Story of a Diet

 So you've got a guy. He lives pretty well, does pretty well. And one day, someone offers him some candy.

As it happens, he hasn't had candy before. But the guy promises that it tastes great, and has very few calories, and is practically good for you, and it'll give him all these great feelings and such... and, you know what, the guy is right. He likes it. He gets some, and he starts eating it for dessert instead of pies, cakes, cookies, spiced fruit, and various other things he's used to.

His friends are a wee bit concerned, but not too much. After all, a little candy for dessert won't do any harm. But it isn't just a little after a while. He wants more, and then more, and then he starts to gain weight. His friends say, "Lay off the candy. It's just sugar." But he loves the sugar rush, and the way the artificial flavorings make his mind race for a while. So he has different ideas.

He finds some studies and warnings claiming that red meat is evil. It raises your risk of death. It has cholesterol, and that's bad. Candy doesn't have cholesterol in it. So he cuts all meat out of his diet, and in place of that meat, he eats candy.

I bet you can guess how that works - it doesn't. So, after citing similar studies about dairy, he gives that up, too, and he replaces it with candy. His friends are concerned, and they try to tell him that meat and dairy at least have vitamins and minerals in them. They tell him that a little fat and cholesterol won't hurt him, but the lack of nutrients will. But he'd rather eat candy than meat. It's quicker, easier, cheaper, more satisfying in the short-term.

Well, now he's doing even worse. His weight is still going up and he's starting to have tooth problems. But he has a new culprit - starches. Starches cause weight gain. Starches cause all these other problems, too. In vain, his friends try to explain to him that the risk of starches is that they break down into sugars, and the reason why the main problem is with refined and processed starches is that they break down more quickly into sugar. They try to explain to him that candy is already sugar, and trying to replace starches with sugar is just flooding your system more with what's wrong with starches. But guess what. By now, he loves the taste and feel of candy, and by now he's found that eating candy instead of meats and dairy means that he gets hungrier faster, and the lovely candy feeling fades faster, so he needs more candy and he needs it more often. So out the door go the starches, and it isn't long before the fruit follows, for the same reason... the sugars in it are 'bad for you'.

At this point, as anybody could guess, he starts getting more erratic. His doctor diagnoses him with Type 2 diabetes. His weight continues to grow. And he's got one final culprit left - the worst of all - and his arguments against it are even stronger than against the other foods. That culprit - vegetables.

Vegetables are what's really wrong with diet, he argues. Vegetables are worse than all else. He points to vegans and how many of them struggle to balance their diets. His friends try to explain that it's because of the lack of protein, iron, and other minerals in their diet and not because there's something wrong with vegetables, but he won't listen. He cites Eskimos and others who eat few vegetables and thrive, and they try to explain that Eskimos don't eat candy - they eat meat and fish, and the harsh environment means that their bodies make better use of such foods - but he won't hear it. They try to explain that what's wrong with his diet is the candy and the vegetables are the last thing he's got going for him, but he won't listen.

And he gets stuck on vegetables. When giving them up doesn't improve his health, he starts declaring that his problems are caused by people who eat vegetables. The only example he'll give of vegetables being problematic in a diet are vegans who don't put the effort into getting what they'd get from meat/dairy in other foods. He gets to the point where he's practically screaming it by reflex, his greatest enemy: "Vegetables! Vegetables! Vegetables!" He shuns his friends, because they eat Vegetables. He rails against society, because it allows Vegetables.

Unfortunately, this man does die young. He dies of malnutrition, while surrounded by good and healthy food. He dies obese, claiming that the only unhealthy people in the world are skinny.

First, he shunned religion and cultural tradition. in favor of socialism. Then, he abandoned principles of restrained and limited government and personal responsibility. Finally, he descended fully into communism while still believing that he was only dabbling in socialism, and his dying words were his rant against 'all that is wrong with this world'.

"Capitalism! Capitalism! Capitalism!"

The Other Path to a Living Wage

Living Wage.

This seems to be the new socialist bugaboo. I do call it socialist, even though its implementation may be more fascist in appearance. I have said this before: Fascism and Communism are two fingers on the same hand of Socialism, though one may be purer than the other. In the former, the government controls the people through the companies, while in the latter, the government forbids the companies and controls the people directly. There is very little difference; in Fascism, the government forbears the existence of the companies for the time being, while in a free market economy, the government is limited in the ways that it is allowed to control them.

Economics lesson aside, let's break into the actual thought. The usual suspects are now calling for a government-enforced "living wage", the ability of any job to support a spouse and family. They like to claim that this was quite possible and expected back "before all this deregulation", as if the 1950's may as well have been lived under the hammer and sickle or something. Frankly, I'm pretty sure they don't know what they're talking about. But let's take a moment and ask the question: Why are so many jobs no longer offering "a living wage"? There are a few reasons that we can note before stepping into this one. In the 1950's, a "living wage" supported a smaller home with fewer amenities, fewer electronic devices with monthly plans, fewer restaurant meals, and smaller wardrobes. If you were to study the time period and attempt to live only with the amount of stuff and amenities that they had, eating what they ate and owning the clothing that they owned, you might find that a minimum wage job would in fact provide your needs. But let's set that, also, aside for a moment and ask this question:

Are corporations not offering a "living wage" because they are already subsidizing it via government fiat?

A worker costs an employer a great deal. Government-required taxes and benefits alone may increase the cost of an employee a minimum of 25% and maximum (more common in larger businesses, which have additional mandates that small businesses do not) of 40% above the employee's base salary. Many of these 'benefits', like 'health insurance' (itself becoming increasingly expensive and useless), would have been paid by the worker back in the days of the Living Wage.

On the other side, we have corporate and personal income taxes. Why did I say "corporate and personal"? Many companies nowadays are taking advantage of the S-Corp filing status, and filing as if they are persons. That lowers the bewildering complexity of the process and may lower the tax rate. On the other hand, someone who makes $35K/year may be paying taxes on his company's $120K/year profits instead. When we talk about government income from employers, we need to include them. All in all, the top 1% of income earners pay nearly half of personal income taxes, the top 20% pay 85% (the bottom 60% pay 2%), and many, perhaps even most, of those are S-Corps rather than individuals like Elon Musk or Bill Gates. The average S-Corp tax rate is 31%, with a range of 19-35%. (Note: That information is pre-Trump and so is at least slightly out-of-date. But hopefully it gets some thoughts stirring.)

