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  An American Manifesto
Friday April 25, 2014 
by Christopher Chantrill Follow chrischantrill on Twitter

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

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Vote for Barack Obama? Or Fred Smith?

by Christopher Chantrill
November 03, 2008 at 11:02 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


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


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


Hugo on Genius

“Tear down theory, poetic systems... No more rules, no more models... Genius conjures up rather than learns... ” —Victor Hugo
César Graña, Bohemian versus Bourgeois


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


Faith & Purpose

“When we began first to preach these things, the people appeared as awakened from the sleep of ages—they seemed to see for the first time that they were responsible beings, and that a refusal to use the means appointed was a damning sin.”
Finke, Stark, The Churching of America, 1776-1990


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


Postmodernism

A writer who says that there are no truths, or that all truth is ’merely relative’, is asking you not to believe him. So don’t.
Roger Scruton, Modern Philosophy


Faith and Politics

As far as the Catholic Church is concerned, the principal focus of her interventions in the public arena is the protection and promotion of the dignity of the person, and she is thereby consciously drawing particular attention to principles which are not negotiable... [1.] protection of life in all its stages, from the first moment of conception until natural death; [2.] recognition and promotion of the natural structure of the family... [3.] the protection of the right of parents to educate their children.
Pope Benedict XVI, Speech to European Peoples Party, 2006


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


Religion, Property, and Family

But the only religions that have survived are those which support property and the family. Thus the outlook for communism, which is both anti-property and anti-family, (and also anti-religion), is not promising.
F.A. Hayek, The Fatal Conceit


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


US Life in 1842

Families helped each other putting up homes and barns. Together, they built churches, schools, and common civic buildings. They collaborated to build roads and bridges. They took pride in being free persons, independent, and self-reliant; but the texture of their lives was cooperative and fraternal.
Michael Novak, The Spirit of Democratic Capitalism


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©2007 Christopher Chantrill