Saturday's Duluth News Tribune had one of its Pro/Con pairings of opinion; they were titled "Can free enterprise boost the nation's economy?" I would have liked to have read them then but I didn't want to do it on my wife's cell phone, our fastest web access at the cabin.
Today I did, and oh, boy! The pro was an unbelievable, non-critical, paean to "free enterprise" that I just have to comment on. It was written by Steve Van Andel, co-CEO of Amway and chairman of the U.S. Chamber of Commerce Board of Directors. The con was a standard piece about the government needing to do more to regulate the economy through stimulus and other measures. The latter was written by Mark Weisbrot of the Center for Economic and Policy Research.
I found so many clichés in Van Andel's piece passing off as received wisdom that I have a hard time picking a few of the most egregious.
"When employers and entrepreneurs are successful, they indirectly share that wealth by expanding opportunities and creating jobs for others." Success has too often been measured by stock price, and stock price often means cutting jobs rather than creating jobs.
"Businesses wanting to remain successful always strive to do better." Too many successful businesses ignore their customers. Just look at the support boards of Apple, Microsoft, Google, CenturyLink, and many others. Users complain about the same problems for years and they don't seem to be fixed or responded to.
"The truth is that government doesn’t create opportunity, equality or success — the private sector does." Let's see! Federal government purchases of computers led to further development of computers; for example, the first UNIVAC was sold to the Census Bureau. ARPAnet led to the Internet; ARPA was Advanced Research Project Agency, a part of the government. An NSF grant led to the creation of Google. How many private weather forecasters depend on the Federal Government for their raw data?
"When our leaders attempt to reach deeper into the affairs of businesses and individuals — through overregulation and higher taxes — they breed uncertainty and stifle growth." Just what is "over-regulation" - requiring proper labeling on food, reducing power plant emissions, requiring easy-to-understand contracts? What are "higher taxes" - taxes sufficient to enforce the laws, taxes sufficient to rebuild our infra-structure, taxes sufficient to have a "strong" military?
Van Andel's article is copyrighted by the U.S. Chamber of Commerce and has been reprinted in several newspapers besides the Duluth News Tribune. The links that I found include
The original article was published by McClatchy – http://www.mcclatchydc.com/2013/07/03/195685/more-economic-independence-will.html
Others include
Centre Daily Times – http://www.centredaily.com/2013/07/07/3680519/column-more-economic-independence.html
Arizona Daily Star – http://azstarnet.com/news/opinion/can-free-enterprise-boost-the-economy/article_7236fff9-82d0-5f0a-8c3a-0a6adada2c53.html
Deseret News – http://www.deseretnews.com/user/comments/765633503/More-fiscal-independence-will-push-the-economy-to-new-heights.html
The comments to all of these are mostly critical of Van Andel's view.
A good critical letter appeared South Coast Today, but a search of South Coast Today for "Van Andel" did not turn up the original opinion piece.
Showing posts with label wealthy. Show all posts
Showing posts with label wealthy. Show all posts
Monday, July 08, 2013
Monday, October 29, 2012
Plutocracy and democracy
Someone on a facebook page asked what is plutocracy. I don't remember whether it was about all the money in politics or not. I answered that plutocracy meant rule of the wealthy. We certainly see it with the Koch brothers and Michael Bloomberg. The greatest danger of plutocracy is that it drives out participation by ordinary people, the essence of democracy.
I looked up plutocracy on Wiktionary and found this wonderful quote by G.K. Chesterton:
I looked up plutocracy on Wiktionary and found this wonderful quote by G.K. Chesterton:
"Modernity is not democracy; machinery is not democracy; the surrender of everything to trade and commerce is not democracy. Capitalism is not democracy; and is admittedly, by trend and savour, rather against democracy. Plutocracy by definition is not democracy. But all these modern things forced themselves into the world at about the time, or shortly after the time, when great idealists like Rousseau and Jefferson happened to have been thinking about the democratic ideal of democracy."
Monday, October 15, 2012
Quote of the day - money in politics
"[M]oney doesn't just talk in politics - it screams."
From "'Munger Sandwich' Squeezes California Governor", Robert Frank, CNBC, 2012-10-15, via Yahoo Finance!