Including all Federal spending, over half goes to social welfare programs, and state spending further adds to the bundle. A cursory look 'round state budget pie charts shows that welfare spending seems to run about the 20-40% range in general. Where am I going with this?

The average low-paying job is indeed already paying a Living Wage.

How can this be? Well, in the 1950's, he would do it by giving you a paycheck with which you could purchase all that you need. Nowadays, he does it the same way the government does for nonworking families. He pays for your health insurance, pays for a fair bit of your tax burden (did you know he pays half your Social Security tax? Try to work for yourself and you'll quickly find that out!), and pays the government to give you food stamps, heating assistance, rent assistance, free school lunches for your children, possibly free medical care for your children as well (CHIP/SCHIP), and, as your salary, a small cash allowance with which to obtain that which he and the government through his taxes have not provided.

Indeed, we see that this provision is sufficient, as there are workers in California under an increased minimum wage who have asked for fewer hours in order to preserve the same Living Wage.

Now's the part where everyone starts accusing me of saying that the poor have it easy, that they are freeloaders, that I don't care if babies starve, yadda yadda. Let's see who can continue to keep an open mind and listen to what I have to say about that. This is not by any means an ideal situation, and the poor do struggle. The reason they struggle, however, is not due to lack of funding. It is because the method of that funding is almost the least efficient and least effective manner possible. I say "almost" only because full-on Communism exists in the world, and it is by far the least useful way to handle wealth.

Raising children has helped me to remember and think about what it was like to be a child. People look back to that time period fondly, thinking of it as being idyllic, because "the world was less complicated and more safe". Indeed, when an adult controls your life, you have less responsibility and you don't have to worry as much about the dangers that still surround you. You still have a chance of being hungry, of being homeless, but in that event the adult will tell you what to do. What people forget is the loss of freedom. Sure, there's a measure of it if you live in a suburban area and own a bicycle. Other than that, though... You still have to ask if you can go to a friend's house. You have to ask if you want to visit a museum. You have to accept the food they give you; your parents determine your diet. You are severely restricted in how you can earn income and how much money you will have. And, of course, your school takes up much more of your life than you would have ever remembered; your precious memories of freedom and fun were most likely snipped out of a plethora of weekends and holidays (the parts that don't involve mandatory visits and customs) and stitched together out of a pair of decades.

Well, the current method of providing a Living Wage is much like being a child. Someone else controls how often/much your house receives to heat, how much you spend on food, which doctors you see, and what your child eats for lunch every school day. This is great, if you live the exact lifestyle that these social programs were optimized for. The problem is that it does narrow you down into a specific form of lifestyle; a purely cash form of a Living Wage allows you to spend more on your housing and less on your cell phone, or more on your clothing and less on your groceries. It can be very, very frustrating to need money for one budget category and be blocked by the Government from simply doing what the middle class takes for granted and transferring it from another category.

What is the answer?

The obvious answer to me is to reduce and reform the welfare system, and with it the tax system. Every reduction in welfare spending must be paired with an equal reduction in employer taxes. I was hesitant to suggest this before, because there must be a time period, I thought, in which wages were still low and people would be hurting. However, the quick responses of businesses in handing out bonuses as they began to raise wages after Trump's tax cut surprised and emboldened me in saying this: As they spend less on the employees through the government, they will spend more on the employees through regular wages.

On top of that, market competition will come into play, this time with a strong emphasis on employee demands rather than employer offers. When you can get a job as a cashier at Walmart and have the government spend tens of thousands of dollars on welfare to make up your Living Wage, you will not have to insist that your employer pays you that wage or you will fight for one of the jobs that pays it. The employment market is indeed a market with customers and 'sellers', and companies that do not offer that wage will have difficult finding people qualified to do the work.

If we do this, I think we will find that the effect of "wages not rising with national wealth", an argument that Liberals tend to use to try to justify actions that depress wages further, will correct itself, and workers will receive their Living Wage as cash instead of an unholy mixture of cash, government-mandated employer spending, and government-mandated welfare spending.

Does "Trickle-Down" exist?

I wrote this up as a comment on another board, and have been asked to make it available as a blog post for easy linking. Someone noted that other people have been arguing that "Trickle Down" doesn't work, leading to the question: "Just what is 'trickle down' and how do we know if it's working?"

This was my answer:

There is a specific economic example of "trickle-down" that basically says that companies under a smaller government-levied financial burden will be more likely to hire new people (provide more jobs) and have a ladder by which people can improve their socio-economic status over time. There are people who seize upon this specific definition, try to find examples where it didn't happen exactly that way, and claim that "it fails" or "it doesn't exist" as a theory *at all* because of it.

But it isn't always going to work exactly like their rigid definition says it should, because, in a free market, companies don't all go on a huge growth stint. In a free market, companies are what they need to be. They go lean when they need to be lean, fat when they need to be fat, and they grow at a natural pace. This rigid definition of "trickle down" happens most obviously when the government is deliberately stunting economic growth (whether intentionally or not) through government policies, in which case removing the artificial limiting factor will result in growth.

The other mistake that they make when insisting that it doesn't work is in looking at living standards compared to the rich, instead of compared to the previous poor. Here's an example. Let's say you have a gym class. Billy starts the year able to do 20 pushups and ends the year able to do 50 pushups. Bob starts the year able to do 2 pushups and ends the year able to do 5. So they start a new exercise program. In next year's class, Jason starts the year able to do 20 pushups and ends the year able to do 100. Jon starts the year able to do 2 pushups and ends the year able to do 10. People claiming that "trickle down doesn't work", by the *same logic*, would claim that the new exercise program has failed in its goal to improve the physical fitness of the lower-performing students.

You guys with me? :) Trying to untwist corkscrews here and lay out their contents clearly!

* * * * * * * * *

Now that's the rigid definition of "trickle down" used to "prove" that "it doesn't work". If you actually look at it as a basic concept being "when the rich are *allowed* to be richer, the poor and middle class do receive the benefits of that", you'll find it all through a free market, profoundly affecting all levels of society. Trickle-down may happen directly, when a rich person can afford a private jet and therefore needs to hire a pilot making $70K/year. Bam, wealth created a job. It may happen the way the rigid definition claims, in which a company has record profits and opens ten new locations in rural markets where they may not have had the infrastructure to serve before, thus opening up a couple hundred new jobs throughout the nation.

