Thursday, September 11, 2014

The political world relies on coercion. Most of the nation prefers cooperation.

An interesting take and I don't think he's wrong: Vox Explanation Highlights Gap Between Political World and Everybody Else by Scott Rasmussen. Using an example to illustrate how those within the beltway fail to understand the real world.
So, Vox included a question-and-answer attempting to explain why anyone would buy non-voting stock in a public company. “It’s a little mysterious,” according to Yglesias. The Vox blogger wrote that, “the value of a share of stock stems from the fact that owning it entitles you to a small slice of control over the enterprise.”

It’s understandable that a political junkie would think of stock ownership in terms of control. That’s especially true of a left-leaning blogger writing about a merger story involving Fox and CNN.

However, most people who invest don’t buy stocks with hopes of controlling the company. They do so because they want to make money. For some, it might be part of their retirement planning. Others are trading for shorter-term goals. But, with only rare exceptions, investors buy stocks in hopes of making financial gains.

Seen from this perspective, the value of a share of stock has nothing to do with voting rights.

The real value of a share of stock depends upon how much cash it will generate for the owner.
Rasmussen elaborates but it come down to:
The political world thinks of using their influence to control others. Whether it’s prohibiting pot or mandating specific health insurance requirements, the political process is about telling others what to do. Nothing else matters. Yglesias even writes that if you own stock without the ability to exercise, “You don’t really own anything of real value.”

While political types think of controlling others, that’s not something most Americans value.

Most think of what they can do every day to make life just a little bit better for themselves and their families. If they invest wisely, they prepare for the future. If they work together with others in their community, they make their community stronger.

At the end of the day, the difference is simple. The political world relies on coercion. Most of the nation prefers cooperation.

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