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As part of legislation, Congress made it illegal for banks to charge a certain percentage to merchants when a debit card was swiped.  As a result, the merchant was able to retain more of the purchase price, but the bank lost a segment of its revenue; profits were threatened.

Because banks don’t enjoy profit margins significantly above the average, they have to work to retain whatever margin they DO have.  This means that the lost revenue from debit card swipes paid via the merchant would have to be made up elsewhere.

Banks began to end free checking.  They even began to add $5.00 fees for using a debit card for purchases.  The banks changed the way and manner in which they billed individuals based on indiscriminate legislation.

Now consider Verizon.  The telecommunications giant introduced a $2.00 fee for electronic billing to certain customers.  There was o regulation that forced this move, no change in laws.  Verizon simply felt that they need to move revenue in a specific segment.

Customers were enraged.  And Verizon changed course and ended the charge:

Verizon Wireless bowed to a torrent of criticism on Friday and reversed a day-old plan to impose a $2 bill-paying fee that would have applied to only some customers.

The consumer vitriol, which cascaded across Twitter and onto blogs and petitions all around the Web, struck a chord with a company that was clearly not expecting it.

“The company made the decision in response to customer feedback about the plan, which was designed to improve the efficiency of those transactions,” Verizon Wireless said in a statement referring to the reversal.

Companies risk capital in an effort to produce a product or service that the consumer wants.  In return for this risk, investors desire a return on capital.  If they fail to obtain this return, they move their capital somewhere else.  Therefore, it is incumbent for a company to look to improve revenues in any way they can.  And if those methods fail in the market place, shrewd companies will adapt.  Inefficient companies will fail.

And all of this is achieved through the free market.  Not one of government control.

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As I sit here “flying my desk” I continue to receive confirmation notes from Amazon that:

  1. My order has been confirmed
  2. My order has been shipped

These notes come complete with tracking numbers that allow me to view the status of each order and, then, to see where FedEx is in shipping each order.  It’s my hope that in the coming year I will have outdoor cameras/locked delivery boxes that will allow me to view the delivery of each package.

In any event, I am struck by the absolute and sheer awesomeness of a marketplace that is open 7x24x365.  I’m able to shop for goods around the globe at any time of the day.  Most specifically, a time of day that is convenient for me.

In addition to the fact  that the market makes available global goods of all kinds at any time of day, I don’t have to leave my desk, or sofa, or tub or wherever I am accessing that market place from.  I am able to order, pay for and then have delivered to me my goods and never even leave the house.  Depending on my specific state of organization, this may be literally true.  I could order a book and have it delivered to me before I even ever need to leave the house.

And this whole trade I make with the market place makes me richer.

I value having a book delivered to me more than I value the $10.50 it cost me.  By definition, I become more “wealthy” as a result of this transaction.  As each transaction adds up, I become even MORE wealthy.  Bird food delivered to my door?  More wealthy.  Bakugans for the boy?  More wealthy.

And the genius is that Amazon becomes more wealthy too!  They value the $10.50 more than they value the capital it took to establish the infrastructure to facilitate the sale.  Same with FedEx and the imbedded shipping charges.  And the publisher who printed the book.  And the author who penned it.  None of them would have entered into the arrangement had they not felt so.

We ALL become more wealthy as a result.

And it struck me.  If we reject capitalism, that each man is out to obtain the best value for himself, then what we are saying is that we would only desire to read books written by ourselves.  To wear clothes woven and stitched by ourselves.  Eat food grown or raised by ourselves.  And live i houses built by ourselves.

That, or enjoyed at the coercion of others.

Are there losers in capitalism, even as it functions “properly”?  Yes, without a doubt.  But it is the unmistakable sting of failure that drives us to succeed.  It is the joyous sense of success that drives us to avoid failure.

And so it must be.  It is how we evolved from that first strike of lighting in the primordial mud.  A series of experiments where some failed and withered while others succeeded and thrived.  Evolution is, in a sense, capitalism.

To reject the free market is to reject truth.  And instead rely on “faith”.  Faith that all men, or enough of them, will act in such a manner that is contradictory to his nature.

In the same way that the Left characterizes climate skeptics as loons, educational reformers as child haters and minimum wage advocates as haters of the poor, the Left characterizes free-market capitalists as greedy bastards.  Any support shown for a system that rewards the successful is immediately attacked as shilling for the rich.

