of play. Freedom of information and an impartial accounting score keeper keeps the field honest and level. Nobody really knows what money is or what it does. Where does it come from, where did trillions go.

Money is our religion yet like religion it has been used by some to bamboozle us. If we define what money is and does based on our education and collective knowledge, intelligence and values what does that imply for the keepers of other systems of values that use more spiritual tokens for reward and punishment? That we proclaim and establish our right to think by thinking? Our country was established based on severance of foreign control and affirmation of our right to control our own affairs. Especially when things are all screwed up in an unjust system. The entity that controls our money controls our affairs. Who controls our money? What is money?

In the 60's we questioned authority and there was a change. We need to question money. The answers and actions today will determine the course of this century. We need a bigger change than just the magnitude of the numbers in a stimulus or bailout package. A news person tried to explain that we need to look at each one separately as they are two different things with the similar money magnitude and that can get them confused in the mind of the public.

They are related and it is no coincidence that they are related to an economic problem at the same time.

Question money. Is it too complicated for us to understand? In whom do we trust on such a basic issue? Money in terms of all denominated dollar bills with serial numbers that say "In God We Trust" is just 3 percent of the money supply. The rest is debt money. Cyber debt money that exists on some computer or piece of IOU paper that says it exists (10 to 14 Trillion?). All that money should be denominated and serialized with a cyber inscription that says "In Us We Trust". That is the true value on which money is based. Then we know how much we have in sum total as well as cyber serialized denomination, where it is at, who had it last and what transaction caused the change in holding. Then it can be expanded contracted, used for whatever transactions we choose to use it for in our own self interest, maybe with no payment of interest if that benefits us rather than bankers. Transaction fees could be applied to pay bankers for their efforts and pass on a portion of a transaction fee to the government for its use, which is our benefit.

Our collective thought of what money is and does is the sum total of individual thought. Everyone has some money and should have some thought on the matter. Does having more money convey the right to have greater say on what it is and does or should do?

What is money really all about? We let others tell us because it is too complicated for us to understand? In that case we will never see "In Us We Trust" on our cyber money. The biggest joke in the world is paying off the national debt.

Question money!

[earcandle]

50. Thanks for the explanation and personal example.

I had a feeling that profit projections were more important
than simply making a profit at all.

I do hope we can get a grip on all of this.

[valerief]

51. Yeah, I wish the world ran on a resource economy rather than a monetary one. nt

[mimitabby]

52. sadly

that's a big part of what is wrong with all medical care today. My husband couldn't keep working as an addiction counselor. They wanted more and more, for less and less. And i'm sure it was to line some fat cat's wallet somewhere!

[Joe Chi Minh]

53. An interesting leader in the Comment column of the UK's far-right Daily Mail.

The concluding paragraphs read:

"With barely-disguised relish, Schools Secretary Ed Balls now says th recession is likely to be the longest for 100 years, and will 'change the political landscape'. There are no prizes for guessing what he means. He reckons the finanical crisis has opened the way to full-blooded nationalisation and state Socialism, of the sort Gordon Brown, to be fair, has ben struggling to resist.

Unless bankers mend their ways - and fast - Mr Balls could just be right."

If ever two countries needed dyed-in-the-wool Socialism, Scandinavian-style, it's the US and the UK. Unfortunately, we are as peoples so degenerate that it would probably still be ugly in many ways, but physical survival is paramount, isn't it
? Even before considerations of the the purpose of our lives, ethical/religious considerations, as human beings made in the image of God - unless we are called to martyrdom, anyway.

But the capitalism you have in the US is simply unspeakably wicked. When I read posts such as the OP's here, I feel like vomiting.

[patriotvoice]

54. Excellent post. I run my own company - and encourage development of craft alongside profit - for...

exactly this reason. I like capitalism, when it's "creating a product or service people want or need, doing it superbly well, competing successfully against others who offer similar products or services" not this bastard version of "providing barely adequate products or services just to bolster bottom lines."

And, I think, that philosophy has allowed us to retain and grow customers since before the tech bubble burst (2001) and even now.

Kudos to your husband, and thank you for sharing your experience!

[harun]

55. I didn't even know there was such a thing as for-profit rehab.

[TygrBright]

59. Virtually all rehab that is not operated by a 501(c)(3) is now for-profit.

That includes most of the state, county, and local behavioral health services that are operated for the jurisdiction by a private corporation. You may THINK it's Washington County Behavioral Health Outpatient Clinic, but it's actually being operated by Counseling For Bucks, Inc., under a contract from Washington County.

