Today I pull a bunch of feathers out of the featherbed as I look at what what is commonly known as “The American Dream.” We raise our children believing it. We see it on TV. It is a favorite topic among motivational speakers. If you have the belief and the discipline, you can get rich by owning your own business. Only in the US, they proclaim, can any child who puts his or her mind to it open their own storefront and become a millionaire. It is a lie, and it is a multi billion dollar lie.
This is a personal story. It is hard to tell. It hurts.
Five years ago last month, my son and partners negotiated a lease on a store front in a strip mall. To ensure their acceptance on the lease, I cosigned. They were sure I would never have to pay in any money, they were going to be able to pay it easily from the profits they would make. My son and his partners were about to realize their dream, the American Dream. They were going to own their own gym. They bought a franchise and began the build out. It would be spectacular. They were talking about the lavish lifestyles they would have when the profits came rolling in.
The profits weren’t there immediately. That was ok, because I told them it would take three to five years before any new business that required capital would show a profit. So they worked. And worked. After a few months one partner left, then before they had been open a year the other partner walked out. Now it was just my son – and me. He did the work, I infused the cash (well, my husband and I did, month after month, exhausting our savings and the equity in our home). My other son worked too, to help out. Those profits weren’t coming in.
Over the years, 9 other gyms went under and we got many of their members. We expanded to include day care and a classroom to retain them. We were always within a hair’s breath of making a profit but each time we were there something would happen – a furnace would blow out and need to be repaired. A bad snowstorm. A trainer would leave and take his clients. The horrible economy cost several members their jobs and forced them to quit. A multinational company came in right up the street. We weathered that too. Over the summer, our franchise agreement came to term and the franchise wanted us to spend thousands of dollars to remodel in their new image as well as wanting to change our pricing structure, so we left them to another local franchise. As a result, we had to hire several new employees. After many snafus and much expense in making the change, we were beginning to click. It looked like we would finally be profitable. My son took great pride in the fact that even in this economy he was providing employment to some 30 employees and another 25 independent contractors. The employees were not full time, but it was work they would not have otherwise had. One time he posted a help wanted ad on Craig’s list and within half a day he had over 200 applications. Times here were tough.
Then another multinational moved in. they began charging new members so little we could not process the paperwork for the price they were charging. And they were much bigger, with many more amenities. They were funding their initial pricing with profits from other locations. Yes, it was predatory pricing as described in the Sherman Antitrust Act and the Clayton Act. But those laws have either been gutted by corporate owned courts or are no longer enforced. In three weeks, we lost 40% of our members. It wasn’t just us. Even established, very profitable gyms suffered similar losses. We could not survive. When we first decided that we had to shut down, it was like being punched in the gut. I found myself recalling the words from the Stones’ Angie, “they can’t say we never tried.” “All the dreams we held so close seemed to all go up in smoke.”
We did not have Christmas with the family. We were not invited, and I was relieved. I did not need to watch my brothers take my son apart, rehash his every mistake. We did not need the I told you so’s or the I knew you couldn’t make it’s. He was suffering enough as it was. I had already watched him eating humble pie as he was called a failure and worse by the partner who walked out. I had watched him prepare to deal with the employees and creditors, and the landlord and seen his shame and sorrow. Yesterday we closed our doors. We moved the equipment out. We will be selling it to pay off some of the debts. Since we were personally responsible for the equipment leases and the facility lease, we will be years paying it all off. After putting half a million into the venture, it will cost us an additional quarter million to get out. My son said it was like presiding at his own execution. It was appropriate that it was snowing.
And so I get to the lies. Lie number 1 – that in the American Democracy anybody can open a business and become wealthy if they just work hard enough. Except the USA is not a democracy any more. It is a corporatocracy. You are allowed to own and run a profitable business as long as a major corporation does not decide it wants your share. Then the thousands of dollars you have spent creating demand will be sucked up by that corporation as sure as dirt into a good vacuum cleaner. You cannot lower your prices enough to compete with them and still survive, and they can always offer more as long as you are there.
Lie number 2 – These low prices are good for the consumer. They are good while there is still somebody they want out of the way. Then the prices go up. The corporatists say that people clearly want what is offered, or they would stay with the neighborhood business. This is nonsense. People will always look for a way to save, especially in economy like this one. It is as if the corporation is a chicken snake and the consumer is a sparrow. The consumers stare into the eyes of the snake and get mesmerized until they are eaten alive. Once the competition is destroyed, this company will do what it has done in its other venues – raise the prices to well above what was ever charged in the area. The consumer will either have to pay much more or do without.
Lie number 3 may be the most insidious lie of all. It is the lie told by the corporate shills they call motivational speakers. They swear that if you “visualize” right, if you work hard enough and just believe hard enough you will make it happen. This is nonsense. When I was young I wanted to be a ballet dancer. Problem was, I was 5’10 and I simply could not visualize off 6 inches. Some things are what they are and no amount of visualizing will change that. You could not have worked harder than my son worked, averaging 16 hours a day and no vacations. You could not have believed harder than he believed. You could not have been more positive than he was for 5 years.
Corporations (including franchises) have spent a lot of money figuring people out. They spend a lot of money pushing these lies. They own the airwaves, they own the newspapers. They ensure the snake-oil peddlers we call motivational speakers are successful. Motivational speakers make six figure incomes pushing these lies to keep the people in line. They are tools used by franchising operations, network marketing and corporations to get people with a dream to drop big bucks or to work ridiculous hours for a promise that will never be fulfilled. When it is not someone who wants to own his own business, it is the young employee that is conned into sacrificing his family life for the company who will accept all his extra work and throw him away when he is used up. Just take a look at how many of these speakers got their start and their initial fortunes doing multilevel marketing tapes and events and getting MLM distributors to buy their books. The insurance industry has supported several of these speakers and writers. How many corporations give out these books and have these speakers at their own events? This same message was pushed by Donnie Deutsch on CNBC. And on and on. Because people are desperate. The really ugly thing about it all is that those most likely to cling to these lies are the people who can least afford to make an outlay. Not unlike people who got sold the bill of goods called nonconventional loans, they are the ones most in need.
Sadly, at one time none of these three items were lies. Once upon a time, you could start a business and become comfortable financially. You could work your way up through hard work. At one time this was a democracy. But once we made corporations into individuals, the rules changed. You see, people as individuals are expected to act within a societal set of boundaries. When a nonperson is an individual, the rules are very different from the rules for people. Since corporations only answer to the stockholder (on three month intervals), they no longer believe they have obligations to the society around them. Corporations cannot by their very nature have personal contact. Corporations cannot behave democratically, because the root of democracy is people. As in personal. Multinational corporations, by definition, can’t see you. When the antitrust laws were written, it was to put in place the set of rules people would need to deal with these corporations (same with unions). Now that they are gutted, or not enforced, people have no chance against them. And now, corporations run the country.
My son and I will survive. As I said, it will take years to dig out of this mess. But we will survive. What makes me sad is that our Democracy did not survive. And unlike the French Revolution, when the people rise up, they have no person to rise up against. You can’t send a corporation into exile on a deserted island. So the feathers I pull from the featherbed today are that anybody can get rich in America through visualization and hard work.