Old problems, new solutions?

This idea has bounced around in my head all day like a hot pinball machine, racking up points the ball going everywhere, yet at the end of the day I am back where I started. I think?

Seriously though, something caused my brain to run around in hundreds of tangents and I cannot remember where I started, yet at the time it was important.

I hope to narrow it down for you.

Here are the problems: Wall Street, trash and pollution, jobs, education, and so how does all this tie together?

I vaguely remember thinking earlier it would be like taking all the trash out of the ocean. Which to me is a goal we should reach. I do not remember what made me think about the trash in the ocean, but I got started thinking about why is it so hard to get people to make cleaning up our environment a priority, then the obvious hit me. There is no money in it. Duh

People talk about recycling, yet even that never gets real traction. And the recycling companies struggle to make money. I do not know the logistics of it, but let’s work on that.

Or do we need to make money from it? And this is where the Wall Street problem comes in. Instead of trying to have a for profit company that has to answer to stockholders that expect ever increasing sales, why not accept that not all companies are growth companies, some can survive without constantly trying to please Wall Street’s insatiable greed.

The key is structuring the expectations carefully and structuring what the goal of the company can be.

So instead of always trying to “grow”, instead create a dividend generating company so it has public investment and allows for income only. If you know securities you have probably have heard of preferred stock. Imagine a company with something similar, no common stock. There are no earnings structured by the stock price. Everything is based on annual earnings.

Now this would not work for most corporations especially those that sell products. The difference is you aren’t selling a product and you are doing the public a favor. And this is not specifically for recycling companies, that is just one example.

Sticking to that example though, recycling companies receive contracts from both companies and governments to clean areas, or a combination of general recycling and clean ups.  The company earns x amount of dollars and the profit is sent to the investors in dividend income. Outside of capital expenditures to meet new demands or invest in better technology, the majority of the net profit is paid out.

You do have the problem of possible fluctuating income based on the contracts, yet this is a bit of a public private partnership. And to carry this further, here is an extreme example.

Coal is a dying industry, no matter how hard people try to revive it. And has it dies people are losing jobs. And coal is dirty, not just in air pollution, but what it has done to the environment where it is mined.  And who has benefited the most from this, the corporations who ran the mines. And this is extreme and the coal industry won’t like it, but the government can exchange the cost of cleaning up the environment, retraining some of the workers to how it needs to be cleaned up and letting investors come in and create a company that not only cleans up the environment, but also restores either farmland or forests or brand new planned developments to invigorate the local economy and environment. The cost to the coal companies can be either they hand the land back to the government or they pay a direct fee. The government collects the fees and pays the new company or the government pays the new company through bonds and taxes then once the clean up is completed they sell the land to the newly created economy, ie forestry, farms, or new development.

And here is the kicker, the company that does this has planned end. Once the project is completed the company can be broken up or shut down and all the assets sold to finalize the payoff to the investors so they can go invest elsewhere.

The government isn’t in the business of cleaning up and finds the resources outside of raising taxes or it invests in the land and recoups their investment to offset future taxes. Once the environment is cleaned up then there is less taxes needed going forward.

And there are other companies along the same lines. And these are supply chain companies, manufacturing companies, and others. We need to go back to the business of products that can be recycled, like glass bottles, we have aluminum cans, but they are forced to perform under Wall Street pressure, and other items like real cloth instead of “synthetic” fabrics which are really plastic. The exact same companies that make plastic can switch gears and go back to products that either decompose like paper or can be recycled. THe difference is the producers are also the recyclers and this part of the business helps to offset costs, but they are not bound by Wall Street growth factors. Some may and some probably could, but overall a secondary industry that maintains a status quo of that gives you a predictable business model.

Recessions might have some effect on income, but recessions would only have muted effect. Jobs would not be as drastically affected if you knew you could adjust the dividend temporarily, or always have the dividend underpaid a small amount and the company actually has a savings account to adjust for moderate fluctuations in income so investors can rely on their plans.

We receive a secondary gain because the same jobs that rely on plastic production get switched over to the recycle industry and we have less reliance on oil. Will the oil industries be upset, yeah but who cares. They can invest in the new production just as much as the rest of us. People are always pro free market when it benefits them, take away something and they whine just like everyone else.

The trend will eventually be away from oil as it was with coal over time. They can stay relevant by investing their current profits into new ventures. Don’t believe me, research what T. Boone Pickens is doing.

And we can use the same principle to clean the ocean or wherever. Industries that benefit from the use of the ocean pay a fee to the companies responsible for cleaning and recycling what they collect. Governments can create treaties to facilitate their fee schedule.

Basically it is a temporary tax to do business that has a built in reduction as time goes on. The more the clean up is successful the less there will be in the future. There may be a smaller version of the company as time goes on, but that is good. The fees become smaller for the companies etc...and jobs can transfer to the very industries that paid the fees as they now have more potential growth as habitats and environments come back. And this “tax” or fee is applied to the companies that receive the most benefit instead of being part of larger taxes whole citizenry face that if run by governments never goes away.

Businesses can be structured where success in completing the project is where managers and employees receive bonuses, not stock price. Many of these projects will go on for decades and some of the businesses will become part of our lives. The investments won’t pay the like the growth in Apple or Amazon stock, but the investors will know that. And these will be great investments for pension plans, trusts, retirees, as similar to bonds they generate income.

So how are the original issues resolved, plus some other benefits.

Wall Street’s influenced is reduced so the certain businesses can operate solely on their core plan.

Clean up helps the environment, and as people look for new ways to address different scenarios new technology develops so businesses develop to fill this need.

Taxes can be reduced as we can switch the responsibility of EPA super clean ups to these companies. The fees are paid by the corporations who created the problem, hence some government interaction will be needed to enforce, but the overall burden doesn’t fall on the general populace.

Stable industries help communities develop so local tax bases can spend money on what is important to the community such as better schools. Retraining to help people in dying industries make the switch can encompass  more than just job specific training. The need for new technologies offer new opportunities for research and development which requires more people attending higher education.

Consumers are not affected over the long term as the switch from plastics to products that either decompose on their own or more recyclable products come back into everyday use.

So you go back to paper, glass, continue use of aluminum, cotton and wool clothing, (agriculture) etc.. these businesses still exist today, you just expand them to replace all the plastic currently being used. It may not bring a net job gain, but you should not lose jobs either. Over time you might get the gain as some of these industries will become more localized by their nature, especially the clothing changes. And since these products will either be used for other products or products direct to the consumer they have the opportunity to be more traditional corporations closer to what we had in the 50’s and 60’s with just more automation and technology.

To some people this is pie in the sky thinking, when actually it is basic common sense. This won’t happen overnight, but we could begin right away. The big key is changing the mindset and millennials today already have some of this mindset.

And this has looped through my brain in many shapes forms and fashions today, so it is hard to come back and write it down. I hope you get the jist of it and gives you some food for thought. The examples aren’t as succinct as I would like, but if I try to rehash it all, it becomes even more jumbled.  

Cheers