So one thing I have noticed it seems with quite a few of the wealthy (or formerly wealthy) with this economic/financial crisis and recession, is that a lot of wealthy people seem to be oblivious to the concept of not having all of your eggs in one basket. I think Felix Dennis said it best in his book, "How to Get Rich," when he mentions that you should not have all of your eggs in one basket, nor should you spread the eggs of one basket out, but rather, try to create multiple baskets of eggs! But even if one wasn't/isn't into creating multiple baskets but rather just watching what eggs they have, one would think people would have been a bit more vigilant.
For example, some people had all of their net worth (or almost all of it) tied up into one company, a company in an industry that was definitely prone to being devastated by a major recession. And thus the great majority of their hard-earned wealth disappeared due to their company getting decimated by the recession. If you have all of your net worth tied into one company, then you make damned sure that it is a company that is very strong and very recession-resistant. Otherwise, it is just too risky. Or, take a portion of your wealth and put it into other assets, so that you are not just tied to this one business you own.
Another example of bad thinking was all the people who entrusted their entire net worth to one guy. This is what many rich apparently did with Bernie Madoff. And even with entrusting it to multiple guys, you have to be careful, because some of those so-called investment managers simply entrusted all of their money to Madoff as well. Some may say, "Well no one ever DREAMED that Bernie Madoff was a scoundrel!" well true, however, you could entrust your money to a guy who has a heart of gold, that doesn't mean he can't mess up. Investing and asset management, like any business, is part art, part science, not hard science or engineering (and even engineers have been known to make mistakes occasionally).
Mark Ecko is another guy who seemed to be oblivious to this. Apparently he had a lot of his net worth tied up in his company, which is a fashion industry company. The problem was that his company was in an industry that is extremely prone to recessions, and thus when the global financial crisis hit and then the ensuing economic depression, his company crashed, and thus so did much of his net worth.
Now I have been going off on a tangent here as I am more referring to wealth management overall with all of this, but I think the same principle applies with building a company: don't have all the eggs in one basket. If your company is recession-prone, or in an industry that goes through cycles, then make sure that you take all of this into account. The business should be ready at all times for the chances of a recession (although I am sure that this is much easier said then done).
If your business is more recession-resistance, than that is great. And if your company consists of multiple sub-companies, then I would try to make quite a few of those sub-companies ones that tend to be recession-resistant. This way, when a recession inevitably occurs, those sub-companies can help prop up the faltering companies that are recession-prone. This will thus help protect the company and help protect your fortune/wealth as well.
Friday, October 22, 2010
Bureaucracy VS Anarchy Within a Business
So in my previous post, I mentioned how one strategy to build a large company is by building up a company that consists of many smaller companies. Another advantage that this can provide, at least in theory (although apparently in practice from my understanding as well), the best of both worlds for when it comes to companies. That basically you get the benefits of a big business (size, economies of scale, purchasing power, etc...) combined with the benefits of a small business (agility, ability to think and react quickly, etc...) at the same time.
The thing is, either one of these can have extremes that can be bad, and it seems like a challenge for any good business thus is how to find the right balance. As mentioned, in theory, a company consisting of a bunch of independent sub-companies that all operate on their own and then report to the holding company, can be able to provide the same types of fast innovation and agility that a small company will have while also providing the benefits of the economies of scale and purchasing power of a large organization. Examples can be companies such as the locks conglomerate Assa-Abloy, the luxury goods conglomerate LVMH, automation companies that consist of multiple smaller companies, and so forth.
The problem as I see it, however, is that one cannot just have anarchy. There has to be some level of central organization and direction from the top, or else you might end up with companies creating competing products, or companies doing the same kinds of research, but not sharing their research with one another, and so forth, which leads to money wasted within the overall organization (why have company B working on how to figure out the solution to a problem if company A already figured it out, but company B isn't aware of company A's research?).
I don't really have the answer to this type of problem, as I am no expert and I am more writing about it to just throw the idea out there, as I am sure plenty of other companies grapple with this on a daily basis and for all I know it has even been written about in the Harvard Business Review and so forth (I don't know). From what I have read from the management of such companies however, it seems to be that the management seek to give a good deal of autonomy and independence to their sub-companies, so that they can all act as independent smaller companies, while just guiding all of the sub-companies along in a general direction (the CEOs of the sub-companies must report to the leaders of the holding company).
The other extreme, i.e. too much top-down management and bureaucracy, is what slows a company down and kills innovation. I mean who wants to have to go through six layers of bureaucracy just to get an idea assessed, and it still may get shot down?
This problem can also manifest itself in individual companies, not just organizations that are holding companies for multiple sub-companies, but I mean individual companies themselves. There is that fine art of achieving that happy balance between innovation, entrepreneurship, and idea-generation and central direction and control, within individual companies as well. In fact, a large holding company consisting of many sub-companies may follow the way of some general central direction and lighthearted top-down management of the sub-companies while otherwise allowing them to all operate independently, so that they can innovate and prosper and be agile. These individual sub-companies, at the same time, will then have managements that must do this same process, create an environment for innovation and idea-generation while at the same time have some lighthearted top-down central direction.
How to Create a Creative Company Culture?
The above leads one to then ponder, how exactly does one foster a creative company culture? I would imagine that for one thing, try to keep bureaucracy light and efficient. As said, the company cannot function without professional management, but it cannot be too heavy. If you end up where someone has to go through layers of bureaucracy in order to get anything looked at, approved, or done, then your company has a problem. And also, try to hire creative-minded people and then listen to their ideas. I am sure there are other aspects as well, but I am forgetting them right now.
