10/13/24: Still here, tomorrow gets a new post, one that I didn't want to write. Many things going on, not enough time in the day. I have a dozen articles that I need to finish. I am working on them. I promise.
I’m not blowing smoke here. My chops are I installed Point of Sales in McDonald’s for several years. I came in, trained the managers and the crew in operation of my equipment, laid the network and installed up to 8 POS systems, along with hanging a 19” CRT monitor from the ceiling and other modules. I had to help the managers with entering food costs and other “back office” things. It took 4-5 days to go from a FedEx container full of boxes to an operational store.
That $5.00 burger you bought? The components (bun, meat, cheese, wrapper, etc.) cost about $1.25. So there is a gross profit of $3.75. That is where the payroll, building rent, equipment maintenance and replacement, franchise fee, etc. are paid. In the end, the net profit for the owner is 15 cents.
It is an economic fact that every job has to be profitable. Every worker has to bill, or help the line workers bill the customer. If I hired you and pay you $10/hour, I need to “bill you out” for $20-25/hour. Because I have to pay “my” half of the SS/Medicare taxes, my part of the benefits package and pay for those who don’t directly bill the customer for their time.
If a job isn’t profitable, the employer must do at least one of these things:
Pay the worker less (pay or benefits)
Charge the customer more, or
Eliminate/automate the job.
Cutting pay or benefits usually ends in disgruntled workers, or no workers. Charging the customer more is covered under the Law of Supply and Demand: As prices go up, sales will go down because the customer has a fixed amount of money to spend on your product. If a Sausage Biscuit is $1, I can have one every day. If it’s $3, I’m only going to have it once or twice a week.
Eliminating the job does not necessarily mean less company revenue. The job could be automated. I recently learned that in the US steel industry, there are half as many workers in that industry as there were in the 80’s. The flip side is, the amount of tons of steel produced from then to now has doubled. In other words, the steel worker of today is producing four times the amount his grandfather did.
When you consider the automating of a job, you have to consider the cost of the machine to purchase and install, the cost of running it, and the cost of servicing it when it breaks. When labor is cheap, there is no profit in mechanizing or automating jobs.
This is a testbed McDonald’s that is almost entirely automated. The order is taken and the food is cooked, assembled, wrapped and presented without human intervention. There are still one or two people in the store, because they have to receive the truck, store the product, then load the product into the machine and clear jams.
The workers will be skilled and technically savvy, as in being able to detect abnormalities in the operation, and correct them via unjamming or actual module replacement. The regular service contract of “Call when there’s a problem and we’ll get there when we arrive” won’t fly here. A machine like this, down for even 30 minutes will cost tremendous amounts of lost sales, customer goodwill and food spoilage. The technical person there to keep things running will have to attend the manufacturer’s training school for training and maintenance. This means those workers are going to get the $15-25/hour the Leftists clamored for. The down side is, there will only be two workers instead of 6-12.
Here is the catastrophe coming down the road:
Since the 50’s and the first “fast-food” places, this has been the first job of teenagers. They were paid minimum wage, but the biggest thing they received was the “soft skills” they would need for the rest of their working lives. Those would be:
Showing up on time
Showing up properly dressed
Do what you’re told, even the stuff you hate to do
Do what you’re told to the best of your ability
The self-control to be polite to angry people
And more.
The kids just coming old enough to hold jobs will soon not see these jobs their career ladder is missing the first rung.
And here’s the very simple reason why: #Fight for 15. There are five types of people who work fast food:
Teenagers living at home
Young adults who want to become management at the store
People who are physically/mentally handicapped and this is the best job they can do well
Adults laid off from their career and are there for some income for their household
And last (and least) Slackers.
It’s the slackers who have instigated this. Fast food jobs are somewhat hard, and are not difficult. Any job that can be explained in pictograms is not going to be mentally challenging. You will need to have at least some attention to detail to do the job correctly, however it is not that physically or mentally demanding compared to a technical trade.
And because it’s “that easy,” the slackers like jobs like this. They don’t have to upgrade their skillsets to be worth more. They just demand to be paid more.
I still repair equipment in fast-food places, and other “first job” companies. The managers agree universally:
These kids today don’t want to work. They want to get paid, but they’re not worth what I have to pay them.
The speed and quality of their work also costs the company money. If a manager needs a worker to (properly) complete four tasks in a shift, and the kids only get three (or less) done, that means the manager has to have more people to get the jobs done.
In the end, it’s the demand for unreasonably high pay and the lower productivity that created the market for someone to design and manufacture this machine. As long as it was cheaper for employers to pay 6-8 workers at $7-9/hour to first job teenagers than it would be to buy a “whole store” machine, the kids would have jobs. Now that the employer has to pay 50% and more to have bodies in a store, it is economically viable and reasonable to automate those jobs.
If you haven’t heard by now, as part of the “Inflation Reduction Act,” the IRS has 87,000 new positions open to be for the most part tax auditors, and a lot of people were upset that these agents will be armed.
Let me tell you, the most fearsome tool a law enforcement officer has on his person is not his sidearm, but his radio. A LEO wears a sidearm for the exact same reason armed citizens do, self-defense for when they are confronted with violent resistance. One-on-one, any person in reasonably good shape has a chance of besting a LEO in a fight. However, if that LEO is able to get on the radio and say “officer needs help” you will quickly find yourself surrounded by 38 officers that will start at the top of the “Use of Force continuum” model instead of the bottom.
But that’s not the way to look at this situation.
Government grows. Once you are employed by the bureaucracy, it would take some particularly heinous acts (and a few felonies) to actually fire you. And positions themselves almost never go away either.
Once these agents are in place, they will be locusts. Not “like locusts,” they will be locusts. Insect locusts live underground until the time is right, then they will emerge and swarm, before descending upon the nearest farmers’ field and strip it bare, consuming everything of value. Then the locusts will move on to the next field, and so on until they come around again to strip the first farmers’ field bare again. Government locusts will be required to justify their employment. To keep their jobs they must audit so many households, “find” their quota of unpaid taxes and confiscate said taxes.
I lost the link to a story where a couple was “deemed” to owe taxes (there is a whole terrible story that I can’t remember accurately and thus will not relate). When the IRS agents showed up to the house to collect the debt, they confiscated every asset in the house all the way down to the cash in their child’s piggy bank.
So, these agents will start with the second quintile (because there’s already lots of agents on the top quintile), strip those households bare of “unpaid taxes,” then move on to the third quintile, then the fourth, then the fifth, and back up to the second again. And this cycle will repeat.
Oh, before I forget, the new department being set up to run these 87,000 locusts is headed by Nikole Flax. You don’t know the name, but she was one of the seven IRS managers whose laptops crashed mysteriously and without backup when IG’s were sniffing around the IRS in 2014, due to the kerfuffle over the IRS not granting non-profit status to Conservative non-profits.
Warning: I have an alcohol level in excess of 0.2% Barriers are down, spicy content is ahead. You have been warned.
Bifurcation, as in "the point or area at which something divides into two branches or parts."
Growing up, I was a voracious consumer of Sci-Fi fiction. The Big Three of Asimov, Bradbury, Clark, certainly. E.E "Doc" Smith, Pohl, LeGuin, Crichton, frequently. Series such as I, Robot, Lensman, Venus Equatorial, Foundation, Dragonriders of Pern, you betcha. Not so much once I became an adult, but as a teenager, it was rare to see my full face, as it was usually buried in those books.
I am also an avid player of a miniature wargame known as Battletech. Not going to go into the particulars of the game, because it's not germane to this article. One of the most prolific writers of the lore of the universe for this game is Blaine Lee Pardoe. He is a major contributor to the lore of the Battletech universe (every time you say "fluff" a kitten dies) and is responsible for a large part of the "lore bible" (a book for writers who want to write stories for this universe that details fixed events, major characters and their personalities/habits to provide a consistent world to the reader across multiple authors). As long as there has been lore about Battletech, Blaine (BLP for short) has been there. I personally don't read any fiction anymore, so I know next-to-nothing about BLP.
The other day, BLP spouted off against a poor review about his latest book. All I can figure was he caught BLP just right between what the guy said and where BLP was at the time, and everything in the world BLP was (might be) angry at became focused on this hapless creature, much like a magnifying glass on an ant during a sunny day. BLP took the reviewer to the woodshed and verbally beat him like the proverbial red-headed step-child. It seems the "reviewer" had an issue with which military unit was used in a given situation. In the grand scheme of things, this "issue" was about as important or earth-shaking as a bear shitting in Alaska north of the Artic Circle.
UPDATE: After delving deeper into this issue, I learned that this "reviewer" had been stalking BLP for a long time, and had made physical threats against him. The company attempted to mollify this angry person, which did not apparently succeed. It then progressed to "several people" to complain (sock-puppet accounts are hard to verify) to the company, and as an attempt to make the whole matter go away, simply ended their relationship with BLP. I am not blaming anyone (other than the stalker), however I need to point out that any attempt to mollify screeching banshees like this (the stalker, not BLP) only embolden them. You give an inch, they take a league.
Let me be clear, I am an apologist to nobody. I am only explaining from my perspective and insight non-evident thoughts and feelings about these or other events. My opinion and $7.85 will get you a cup of hot flavored water at a Seattle-Based caffeine dealer. Was this a good and proper response by BLP? I doubt it. Was it appropriate? In a personal setting, maybe. as a professional, no. Was it cathartic for BLP? I'm sure it was, I can feel the anger dissipation from here. If it had been me, let's just say the only thing that would have been left by this idiot would have been a smear of something like tomato paste. The fallout from this was entirely predictable because it's been replicated ad nauseum too many times in the past few years.
And due to the squealing and whining of less than five people, the owners of the Battletech IP have decided to part ways with BLP. The numerous works of BLP has entertained thousands of young adults and "adult" adults since the 1980's with his writing. Not to mention earning the owners of Battletech bucket loads of money through building that following.
As such, we have the latest example of the bifurcation of the US economy. Half of the country gets pissed off about something that happened (or didn't happen) and have decided to go off on their own. And because many of the largest tech companies are sympathetic to Leftist causes (Amazon, Facebook, Twitter, YouTube, et.al.), it has taken many brave souls to break out the saw and bifurcate themselves from the Leftist corporations. Thanks to Facebook and Twitter going Woke, we now have platforms such as Locals, Parler, Rumble, ThinkSpot, TrueSocial and so on. We have The Daily Wire getting into producing movies in direct competition of Hollywood. We have news websites such as 1440, Bongino Report, The Daily Wire, Not The Bee, and more trying to provide Conservative (or at least balanced) reporting of the news.
This is the interesting part, and a major difference between Leftists and Conservatives: Leftists get all outraged and angry, march with signs and protest. A couple of months later, the anger dissipates and they tend to go right back to the offender. Conservatives don't "hate" (dislike) quick, but when they do, they "hate" hard. Once they make the change away from a company, it will be a long time, if at all, before the come back. Conservatives vote with their wallet. They don't complain, they don't raise a ruckus, Conservatives just stop buying from whatever Woke Company and they find an alternative and not come back.
A good example is Disney. Here's the stock value history I just grabbed from Business Insider:
Since Going Woke, they have been going Broke. This is a good example why its a bad idea for businesses to involve themselves in social or political issues. Their purpose is to provide a wanted good or service at a price point the desired consumers can afford.
I am terrible at predicting the future. While many Battletech players are heavily into the "gnashing of teeth and rending of clothes" over this issue at the moment, they are basically stuck, as no other game system is as good (IMO). That being said, they will be most likely purchasing less Battletech lore from now on. BLP gets the last laugh. Blane has diversified his writings into several avenues that are all returning money. He will still get royalties from what he has written. The assholes who told him to bug off will still have to cut a check to him every month for a long time to come. No better payback than that. As a sign of support, I just bought his techno-thriller, Blue Dawn. I bought it cold, just to support him. I haven't read a techno-thriller since Clancy. When I get to reading it, I will give you an honest review.
Put this in the pile of "Sounds good" idea pile, rather than the "Good, Sound" idea pile.
What? You didn't hear about this? If you pay attention to the news, you did hear about it, he just didn't use those exact words. Biden is proposing a massive corporate tax hike. That's what he said, what he meant is a tax hike on you. Let me explain.
A business, be it a mom-and-pop shop, or a multi-national corporate conglomeration, has revenue and expenses. A profitable business has more revenue than expenses. The difference between the two is called profit. If expenses are greater than revenue, the business will sooner rather than later go out of business. If expenses exceed income, the company will try to cut expenses and/or raise prices. The net profit is almost never cut, because if there is no net profit, why even have the business?
Here's my point. Taxes are an expense to the business. Just like office supplies or building rent, taxes deduct from the revenue of the company. True, taxes are paid first, payroll second and everything else third, but taxes are at the end of the day just an expense that counts against revenue. This is different from "pass-through" taxes where businesses collect things like the sales taxes you're charged at the register. The business counts that as income, but not revenue. Yes, there is a difference.
So, the only thing a corporate tax hike does is raise prices of what you buy. The business sees its' expenses increase because "they" are paying taxes, and in the end, they add all the expenses together, add their net profit on top of that, and adjust their prices to you on top of that.
This is on top of prices already increasing because Biden's out-of-control federal spending is giving us inflation on a scale we haven't seen since Jimmy Carter.
This is the other video my responder gave me to watch. Please excuse me for a moment while I put a fine edge on my fillet knife.
It sounds like this guy studied at the knee of Robert Reich. “18 million Millionaires.” What he didn’t tell you was about 14.4 million of them (80% if you don’t math) are first-generation millionaires. Also, most of these self-made millionaires didn’t start on their “second million” until they were on average 50 years old. That means they worked hard, lived within their income and saved for THIRTY YEARS to get to that point. He laments the wealth of the millionaires, yet implies those rich people were lucky, when it actually took decades of hard work and discipline.
