I call my parents every Sunday morning, at least I have for the past few years. I have a difficult relationshipwith my parents for a lot of reasons which are mostly historic and I still struggle with many of those issues today, but my mother had health scare and I decided I would attempt to put my feelings about the past aside and I would call them every weekend.  I guess I’m trying to be the bigger person or some such

thing. With very few exceptions I have kept my commitment to myself, and I call them every weekend, which hasnot always been easy.

One of the reasons my commitment has not always been easy is my father’s dedicated political opinions which to be polite, vastly and at times wildly, differ from my own.

As a rule I try to follow Socrates’ advise and never discuss politics or religion, especially with those who I know are mostly looking for a fight. My father tics that box too, he loves to argue like most people love to breathe.  Personally I don’t mind a debate but I hate arguing with a burning passion.

Growing up I don’t recall much political conversation in the house. In fact I really only remember hearing my father discuss politics once and that was when he was lecturing my grandfather about the recommendations his union had sent for the upcoming election.

Perhaps it was how my grandfather explained it (that is who the Union wants me to vote for) or it was the fact that the recommendations were not in line with my father’s opinions on the matter (honestly I don’t evenremember what election it was but based on my age at the time it may have been the Carter v Reagan presidential), whatever the case was my father went off for what seemed like a very long time about “this country was founded on the freedom to vote for whoever you want.” My grandfather had tried to explain that the union had been good to him and had provided for his family, which included my father, since they had immigrated from Canada in 1962.  My grandfather was a lot of things in his life, but always a tradesman, and he retired as a union plumber.  

My father who also immigrated with my grandparents in 1962 was not a tradesman and as of late also hates unions (and immigrants for that matter). In fact he told me on many occasions (including last Sunday’s call)that his only goals for his employment were to not have dirty hands like my grandfather’s (I recall my grandfather’s hands prior to retirement had a permanent blackish tint to them and were sufficiently calloused over that he could put a cigarette out on the palm of his hand without burning himself) and to make as much money as he could. My father went into business and retired from his own business which was very profitable until 9/11, but that is a story for another day.

Since retirement my father has become increasingly politically minded and even more republican if that is possible. He always was a republican, in fact in the first election I was old enough to vote in I asked him how one goes about voting, specifically how do I know what party to register for? His response was to register for whatever party I wanted as that made no difference, “just make sure when the time comes to vote republican.”

I also recall him asking me after the last election who I had voted for. An election, mind you, that he did not vote in. One of the issues that grates me the hardest is him (or anyone) being of such strong political views and-yet not even being registered to vote let alone actually voting.

So last Sunday’s call comes around, my parents always put me on speaker so they can both speak at the same time.  My father had gone to do something, get a sweater or take off a sweater, and my mom and I were chatting about whatever and the subject of inflation came up.

My mother asked how inflation happens, “why do prices keep going up, it doesn’t make sense.” 

I answered, “In part it is because of the pandemic, when production gets shut down supply dwindles and prices go up,” Adam Smith would be so proud, “however what has been shown to be a larger factor in this current inflationary period is corporate greed.”

I happen to know a thing or two about economics, not because of anything in particular beyond this factor in my life which others talk about a lot and I wanted to understand how it worked. I also worked in finance, particularly investment and estate planning (for way too long) and economics and inflation were subjects that were discussed in every meeting and training I ever went to, but seemed to be something that few of the people talking really understood.  Not that it is complicated as far as subjects go, but the typical explanations that are given as to why the economy does this or that or why inflation may be going up or down really don’t seem to be very accurate when even slight amounts of digging are undertaken.  Something else an econ professor once said in class, “economics isn’t a hard science like chemistry, it’s a social science like psychology.”  

Hmmm did I just make a connection?

At this point in the conversation my father came back and smelling the potential for an argument jumped right into the conversation, “Oh I don’t believe that.” My father’s economic education is, well let’s say more conservative than my own and largely, perhaps entirely, based on what a particular “news” network tells him.

“Look at it like this dad,” I began already working on my breathing exercises, “When you were in business and you could sell something today for ten dollars that you could only sell for five dollars yesterday you would sell it for ten, right?”

“Well yeah,” because of course you would dad.  Most people would.

“It’s something along those lines. As the pandemic restrictions started to ease and everyone started talking about supply chain issues prices started to go up as one would expect them to do but they went up exponentially which is much higher and much faster than their excuse of supply chain issues could support.  Then when those same supply issues started to ease instead of prices coming back down as they should done, as they would have done had supply chain issues actually been a major contributor to prices, they continued to rise.”