The thing is, either one of these can have extremes that can be bad, and it seems like a challenge for any good business thus is how to find the right balance. As mentioned, in theory, a company consisting of a bunch of independent sub-companies that all operate on their own and then report to the holding company, can be able to provide the same types of fast innovation and agility that a small company will have while also providing the benefits of the economies of scale and purchasing power of a large organization. Examples can be companies such as the locks conglomerate Assa-Abloy, the luxury goods conglomerate LVMH, automation companies that consist of multiple smaller companies, and so forth.
The problem as I see it, however, is that one cannot just have anarchy. There has to be some level of central organization and direction from the top, or else you might end up with companies creating competing products, or companies doing the same kinds of research, but not sharing their research with one another, and so forth, which leads to money wasted within the overall organization (why have company B working on how to figure out the solution to a problem if company A already figured it out, but company B isn't aware of company A's research?).
I don't really have the answer to this type of problem, as I am no expert and I am more writing about it to just throw the idea out there, as I am sure plenty of other companies grapple with this on a daily basis and for all I know it has even been written about in the Harvard Business Review and so forth (I don't know). From what I have read from the management of such companies however, it seems to be that the management seek to give a good deal of autonomy and independence to their sub-companies, so that they can all act as independent smaller companies, while just guiding all of the sub-companies along in a general direction (the CEOs of the sub-companies must report to the leaders of the holding company).
The other extreme, i.e. too much top-down management and bureaucracy, is what slows a company down and kills innovation. I mean who wants to have to go through six layers of bureaucracy just to get an idea assessed, and it still may get shot down?
This problem can also manifest itself in individual companies, not just organizations that are holding companies for multiple sub-companies, but I mean individual companies themselves. There is that fine art of achieving that happy balance between innovation, entrepreneurship, and idea-generation and central direction and control, within individual companies as well. In fact, a large holding company consisting of many sub-companies may follow the way of some general central direction and lighthearted top-down management of the sub-companies while otherwise allowing them to all operate independently, so that they can innovate and prosper and be agile. These individual sub-companies, at the same time, will then have managements that must do this same process, create an environment for innovation and idea-generation while at the same time have some lighthearted top-down central direction.
How to Create a Creative Company Culture?
The above leads one to then ponder, how exactly does one foster a creative company culture? I would imagine that for one thing, try to keep bureaucracy light and efficient. As said, the company cannot function without professional management, but it cannot be too heavy. If you end up where someone has to go through layers of bureaucracy in order to get anything looked at, approved, or done, then your company has a problem. And also, try to hire creative-minded people and then listen to their ideas. I am sure there are other aspects as well, but I am forgetting them right now.
One Way to Build A Billion-Dollar Business
So I have been thinking to myself a strategy on how to build a billion-dollar company. When it comes to thinking up business ideas on how to become a billionaire, well the main strategy of course is to think up a business that you can build to the size of one billion in revenue that you will own. But some people may associate this with a business in one particular industry. One can have a "business" that makes lots of money that is really a holding company consisting of multiple separate, smaller businesses that are in completely different industries.
So for example, if you had a business that consists of ten $100 million companies, well then your holding company is essentially a billion-dollar enterprise. Your company could also own stock in part of another enterprise as well.
My personal goal is to build a multibillion-dollar company that consists of multiple sub-companies, but those sub-companies may themselves consist of even more subcompanies. There are actually quite a few businesses like this it seems. In fact, one way it seems to build a big company is simply to combine together a bunch of smaller companies.
Some examples of this are:
Assa-Abloy - this is a locks conglomerate that consists of around 90 locks brands. Basically it's just a giant holding company that consists of a bunch of smaller locks companies which it has gobbled up over the years. it continues to gobble up further locks companies (okay, maybe the term "gobble" is a bit bad because that implies that companies it has purchased were forced into being absorbed or else run out of businesses, which from my understanding is not the case here)
Quanta Services - this is a specialty contractor for the electrical, cable, telecommunications, and gas pipeline industries. Again, it is really just a holding company that consists of many smaller sub-companies it owns, which themselves sometimes consist of sub-companies, or they are a functioning company, but they own a few smaller subsidiaries as well. And I think a few of the subsidiaries of the sub-companies have their own subsidiary occassionally as well! Quanta Services apparently was started by taking a few electrical contracting businesses and combining them together under one holding company and then building from there. They eventually took the company public and have continued building, recently acquiring the nation's largest pipeline construction company.
LKQ - this is an alternative auto parts distributor. It specializes in recycled (i.e. used) auto parts, refurbished (i.e. rebuilt), and aftermarket collision replacement parts. It also has gotten into the above for truck parts as well it seems, and it does this in both wholesale and retail too. Like the previous two, it is made up of a bunch of small sub-companies, and like Quanta Services, it was started by taking four (I believe wholesale) used auto parts businesses and combining them, and then building up from there. Like Quanta, they took the company public and also like Quanta, they just recently made a very large purchase of what appears to be (or have been) the largest used auto parts retailer in the United States. They also have become a good aid to auto insurance companies in that auto insurance companies can rely on them for cheaper replacement parts for automobiles. LKQ also owns Keystone Automotive Industries, Inc, a leader in generic collision replacement parts for autos. They also own some wheel and headlight rebuilding companies too.
Consolidated Graphics - this is a holding company that consists of a bunch of independently-operating sub-companies; to quote from Wikipedia:
Companies under the Consolidated Graphics umbrella operate independently with their own management, sales force, and market presence. This business model allows these flexible, local printing companies to have the purchasing power and resources of a well managed national corporation.