In stark contrast to those millionaires is the nihilistic YOLO hedonists that seem to be the prevailing type of young person. These YOLO’s dig themselves a $90K student debt hole at age 21 for a worthless degree in Gender Studies or Comparative English, and then never earn enough to pay that student debt off. That’s not including the car loan that has “negative equity” from their prior two cars plus the credit card debt as they try to keep up with the Joneses. With all of that debt and stress, these people will never realize that goal of becoming a millionaire. That inevitably leads to anger, resentment and jealousy.
He then laments for an extended period crying about how broken the US medical system is. Thankfully, I’ve already written on the subject to provide a simple, clear solution to fix healthcare, some of it anyway. Curing Healthcare. And any time you want to see what American socialized healthcare would look like, go to any Veterans Administration hospital. It’s free, and you pretty much get what you pay for it. Once you get into the system, it’s pretty good. But to get into it, you’re looking at the paperwork equivalent of trying to successfully pole vault a 16’ tall bar with a 6’ pole. The best way I can describe such a system is, “The efficiency of the DMV and the compassion of the IRS.” And Charlie Gard is one of the many victims faces of such a system.
The OP also quoted Albert Einstein from the first article in the first issue of Monthly Review, which Al founded in 1947. Why Socialism:
Here’s the conclusion:
I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals. In such an economy, the means of production are owned by society itself and are utilized in a planned fashion. A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child. The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow men in place of the glorification of power and success in our present society.
Nevertheless, it is necessary to remember that a planned economy is not yet socialism. A planned economy as such may be accompanied by the complete enslavement of the individual. The achievement of socialism requires the solution of some extremely difficult socio-political problems: how is it possible, in view of the far-reaching centralization of political and economic power, to prevent bureaucracy from becoming all-powerful and overweening? How can the rights of the individual be protected and therewith a democratic counterweight to the power of bureaucracy be assured?
Albert died in 1955, and I wonder, after he saw some of the ravages that the Soviet system inflicted upon its own people, if he ever changed his mind on the subject. By the time Albert had passed, the Soviet government had starved to death or just executed over twenty million people. And every other centralized economy has followed suit to varying degrees.
In conclusion, I will never claim or imply that Capitalism is a perfect system. It’s not. No system developed or run by us fallible humans will ever get close to that goal. Capitalism is a cobbled-together mish-mash of kluges that the only things keeping it from exploding have been duct tape, bailing wire and hope. But it’s the best we can do. Yes, people are “left behind” in a Capitalist system for a variety of reasons. But the people in the middle and high ends of the bell-curve move the whole population to the right. By their efforts, more and better goods are produced cheaper. The excess capital they generate is used by government or private corporations to provide for those who can’t work. The poorest of the poor in this country would be considered rich in any undeveloped country.
The only allure of a Socialist economy is that the people on the right side of the economic bell curve are taxed and forced all the way to the left side of the curve, where everybody sits, equally in squalor and misery. Is that really the kind of “equality” you want? Because that’s a real “Dog in the Manger” kind of attitude to have.
Then, of course, when the common people start exercising their own “enlightened self-interest” and throwing the centralized and command-controlled economy into chaos, well, the leaders just start shooting or starving those “dissidents.” ONE HUNDRED MILLION people between 1917 and 1999 were killed by their own Socialist governments. Everywhere Socialism got a foothold, it became a cancer and people paid the price.
For recent examples of this, in the past few years we heard about the average Venezuelan losing about 17 pounds of body weight from lack of food when the Socialist government nationalized the economy. Or that North Koreans are about 1.5” shorter than their cousins in South Koreas because of the decades of starvation diets. I can’t imagine the amount of mental gymnastics from all of these people who push how wonderful Socialism will be, while simultaneously ignoring the millions of dead in the wake of that same system. If you get the “we’ll get it right this time” argument from them, remind them of Jordan Peterson’s words, “How arrogant can you be to think you’ll do better than everyone else who has already run a Socialist system?”
Failure is a feature, not a bug in the system of Socialism. It literally requires individuals to do things against their own self-interest. While you can get people to do that in the short-term, maybe, in the long term, human nature wins out. And when people’s desire to act in their own self-interest exceeds their desire to act for the community, Socialist governments have the choice to exterminate the people or collapse. When they had the choice, these governments always chose the former.
You can’t sell me on the advantages of Socialism. It looks great on paper, however it fails miserably when put into execution. Marx and Engels were the greatest snake-oil salesman in human history.
Because I wrote these at the same time, part 2 is under this post, not above.
Before I say anything else, Socialism is defined (by me and older dictionaries) as “An economic model where the government controls the means of production and distribution of goods.”
This all started with the Planet Money PodcastSocialism 101. I went on their Facebook page and told them how I could take their featured “Socialist Economist” apart without any difficulty.
I was ultimately responded to by another user who said (I did not edit or clean it up) this:
We Produce More Now Than Ever In Our Recorded History, And The Workforce----The Ones Who Make It ALL Possible----Are Poorer Than Perhaps Ever(, & Drowning In Foisted Debt).....We're CLEARLY Being Scammed ---> #FollowTheMoney Management ain't Nothin', But it's Not hard. Bezos, etc., is Nothing without the Laborers; They're Almost Everything-----With Or Without him. C(r)apitalism's payscale is Mostly 'Regressive'... I disagree with the Minimum Wage, as it has been structured, because it Doesn't work; it's Too Easily defused. It's idea's heart is in the right place, but it is Too Flawed to be implemented effectively. What's Needed is the 20-to-1 rule; Not necessarily that Exact fraction, But That Principle. Tie the wages of the Lowest Payed to the Highest Payed. That said, it's better than nothing, For The Moment. Imagine NOT working, Exploiting the Labor of those who Do( work), And Extracting this https://www.google.com/imgres... The fact of the matter is, Moving "up" is Nice, but Realistically Not Everyone CAN because of Simple Physics------You Can't pick yourself off the ground. There Needs to be people in All Stratas for the society to function-----The Higher Up, The Less Possible Positions Available. If you work, you should have enough to survive And enjoy your Life/Freetime. Wages Need to be Tied to business's ( Total-)Pies, not Archaic Extortion-Brackets. Janitors may not be Technically as valuable as Scientists, True, But, if the scientists have to do the Janitation As Well, they'll hardly have Time for the Science-----Suddenly Janitors-Etc. are Revealed To Be Almost As Valuable As Gas To Automobiles, lol. ..and What Good is a Car Without Gas? We ALL Need Each Other OR The Whole System Ceases Functioning. We're ALL Essential. We're ALL Necessary To Produce 'Value'.
This user gave me a couple of videos to watch, which I did. Here’s the first:
Let me say right off, “The blackest lie is a lie that is a half- truth.”
Yes, some large corporations like Luxotica have an actual monopoly in some markets. That’s called “The Setup” where you throw out a couple facts to establish you’re being truthful. It reminds me of Robert Reich, whom I took apart one of his videos in 12 Strawmen.
It was at 1:26 when the lies started with the “Work or starve” point. Please, Ms. Teachout, point out any point of history outside of the post WWII developed nations, where this wasn’t true.
For the past 100,000 years of Homo Sapiens, this “work or starve” concept has been a simple, cold, hard truth. If you were able to work (not physically or mentally impaired) and didn’t work, no one supported you for very long. Individuals or churches (not government) would perform short-term charity to individuals to “get them on their feet.” The charity quickly stopped if the person receiving the charity didn’t start working somewhere. If this not working and begging continued, the person was deemed a freeloader and “ridden out of town on a rail.” The rail was not part of a railroad, rather a fence rail, which was a quarter-log, like this:
The community would also express their displeasure on this freeloader and to encourage him to leave the area (and serve as a warning to those who might encounter him), he was tarred and feathered.
The only exception to this was when a couple became too old or infirm to work, their children would support them. And example #2 where individuals, not government supported those who could not provide for themselves.
In the Antebellum South, slave owners used to work a slave until they were too old to work anymore, then the owner would give them their “freedom papers” and let them loose to fend for themselves. Believe it or not, it was the Southern states that passed laws to stop that kind of thing. But it was the slave owner, not the government, who had to support the retired slave. Example #3.
Just to keep you off balance, they throw in another fact: 40% of people don’t have at least $400 in a personal emergency fund.
I’m sorry, most people are sold a bill of goods about a job, with the understanding of “you should always go after your dream job.” I’m here to say, “NO. You shouldn’t.” The quickest way to kill your interest in a passion or hobby is to do it as a mandatory income-producing activity on a daily basis, knowing that you have to live off the profits generated from it. You should do what you like and you’re good at doing. I like and am good at fixing machines. That’s what I get paid to do and that keeps food in my fridge, a roof over my head and my lights on. My “dream job” would be to sit here and write content for this website, a YouTube channel and so on. The good news is I know my wordsmithing does not rise to the level where I could earn enough to live off, and I’m okay with that. I am perfectly happy to make this website my #5 priority and crank out articles when a subject or an idea that I want to write about hits me. Not “I have to crank out articles on a consistent basis to keep my income streams going.”
Next, she laments that “All jobs are menial and repetitive.” No matter what you do, you perform the same actions over and over and over again. It doesn’t matter if you’re putting a ball through a net on a basketball court, fixing a machine, assembling a product, or dealing with people. While the exact circumstances may change, the overall concept is exactly the same. Repetition is how we become fast, efficient and good at our jobs. Michael Jordan probably shot 1,000 baskets on the practice court during his career for each shot he took during a game. And not just “shooting baskets” like you or I might do, but the mental work, the physical work and the striving to make each shot better than the last one.
And what IS a job exactly? It starts with a person or company has decided they want you to make/do something for them. It doesn’t matter what “it” they are asking for is. In return you receive an agreed amount of compensation. If you do “it” to the company’s satisfaction, you get to do it again. You are there to generate income for the company, period. If you can’t generate enough income for the company to pay you and generate a profit, you’re out of a job. In 2020 I was hired by “Company A” to be an on-site IT technician at “Company B” to fix stuff broken by the workers of “B.” I was laid off after 4 months because there wasn’t any work for me to do. I sat around for 7+ hours a day watching YouTube videos and other stuff because everyone was still working remotely. There was a financial liability to keep me around. They liked the work that I did, but that was the economic reality. And while I don’t like or justify it, an employer has the duty to monitor you however they see fit concerning your paid work. If you’re not doing what you’re told (and paid) to do, why should you be paid for that time?
If you think there should be “worker protections,” look at places with those kind of policies, like New York Schools. How to Fire an Incompetent Teacher. Something is wrong when a teacher can openly admit to sexually harassing a student, and then got paid to do nothing for SIX YEARS, getting paid $350,000 overall as the school system goes through the laborious (and expensive) process of firing them. The average time it takes to fire a teacher is 830 days, or just over two years, at a cost of $313,000, which means that money wasn’t spent on children or raising the pay of good teachers.
I cannot and will not defend the actions of any company. Not my place to do so, unless I am paid for the effort. Yes, people are worked long, hard and incessantly at an Amazon warehouse. Ms. Teachout decries Amazon’s treatment of their warehouse workers, but I just wonder how many Amazon packages are delivered to her doorstep every month. Because every box she orders keeps Amazon in business and more people are oppressed.
If you don’t like the work practices of a company, don’t buy stuff from them. Leftists are good at boycotts (well, they think they are. Check out how well their boycott of Chik-Fil-A is doing), maybe they should all boycott Amazon. More importantly, you need to BUYCOTT companies who do engage in practices you like.
Here's Part 2, just in case you came here directly.
Let’s skip the history lesson, and dive right to this part:
A capitalist nation is dominated by the free market, which is an economic system in which both prices and production are dictated by corporations and private companies…
No, no and no. Prices of non-essential goods and services are driven by consumer demand. This demand then determines production. If something is priced at $100, but most people would only pay $50 for it, the choices of the business is to find a way to sell it for $50, accept that very few people will pay $100 for it, or not make it at all. This is the bedrock of Capitalism, the law of supply and demand.
Believe it or not, it is the first people who buy the product at that $100 enable the economies of scale that brings the price down to $50. Just think about flat-screen TV’s. When they first came out, a 48” flat-screen cost $2,000. Today, they are $200. Not only are the $200 TV’s 10% of the price of the original, they have better resolution and has more features.
Then there’s this paragraph:
The kind of impact that capitalism has on your life depends on whether you’re a worker or a boss. For someone who owns a company and employs other workers, capitalism may make sense: The more profits your company brings in, the more resources you have to share with your workers, which theoretically improves everyone’s standard of living. It’s all based on the principle of supply and demand, and in capitalism, consumption is king. The problem is that many capitalist bosses aren’t great at sharing the wealth, which is why one of the major critiques of capitalism is that it is a huge driver of inequality, both social and economic.
That’s a lot to unpack. Let’s get this straight. “many capitalist bosses aren’t great at sharing the wealth,” but what about those Party members who allocate the resources in a Socialist economy? You would be a fool if you think they wouldn’t “take a cut of the action.” For any business that has employees, payroll is the first expense to be paid. Because no employees means no goods or services produced, which leads to no income and very quickly no company. As far as pay goes, you are paid directly proportional to how much income you generate. If the company receives $10/hr of income due to your work, does it make sense for them to pay you $15/hr? And you are not “stuck there.” You can improve your skills and as a consequence generate more income for the business and yourself.
Another thing is the owner is the person on the hook for everything. If the business closes, the owner is still responsible for the building and equipment leases, along with any the loans or other obligations. A good owner takes enough net profit to live off of and continually pours the rest back into the company.
If a worker wants to be paid more, they have to improve their skills. There’s always a high demand for people in the HVAC industry. You can get your certificate in 8-24 months, pay averages around $23/hr and as long as there are air conditioners and freezers, you have a job.