It's about a very wealthy man opposing a tax hike Proposition and is very wealthy half-sister supporting a different tax hike proposition that she claims provides more support to schools. Both are spending tens of millions of dollars.
The same paragraph that I took the above quote from also includes: "But one family pouring more than $50 million to defeat the governor's proposal will only add to the media chorus that the rich are distorting democracy."
From "'Munger Sandwich' Squeezes California Governor", Robert Frank, CNBC, 2012-10-15, via Yahoo Finance!
It's about a very wealthy man opposing a tax hike Proposition and is very wealthy half-sister supporting a different tax hike proposition that she claims provides more support to schools. Both are spending tens of millions of dollars.
The same paragraph that I took the above quote from also includes: "But one family pouring more than $50 million to defeat the governor's proposal will only add to the media chorus that the rich are distorting democracy."
Saturday, March 03, 2012
The party of pluck and luck versus the parties of cluck
I started to read a tribute to Andrew Breitbart, ("Andrew Breitbart's final message to the left" by Star Parker, Scripps Howard News Service, 2012-03-02) a severe critic of the "left", and couldn't read any further. Like so much writing nowadays, no matter the source, it gives sweeping praise to "our side" and sweeping castigation to "the other side".
We have those who have financial resources claiming that they earned their wealth, and those who feel that many have been left behind have been put there through no fault of their own by those with excessive wealth.
Parker claims that the wealthy have more stable families, et cetera, et cetera; and that the poor have out-of-wedlock births and single parent families, et cetera, et cetera. Could it be that the more wealthy have more resources to hide their dysfunctional families? Could it be that the less wealthy have these problems because they are less wealthy?
Parker blames the left for creating all these problems, including the sexual revolution which increased poverty.
I got news for Parker and others who blame those who are trying to solve certain problems for creating those problems. They have been around for centuries.
I was born in March 1938, supposedly six weeks premature at 8+ pounds. My parents were divorced in 1943. When I was in college, my mother showed me her marriage certificate; she was married in September 1937. You do the math.
Many years later I found out that my great-grandfather left his family in 1904 because he loved women and wine. Even later I found out that his likely father, born in 1818, probably had a "girl in every port" - one in Brooklyn, New York, one in Baltimore, Maryland, and one in Liverpool, England. The person with my surname married in Liverpool gave his father's name as Vincent Magree. Vincent Magree was listed in the 1840 census in Baltimore with a male between 10 and 15 years old.
Well, some of the descendants became college-educated and well-paid, some continued to struggle, and some just muddled.
I can't speak for all my relatives as to how they arrived where they did, but I know my own life has been a crazy stew of pluck and luck. I had a family that expected me to do well in school. But many were the times I could have blown it with some stupid act. I had a teacher who encouraged us to go to a highly-rated engineering school. I had an assistant principal who found a full-scholarship for me to that school. I blew that by being unsure of what I wanted to do. I had a registrar in another college accept me and encourage me to study mathematics. That got me into graduate school in the school I flunked out of. That school happened to be buying a new computer. The manufacturer of that computer was hiring and hired me. And on and on with ups and downs. Some of these because I kept trying, some because somebody helped me, some because I kept screwing up. Pluck and luck, over and over again.
Right now we have two parties of "cluck". One claims that the wealthy are solely responsible for their wealth without recognizing all the clerks, laborers, and government institutions that supported them. The other claims that the wealthy are solely responsible for the problems of the poor without recognizing that that some of those problems (not all) are self-inflicted. These are the factions that James Madison warned about in Federalist No. 10
We really need a party of "pluck and luck". One that recognizes that problems go beyond blame, that many of these problems have been with our country since before the Revolution, and that we have to keep trying to provide some means of increasing the opportunities for both pluck and luck. We need a party that truly recognizes the problem of balancing "public good and private rights" - James Madison, Federalist No. 10.
We have those who have financial resources claiming that they earned their wealth, and those who feel that many have been left behind have been put there through no fault of their own by those with excessive wealth.
Parker claims that the wealthy have more stable families, et cetera, et cetera; and that the poor have out-of-wedlock births and single parent families, et cetera, et cetera. Could it be that the more wealthy have more resources to hide their dysfunctional families? Could it be that the less wealthy have these problems because they are less wealthy?