It may happen, not through jobs, but through goods and services. Richer people get new furniture and have the old stuff hauled off to Salvation Army to be purchased by lower-class folk. I've seen slightly richer and less 'humble' people who buy a Walmart couch because they refuse to 'take rich people's cast-offs' have to replace a broken couch within a few years; a good quality piece of furniture, even bought used, can last the lifetime of its new owner. As Scott pointed out, the used car market is a prime example of trickle-down. Cash for Clunkers damaged it by focusing mostly on the fairly economical cars that the poorer people buy to replace their gas guzzlers instead of the gas guzzlers themselves, and not rebating enough for the poorer folk to replace their vehicle, thus basically breaking the chain in the middle instead of trimming off the end and arguably causing *more* pollution than if they'd just let the guy making $30K/year junk his '92 Chevy for $200 and buy a '98 Civic for $6K instead.

(A further note on goods: A lot of lower-class families practically depend upon a big circulating wardrobe of free and discounted used clothing, especially for young children, who grow into new sizes very quickly. Toys, books, DVD's... if you can find it sold used and discounted, that means a person who could afford it at its original price bought it new. If they couldn't afford it due to heavier taxes and regulations, they wouldn't have bought it, and you would not have the opportunity to afford it afterwards.)

It may happen through charity. Richer people who aren't hounded into "repaying society" through heavier taxes do often feel a desire to help other people out. Even if they aren't being altruistic, they will still like the good PR and having their names or the names of loved ones on hospital wings and park benches. Food kitchens aren't stocked by the hungry. Our Boy Scout troop and our church periodically have auctions or gift baskets as fundraisers for charities. To get these items, they go to local businesses and ask for, basically, free goodies to 'sell'. That business has to be able to afford to give away a free pedicure, a free pair of movie tickets, a free box of gourmet popcorn, etc.

And finally, it may happen totally indirectly/unconsciously. Have you ever wondered why you can go to Walmart and buy a 55" HDTV for under $500? I learned how it works when I was working at a defense contractor (long story) and listening to the higher-ups complain. Any new fancy appliance or entertainment item (or, for that matter, medical equipment or advancement) has a development cost. Factories also have to spend money to retool for the new item. That cost is factored into the initial price of these items. The only reason why HDTV's aren't still curiosities costing $3000 in the back of Best Buy is because a bunch of rich people bought $3000 HDTV's in the back of Best Buy and basically *paid the cost* of their research and development. Once that's paid off, prices drop sharply, unless another factor intervenes, like scarcity due to other factors. (DVD players are cheaper than VHS players now.)

* * * * * * * * *

Remember back up a few paragraphs where I was talking about opponents/skeptics comparing the rich to the poor over time and claiming that trickle down doesn't happen because of it? The analogy of the kids and the pushups? Part of the reason why I am so content with my own situation is because I compare myself to myself, and I compare my economic status to my economic status. I don't keep up "with the Joneses", and I don't measure success by whether I am richer compared to rich people now than I was compared to rich people then. I do what any *good* school does with classes like Phys Ed and compare myself to myself. As an aside, and to stick with the analogy, my public elementary school was considered to have a poor PE program, in part because the teacher graded students by ability compared to each other; my highschool was considered to have a good program, in part because the teacher graded students by their own improvement. In athletic ability and in economics, that really is the only proper way to do it. And doing so, I come up with this:

My grandparents raised three kids in a 960sqft house. They had one car, one refrigerator, one stove with oven, one washing machine, one television. They saved up and went out for ice cream once a year.

My parents raised five kids (now raising a sixth, adopted) in a 1500(roughly) sqft house. They had two cars, one refrigerator, one dedicated freezer, one stove with oven, a microwave, a washer, a dryer, one television, one VCR, one video game console, one personal computer, and we managed to go out for pizza once every few months or so.

I'm raising three in a 1600sqft house. We had, at the same economic position as parents and grandparents, two cars, one refrigerator with icemaker, one dedicated freezer, one stove with oven, a microwave, washer, dryer, dishwasher, (quality) electric mixer, bread machine, window A/C, two televisions, VCR, DVD player, Blu-Ray player, three video game consoles (Gen 1, Gen 2, Gen 3), two personal computers, two laptops, three tablets, and one cell phone. We also have a monthly eating-out budget.

Am I to believe, then, that I never benefit from the rich being allowed to be rich?

* * * * * * * * *

I'm not going to get into this in detail, but let me offer this thought.

When the government streamlines regulations, lowers regulatory fees, lowers taxes, and doesn't punish wealth accumulation, the poor and middle class benefits in one more way that has nothing whatsoever to do with what the rich do with their money or if they even exist: they are more free to start their own businesses and make their own opportunities, and the social mobility in the country becomes much more fluid. So even if you can't thank the rich for your "new" car, your affordable new market-midrange TV, your kid's scholarship, or your job, you can thank the lower regulatory burden for your ability to afford to start a new business and keep what you earn.

However, this would not actually be part of the specific concept of "trickle down".

The 47% Dichotomy

There has been much ado lately about Romney being recorded at a meeting talking about "the 47%". Of course, everything has been blown out of proportion. In fact, Romney is making a very simple and good point, and Obama has made the exact same point himself in other speeches and policy-making.

Mitt Romney pointed out that there are about 47% (Obama's current support according to polls) who prefer government regulation to freedom. Then he pointed out that the 47-49% who pay no Federal Income Tax are not likely to be swayed by promises of lowering the Federal Income Tax. (It's the shame of the Democrats that they can't understand the simple concept of a Venn diagram.)

Obama said, in a speech when he was Senator, that he hoped to build a Democrat majority out of the people who received government assistance. That's basically the same thing Romney is saying! Obama is capitalizing on the Change that has put more people on government assistance than ever before and the Hope that they will support him to keep the "Obama money" comin'. You can see this clearly in his "Life of Julia" ad, in which he tries to impress upon us our complete inability to succeed without lots of government aid programs.

