Go Lean…Caribbean

Go Lean Commentary

“Put your money where your mouth is” – Popular Challenge

It is appropriate to look back 50 years at the height of the counter-culture – Hippie movement – and ask the question:

Were the counter-culturists willing to pay for the change they were demanding?

As asserted in the last submission of this series of commentaries on the counter-culture of the 1960’s/1970’s, the counter-culturists didn’t just go away, they won! They had some relative victory and transformed the mainstream values of society.

A counter-culture typically involves criticism or rejection of the status quo powerful institutions, with accompanying hope for a better life or a new society. There was a subsequent shift in the Social Contract deliveries after this counter revolution.

But how did the advocates pay for the change?

In the height of the 1960’s counter-culture movement, this question was asked – by the Number 1 English-speaking band, The Beatles – and the answers didn’t emerge for years, decades and generations.

The question was in the form of a song – You say you want a Revolution – see here (and the lyrics in Appendix A below):

VIDEO – The Beatles: Revolution (1968) – https://youtu.be/BGLGzRXY5Bw

The Beatles

Published on Oct 20, 2015 – The Beatles 1 Video Collection is Out Now. Get your copy here: http://thebeatles1.lnk.to/DeluxeBluRay

“When you talk about destruction, don’t you know that you can count me out”

“I did the slow version and I wanted it out as a single: as a statement of The Beatles’ position on Vietnam and The Beatles’ position on revolution. For years, on The Beatles’ tours, Brian Epstein had stopped us from saying anything about Vietnam or the war.” – John Lennon.

“Plugging directly into the Abbey Road desk and pushing the needles into the red achieved the fuzz-guitar sound. According to George Martin “We got into distortion on that, which we had a lot of complaints from the technical people about. But that was the idea: it was John’s song and the idea was to push it right to the limit. Well, we went to the limit and beyond.”

“Revolution” was directed by Michael Lindsay-Hogg, and filmed on the 4th September 1968 at Twickenham Film Studios. “Don’t you know it’s gonna be all right”

Music video by The Beatles performing Revolution. (C) 2015 Calderstone Productions Limited (a division of Universal Music Group) / Apple Films Ltd.

• Category: Music
• License: Standard YouTube License
• Music: “Revolution” by The Beatles Listen ad-free with YouTube Red

Only now, 50 years later, are we able to look (back), listen and learn the lessons from those times. (This exercise is part-and-parcel of the popular 5 L’s methodology: Look, Listen, Learn, Lend-a-hand and Lead). Monetizing the change is easier said than done!

The Beatles stated:

“But if you want money for people with minds that hate … All I can tell is brother you have to wait”

What did the counter-culture movement do so as to monetize the change that they were protesting for? As these groups assimilated their victories into mainstream society, they forced changes to the financial-economic systems as well. For example, one innovation that emerged in the US was moving away from institutional pensions to a new scheme of Individual Retirement Accounts or the 401(k). See more here on the US program, though this term 401K has been used in many other countries as a generic term for Individual Retirement Accounts:

Reference Title: 401(k)
In the United States, a 401(k) plan is the tax-qualified, defined-contribution pension account defined in subsection 401(k) of the Internal Revenue Code.^[1] Under the plan, retirement savings contributions are provided (and sometimes proportionately matched) by an employer, deducted from the employee’s paycheck before taxation (therefore tax-deferred until withdrawn after retirement or as otherwise permitted by applicable law), and limited to a maximum pre-tax annual contribution of $18,500 (as of 2018).^[2][3]

Other employer-provided defined-contribution plans include 403(b) plans for nonprofit institutions, 457(b) plans for governmental employers, and 401(a) plans. These plans may provide total annual addition of $55,000 (as of 2018) per plan participant, including both employee and employer contributions.