Parker blames the left for creating all these problems, including the sexual revolution which increased poverty.
I got news for Parker and others who blame those who are trying to solve certain problems for creating those problems. They have been around for centuries.
I was born in March 1938, supposedly six weeks premature at 8+ pounds. My parents were divorced in 1943. When I was in college, my mother showed me her marriage certificate; she was married in September 1937. You do the math.
Many years later I found out that my great-grandfather left his family in 1904 because he loved women and wine. Even later I found out that his likely father, born in 1818, probably had a "girl in every port" - one in Brooklyn, New York, one in Baltimore, Maryland, and one in Liverpool, England. The person with my surname married in Liverpool gave his father's name as Vincent Magree. Vincent Magree was listed in the 1840 census in Baltimore with a male between 10 and 15 years old.
Well, some of the descendants became college-educated and well-paid, some continued to struggle, and some just muddled.
I can't speak for all my relatives as to how they arrived where they did, but I know my own life has been a crazy stew of pluck and luck. I had a family that expected me to do well in school. But many were the times I could have blown it with some stupid act. I had a teacher who encouraged us to go to a highly-rated engineering school. I had an assistant principal who found a full-scholarship for me to that school. I blew that by being unsure of what I wanted to do. I had a registrar in another college accept me and encourage me to study mathematics. That got me into graduate school in the school I flunked out of. That school happened to be buying a new computer. The manufacturer of that computer was hiring and hired me. And on and on with ups and downs. Some of these because I kept trying, some because somebody helped me, some because I kept screwing up. Pluck and luck, over and over again.
Right now we have two parties of "cluck". One claims that the wealthy are solely responsible for their wealth without recognizing all the clerks, laborers, and government institutions that supported them. The other claims that the wealthy are solely responsible for the problems of the poor without recognizing that that some of those problems (not all) are self-inflicted. These are the factions that James Madison warned about in Federalist No. 10
We really need a party of "pluck and luck". One that recognizes that problems go beyond blame, that many of these problems have been with our country since before the Revolution, and that we have to keep trying to provide some means of increasing the opportunities for both pluck and luck. We need a party that truly recognizes the problem of balancing "public good and private rights" - James Madison, Federalist No. 10.
Tuesday, December 20, 2011
Misquote of the day - Capitalists make products…
Max Abelson indirectly quotes Leon Cooperman, "They [Capitalists] make products that "fill store shelves at Christmas" and provide health care to millions." - "Bankers Seek to Debunk 'Imbecile' Attack on Top 1%", Bloomberg, 2011-12-19, via Yahoo! Finance. Cooperman is a hedge fund manager. I wouldn't exactly call a hedge fund manager a capitalist; I'd say a hedge fund manager is a gambler with other people's money.
Right! These capitalist are on the factory floor making toys and electronics. These capitalists are working the emergency rooms and the hospital rooms to heal sick and broken people. They really should spend some time reading Adam Smith's "Wealth of Nations", every word of it.
For some very appropriate citations from Smith, see "Adam Smith on Labor and Profits (Letter to Reader Weekly)". Essentially, labor is the basis of wealth, if profits rise too far the nation is on the road to ruin, and the interests of business are not the interests of society.
Right! These capitalist are on the factory floor making toys and electronics. These capitalists are working the emergency rooms and the hospital rooms to heal sick and broken people. They really should spend some time reading Adam Smith's "Wealth of Nations", every word of it.
For some very appropriate citations from Smith, see "Adam Smith on Labor and Profits (Letter to Reader Weekly)". Essentially, labor is the basis of wealth, if profits rise too far the nation is on the road to ruin, and the interests of business are not the interests of society.
Tuesday, December 06, 2011
Quote of the day: Fair share from wealthy
"[T]here's no reason to punish the wealthy, just to expect them to shoulder their fair share of the tax burden. And expecting proportional sacrifice from those very well off is not 'punishing success,' as some would have it. It's as simple as expecting the strongest campers to carry the heaviest canoe. It just makes sense." - Comment by Will Rice in the comments to his article "Coming Out of the Money Closet".
This and other blogs by Will Rice can be found at http://www.coffeepartyusa.com/category/categories/will-rice. How does he get all of his money? By going to the mailbox to get his dividend checks from inherited stock. See "The Rich Don't Need a Free Ride".