A while back, Romney claimed that he was not going to focus his speeches on the poor, because they were already well-served by government programs that he didn't plan to mess with. Obama has claimed that he is giving up on the working class. (The *white* working class, specifically, which is not only a horrible racist thing to say, but also will end up meaning the entire working class... unless he plans to start refusing government aid based on the color of your skin.) I have to wonder why Obama has decided to give up on the most hurting group in the country at a time when a family making *above the median income* is eligible for food stamps. It could be that he realizes privately that those who were independent under Bush will not be happy about losing half their wealth and (on average) 12% of their income in order to fall underneath the expanding government umbrella and receive government funding for which they must follow the government rules for everything from diet to housing.

So the question then to all of us is this: Which side? Which path? Which country? The one where aid goes to those in need and the rest of us flourish on our own two feet? Or the "'Julia' couldn't build that" country where the politicians hope that you'll vote blindly for them as long as they keep giving you free stuff? Both Romney and Obama have clearly stated the dichotomy and chosen a side. And I'm afraid the third party vote will not be strong enough to choose a third way... if indeed there is a third way between liberty and subjugation.

Note: Have you heard the latest, by the way? It appears that Romney is a hypocrite because he overpaid his income taxes (by not declaring all charitable contributions), and a hypocrite because he is one of the "47%" due to having paid no income taxes. You just can't win with these guys, even when they have to subvert the basic rules of mathematics in order to hate you.

Are they better off?

So this election season is an interesting one. The two choices are very stark. There is a deeper contrast than there has been for some time. Someone looking at this election would have her pick of issues to address. Today, I want to address one that Romney has been pushing, a question that Obama has a hard time answering... but I want to address it from a different perspective than I have heard anybody address thus far.

Are you better off than you were four years ago?

See, Obama has been going about apologizing and being generally deferrent in his foreign policy. This hasn't worked very well, mostly because the people who hate us are going to hate us regardless, the people who love us don't want us to be weaker, and the few European heads of state who really hated the way Bush did things were replaced in their next election with leaders willing to be a little more kind. But that's really beside my point, so let's move along.

Democrats teach that no man may become rich without stealing his wealth from someone else. Their wealth redistribution policies are based on "fairness". When Republicans say "fairness", what they mean is that it is fair for you to be able to profit from your labor. Democrats mean that it is fair for the people who were disenfranchised by your wealth creation practices to gain from your profit. Thus far, we have mostly seen Democrats apply this on a national level... when they decry the horrible lives of the poor, they mean the American poor, the ones among whom 80% have air conditioning and nearly two-thirds have cable or satellite television. They are not talking about people who live in huts and subsist on a couple of dollars per month.

Obama, on the other hand, has been applying the concept a little more globally. America needs to be taken down a peg. Why? Because we are so rich, that makes us the reason why these other nations are poor. Because one of Mitt Romney's children is attending private school, a Sudanese child goes hungry tonight. We need to give back, he says, on a global level. We have a responsibility, not a Christian responsibility to be charitable to those in need as fellow creatures favored by God, but a guilt responsibility because we 'got rich from their poverty'. Let's set aside the obvious problems with that for a moment and move on.

So America has more people in poverty than ever before. The economy is running at a very low ebb and we are told it is the "new normal". Our debt has been downgraded. Romney and the other Republicans are running on this, asking you if you are better off, and saying that America is a great nation that deserves to be great. Obama is the abusive parent who says that you don't deserve what you have... Romney is the one trying to restore your self esteem and assuring you that you are not somehow sub-par simply for having what you own. This is all well and good, of course, but it is all on an American perspective. So let's look at this from a global perspective.

Is the world better off than it was before due to America's debasement?

We have lost wealth... the average family has lost 40% of its wealth in the recession. Who has gained it? Are Kenyans living any better than they were before? Are Sudanese widows and orphans suffering less for our efforts? Is America giving any more money than before to educate poor children in Africa, or to feed them? Obama told the Egyptian president to step down. (Kind of arrogant for a nation that's supposed to be wallowing in self-debasement.) Do Egyptian women have more power than before? More rights? Under Bush, Afghani women and girls could seek jobs and be educated. Are they as likely to be allowed those rights now?

Is anybody in the world better off for our loss of wealth? European countries have floundered, partly under their own weight, but partly due to the depth and length of our recession. China has managed a short-term surge by buying our debt, but as our dollar devalues, their position degrades as well. American manufacturing jobs pay better in much of China than their own jobs. When Americans have less money, they buy less, they call for less manufacturing... And have we been giving any more money to their poor than before, as a result? Have we been doing more for Indian dalits? Are we saving any Chinese rural women from having their unborn babies killed against their will? Have we been helping anybody with our loss?

Obama and Romney will ask us whether it is worth losing our wealth and prestige in order to aid foreigners. I hope Romney will have the insight to point out that it is our strength that not only we, but others in the world should want to see, because we benefit other nations the most when we have something to offer.

And just as our poor are not richer for the wealth loss of our rich, the world is not better for the wealth loss in America.

So much for resolutions...

Of course I haven't posted in a while now. It seems that "real life" continues to intervene! For today, I have a piece that I wrote in response to a forum thread. The conversation shifted to various economic responses to various tax cuts and government spending.

The first gem was the reminder that the "Clinton Surplus" was created by a Republican Congress and finally passed after Clinton stonewalled it so hard that the entire government shut down for several weeks. In this post, I went into the reasons behind the recent economic problems and their results.

This is what happened in 2006:

Shortly after the Democrats swept Congress, there was a bursting of a gas bubble. Not a physical bubble, but an economic one. Refinery problems plus Middle East concerns plus an increased integration of ethanol worked together to bring gas prices up. Food prices followed quickly. Whenever gas prices go up, food prices go up, because grocery stores work on a shoestring budget. They make almost no profit. So when it costs more to transport food to the store, the items cost more.

Now in 1977, the Community Reinvestment Act was passed by a Democrat majority Congress and signed into law by President Jimmy Carter. The CRA had good intentions... to end the practice of redlining, or refusing to sell homes in certain areas to minorities. However, it basically involved sending the government into real estate to enact something very much like Affirmative Action. It didn't impact us much, though, for nearly 20 years, because it didn't have much teeth.

That changed under President Clinton, who empowered Reno to set things into motion that would punish banks that didn't make enough loans to minorities who wanted to buy homes. The only problem was that the reason why fewer minorities were buying homes was because fewer minorities had the financial means and acumen to hold down a mortgage. The banks were ordered to make it work somehow, and the bank response was the Subprime Mortgage.

