Pens and Pitchforks

Saturday, a worker from the Obama campaign stopped by to pick up my wife’s absentee ballot (thanks to the campaign for helping get her registered) and I had an opportunity to engage this gentleman in a friendly chat about the issues.  However, I was disappointed to learn that he had somehow missed Sen. Government’s remarks about the shrinking pie that has been gobbled up by millionaires and billionaires.

This conversation made me think of another fundamental flaw in the way that Sen. Government views the pie: he has no idea who makes the pie.  The way Sen. Government talks about pie, it is as if the government runs the bakery.  The truth is, the pie is made by the millionaires, billionaires, and aspiring entrepreneurs that grow the economy through capitalist pursuits in private industry and it is only after they create the pie that there is anything for Senator Government to tax and redistribute.

To get the bakery to bake more pie do you: a) Take half the pies produced and give them to people who don’t have a clue about baking or b) Let the bakery keep more pies to sell at the prevailing market rate earning more profit and having more incentive to bake more pies?

To expand the number of jobs available do you: a) Take half of the bakery’s profit and let the government create jobs after they subtract administrative overhead or b) Let the bakery keep more profit and expand its baking facility?

Your answers to these questions gives you a little bit of insight as to whether you are a capitalist or a socialist.  Whether you favor large government reducing risk and slowing economic growth or entrepreneurship with less regulations, more risk, and faster economic growth.  Sen. Government can reduce your individual risks with significantly larger government, more oversight, more spending and more regulations.  However, with this reduced risk, comes reduced reward, not just for you, but for America as a whole.

Senator Government says that the pie is shrinking and what is left is being eaten by millionaires and billionaires.  It is true that we are going through a spell of economic hardship, but Senator Government’s pie analogy points out the main difference about how the rich and the poor view cash (capital) differently. 

The poor see getting money they didn’t earn as getting their ‘piece of the pie’ as Senator Government proposes ’sharing the wealth’ so that when Joe the Plumber becomes a successful entrepreneur he can pay his fair share to subsidize Joe the Cashier who didn’t finish high school and never learned a trade, but is perfectly happy being below average Joe.  To Joe the Cashier, this proposal seems ‘fair’ as it benefits him and his aspirations of mediocrity.  However, to aspiring entrepreneur Joe the Plumber, this sounds an awful lot like socialism and is not congruent with his American dream of working hard, becoming successful, and enjoying the fruits of that labor.

Joe the Cashier sees money as a piece of pie to be consumed for immediate gratification, whereas Joe the Plumber sees money as the flour, eggs, milk, and butter that he needs to bake more pie, feeding himself and his employees better as a result of the invested capital rather than consumed pie.  This is why the wealthy pick up more of the tax bill in a time of tax cuts that favor investment and entrepreneurship, because they are making more pie for the government to take a slice from.

We are a wealthy nation, let’s make sure the poor don’t starve, but don’t let the poor get fat eating someone else’s pie while we take flour, eggs, milk, and butter from the wealthy and then complain the pie is not as big as we would like.

Taxation is a very simple formula:  a * b = c

a = tax base (income, property value, sales, etc)

b = tax rate

c = total tax revenue

Politicians generally focus only on changing the tax rate as a means to change total tax revenue, however when looking to influence total tax revenue growing the tax base may be just as important.  Especially with the situation of income taxation, there is a relationship between the tax rate and the tax base, if the tax rate is raised, the tax base will shrink over the long term.

The reason for this is rather simple.  Raising the tax rate decreases money available and incentive for risk taking in private enterprise.  Employers (evil rich people with lots of money to tax away - aka the people ‘eating’ all the pie) may have to lay off employees or not hire new ones as the increased risk of these fixed costs is not worthwhile or even achievable when there is a heavier tax load to manage.  This decrease or stagnation in employee wages lowers the income tax base, thus decreasing total revenue to the government in the aftermath of a tax rate hike.

So don’t just assume that giving a greater percentage of income to the government will increase the revenue to the government and cover the costs of huge spending programs.  In the short term total revenue may increase until the effect of the rate hike filters into the tax base, but over the long-term the economy will be stifled, the government still underfunded, and there will be less pie for everyone, no matter how Senator Government slices the pie.