BTW, we aren't in the one percent, but since we both stopped working, we get all of our money at the mailbox or by direct deposit.
This and other blogs by Will Rice can be found at http://www.coffeepartyusa.com/category/categories/will-rice. How does he get all of his money? By going to the mailbox to get his dividend checks from inherited stock. See "The Rich Don't Need a Free Ride".
BTW, we aren't in the one percent, but since we both stopped working, we get all of our money at the mailbox or by direct deposit.
Sunday, December 04, 2011
High profits are the road to ruin - Adam Smith
The Rev. Bruce Johnson of the Unitarian-Universalist Congregation of Duluth gave a sermon this morning on consumerism - "Consuming Religion". In it, he used "free markets" in the corrupt sense, that is, business is free to do whatever it wants, free of regulation. I knew that Adam Smith used "free market" only once in "Wealth of Nations"; I wondered how often he used "regulation".
Well, I gave up counting, but I noted that he treats regulations as both good and bad. One of the good senses is that regulations prevent abuses. One of the sections that mentioned regulation discussed the three classes involved in the economy - one does nothing and keeps getting richer, the second is necessary to get things started, and the third actually does the work. Here is what he wrote about the second, those who supply the capital (stock in the sense of materials, equipment, and workplaces).
"It is the stock that is employed for the sake of profit, which puts into motion the greater part of the useful labour of every society. The plans and projects of the employers of stock regulate and direct all the most important operation of labour, and profit is the end proposed by all those plans and projects. But the rate of profit does not, like rent and wages, rise with the prosperity, and fall with the declension of the society. On the contrary, it is naturally low in rich, and high in poor countries, and it is always highest in the countries which are going fastest to ruin."
Well, I gave up counting, but I noted that he treats regulations as both good and bad. One of the good senses is that regulations prevent abuses. One of the sections that mentioned regulation discussed the three classes involved in the economy - one does nothing and keeps getting richer, the second is necessary to get things started, and the third actually does the work. Here is what he wrote about the second, those who supply the capital (stock in the sense of materials, equipment, and workplaces).
"It is the stock that is employed for the sake of profit, which puts into motion the greater part of the useful labour of every society. The plans and projects of the employers of stock regulate and direct all the most important operation of labour, and profit is the end proposed by all those plans and projects. But the rate of profit does not, like rent and wages, rise with the prosperity, and fall with the declension of the society. On the contrary, it is naturally low in rich, and high in poor countries, and it is always highest in the countries which are going fastest to ruin."
Sunday, November 20, 2011
Economy and wages are each cause and effect of the other
"The liberal reward of labour, therefore, as it is the necessary effect, so it is the natural symptom of increasing national wealth. The scanty maintenance of the labouring poor, on the other hand, is the natural symptom that things are at a stand, and their starving condition, that they are going fast backwards."
- Adam Smith, Wealth of Nations, Book I, Chapter VIII, Of the wages of labour
Let me decipher this a bit. If the national wealth is increasing, then labor will be paid well. If labor is paid well, then the national wealth is increasing. If labor is paid the same year after year or even less, then the national wealth is decreasing rapidly.
Consider that many have said that stagnant wages or massive layoffs make the economy worse, not better.
In other words, if the wealthy are hoarding the flour to bake cakes, the less wealthy won't have much bread. Or, in the case of the U.S. today, if the wealthy are hoarding their wealth to buy luxury goods, the less wealthy won't have much to buy groceries.
If you are a determined reader, or have a very inquiring mind, I highly recommend that you make the effort to read Adam Smith's "An Inquiry into the Nature and Causes of the Wealth of Nations". For any edition that you are considering, be sure to check what the printed pages look like. Some editions have two-columns with small print.
I downloaded my copy from Project Gutenberg and then put it into Word so that I could add comments and bookmarks. Even then, reading it on a laptop screen tempts me to get an iPad. In any case, I hope I can finish reading it by spring. I'm sure I'll be posting many more blog entries on it. I just wish those who assume that it is a paean to the free market would spend more time with it.
- Adam Smith, Wealth of Nations, Book I, Chapter VIII, Of the wages of labour
Let me decipher this a bit. If the national wealth is increasing, then labor will be paid well. If labor is paid well, then the national wealth is increasing. If labor is paid the same year after year or even less, then the national wealth is decreasing rapidly.
