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  An American Manifesto
Tuesday July 29, 2014 
by Christopher Chantrill Follow chrischantrill on Twitter

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The Rest of the Credit Story Am I Still a Conservative?

print view

Vote for Barack Obama? Or Fred Smith?

by Christopher Chantrill
November 03, 2008 at 4:02 pm

IF YOU VOTE for Sen. Barack Obama (D-IL) maybe he’ll spread the wealth around. He’ll take money from the rich earning more than $250,000 a year and give it to 95 percent of the American people. Obama is a student of Saul Alinsky, who wrote Rules for Radicals. Alinsky’s idea was that you organize poor people to demand justice and their share of the economic pie. You can read all about Obama and community organizing from Stanley Kurtz.

Or you could vote for Fred Smith. Fred Smith is the guy who wrote a paper in business school on the idea of an overnight package business. Today FedEx Corporation owns 300 planes and employs 290,000 people. But back in the day his business school prof didn’t think the idea would work.

Fred Smith is frustrated. He’s built his company on blue collar and community college types, according to an interview with Stephen Moore at the Wall Street Journal. The high flyers won’t go to work at ordinary industrial companies. They want to earn the big bucks in the finance industry. Or they did.

He says that most of FedEx’s first line managers come not from the top flight universities, but out of community colleges and the military. "The top talent has wanted to go to Wall Street."

But if you want to spread the wealth, according to Fred, you want to forget about Obamanomics.

"The politicians deplore the fact that we have a disparity of income," he says, but "the only way to make a blue-collar person earn more is to invest in capital, training and infrastructure. So the more you tax capital, the more you hurt workers." He estimates that about 70% of the return from FedEx capital expenditures is captured by workers in the form of higher wages as their productivity rises.

You mean that the way to help ordinary Americans is not by government spread-the-wealth but by corporate invest-in-capital-training-and-infrastructure? My, that’s radical!

Notice that Fred doesn’t mention education. The way to make a blue-collar person earn more is to invest in capital, training and infrastructure, he says.

Fred Smith deplores the high leverage in the financial industry.

"Rather than in our business where you have to have a dollar of equity for, 10 cents or 15 cents of debt," he explains, "it’s exactly the opposite in the financial sector where you have one dollar of equity for 10, 25, 50 times risk."

The thing about having 1 to 10 debt to equity rather than 10 to 1 like the finance industry is that, when things go south, you get to survive. In today’s economy that has to mean something.

Fred argues that the way to encourage corporations to reduce debt load and increase equity is to tax equity less, starting with lowering the corporate income tax rate from 38 percent down to 25 percent.

Now that would be something.

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Christopher Chantrill blogs at www.roadtothemiddleclass.com.  His Road to the Middle Class is forthcoming.


 TAGS


Action

The incentive that impels a man to act is always some uneasiness... But to make a man act [he must have] the expectation that purposeful behavior has the power to remove or at least to alleviate the felt uneasiness.
Ludwig von Mises, Human Action


Chappies

“But I saw a man yesterday who knows a fellow who had it from a chappie that said that Urquhart had been dipping himself a bit recklessly off the deep end.”  —Freddy Arbuthnot
Dorothy L. Sayers, Strong Poison


China and Christianity

At first, we thought [the power of the West] was because you had more powerful guns than we had. Then we thought it was because you had the best political system. Next we focused on your economic system. But in the past twenty years, we have realized that the heart of your culture is your religion: Christianity.
David Aikman, Jesus in Beijing


Churches

[In the] higher Christian churches... they saunter through the liturgy like Mohawks along a string of scaffolding who have long since forgotten their danger. If God were to blast such a service to bits, the congregation would be, I believe, genuinely shocked. But in the low churches you expect it every minute.
Annie Dillard, Holy the Firm


Civil Society

“Civil Society”—a complex welter of intermediate institutions, including businesses, voluntary associations, educational institutions, clubs, unions, media, charities, and churches—builds, in turn, on the family, the primary instrument by which people are socialized into their culture and given the skills that allow them to live in broader society and through which the values and knowledge of that society are transmitted across the generations.
Francis Fukuyama, Trust


Class War

In England there were always two sharply opposed middle classes, the academic middle class and the commercial middle class. In the nineteenth century, the academic middle class won the battle for power and status... Then came the triumph of Margaret Thatcher... The academics lost their power and prestige and... have been gloomy ever since.
Freeman Dyson, “The Scientist as Rebel”


Conservatism

Conservatism is the philosophy of society. Its ethic is fraternity and its characteristic is authority — the non-coercive social persuasion which operates in a family or a community. It says ‘we should...’.
Danny Kruger, On Fraternity


Conservatism's Holy Grail

What distinguishes true Conservatism from the rest, and from the Blair project, is the belief in more personal freedom and more market freedom, along with less state intervention... The true Third Way is the Holy Grail of Tory politics today - compassion and community without compulsion.
Minette Marrin, The Daily Telegraph


Conversion

“When we received Christ,” Phil added, “all of a sudden we now had a rule book to go by, and when we had problems the preacher was right there to give us the answers.”
James M. Ault, Jr., Spirit and Flesh


Democratic Capitalism

I mean three systems in one: a predominantly market economy; a polity respectful of the rights of the individual to life, liberty, and the pursuit of happiness; and a system of cultural institutions moved by ideals of liberty and justice for all. In short, three dynamic and converging systems functioning as one: a democratic polity, an economy based on markets and incentives, and a moral-cultural system which is plural and, in the largest sense, liberal.
Michael Novak, The Spirit of Democratic Capitalism


Drang nach Osten

There was nothing new about the Frankish drive to the east... [let] us recall that the continuance of their rule depended upon regular, successful, predatory warfare.
Richard Fletcher, The Barbarian Conversion


Education

“We have met with families in which for weeks together, not an article of sustenance but potatoes had been used; yet for every child the hard-earned sum was provided to send them to school.”
E. G. West, Education and the State


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©2007 Christopher Chantrill