LVMH - this is the mighty French luxury goods conglomerate. they own all sorts of major luxury goods brands, everything from jewelry and watch companies, to spirits companies, to handbag companies, etc...they are a good deal responsible for having commoditized luxury over the last few decades actually (separate discussion though).
Jarden Corporation - this is a niche consumer products company; basically it is a conglomerate of smaller consumer products companies that focus on niche areas.
Automation - this isn't a company here, I am referring to the automation industry. Basically this is a very fragmented industry, and many, if not most, of the companies in it are small, specialized operations, usually no more than $50 to $100 million in revenues. It can be very difficult for companies to grow to a large size in this industry (though some are), however one strategy one can follow is to combine a bunch of smaller companies together to form one large company, which some companies have done. Two such companies are Ametek and Spectris.
Wayne Huizenga followed this strategy of building companies by combining a bunch of smaller companies together with first Waste Management, then Blockbuster, then Autonation.
Rollups
During the 1990s, this became very popular in doing what became known as rollups, basically an entrepreneur would get capital and funding and then proceed to buy up a bunch of smaller companies and combine them and then take the operation public. The problem with this is that it is a business model that can be prone to fail, and thus rollups had their own little bubble right alongside the Dot Com bubble. When the Stock Market crashed in 2000, many rollups went bust along with the Dot Coms.
Rollups can work, the problem with them is that they are not quite the same as forming a company that is an actual functioning company and then gobbling up a bunch of additional companies (and this in itself is not guaranteed to work either). Basically a rollup just takes a bunch of independent companies, combines the under a holding company, and then expects the operation to work.
Wellllll....that depends. One flaw can be in the structure of the overall operation. One incentive for the people who own the sub-companies being absorbed into the organization is to let them continue to run their operation as part of the larger overall organization, but to grant them stock in the holding company. But if the owners each own large shares of stock, and thus have a lot of say in the managing of the company, and each of them also have an equal say, problems can occur. For example, what if the individual sub-companies don't get along well? What if they disagree? What if some company owners think other company owners are total idiots?
If the rollup is being funded by venture capital, and the company consists of say ten shareholders, nine individual company owners with a 10% stake, and say yourself, the entrepreneur, with a 10% stake, well it is this kind of stuff that can cause a rollup to fail. If the venture capitalists also demand a stake in the company, that can complicate things even moreso. Whereas if you have a main, large company from the get-go, that then starts making acquisitions, well this can be more solid, because you then have a functioning business from the beginning that is just buying up other companies. And oftentimes when this happens, although the original owners may be compensated fully or partially in the form of stock in the main company, they likely will not have the kind of sway like in a rollup. They would instead likely stay on to continue to run their company as part ofthe larger organization, or stay on for awhile as an advisor to help the bigger company integrate their smaller company in.
I could see a rollup being a lot less prone to problems perhaps if it is smaller (say four companies at the start) and one person has the authority to override the others if need be. So for example you the entrepreneur hold a 51% stake in the holding company, and the four companies in the organization hold together 49%. Thus if push comes to shove, in the end, you can overrule everyone if need be and centrally direct the organization.
And if you have the money, you could always just own 100% of the operation from the get-go, purchasing the sub-companies completely from the owners, so that you answer to no one but yourself. If you have venture capitalists involved, you will have to answer to them, but at least then it is just you and the venture capitalists, not you, a bunch of scattered company owners, and the venture capitalists (by "venture capitalists," I in general mean a venture capital firm consisting of multiple partners). Venture capitalists or no venture capitalists, if you take the company public, well then you have various shareholders that you now have to answer to, but it is usually different from the rollup model, because now you'll have many shareholders as opposed to just a dozen or so that can all argue on how to run the company. These many shareholders will expect you and the professional management of the company to then work to increase the quarterly share price of the company.
So for example, if you had a business that consists of ten $100 million companies, well then your holding company is essentially a billion-dollar enterprise. Your company could also own stock in part of another enterprise as well.
My personal goal is to build a multibillion-dollar company that consists of multiple sub-companies, but those sub-companies may themselves consist of even more subcompanies. There are actually quite a few businesses like this it seems. In fact, one way it seems to build a big company is simply to combine together a bunch of smaller companies.
Some examples of this are:
Assa-Abloy - this is a locks conglomerate that consists of around 90 locks brands. Basically it's just a giant holding company that consists of a bunch of smaller locks companies which it has gobbled up over the years. it continues to gobble up further locks companies (okay, maybe the term "gobble" is a bit bad because that implies that companies it has purchased were forced into being absorbed or else run out of businesses, which from my understanding is not the case here)
Quanta Services - this is a specialty contractor for the electrical, cable, telecommunications, and gas pipeline industries. Again, it is really just a holding company that consists of many smaller sub-companies it owns, which themselves sometimes consist of sub-companies, or they are a functioning company, but they own a few smaller subsidiaries as well. And I think a few of the subsidiaries of the sub-companies have their own subsidiary occassionally as well! Quanta Services apparently was started by taking a few electrical contracting businesses and combining them together under one holding company and then building from there. They eventually took the company public and have continued building, recently acquiring the nation's largest pipeline construction company.