The downside is you’ll be outside a lot, winter and summer, in hot attics, or crawling under houses. You’ll be lifting heavy things constantly, dealing with angry customers and more. Most people don’t want to put up with that, so they don’t get the pay for it either.
We continue:
Capitalism’s supporters believe in several key points: Economic freedom leads to political freedom and having a state-owned means of production can lead to federal overreach and authoritarianism. They view it as the only sensible way to organize a society, insisting that alternatives like socialism, communism, or anarchism are doomed to fail. As former British prime minister Margaret Thatcher, whose pro-capitalism stance is said to have devastated the British working class, once put it, “There is no alternative.”
The proper quotes by Thatcher which the author ignores are.
The problem with socialism is that you eventually run out of other peoples' money.
And
Let us never forget this fundamental truth: the State has no source of money other than money which people earn themselves. If the State wishes to spend more it can do so only by borrowing your savings or by taxing you more. It is no good thinking that someone else will pay - that 'someone else' is you. There is no such thing as public money; there is only taxpayers' money.
I’ve done some research, and the earliest society that I found that practiced Socialist ideals (“From each according to their abilities, to each according to their needs”) was the Pilgrims at Plymouth in 1620. Everyone gave the fruit of their labors to a “company store” then received equal shares. They starved under that system with everybody giving to and drawing from a “communal stock.” They didn’t start thriving until the colonists had control over the land and what they produced. This manifested as people growing food for themselves and could sell excess goods to others.
William Bradford, in his journal “Of Plymouth Plantation” related this:
So they began to think how they might raise as much corn as they could, and obtain a better crop than they had done, that they might not still thus languish in misery. At length, after much debate of things, the Governor (with the advice of the chiefest amongst them) gave way that they should set corn every man for his own particular, and in that regard trust to themselves; in all other things to go on in the general way as before. And so assigned to every family a parcel of land, according to the proportion of their number, for that end, only for present use (but made no division for inheritance) and ranged all boys and youth under some family.
My task for you Anti-Capitalist/Pro-Socialist readers, is to remark in the comments below, any group of people, large or small since 1620, who successfully practiced Socialist principles and didn’t eventually commit Democide. I know of one (not telling), and it didn’t outlive the founder.
To show Marx and Engles in such glowing terms like this shows you how much of a sell job this is:
The essential anti-capitalist argument is that “the hallmark of capitalism is poverty in the midst of plenty.” They say the immense suffering and violence that has been forced upon the laboring classes, the ruthless emphasis on profits over people, the proliferation of wage slavery — in which people have no choice but to sell their labor…
Think about it this way. In order to survive, a person must have:
1) Enough good food and clean water to be healthy and strong enough to be able to carry out the rest of this list. 2) Have a warm and safe place to sleep. 3) Have the tools to make labor easier (try chopping a tree down with a stone axe). 4) Stockpile food and fuel to get you through the winter.
Now, that’s what you need to survive. To accomplish those tasks alone is nigh impossible. You are doing what needs to be done from dawn to night. However, one mistake will probably kill you. A scratch can turn septic, a broken limb means a slow death from thirst or starvation. To flourish, you need time to rest from your labors and think about things, make things that will comfort and enhance your existence, etc. That takes a group of people, each doing different jobs and exchanging the fruits of their labor with each other.
That may sound Socialist, but it’s not. To be Socialist (meaning a command-controlled economy), “someone from the community” (a single person or committee, rarely the whole community) has to decide who will do what, what goods or services will be produced and how those goods will be distributed. Under a free-market Capitalist economy, each person decides what and how much they want to produce. If no one produces one thing that is needed, someone will see the need and demand for whatever “it” is, and make a profit.
And frankly, you’re going to be a “wage slave” under both Capitalism and Socialism, because someone has to make the goods and services no matter who’s in charge.
This is the part that chills me to my core:
There are many forms of socialism, but at its core, socialism is an economic system in which a whole community — not just bosses or private companies — control the means of production equally. It assumes that people are naturally cooperative, instead of competitive. The goal of socialism is an egalitarian society run by democratically elected representatives for the benefit of all in accordance with a set of collectively determined parameters; unlike under capitalism, industry and production is run by the state, and the acquisition of private property is seen as counterproductive. [Emphasis mine]
Consider this very, very carefully. The first piece of private property every person owns… is themselves. As long as you own yourself, you control what you do and what you produce. The dictionary definition of a slave is someone is “chattel” (property) of another person. The economic definition is a person who does not control or own the fruits of their labor. So, under the concept of “the owning of private property is counterproductive” means you don’t control your labor, you don’t control the fruits of your labor, and you don’t own yourself. You do what the State tells you to do, not what you want to do. As the article says,
“…a whole community — not just bosses or private companies — control the means of production equally.”
So now I have to ask, define “community.” Is that neighborhood, city, county, state or country? And define “control the means of production.” Does this mean everyone stops working and we hold a communal meeting to debate the merits of producing Windows phones instead of iPhones, along with the 378 other things the city produces? How long will that take? Days? Weeks? And while everyone is doing that, nothing gets done.
Maybe we just need to elect committees to make these decisions for us. Which would make the committee the de facto owners of the company and make them our bosses/leadership. In a free market, you vote for who your bosses are by applying to different companies.
Now I’m going to jump back to the beginning of the article. Right after the first quote I gave, there’s this point:
[Capitalism] and places a heavy focus on private property, economic growth, freedom of choice, and limited government intervention.
Notice how the author doesn’t mention “freedom of choice” or “limited government” as positive aspects of Socialism, just that private property is ‘counterproductive.’ I can only infer from these omissions that in a Socialist society, you don’t have freedom of choice or have a government that follows the will of the people.
And before you ask “What about Democratic Socialism?” it’s not a pig with lipstick, it’s a wild boar with lipstick. It’s a pig, with different markings, but a pig nonetheless. The only difference that I see between Socialism and Democratic Socialism is that you think you’re voting for who’s in charge of things. There will still be a committee for everything that needs a decision and you will still be a wage slave, with the major difference being if you don’t like your boss or the working conditions at your job, you can’t just quit without permission from the Labor Board (or whatever it would be called).
And the best argument against Socialism is expressed in one word: Democide.
One hundred million (100,000,000) people died by government action (or lack thereof) in Socialist countries last century. Most of the deaths were by starvation, but more than a few were executed for things like having ideas that weren’t approved by the Politburo.
To give you an idea about the hunger I’m talking about, imagine being so hungry that you make a literal mud pie and eat it. The bad news is, the dirt basically solidifies in your intestines blocking everything and you die, slowly and in tremendous pain. All because some asshole in Central Planning slipped a decimal point and your village got one truck of food for the month instead of the ten that it needed.
Korea is an interesting microcosm of Socialist vs. Capitalist ideals. It is a genetically homogenous gene pool (very little immigration) that has been under an A-B experiment for seventy years now. North Koreans are on average about 1.5” shorter than their cousins in the South. This is from multiple generations of near-starvation diets. Those people never got the nutrition they needed. And on the few occasions that food agencies personally gave food to the people of the villages, the Army came along and gathered the food up as soon as the aid workers were out of sight. And anyone who ate even a handful of food, you know, because they were hungry, they and their family were dragged out to the center of the village and executed to serve as an example.
And if Socialism becomes the law of the land in our time, we will probably not see atrocities like that, but our grandchildren will. It’s happened every time Socialism gets a stranglehold on a people.
Let that stew in your consciousness as you go to sleep tonight.
If you remember, in 2007, Hugo Chavez, as President of Venezuela announced “All that was privatized, let it be nationalized.” Chavez was talking about nationalizing (government control) companies in the telecommunications and electricity industries. Of course, the major oil company was nationalized soon after.
If you were taught factual history instead of the whitewashed bullshit, you would have seen this is where Venezuela started declining. The bottom dropped out of their economy when the oil prices fell and the bureaucrats didn't know what to do. It started getting bad when Venezuela couldn't pump and refine enough oil for domestic use, let alone to the rest of the world.
You should know the rest of the story. In 2016-2017, Venezuelans lost an average of 19 pounds because they were starving. Bakers forced to make bread at gunpoint because they wanted to make pastries. Hyperinflation, worthless currency, massive refugee crisis and all that.
The other day, Bloomberg reported that Venezuela has given up on their "Socialist Utopia" and started privatizing businesses and industries again.
What this means is another example of failure to heap upon the dumpster fire known as "Socialism."
Yes, I know this video is almost a year old. First of all, it takes an order of magnitude more effort to refute BS than the effort to create it, second, I've had other things to occupy my time while I have been writing and researching this.
Robert Reiche, economist extraordinaire (just ask him), New York Times columnist and destroyer of nations put out a video in April 2019 which is nothing more than another rapid fire video, full of platitudes, carefully distorted half-truths that sound good and talking points that are totally devoid of any sustenance.
I pulled apart one of his points of his “The 7 Biggest economic lies” video in this post. Here I will tackle all twelve of these.
Before I begin, a couple of points so we have a common ground to work upon. First, Reich attempts to portray “The Rich” like Scrooge McDuck, like this:
In reality, someone like Bill Gates (net worth $90 Billion or more) probably has less than 1% of his wealth in cash, either physical or in a bank. The other 99% of his wealth is in various forms of investments. Stocks, bonds, property and the like. These investments have a variety of degrees of difficulty to turn into cash.
Second, when you own something, it’s worth only what someone else will pay you for it, not what you paid for it. Say I have a house I bought for $100,000 ten years ago. If for whatever reason I try to sell it today and the best offer I could get is $30,000, then the house is worth only $30,000, no matter what me, the county property assessor or the appraiser says. The person who sets the value is the person who is willing to shell out the most cash. Also, the value of things go up and down. As I write this, shares of Microsoft are going for $178.59 and Bill has about 298 million shares, which works out to about $53.2 billion and 3.8% of the total company stock. If Bill did something stupid and caused the stock price to tank to $60, he now only has $17.8 billion in stocks, if he sold them. The same goes for cars, property, collectables and the like.
Third, you become wealthy by having a cash income greater than your expenses over an extended period. If you have $1,000 a week income, but you spend $1,100 a week (rent, utilities, food, other expenses, etc.) you will never become wealthy. If you have that $1,000 a week income, but you only spend $800 and put the remaining $200 into an investment (or even under your mattress), that’s how wealth is acquired.
Here is the video, be ready to be stupefied.
Here are my responses, point-by-point.
Myth 1 – A top marginal tax rate applies to all of a person’s total income or wealth. I have to admit, he’s right on this point. The US has a regressive “last dollar” marginal tax rate. I’m sure Reich was deliberately correct on the opening point to get you to let your guard down because he “might be reasonable this time.” Fat chance.
Myth 2 - Raising taxes on the rich is a far-left idea. Look at it this way. Since the establishment of the Sixteenth Amendment (the income tax) in 1913, we have seen five presidents enact some kind of lowering or restructuring of the income tax rates. Those presidents are/were Hoover, Kennedy, Reagan, Bush 43 and Trump. Kennedy proposed the tax cut, but was assassinated before it passed. It happened under Johnson and was considered part of Kennedy’s legacy. All of these tax cuts had success, some better than others. All were/are Republicans except for Kennedy. And while Kennedy was a Democrat, if you were to look at his 1960 stances on race relations, taxes, gun ownership and more, his positions viewed through the political lens of 2020, he could undoubtedly be called a Racist Republican Nazi.
Then Reich quotes an opinion poll showing the support of a general “tax the rich” proposal, including 57% of Republicans. All this tells me is Leftists like Reich have been effective in making the Liberal talking point about having the rich “pay their fair share” sound reasonable.
According to The Tax Foundation, in 2014 the top 1% of US households paid 35% of the total income taxes paid to the federal government.
The 90% top marginal tax rates in the 1950's is correct. But did you know there were less than 50 households out of a total of 60 million at that time which were subject to that tax bracket? That’s 0.00000083% of households.
Myth 3 – A wealth tax is unconstitutional. Remember, the Constitution is a document that defines and limits the federal government. Property taxes are determined, assessed and collected on the city and county level and have zero to do with the federal government. State sales and income taxes also have nothing to do with the federal government.
Then Reich says, “But THE RICH hold most of their wealth in stocks and bonds, so why should these forms of wealth escape taxation?” This guy claims to be an economist, right?
You have already paid income tax of some kind (federal, state and local) on the money you used to purchase those stocks and bonds. When you sell them at a profit, that’s called INCOME and is taxed as capital gains. The same goes for losses. If you buy stock at $10 and sell it at $5, that’s a loss and can be deducted from any profitable trades you made in that year.
And when Mr. Reich brings up Article I Section 8, he neglects the last half of the clause: “…but all duties, imposts (a tax on imported goods, called tariffs today), and excises shall be uniform throughout the United States;” Which means this doesn’t include taxing personal income, or profits from sales. It means a tax on imported goods and it must be equal for the entire country.
The Sixteenth Amendment modified the power of the Congress to lay and collect income taxes and reads thusly:
The Congress shall have power to lay and collect taxes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
By that Amendment, Congress can tax personal income and set whatever tax rates they want, subject to the normal lawmaking process. Which includes capital gains tax rates.
Myth 4 – When taxes on the rich are cut, they invest more and when taxes on the rich are increased, economic growth slows. (Trickle-down economics)
“The Rich” have two things going for them that regular people don’t: accountants and campaign donations. Accountants practice the art of tax avoidance by structuring a person’s or company’s assets in such a way as to pay the least amount of tax possible. They do this by knowing the rules of the game (tax laws) and taking advantage of every deduction possible.
Campaign donations are really nothing more than an investment, in politicians rather than companies. By “investing” in politicians, the politicians write laws into the tax code that are advantageous to the donors. I don’t like it either, but that’s the reality of our present political system.
I found a Pew Research chart that showed between 1981 and 1991, the group with the lowest income did grow by 1%, while the top tier income group grew by 2%. So yes, some people became poorer, but more got richer.