The Subprime Mortgage, like the Saltbox and the SUV, was something created by private industry trying to keep what they wanted/needed while skirting Federal regulations. In all three cases, you ended up with something that didn't have all of the advantages of what the government wanted to force or what the private groups originally used. (The SUV is a replacement for the Station Wagon that not only fails to meet sedan fuel economy, but it fails to approach station wagon fuel economy as well. The Saltbox has a partial upper story with a roof that drops to the first story on one side, resulting in a loss of useable space.)

These subprime loans were snapped up by people for whom they were and were not originally intended, creating a heavy demand for new and expensive housing. People who would have been steered towards a starter home were using subprimes to afford twice the house they would have purchased otherwise. We had a housing bubble. W Bush sounded the alarm multiple times, but Frank and Dodd staunchly refused to look into it. All of these subprime home owners were barely managing to make their finances work, and the slightest rise in any of their other bills would lead to disaster.

Then, of course, as mentioned above, the oil price went up. That started a comprehensive collapse that ended in failing banks, foreclosures/abandonments, and rampant unemployment in the construction industry. Unfortunately, instead of isolating this disaster and allowing it to burn itself out, Obama decided to ramp up federal spending, and now it's affecting private sectors that had nothing to do whatsoever with construction or mortgages.

And now the fix, being basically the "You still have to provide mortgages for minorities whether they can afford them or not, but you can't do it this way", is making it nigh impossible for smaller businesses to operate through lack of liquidity. The government we-can't-allow-banks-to-fail mindset has brought to a full stop the natural process of stronger banks buying weaker ones and fixing the problems naturally. Did you know that, at the beginning of the recession, if you had been saving up a little money during the good times, you could have any home renovation done well on the cheap? Before Obama intervened in hopes of getting people to refinance their mortgages, refinancing was easy and very useful. We did it ourselves. Now it's all but impossible unless you fit the narrow and confusing government standards.

Gas prices also started to fall as demand fell, but now the weak dollar plus inflation (both the result of government spending) kept prices up and are now primarily responsible for the current spike. Of course, every part of this, from an end to free checking (next month, I believe, part of Obamacare) to the 50-100% rise in basic food prices, to the tightening of loans and resulting unemployment, is impacting primarily the poor and the middle class.

In short, the particular Democrats who swept Congress in 2006 (aside from Dodd/Frank and other members of the Old Guard) really were no more responsible for the beginning of the recession than W Bush was for the tech bubble burst and 9/11. It's what they've done with it since that has landed us in the Pit of Despair.

Becoming Rich Pt. 2

In my last post, I discussed the first of a couple of principles that will aid you in the process of becoming rich. The second is like it, and is best described in Heinlein's book, The Moon Is A Harsh Mistress. The principle is known as "TANSTAAFL", said as one oddly-pronounced word. It is an acronym that stands for "There Ain't No Such Thing As A Free Lunch."

What does this mean for the person who is becoming rich? Simply this: Aside from a very few insanely lucky people, it will not happen quickly, and it will not happen without effort. Get-quick-rich schemes either depend on such vanishing statistical chance that they cannot in any way be depended upon, or require of you a price that you may not realize that you are about to pay.

I was tempted by offers of a $1,000 or even $2,000 shopping spree at a national electronics chain. All I had to do was to sign up for a certain number of free or almost-free offers. It was easy money, wasn't it? Not necessarily. I knew from the experiences of others that you would have to remember, personally, to cancel the various offers before you had anywhere from nine to fifteen companies charging you $10-20/month for their services. Actually getting these offers canceled is often a real pain, because many of these companies are less than scrupulous. They will take up your time trying to convince you to stay, and then mysteriously lose your cancellation paperwork to get everything out of you that they can. These offers also often involve you signing away the right for them to sell your information to other companies. One of these shopping sprees can result in a huge overflow of junk mail for years to come.

In other words, the price for the offer was my privacy, along with a great deal of time and energy that in retrospect would be more burdensome than simply finding a job that paid $20/hr and working full-time for about a week and a half. TANSTAAFL.

I have a third principle, and liberals will not want to believe this one, because it undercuts their preferred form of aid to the poor. The principle is this: Spend the money that you earned. Earn the money that you spend. This will aid you greatly in becoming rich.

When people do manage to 'hit the jackpot' and become rich quick, it is almost always temporary. Give them a few weeks to a few years, depending on the dollar amount, and they will be just as poor as before. I have heard it said that if wealth was collected and distributed utterly equally, both property and money, within a generation all the wealth would be back where it was. Why is this?

Human beings value things based on the cost to acquire them. When your riches come to you by your own efforts, you are more likely to be careful with them. If you spent five hours digging ditches to get your check, you are less likely to toss it away on frivolities. Money in and of itself has no value. It's cotton and linen and dyes. The number stamped on it is more or less an arbitrary marking. The reason why it has value to you is because it represents those hours of sweat and aches, and it can be exchanged for a good meal and soft, safe place to sleep.

When people receive money through no effort of their own, through winning a huge prize or being handed it readily by faceless government officials, the money does not represent their hard work. It does not represent hours spent out in the sun, or days of frustrating problem-solving. It has little or no value, and the riches they purchase also mean little to them. What if your television breaks? Buy another! Break it out of pique and buy another! It cost you no effort. It cost you no pain, no determination, no struggle.

Now there are exceptions. Some people who win the lottery do manage their money wisely. Some people who receive aid do invest and use it wisely. By the great majority, however, you should not wish for instant riches if you want to become rich. You should wish instead for the slow and steady path, for the accumulation over years, for the knowledge that every time you are knocked down, you can get back up and start again on the path to becoming rich. Becoming rich, like aging fine wine, is more about the process than the result.

My own family is following this path.We have had downturns and upturns, but over all we are on a slow but steady path to the Middle Class. We take care of the things we own, because they cost us dearly in time and effort to accumulate. We save when we can, spend when we must, and reduce where we can. I used to think that it would be wonderful to win the lottery or suddenly have our mortgage debt randomly forgiven. Now I am beginning to see that such 'blessings' may turn out to be a curse. When we have won our way, we will do so by our own efforts, with our own skills, and our wealth will mean something to us.

May it be for everyone. Then everyone can become truly rich.

