Posts tagged “economy”

#OWS, Educate Thyself - Income Inequality (Part 3)

October 23, 2011   9:21 pm

Previously in this series - Part 1 - IntroductionPart 2 - Credit and Banks

Income inequality. The rallying cry of the Occupy Wall Street crowd really rings hollow with this 99%-er. This is certainly not a new complaint; “eat the rich” has been a sentiment for decades (or centuries). I would posit that covetousness has existed for over 6,000 years, and led to the first recorded murder in human history. It was wrong then, just as it is wrong now. Now, this is education, not church; we’re not going to belabor this point too much. But, the cries of “fairness” are a moral appeal, and must be dealt with accordingly. The ultimate in fairness is that everyone is taxed the same, and paid the same wage for the same type of work. Some people believe this is way-unfair, and they seem to start with “from each according to his ability, to each according to his need” and work backward just enough to make it palatable to someone who claims to desire freedom. Know, as we enter this education, that I’m much more on the former end than the latter. (See the “Welcome to the Real World” heading in the introduction.)

Income inequality would be incomplete without a discussion of equality of opportunity. Think back over your life; have you ever had a friend who could out-eat everyone else, but still retained their beanpole-like physique? Did you also have a friend who was always dieting, and always looked like they should be dieting? Given an equal opportunity - a pizza and birthday cake celebration, for example - these two people will have unequal results. This is exactly how it is in life. Many different people take the same high school courses; some do well, others do not. Does the fact that everyone is not the valedictorian mean that the system is not fair? On the contrary, this illustrates that given equal opportunity, different results are possible (and likely). There’;s a phrase that originate with cars, but now is used for almost anything - “Your mileage may vary” (YMMV). This is an acknowledgement by car companies that, the way they drove the car, in the environment they had, that was the mileage they got; but, you may drive it a different way, or in a different environment, so your mileage may not be the same as what’s printed on the sticker in the window.

A boy is pushing a bagging lawn mower, with the caption "I figured out at a young age the easiest way to get money from rich people. Its called a JOB."

Now, let’s continue this train of thought. There are two people who get the same college degree; let’s even say that their GPA was the same, and it was good - they graduated Cum Laude. Fast-forward 5 years, and the likelihood of these two individuals bringing in the exact same salary is very low; one is going to be making more than the other. Is this fair? That’s tough to say, but just with these facts, it seems pretty fair to me. Going back to the introduction again, a college degree is a tool, and what one does with it has a lot to do with their decisions, and also has a lot to do with the environment in which they live. Think about it this way - the same hammer that demolishes a house can be used to hit a chisel to make a sculpture; and, depending on the scenario, both are important. However, the demolisher is probably not going to get paid the same as the sculptor.

How many people could you employ? I know my answer to that question - zero. I have a small programming business, and currently, I am at the point of breaking even. Over the course of 2+ years, I saw a project with potential to go nationwide fizzle and die; the work I put into that is gone, with no monetary return. I went from looking at a breakthrough project to being back to square 2 (not quite back to square 1) overnight. What am I doing? Continuing on, keeping the lessons learned in mind. I’m not camping out in front of the organization that didn’t choose me, and I’m not blaming the system. But, I can assure you that there is no room in my budget for any employees at all.

Businesses can only hire people as they have resources to do so. These resource quite often manifest themselves as stores of money saved and earned via profits. There is nothing wrong with businesses making a profit, just as there is nothing wrong with you exchanging an hour of your time for a profit yourself (via a wage). (For the record - who was one of the voices saying that a rise in the minimum wage would lead to fewer available jobs? Oh yeah - me. I take little pleasure in that vindication, but I’d be remiss if I didn’t point it out.)

A graphical representation of the tax burden shift from Herman Cain's 9-9-9 tax proposalTo illustrate, let’s look at a hospital. Profit is a motivation even in a seemly-altruistic endeavor like health care. The operators of the hospital are responsible for hiring doctors, surgeons, nurses, nursing aides, medical technicians, janitorial staff, laundry personnel, anesthesiologists, etc. (or contracting it out). They are also responsible for purchasing beds, linens, cleaning supplies, medical supplies, and a full array of drugs; they also must maintain power, water, environment, and maintenance on their facilities. (I’m stopping there; I’m sure this list is incomplete.) The janitors and surgeons are both important; however, you’re not going to find a single hospital that pays janitors as well as it pays surgeons. Why? Two words - skill and education. Is that fair? Absolutely. The additional pay surgeons receive over janitors is a big reason many of them go through years and years of schooling, internships, and career-long continuing education.

