My solution to changing Wall Street

*Originally posted on October 31st, 2011 on a previous, now defunct blog site.  Re-posted here for historical purpose.

In my previous post, I identified three key areas where I agreed with the frustrations of the Occupy Wall Street Protesters.  I also stated that I felt that the use of the "Arab Spring" tactics were flawed and were therefore doomed for failure.  I believe there are more effective ways to force change.

As I stated in my previous blog, Corporate Executives could not care less about a bunch of people camping out in a park.  You are not effecting their bottom line.  The first thought is to organize boycotts of these companies. However, this has a very undesirable ripple effect.  If you successfully organize a boycott and get people to stop buying ones products/services, then all they are going to do is reduce their workforce even more and put even more people out of work.  So that doesn't really solve anything.  You are just making the problem even worse.

In any interview that you see with a CEO or Executive, what is the number one thing they all say?  They claim that they are not bad people, they are merely doing their job.  They also clearly state that they answer to their shareholders.  That is their #1 responsibility.  Want to change a Corporation's behavior?  Affect their stock price.  I guarantee you that if a companies stock starts dropping, they will change their ways real fast.  Just look at Netflix as an example.  Their stock dropped over 35% after they ticked off their users.  You don't think that CEO and Board is in the hot seat?

So my three gripes were:

• Outsourcing our middle class jobs oversees
• Not bringing workforce levels back despite an increase in corporate profits
• Insane Corporate bonuses that do not reflect the performance of the company.

The Primary solution to solving each of these three grips lies in affecting the stock price of a company.  People spend many years of college learning how exactly a stock price is valued.  But in very basic terms, it is based on what people are willing to pay for that stock.  So for example, I have a stock that I believe is worth $10, but I call my broker to sell it.  He says "Hey i have a stock to sell."  However the best offer he can get for it is $9.  Now I can say no deal and wait a little longer until someone is willing to pay me the amount I want, or I can cave and sell it for the $9.  At that moment, the stock is really worth $9.

So rather than spend all of these fruitless efforts protesting, why not research and figure out all of the companies that are currently shipping good paying middle class jobs oversees.  Research and identify these companies.  Once you know the companies, make it politically and socially embarrassing to own stock in those companies.  Sway popular opinion that it is politically and socially bad to be associated with those companies, until they bring their jobs back to the US.

The second prong to the solution is for our government to offer tax incentives encouraging companies to bring those jobs back.  Not blanket tax incentives mind you  One idea is a temporary payroll tax holiday on those jobs that are brought back to the US.

The third prong is the solicitation of these companies to look at moving those jobs into places that have low cost of living.  Whether it is the Midwest or the South, the idea is that costs far less to employ someone in "Smalltown USA" than it does in New York or California.  Foreign companies are realizing this when they are opening up manufacturing plants here in the States (Honda, Mitsubishi, Toyota, etc).

The Workforce Levels issue is tougher to solve directly.  This is because it impossible to have guidelines on how many people to employ for a job.  I would love to say that this is the niche that the Unions could fill.  However the Labor Unions are as corrupt as the politicians (maybe even more).  They don't care about their workers.  They only care about power.  Nothing else.  So I don't have a clear solution yet.  I would love to hear constructive ideas though.

As for the insane bonuses... the primary approach has to be the same as above.  Affect the stock price.  When a company performs badly and yet still hands out crazy bonuses then they should be vilified by the public.  Make it socially awkward to be a stockholder of that company.  And if a company receives a Government bailout, then the entire Board of Directors and CEO must resign as a terms of receiving that bailout.

Again the entire key is that you must affect the stock price and make it so that the stockholders are not happy.  That is what will gain the attention of the Executives on Wall Street.  I commend the efforts of the protesters, however take that energy and focus it in a way that will gain the result that you wish to achieve.

Rather than demonize capitalism, use it to your advantage to achieve your goal.  It could not be clearer.