Consider that many have said that stagnant wages or massive layoffs make the economy worse, not better.
In other words, if the wealthy are hoarding the flour to bake cakes, the less wealthy won't have much bread. Or, in the case of the U.S. today, if the wealthy are hoarding their wealth to buy luxury goods, the less wealthy won't have much to buy groceries.
If you are a determined reader, or have a very inquiring mind, I highly recommend that you make the effort to read Adam Smith's "An Inquiry into the Nature and Causes of the Wealth of Nations". For any edition that you are considering, be sure to check what the printed pages look like. Some editions have two-columns with small print.
I downloaded my copy from Project Gutenberg and then put it into Word so that I could add comments and bookmarks. Even then, reading it on a laptop screen tempts me to get an iPad. In any case, I hope I can finish reading it by spring. I'm sure I'll be posting many more blog entries on it. I just wish those who assume that it is a paean to the free market would spend more time with it.
Monday, March 07, 2011
More wealthy calling for more taxes
Bill Gross, a founder of PIMCO, an account management services company, added his voice to those of Warren Buffett and Bill Gates that the wealthy should pay more taxes.
"Add PIMCO founder Bill Gross to the list of wealthy Americans who think they aren't being taxed enough, already. 'Of course we should' pay higher taxes, Gross says. 'Higher income groups have enjoyed an enormous privilege ever since the Reagan tax cuts...and actually ever since Kennedy began the process back in the ‘60s.'"
See "Bill Gross: 'Of course' the Wealthy Should Pay Higher Taxes, Corporations Too", Tech Ticker, 2011-03-07.
Nowhere in the interview did he mention any rationale besides that they can pay more. I wish he had mentioned all the services of a civil society that make it possible for the wealthy to become wealthy.
Maybe some clever economist or accountant could come up with a cost-benefit ratio to show that those who can afford to pay more should pay more taxes; if they pay less taxes they will get less benefit from a civil society. Maybe even their overall costs will go up because they pay less taxes.
"Add PIMCO founder Bill Gross to the list of wealthy Americans who think they aren't being taxed enough, already. 'Of course we should' pay higher taxes, Gross says. 'Higher income groups have enjoyed an enormous privilege ever since the Reagan tax cuts...and actually ever since Kennedy began the process back in the ‘60s.'"
See "Bill Gross: 'Of course' the Wealthy Should Pay Higher Taxes, Corporations Too", Tech Ticker, 2011-03-07.
Nowhere in the interview did he mention any rationale besides that they can pay more. I wish he had mentioned all the services of a civil society that make it possible for the wealthy to become wealthy.
Maybe some clever economist or accountant could come up with a cost-benefit ratio to show that those who can afford to pay more should pay more taxes; if they pay less taxes they will get less benefit from a civil society. Maybe even their overall costs will go up because they pay less taxes.
Sunday, March 01, 2009
Fair share of taxes, just what is it?
Many writers on the left call for the "rich" to pay their "fair share of taxes". A recent example was printed in the Reader Weekly of Duluth, "Obama is right to take on the very rich", written by Chuck Collins and Sam Pizzigati for Common Dreams. An aside, don't be thrown by the forms at the top of the page; the full article is below the form.
So what is this "fair share"? Many define it as people paying the same percentage of their income or even paying a higher percentage for higher income. This latter is called progressive taxation. Others define it as paying for what you use of government services. For example, if you don't have kids in school, then you shouldn't have to pay taxes to support the schools.
This latter is a very narrow-minded approach to government services. It's like saying that you don't drive anywhere, and so you shouldn't pay for roads. However, how are groceries brought to the store; how are packages delivered to your door; how does the ambulance get to your house when you have a heart attack? You'll need roads for each of these, whether you drive or not. And when you have a heart attack, you will need a doctor who most likely began his or her schooling in public schools.
Depending on others being educated is what makes many people rich. Do you think somebody like Bill Gates programmed every piece of software, wrote every piece of advertising, and wrote every piece of documentation? No, he depended on thousands of programmers, marketing people, writers, delivery people, sales people, and floor sweepers. Even the last had to be educated to read directions, cleaning supply labels, and signs in the buildings.
