Archive for February, 2011

A New “Sweat-Equity” Economy

February 1, 2011

I have a good friend who subscribes to the theory of “trickle-down” economics to the exclusion of any competing viewpoint including “bubble-up” or “supply-side” economics (or even “demand-side” economics if there is such a prevailing theory). I personally subscribe to a balance of all these – there is validity to trickle-down reward enrichment and bubble-up consumption-enabling. There is also validity to supply-side push by reducing barriers to production and demand-side pull by creating consumption enticements. The forces described by each of these trendy economic theories in concert tend to converge at an optimum point that benefits all participants in an economy for the greatest net gain. There is a balance of these forces of a sort today, but I fear that the balance of force is shifting rapidly and substantially in a bad direction…

My concern #1: When times are tough, “trickle-down” tends to fail. Trickle-down essentially pushes money from the enterprise to the consumer through wages and other compensation. Here are a few recent quotes from people I know or have met that clearly demonstrates a reluctance to “trickle-down”:

“Do you know why I was so angry at lunch? I’ll tell you. You are suggesting that my company ‘give away’ some money – this is My money – it is for My future. We are already being too generous (…with our employees).”

“I own this company. I won’t spend a dime unless it makes Me money.”

“I would like to reduce the salaries for our current employees and automate some functions so that I can reduce my headcount. That would boost my bonus this year.”

Clearly, there is a powerful reluctance to “spread the wealth” and let it “trickle down”. When times are tough and one holds the “purse strings”, you withdraw a pence only when someone is standing in front of you to wrest it from your clenched fists. When times are tough, the “trickle” slows to a “drip” and eventually stops completely.

To rub salt in this wound, there is a downward spiral when one negative force reinforces another. When times are tough, the consumers take a tough hold on their own purse strings and demonstrate a reluctance to spend out of fear of a bleak future – out of a new sense of conservatism. Consequently, the enterprise suffers a decline in revenue and resists any further trickle-down even more strongly. These quotes above are no surprise…

My Concern #2: When times are tough, and tough times have persisted, “bubble-up” also tends to fail. Bubble-up is typically found in the form of entitlements, direct investment and other funding from the public sector – from Government, and from the private sector. When times are tough and have persisted, there is a public outcry to “stop the bleeding” – to stop the flow of red ink in the public sector. Listen for the “tea party” – they are already quite vocal. When budgets run into the red, many governments are obligated to stop spending By Law. When times are tough, the “bubbles” simply fade and stop in time.

The Promise of “Sweat-Equity” Economics – I would like to see a “Volunteer America” movement. I would like to see everyone in the country volunteer at least a half day every two weeks in the Public Sector. I would like to see every company in the country participate in their own volunteer initiative and encourage their employees to volunteer. I would like to see a public spirit to “spread around” the wealth and enable sustained “bubble-ups” in every community in the country with one’s time and sweat in lieu of dollars. Wherever I have seen widespread community volunteerism, the output reflects on the personality and the values of the volunteers and the community in tangible ways.

Four hours of volunteered time from everyone in the country every two weeks is a 5% contribution of the nation’s productivity in the form of “sweat equity” to the public sector to clean parks, or paint the courthouse or fire hydrants, or help install stop signs and street lights, or help care for the elderly in public convalescent homes, or administer a city FAQ on the Internet, or help renovate public housing, or – well, the list is almost endless. A sweeping volunteer movement could give back substantial value to the public sector to enable the local, state and Federal governments to do more for the people than is currently done for less cost than presently budgeted. More for Less – that’s a good public bargain.

More benefit to the public for less cost through one’s own sweat equity is a bargain that I expect exists “for the asking” in many communities. We only need our communities to ask us – to orchestrate a new movement of “sweat-equity” economics with armies of volunteers from every community across the country.

I already volunteer – will you join me?

You can volunteer in your church, temple or mosque.
You can volunteer in your child’s school.
You can volunteer for a professional association related to your career field.
You can volunteer for your neighborhood’s HOA.
You can volunteer for your university.
You can volunteer to serve meals in a homeless shelter.
You can volunteer with many charities directly – here are a few that I am personally thankful for:
Red Cross (they are always where there is a need)
United Way (they help support Scouting in America)
National Wildlife Federation (I like animals, and so do they…)

Want to know more? Google “Volunteer” or click on one of these links that Google returned to me (it is surprising how many volunteer organizations there are…):

Serve.gov
Volunteers of America – VOA.org
Volunteer.com
VolunteerMatch.org

Volunteer. Make a difference and become an active participant in a new “sweat-equity” economy with me with your time and sweat devoted to something in the public sector that you care about!