Now Reich brings up a chart saying that average real GDP growth between 1950 and 2010 averaged 2.1% for lower tax rates and 4% when the tax rate is 71% or higher. I verified his numbers, and they are correct. I see statistically equal samplings (18 years for the higher tax rate and 14 for the lower), but I have learned to never trust Bob when it comes to statistics, and I was justified in my distrust. Bob should go into magic, with his mad misdirection skills he’d give David Copperfield a run for his money.
You have to pay attention to what is being compared. Reich is doing the equivalent of comparing the length of women’s skirts in the US to the price of coal in India, i.e., these things are not related. Instead of comparing the whole GDP, why not compare each person’s share of the GDP? Because the population as a whole changes, just like the GDP itself. So I found the data for “Average Real GDP Growth Per Capita” (GDP divided by the number of people in the country), and lo and behold, his GDP growth for the high tax rate drops from 4% to 1.07%, while the number change for the lower taxation increases slightly from 2.1% to 2.33%.
Myth 5 – When you cut taxes on corporations, they invest more and create more jobs.
Reich then explains how corporations took the tax cut and bought back their own stock, keeping the stock price high. This is a shell game, and Reich is not explaining the rules.
The “Market cap” of a company (its price if someone wants to buy it) is determined by the number of shares issued times the share price. So which is a bigger company? One that has 1 million “shares outstanding” and has a share price of $100, or one that has 50,000 shares that trade for $2,000 each? They have the same “market cap” so the companies are considered the same size.
Corporations like to keep their stock price in a certain range to make them attractive to certain types of investors. Wal-Mart keeps its’ share price around $100 a share, while Google/Alphabet’s stock price is over $1,100. If the corporation grows, the stock price goes up (see math above). If the value goes down, same thing. When the stock price goes out of the target range, the corporations can do several things:
Stock split: When the price gets too high, they “stock split.” What was one share becomes two (or three, or four, it depends). With a 2-for-1 split, that single $100 share becomes two $50 shares.
Stock merger: This is the opposite of a split. If you have two $50 shares, they become a single $100 share. Don’t ask about odd numbers, I don’t know.
Stock buyback: A corporation purchases and keeps shares to reduce the “shares outstanding” and raise/keep the stock price up. This is part of the first rule of economics, the supply and demand curve.
Mr. Reich gives you the impression that this is a “nefarious action.” But if you pay attention to the markets, all three of these are common occurrences.
“Enriching executives and wealthy investors but providing no real benefit to the economy.” This is one of these few times where the phrase “A rising tide lifts all boats” applies. It doesn’t matter if you have 10 shares or 10 million shares, you benefit from a higher stock price (when you sell it) and the associated dividends. So not just “executives and wealthy investors.” All investors benefit.
As a last point, looking at the recent unemployment numbers, the number of unemployed people are at records lows, like “the last 50 years” record lows. That includes Blacks and Hispanics, who historically have had higher unemployment numbers than the general population.
During Obama’s tine in the White House, seeing a business with a “help wanted” sign was an anomaly, on the scale with “hen’s teeth.” As I write this in 2020, you can’t turn around without bumping into a help wanted sign. In such a market, companies have to pay more to gain and keep good workers, so employee pay has been increasing since Trump took office. Yes, the pay of the top 20% of workers is rising, what isn’t reported is the pay for the bottom 20% is increasing more.
What was that again, Bob? I would call this “myth” a reality.
Myth 6 – The rich already pay more than their fair share in taxes.
Reich starts out by saying, “This is misleading because it only talks about income taxes.” Remember, wealth is acquired when your expenses are lower than your income for an extended period of time.
Reich then shows a pie chart with Income Taxes, Payroll Taxes, State Taxes, Local Taxes and Property taxes. Again, are we talking about federal, state or local taxes, or all three combined? He jumps back and forth, hoping to confuse you.Income taxes include those capital gains taxes paid by THE RICH. They file a 1040 like the rest of us and use Schedule D to figure out their Capital Gains (or Loss) and the taxes assessed from that form end up on line 11a on the 1040 form.
Payroll taxes (invented by Milton Friedman) are your tax pre-payments to the government that are taken out of every paycheck. What you paid in payroll taxes during the year is compared to what taxes you actually need to pay when you file. If your payroll tax withholding is too high, you get a big refund check (you gave Uncle Sam an interest-free loan) when you file your taxes. If you didn’t withhold enough from your paycheck, you have to send the difference in to get square. So, federal, state and local income taxes all fall under that “payroll taxes” umbrella.
And wouldn’t you think THE RICH pay the same rate in property taxes?
In my county, there is a 1.38% tax on the fair market value of a property. A $75,000 house pays $1,035 a year, a $7,500,000 house pays $103,500 a year. Or does Mr. Reich suggest we should go with a regressive property tax system like our income taxes?
Myth 7 – The rich already pay capital gains taxes.
Reich says, “The rich avoid paying capital gains taxes because they pass their wealth on to their heirs.” Then he passes quickly over “unrealized capital gains.”
See paragraph 5 at the top of this article. An “unrealized capital gain” happens no matter if you hold onto it yourself or pass it to your heirs, any profits (or losses) made are counted when you sell the asset. If I used $100,000 of my money to buy an investment and a couple years later it’s appraised for $200,000, if I haven’t sold it, that extra $100,000 is an unrealized capital gain. It is not taxed nor counted as taxable income because I haven’t sold it yet. “Unrealized” is “ghost money” because if I (or the government) think it’s worth $200,000, but I can only sell it for $95,000, then I have a “capital gains loss” (I know that’s confusing).
Myth 8 – The estate tax is a death tax that hits millions of Americans.
I admit it, he’s right on this one. The estate tax doesn’t kick in until you have assets in excess of $11 Million for a single person, $22 Million for a couple, and a minuscule amount of estates are affected.
But you see, my positions on things like this are based on principles, not political ideology or which way the political winds are blowing. Would you want the IRS showing up at the funeral of your parent, their hand out asking for money? Once you realize the size of the estate is irrelevant, the side of the issue to be on becomes easy. Remember, the IRS will collect taxes when the property is sold.
Myth 9 – If taxes are raised on the wealthy, they’ll find ways to evade them. So very little money will be raised.
Now we skirt the edge of Constitutionality here. Reich states “Elizabeth Warrens’ 2% wealth tax will raise about $2.75 Trillion over 10 years.” First of all, that’s an accounting trick. Let me put it this way, every year, Reich claims this tax would raise $275 Billion, which is about 7% of the annual federal budget. That’s what Leftists have previously called “a rounding error.” It’s also only about 20% if the annual deficit. It doesn’t really matter if you’re overspending by $4 or $5, you’re still overspending.
The Constitutionality of such a tax could be contested under Article I, Section 9, Clause 3 which reads,
“No bill of attainder or ex post facto law shall be passed.”
A bill of attainder is a law that is directed toward a specific person or groups of people. A “wealth tax” that would affect only the top 1% (about 2 million people or 0.00625% of the population) could bump up against this Clause.
A “loophole” is an imperfection in how a law is written or interpreted. Taking advantage of loopholes is called tax avoidance and is legal. Tax evasion is where you falsify documents to pay less taxes (or don’t file or pay them at all) and against the law. Loopholes can be accidental or they can be intentional on the part of the law writer. The more complex the tax laws are, the easier it is to have loopholes. And with the current tax law running over 75,000 pages, that’s a lot of loopholes.
This was one of the reasons for the Flat Tax proposal. There were no deductions, no write-offs, no exemptions, no targeted tax cuts. Line 1, “How much did you make?” Line 2, “Multiply Line 1 by the tax rate.” Line 3, “How much have you paid already?” Line 4, “Subtract Line 3 from Line 2. If positive, send this amount in.”
Then Reich says “ 'for a 70% tax over $10 million' we would raise a whopping $720 billion over the next ten years." Again, per year that works out to $72 billion a year, or about a quarter of Warren’s 2% wealth tax.
Myth 10- The only reason to raise taxes on the wealthy is to collect revenue.
“Help us reduce the national debt?” Really Bob? Really?
Sorry Bob, the only way to reduce the national debt is if the federal government spends less than it raises in tax revenues. Just raising taxes (no spending cuts) is a horrible way to achieve that goal. In 1981, the federal government collected about $505 Billion in taxes and spent $578.8 Billion, leading to a spending deficit of $73.8 Billion. When Reagan left office in 1988, thanks to his tax cuts the government collected $949 billion that year. Thanks to Congress, the 1988 deficit was $155.18 Billion because Congress spent $1.104 Trillion. If Congress had kept spending level (or near to it), we would have been filling in that hole of the national debt instead of digging deeper.
Then Reich spills the beans by saying, “It’s to promote [income] equality and prevent oligarchy.”
So, a small cadre of people who get Political Science degrees in prestigious Universities and immediately enter into government service, then work to rise to positions of power in the federal government and basically dictating what is actually done, not necessarily what the elected leaders tell them to do, how is this not an oligarchy?
And if we confiscate the wealth of "The Rich," then who would have the incentive to start a small business with the intent of becoming wealthy? I mean, you put everything into your business, 80-100 hour work weeks, 3rd mortgage on the house, sell everything but the kids to keep things running until it takes off, then as soon as you become successful and get that big cash flow... the government takes most if not all of it.
Myth 11 – It’s unfair to raise taxes on the wealthy.
Let me put it this way. If you took every dollar, every asset of “The Rich” over $250,000, that would be about $1.5 Trillion dollars. At the current spending rate, that would fund the government from 12:01 January 1st until about April 30th at 8:30pm. There’s 244 days left in the year after we confiscate all the wealth of “The Rich.” And what are we going to do next year? There’s nothing left to take or tax from them. You didn’t shear the sheep and remove its wool, so it could grow more wool, you killed it, harvested its meat and other parts and there is nothing left.
Myth 12 – They earned it. It’s their money!
I just found a whole new level of stupid, and Bob’s his name. He sets up the strawman of Myth 12, then says, “[The Rich] couldn’t maintain their fortunes without what America provides… and a nation that respects private property rights.”
So he plagiarizes Obama’s “You didn’t build it” speech, then says "we live in a nation that respects property rights." Literally 82 seconds after Bob is talking about overtaxing “The Rich” to provide “income equality,” he then says, “…a nation that respects private property rights.” This makes my brain hurt. I’ve heard the phrase, “The logic is inescapable” before, for this instance I’m going to have to say, “The logic is unachieveable.” Bob is needing you to have the memory of a goldfish (11 seconds) to swallow his BS.
When we get right down to it, what is money but private property? Money is a measure of the value of my work product. The more valuable my work product is, the more money I get for a given period of time. Doctors are paid more than plumbers because their work product is more valuable.
And there you have it. My article on “What is money?” should enlighten you a bit as well.
A few years ago, the Panera Bread Company thought they would try a socialist experiment in a capitalist environment. Panera CEO Ron Shaich seems to have coined a new phrase for Socialism, namely "Conscious capitalism." He created Panera Cares, basically a Panera store that operated off of the Marxist phrase, ”From each according to their means, to each according to their needs.” The idea was the menu had suggested prices. If you could pay more, you were asked to. If you couldn’t afford to pay, you were asked to pay what you could. The experiment failed with the closing of the last store on February 15th.
What Panera (and Marx) failed to consider was the “enlightened self-interest” of people. It is a cornerstone of the human condition to pay as little as possible for anything, be it time, energy or financial resources.
When you have a set price for a good or service, people decide to buy on their judgement of, “is what I am getting worth what I am paying for it?” If a customer decides that the product isn’t worth what they have to pay for it, they don’t buy it. If you have no set price, I would be surprised if anyone paid anywhere close to the “suggested” price, let alone more. Most people would pay something, just out of social guilt or wanting to be fair. I would be very surprised if more than 5% of the customers paid more than the suggested price.
The problems with this concept were easily predictable and numerous, right from the start. The stores needed people with additional means to pay for those who didn’t have the means to normally eat there. So you have someone who is well dressed and groomed, while at the next table is a homeless person who was more concerned with making it to the next sunrise than hygiene. This made both people uncomfortable. One person didn’t want to eat sitting next to someone who smelled like a dumpster in the Summertime, while said smelly person didn’t want their odor (and things) intruding on the other person. Then you had drug use in the bathrooms, or people who didn’t want to use the toilet, so they did their business on the floor and so on.
By the time the last one closed, the homeless were prohibited from eating there more than a “couple times a week” and the only ones attending were starving college students. The revenue of these stores never got above about 70% of the expenses, so they were big money holes.
Again, the basic flaw in the plan should have been easily predictable to anyone who has a faint idea of how humans operate.
Socialism inevitably comes down to the muzzle of a gun because only the most naïve will willingly surrender the fruits of their labor to those who will not likewise produce. The major Communist states (Soviet Union, China, Cuba, North Korea and more) had to convince its citizens on a daily basis that they were living in a “workers paradise.” And if you didn’t believe them, they either shot you or starved you to death.
Socialism will never work for any length of time on its own accord. It must be constantly pushed forward by those forced to live under the system, with the muzzle of a gun in their back to “inspire” them to keep pushing.
I am beginning to think that the major problem is not excessive government, rather SJW-led corporations. We already know about Facebook, Twitter, et.al., banning people whose political views don't agree with management. And in ideas developed through Operation Choke Point, the financial strangling of people who have jobs or businesses deemed "undesireable" by the government. The latest effort to silence "undesireables" has resulted in accounts for Carl “Sargon of Akkad” Benjamin, James Allsup, and Milo Yiannopoulos being banned from Patreon.
The result of this is Dave Rubin and Jordan B. Peterson leaving Patreon (where they both derive a substantial portion of their income) and starting their own payment service. This, I believe could be the start of something that's been looming on the horizon, namely a "Conservative economy."
