MCWB Club Rationale

by Kun Luf on January 28, 2011

The idea of the MCWB Club sounds alien to many in the middle class. Well, let me try to make a case for the existence of the MCWB Club below.

The first thing we have to be clear on is that the MCWB Club is not about any one person, or organization – it is a common effort by middle class folks (MCFs) to solve middle class financial problems.

You may not realize this but, as a practical matter, there are 2 types of currencies in circulation everywhere. The real currency (invisible), and the fake currency (visible to all) – if you have (or trade in) the real currency, you will always have an ample supply of the fake one. On the other hand, if all you have and know about is the fake (fiat or paper money type) currency, you may not always have enough of it (due to unemployment, job loss, disability, etc) and will definitely have a hard time getting the real currency. There is a separate blog post about these 2 currency types – for now, suffice to say that the MCWB Club is set up to make the real currency more readily accessible to MCFs (middle class folks).

Remember the old mutual companies (savings & loans, insurance  are 2 good examples)? Where the depositors (savings & loans) or policyholders (insurance companies) were also the ‘mutual’ owners? These were fairly common even as recently as 30 years ago – ironically, many of them got demutualized and most of the ownership (and much more importantly, control) got into the hands of the wealthy elites. The MCWB Club fills the kind of role those companies filled – ownership by the ‘common’ or ‘Main Street’ man/woman, products and services (of mutual companies) priced more moderately such that consumers are not ripped off – but goes beyond individual sectors like insurance, or mortgage lending. The MCWB Club makes it possible for the average Jane/Joe to buy ownership and, more importantly, control of a wide range of income generating assets (businesses, commercial real estate, etc) and then introduce corporate policies that are middle class friendly – closing the gap between the highest and lowest paid employee within the same company for example, or using employee layoffs as a last resort, rather than the acquisition game plan that many private equity leveraged buy out players  use.

Myths Realities
Level playing field Uneven, unequal playing field
Equal opportunity Unequal opportunity
Tertiary  education = A Good job + Decent living standards + Job security Higher education = Huge student loans + Unemployment/Underemployment/Casual jobs + Job insecurity
Large (mainstream) financial institutions design their products and services to benefit the middle class Large (financial) institutions make most of their profits from the middle class, but disproportionately help the wealthy elites and large corporations to create more wealth
The government and its regulators are looking out for the best interests of the middle class The government and its regulators are constantly watching to see how much they can allow elite interests and powerful corporations to get away with
The progressive tax code means the rich bear more of the tax burden Through various loopholes in the tax code, corporate welfare (government  grants, subsidies, write-offs, etc), preferential tax treatment (dividends & capital gains for example), distorted tax cuts and other tools, the middle class is actually carrying more than its fair share


In the status quo (existing structure of things), MCFs think someone else (the government, their bank, regulators, lawmakers, etc) is looking out for their welfare – the truth is that the government is looking out for the wealthy (high-income) individuals and large corporations, small businesses, and if any resources are left over, the wretched poor will be accommodated. No one looks out for the middle class, if the government ever studies matters affecting the middle class, it is to see which programs and/or benefits can be reduced or discontinued. The MCWB Club will look out for the middle class – that is the sole reason for its existence.

It is easier to buy full or partial ownership stakes in income generating assets and much more importantly, acquire control of such assets if you are from the country club (elite) class. More often than not, the interests of the elites are in direct conflict with those of the middle class – thus the elites have been taking a disproportionate share of any economic rewards while passing on all the pains of any losses and setbacks to the workers . The MCWB Club will make it possible for workers to control businesses and get a fair share of economic rewards.

Elite Interests Middle Class Interests
High unemployment rate (NAIRU) Zero to low unemployment rate
Low wages, no minimum wage High wages or low wages with a proportional share of profit
No benefits Good benefits
Upward mobility for elites only, downward mobility for everybody else Upward mobility for all
Profits should be maximized and belong exclusively to the owners Employees should have a chance to participate in the profits
The consequences of losses or below budget returns should be layoffs, wage/benefit cuts for working folks The pain of losses should be shared proportionately across board, preferably those who benefit the most from excess (windfall) profits should give up the most in a bad year
Zero collective bargaining rights Strong collective bargaining rights


The MCWB Club’s role is to make the acquisition of ownership stakes and control of income generating assets as easy as buying a can of Coke – the more businesses are controlled by MCFs, the more those businesses will further middle class interests.


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