Food For Thought

"Labor unions would have us believe that they transfer income from rich capitalists to poor workers. In fact, they mostly transfer income from the large number of non-union workers to a small number of relatively well-off union workers." - Robert E. Anderson

Tuesday, April 19, 2011

And the Band Played On

[Editorial Notes: What you're about to read is scary. It's meant to be. It's not a movie, its real life. This is happening and some of the outcomes are inevitable. If you're scared at the end of this piece, good. Do something about it. Get involved and tell your representatives to start building lifeboats.]

On Monday, the financial world (cue the eye-rolling "not again" reactions) was stunned by the announcement from ratings giant Standard and Poor's that it has downgraded the financial outlook of the United States.
Most people on the street metaphorically shrugged their shoulders and said, "So?" I'm going to answer that question by continuing an allegory that I'm using with the people I meet.

Last November, I likened the U.S. economy to the Titanic. I spoke about the QE2, "Quantitative Easing", as being akin to applying full power to the economic ship while headed straight for the iceberg. Extending that metaphor, yesterday's announcement was that we've not only hit the iceberg, but, as Titanic's builder Thomas Andrews told Captain Smith, "We have about two hours," -- the ship of the United States is sinking and the outcome is a foregone conclusion.

You see, what this means is the Wall Street -- Thomas Andrews -- is finally acknowledging what analysts -- Frederick Fleet, the lookout -- have been warning of for years: there's an iceberg looming and we're going to hit it. In fact, we have hit it. And now we're "down by the bow."

For years, Captain Smith (successive administrations) and J. Bruce Ismay (Congress) have been blithely ignoring the ice warnings issued by numerous other ships (Greece, Spain, Portugal and the E.U.) have issued and have instead confidently sailed directly into ice fields with "full steam ahead." And yet, as I noted above, they are "stunned" when the ship hits an iceberg.

In the case of the Titanic, Captain Smith was, by many reports, so distraught and unbelieving that he was almost, at times, catatonic and paralyzed into inaction. And our leaders, and Wall Street, are now having the exact same reaction.

On the Titanic, Captain Smith told his officers not to "panic the passengers" by telling them to muster on the boat decks. In the United States, the Obama administration and a compliant media is focusing on so-called "recovery stories" and partisan wrangling.

But they're not the only ones. In our own state of Wisconsin, which like the Federal Government, is bankrupt (yes, that's right, both have no money - literally, not figuratively), the Unions and state workers are scrambling over each other to scream about their "rights". As the ships of state sink out from under their feet, they're only concern is, like those first class ladies on the doomed Titanic, that they are "properly dressed for the occasion."

In hindsight, its easy to see the series of miscalculations, mistakes and accidents that lead to the sinking of the grand ship. Its easy for us to shake our heads and make the judgement, "Couldn't they see they didn't have enough lifeboats? How stupid!" And yet our governments have done the exact same thing.

The British Board of Trade regulations in 1912 required only that one have lifeboats according to the tonnage of the ship, regardless of the number of actual passengers. It was an outdated and outmoded way of thinking with disasterous consequences.

Likewise, our governments have been following the Keynesian model of economics which prescribes that governments spend money to stimulate the economy. It is an outdated and outmoded way of thinking with disasterous consequences.

Even China, often touted as the superpower of this century that will eclipse the United States, has subscribed to this discredited economic theory and is soon to face its own massive financial crisis.

On the evening of April 12, 1912, there were no ships (save the Californian, whose radio was off) close enough to Titanic to affect a rescue. Likewise, given the current state of affairs in Europe and the impending Chinese meltdown, there is no one to save the United States. Its up to the passengers, each and every citizen, to make the officers, our legislators, take immediate action to save as many as possible.

Ladies and gentlemen, we have hit the iceberg. We are sinking. The builder Mr. Andrews has admitted that we are going down. The question now isn't "how do we save the ship", the question is, will we have enough lifeboats for everyone. And given that our government plans as well as J. Bruce Ismay, the answer isn't encouraging.
It is up to each of us, regardless if First Class or Steerage, white collar or Unions, to take our fiscal lives and those of our fellow passengers in our own hands. We are all in the same sinking boat.

I am sending this column to my legislators at both the state and Federal level. I am going to hound them about priorities and building life rafts. And I'm making sure my own life jacket (my financial "house") is secure. What are YOU doing?

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Thursday, April 14, 2011

The Tax System - Explained With Beer

Special thanks to Mike N. for sending me this column:

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.

If they paid their bill the way we pay our taxes, it would go something like this:
  • The first four men (the poorest) would pay nothing.
  • The fifth would pay $1.
  • The sixth would pay $3.
  • The seventh would pay $7.
  • The eighth would pay $12.
  • The ninth would pay $18.
  • The tenth man (the richest) would pay $59.
So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20."

Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men -- the paying customers? How could they divide the $20 windfall so that everyone would get his "fair share?"