I don't deny that he came up with a clever idea when he wrote Microsoft BASIC, and horrors, according to the ethos of the time, he sold copies of it. He also had many other clever ideas and built a very large team to come up with more clever ideas. He also invested a lot of money into Microsoft. You can argue that he overcharged and engaged in monopolistic practices, but few would argue that he shouldn't have become rich from the effort he started. But he couldn't have done it without a lot of government support in the form of roads, schools, sewers, regulations that ensure a reliable supply of electricity, building inspections for safe workplaces, oversight of securities markets for fair buying and selling of shares in Microsoft, and on and on.
In other words, Bill Gates depended on a predictable, civilized society to create, build, and maintain his enterprise. The more money you have, the more you need a civilized society. "Taxes are the price we pay for a civilized society", Supreme Court Justice, Oliver Wendell Holmes, Jr.
Somehow, our politicians have bought into the myth that rich became so by their own individual efforts and that government taxation will take funds from further investment. That would be true if government confiscated all, or even nearly all income above a certain level. On the other hand, if government didn't tax at all, there would be no infra-structure to support investment, no educated people do all the work investors need to be done, and even no educated people to use many very sophisticated products that have been produced with investors' money.
This myth has led to more and more tax breaks for those who merely move money around, and less civilized society for those who really make the increase in money possible. Because our government withdrew from many of its responsibilities because of a disdain for government and taxes, even the wealthy have become less wealthy, and many of those who the wealthy depended upon are losing almost all of their own wealth.
For more of my thoughts on taxes, see "Straight talk on taxes" as well as the articles listed in the "Related Articles" sidebar.
So what is this "fair share"? Many define it as people paying the same percentage of their income or even paying a higher percentage for higher income. This latter is called progressive taxation. Others define it as paying for what you use of government services. For example, if you don't have kids in school, then you shouldn't have to pay taxes to support the schools.
This latter is a very narrow-minded approach to government services. It's like saying that you don't drive anywhere, and so you shouldn't pay for roads. However, how are groceries brought to the store; how are packages delivered to your door; how does the ambulance get to your house when you have a heart attack? You'll need roads for each of these, whether you drive or not. And when you have a heart attack, you will need a doctor who most likely began his or her schooling in public schools.
Depending on others being educated is what makes many people rich. Do you think somebody like Bill Gates programmed every piece of software, wrote every piece of advertising, and wrote every piece of documentation? No, he depended on thousands of programmers, marketing people, writers, delivery people, sales people, and floor sweepers. Even the last had to be educated to read directions, cleaning supply labels, and signs in the buildings.
I don't deny that he came up with a clever idea when he wrote Microsoft BASIC, and horrors, according to the ethos of the time, he sold copies of it. He also had many other clever ideas and built a very large team to come up with more clever ideas. He also invested a lot of money into Microsoft. You can argue that he overcharged and engaged in monopolistic practices, but few would argue that he shouldn't have become rich from the effort he started. But he couldn't have done it without a lot of government support in the form of roads, schools, sewers, regulations that ensure a reliable supply of electricity, building inspections for safe workplaces, oversight of securities markets for fair buying and selling of shares in Microsoft, and on and on.
In other words, Bill Gates depended on a predictable, civilized society to create, build, and maintain his enterprise. The more money you have, the more you need a civilized society. "Taxes are the price we pay for a civilized society", Supreme Court Justice, Oliver Wendell Holmes, Jr.
Somehow, our politicians have bought into the myth that rich became so by their own individual efforts and that government taxation will take funds from further investment. That would be true if government confiscated all, or even nearly all income above a certain level. On the other hand, if government didn't tax at all, there would be no infra-structure to support investment, no educated people do all the work investors need to be done, and even no educated people to use many very sophisticated products that have been produced with investors' money.
This myth has led to more and more tax breaks for those who merely move money around, and less civilized society for those who really make the increase in money possible. Because our government withdrew from many of its responsibilities because of a disdain for government and taxes, even the wealthy have become less wealthy, and many of those who the wealthy depended upon are losing almost all of their own wealth.
For more of my thoughts on taxes, see "Straight talk on taxes" as well as the articles listed in the "Related Articles" sidebar.
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