LKQ - this is an alternative auto parts distributor. It specializes in recycled (i.e. used) auto parts, refurbished (i.e. rebuilt), and aftermarket collision replacement parts. It also has gotten into the above for truck parts as well it seems, and it does this in both wholesale and retail too. Like the previous two, it is made up of a bunch of small sub-companies, and like Quanta Services, it was started by taking four (I believe wholesale) used auto parts businesses and combining them, and then building up from there. Like Quanta, they took the company public and also like Quanta, they just recently made a very large purchase of what appears to be (or have been) the largest used auto parts retailer in the United States. They also have become a good aid to auto insurance companies in that auto insurance companies can rely on them for cheaper replacement parts for automobiles. LKQ also owns Keystone Automotive Industries, Inc, a leader in generic collision replacement parts for autos. They also own some wheel and headlight rebuilding companies too.
Consolidated Graphics - this is a holding company that consists of a bunch of independently-operating sub-companies; to quote from Wikipedia:
Companies under the Consolidated Graphics umbrella operate independently with their own management, sales force, and market presence. This business model allows these flexible, local printing companies to have the purchasing power and resources of a well managed national corporation.
LVMH - this is the mighty French luxury goods conglomerate. they own all sorts of major luxury goods brands, everything from jewelry and watch companies, to spirits companies, to handbag companies, etc...they are a good deal responsible for having commoditized luxury over the last few decades actually (separate discussion though).
Jarden Corporation - this is a niche consumer products company; basically it is a conglomerate of smaller consumer products companies that focus on niche areas.
Automation - this isn't a company here, I am referring to the automation industry. Basically this is a very fragmented industry, and many, if not most, of the companies in it are small, specialized operations, usually no more than $50 to $100 million in revenues. It can be very difficult for companies to grow to a large size in this industry (though some are), however one strategy one can follow is to combine a bunch of smaller companies together to form one large company, which some companies have done. Two such companies are Ametek and Spectris.
Wayne Huizenga followed this strategy of building companies by combining a bunch of smaller companies together with first Waste Management, then Blockbuster, then Autonation.
Rollups
During the 1990s, this became very popular in doing what became known as rollups, basically an entrepreneur would get capital and funding and then proceed to buy up a bunch of smaller companies and combine them and then take the operation public. The problem with this is that it is a business model that can be prone to fail, and thus rollups had their own little bubble right alongside the Dot Com bubble. When the Stock Market crashed in 2000, many rollups went bust along with the Dot Coms.
Rollups can work, the problem with them is that they are not quite the same as forming a company that is an actual functioning company and then gobbling up a bunch of additional companies (and this in itself is not guaranteed to work either). Basically a rollup just takes a bunch of independent companies, combines the under a holding company, and then expects the operation to work.
Wellllll....that depends. One flaw can be in the structure of the overall operation. One incentive for the people who own the sub-companies being absorbed into the organization is to let them continue to run their operation as part of the larger overall organization, but to grant them stock in the holding company. But if the owners each own large shares of stock, and thus have a lot of say in the managing of the company, and each of them also have an equal say, problems can occur. For example, what if the individual sub-companies don't get along well? What if they disagree? What if some company owners think other company owners are total idiots?
If the rollup is being funded by venture capital, and the company consists of say ten shareholders, nine individual company owners with a 10% stake, and say yourself, the entrepreneur, with a 10% stake, well it is this kind of stuff that can cause a rollup to fail. If the venture capitalists also demand a stake in the company, that can complicate things even moreso. Whereas if you have a main, large company from the get-go, that then starts making acquisitions, well this can be more solid, because you then have a functioning business from the beginning that is just buying up other companies. And oftentimes when this happens, although the original owners may be compensated fully or partially in the form of stock in the main company, they likely will not have the kind of sway like in a rollup. They would instead likely stay on to continue to run their company as part ofthe larger organization, or stay on for awhile as an advisor to help the bigger company integrate their smaller company in.
I could see a rollup being a lot less prone to problems perhaps if it is smaller (say four companies at the start) and one person has the authority to override the others if need be. So for example you the entrepreneur hold a 51% stake in the holding company, and the four companies in the organization hold together 49%. Thus if push comes to shove, in the end, you can overrule everyone if need be and centrally direct the organization.
And if you have the money, you could always just own 100% of the operation from the get-go, purchasing the sub-companies completely from the owners, so that you answer to no one but yourself. If you have venture capitalists involved, you will have to answer to them, but at least then it is just you and the venture capitalists, not you, a bunch of scattered company owners, and the venture capitalists (by "venture capitalists," I in general mean a venture capital firm consisting of multiple partners). Venture capitalists or no venture capitalists, if you take the company public, well then you have various shareholders that you now have to answer to, but it is usually different from the rollup model, because now you'll have many shareholders as opposed to just a dozen or so that can all argue on how to run the company. These many shareholders will expect you and the professional management of the company to then work to increase the quarterly share price of the company.
Monday, October 4, 2010
On the subject of a "Great Idea"
So one recurring theme about becoming rich that many people seem to buy into is the idea that you need a great idea, that it is the thinking up that Great Idea that is what makes people rich. For example, the engineer who came up with the idea for the Super Soaker water gun, or the guys who came up with the Life Is Good phrase for apparel.
But this is a misconception. Yes, a great idea can certainly be a nice thing to have, and if you are selling this idea to an established company, this is fine, but this is not essential to building a company, which is the primary way I am talking of to become wealthy. For building a company, what counts most is the quality of the company itself. Sure you can start off with a great idea, but the most important thing is to build a great company that has a creative culture that can continue to produce all sorts of great new products.
Many people focus solely on the idea of creating a world-class product and forget that one also needs to create a world-class company as well. A world-class company will create world-class products and services.