Wanna reduce taxes on corporations because corporations will move to where there are lower taxes?  You support corporate welfare.  Wanna create laws that allow businesses to hire, and then fire, the most qualified and least productive?  Then you don’t care about the poor and disenfranchised.

With all the tribalism in today’s politics you can’t get the concept through the noise.  You’re unable to penetrate the distinction between “my side” and “your side”.  It’s more important to win than it is to create a viable path forward.  I see this often in corporate America.  I see competing managers championing their idea to the detriment of the team.  I feel I’m witnessing the same thing here in our politicians.  It’s more important to “win the debate” than to actually be right.

Because of this, because the Left vilifies all those who want to create a system that rewards the producers while removing the ability to destroy value from the ineffective managers, we will never be able to have a reasonable debate that typically successful people are reasonable people who, as it turns out, love other people:

The donor whose $350 million gift will be critical in building Cornell University’s new high-tech graduate school on Roosevelt Island is Atlantic Philanthropies, whose founder, Charles F. Feeney, is a Cornell alumnus who made billions of dollars through the Duty Free Shoppers Group.

Mr. Feeney, 80, has spent much of the last three decades giving away his fortune, with large gifts to universities all over the world and an unusual degree of anonymity. Cornell officials revealed in 2007 that he had given some $600 million to the university over the years, yet nothing on its Ithaca campus — where he graduated from the School of Hotel Management in 1956 — bears Mr. Feeney’s name.

The $350 million gift, the largest in the university’s history, was announced on Friday, but the donor was not named. Officials at Atlantic Philanthropies confirmed on Monday evening that it was Mr. Feeney, a native of Elizabeth, N.J., who is known for his frugality — he flies coach, owns neither a home nor a car, and wears a $15 watch — as well as his philanthropic generosity, particularly to medical research.

It turns out that capital, in the hands of the skilled, produces significant value to all the world.  And, as a reward, the capitalist acquires significant wealth as well.  And then, in the end, he often gives that wealth away.  As if to say, “I have come, I have made a difference and now it is time for me to give it all back.”

 

For ever we’ve heard the anti-free market crown complain that corporations exploit the workers of the world by moving production to heap labor.  Right?  We exploit the villager that has experienced bone crushing poverty for generations by providing a job that allows them to own their own house.  The first of their family EVER.

All of this in the name of profits and corporate greed.

Well guess what happens when the market begins to correct and the worm turns:

One of the things that’s showing up in Christmas stockings this year: higher prices, courtesy of China.

After decades as America’s go-to destination for low-cost consumer goods, China is undergoing a profound shift. Rapid economic development and a smaller supply of young migrant workers are pushing up labor costs. Tack on rising raw-materials prices, driven largely by Chinese demand, and a strengthening currency, and China-made goods aren’t the bargains they used to be.

Last month’s prices for Chinese imports were up 3.9% from a year earlier, the Labor Department said Wednesday, matching October’s gain, the largest year-to-year monthly rise since 2008.

Wednesday’s report showed that prices were up sharply for many kinds of goods for which China is the dominant supplier.

China accounts for about 80% of U.S. shoe imports; imported-footwear prices in November were up 6.1% from a year earlier. It accounts for about 60% of furniture imports; imported-furniture prices also were up 6.1%. About 80% of U.S. luggage imports come from China; prices in the category that includes luggage and similar goods rose 8.3% in November.

Those higher costs are one reason that U.S consumer prices have risen this year, despite the weak economy.

For all the complaining that has gone on concerning off shoring, people have been silent regarding the prices.  Maybe now, as prices begin to rise, people will begin to understand the benefits.

I have been harsh in my critique of the Occupy crowd.  In reality, the majority of the protesters are unemployed kids who’ve been coddled through life and feel that the world owes them …. something.  They don’t even know what.

Whatever.

I was very surprised today to read something that shocked me.  An idea generated from the 99% that could get even me to join in.  They wanna start a bank:

Members of Occupy SF announced their ambitious plans to turn protesters into bankers by creating the People’s Reserve Credit Union. According to Occupy SF’s Facebook page:

The goal of this project is to encourage San Francisco residents, businesses, as well as nonprofit and city agencies to keep their money out of the big banks and to redistribute that money locally. Initial services will include micro-loans for the working poor and homeless, and subsidized student loans at low interest rates.