History
In the early 1970s a group of high earning individuals from Kodak approached Congress to allow a part of their salary to be invested in the stock market and thus be exempt from income taxes.^[4] This resulted in section 401(k) being inserted in the then taxation regulations that allowed this to be done. The section of the Internal Revenue Code that made such 401(k) plans possible was enacted into law in 1978.^[5] It was intended to allow taxpayers a break on taxes on deferred income. In 1980, a benefits consultant and attorney named Ted Benna took note of the previously obscure provision and figured out that it could be used to create a simple, tax-advantaged way to save for retirement. The client for whom he was working at the time chose not to create a 401(k) plan.^[6] He later went on to install the first 401(k) plan at his own employer, the Johnson Companies^[7] (today doing business as Johnson Kendall & Johnson).^[8] At the time, employees could contribute 25% of their salary, up to $30,000 per year, to their employer’s 401(k) plan.^[9]

Taxation
Income taxes on pre-tax contributions and investment earnings in the form of interest and dividends are tax deferred. The ability to defer income taxes to a period where one’s tax rates may be lower is a potential benefit of the 401(k) plan. The ability to defer income taxes has no benefit when the participant is subject to the same tax rates in retirement as when the original contributions were made or interest and dividends earned. Earnings from investments in a 401(k) account in the form of capital gains are not subject to capital gains taxes. This ability to avoid this second level of tax is a primary benefit of the 401(k) plan. Relative to investing outside of 401(k) plans, more income tax is paid but less taxes are paid overall with the 401(k) due to the ability to avoid taxes on capital gains.

For pre-tax contributions, the employee does not pay federal income tax on the amount of current income he or she defers to a 401(k) account, but does still pay the total 7.65% payroll taxes (social security and medicare).
…
Source: Retrieved May 10, 2018 from: https://en.wikipedia.org/wiki/401(k)

This commentary continues the series on the counter-culture of the 1960’s/1970’s. This series from the movement behind the book Go Lean … Caribbean considers the experiences of how people deviated from the mainstream society to forge change in their communities. The other commentaries in the series are cataloged as follows:

1. Counter-culture: Embracing the Change – Battling against Orthodoxy
2. Counter-culture: Manifesting Change – Environmentalism & ‘Climate Change’ abatement
3. Counter-culture: Monetizing the Change – Education, Healthcare & Retirement Mandates
4. Counter-culture: Pushing for Change – Is Ganja here to stay?

All of these commentaries convey “how” the stewards for a new Caribbean can forge a change culture when established institutions are dysfunctional and defective; the status quo must be protested. This entry – 3 of 4 – considers the financial and economic changes that emerged as a result of the 1960’s counter-culture movement; subsequently a more independent spirit emerged for planning retirement, education and healthcare. Today there are solutions that deviated from the previous broken institutional offering.

The affected countries – United States, Canada and Western Europe – are in better financial dispositions now than they were in the 1960’s. There are lessons for us to learn and apply here in the Caribbean.

The book Go Lean…Caribbean – available to download for free – serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU), for the elevation of Caribbean society – for all member-states. This CU/Go Lean roadmap has these 3 prime directives:

• Optimization of the economic engines in order to grow the regional economy to $800 Billion and create 2.2 million new jobs. The deficient delivery of Caribbean Jobs is a sore subject regionally; this is responsible for so much abandonment.
• Establishment of a security apparatus to ensure public safety and protect the resultant economic engines.
• Improve Caribbean governance to support these engines, including a separation-of-powers between the member-states and CU federal agencies.

As the foregoing details, 401(k) Individual Retirement Accounts (IRA) brought a revolutionary shift in American society for Middle Class economic values. No longer where citizens dependent on broken institutions to deliver their financial solutions late in life. This spirit was also manifested in other areas of American financial life:

• Education / College Planning – A 529 plan is a tax-advantaged savings plan designed to encourage saving for future college costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code – Source: SEC.gov.
• Health Savings Accounts – HSA‘s are tax-advantaged medical savings accounts available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP).^[1][2] The funds contributed to an account are not subject to federal income tax at the time of deposit. HSA funds may currently be used to pay for qualified medical expenses at any time without federal tax liability or penalty. Beginning in early 2011 over-the-counter medications cannot be paid with an HSA without a doctor’s prescription.^[3] Withdrawals for non-medical expenses are treated very similarly to those in an individual retirement account (IRA) in that they may provide tax advantages if taken after retirement age, and they incur penalties if taken earlier. The accounts are a component of consumer-driven health care. Source: Wikipedia.

All of these financial-economic empowerments enhanced the Middle Class eco-system for young men … and women. The counter-culture brought a lot of opportunities for women … finally. Women in the workplace! It was real thing!