Becoming Rich

Thomas Sowell has an excellent article up today about rich people and how they got that way. This is not going to be the exact topic of my post today, but it's worth a read.

I learned a lot from my uncle, my mother's sister's husband. Though he is not related to me by blood, he might as well be. One of the few solidly INTJ people in the world, like me, he was able to help me understand how people like me can move through the world without breaking us... or it. One of the most important things he taught me was how to become rich.

Now, I chose my words very carefully. "Becoming" rich is not the same as "being" rich. The method doesn't guarantee any particular measure of wealth in any particular time. It merely ensures that you will remain on the road of improvement, and you will be better off than the way that you were.

These days, advice about life and work tends to be the kind of advice you'd expect from a very wealthy society. "Find out what makes you happy. Settle for nothing less." That is all very well and good when all businesses are booming and the world is full of friendly bosses just looking for the next CEO. Such environments, though, are historically very rare and unusual, existing only in small parts of the world for mere years or decades at a time. You can't rely on them, especially in this economy.

Of course it's a good thing to find out what makes you happy and strive towards it. Rush Limbaugh encourages his listeners to find what makes you happy and then find out how to make money doing it. He cites that as the secret to his success. It's not the only secret, though, and it is not the most important if what you want is to become rich.

Now let me explain my terms once again. People hear the phrase "become rich" and they think that you're automatically talking about turning from minimum-wage poverty to, well, Rush Limbaugh wealthy. Not everybody is going to do that. Not everybody actually wants it, no matter what they think. By the time I'm done explaining this, you'll understand why. However, if you are in dire straits, you do not have to become rich for your entire life. You only have to do it until you are closer to where you want to be.

The first principle to becoming richer is to do anything (within moral standing) that will get you paid. Nowadays there are too many young people who believe that a certain job is beneath them. They graduate with big-sounding degrees, and they've learned to believe that they should only have to work within their specialty. You can't have this mindset if you want to become richer. If you are searching for a job, you should be willing to take what comes your way. My father has worked as an electronics technician, a system designer, a laser builder... and a carpenter for a cabinet company.

My uncle has told me that he has trouble understanding why some people claim that they are just plain unable to get a job. He taught me that you can get a job as long as you're willing to do anything for pay and let enough people know about it. It may be dirty and unpleasant. You may be digging ditches, or working in a factory. Still, it will be work, and you will get paid. There will be times in your life when that will be the most important thing you can do just to keep yourself and your family going.

Now once you've got that job, you can work your way up. You can find out what you enjoy and try to make money doing it. But the first step is to simply get a job, any job that will feed you, or at least help you make ends meet. You may have to lower your expectations, especially in a poor economy. You may have to lower your standard of living for a time. If you want to survive, however, there will be times in your life when  you simply have to take what you can get. That dirty, tiring job should be viewed, not as a disgrace, but as the beginning of your rise.

Death Panels explained: Part 1

I've been hearing people claim that, without Obamacare, there will be medical scarcity. The truth is that Obamacare artificially creates medical scarcity. Granted, the current way Medicaid and Medicare are run already artificially creates a certain level of medical scarcity. Obamacare just makes it worse.

The new phrase to learn is "Pay for Performance". This is something that has been implemented privately already within some hospitals and publicly with some state-run programs. This is how it works: When the P4P group reimburses the doctor, they look at his rating. The rating is used as a modifier to decide how much he is reimbursed. This rating may be created in many different ways, but Obamacare has a specific means in mind.

Obamacare, I must add, reserves this wonderful new measure for Medicare and Medicaid.

Medicare and Medicaid are already notorious for under-compensating the doctors. If a Medicare patient goes to the doctor with a bad cough and is charged, say, $150 for the visit, Medicare will pay the doctor, on average, about $50-70. If our private insurance companies did that, then the doctor would charge us the other $80-100. However, in Medicare and Medicaid, the doctor is not permitted to make any effort towards regaining his lost income. Now, most doctors do not work with a profit margin of 60% of their intake. Therefore, all Medicaid and Medicare patients provide a loss.

This is, by the way, why doctor's offices will only take a certain number of Medicare or Medicaid patients. This is why it's hard for them to find doctors. Each doctor can only afford to take so much of a loss before he risks bankruptcy. Only a small percentage of his patients can come from Medicare or Medicaid.

Now P4P will create a rating for each doctor that is based nearly entirely on his cost effectiveness. What does this mean? Suppose a 95-year-old woman needs a knee replacement to remain mobile. She has two choices: Have the operation and stay on her feet, or consign herself to a wheelchair for the rest of her life. Usually, she would make that decision depending on affordability versus usefulness, and she would make it based on her own beliefs and ideals. If she is a sedentary woman, she may find the wheelchair to be an easier path, but if she is an active runner, she might think that it is worth any cost to give her that ability back again.

In Obamacare, however, if she has that operation and then dies of pneumonia 18 months later, her operation is deemed to have not been cost-effective and her doctor's score goes down.

That score is used along with a multiplier to decide how much the doctor gets paid by Medicare or Medicaid patients. If he refuses to do the operation for her, he keeps a Grade A rating and may receive something like $100, or maybe even $120, for the $150 office visits. If he does it, however, his rating drops and his reimbursement does as well, for every Medicare or Medicaid patient he takes.

Why on earth would anybody set up something like that? The problem is that liberals do not understand why the doctor makes the medical decisions that he makes. See, there really is a mild problem with doctors over-prescribing and over-treating certain situations. For instance, a patient with bronchitis is likely to be able to clear it up with his own immune system inside of a week or two. However, the doctor is likely now to prescribe antibiotics whether he needs them or not. Why?

The current system of malpractice suits allows anyone who can convince a judge that he has been wronged by his doctor to sue, not only for damages, but for 'pain and suffering' as well. Suppose that doctor does not give out the antibiotics, and tells the patient to return within a week or if certain systems develop. Suppose that patient doesn't see the doctor in a week and gets worse and worse, until he has to come in and receive an emergency course of antibiotics for, say, $800 all told. Now he can sue that doctor for $800 in costs and $10K, or maybe $100K, or any arbitrary number, for pain and suffering.

The Republican answer to this problem was a proposal to cap pain and suffering malpractice payments and to set up a special court system allowing people with medical knowledge to judge whether or not the doctor did the wrong thing. That's because the Republicans understood that the reason why doctors over-treat is because of fear of lawsuit.