This is EXCELLENT news.  And not only because I think that young energetic people who have nothing better to do with their time should get a job, but because I have long LONG begged for the Leftists of the world to unite and build a company, a non-profit, that would put their beliefs into action.

Wanna get food to poor people cheaper?  Open a not for profit grocery store.

Wanna make gasoline affordable?  Open a not for profit gas station.

Cars too expensive?  Open a car dealership?

Jobs for everyone and cheap shit too!

Even more impressive, in my mind, is the actual definition of a plan.  Something that the Left can’t do.  EVER.

Tax the rich, make them pay their fair share!

More money for education; you hate kids!

More money for homeless kids; you hate the poor!

But when asked how much that would be?  When would enough be enough?

Gotz.  Nada.  Nothing.  Blank “I went to Yale and learned bullshit” looks.

But these kids, they got game:

  • Accumulate capital assets of $7 million or more, through investments by different organizations, members, et al.
  • Open two credit union branches within the city of San Francisco. The first branch location in the mid-Market Street corridor , in the former Social Security Administration storefront (MOCD) , with the assistance of other local nonprofits. Each branch will have a cafe within it and a commercial kitchen available to rent.
  • The credit union will employ students and homeless, creating 60 part-time jobs.
  • Issue 300 to 500 micro-enterprise loans (max. $5,000).
  • Add 1,000 people overall to the city employment payroll.
  • Finance and start a food co-op large enough to support a neighborhood.

If THIS is what the 99% is talking about, count me in!

A most excellent development in the whole Occupy movement has occurred here in Raleigh.  See, the young socialists had been thinking that they could just camp on public grounds; the capital being public, the idea was they could just stay there.

Well, it turns out that the good people of North Carolina don’t want the Occupy people clogging up and cluttering up the State Capital with their nonsense and noise.  The city and the State has said that they have to move on.

So, they did.  And where did they move to?

Raleigh, N.C. — Protesters with the Occupy Raleigh movement moved into a more permanent base camp last week, thanks to a local business owner who saw his new tenants as a capitalist opportunity.

Rob Baumgart, who owns a Sprint and Nextel sales company called Chatterbox Communications, is leasing a 2,500-square-foot lot near the corner of West and Edenton streets, not far from downtown. He’s charging $400 a month to the group of about 15 people who have braved the cold and rain to camp out for their cause.

It’s what any small businessman who believes in making money would do, he said.

“That’s $400 that I didn’t have last month, and if the city allows me to continue doing it for 12 months, that’s $4,800,” Baumgart said Tuesday. “I don’t know a single American who would turn down $4,800 a year.”

Excellent news!

The young protesters protesting the evils of capitalism are now going to get a first hand look at running something.  See, ow that they pay rent, they are going to expect that members contribute.  See, every month that rent check is gonna come due and they are gonna need their friends to chip in.  Or but out.

We’ve seen how this plays out in other OWS encampments around the country.  We see in NYC that the haves and the have nots don’t always see eye to eye.  In Portland Oregon folks have been angry that people who don’t contribute to the movement are glomming on to the free food and shelter.

The sooner these kids can see that organizations require real leaders, the better they, and we, will be.

I’ve reflected on the discovery of free markets o the part of Broadway and the airlines.  I can’t help but feel that the attitude of the Liberal is to rejoice that the Arts will enjoy increased revenues to further their artistic causes while the same activity by the airlines will be reviled as further evidence of corporate greed.

Ugh.

Friday I mocked the Liberals who dominate Broadway theater for their embracing market pricing for their tickets.  I was correctly mocked back in the comments for not calling out traditional conservative bastions for equal failure.

Well, critics all here is your reward.

Greedy corporate pig airlines discover capitalism:

Fliers can still choose between window and aisle seats on Delta Air Lines, but they’ll have to pay extra if those spots are near the front of the plane.

Economy passengers can now pay $9 or $29 for these prime seats, depending on the length of the flight. They were previously only available to frequent fliers in the airline’s Medallion program.

Other airlines such as US Airways, Sun Country and American Airlines already charge for window and aisle seats. The fee for premier seating is the latest in a string of surcharges by airlines. The fees have generated billions of dollars in extra revenue and have helped offset rising fuel costs.

I’ve long lamented the lack of markets in airline seating.  As airlines are continually being squeezed for revenues by the competition, they are looking to gain efficiencies wherever they can.  And part of that is scheduling flights as tightly as possible.  Often I find myself looking at a connecting flight with only 20-40 minutes to catch it.  I NEED to sit in the aisle and up front.  At other times I’ve scheduled my flight the day before and am in a position where I can sit in the back without a problem.