You see, Counseling For Bucks, Inc. (CFB), can hire people who are not members of the public employees' unions. They do not have to follow prevailing wage rules that constrain many state and local government entities. They can work out sweetheart deals with the local government to operate the programs in outmoded, unused government buildings and, since the buildings are owned by the government, they can often get waivers on bothersome occupancy code trivia. Or, in another profit-laden twist, CFB's "sister organization," owned by the same company, can lease a building to the local government, so that CFB is making money on both operating the program AND being its landlord.

Oh, there are hundreds of ways for CFB and its clones to make profits from the needs of people in pain and their families, and from demand by the public that government provide help to those people in pain and their families.

A friend of ours, always with rich irony, calls it "The Vaunted Efficiency of the Private Sector." And it is true that CFB can invariably produce "metrics" at a cheaper per-unit cost than the government or many non-profits. To be fair, some CFBs even do a good job-- even a VERY good job-- of helping people through treatment and recovery. Some CFBs are the equivalent of small, entrepreneurial businesses started by people who are themselves in recovery and who have a real passion for getting the help to people who need it. But over the last twenty years, the numbers of that kind of CFB have greatly declined, as they have been bought out by corporations like ARS and become part of mega-congloms.

Most of "The Vaunted Efficiency of the Private Sector" is simply a way for overstressed state, county, and local budget managers to try and meet the expectations of legislators and voters for the delivery of any behavioral health services at all. Between declining public funding and the rapine of the managed-care organizations, we're lucky any services are available at all.

But there is still a demand among those who can afford it, to pay for rehab, and so there is a thin but rich icing atop the mouldy, crumbling cake. Private rehab centers can charge fabulous amounts to the families of addicts and the mentally ill, to get them out of their parents/childrens/spouses/etc. hair for a few weeks.

I would say "be sure you send YOUR loved one to a rehab operated by a genuine 501(c)(3) organization," except that the funding that supports nonprofits has been cut so drastically that many of them are hanging on by a fingernail and having to cut costs in ways that compromise THEIR quality as well. And some 501(c)(3)s are 'charitable organizations' only in name. Indeed, some ostensible 501(c)(3) organizations are actually controlled by Counseling For Bucks, Inc., with key CFB owners/managers/board members on the nonprofit board, effectively "owning" the so-called nonprofit. This is often necessary in jurisdictions that have rules about only being able to let behavioral health service contracts to non-profits.

The behavioral health services sector is in worse shape now than it has been at any time since the late 1970s. We have effectively destroyed it. Every time some hopeful public legislature takes what appears to be a positive step, like allocating funding and requiring local jurisdictions to spend it, or mandating parity for insurance coverage of behavioral health, or other stratagems, the profit machine that is our "health care sector" finds a way to increase their share of the take, at the expense of the patients and their families.

Sorry... you pushed a button (obviously.)

:rant:

sheepishly,
Bright

[harun]

61. Wow, thanks for the info

[justaregularperson]

56. self delete

[Tab]

57. Wrong. It IS capitalism.

You're just (and it's common) mistaking the product for the company. "ARS" is buying and selling product, and maximizing value. They don't give a rat's if you do rehabilitation, new age jewelry, or fitness centers. They buy raw product (crappy companies), add value, and resell them. That's capitalism.

The mistake comes in assuming they share your values. They don't. They buy and sell companies. They'd buy and sell mouse traps if they thought it was a growth industry.

You and your husband have a more personal interest in what the company does, and so your husband engages in capitalism on a local level - making a company work, and it's a benefit that it's a personal interest of his. They do it at a more macro level - just trying to identify potential growth industries and pick one and capitalize it.

Your main problem is that you confuse your objectives with theirs. You're both conducting capitalistic enterprises, just with different agendas, is all.

[moodforaday]

60. Roche: Saving lives is not our business

From an article I read just the other day:

South Korean activists report that the head of Roche Korea told them, “We are not in business to save lives, but to make money. Saving lives is not our business.”

http://naturalhealthnews.blogspot.com/2009/01/not-in-business-of-saving-lives.html

[mnhtnbb]

62. Hubby is a psychiatrist with 30+ years experience. He's worked for the Air Force

(Berry plan during VietNam war because his draft number came up), the VA, county clinics in NC and been in private practice in several states. He was in academic psychiatry for many years with UCLA. He ran the first methadone maintenance clinic in Los Angeles--years ago.