I have long said this in private conversation, but when national debates heat up over what to do with Social Security, I have not seen or heard it called for what it is, a Ponzi scheme.  It seems that calling it out in this way may lessen it’s legitimacy as a government institution, however I did notice one politician call it out on national television.  Bob Barr in an interview with Glenn Beck said:

This is the 73rd anniversary today of Social Security, the greatest Ponzi scheme in the history of our country. We put out and we’ll certainly send it to your folks an extensive Social Security plan that gets us out of this entire situation and moves the country dramatically to individual accounts.

Why did the idea of individual accounts get swept away so quickly and will probably never be mentioned again?

We need to define what Social Security is and what we want it to be in the future.  If we want it to be a safety net for the poor, then means test it and do the same with Medicare while you’re at it.  If it is to be a compulsory savings plan for every citizen, then privatize the accounts and be accountable to each and every citizen for the dollars they have invested into the plan. 

Until we make a decision about what Social Security is and should be, we will be strapped with the burden of a government sponsored Ponzi scheme that will only float by mandating higher levels of taxation onto future generations that are currently disenfranchised as they are either not old enough to vote or currently unborn.

This week’s column in Newsweek by George Will really struck a chord with me in a few places.  The first is:

Today, Americans seem to demand a government that is an omnipresent and omni provident cornucopia of entitlements, but that also is small and imposes low taxes.

As a collective our country can’t make up its mind as to whether we wish to be a bastion of capitalism or the new hope of socialism.  We can’t have it both ways and it seems 49% of the country will always be royally pissed about what or who the other 51% have voted for (actually it’s generally not 51% for, but a lesser number that wins due to a few votes going a third direction). 

The next point I took great note of really follows from the first:

At the nation’s founding, Americans believed that government exists to protect people in the exercise of their pre-existing “natural” rights to life, liberty and the pursuit of happiness. But time passed, bringing us FDR and Oprah and other facets of modernity. Now Americans believe that government exists to create new rights for them, and to solve their problems…

This sentiment is espoused time and again in agony by commentator Glenn Beck as he cries that the answer is not in government, but in the people, and the government needs to step aside and let the people fix our nation’s problems.  When did we become a nation of whiners, as Phil Gramm would say, looking to the government to rock us to sleep and sing a lullaby, while we the people suck our thumbs and attempt to soothe our wails for more services and less taxes.

We should not be looking to the government to solve our problems, but rather asking the government to stop causing so many problems.  The government needs to back out of some of the areas it has greatly intruded upon and scale back to what is needed, rather than what is desired by some.  We do need to have provision for those least fortunate in our society, but it needs to be a safety net, either from government or charity, not a lifelong committment to handholding for those not ambitious enough to fend for themselves.

We need to allow people and businesses to learn from their mistakes and increase transparency so that the market can more easily flush out those who do not act ethically.  More regulation is less necessary if more information is more widely available.

We need to stop wishing America could be what it once was, and start planning to make America greater than it has ever been.  We need to continue to lead the world in ideas, thoughts, and business to set an example of greatness to which other wish to aspire.

McCain picked Sarah Palin.  WHAT THE HELL WAS HE THINKING? Oh I will pick a women governor from Alaska as my VP and try to capitalize on some of those Hilary votes.  That will fail ……miserably.  Why?  Because Hilary, for all the good things she stands for, is a NAZI Fembot.  Most women love Hilary because she is an extreme feminist.  Palin on the other hand has penis envy.  The vast majority of women do not like Palin, so who does?  Old, rich, white men that like to brang that she is 100% pro-life (no matter what the situation) and she a former miss-Alaska nomiee (1984).  Didn’t McCain already have those voters in his back pocket. 

Ya, Palin is good looking for her age, no argument here.  But what appeal does she have.  Her experience in Economics (which by the way is McCain’s weakest area).  Get real, Alaska’s version of economics depends on “how the fishin be doin…Ahhh.”  How pathetic!!!  I know Biden is from a no-nothing state (Delaware) as well, but realistically he is Pennsylvania’s 3rd senator which makes him valuable.  What borders Alaska?  Ohio? Florida? Indiana? Nope, try British Columbia (zero electoral votes, because fish can’t vote).  McCain should have chosen someone with a vast successful record in the economy.  Mit Romney or Mike Huckabee would have been much better choices.  Hell, if McCain wanted to shake things up a bit, why didn’t pick Lieberman (turncoat) ? 