And in creating a world-class company, one doesn't necessarilly need any revolutionary new idea. They just need to find a product or service and find a way to deliver or provide that product and service better than the existing competition. A perfect example was the creation of the company Waste Management. There is nothing exciting about garbage or waste. But building a world-class company for removing and properly handling waste in a professional manner resulted in a huge company.
Or plumbing. An entrepreneur might have the goal to build a huge professional plumbing company. Again, no "great ideas" involved here, just the concept of building a world-class company to deliver a service everybody needs.
But this is a misconception. Yes, a great idea can certainly be a nice thing to have, and if you are selling this idea to an established company, this is fine, but this is not essential to building a company, which is the primary way I am talking of to become wealthy. For building a company, what counts most is the quality of the company itself. Sure you can start off with a great idea, but the most important thing is to build a great company that has a creative culture that can continue to produce all sorts of great new products.
Many people focus solely on the idea of creating a world-class product and forget that one also needs to create a world-class company as well. A world-class company will create world-class products and services.
And in creating a world-class company, one doesn't necessarilly need any revolutionary new idea. They just need to find a product or service and find a way to deliver or provide that product and service better than the existing competition. A perfect example was the creation of the company Waste Management. There is nothing exciting about garbage or waste. But building a world-class company for removing and properly handling waste in a professional manner resulted in a huge company.
Or plumbing. An entrepreneur might have the goal to build a huge professional plumbing company. Again, no "great ideas" involved here, just the concept of building a world-class company to deliver a service everybody needs.
Becoming a Billionaire
So one of my primary goals is to become a billionaire. No, not a millionaire, a billionaire. In order to do this, I intend to build a huge company and invest and build real-estate. I love entrepreneurship (or at least the subject of it---I still have to actually engage in it) and my dream is to build enormous companies.
Why am I so bent on becoming a billionaire? Well, a few reasons. For one thing, I love luxury. To expand on that more I love architecture, gardens, furniture, and interior design. As a result, I have some dream homes that I plan to own, and the only way I will be able to own these dream homes is to be very wealthy. I also love fine automobiles, everything from Lamborghinis to Bentleys. Again, the only way to own these is to be wealthy. And I love yachts, private jets, and fabulous vacations. Again, this stuff requires wealth.
The other reasons are that there are a lot of things that I want to do that will require a lot of wealth. For example, I want to work at underwater exploration, at underwater flight as Graham Hawkes has been. That will require some money. I want to be able to study whatever I want and to fund my own research. I want to contribute a lot to philanthropy. I want to do a lot of work in the arts as an artist, but to do this requires money as one can't make much income from the arts.
I also want the ability to start any companies I think up. This, again, requires money. I want to develop real-estate and invest and so forth as well. Yes, one doesn't necessarilly need a billion-dollar net worth for all of this stuff, however for the homes I want, I think the cost of the home would be around $40 million to $50 million, which to comfortably afford, I'd prefer a $1 billion net worth at least.
Basically I want the ability to build and create things as I please, whether this be through scientific and engineering research or the arts. To get this wealth, I will have to succeed in building a huge company.
Why am I so bent on becoming a billionaire? Well, a few reasons. For one thing, I love luxury. To expand on that more I love architecture, gardens, furniture, and interior design. As a result, I have some dream homes that I plan to own, and the only way I will be able to own these dream homes is to be very wealthy. I also love fine automobiles, everything from Lamborghinis to Bentleys. Again, the only way to own these is to be wealthy. And I love yachts, private jets, and fabulous vacations. Again, this stuff requires wealth.
The other reasons are that there are a lot of things that I want to do that will require a lot of wealth. For example, I want to work at underwater exploration, at underwater flight as Graham Hawkes has been. That will require some money. I want to be able to study whatever I want and to fund my own research. I want to contribute a lot to philanthropy. I want to do a lot of work in the arts as an artist, but to do this requires money as one can't make much income from the arts.
I also want the ability to start any companies I think up. This, again, requires money. I want to develop real-estate and invest and so forth as well. Yes, one doesn't necessarilly need a billion-dollar net worth for all of this stuff, however for the homes I want, I think the cost of the home would be around $40 million to $50 million, which to comfortably afford, I'd prefer a $1 billion net worth at least.
Basically I want the ability to build and create things as I please, whether this be through scientific and engineering research or the arts. To get this wealth, I will have to succeed in building a huge company.
Why I Love Entrepreneurship and Business
To me, entrepreneurship is one of the most wonderful of professions, right up there with being a medical doctor, lawyer, scientist, engineer, statesman, etc...entrepreneurs solve problems and build things. They create and innovate. They improve the standard of living for everyone, and they create jobs and economic growth along with it.
For example, a successful entrepreneur who builds a big company ends up doing the following:
1) Creates a lot of jobs
2) Creates economic growth and contributes to the overall economic growth of their community
3) Creates a lot of new tax revenue for the government (through the job creation and business growth)
4) Provides new products and services for society, which improve the standard of living
5) Allows the owner (s) to become wealthy (nothing bad there), and this thus allows the owner to contribute to things like charities, churches, and so forth
Now YES, I am well aware that plenty of entrepreneurs do not become entrepreneurs with all of the above in mind, who do it mostly for the money. Just the same, there are plenty of people who become medical doctors for the money, lawyers for the money, politicians for power (very few politicians are true statesman in my opinion), but this isn't true for all people in these professions.