Mental health reform in NC has been a disaster. One after another county clinic is going belly up.
Hubby interviewed at a not-for-profit clinic this week where one of the administrative interviewers
was thrilled to tell him what a profitable business they were running. Hubby just about ran the other direction. Yes, these folks have figured out how to manipulate mental health care services
for the economically disadvantaged, but they aren't providing quality care. They are maximizing their
numbers. They expected hubby (or any psychiatrist) to see sickest of the sick, needing huge amounts of resources, 15 minutes/patient. They wanted him to see 32 patients in a day! Jeebus. Not only that,
but he was to do it paying his own malpractice and at a reduced fee.

It's no wonder they're looking for a psychiatrist. Anybody with any experience in their right
mind wouldn't take the job. But the administrators who interviewed him were proud of their business
model and proud of "mental health reform" in NC.

[readmoreoften]

63. Your post is actually a great example of why Adam Smith's capitalism is more story than science.

This is why it has been critiqued for over 150 years. Capital-ism is about growing and circulating capital. "Industry" is the method of creating it. What we imagine capitalism to be is a sort of a petty-capitalist fantasy: i.e. a innovator has a great idea and people reward him for his innovation by giving him the money to bring it to life, and he creates jobs for less intelligent people who haven't had their 'great idea' yet. The question is--and this isn't a moral question it's a planning or predictive one: where did the capitalist get their money to fund your "good idea"? The American cultural imagination has it that the money came from someone else's good idea, way back when. The family just put their money back into other people's good ideas. But this is just storytelling. This is not how money is made.

Yes, every now and then, someone who is a good worker, an average person, comes up with a great idea that takes off, they can get a loan from a bank and they are successful enough to repay that loan and make enough profit to keep going. They get enough to "be their own boss". But the reality is--and even Smith agreed with this--all value comes from the workers. The original person with the 'idea' who works to bring it to life, the person who manufactures it, the person who plants it and harvests it, the person who mines it.

Capitalism--not the occasional restaurant, the Horatio Algier story, the movie star--but capitalism itself is simply profit made by selling something at a higher cost than its materials, including its workforce. In 'olden times' capitalists were more wont to suppress worker pay than sacrifice the quality of a product, but with branding there is no reason to factor in quality either. So what we have is pure hallucination. We have garbage created by exploitation.

The system isn't broken, it's meant to work this way. The original capitalists were the cutthroat Burgher class who subdued the power of the monarchs by the creation of new luxuries: silks, spices, etc. (Now it's iPods and cocaine.) To put it bluntly--money is largely the abstracted work of dead labor put into circulation again and again. Capital doesn't come from the working class because capital is precisely what is EXTRACTED from the working class. Their goal is to suck everything dry. They are a parasite class.

What the world needs is people like your husband. People who are workers and managers who want to create a better world, who have knowledges that they can put to use to heal people, to create new inventions. Creative people. People who know how to make things, who have ideas, and who can manufacture and maintain those things--from the hands of children who make our computers to the minds who develop them. We're the ones who are needed.

[TygrBright]

65. I see your point.

I'm not entirely sure I agree with your parsing of capitalism (though you bring up some very good arguments and it's worth a more thoughtful and detailed analysis than I'm giving it right now,) but for the sake of discussion I'll stipulate that you are correct, and capitalism is about money movement at the highest levels, for the benefit of a parasite class.

OK. Stipulated.

Also stipulated (unreservedly and enthusiastically:)

>>What the world needs is people like your husband. People who are workers and managers who want to create a better world, who have knowledges that they can put to use to heal people, to create new inventions. Creative people. People who know how to make things, who have ideas, and who can manufacture and maintain those things--from the hands of children who make our computers to the minds who develop them. We're the ones who are needed.<<

What should the economic framework that facilitates these needed people doing the things that are needed look like? What mechanism should exist to channel resources in the right direction? How should it be regulated? How should differences about what is needed, and how much, and where, be resolved?

I don't know what to call it. I believe that certain things can and should be provided entirely by the government (example: military.) Other things should be provided by non-government (private, for-profit) sources, under a fairly strict level of control by the government (example: utilities.) Other things should be provided by non-government (private or quasi-government non-profit) sources, under a fairly strict level of control by the government (example: education.) Other things should be provided by non-government (private, for-profit) sources in competition with one another, under the minimum of government control necessary to ensure public safety.

How would the resources necessary to establish sources-- financing, real estate, etc.-- get where they were needed? Who would decide and how?