Obama told us a bunch of stories about pediatricians removing tonsils from children and physicians amputating the feet of diabetics in order to make more money. That's right, Obama and those who created Obamacare firmly believe that the only reason why doctors over-treat (and perform regular acts of malpractice) is to line their own pockets. Naturally, they believe that the best way to rein in these evil doctors is to pay them less for over-treating their patients.

That leaves doctors in a catch 22. They will have a choice with Medicaid and Medicare patients between risking higher bills by being sued for perceived under-treatment or risking lower payments from the government for perceived over-treatment. Since so many doctors are still small business owners working under private practices, the best and safest answer is clear: Stop taking Medicare and Medicaid patients at all.

So simple, even a housewife can understand

This feels strange. These days, I read the news, and I immediately spot the flaws in the Democrats' plans. I do not own a business. I have had no formal education in business. My bachelor's degree is in Computer Science, for heaven's sake. Yet still, I can read these proposals, and the flaws show as clear as day for me. Is there something unusual about me, or about them?

Today's beauty comes from a Reuters article that I picked up from Newsmax:

Democrats are looking at the possibility of a windfall profits tax on insurance companies as part of healthcare reform, House of Representatives Speaker Nancy Pelosi said on Thursday.

Pelosi said she had asked House Ways and Means Committee chairman Charles Rangel to examine the possibility and report back to her.

"This is very preliminary," she told reporters.

But she added that insurance companies would get some 50 million new consumers, many subsidized by taxpayers, under reforms Democrats are planning and "we think they can put more on the table."

Okay, it doesn't take a genius to put this plan together. We're talking about switching out the public option (at least in part) for taxpayer-subsidized private options, kind of like what Congress has... but not quite as posh. It seems they want to keep from raising taxes on the middle class by doing it to the insurance companies instead.

This sets up a neat bit of circular logic.

Only a fool would consider it a victory to let someone else take his profits and use them to buy his product.

Remember that profit is what's left after you have paid for your supplies and paid your workers. It's the part that you get to keep for yourself. It's a percentage, sometimes a small percentage, of what your actual product costs. In this plan, you are only going to recover a small percentage of what was taken away.

Now we've had some discussions about profit. Where does it actually go? It pays the salary of the business owner. So technically, if you earn $25,000 per year as a business owner, you have a profit margin of $25,000. In this society, however, it is also paid out in percentages to stockholders. Who owns stock in the company? Why, anybody can own stock, including the workers, who often are given stock as part of their pay.

If your salary is being decreased by the government and you need more money, the only way to do it is to lower your costs or raise the price of your product.

So where will this "windfall tax" money be coming from? Part of it will come from the CEO's salary, and I am sure that's what the Democratic Party is claiming as the source of the entire tax. In truth, only part, probably a small part, will come from there. The rest of the money will come from the middle and lower class in the form of raised premiums, lower stock returns, and fewer workers employed.

Yet again, the Democrat plan basically involves taking from us to spend on us... retaining a percentage for their own purposes, of course. It's a scam, and as scams go it may look good on the surface, but it is fundamentally flawed.

I'm just bewildered that it seems so obvious to me. After all, I am not one of the elite ruling class that the Democrats deem capable of making my own financial decisions. How can I be clever enough to understand the problems with the way they want to spend my money?

Short thought on labor unions and feminism

As the modern woman tries to "have it all" and ends up with nothing, people are beginning to realize more and more the importance of "mother-friendly" work. The truth is, no matter how much feminists try to push women into high-profile careers, the majority of women continue to want their own children.

The feminists use the phrase "barefoot, pregnant, and in the kitchen," though it has greatly outlived its usefulness. The woman shrieking it in fury still thinks that it refers to a woman who is unable to go anywhere, using up her life in making her husband pleased while toiling endlessly over a hot stove. The average woman in touch with the real world pictures an idyllic moment of relaxation, connecting with the unborn dancing within while feasting upon a much-craved bowl of fresh-picked strawberries and cream, as opposed to trying to force her attention on company business as her pregnant body's feet swell uncomfortably inside rigid formal shoes and the only strawberries in sight are either freeze-dried or cost $5 for a small bowlful in the cafeteria.

The truth is that though women want children and are told that they should desire a career, the majority of actual work available for them is not child-friendly. The boss worries over how this little nuisance will impact the department's performance, while the woman looks forward to using a mechanical pump in the bathroom with a picture of her baby, who is in the care of some other woman being paid half of the mother's earnings. Working mothers have it tough. I should know... I was one out of necessity for a while, and as working mothers go, I had it easy.

How can we deal with this situation? Currently, a variety of possible solutions involve more and more regulation... rules that you can't fire a pregnant woman for being pregnant, rules that she must be given a certain amount of time in which her job is held open but empty, rules that she must be able to use "flex time" to be there when her children get off the bus, even if it means that she spends a cold and lonely Saturday making up her time.

I have a different suggestion.

Remove a few layers of regulation instead of adding more.

Why do so many women work full-time when so many want to work part-time? Part-time is getting harder and harder for employers to manage. A few years ago, I worked as a "casual employee" as a computer programmer. I was paid a set amount per hour, and that was it. No benefits. No holidays. No sick time. No vacation time. No health insurance. No retirement fund. Nothing but a simple wage for hours worked.

That situation is very, very difficult to find nowadays, thanks to a mixture of labor unions and employment law. Generally, hiring someone involves paying a salary plus significantly more for all the associated benefits. Places that seek to minimize their costs by hiring multiple part-timers without benefits are vilified, and they are becoming rare.

However, this is the perfect situation for the working mother. In most cases, her husband is working full-time and providing the family with everything from retirement coverage to medical insurance coverage. She doesn't need paid holidays. She doesn't need stock in the company. She just needs to put in a few hours when she can, to help fill in the gaps in the family budget.

I can see the justification of benefits in full-time jobs, which are usually worked by a wage-earner looking to provide for his family. Nowadays, a hefty percentage of the workforce are 'supplementary earners', and they should not be treated the same way.

Obama's motivation?

Many of my posts here are influenced by various forum discussions on political happenings. Most of them are ideas that I have fleshed out while taking my morning shower. This morning, though, I sat down and wrote an entire post, first draft, straight from my head, while giving my baby her breakfast after a record eight hour stretch of sleep! Upon re-reading it, I thought it was worth simply posting in its entirety.

