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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.


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Responsible Self

[The Axial Age] highlights the conception of a responsible self... [that] promise[s] man for the first time that he can understand the fundamental structure of reality and through salvation participate actively in it.
Robert N Bellah, "Religious Evolution", American Sociological Review, Vol. 29, No. 3.


Taking Responsibility

[To make] of each individual member of the army a soldier who, in character, capability, and knowledge, is self-reliant, self-confident, dedicated, and joyful in taking responsibility [verantwortungsfreudig] as a man and a soldier. — Gen. Hans von Seeckt
MacGregor Knox, Williamson Murray, ed., The dynamics of military revolution, 1300-2050


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


What Liberals Think About Conservatives

[W]hen I asked a liberal longtime editor I know with a mainstream [publishing] house for a candid, shorthand version of the assumptions she and her colleagues make about conservatives, she didn't hesitate. “Racist, sexist, homophobic, anti-choice fascists,” she offered, smiling but meaning it.
Harry Stein, I Can't Believe I'm Sitting Next to a Republican


Liberal Coercion

[T]he Liberal, and still more the subspecies Radical... more than any other in these latter days seems under the impression that so long as he has a good end in view he is warranted in exercising over men all the coercion he is able[.]
Herbert Spencer, The Man Versus the State


Moral Imperatives of Modern Culture

These emerge out of long-standing moral notions of freedom, benevolence, and the affirmation of ordinary life... I have been sketching a schematic map... [of] the moral sources [of these notions]... the original theistic grounding for these standards... a naturalism of disengaged reason, which in our day takes scientistic forms, and a third family of views which finds its sources in Romantic expressivism, or in one of the modernist successor visions.
Charles Taylor, Sources of the Self


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


Society and State

For [the left] there is only the state and the individual, nothing in between. No family to rely on, no friend to depend on, no community to call on. No neighbourhood to grow in, no faith to share in, no charities to work in. No-one but the Minister, nowhere but Whitehall, no such thing as society - just them, and their laws, and their rules, and their arrogance.
David Cameron, Conference Speech 2008


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


Never Trust Experts

No lesson seems to be so deeply inculcated by the experience of life as that you should never trust experts. If you believe doctors, nothing is wholesome: if you believe the theologians, nothing is innocent: if you believe the soldiers, nothing is safe. They all require their strong wine diluted by a very large admixture of insipid common sense.
Lord Salisbury, “Letter to Lord Lytton”


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


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”


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©2007 Christopher Chantrill