excerpt from Chapter 6 - flood example

Chapter 6 - page 102

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One excellent example of “Constructive Capitalism” came from Home Depot who shut all their stores in the Southwest US during the Austin, Texas floods in late 2013.  As part of their relief effort, the Home Depot shipped warehouses full of supplies and sent their staff to the flooded area to immediately start rebuilding the damaged communities.  The employees were paid in full their regular salary and all their travelling expenses.

Hurricane Katrina in New Orleans (August 2005) was still a fresh memory in 2013, and no one wanted to see the same thing happening in the city of Austin, so Home Depot mobilized almost five thousand employees, delivered untold truck loads of supplies and utilized their management skills to deliver on-ground support to those affected by the floods.  Just to be clear, the Home Depot was not involved at all in the initial rescue or relief effort but rather the rebuilding efforts that followed.  Fortunately, the rescue and relief efforts were pretty well managed as opposed to Katrina, so the rebuilding process could start right away.  The Home Depot did not wait for insurance issues, local zoning discussions or the media.  They just started rebuilding and repairing people’s homes so the owners could move back in.

The effect was immediate and astounding for Home Depot.  Home Depot had forfeited a sizable portion of their marketing budget to fund this effort but certainly reaped the rewards from a business standpoint.  Their brand value sky-rocketed as did their stock price following the Austin floods.  By March of 2015, Home Depot’s stock price had almost tripled to just under $200.  When asked about their efforts at the time to make such a large commitment, the CEO said that he just could not sit back and watch people in trouble when he knew he had the resources at his finger tips to do something about it.  He pointed out that Home Depot was monstrously successful in the South Texas area and that he felt that they should contribute as much as possible.  Many share holders at the time questioned his decision as they felt that the Home Depot was going to potentially forego billions in sales as a result of the rebuilding effort and that the materials should not have been just “given-away”.  Home Depot at the time made it clear to the stock-holders, that as a part of the local business community, they had an obligation to be involved in the rebuilding of its communities whenever required.  It is not moral to profit from the suffering of its customers.  This was revolutionary corporate thinking.

Today, the Home Depot has a regular rebuilding program that goes to disaster areas all over the world and pitches in “on-ground” as required.  They are under no obligation to wait for governmental efforts other than not to interfere with rescue efforts.  

Bringing Back Ethics: "The Spirit of Law"

America needs to bring back morality and ethics into the private operations of corporations and in the mindset of individual citizens.

One hallmark of the modern world is that organizations, corporations and individuals try to find loopholes in the system that work for their advantage and then stand on the their principals and claim that they did nothing wrong when it blows up. This practice absolutely has to be ended.

The recent Wall Street meltdown is a primary example of this practice whereby the financial firms ultimately had a whole team of lawyers who tear apart every piece of legislation in order to find the gaps or the opportunities within the legislation that are open to them. They then proceed to find ways around the overseeing institutions such as the SEC in order to continue their actions. 

The obvious problem in this approach is that it undermines the intent of the legislation and results in border line illegal activities that benefit very few people but also serve to undermine society in general. Whether one sees intervention in the private sector as socialist or not it has been demonstrated time after time that if left to its own devices, the free market forces will do what is in their selfish best interest and then not be held accountable for any damage done to others.  They do this with a clear conscience as they are able to claim that they have technically done nothing illegal.

The issue is not that they have been able to usurp the legislation rather that what they have done, though not technically illegal, it is definitely 100% unethical.  Morality has gone out of the current American way of thinking.

However, in order to overcome this monstrous gap in America, weherby societal ethics have been abandoned by the "ME generation", what needs to be implemented are "Spirit of Law" provisions whereby the actual intent of the legislation is considered legally binding over and above the actual specifics of the legislation itself.

In today' world, it is pretty unrealistic to imagine that any legisaltive body would be able to create a set of rules that will cover every and all future situations that might arise or have yet to be imagined.

The "Spirit of Law" legal provision will make individuals and corporations legally bound to follow through on the intetnion of the legisaltion rather trying to find ways to circumvent it. Under the "Spirit of Law" mantra any entity that finds loopholes in legislation and then exploits them would be held criminally liable and subject to prosecution.