In addition to all of the good entrepreneurship and business overall does, because it is about solving problems, building things, and providing products and services that improve the standard of living and quality of life for everyone, it also involves things such as passion, creativity, drive, determination, tenacity, courage, calculated risk-taking, etc...all qualities I admire in a person.
For example, a successful entrepreneur who builds a big company ends up doing the following:
1) Creates a lot of jobs
2) Creates economic growth and contributes to the overall economic growth of their community
3) Creates a lot of new tax revenue for the government (through the job creation and business growth)
4) Provides new products and services for society, which improve the standard of living
5) Allows the owner (s) to become wealthy (nothing bad there), and this thus allows the owner to contribute to things like charities, churches, and so forth
Now YES, I am well aware that plenty of entrepreneurs do not become entrepreneurs with all of the above in mind, who do it mostly for the money. Just the same, there are plenty of people who become medical doctors for the money, lawyers for the money, politicians for power (very few politicians are true statesman in my opinion), but this isn't true for all people in these professions.
In addition to all of the good entrepreneurship and business overall does, because it is about solving problems, building things, and providing products and services that improve the standard of living and quality of life for everyone, it also involves things such as passion, creativity, drive, determination, tenacity, courage, calculated risk-taking, etc...all qualities I admire in a person.
Saturday, October 2, 2010
Ignorant Progressives Versus Smart Progressives
So I've been thinking recently about Progressives and their worldview and what they desire, and I've come to the conclusion that in general there are three types of Progressives: what I'll call the Ignorant Progressives, Smart Progressives, and Ideological Progressives.
Ignorant Progressive
So what exactly is an "Ignorant Progressive?" This type of Progressive is the good-hearted kind, the kind who fits Ronald Reagan's quote when he said, "The trouble with our liberal friends isn't that they're wrong, it's that they know so much that isn't so." These Progressives think that the solution to every problem in society is more government. That to fix poverty, education, healthcare, crime, etc...we just need government programs.
Such Progressives do not adhere to this belief in big government out of any ideology, it is out of ignorance. They literally have no understanding of the alternative ways of looking at and thinking about these problems. It is "obvious" to them that more government is the solution and that we could create a utopia if only those evil meanie conservatives would just let us spend the money.
If those evil conservatives who just "don't care" and only "represent the rich" would just get the out of the way or get with the program, we could provide everyone with free healthcare, free education, fix crime, fix poverty, and so forth.
These types of Progressives from my observation often end up becoming Republicans, or much more moderate Democrats, later on in life if/when they learn about the Republican positions on these subjects a lot more in-depth.
Smart Progressive
This type of Progressive is the truly dangerous type, and the one with a malicious agenda. They are usually elitist, and do not care much at all about the people (note this is usually the case).
They understand fully that the creation of a cradle-to-grave social welfare state will turn the people into obedient lambs to the government and keep them mired in poverty, sucking off of the breast of the government, which is what they want.
They understand fully that heavy regulation over an industry will allow that industry to become dominated by a few very large, very powerful corporations, which is what they want, as an industry dominated by a few very large and powerful corporations is far easier to control and regulate, and form a relationship with, then one made up of many hundreds or thousands of smaller players.
The understand that control over certain industries allow a great deal of control over the economy overall, for example healthcare, as this is one-sixth of the economy.
They understand fully that a high minimum wage protects Big Business by making it much tougher for their smaller business competitors to compete, and also protects the labor unions from cheaper labor (in the 1940s and 1950s, this was blacks and minorities, in current times, it is immigrant labor).
The Smart Progressive understands fully the conservative arguments against their policies, and understands fully that their policies aid Big Business and keep the people mired in poverty. But this type of Progressive is an elitist who is after control. They are not at all interested in helping the people so much as in controlling the people and maintaining permanent power. They are usually very elitist and believe that the people need to be ruled by them.
Ideological Progressive
This type of Progressive is very interesting, and even confusing, because it usually consists of very intelligent people, who are also decent, but for some reason these people adhere to beliefs that make no sense. to give an example, such a Progressive might claim we could fund universal healthcare and universal college-level education for everyone. If you point out to them all of the problems occuring with the nations and states that try these things, they will just ignore those facts.
For example, the French national healthcare system is deeply in debt. The British National Health Service, is also in debt. The UK and France themselves are in some rather deeper debt. Italy, Spain, Greece, and Ireland, are on the verge of bankruptcy financially. One could look at the financial crisis that is the Massachussettes healthcare program, the financial disaster that was the Tennessee experiment with expanded government healthcare (TennCare), the massive fiscal disaster that is California, our largest economy in the USA, etc...plus you factor in the fact that the European nations also spend less as a percentage of GDP on national defense than the United States does. Yet, they still cannot afford their social welfare states.
But none of the above will phase the Ideological Progressive. They are not evil and they usually even understand all the conservative arguments. But yet they adhere to this belief system in a very large social welfare state. Which is why I name them the Ideological Progressive...the only thing I can think of that makes them this way is ideology.
Ignorant Progressive
So what exactly is an "Ignorant Progressive?" This type of Progressive is the good-hearted kind, the kind who fits Ronald Reagan's quote when he said, "The trouble with our liberal friends isn't that they're wrong, it's that they know so much that isn't so." These Progressives think that the solution to every problem in society is more government. That to fix poverty, education, healthcare, crime, etc...we just need government programs.
Such Progressives do not adhere to this belief in big government out of any ideology, it is out of ignorance. They literally have no understanding of the alternative ways of looking at and thinking about these problems. It is "obvious" to them that more government is the solution and that we could create a utopia if only those evil meanie conservatives would just let us spend the money.