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:
  • The fifth man, like the first four, now paid nothing (100% savings).
  • The sixth now paid $2 instead of $3 (33%savings) .
  • The seventh now pay $5 instead of $7 (28%savings) .
  • The eighth now paid $9 instead of $12 ( 25% savings).
  • The ninth now paid $14 instead of $18 ( 22% savings).
  • The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man, "but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than me!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up any more. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

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Thursday, April 7, 2011

It's Gotta Work Sometime

You have to wonder, sometimes, about how sly some of these despots really are. President Obama received a letter from Qaddaffi begging him to stop bombing Libya. Ok, nothing new there... but just read the letter (new window) (here's the beginning):

Our son, Excellency,

President Obama


We have been hurt more morally that physically because of what had happened against us in both deeds and words by you. Despite all this you will always remain our son whatever happened. We still pray that you continue to be president of the U.S.A. We Endeavour and hope that you will gain victory in the new election campaigne.

I gotta say, it reminded me of this (new window):

From: Pastor Kothapalli Prabhakara Rao
Subject: fellowship
Date: Mon, 12 Jan 2004 11:14:57 +0000 (GMT)

Dear in Christ,
I greet you in the precious name of Jesus. I praise God that He has
privileged me to send this email to you for your kind co-operation to
spread the Gospel and save the perishing soul.
You do not know me, but it has happened for me to find your e-mail
address on the internet. Please for give me for my intrusion like this. I
am Pastor. K.Prabhakara Rao.

Now give Qaddafi some credit. Obama's giving everyone else money, why not him??

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Monday, April 4, 2011

My Job is Your Job is Our Job

The local, state and even national media spent quite a bit of time this winter on the budget battle in the state of Wisconsin. In a very short time, the 60's wanna-be's drummed up sit-ins, walk-outs, websites, chain letters and all of the other hallmarks of "activism". Hours of airtime and reams of pages were devoted to the small but vocal groups of protesters and their antics. They shouted their vitriolic rhetoric from every possible venue. They even went so far as to attempt to blackmail businesses into supporting them. And yet the majority remained silent (although, thankfully, in some instances effective).

What conservatives need to do is to take some lessons from the "symbolism over substance" left and heed the warnings. We can and must learn if we're to save the progress that was made this last November:

Cult of Personality
The left is all about "feelings", not logic. They are about "rights", not responsibilities. They peg their hopes and dreams on an anointed saviour who can do no wrong and then defend that person regardless of their glaring mistakes. Look at Marion Barry, Gordon Hintz, Bill Clinton and now President Obama.

Last fall, Conservatives stunned the liberal demagogues at the polls. People like Scott Walker were swept into office with a mandate from the people to cut spending. Scott Walker is not the messiah. He does not walk on water. And he can't do this by himself. The liberals are pulling out all the stops, using the state's courts to legislate from the bench. Like the liberals, the conservatives must "stand by their man". But unlike the liberals, conservatives cannot assume that now that "their man" is in, its all up to "him".

Government of the People
The liberals like to claim that they are for "the people". They claim to represent the downtrodden masses and the "little guy". They believe that they are right, no matter what the majority might say and that its their duty to make sure that their views are pushed through. When their views are challenged, they resort to tactics like legislation from the bench.

Conservatives believe in a government of the people, by the people and for the people. They believe in democracy and the will of the people. Conservatives showed the will of the people last November. But its not a single, one-time, isolated instance. The will of the people must be proven time and time again in each election and for each issue. That's the essence of a government of, by and for the people. Every election is a referendum on that principle. Like the liberals, conservatives must muster for every election and continue to show the will of the people.

Representative Government
Liberals believe that the masses are sheep who need to be lead. They elect leaders to make decisions for them. They believe in being governed, not in being represented.

Conservatives believe in self-government. Self-government means exactly that - you govern yourself. You elect people to represent your views, your will. Like the liberals, conservatives need leaders. But those leaders need continuing support and feedback. Without that, they are no longer representatives of the people.

To paraphase Ronald Reagan, from his "A Time for Choosing" speech:
"We will keep in mind and remember that Scott Walker has faith in us. He has faith that you and I have the ability and the dignity and the right to make our own decisions and determine our own destiny."

April 5th is another state election in Wisconsin. According to poll watchers, turnout is likely to be very low. People look at these spring elections as "why bother?" In the past, many patriots would have responded with words like "civic duty", but this time, there's a deeper reason. It's about grass-roots activism and continuing what's been started. Conservatives can do this, but, let's face it, liberals have a much longer track record with it. That's why the Tea Party movement has so confounded the left. The right just doesn't have the record of continuing grass-roots activism.

April 5th's election is more than just another judicial seat-filling exercise. It is a referendum on Conservatism. It is a rebuttal to the voiciferous left. It is a repudiation of legislation from the bench. It is a support for the continuation of the principles that were expounded last November. If you remain silent on the 5th, Conservatives, don't wake up on the 6th and wonder "what the hell happened?"

Government isn't just Scott Walker's job. It's the people's job. Every day. Every election. Every issue. Unlike the Runaway Fourteen, on the 5th I'll be doing my job. What will YOU be doing?

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