I'm perfectly willing to not call it "capitalism," and to not refer to it as "the market," but somewhere or other there has to be a conceptual frame that will describe the functions of providing resources and allocating them that takes into account the realities of human nature and human needs. Competition is an important way to improve the essential services and goods that sustain societies. Regulation is required to ensure public safety, fairness, etc. Who decides and how? What's left up to whatever takes the place of "the market" and what's turned over to government?

That's quite a can of worms.

Interesting.

fascinatedly,
Bright

[bos1]

70. read "Unconscious Civilization" by John Ralston Saul

He talks in length about the phenomenon you encountered -- how managers are not capitalists, they are private bureaucrats, how the numbers game is a wrongheaded goal taught in equally wrongheaded "business schools" which shouldn't exist in the first place

[MADem]

64. There is an outfit called

...well, let's call it the APRIL Company, or maybe the JUNE Company, that for years was in the business of taking care of mentally retarded, mentally ill, and neuro-compromised adults in group home settings. They were a small outfit, founded by an individual with a personal interest in good care for challenged adults, with several group homes that had a reputation for an outstanding level of care. Then, they got "acquired" and got bigger. Still, the facilities were well run, the workers were respectfully (not generously) compensated, they had good relations with the residents, and all was running smoothly. Then, they got acquired again, and are now headquartered in a Fuck You Worker state, and things have gone to shit. Experienced people are getting fired left and right with no notice for no reason (the managers are located down south, and they think they can get away with that "right to work" bullshit) and they're hiring idiots to replace them. People who have worked there for years are quitting in disgust, on top of the ones who are getting fired for no reason.

Families are pulling their adult kids out of environments that they used to thrive in, because they fear they're being neglected if not abused. It's an ugly situation, all driven by profit. The workers, though, are starting to push back, because on top of getting fired, the first line of attack by the company is to deny the workers unemployment. The workers then have to get a hearing (and do without any pay for awhile, sometimes two or three months) and they get their pay at the hearing after the arbitrator hears the tales. The idea the company is following is to force the workers to take ANY job to survive, so they can get out of paying the unemployment. Then, if the worker is getting the unemployment for "too long," they appeal the decision, forcing the worker back to court to again justify their receiving a fucking entitlement.

Horrible bastards, they should rot in hell. The disservice they are doing to the workers and the clients in the group homes is disgraceful.

It's greed, and it is happening everywhere.

[earth mom]

66. This is why I think the stimulus package should give everyone a lump size amount of money

so that micro home based businesses can be created.

No one is more invested in the success of a business than someone who creates it from the ground up.

Wall Street is nothing more than a bunch of leeches who should be killed off.

[glitch]

68. Important post. Thank you for taking the time to explain a very simple difference between what we've

been doing in our "capitalist, free-market economy" and a capitalist, true-market economy. And by true I also mean fair and genuinely productive.

[GeorgeGist]

71. The bottom line of REAL capitalism ...

is profit-by-theft.

[tblue37]

72. TygrBright , I must say, this is one of the most thoughtful and

intelligent posts I have ever read anywhere on the Net, and since DU is one place among many where I often read thoughtful and intelligent posts, I intend this as very high praise indeed! I will be bookmarking this and showing it to people.

[burythehatchet]

73. I agree with you, as I have developed the same viewpoint over time,

but what makes the situation practically impossible is the fact that the remaining employed people, if they aren't flipping burgers, are working for the people and companies who create nothing. They make a lot of money, comparatively. These individuals are the unwitting accomplices to the continuation of the system as it exists today, because their own financial interests prevent them from questioning the status quo.

[XemaSab]

74. You want to work in consulting biology?

It's a similar deal in a lot of places.

[MilesColtrane]

75. Since I'm a musician, my REAL business is selling....

...alcohol, food, various licensed merchandise, cars, pizza, furniture, books, etc.

All of the above is in the guise of playing at bars and restaurants, in the orchestra pit for Broadway shows (lots of Disney), and jingle sessions.

In my spare time I try to play music.

[Phoebe Loosinhouse]

76. Really well done and cuts right to the core issue. K&R

On a similar but different sidenote:

Sometimes when my husband and I eat out, particularly if we're traveling and we're in some chain restaurant, I think about the numbers of buildings, the corporate headquarters, the bureaucracy, the employees, the stockholders, and I say to myself - the whole shebang is resting on the shoulders of the guy in the back cooking the burger. If he does a good job and the customer is satisfied, there will be repeat business and the chain might thrive for years. If he does a bad job, then no repeat business and the chain goes down the tubes. But they're willing to pay this lynchpin of the corporate empire almost nothing. He DOES what they're supposedly in business to do- cook food that people pay to eat. But, as you say, that's not REALLY what they're in business to do.