If those evil conservatives who just "don't care" and only "represent the rich" would just get the out of the way or get with the program, we could provide everyone with free healthcare, free education, fix crime, fix poverty, and so forth.
These types of Progressives from my observation often end up becoming Republicans, or much more moderate Democrats, later on in life if/when they learn about the Republican positions on these subjects a lot more in-depth.
Smart Progressive
This type of Progressive is the truly dangerous type, and the one with a malicious agenda. They are usually elitist, and do not care much at all about the people (note this is usually the case).
They understand fully that the creation of a cradle-to-grave social welfare state will turn the people into obedient lambs to the government and keep them mired in poverty, sucking off of the breast of the government, which is what they want.
They understand fully that heavy regulation over an industry will allow that industry to become dominated by a few very large, very powerful corporations, which is what they want, as an industry dominated by a few very large and powerful corporations is far easier to control and regulate, and form a relationship with, then one made up of many hundreds or thousands of smaller players.
The understand that control over certain industries allow a great deal of control over the economy overall, for example healthcare, as this is one-sixth of the economy.
They understand fully that a high minimum wage protects Big Business by making it much tougher for their smaller business competitors to compete, and also protects the labor unions from cheaper labor (in the 1940s and 1950s, this was blacks and minorities, in current times, it is immigrant labor).
The Smart Progressive understands fully the conservative arguments against their policies, and understands fully that their policies aid Big Business and keep the people mired in poverty. But this type of Progressive is an elitist who is after control. They are not at all interested in helping the people so much as in controlling the people and maintaining permanent power. They are usually very elitist and believe that the people need to be ruled by them.
Ideological Progressive
This type of Progressive is very interesting, and even confusing, because it usually consists of very intelligent people, who are also decent, but for some reason these people adhere to beliefs that make no sense. to give an example, such a Progressive might claim we could fund universal healthcare and universal college-level education for everyone. If you point out to them all of the problems occuring with the nations and states that try these things, they will just ignore those facts.
For example, the French national healthcare system is deeply in debt. The British National Health Service, is also in debt. The UK and France themselves are in some rather deeper debt. Italy, Spain, Greece, and Ireland, are on the verge of bankruptcy financially. One could look at the financial crisis that is the Massachussettes healthcare program, the financial disaster that was the Tennessee experiment with expanded government healthcare (TennCare), the massive fiscal disaster that is California, our largest economy in the USA, etc...plus you factor in the fact that the European nations also spend less as a percentage of GDP on national defense than the United States does. Yet, they still cannot afford their social welfare states.
But none of the above will phase the Ideological Progressive. They are not evil and they usually even understand all the conservative arguments. But yet they adhere to this belief system in a very large social welfare state. Which is why I name them the Ideological Progressive...the only thing I can think of that makes them this way is ideology.
President Bush Was Not a Right-Winger
...or at least, not in the way the Democrats like to keep making out. The way they keep speaking, you would think that he governed like a Reagan Republican or something. The Democrats keep talking about how we need not return to the types of policies that "got us into this mess in the first place." Okay, well what policies exactly of President Bush's are they talking about a "return to?" Because last I checked, President Bush governed in many ways like a Democrat with a Republican twist:
1) He said he would re-sign the Assault Weapons Ban when it expired if Congress would renew it
2) He signed what at the time was the largest expansion of the government into healthcare in decades with his Medicare Prescription Drug Bill (which ironically is actually managing to pay for itself right now! a first it seems among government healthcare programs considering the Massachusettes program, the Tennessee program, and Medicare and Medicaid, have all spiraled out of control in costs).
3) He signed the Sarbannes-Oxley legislation, which increased regulations on corporations and the financial system, because of the scandals from companies such as Enron, Worldcom, Tyco, and so forth.
4) He implemented No Child Left Behind, an expansion of the federal government into the educational system, something traditionally only supposed to be the realm of the states and local government.
5) He tried to grant amnesty to illegal immigrants
6) He sent more aid to fight AIDS in Africa than any other president in history (indeed, really any other person).
7) He doubled the Child Income Tax Credit from $500 to $1000 per child
Where is any of this "right-wing?" Yes, he did try to partially privatize Social Security which fell through and he would not engage in any kind of carbon cap-and-trade scheme, and of course there were his national security and foreign policies, from the wars in Iraq and Afghanistan to Guantanomo Bay, surveillance ("wiretapping"), the Patriot Act, waterboarding, enhanced interrogations, rendition, military tribunals, his shifting American foreign policy to being much more unilateral, etc...but none of this stuff had anything to do with the economy (except for the cap-and-trade resistance, which helped the economy, not hurt it).
I do not know of any Republicans talking about going and increasing gun control, increasing the federal government's presence into education, increasing the government's presence into healthcare, increasing the government's presence into the financial system, granting amnesty to illegal immigrants, and so forth.
Nope, the people talking about doing all that, and in the name of "Change," are the Democrats, and in particular Obama. In fact, it almost seems as if Obama is just Bush 2.0 in this sense. Or President Bush was Obama-lite in this sense. President Obama pushed through MASSIVE new regulation of the healthcare system, MASSIVE new regulation of the financial system, and wants MASSIVE change to the areas of education (actually he already nationalized the Student Loan Program), and energy.
1) He said he would re-sign the Assault Weapons Ban when it expired if Congress would renew it
2) He signed what at the time was the largest expansion of the government into healthcare in decades with his Medicare Prescription Drug Bill (which ironically is actually managing to pay for itself right now! a first it seems among government healthcare programs considering the Massachusettes program, the Tennessee program, and Medicare and Medicaid, have all spiraled out of control in costs).