Now, imagine you’re the surgeon. Would you think it fair if unemployed people demanded that you reduce your pay to that of the janitorial staff? If you say you’d be OK with that, you’re either naive or lying. But, these people get their way, and your pay is cut. You would be indignant that the fruits of your hard work were being demanded by people who have no claim on them. You would also no longer be able to pay the support staff necessary for your surgery practice, nor would you be able to spot the neighborhood kid the $50 to keep your yard up on a weekly basis. You would have to pull your children out of whatever private school they attend, which affects the teachers and workers at that school.

To put it as plain and simple as I can, these “rich” people you decry are the ones making our economy work. And, in our economy, you start where you start and try to improve your lot. That’s the promise of America. Not everyone will succeed, but the opportunity is there for those willing to work for it. For years, one party has fomented angst against one class of people, while pillorying those who are against that party as filled with hate. (Oh wait - maybe those are big words for college-educated people…) The Democrats make people mad about people who run businesses, and cast Republicans as hating poor people. Like many items of the Democrat platform, nothing could be further from the truth. These rich people are the ones employing people and supporting other businesses; they’re not sitting around their fireplaces smoking $100 bills and laughing at the peasants.

The graph running down the side of the post, as best I can tell, originated here, and was produced as an example of how bad Herman Cain’s 9-9-9 plan is. But, what I’d like for you to do is click on that, and look how tiny the increased tax is on the bottom 20% versus how much it saves the top 20%. (Keep in mind, #OWS-ers, that 19% of that top 20% are in your 99%.) This chart illustrates perfectly what is wrong with our tax code, and why our jobs are going to other countries. Where is the motivation to move yourself into that top 20%? (FTR, I am saddened by Cain’s recent adjustment to 9-0-9 “for poor people” - this completely destroys the beauty of 9-9-9 as an equalizer.)

At this point, I can hear the rebuttals about all the greedy people who have broken the law to increase their wealth. Those people will find no quarter here with me. One of my biggest problems with immigration reform is that the focus is always on the illegals, rather than the businesses who hire them with impunity. However, this greed and illegality must be fought where it is found, not via a whole-scale war on wealth. American has her position in the world because of her wealth! If profiling is so wrong in other areas, why is tolerated here?

Bottom line - instead of seeing these people as the enemy, you should see them as people you should emulate, whose accomplishments to which you should aspire. You should stop looking at what someone else has, and start looking at how you can improve your lot in life. Chase Bank is probably not hiring many Gender Studies graduates, and Exxon doesn’t have a great need for Gay and Lesbian Studies graduates. You may not find a job in your degree specialty - that’s OK. Work where you can find it, continue your education (but by all means, not at the same university that failed you so much already), and quit looking around so much.

Derek Sivers, in his summary of Barry Schwartz’s The Paradox of Choice, puts it this way.

More than half of people chose options that give them better relative position : better to earn $50k/yr while others around are earning $25k/yr than to be earning $100k/yr while others around are earning $200k/yr.

Can you see the lunacy in this? Because of their jealousy and covetousness, over half the people would choose half as much pay. This is exactly what you’re doing. Wake up, #OWS.

 

100 Day Report Card: D-

April 29, 2009   11:03 pm

Yes, in 100 days I’ve gone from “skeptically optimistic” to hoping that 3 terms of Republicans can stem the tide from 4 years of our current administration. For all of the left’s making fun of Bush, and VP Biden’s history of gaffes, who knew that the current administration would make them look downright composed? It’s Amateur Hour at the White House, and our kids get to pay billions of dollars for us to watch!

Bar Graph showing a $2T budget deficit projection for 2009, with the highest ever before being less than $500B

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Economics: F (only because F- isn’t technically a grade)

You would think that this would be the current administration’s strong spot, seeing that they won the election last year based on the crappy economy (or so they’d have you believe). Yes, the fiscal irresponsibility of the final year of the Bush v2 administration looks miserly compared with this stimporkulus and budgets we’re being asked to finance. The graph to the right gives an illustration of the impact of the current budget, compared to budgets under Reagan, Bush 1, Clinton, and Bush 2. Just as the New Deal lengthened the Great Depression, these artificial attempts to “fix” the economy are actually doing it more harm. Then they label those who are against it as dangerous - but more on that later.