There has to be a better way than randomly assigning seats or even setting up an “e-bay’esque” type of event like Southwest does.  And for a long time I’ve told my poor suffering wife that “the market would set them free”.  Now, of course, I’ve always wanted them to set up a market where I could sell my seat position with the airline taking a cut.  But I guess this was inevitable.

In short, the market will allow people who need to be up front to be there while giving the folks who don’t need to be there the ability to well, not be.

I, of course, have no problem with this practice.  I do, however, find it deliciously ironic that the delicate Lefties that enjoy and embrace theater are so willing to allow such an evil concept as “free market pricing” to invade their world.  Then again perhaps I shouldn’t be surprised.  Conservatives are more charitable than Libbers.  And while the charity of choice for the cons is the church, the charity of choice for the libs is the arts.

Anyway, it appears that Broadway shows are not meant for the 99%.

The producers of Hugh Jackman’s song-and-dance-and-bump-and-grind show on Broadway were so bullish about his popularity that, even before the first performance last month, they raised prices from $155 to $175 on dozens of orchestra seats for the 10-week run. The bet is now paying off handsomely, so much so that the producers are increasing premium prices for the best seats in the house: what were $250 tickets are now going for $275, $325 or even $350, depending on the demand at particular performances.

I happen to think that this is a wildly fantastic idea.  I think that people who sell tennis shoes should charge what the market would bear.  I think the same thing about pumpkins and pencils as well.  That Broadway shows be exempt is silly to me.

And roof that this works?

“Have I ever paid anything close to $600 for a pair of tickets? No,” John Joyce of Rockville Centre, N.Y., volunteered on Monday after mulling a range of prices at the Broadhurst Theater box office. “But my wife wants to see Hugh. It’s the holidays and it’s a surprise for her. So I think it’s worth it.”

So I think it’s worth it.

But doesn’t this type of free market based capitalism negatively impact the theater?

…a supply-and-demand strategy that is a primary reason why Broadway has weathered the economic downturn unusually well.

To the contrary.  Because of this strategy, the industry is booming and allowing all kinds of people to enjoy continued economic success.

And perhaps the most inspiring aspect to the story is how these Lefties have intuited and come to an understanding of what this all about.  See, in the past, when these shows would sell tickets at dictated prices, not market based prices, tickets would be scooped up by companies and resold at their proper level.  But this only benefited the ticket resellers and the consumer; not the producers of the shows, the folks who performed and invested money.  This now is taken care of:

The producers of Mr. Jackman’s show said they turned to dynamic pricing to help ensure that their investors and creative team — not ticket resellers — would be the ones profiting from high-cost tickets.

“People are prepared to pay a lot more than we’re charging, but nobody in the theater industry would have benefited,” said Robert E. Wankel, president of the Shubert Organization, a producer of Mr. Jackman’s show and the Broadway landlord for his theater. (It is Broadway theater owners who take the lead in setting ticket prices, with input from producers.) “By doing it through dynamic pricing, at least the people who do the work and took the risk are getting some benefits.”

See?  They understand.  They understand that the people who work and risk ought be rewarded.  This is very consistent with what we believe should take place in other markets as well.

Here’s an interesting illustration for the 99% camping out in tent cities all across our nation:

Reed Hastings was soaking in a hot tub with a friend last month when he shared a secret: his company, Netflix, was about to announce a plan to divide its movie rental service into two — one offering streaming movies over the Internet, the other offering old-fashioned DVDs in the mail.

That is awful,” the friend, who was also a Netflix subscriber, told him under a starry sky in the Bay Area, according to Mr. Hastings. “I don’t want to deal with two accounts.

Mr. Hastings ignored the warning, believing that chief executives should generally discount what their friends say.

He has since regretted it. Subscribers revolted and many dropped the service. The plan further tarnished a once widely respected Internet service that had already been wounded by an unpopular price increase in the summer. Mr. Hastings was forced to reverse the planned split — but not the price increase — three weeks later and apologized.

On Monday, the company revealed the damage that had been done. It told investors that it ended the third quarter of the year with 800,000 fewer subscribers in the United States than in the previous quarter, its first decline in years. The stock plummeted more than 25 percent in after-hours trading

The market works.

Even the 99% can impact the 1%.

Learn and implement.