3) He signed the Sarbannes-Oxley legislation, which increased regulations on corporations and the financial system, because of the scandals from companies such as Enron, Worldcom, Tyco, and so forth.
4) He implemented No Child Left Behind, an expansion of the federal government into the educational system, something traditionally only supposed to be the realm of the states and local government.
5) He tried to grant amnesty to illegal immigrants
6) He sent more aid to fight AIDS in Africa than any other president in history (indeed, really any other person).
7) He doubled the Child Income Tax Credit from $500 to $1000 per child
Where is any of this "right-wing?" Yes, he did try to partially privatize Social Security which fell through and he would not engage in any kind of carbon cap-and-trade scheme, and of course there were his national security and foreign policies, from the wars in Iraq and Afghanistan to Guantanomo Bay, surveillance ("wiretapping"), the Patriot Act, waterboarding, enhanced interrogations, rendition, military tribunals, his shifting American foreign policy to being much more unilateral, etc...but none of this stuff had anything to do with the economy (except for the cap-and-trade resistance, which helped the economy, not hurt it).
I do not know of any Republicans talking about going and increasing gun control, increasing the federal government's presence into education, increasing the government's presence into healthcare, increasing the government's presence into the financial system, granting amnesty to illegal immigrants, and so forth.
Nope, the people talking about doing all that, and in the name of "Change," are the Democrats, and in particular Obama. In fact, it almost seems as if Obama is just Bush 2.0 in this sense. Or President Bush was Obama-lite in this sense. President Obama pushed through MASSIVE new regulation of the healthcare system, MASSIVE new regulation of the financial system, and wants MASSIVE change to the areas of education (actually he already nationalized the Student Loan Program), and energy.
Stop blaming Bush
So one of the rants I have often seen leftists make on forums (and occasionally on television if my memory is serving me right) is that yes, the economic problems we currently face are very large and deep, but the Tea Party and their proponents such as Sarah Palin are stupid idiots for thinking that the solution to the mess is to just put Joe Sixpack in charge (to use the phrase of one guy on a forum).
Well ignoring the fact that I don't think the Tea Party types are promoting necessarilly just putting Joe Sixpack in charge, one thing these very leftists repeatedly keep doing that I do not understand is blaming Bush for the cause of the economic problems.
Their reasoning seems to be: "These problems are very deep and there are no easy answers or solutions; the actual problems themselves are not really fully understood yet. But Bush did it."
Now of course, exactly how President Bush caused it, is never addressed. What these "failed Bush policies" President Obama keeps referring to, precisely are, you never really see defined. The reality is that, just as the solutions to the crises are complex, so is the cause. You could literally fill an entire shelf with books and you still would not have a full understanding of the causes of this crises. There are all sorts of variables involved:
Deregulation of certain areas perhaps
Excessive regulation of certain areas it seems
Lack of oversight from the SEC as they couldn't keep track of all the information from the regulations
Greedy mortgage lenders who lent mortgages to those who wouldn't be able to pay them back
Greedy home buyers who took out mortgages they should not have
Fannie Mae and Freddie Mac
Bad monetary policy on the part of the Federal Reserve
Excessive spending by the Bush administration (now with further spending by the Obama administration it seems)
...and so forth. There are probably other things I did not cover that I am not thinking of right now or just am not aware of. But this crises is like the Great Depression. There were a lot of variables that created what we now know of as "the Great Depression." Just the same, this current crises's causes were very complex and deep.
And the Republicans can get faulted somewhat for this kind of simplistic reasoning too. Claims ranging from "Bush did it" and "failed Bush policies" to "Democrats did it with Fannie Mae and Freddie Mac" to "Reagan did it" to "Alan Greenspan did it!" all are grossly oversimplifying this topic.
Well ignoring the fact that I don't think the Tea Party types are promoting necessarilly just putting Joe Sixpack in charge, one thing these very leftists repeatedly keep doing that I do not understand is blaming Bush for the cause of the economic problems.
Their reasoning seems to be: "These problems are very deep and there are no easy answers or solutions; the actual problems themselves are not really fully understood yet. But Bush did it."
Now of course, exactly how President Bush caused it, is never addressed. What these "failed Bush policies" President Obama keeps referring to, precisely are, you never really see defined. The reality is that, just as the solutions to the crises are complex, so is the cause. You could literally fill an entire shelf with books and you still would not have a full understanding of the causes of this crises. There are all sorts of variables involved:
Deregulation of certain areas perhaps
Excessive regulation of certain areas it seems
Lack of oversight from the SEC as they couldn't keep track of all the information from the regulations
Greedy mortgage lenders who lent mortgages to those who wouldn't be able to pay them back
Greedy home buyers who took out mortgages they should not have
Fannie Mae and Freddie Mac
Bad monetary policy on the part of the Federal Reserve
Excessive spending by the Bush administration (now with further spending by the Obama administration it seems)
...and so forth. There are probably other things I did not cover that I am not thinking of right now or just am not aware of. But this crises is like the Great Depression. There were a lot of variables that created what we now know of as "the Great Depression." Just the same, this current crises's causes were very complex and deep.
And the Republicans can get faulted somewhat for this kind of simplistic reasoning too. Claims ranging from "Bush did it" and "failed Bush policies" to "Democrats did it with Fannie Mae and Freddie Mac" to "Reagan did it" to "Alan Greenspan did it!" all are grossly oversimplifying this topic.
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