My father is not a big fan of my way of arguing, “What makes you think that?” he asked.

‘Data dad. The data makes me think that.’ I thought, but I learned long ago that such trivialities such as data, analysis, or science don’t carry much water with my father.

What I said was, “Corporate profit reports. These same companies which are telling everyone that their prices for supplies are going up so they have to raise their prices are also reporting record profits. Profits in-fact that are higher than they have ever been so either they are lying to their stockholders about their profits or they are lying to everyone else about their costs.”

My money is on both, but I digress.

I am a fan of economists like Richard Reich and while I do not profess to have a deep understanding of economics, but I do try to keep myself informed on the subject.

What I am is a person with a deep understanding of human behavior and by and large I know that people of a certain personality will attempt to get away with anything that they believe they can, but more than that I understand human motivation. These same people who will attempt to get away with whatever they think they are also fine examples of the extent to which a person will go to seek the type of motivation they require.

By and large people are motivated by one of three things: Reward, prestige, or recognition.

Reward is payment, that is to say money. My father falls in to this category.

Prestige would be something along the lines of fame. These are the people who will do whatever it takes to keep their name in lights, certain reality stars perhaps, those people who are famous for being famous, could fall into this category.

Recognition is awards, trophies, contest winning, and bragging rights. My father is also heavily motivated bythis particular carrot, which is a great example of the reality that a person can be motivated by more than one reward item.

Research into CEO behavior has shown many of these people not only test high in narcissistic personality traits but also high in psychopathological traits. In short these people care more about themselves than others and do not care how their actions affect others.

Take a person like that and put them in a position of power where their compensation is directly and mostly tied to company performance in the form of stock options and what you have is a recipe for disaster for not only the employees of that company but also the general public.

How is that a disaster you, and my father, might ask? Well he actually did some time ago, but anyway…simple economics really.

Did you know that the one factor which affects stock prices the most are profits? Kind of makes sense doesn’t it? What better indicator could there be for a healthy company, it makes money. The more money the company makes the more people will be interested in buying that company’s stock and the more people buy a stock the higher that stock price goes. 

Did you know the number one drain on corporate profits is fixed costs? Those pesky reoccurring monthly expenses which must be paid in order for a company to exist and do whatever it is that the company does.Things like rent and electricity and fuel if your company is shipping things and storage if your company warehouses things

Oh yeah and things like employee compensation.

Yep, you and me and everyone else who works for someone else and gets paid to do so is a fixed cost item on a spreadsheet somewhere and hypothetically speaking if a company were to say lay off a bunch of employees for some reason, even if that company is having financial problems because of poor management or I don’t know nobody wants to buy your product, profits will appear to suddenly and often dramatically rise.

and bingo-bango that company’s stock price will go up.  Works like magic really.  If you are a person with a lot of stock options you could sell (or exercise it’s called in the industry) you stand to make a bunch of money and if you are the type of person who does not feel pity or empathy or any of those other pesky feelings you are not very likely to give a damn that those 5, 10 or 20,000 people you just laid off are going to be struggling.  Seriously, those rockets aren’t going to build themselves.

Also fun fact if you can raise the price at which you are selling your company’s product without an increase in production costs you also can increase your company’s profits.

and bingo-bango again, more money for the C-Suite folks and nothing for the employees who tend not to have their income tied to corporate stock price. Oh and the rest of us who may buy your product get to pay for those CEO bonuses.

Capitalism at its best.

You want to take a guess at which of the three motivators most CEO’s report driving them? Yup, money and power. That is rewards and prestige. Making money and winning was what Matthew Broderick playing Purdue Pharma CEO Richard Sackler said, “I’m only interested in making money and winning.”

Think about that the next time you hear about corporations crying about how sad they are to have to raise theprices of their products.

as for the conversation with my father, why does he believe prices have gone up so much? Well he is a firm believer in the right-wing conspiracy of the government handout cause, that is the pandemic stimulus that trump pushed through and the GOP celebrated while he was president but then blamed on democrats, wokeness, and Joe Biden when he wasn’t president caused people to buy too much stuff, and therefore the cause of inflation.  Darn that Brandon.

I guess he and I will, as he so eloquently stated, have to agree to disagree…..