In 1986, Rupert Murdoch founded Fox Broadcasting Company. Murdoch did this because he saw the "Big Four" (ABC/NBC/CBS/CNN) being unabashedly Liberal in their reporting and views. So, Fox has made a serious effort to present both sides of an issue. They are clearly Conservative, however they do have real Liberals on their panels and they are allowed to voice their opinion. If there are any non-Leftists on panels on the other four, they are milquetoast centrists who couldn't argue their way out of a wet paper bag and are frequently shouted down. Fox became very popular very quickly because of a simple advertising strategy: "We're Not Them." By being a voice different from the Big Four, FOX attracted almost half of the country because up until then, the needs of that half of the country were not being met.
Now we are starting to see alternative platforms crop up. I discovered MeWe a couple weeks ago. It's a Facebook competitor who openly states they don't collect your information to "provide you with targeted ads." We anxiously await the Ruben/Peterson alliance (whatever it's name will be), and there are other websites and services who tell you, "We're Not Them."
I like the idea of platforms being platforms and not arbiters of what is good and proper speech.
I believe tariffs are a bad thing. If you read Economics in One Lesson, you will learn that tariffs are a tax on incoming goods. While that was the way the government raised revenue in the 18th and 19th centuries (no income tax), from the late 19th century to today tariffs have been used to boost the cost (and thus the price to you) of foreign goods above the same goods produced domestically as a protectionist measure. This is a Bad Thing in today's global economy because we import from and export to just about every other country. There is almost no product you can purchase today where all of the components are manufactured in one country. Also, if we impose tariffs on incoming goods, there is nothing stopping the country we imported from to impose tariffs on things we ship them. In the end, no one wins because the company loses business and the consumer purchases less because the price is higher.
It's been all over the news since Trump took office about the tariffs he has imposed on the EU, China and other places. "TRADE WAR!!!!" is what all of our news outlets headlines have been.
If you had listened to Trump himself, rather than what the MSM talking heads are saying what Trump says, you would have heard Trump say he "wanted to negotiate better trade deals with other countries."
So in a trade relationship with the EU, they slapped tariffs on our goods, while we had few, if any tariffs on EU goods. So Trump equals and exceeds the tariffs on EU goods, the EU threatens to escalate their tariffs and back-and-forth several times. Then Trump meets with the EU and says, "These tariffs hurt both of us. Let's eliminate all of them. What do you think?" In a not-very-amazing move, the EU agreed. I say "not-very-amazing" because when you look at it from a global business point of view, tariffs are unquestionably A Bad Thing.
So, Trump has done a Very Good Thing. With EU tariffs on US goods gone, we should get more orders from Europe for our stuff. More orders == more demand == more jobs. Now all he has to do is rinse, wash, repeat for China.
Yesterday, the NFL came out with a new rule, "players may remain in the locker room during the playing of the National Anthem, however if they are on the field, they must stand and show respect."
Since Colin Kaepernick first knelt two years ago, I have fully supported his choice to kneel. I said so in my post Sitting down for what you believe in. And since I supported his right, I hoped he would support my choice to not watch football games where this disrespect was performed. The 3 hours of a Football game was a place I could be in and not think about politics at all. Colin and all who followed suit destroyed that safe haven for me. It seems that millions of other Americans shared my views, because since that first kneeling, NFL viewership is down some major numbers. Major enough that the sales downturn is enough that the yells of the accountants are now louder than the Social Justice Warriors.
I am not naive enough to think Colin's Caper is the sole reason. You have many people "cutting the cord" and abandoning cable TV services, plus Millennials who are starting their own households are not getting cable TV in the first place, opting for Internet only and streaming everything. It may be also that Football was the last reason why people had cable TV at all. I am sure there are at least one reason for everyone who stopped watching the NFL. All that being said, Colin may have been the straw that broke the camel's back. I personally gave up watching all TV except Football over 5 years ago. I stopped watching Football as of the Colin Caper. Right now, I have broken the habit and interest of Football for so long I have zero interest in watching again.
Now, if the NFL had been smart and saw what would happen (almost anyone with a modicum of common sense would have seen this coming) and had Colin apologize and beg for forgiveness the Monday after he first knelt, I might have been still watching Football. But they didn't so now I'm not.
I do support the NFL for making this change, I understand it's the best compromise they can make between the fans, the advertisers and the SJW's. For me, it's almost enough way too late.
For all y’all who want to see a $15/hour “working” minimum wage, let me make this clear. It’s a math issue, like I’ve alluded to all along. The government cannot force an increase in payroll costs and not expect a business to either lower the product quality, number of employees or their hours, and/or prices to rise. It all boils down to the math of the numbers in a business’s Profit/Loss sheet.
… If you make $9 an hour, but generate $10.50 in revenue for your boss, a law that raises the wage to $10.45 may cause her to shrug and decide it’s easier to keep you on as long as she’s making something. But a wage that forces her to pay you far more than you bring in…. Continuing to employ you would just be bad business.
So let’s set the stage to open this discussion.
In April 2015, Seattle raised the hourly minimum wage from the Washington State mandated $9.47 to $10 or $11, depending on several factors, on its way to $15 in 2021.
So, let’s recap. The first step raised the minimum wage 5-16% and showed no significant ill effects on the Seattle economy. So far, so good.
Then on January 1, 2016 Seattle again boosted the minimum wage to anywhere from $10.50 to $13, depending on several factors. The second step raised (from the original $9.47) the minimum wage by 10-27%. According to The National Bureau of Economic Research (paywall, sorry), things started happening. When that second step hit, pay overall increased by 3%. That’s the good news. The bad news is the number of hours worked decreased by 9%, leading to these workers on average losing $125 a month in pay. This is where that math thing comes into play.
So if it’s a math thing, why didn’t the number of hours worked decrease by 3% and make it balance out? Administrative costs went up because with the increased minimum wage also came new regulations, increasing the administrative workload (and thus overhead) on the business.
Things have been harder on Joe Fugere, the owner and founder of Tutta Bella Neapolitan Pizzeria. He runs five restaurants -- three are within city limits -- and also manages 200 employees.
Fugere says he's always supported a $15 minimum wage, and still does. But an array of new regulations have collectively been tough on his business.
One example, he said, is a scheduling ordinance set to go into effect in July. It mandates that bosses must give workers their schedules two weeks in advance -- and requires them pay up if hours change.
"One piece of legislation after another, in a very progressive city, can add up," Fugere said.
He loves his city, but said he's hesitant to expand his operation there.
"If I were to open another restaurant today, I would not open it in Seattle," Fugere said. "In fact, I'm looking elsewhere." (emphasis mine)
So here you have Mr. Fugere saying he will expand his business, just not in Seattle because he can’t afford it there.
How can you say with a straight face that “raising the minimum wage helps the workers”??? Because when that worker’s wage went from $10.20 to $10.50, their pay (assuming a 40 hour week) went from $408 to $420, however that workers hours dropped to 36 hours a week (assuming that 9% reduction in hours). This means they only made $378 that week, which is a $30 pay cut from what it was before the pay raise.
In conclusion, what does this show? That Economics is a very complex science, made harder by the randomness of human beings. The laws of physics are pretty much universal (if you excuse the pun) across the universe. Economics will get a close but not exact result from a repeated given action. You could try the same experiment twice with the same set of people and not get the exact same result. The same experiment in another culture would also produce a similar, but not exact replication of the result.
Economics also shows some elasticity in it. In the example above, the first small rise in the minimum wage did not produce an appreciable negative result. However a second rise outside of an unknown trigger level produced a significant negative change in the result. If that second change had happened a year later, the result would probably have been similar to the first, i.e. negligible since the market had time to absorb the first change and stabilize to "the new normal" from it.
I am still doing research on the nature and demographics of minimum wage workers, you should see that soon.
I put this in my category of Economics rather the Obamacare because this is more of an economic plan than a plan to repeal/replace the ACA (although that clusterfuck should be taken out into the woods and buried alive).
This is a relatively simple plan, however it will be far from an easy plan to bring to life. There will be pain for many in the short term. But, like resetting a dislocated joint without anesthesia, once the initial great pain is over, the relief will be great and lead to a better quality of life. This is also not the exact or final version. However the overall concept needs to happen this way or it will fail.
I believe every person has the right to choose whom they want for all of the products and services they use every day. I believe they have the right to not necessarily act in their own best interests as well. Mistakes are how we learn and improve ourselves. Government should exercise restraint so it does not interfere with that process.
The free market and its incentive to drive costs down and quality up will be the major lever in every aspect of this plan. Insurance companies, drug companies, medical device providers and healthcare providers will have a constant pressure on them to keep prices and premiums down and services up.
The first step is to get government all the way out of healthcare. Medicare, Medicaid and the VA can be just like (and compete with) the private insurance companies. Every time the government gets involved with a private industry and starts subsidizing this or that aspect, the prices go through the roof because it becomes a third party-payer. There is you, the company that provides the good or service you seek, then the government. When the government pays for you, it does not care about the price or the quality of the good or service rendered to you. When that happens, prices skyrocket and quality tanks.
The second step is to get employers out of healthcare as well. Employers only started offering healthcare as a job benefit when there were wage freezes during WWII. This extra benefit helped companies lure talent to them. So, if the employer no longer has to subsidize the health insurance plan, they can just raise the pay rate of the employees commensurate with what they contribute now, or just pay it to the employees as a line on their paycheck for income.
Step three, healthcare ought to be available nationally. Because right now, if you change jobs or move to another area, your healthcare plan may not service that area.
Before I get into my idea, let’s talk about the present system so you know how things are done now. I worked for UnitedHealthcare for 5 years and was acquaintances with the two people who negotiated the contracts with providers. I also interacted frequently with the admin staff who handled the paperwork.
A healthcare provider (HCP), if they want to accept insurance from one or more insurance companies (IC) has to negotiate a contract with each insurance company. Each IC will charge different rates for the same service. IC A will pay the HCP $100 for a service 1 and $80 for service 2. IC B will pay $92 for service 1 and $98 for service 2. Each IC also has their own paperwork and procedures to submit charges. For medium-to-large HCP’s this requires at least one full-time administrative person per IC to process and track the claims to make sure they are filled out properly, correct any errors and make sure the HCP gets paid. The IC likewise has a veritable army of staff to process the HCP paperwork.
Hospitals in particular have multiple price structures. A few years ago I got to spend 5 days in the ICU and 7 days in a regular room because I choked on my own cooking and the ER doctor almost killed me trying to get it out. The “book” price (i.e. list price) for my stay was just over $125,000. Because I had insurance, $102,000 of that “disappeared” due to negotiated prices with my IC. My IC paid about $21,000 and I paid the balance.
The present system is a purposefully confusing mish-mash of prices, most of which are hidden from the consumer/patient. Even if you pay your HCP cash up front, what you pay is not necessarily what the IC pays.
So here is my idea. It’s so simple it’s actually frightening, mostly for the people who like to overcharge you.
The first step is IC’s tell you plainly and up front when and how much they will pay for services. Think a menu board at McDonald’s. The services are already detailed using the ICD-10 codes currently used to bill goods and services. Prices could be indexed according to the cost of living by zip code.
The second step is the HCP will also have a menu board for how much they charge for services.
First of all, all of this applies to non-emergency care. Emergency care, believe it or not, only accounts for 6% of medical spending. While it would be similar, I haven’t thought through the particulars for that side yet.
The actual execution of this new system goes like this:
1. You discover you have a need for medical services. 2. You select a HCP to perform those services. You consider your choices based on your priorities and criteria, using the variables of cost, quality and accessibility. You shouldn’t have to choose based on if they are “in network” or not. 3. You visit said HCP and have those services performed. 4. At the end of the visit you are handed a bill, detailed by ICD-10 codes. 5. Depending on your financial situation, you can pay it now or later. 6. You send said bill to the IC, who then reimburses you according to the plan you have purchased (deductibles, co-pays, etc.).
That’s it! What are your advantages? You choose your HCP, based on your priorities of price vs. quality, not a bureaucrat of either the IC or governmental kind.
Let’s say you need a regular office visit. The IC will reimburse you $90 for the visit. You have narrowed your options to HCP A or HCP B. A is a mediocre doctor skills-wise, but is very communicative and friendly. He charges $100 for this visit. B is a great doctor in the skills department, however his bedside manner is lacking at best. Your questions are either ignored or answered tersely. You get more information from his nurse than you do from the doctor. He charges $80 for his services.
Your choice (and not someone else’s) is which doctor you partake the services from. You can choose a great doctor who treats you as your symptoms, confident that he is methodical in his methods, complete in his diagnosis and treatment regimen, or go with a less-capable doctor who does good (but not outstanding) diagnosis and treatment and treats you as a person rather than your symptoms. This is your choice to either pay an extra $10 with HCP A, or pocket $10 and see HCP B.
But where do the market forces come in? Before you walk in the door.
Because the doctor has one set price for each service, they save on payroll by not having extra staff to deal with the IC’s. This lowers the HCP’s payroll costs and their prices can come down accordingly from less overhead. They also have market forces holding their costs down because no business wants to be on the high end of a price range of standardized services without offering additional services to make the higher price justifiable. If you have three gas stations relatively close to each other (physically and price-wise) and one of them sells gas for 20 cents a gallon less than the other two, which one will you stop at? Probably the cheaper one, unless you know it is a low-quality fuel that gives your vehicle trouble. Of course, if one offers a full-service experience (pumps the fuel for you, wash your windows, check the air in the tires, check the oil, etc.) they could probably charge 20 cents more a gallon than the others and people would pay the higher price for the services.