I was wanting to see a “Battle Royal” for the presidential seat, (although no matter who McCain picked I would still bet on Obama by at least 10%).  But now all we have to look forward to is a younger, dumbering version of Geraldine Ferraro in the Vice Presidential debate.  McCain just gave away the presidency.  He needs to admit himself to a nursing home, and soon before he picks Laurana Bobit as his speech writer.

Since this seems to be a question that people on all sides of the spectrum are dealing with, I will take a stab at nailing down a reasonable answer.  However, I would first like to rule out two unreasonable answers, conception and birth.  Pro-life groups love the answer of conception, but I don’t think all of those pro-life women are ready to give up their birth control, as an answer of conception effectively makes birth control an abortion.  Full term natural birth is an unreasonable answer, as there is a wealth of evidence to show that a fetus is a viable life outside the womb before it reaches full term.

The morning of 8/19/2008 on the Laura Ingram program, I heard discussion with Jill Stanek of this issue with regard to abortion around the 21st week of pregnancy.  These aborted ‘fetuses’ were given birth certificates and death certificates the same day.  The question here is, does this count as a birth or as an abortion?  It seems the issuance of a birth certificate by the hospital performing the abortion is an admission that this is a medically assisted birth where the child is allowed to die because it is unwanted.  The reason given for most of these abortions this late in pregnancy was usually some sort of defect such as downs syndrome.

I understand that with certain extreme defects, an abortion could be seen as an act of mercy rather than one of hostility.  However, if the point is a merciful death rather than a tortured life, I would think these children once taken from the womb should be anesthetized or administered something to assure it is quick and painless.  Taking them out and leaving them in a sink waiting for them to die on their own is not merciful.

The question above my pay grade is whether we are better for giving someone a merciful death rather than a possibly tortured life.  How are we to measure the torture that they will face in the future and qualify that for decision making now?

Defining the beginning of life for purposes of making an informed decision about whether or not to bring a new life into the world would have to be the earliest point at which testing for severe defects is possible and rather accurate.  A decision to terminate before that point would be an uninformed decision that is certainly worse than a well informed one.  Past that point, it seems that one has relinquished the right to choose through inaction to terminate the pregnancy.  If it is a convenience issue regarding not bringing unwanted children into the world, that decision is ideally made before a pregnancy occurs by using preventative measures.  However, if proper prevention fails, a woman should not be forced to carry an unwanted child so long as she takes merciful action to end the pregnancy before there is a life that would be viable outside the womb.

This decision should not be taken lightly and never procrastinated.  The moral implications of this decision are ones that each must decide on their own.  The government should not regulate whether or not this procedure is legal or illegal, but should regulate the procedure to make sure it is done responsibly, with proper regard given to all parties involved.

With the American Presidential election in full swing, I would like to throw in my two cents regarding what we should look for in a president and what that person should do for us as citizens.  I know that there is no way we can find someone as president that will fully represent our ideas as individuals, but we need a person in that position that is willing to set aside their own opinions and ambitions to represent the will of the people.  Some may call this flip-flopping or government by poll numbers as Bill Clinton was often accused of doing, but the roll of the president is not to shove his own agenda down our throats, but to advance our agenda at home and abroad.

 To that end, I would like to see some work to advance electronic platforms that give us a better information and feedback system for concerned citizens to see what the government is working on and to comment on that in a way that is public and actionable.  Our government is run by our elected officials, but too often these officials are more responsive to the corporate sponsors that pay their campaign bills than to the people that cast the votes for them.  Real time information and transparency is good for corporations and capitalism, but it is even better for governments so that accountability to the people is not buried like some pork barrel legislation.

Again, our new information age has made a lot of change possible, as candidates can raise millions of dollars with small online donations, rather than always pandering to sponsors to rack up the same goal.  I want to see this trend continue, so that we are not governed by the wealthy, the best sales people, the best fundraisers, but we are governed truly by our peers. 

Back to the president, he needs to be a facilitator not a king.  He needs to win hearts and minds with regard to good ideas rather than political affiliations.  He needs to care for the good of the people, without thinking that he knows better than the people.  The president should be such a person that no ideologue can stand to drink from his or her kool-aid cup, but one that receives praise and criticism from all sides.

The president needs to see that the solutions are in the people, not in the government.  The government is merely a conduit to make sure the solutions from the people get a fair shot.   The president should know that the role of government is not to impose one groups set of ideals upon another, but that the government should maintain freedom for all ideas to flourish.  The president should not be a panderer, but a thinker committed to the ideals that make America great, not the ideals embraced by one half of the country or the other.