So society changed upwards … for the better by ushering in dual income households (DINC = Double Income No Children). Imagine all the additional capital added to the securities markets (Wall Street) because the Middle Class was now participating in deferred savings and investments schemes. Consider the Economic Study in Appendix B.

Household Budget Before the 1960’s Revolution.

Household Budget After the 1960’s Revolution; a Bigger Pie.

Society also changed downward … because less and less women were fulltime homemakers. Family harmony suffered!

Lessons abound by studying the pro’s and con’s of the after-effect of the counter-culture on Middle Class American life.

The Go Lean book stresses that quest to reform and transform Caribbean societal engines can benefit by looking, listening, learning about the American Middle Class experience; then the goal would be to lend-a-hand and lead with a regional focus. This was an early motivation for the roadmap, as pronounced in the opening Declaration of Interdependence (Pages 12 – 13):

xi. Whereas all men are entitled to the benefits of good governance in a free society, “new guards” must be enacted to dissuade the emergence of incompetence, corruption, nepotism and cronyism at the peril of the people’s best interest. The Federation must guarantee the executions of a social contract between government and the governed.

xxiv. Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

The Go Lean book provides 370-pages of turn-by-turn instructions on “how” to adopt new community ethos, plus the strategies, tactics, implementations and advocacies to execute so as to reboot, reform and transform the societal engines of Caribbean society. Just “how” can the Caribbean region pay for our revolution, the empowerments to elevate our regional society. This is the actual title of one advocacy in the Go Lean book. Consider the specific plans, excerpts and headlines here from Page 101, entitled: “10 Ways to Pay for Change“. Consider the specific plans, excerpts and headlines here:

10 Ways to Pay for Change

There have been a number of blog-commentaries by the Go Lean movement that highlighted the regional economic revolution; this is part-and-parcel to rebooting the Caribbean eco-system. See a sample list of those previous blogs-commentaries here:

In summary, it is only logical that the stewards for a new Caribbean consider the practicalities of how to pay for or monetize “their revolution”. If we want to be serious about effecting change in our society – we do – then we must have a formidable strategic, tactical and operational plan. This is the modus operandi of the Go Lean roadmap: a plan that is conceivable, believable and achievable for making the Caribbean homeland a better place to live, work and play.

We urge all Caribbean stakeholders to lean-in to this roadmap. 🙂

Download the free e-Book of Go Lean … Caribbean – now!

Sign the petition to lean-in for this roadmap for the Caribbean Union Trade Federation.

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Appendix A – Song Lyrics: Revolution (1968) by The Beatles

You say you want a revolution
Well, you know
We all want to change the world
You tell me that it’s evolution
Well, you know
We all want to change the world

But when you talk about destruction
Don’t you know that you can count me out
Don’t you know it’s gonna be
All right, all right, all right

You say you got a real solution
Well, you know
We’d all love to see the plan
You ask me for a contribution
Well, you know
We’re doing what we can

But if you want money for people with minds that hate
All I can tell is brother you have to wait
Don’t you know it’s gonna be
All right, all right, all right

You say you’ll change the constitution
Well, you know
We all want to change your head
You tell me it’s the institution
Well, you know
You better free you mind instead

But if you go carrying pictures of chairman Mao
You ain’t going to make it with anyone anyhow
Don’t you know it’s gonna be
All right, all right, all right
All right, all right, all right
All right, all right, all right
All right, all right

Songwriters: John Lennon / Paul Mccartney

Source: Retrieved May 10, 2018 from: http://www.lyricsfreak.com/b/beatles/revolution+1_10026331.html

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Appendix B – The Effects of Pension Funds on Markets Performance: A Review

Abstract – The worldwide reforming process of pension systems triggered by the demographic transition and globalization has led several countries to implement multi‐pillar pension systems and enhance pension funds. For this reason the studies on the effects that pension funds exert on markets performance have been flourishing in the last decades. In this paper, we provide an updated review of the empirical advances in this field of study, with particular focus on the effects that pension funds produce on labour markets, financial markets and economic growth.

Read the full report at: https://doi.org/10.1111/joes.12085

Source: Posted August 22, 2014; retrieved May 10, 2018 Wiley Online Library