The same concept will apply to the IC’s and other medical-related industries, such as pharmaceuticals and medical devices. They will have to deal with market forces. If pharmaceutical company decides to overcharge on a product (e.g. the 1,000% price hike of epi-pens), they will suddenly find themselves with a lot less customers, who will seek cheaper alternatives, or use it less often. Our seniors on Medicare are faced with these choices today when they fall into that “donut hole” of coverage. There would also be new companies which would have the incentive to bring a new product to market that is just as effective and a lot cheaper.
These market forces foster competition in providing goods and services with more value and quality for the same or lower price. We see that every day right now. HCP's who are of poor quality, overcharge for their services and all that bad stuff would be quickly run out of business because word gets around quickly today on various referral sites and social media on both good and bad companies.
Here is an example of how the free market delivers better products or services for the same or lower price. My first car was a base 1963 Dodge Dart. It was a “slant-6”-cylinder motor, manual “three on the tree” transmission, hand-crank windows, no A/C, no airbags and lap belts. The base model cost $2,385 back then, which in today’s dollars works out to be $19,136. A base 2016 Dodge Dart costs about $22,190, with a V-6 engine, automatic transmission, electric windows, A/C, three-point seat belts, airbags, and a whole bunch of other features that in 1963 would be considered luxury features, if they were available in any vehicle at all. Not to mention the 2016 Dart is a lot more comfortable. Yes, today’s Dart is more expensive than the older one, but not by a large margin, which is more than offset by improvements in safety, comfort and convenience.
But, you ask, what if the patient doesn’t pay the bill and pockets all the money? Then their physical pain will translate to a legal pain. The amount of medical bills covered by insurance, reimbursed to the patient but not paid to the doctor would be like student loans, not able to be discharged under bankruptcy.
Do I have any evidence that this model will work? I sure do! The Surgery Center of Oklahoma is one of several practices that accept cash only. The Ocean Surgery Center is another. SCO has one facility and performs over 25 surgeries a day, using a "cash, one payment, up front and no insurance accepted" model. Their prices are published on their website, are soup-to-nuts (all pre-operation consulting/testing, the surgery itself, overnight post-op stay and followup care) and their prices are 50% and more off hospital prices for the same services. Time has an article on SCO and "direct primary care" where you pay a monthly fee to your PCP for all your care offered there. Business Insider has separate articles on SCO and Direct Primary Care. I think DPC is a great start, however what do you do when you need services outside your PCP's office? Hence, my idea above.
This will not be an overnight process. In all actions economic, once the change happens there will be a 6-18 month period of “fluctuation” while the market adjusts to the new conditions and everyone sorts out the changes and their ramifications. Prices and components of services will jump and fall in price. But like that dislocated shoulder, once that initial pain and the echoes of resetting the dislocation have passed, the healing can truly begin.
The City initially estimated that they would collect $46.2 Million in revenue between January 1st, 2017 when the tax started and the end of its fiscal year June 30th. Through some accounting sleight-of-hand known as “revised projections,” city officials stated that they have “adjusted” this number to $39.7 Million, a 14% downward revision. Too bad the actual receipts came up short of even that number, at $39.46 Million.
As with most taxes, it hurts those on the bottom of the economic ladder the hardest. Those with transportation engaged in the classic American pastime of tax avoidance by shopping outside Philadelphia where the tax was not collected. Those who couldn’t drive out to the suburbs to shop made the difficult choice to buy less food or less soda.
Please notice in the receipt below that the tax is over half the price of the product and the transaction was cancelled.
Then there are the secondary economic effects of such a tax, between Coca-Cola (40) and PepsiCo (80-100) over one hundred people have lost their jobs at the bottlers because of the drop in sales. PepsiCo is also pulling all of their 12-pack and 2-liter products from all stores that sell those products in Philadelphia. I don't have any information on if or how many people working at grocery stores, convenience stores and other places that sell soda have lost their jobs due to decreased sales at their store, or how many stores had to close because the drop in sales killed their profitability.
There is a (somewhat) good news part to this rather stupid idea, beer is now less expensive than soda, so Philadelphians are now consuming cheaper but higher calorie beer and thus becoming more overweight than they would have been if they had stuck with the now unaffordable soda. I called this a stupid idea because the tax covered all sugar-sweetened sodas, fruit drinks, sports and energy drinks, sweetened water, pre-sweetened coffee and tea and mixers in alcoholic drinks. Starbucks and other places that prepared the drinks were exempted. To show you that this is about 1) controlling the citizens and 2) raising money for the city coffers by taxing citizens to the breaking point, zero-calorie diet drinks are also subject to the tax. Thomas Farley, the head of Philadelphia’s health department admitted his stupidity when he explained why diet drinks are included: “People will be less likely to switch from sugary drinks to diet drinks, but they may be more likely to switch from sugary drinks to water, and that is what we want.” (emphasis from National Review article)
So again, Liberals show their inability to grasp second-level thinking. They institute a tax and base their economic budgets on past levels of consumption, never considering for a second that their tax might cause a decrease in demand for the product they are taxing.
When (not if) the taxes come in short of what the politicians already spent, they face a fiscal crisis. This means the services supported by the tax are now cut back or even eliminated, while the citizens have less money in their pocket. Both lose in the short and long term.
Liberals are very similar to the old-time snake-oil salesmen. They talk fast and use words you don’t understand to get you to trust and believe them. Case in point, .
In 2 minutes and 30 seconds, Reich fast talks his way through seven “economic lies.” What he gives you are actually non-substantive soundbite talking points that don’t inform you, they just give you words to parrot. Because they are soundbites given to you that you haven’t actually read or researched about them, you can’t back up the talking points when someone asks you a question that requires more information or thought than the initial talking point. This is why I think the Left resorts to yelling, name calling, personal destruction and their favorite card, violence or the threat of violence. They have to shut down anyone who challenges the talking point because there is nothing behind it. Most of their positions are indefensible in the face of actual scrutiny.
I would have loved it if he had spent an hour on each one, giving reasoned and verified data on what he says. Of course he won’t because once you actually see the data, it will be obvious to anybody with a modicum of reasoning that he’s selling you snake-oil (i.e. empty promises).
Case in point: #6, Social Security is a Ponzi scheme.
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Transcript: Wrong. It’s solid for 26 years (until 2037) and would be for the next century if we lifted the ceiling on income subject to Social Security Payroll taxes.
Now, if you did not know who Mr. Ponzi (the caricature he drew at triple speed) was, or what a Ponzi scheme is before you watched this clip, do you now know what a Ponzi scheme is or why Social Security is not a Ponzi scheme? I didn’t think so.
If you already know what a Ponzi scheme is, did Mr. Reich explain anything about it at all, or did he just let us know that Social Security is solvent for a while (as I wrote this, that 2037 point has drifted down to 2033 according to Social Security themselves) and we can push the “solid date” to 2111 if the rich pay more taxes.
To explain and give context, a Ponzi scheme is named after Charles Ponzi who used this technique in 1920. The scheme entails taking money from investors on a continuous basis, paying the early investors with the money “invested” by later investors.
Let’s say Mr. Smith is convinced by Mr. Ponzi’s salesmanship about “guaranteed income” and in January Smith gives Ponzi $1,000 on Ponzi’s promise that the “guaranteed income” will net Mr. Smith a return of his investment of $250 by June. In May, Mr. Ponzi convinces Mr. Jones to invest similarity as Mr. Smith. Mr. Ponzi then takes $250 of the $1,000 Mr. Jones gave him and gives it to Mr. Smith. This convinces Mr. Smith to invest $10,000 with Mr. Ponzi, hoping to reap a benefit of $2,750 (he is still earning that “$250 profit” on the first $1,000) just in time for Christmas. Now Mr. Ponzi has to come up with four new investors, to pay out the $3,000 to his “investors” ($2,750 for Smith and $250 for Jones). Why four investors? Because Mr. Ponzi has expenses, you know...
Eventually, this all comes apart because Mr. Ponzi cannot continue to recruit the number of investors necessary to continue paying the “profits” out to earlier investors indefinitely. This is called a geometric progression. If Mr. Ponzi needed two new investors for every current investor, the progression would go something on the order of 1, 3, 9, 27, 81, 243, 729, 2,187, 6,561 and so on until he can’t recruit enough people or he figures his bank account is big enough and he flees the country.
When my parents started working as adults around 1935, they paid into Social Security and their SS taxes helped pay the benefits of Ida May Fuller (the first recipient). Back then, there were seven people paying SS taxes to a single recipient receiving benefits. Also, it was kind of a rare thing for people to make it very far past 65, so those that did receive benefits were on the rolls for only a couple of years.
When I joined the Navy, my SS taxes were part of the checks my parents received. My dad retired in 1979 after having paid into the system for 45 years, my mother for about 15 years, being a stay-at-home mom and occasionally working part-time after they got married. They collected SS benefits for 22 years until they passed in 2001. Today, there are only 2-3 wage earners paying to the system for every recipient.
In the 80’s Congress began “raiding the Social Security Lockbox.” What that actually means is the Social Security Administration began purchasing government bonds as an investment. Today, there are Billions of dollars’ worth of these bonds in the SS account, instead of actual liquid cash. These are the “IOUs” that everyone is screaming about.
Remember, it is these government bonds that allow the government to overspend, creating the annual deficit. For the large entities (Social Security, foreign governments, investors, etc.) that purchase large amounts (Millions and Billions worth) of government bonds , they purchase a bond for a fixed term. In order to keep the fiscal juggling act going, when that bond matures, many use that money to immediately buy a new bond. Depending on circumstances, the interest on the bond may go into the purchasers pocket or be used to buy more bonds.
Social Security has been buying bonds, as well as additional new bonds as the old ones mature. In 2033, Social security will have to start “cashing in” those bonds without purchasing new ones because there won’t be enough people paying taxes to support the payments to retirees. This is when they (and we) might find out that the Government can’t pay the full amount on those bonds, if at all. That’s when the juggling act falls apart. That’s when we have more people asking for a return on their investment than SS can take in from new “investors.”
And that is why Social Security IS a Ponzi scheme. Anyone who tells you differently is bullshitting you.
This is part 4 of the three-part “Everything is Rationed” series.
The primary point of this part, sub-titled “ethical dimensions of a responsible business” is that I hate bean counters.
Who (or what) are “bean counters”? These are the people who make the decisions concerning the costs of the parts used in their product. Part A1 costs the company $1.00 to purchase. Part A2 is by another manufacturer, is almost as good as Part A1, however the company can buy it for 90 cents. The “Bean Counter” will almost always go with Part A2 on the sole basis its 10 cents cheaper.
Bean Counters also like to produce products with “planned obsolescence.” This means one or more parts in a product are designed to fail after a certain period of use, usually several months past the end of the warranty. When (not if) those parts fail, a newer model is now out at the same or less price, with more features. So you have the choice to either fix the broken equipment (at a cost close to or exceeding a new unit) or discard the broken unit in favor of a new unit. This is the downside to our consumerism economy.
Thinking about this, I was reminded of a collection of Sci-Fi short stories from the 40’s that I read as a teenager called Venus Equilateral (Wikipedia, Amazon). It was about a station that relayed messages between Earth, Mars and Venus when the Sun interfered with direct communications.
In the story QRM—Interplanetary, a pointy-haired boss came on the station to “cut expenses.” He ended up spacing a room full of genetically-modified sawgrass that was used to replenish the oxygen in the station’s air. He thought “equipment” replenished the air and he saw this room was “full of weeds.” The PHB thought the plants were wasting space. This “cost-cutting” almost suffocated everyone on the station.
To cut costs for the sole reason to “maximize profits” or “boost the quarterly report” is a bad reason in the long term. Because you are probably sacrificing future profits for short-term gains today.
Case in point: the 6-pack plastic ring used to keep aluminum cans together. They are easy to make and inexpensive (at less than a penny each). The bad news is, while the rings are photo-degradable (and thus not likely to end up strangling wildlife like they used to) and while they do break down into smaller bits, they do not fully disappear. There is a long-term negative environmental impact from them and all similar plastic products.
Then we have these:
A fully biodegradable product that is compostable and edible by wildlife. The problem? A current cost of 15 cents per unit.
If companies that sold their product in cans made enough demand for this kind of holder, the economy of scale would kick in and the price per unit would drop. If Anheuser-Busch and one or two other “big name” companies decided to use these, it would not be unreasonable to expect the cost per unit to drop under a nickel.
Would you pay a nickel more a six pack if that recyclable, compostable and edible can holder held your beverages together? I don’t think you’d even notice the price difference. If you knew the better environmental impact of that holder, you might even switch brands, who knows.
I also found this article, Christian-Based Firms Find Following Principles Pays from the 12/8/1989 Wall Street Journal. Sorry, you have to pay to see it. in the article, it talks about business who adhere to Christian principles and how their growth is significantly higher than those who do not engage in these principles. You don't have to be Christian to adhere to these principles, which entail actually serving the customer to help them grow their business, treating the customer fairly and most importantly treating the employees fairly. When Hobby Lobby made negative news due to their stance on abortive birth control, the MSM never mentioned that they pay their employees $14/hour to start. The MSM never clearly said that Hobby Lobby offered sixteen barrier methods of contraception and only opposed four abortive methods.
In case you didn't know it, In-N-Out Burger puts Bible verses on their shake cups, burger bags and other packaging. They are small, so you have to hunt for them.
James Freeman Clarke is quoted as saying, “A politician thinks of the next election - a statesman, of the next generation.”
I can reframe this slightly to say, “A bottom-line businessman sees only the next quarterly numbers – an ethical businessman sees the impact of his business in a hundred years.”
If we had enough “ethical businessmen” in our companies and corporations, we would have little or no need to governmental bureaucracy to micromanage them.
How about all of us start treating our planet as something that we should leave to our children better than how our parents gave it to us?
This iswas to be the last installment in the “Everything is Rationed” series.
A woman taking care of her children while the man is out gathering food for the family is the very foundation of everything we have today. That’s because what kind of society we end up with depends on what the mother instills into her offspring long before the father gets hold of the children to show them the world.