Americans have to embrace a mindset whereby they respect the intent and spirt of the US way of life rather than imagining ways to co opt it for their own selfish purposes. 

Awareness is Pretty Meaningless

Awareness is never effective.

The recent KONY 2012 campaign is a very good example.  Yes, now a whole lot more people know about the situation in Uganda but nothing will change just because of this.  Lets face it, a genocidal tyrant will not disappear just because a bunch of people have tweeted, shared and hit the like button on Facebook.

In the new world of engaged democracy people must get more involved first-hand and on-ground rather than just spreading the word.  Sharing and being involved is now the easiest thing in the world.  However, it is completely useless at this point in time.  Genuine and personal on-ground action, funds and commitment are required.

The fundamental flaw with awareness is that it assumes that there is strength in numbers which we know is not an effective way to get anything done.  A few individuals that are passionate, action-oriented and well-funded have a better chance of reaching good solutions or solving problems than many "concerned and well-intentioned" citizens of the world regardless of how upset they are over the specific issues at hand.

The bottom-line for democracy and to try to really solve the world problems is to have the concept of majority rules abandoned.  Less people should be involved but they have to have more knowledge, be a financial stake-holder, an international organization, a corporation or hold a "significant" interest.  These should be the only people involved.

This approach should lead to institutional reform for our national democratic evolution.  Congress should be repurposed to oversee the process rather than be the involved in making the policies or taking action.  "Engaged democracy" works best when only those who know what is actually happening are involved and the rest of the population are left out...no matter how well-intentioned or aware.

"Ethical Capitalism"...The Next Big Thing in Corporate Profitability

Corporate America is the foundation of America's strength.  The greatest hope for America are its corporations...really!


Many people would likely argue that corporations are self-interested, money-grabbing organizations devoid of any human empathy.  And, this is in fact in most instances is probably quite true. But, embedded inherently within that attitude lies the potential for that self-interest to make a significant positive impact on Americans.

The business movement that is currently evolving is that corporations will see increased profits as the direct result of benevolent actions. I refer to this as "ethical capitalism".

Case in point is the "green" movement.  As public pressure and business opportunities are created due to a demand for cleaner environmental initiatives then it has been demonstrated that this is an area where companies will focus their attention.  The decision by corporations to pursue profits in the environmental arena is a business one and not personal.  To my earlier point, businesses will naturally gravitate to the revenue opportunity and therefore environmental initiatives have become part of the American corporate mindset thus providing a strong sustainability platform for long into the future.


What should be the next step in the green revolution of profitability is that corporations profit more from doing societal-friendly activities.  From a marketing perspective, companies have long known that being seen as part of the community and a good corporate citizen is good for business. Companies will line-up for opportunities to sponsor charitable causes and to provide safe products because the consumer population demands them and it is good for their brand building objectives. Therefore, corporations know that the appearance of being a good citizen is good for business in terms of building brand value and from a product standpoint safety leads to a reduction in the number of law suits and reducing insurance premiums.


The next tactic then in the evolution of corporate contribution is to go well-beyond charitable support, fund-raising and brand building and to make resources and expertise available to the public at large.  For an easy example, one area where corporations can have a dramatic and immediate impact is in terms of disaster relief.  Whenever something happens around the USA the corporations should be the first ones on the scene to help.


The Hurricane Katrina flood in New Orleans could have benefited dramatically from local and national corporations by having access to their expertise in order to provide relief, rebuild the city and care for those affected by the devastation.  A wide variety of companies could easily have pitched in by providing human expertise, labor, supplies, management coordination rather than just providing funds or basic supplies like water and blankets.  Further, corporations are used to working within an integrated network of other companies and suppliers to achieve their goals which is something that governmental agencies cannot claim.  It would have been much easier for a home improvement retailer to work with engineers and contractors to rebuild parts of the city rather than having to wait for governmental resources to coordinate the effort.  Corporations also have the luxury of operating by objectives and have to be less considerate of public attitudes.


If corporations actually pitched in first-hand to actually address the immediate problems then they would be rewarded by increased brand recognition, sales increases and consumer loyalty...all of which which would lead to enhanced profitability and stock price for the company. The result of "ethical capitalism" is increased corporate benefits to the bottom-line through benefiting America.