National Security: D-

This one was not an F due to his quick response to the Somali pirates who had captured the captain of a US ship. Regarding the F/A-22 cutbacks, these were being discussed even in the previous administration, and even so, the “cutback” still result in more airplanes being built and delivered to fill the order. I don’t really have a good feeling one way or the other. The F/A-22 has been in work a long time, and had a lot of money already. To throw that away, when we used its predecessor for over 30 years, seems foolish to me. However, with the services merging more and more operations, perhaps it’s smart to have a plane that’s built to specifications from all interested parties. Time will tell. The release of the CIA memos, though, was a bad move, which I discuss in the next subject below.

Foreign Affairs: F

How many ways are there to mess this up? Maybe we should bow to another head of state. Maybe we should give the Queen of England an iPod with your speeches? How about giving 25 Region 1 DVDs to someone who can only legally play DVDs from Region 2? Maybe we could use the term “England” to tick off a good portion of one of our strongest allies. And these are the people who made fun of Bush? Maybe they should’ve left some folks from the White House Protocol Office on staff to train the new folks. I know that it was Kerry’s slogan and not Obama’s, but isn’t this the party that wants to make us “respected around the world”? Ignoring years of tradition and protocol is not the way to make that happen.

And, the release of the CIA memos has made us look even worse. We have people hyperventilating on both sides over whether waterboarding is torture. The ones who do us harm know that they don’t have to do anything for a while, because we’re doing it to ourselves. What the administration doesn’t seem to have thought through is that, though in this country, it may be easy to pin all that on the Bush administration, to the rest of the world, it’s still “America” that did it. And, if they know that we don’t have the stomach for it (would it really have been that out-of-line to put a caterpillar in a room with a terrorist?), their job is easier. The CIA agents are demoralized, and the enemy is emboldened. Call it what you will - naive, oblivious, amateur hour - it’s dangerous, and it’s made our country weaker because of it.

And, to those hyperventilating - if you’re ever captured by them, you’d better pray that waterboarding is the worst thing they do to you. Because we’re humane, we’ve come up with ways to make people think that they’re being tortured, when they’re really not. Torture has lifelong implications to your health and mobility; John McCain can’t lift his hand above his shoulder - that didn’t come from waterboarding.

(Even the decision to stick by the Iraqi withdrawal timetable couldn’t raise his grade in this subject.)

Domestic Affairs: F

Janet Napolitano is a joke. “Nonetheless, to the extent that terrorists have come into our country or suspected or known terrorists have entered our country across a border, it’s been across the Canadian border. There are real issues there.” “Crossing the border is not a crime….” Tax Day Tea Party protestors are dangerous right-wing extremists, and they could easily recruit returning combat veterans. I don’t feel that our homeland is very secure - I feel that this department is now being run as a playground for political paybacks. Then there’s Hilda Solis, the Labor Secretary confirmed because the Republicans just got tired of fighting. I saw one interview on TV where she must’ve claimed “but we’ve only been here 5 weeks” about 7 different times. That’s not the way a leader talks. An amateur hour two-fer.

Social Affairs: F

I believe I covered Obama’s revocation of the Bush executive orders regarding federal funding for embryonic stem cell research. (I’ve bolded the important parts, because I’m sick and tired of the liberal “You’re opposed to science!” mantra. No, we’re not - we’re opposed to the government paying for research that destroys unborn humans, especially when it has shown no signs of finding anything, but other, similar, non-lethal-to-the-donor research has. (And, check out #1 under “Adult Stem Cell Advantages.”) What you fund, you get more of - fund more experiments on dead babies, you get more dead babies. I happen to be against dead babies, born or unborn.) When Obama rescinded that executive order, he also rescinded one that allows funding of ethical experiments. A good analysis of what that means is here.

He gets a pat on the back for supporting traditional marriage; however, I think that battle is lost. The demise of marriage came not from non-traditionalists, but from people who decided that a promise of forever can be undone by a piece of paper signed by a judge.

Well, he’s got a solid 0.2 GPA headed into day 101 - nowhere to go but up, eh?

Quick Hits II

March 11, 2009   8:20 am

First up is the latest column from Thomas Sowell entitled “Subsidizing Bad Decisions” in which he asks a very good question - “Why should taxpayers who live in apartments, perhaps because they did not feel that they could afford to buy a house, be forced to subsidize other people who could not afford to buy a house, but who went ahead and bought one anyway?” Read the whole thing, particularly the part where he talks about “saving for a rainy day” and “sadder but wiser.” I’d planned a longer post on the economy (and I still may do that), but this is pretty much the way I feel about it.

And, backing him up is some timeless advice from Adrian Pierce Rogers, via Neal Boortz

You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that, my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it.

If only Washington, D. C. understood that simple truth.