The ground floor of society built upon that foundation and upon which everything else stands is... the private business in a free-market economy. I can hear the snorts of derision and eye-rolling from here, but hear me out.
I know the United States is founded upon the myth of the “rugged individualist,” the guy (or gal, I’m not sexist) who can survive on their own out in the wild. This is a myth because one person can’t do it all. You might think of frontiersman like Daniel Boone and his ilk. Those guys actually had a pretty extensive logistical train behind them. The rifle and ammunition they carried, the saddle and shoes on the horse, the preserved food they carried and more. All these goods were produced by someone, not to mention the reason why those men were out there in the first place was to provide a service, namely to explore the land, determine its resources and how to move people farther West.
I’m talking the “Man vs. Nature” level where you have nothing but your mind and your hands. Think of the tasks a single person has to do every day to make sure they have a good chance of survival:
Gather/kill food
Build/maintain shelter
Develop tools/weapons for protection
Gather wood to build a fire
Build/maintain a fire with the gathered wood for warmth and cooking food
A single person does not have enough hours in a day to do all of these things at a level where they can survive for an extended period.. You spend a day building a shelter and you go hungry because you didn’t gather food to eat. Build weapons and spend a chilly night without heat.
This is why people started communities and societies. One or two people can hunt/gather for the entire village, one can build tools and weapons for everyone and so on. This was how bartering started. Trading whatever you have developed/gathered for what another has developed/gathered. Half a pig can get you a stone axe or a spear. A couple of chickens can get you some treated animal skins for clothing and so on.
The barter system is the first stage of a free-market economy. The shortcomings of a barter system is you can have more goods and services that you need, yet the people who offer what you need aren’t interested in what you have to offer. If the Tanner already has a bunch of chickens and all you have to offer him are more chickens, he won’t trade with you. You have to trade your chickens for bread from the baker, then trade half of the bread with the butcher to get some beef, then take those items to the Tanner to get your skins. A lot of your time gets wasted in trading for other things to get what you need. This is how money got invented, but that’s another article at a later time.
A business who combines ethical practices with reasonable profits is our goal. All businesses should and need to “charge for all the market can bear,” meaning that it is a balancing act between the available supply and the overall demand of the product or service.
Using the free market to determine the price of a good or service is not perfect, however it is the best system we have. If a business charges (or is forced to charge by government) a price that is below the costs incurred, then the business must close.
Example: net cost (all expenses, no profit) for a business to produce a widget is $100. The business sells it for $110 to make some profit. If the market won’t buy it at $110, but will at $90, the business either has to find a way to product it for a net cost of $80 or close. Same thing, if the government mandates that it be sold at $90, there is no reason for the business to stay open (unless it’s at the barrel of a gun).
In times of crisis/unrest/upheaval, prices will swing drastically in response until things are normalized.
Let’s say there are 50 gas stations in a town, when the town gets hit by a hurricane. 49 of those stations have their gasoline ruined by floodwaters. For whatever reason, that last station keeps their gasoline uncontaminated. This station owner now has a choice. He can either sell his product at the pre-hurricane price, not knowing when he will get a new supply (a day, a week, a month), running out in an hour and facing thousands of angry people demanding his product,
OR
He can charge an elevated price to discourage many customers, have more money for himself and employees to live off of until the supply resumes, and he can pay the elevated price for the next tanker truck to restock his tanks. Because if the refinery is nearby, they will also likely have damage, contaminated products and the refinery faces the same dilemmas the gas station owner does.
In the overall sense, the consumer is at the end of a long train of transactions that culminate in the product or service they purchase. There are hundreds of businesses mining the raw materials, producing components, assembling the final product and the transportation for all of the bits and pieces between companies and delivered to your door.
When I grew up near Warren, Ohio, I drove by the Lordstown plant all the time. This plant made the wiring harnesses for GM vehicles. Metal and plastic went in one end and completed wiring harnesses came out the other end. They made the wire, coated it with the insulation, made many of the clips and connectors and put it all together, under one roof. This kind of manufacturing does not happen anymore.
Today a constant stream of pre-made wire, clips, connectors, and all the other parts are made by sub-contractors, which ship their product to the new plant (Lordstown closed in the 80’s) who then does the work necessary to turn the components into wiring harnesses. Then those finished products are shipped off to the various assembly plants across the country and the world, to be one of the many components that make up an automobile.
I just realized that I need to expound on the “ethical dimensions of a responsible business” to tie this whole series up and that will take up a whole article in and of itself. Research for that one is ongoing and hopefully I will have it done in time.
Look back here next week for the fourth part of this three part series.
In the intensive care unit, I learned that I had been born with a defective aortic valve. Basically, I’d been walking around my entire life with a ticking time bomb in my chest. How could I not have known? In high school, I ran track and played football; every summer, my wife and I took long hikes in the Swiss Alps. But an experienced nurse was not surprised. “With your condition,” she said, “the first symptom is often sudden death.” OK, I replied, what’s the second symptom?
All well and good, I’m glad that Mr. Lamar managed to survive, spending 47 days in the hospital and rehab and was only out-of-pocket $1,455.
However, I deal in statistics, not anecdotes, which is what the above article describes. You can read my views on that in my earlier article, Anecdotal vs. Statistical.
Now let’s take a look at a socialized health care program that’s been rolling for almost 70 years. That way we can see the inevitable result of long-term use of socialized medicine. Rationing of NHS services ‘leaving patients in pain and distress’, says new report. Mind you, this is a UK paper reporting on a NHS (National Health Service) report. This report is detailing and scathing in its assessment of the quality of care for the Subjects of Britain.
The NHS was created in 1948 when the Labour Party (their Liberals) created it. The bad news is, shortly after that when Conservatives gained power, they kept and expanded it. It’s been rolling along ever since.
Another article broaches the idea about drafting “junior doctors” from India and Pakistan, as well as forcing all graduating doctors from medical school for five years to make up for the lack of practicing doctors.
Then you have staff performing procedures they are not trained to do and doing them without supervision. As in student Nurses being required to do Nurse level and higher (Physician’s Assistant/Doctor) procedures. Add in a medical death rate 45% higher than the US is and that’s just on the staff side.
There are also reports where patients wait hours (and sometimes die) on gurnies parked in hallways. Because all of the surgical resources are tied up doing the emergency work, elective (i.e. non-emergency quality of life) surgeries wait months. Like, 12-18 weeks on average.
Because there isn’t enough money being allocated by the government to adequately address the needs of everyone, many go without and the quality of care those that do manage to receive care is declining rapidly. Once you understand the situation the UK is in with their NHS, multiply that by 5 and then some, because the US has five times the population.
Please, tell me again how wonderful the NHS is and how much of a blessing it would be to the citizens of the US. With a straight face.
This will be the first of three interrelated articles. This article and the concepts I will discuss here provide the foundation for the others.
The first concept I need you to understand is nothing is unlimited, everything is rationed. The term ration is defined thusly:
As a noun: a fixed allowance of provisions or food, especially for soldiers or sailors or for civilians during a shortage
As a verb: to restrict the consumption of (a commodity, food, etc.)
Everything there is on this planet, oil, iPhones, even the air we breathe is limited to some extent and has to be rationed. Don’t think air can be or needs to be rationed? Go SCUBA diving. The air you need to breathe and live, you can only take one ration (what’s in the air tank) down there with you. If you exhaust your ration of air, you either have to leave the water and go back to where air is plentiful or die from the lack of air.
There is also a price and a cost associated with everything. A price is what we pay in monetary units (Dollars, Rubles, Yen, Euros and so on) for a good or service. The cost of an item is what we have to do to acquire the necessary amount of monetary units.
Say you want to buy an iPad. The price for a basic one is $329. The cost for me to acquire that $329 is about a weeks’ worth of work. For someone making minimum wage, it’s more like two weeks of work. The amount of work to acquire this item can be reduced if we are willing to pay other costs. This may mean eating ramen for a week, or paying this month’s utility bill next month. Those costs (low quality food, late fees and/or possibility of getting utilities cut off) can be used to temporarily offset the total cost to obtain that iPad. You will still have to repay the other costs later but those are decisions are for you to make.
iPads themselves are rationed because there are a finite amount of iPads out there available to purchase. If there are 10,000 iPads for sale and 20,000 people want to buy one, then the seller can raise the price until only 10,000 people can afford to get one, or leave the price alone and have 10,000 people go without until more are manufactured. Or one person who owns one can decide to sell their iPad to someone who really wants it and is willing to pay more than the $329 MSRP/RRP (Manufacturers Suggested Retail Price/Recommended Retail Price).
Healthcare is also rationed. A single doctor can reasonably see about eighty-four patients a week. This is 15 minutes with a patient and 5 minutes to do the paperwork (prescriptions, tests, chart documentation, etc) necessary to treat the patient. So that’s three patients an hour, eight hours a day for 3 and-a-half days a week. One day he does work in the hospital, the last four hours in his 40 hour week he is learning about new developments in the medical field and training to gain new skills.
What happens if a hundred people needs his knowledge and skills in a week? He can only see eighty-four. He has to ration his time. This can be done two ways.
First, he can apply free-market principles and if someone wants to pay the doctor extra to get to the head of the line, then those who can pay more get seen before those who can’t. Or
Second, he can apply a Socialistic principal and Triage (a French word, meaning to sort) his potential clients according to criteria that he (or a bureaucrat) sets. It could be those who have the direst need of his services, or who’s been waiting the longest, it doesn’t matter. Sixteen patients have to wait until next week or see another doctor. If one of those sixteen is Bill Gates, then he goes to another doctor or again applies free market principles to slip some extra cash to the doctor to get a priority slot.
Price controls (the price of a good or service that is set by government rather than free-market forces) guarantee rationing. How is that you ask? That’s a great question and I’m glad you asked!
Let’s go back to our iPad example. We still only have 10,000 iPads available and 20,000 potential customers. But the Deputy Assistant Under Secretary of Price Control decides, “That $329 price for an iPad is too high. Let’s make them $159 each.”
The chaos that bureaucrat unleashes is astounding. Because when the price hits that $159, there are no longer 20,000 potential customers, there are now 60,000. Sixty thousand people fighting over ten thousand iPads. The result is now massive rationing because only one person in six can get an iPad. Who decides who gets one and who doesn’t? First in line? Age? Political affiliation? Friends of the bureaucrat?
And what happens when Apple says, “We can’t make a profit selling them at $159, so we will stop making them.” The end result is several hundred people out of a job and 40,000 people who won’t get an iPad.
This is a universal problem because you can replace “iPad” with any good or service and “Apple” with the company that offers the good or service and you will get the same end result.
For those of you with Socialist leanings, you might put forth the supposition that the government should subsidize Apple and give them $170 per iPad so Apple could continue to produce iPads and the customers still get them for $159. What makes you think that the money itself is not rationed? If the government prints and prints money for these subsidies until the money is worthless (1930’s Germany, Venezuela today) the value of the money becomes irrelevant and thus you effectively run out of money.
In the end, all resources need to be managed to make sure that you have those resources today and tomorrow.
Last week, officials from the Venezuelan government (unsure who, as the economic minister Ramon Lobo is denying this happened) seized control of the General Motors plant down there. This comes after Kimberly-Clark had a factory seized, Coke, Pepsi, Mondelez (they make Oreos) and many other companies have abandoned or severely curtained operations in Venezuela. Supermarket store shelves are empty, bread makers have been enslaved to make bread, the list keeps expanding.
The Venezuelan economy has collapsed 18% in 2016 alone, which has been going on since 2014 when the oil market bottomed out.
This is what happens in a government-controlled economy. Let me apologize ahead of time. If you think a government bureaucrat, either at the state or federal level, should be making decisions on how you should run your business, you're an idiot. Here is Bernie Sanders admitting to that at the 2:20 mark of this video:
Here are Bernie's words, in response to the business owner's question, "So my question is, how do I do that [provide health care] without raising prices to my customers or lowering wages to my employees?":
"You see, the difficulty is also, is that I'm not much of an expert on hairdressing in general, and certainly in Fort Worth."
Unless that governmental official has owned a successful business in a particular industry, they will not have the expertise on how to run/control/grow that industry, any decisions made by them will ultimately end in disaster. Sure, they might get a couple of things right, but only through pure chance.
So, when bureaucrats nationalize, then destroy an industry, what do they do after there is nothing left? Nationalize another industry! Wash, rinse, repeat.
This picture seems to sum up how command economies "expand." From the power that comes from the barrel of a gun.
Margaret Thatcher sums it up thusly:
I would much prefer to bring them [the Labour Party] down as soon as possible. I think they’ve made the biggest financial mess that any government’s ever made in this country for a very long time, and Socialist governments traditionally do make a financial mess. They always run out of other people’s money. It’s quite a characteristic of them. They then start to nationalize everything, and people just do not like more and more nationalization, and they’re now trying to control everything by other means. They’re progressively reducing the choice available to ordinary people.
So, now I need someone to tell my why governmental control of an economy would be a good thing. Venezuela is collapsing, the Soviet Union collapsed, China is transitioning to a market economy (at China's speed, which will take another 50 years). Don't point to the Nordic States. They have open markets with large social supports (and a tax rate that starts at 40%). No command-driven economy has ever flourished like open market economies.
This article stemmed from doing my due diligence in researching for the article Have you noticed?, I started reading about the Gender Pay Gap that was the basis of Obama’s EO that Trump abolished with one of his EO’s. I had to split it into a pinned post of its own, The Gender Pay Gap to detail what the issue is about, and then this article about the disingenuousness that exists when your research shows what you don’t want it to show.
The overall lesson of this article is supplied by Mark Twain:
He uses statistics as a drunk uses a lamp post: for support rather than illumination.