[Joanne98]

77. We have all worked for companies like that!

50% of the companies in this country are crap. Who does anything worth paying for. The "service" sector" was always a CON, just like the "information age" CON ARTISTS RULE!

But it's all good to talk about this, it's just to bad we weren't doing that 10 years ago!

[AlecBGreen]

79. very well written

I wish I could rec this twice! big ol' :kick: comin' atcha

[bertman]

80. Recommend and kick.

[ms liberty]

81. K&R - an excellent post. I agree, and I wonder if this has always been how it is..

or if this is yet another result of the last 28 years of Replican power's deregulation of business. I'm thinking it wasn't like this when I was a kid back in the 60's & 70's.

[napoleon_in_rags]

82. There's a lack of holistic good information.

I work in mental health, and I've seen this sort of stuff too. You get these synergistic relationships between people who rely on the system and the people who work in the system..Its not that anybody is consciously trying, but it ends up being a viscious cycle thing rather than creating healing. What the state needs is quality top level information - the kind that comes with IT rather than the mountains of paperwork that we use now, to really track on what's going on. And they need to make sure that the incentives are based on people becoming functioning members of society. Its not easy, it would take time and work, but I believe this stuff should be attempted, at least.

[LeftishBrit]

83. k&r

Unfortunately this attitude is spreading into the public sector, at least in the UK which at least still has a public sector! Thatcher and post-Thatcher governments have demanded that universities and hospitals be 'accountable' and 'competitive', which means running like businesses. And the businesses that they're imitating have been corrupted by the obsession that you describe, with 'creating, not value, but the perception of value. In order to sustain a vast, complex network of intangible products and paper instruments that theoretically relate to real value, but actually IMPEDE the creation of services and products.'

Yes, yes - so true these days in both the public and private sectors!

One of the best - and saddest - posts I've seen in a while.

[DollyM]

84. My husband worked for mental health and I worked for Hospice

Many years back and we both saw the demise of true concern for people in the health care field. Even "not for profit" is about the bottom line anymore. I strongly feel that anything in health care should not be for profit, how can it be and the patient/client get the best possible care? It doesn't even make sense. My husband's superviser once told him, "business is business" and he got the point. If they can't pay, you go on to the next person that can. I worked for a hospice that in it's early days existed soley on donations and United Way funds. When we became Medicare certified things changed almost overnight, we moved into a big fancy building, our director gave her self a 20 thousand dollar raise and treated us like dirt. Even though we were "non profit" you had better believe the profit rolled in and our director made sure she got the best cut and suddenly our patients needs were scrutinized for every aspirin and every cough drop. Money just makes people greedy and the opportunity to make unlimited money it seems, makes people even more greedy. Health care is and should be about meeting people's physical and emotional needs not making big bucks for a corporation.

[bluethruandthru]

85. Radio is the same way.

When ownership restrictions were relaxed and big conglomerates started buying up all the radio stations in the country...radio went from being airwaves - owned by the public - with stewards of those airwaves (the station owners) being licensed to serve in the public interest...to being money machines for CBS, Disney, Clear Channel, Citadel, etc.
There are very few small mom and pop type owners who care about putting out a good product for their local community. It's all about syndicated programming with minimum wage "board operators" watching the machinery while the Ryan Seacrest, Billy Bush, or Sean Hannity program airs.

[cornermouse]

87. This is not a surprise to the manufacturing sector.

We had the best educated and smartest workers in the world and were making decent wages till Reagan got in office. Overnight the memo went out that American workers were lazy, wasteful, and stupid. Reagan successfully attacked the unions. Overnight American companies were portrayed as having shoddy products, and foreign companies portrayed quality products. Then American companies started testing the water by shifting jobs across the border to Mexico till they decided they could get it cheaper in India and China. (By the way, did you see China on camera talking about giving a major tax credit or relief for Chinese buying their electric car? Try to catch an American company doing the same.)

It's been obvious for a long time that quality doesn't matter. If it mattered the executives would allow employees enough time to do a quality job, would hand out raises for a quality job, and would never have started outsourcing. It's all about making a larger profit and the PR that enables one to get there.

Same thing with the demand to make larger sales for Christmas than last year even though population growth had moderated to some extent and in spite of the fact that people were steadily losing their jobs. It amounted to denial of facts and reality and I think that it finally caught up with them this year.