Numbers are numbers and cannot show anything but facts. If you collect the numbers incorrectly or incompletely, or you parse the data to show what you want rather than the logical conclusion the whole data shows, then you are lying. You could say “obfuscating,” “exaggerating,” or any of several other adjectives, but they all come back to lying. The context of the subject and data will determine if the lies are from incompetence or intentional.
Basically, the basis of the “Gender Pay Gap” says that women make 77% of men’s earnings. Some Liberals love to drag this “statistic” out at every possible opportunity, which was derived from taking the average earnings of all full-time female workers and comparing it to the average earnings of all full-time male workers.
Now comes another applicable quote, this one by Neil deGrasse Tyson:
In science, when human behavior enters the equation, things go nonlinear. That's why Physics is easy and Sociology is hard.
In other words, when human choice enters the equation, numbers now have other factors that change their context and thus their significance.
The curious thing is, the link to the document on the American Association of University Women website in both articles leads to this image:
My curiosity, piqued before, now has gone on full alert. Here are two articles that say the gender pay gap is 7 percent. They reference a document that proves this. When you go to try and find this document however, you get the above image. Someone is lying here. I do want to make clear that I am not stating or implying that AAUW intentionally hid this document from these articles. It could be merely a broken link due to an upgraded version of the document, or the document was moved to another directory. I will confess my website is probably guilty of that somewhere. What I am saying is that their data shows way different results than what their images are saying.
I have detailed the why and how women make less in my Gender Pay Gap post and I will not repeat it here. Suffice it to say is that the “Gender Pay Gap,” is there, but it’s 7 percent, not 23 percent. The 16 percent (23 - 7 = 16) are things like the particular career chosen, negotiation of job pay/hours/scope and so on. They spend 63.5 out of 64 pages decrying this humongous pay gap, yet if you read, really read this document, you will see one sentence in the Executive Summary on page two and this paragraph at the end of page 20. The sentence in the executive summary is a summary of this passage:
One-third of the pay gap is unexplained.
Although education and employment factors explain a substantial part of the pay gap, they do not explain it in its entirety. Regression analysis allows us to analyze the effect of multiple factors on earnings at the same time. One might expect
that when you compare men and women with the same major, who attended the same type of institution and worked the same hours in the same job in the same economic sector, the pay gap would disappear. But this is not what our analysis shows. Our regression analysis finds that just over one-third of the pay gap cannot be explained by any of these factors and appears to be attributable to gender alone. That is, after we controlled for all the factors included in our analysis that we found to affect earnings, college educated women working full time earned an unexplained 7 percent less than their male peers did one year out of college (see figure 10; see also figure 13 in the appendix).
Let me translate that passage: “After the variables for human choice to select a less-than-optimal career path is accounted for, there is a pay gap, but it’s less than the numbers we want to promote, so while we are mentioning it to be ‘honest,’ this will be the only mention of it.”
There is also a subtle accounting trick being used here as well that you won’t see if you’re not looking for it. Have you noticed it?
Let me rewrite the last sentence from above and shift it to the same measurement value:
That is, after we controlled for all the factors included in our analysis that we found to affect earnings, college educated women working full time actually earned 93 percent of what their male peers did one year out of college.
Compare “Women makes 77 percent of what a man makes,” and “Women really make 7 percent less than a man,” versus “Women makes 77 percent of what a man makes,” and “Women really makes 93 percent of what a man makes,”
Does that not change the whole context of the case? It sounds very different and a whole lot better than the doom and gloom AAUW is pushing, does it not? In my pinned post conclusion I do state that we should work toward eliminating that 7 percent difference.
Just as an aside, what is AAUW's "solution" to this "problem"? You guessed it. Government intervention by way of laws and regulations to mandate equal pay.
This is why when you see a lot of graphs and numbers being thrown around, it always merits a second, hard and detailed look at the raw data.
Before I begin this, I want you to have some concepts rolling around in your consciousness.
First, I found these words from Calvin Coolidge the other day:
A government which lays taxes on the people not required by urgent public necessity and sound public policy is not a protector of liberty, but an instrument of tyranny. It condemns the citizen to servitude.
Those words tie nicely into my original starting point for this article:
When people die, any debts they have end with them. Secured assets like cars and houses go back to the note holders unless the heirs purchase the house/car or "reaffirm" the debts and continue the payments. Then everything of value that is remaining is sold to pay for any remaining debts (credit cards, student loans, etc.) of those who make claims against the estate. If the deceased’s estate does not have enough assets to pay all of the debts, then those creditors are stuck with the debt. They have no way to get their money back.
Now, imagine we do away with that concept. If your estate does not have sufficient money to pay all of your debts, your creditors can transfer your unpaid debts to your heirs. Would that change how you manage your current financial affairs? Are you okay with leaving your credit card and/or student loan debts to your children?
According to Nerd Wallet, the average US household holds a total of $16,700 of credit card debt and $49,900 of student loans. Be honest with yourself: would you be okay with dumping that debt on your children upon your inevitable demise?
If foisting your excesses upon your children does not sit well with you, why are you okay with the federal government doing it to all of our children?
This needs to be said again, and again, and again until it is hammered home to everybody:
Do not look to Washington to give you money and services, nor to help you whenever you encounter a difficulty in life. Look to your community instead.
Recently, I’m sure you saw the news headlines about President Trump cutting Meals on Wheels out of the budget. Listening to the MSM, you would think Trump shut the entire program down. The truth is a little different. MoW is a private organization and Trump cut off direct federal funding of MoW, which totaled 3% of their entire budget. The rest of the funding comes from donations from state and local governments, corporate sponsors and individual donations.
To be fair, future scheduled cuts of federal block grants to the states can cut up to another 18% from the MoW budget and that will hurt. The good news is, thanks to MSM misrepresentation of the initial facts, private donations to MoW have surged.
You may think that the MoW money is insignificant, however we need to do it to all programs like this, which I will explain why in a minute.
Consider that the US government has $20 Trillion in publicly held debt outstanding. Our “Unfunded Liabilities” (known expenses we will have to pay in the future) total $127 Trillion.
$127,000,000,000,000.00. That’s a lot of zeros. Let me describe it this way to give your head a chance to wrap around it:
A stack of 10,000 $100 bills ($1 Million) takes up a stack 12” by 12.5” by 4.3”, which comes out to 645 cubic inches or just over a third of a cubic foot. Now imagine your average Wal-Mart Supercenter. There is about 250,000 square feet of floor space in that building and it’s about 30 feet to the rafters. That’s 12.96 billion cubic feet.
To visualize $20 Trillion using $100 bills, we could fill that Supercenter from wall to wall and floor to rafters. At that point, there is still enough left to build a block in the parking lot that would measure 100’ wide by 100’ long and 30’ high.
For the unfunded mandates, figure 5 more Supercenters on top of that. That’s the debt we have left our children.
I created this visualization to try and give you an idea of the problem. I am not a Pollyanna who thinks “cutting the budget” alone will fix this problem. We the People have been electing people to Congress for over 50 years that are running the backhoes that are digging this fiscal hole. It will take 100 years of hard, concentrated fiscal discipline to undo what these Congresscritters have done to our children.
But like I said, we could cut the budget to zero, totally disbanding the federal government while still collecting all of these taxes and it would still take decades to get close to catching up.
As Dave Ramsey says, “If you’re in a hole, the first step is to stop digging!” We can’t cut the budget to stop getting farther into debt, we have to grow the economy so the taxes increase as well. You might want to read up on the Laffer Curve so we can create the proper conditions to create and grow businesses that employ more people and thus generate taxes. Then those tax rates should be mindfully and carefully adjusted to maximize growth and taxes in balance.
In the end, this means that Meals on Wheels, NPR, and many other programs must stop receiving federal money because the government is spending our children’s money today. If you want these and other programs and services to survive, donate your time and money to them. That’s a concept known as Freedom. You have the freedom to choose to do it or not, rather than be forced to be socially conscious” at the muzzle of a gun.
More and more people are buying into "Not-Rights." It's time to set this straight.
Let's look first of all at the Rights granted to us under the Constitution. Most of these have phrases like, "Congress shall make no law...", "...shall not be infringed" or some derivative surrounding them:
Freedom of Religion
Freedom of Speech
Freedom of the Press
To peaceably assemble
To petition the government for a redress of grievances
To Bear Arms
To not house troops in your home
To be secure in their persons, houses, papers and effects
To not have these searched except on a Warrant issued upon probable cause
To be indicted for a Felony only by a Grand Jury
To not be subject to double jeopardy
To not be compelled to be a witness against yourself
To not be deprived of life, liberty or property without due process of law
To be justly compensated when property is taken for public use
To enjoy a speedy and public trial
To be tried by a jury of your peers
To see the witnesses against him
To be able to compel witnesses for him
To have the opportunity for a lawyers counsel
To have a trial by jury for a lawsuit in excess of $20 (today, about $500)
To not have excessive bail when arrested
To not have excessive fines upon conviction
To not have punishments be cruel and unusual
The Ninth and Tenth Amendments are the "catchall" amendments and do not cover specific things.
Study these Rights intently. Notice what they have in common? With the exception of "To be able to compel witnesses for him", these all restrict the government's authority over the Citizens of the United States. The government must allow (as in they cannot pass a law to abolish) the ability of the individual citizen to say what he wants to say, to worship the God of their choice and in the manner consistent with the teaching of that God, to not have a government agent go through your personal life without probable cause that a crime has been committed and so on.
Now we come to the "Not-Rights" that have been claimed by the Liberals in order to make themselves feel good and win people who also desire to "do the right thing" to their side. There are several categories of Rights, such as universal (held by everyone), inalienable (you have these rights, even if your current government is repressing you/them) and economic/social (something is granted to you because you are a citizen).
This article is focusing exclusively on the following rights, which would fall under the "economic and social" rights:
Healthcare
Housing
Food
Employment
So what are the difference between the four "not-rights" immediately above and the twenty-three I listed earlier? The most obvious one is "they aren't in the Constitution," and you would be right. But there is another, deeper reason. See it?
These four are all services and/or products produced by someone else. In simple terms, these Not-Rights are a hidden redistribution of wealth. Why is that? I will be happy to explain.
In Healthcare, you have Doctors, Physicians Assistants, Nurses, Nurse Practitioners, Therapists, Technicians, Paramedics, CNAs, the list goes on and on. For Housing, there are Architects, General Contractors, Carpenters, Plumbers, Electricians, and again, the list goes on. Under Food, you have Farmers of many types and all of the people who process the food to render it usable to you. Employment covers every business and government entity in the country.
In order for the government to give you these things (healthcare, a place to sleep, food and a place to work), they must mandate (i.e., TAKE) these work products from someone else. I am not going to suppose this is a Totalitarian State such as the Soviet Union, China and so on, but rather that the government will subsidize the price to the end user some amount.
Let's say that the government will provide a shotgun house (known in today's terms as a micro house) to everyone who wants one. For the sake of the argument, this house sells for $40,000 on the open market. However, the government as part of it's "Everyone Deserves a House" program needs 12 Million of them that they will provide to the citizens for "free." This would cost $480 Billion just for the houses, not to mention the government agency to oversee the construction, the bureaucrats to perform who decides what house they live in, the maintenance and upkeep, etc, but I digress.
But you see, the government never pays full price. They pay what they want to pay and it's left to the builder to make the product (the house) fit the specifications within the cost constraints. For the sake of argument, let's say the materials (wood, drywall, wiring and the like) costs $30,000 and the labor $10,000 to build that house. If the government decides it will only pay $30,000 per house, then the contractor has some hard choices to make. He either cuts the pay to his workers and/or he cuts the quality of the components. If he cannot make an adequate profit (his pay) then he or he won't build them at all.
But our contractor does decide to build the houses anyway. Due to the lower payment he receives for his efforts, when compared to the free-market $40k house, the contractor has to use a lower grade of wood in building the frame, then downgrades components (like from this kitchen faucet to this one, saving about $450), the decorative touches go away and he cuts the pay for the skilled workmen by 20%. For a carpenter, the average pay is $20/hour, however the budget only has room to pay him $16/hour.
So let's see how this program impacts Robert the Carpenter. First of all, he is bringing home $320 less for a two-week paycheck on the top line. Second, in order for the government to pay the General Contractor to build them, the government hikes the income withholding tax rate by 10%. That actually adds $30 back into his paycheck because while the tax rate rose, the base income fell with the result he's paying less in taxes, only because he's making less. By the time the changes hit his take home pay, he's making $290 less every two weeks.
Or Robert could be paid his full $20/hour, but he has to put up one of these micro houses faster. If it takes him 100 hours for his part in erecting a $40,000 house, he now has to do it in 80 hours for the government house. If you think the quality of the houses produced at this faster pace won't be lower, you're an idiot.
This same example can apply to any other "not-right" as well. The government bureaucrat does not really care about the cost or the quality of the product or service. The contractor does not care about the quality beyond the minimum standards and does not care if you like it or not because you're not paying him for it, he gets his money no matter what. The end result is you get stuck with a sub-standard product because no one involved really cares how you feel about it.
As far as employment goes, let's just say that the "Full Employment Act" becomes law and employers are mandated to have a certain number of "government" jobs, all paying that magical $15/hour. Every thing is great if you already have a job. The defecation impacts the rotary oscillator (the shit hits the fan) when you lose your job. Because once you become unemployed, you join the masses. You are assigned a job and your talents and passions do not matter one whit to the bureaucrat charged with getting you employed again. You are forced into the first open position. You will stay there until you find a better job, if you can take the time off to do interviews that is. In the mean time, do you really think that anybody in a forced labor situation, getting a "living wage" who can't be fired will more than likely do very poor work.
Think about how much quality and enthusiasm you would put into your work product if you had to work either off the clock or at a reduced rate for a day or two a week. Then think about how that forced work hurts you while "helping" others.