The discussion started with the new credit card rules and soon moved to things that the administration has been doing that have raised or will raise prices on the average person, thanks to taxes, inflation, and/or changed business practices. One person doubted my take on the situation and basically suggested that I believed everything was Obama's fault because he and the "Demon-crats" had an agenda to bring the American traveler (the last subject was a Democrat-floated proposal to use tax to keep the gas price at $4) to his knees, because that "makes SO much sense *eyeroll smiley*". This was my response:

No, it doesn't, because that's not his plan. It's hard to say exactly what his plan is, but I think I've got the gist of it...it springs from a genuine desire to 'set things right' for the people he believes have been disenfranchised by capitalism.

I don't know if he personally endorses the $4/gallon plan. It springs, however, from a belief that Americans use "too much oil", thereby ruining the environment, and the only way to keep them from doing it is to raise the price until they start cutting back of their own accord. The idea itself follows logically... it just doesn't start with reality. The reality is that though a swatch of middle-class Americans may be able to slim out a small percentage of their driving, the working poor have already gotten it as far down as they can and now have to cut down on food and medical care, and the rich have enough money to continue paying for the increased prices and won't be affected much.

His actual ideas, as well, follow logically from their premise. The only problem is that the premise is not grounded in reality. The car fiasco springs from a belief that hybrids are utterly affordable and easily makeable and the only reason why they aren't all over the place is because the auto companies want bigger profits and the oil companies have it in for us. The truth is that hybrids are losses. They're significantly more expensive as new cars. you can't find them as used cars, and they STILL present a loss between manufacturing costs and selling price.

Obama and most of the Democratic majority are not businessmen, and they're not working poor families, and they're not farmers. They don't understand how you can make more without taking it away from someone else, something any six-year-old with a (supervised) vegetable garden learns by August. They don't realize that you can't make something happen just by saying it'll happen, because they've been steeped in the notion of "positive thinking" (which has its uses, but ordering the sun to shine isn't one of them). They've all gone to these huge famous colleges where the ivory tower notion of the way the world works is passed around and around and around like a cow chewing its cud, and then they have lived lives of privilege (compared to most of the rest of us) surrounded by people who have merely reinforced their beliefs.

This, by the way, is why the percentage of people who approve of Obama as a person, the much-quoted 55-60% depending on which day it is, is much higher (twice as high, last I heard) than the percentage of people who approve of his policies. Lots of people like his charisma, but polls keep showing that Americans don't want the government running banks and companies and such and Obama and his crowd just keep doing it, because they believe they can do a better job. And they can't, because their beliefs are based on a perceived notion of justice and injustice and equality and discrimination, instead of the kind of understanding about profit and loss that any business major already has.

But they won't hear it from businessmen, because they believe that businessmen are all collective Scrooges strip-mining the populace because they like to see people suffer as long as it makes them money money money hahahahaha, like any Saturday Morning villain from the '80's and '90's... at least, the ones whose goals weren't destroying the environment Just Because.

Shattered Dreams

Have you ever hung out with friends or coworkers and started talking about what you would do if you were rich? Usually the conversation starts the same way. "Man, if I won the lottery, I would..."

Stop. Full stop.

If you win the lottery, your winnings are taxed. If you win big, you will be taxed big. Obama is planning on putting a heavy tax on earnings over $250K. Of course, that $250K will be taxed too, at varying rates from the first dollar to the last, so you won't even net $250K. But he's decided that's as much as any reasonable person should ever make in a year, even though you'd hoped that lottery winning meant that you'd never have to work again.

You'd be better off to not buy a lottery ticket at all. The worst that could happen is that you could win, and why are you bothering to spend the ticket money? If you get lucky, it will all be taken away.

Ever been a kid in the basement with a dinky cheap guitar hoping to become the next big hit? Got your friends together, the level-headed bassman, the over-excited lead singer, the wacky drummer? You might want to rethink your plans. You're a musician, not a business. If you make it big, you'll make lots of money. If you make lots of money, Obama will take it away from you. You'd be better off just getting some midrange job and not trying to 'make it big' at all.

Same thing goes if you're a budding inventor, composer, actor... want to make it big? Watch out. You might make it big enough to attract the government's attention. All the risk you took, sleeping in your car, failure after mind-numbing failure, all the years you spent honing your art, all the college debt you accrued trying to stick out from the rest, all gone. Obama and the Democrats have decided that anyone who puts in the work and risk to make it big is destined to hand their money over to people who took neither the work nor the risk simply to make it at all.

What about small businesses? My brother, a tax accountant, clued me into this one. The common designation for a small business is an "S corporation", due to its risks and advantages. Unfortunately, "S corporations" require you to report your business earnings as income, and you do so before you start paying your employees or rent. So if you make a business income of $300K and have expenses of $250K, guess what? You're going under.

From reading what proponents of socialism have to say, I can only guess that they believe that if you take away the incentive to excel, to 'make it big', to win, that people will continue to try. They seem to believe that people will still reach for the prize, even when there is no prize to reach. Capitalism and the free market believe that they are wrong. History is on the side of capitalism and the free market in this case.

What will happen to this country when nobody bothers to risk becoming The Next Big? When inventors no longer fiddle in their garages, and teenagers no longer form impromptu bands in their basements? When nobody buys lottery tickets for fear they might win? When doctors and surgeons do as some are already planning and quit working halfway through the year to avoid making 'too much money', reducing their numbers and making it very hard to get an appointment in October?

What will become of us then?

Hope and Change!

Alright, it's been a couple of months and we've got a fuller and richer idea of what Obama means by 'hope' and 'change'. Let's take a look at what's being said, what's been said, and what is being planned for the future.

President Obama, being eternally optimistic and having run on a platform that claimed sunshine and bluebirds every day should he be elected, has been speaking doom and gloom on the economy so often that even Bill Clinton has reprimanded him on the topic. The stock market has dropped further since his election than it did in all the time W. Bush was in office, and every time he makes a speech, it takes a fall of a couple hundred points. His message is simple; the only way for this country to survive is to give him every power, and to oppose any of his decisions is to want this country to fail. As well, to want lower taxes and greater freedom is now unpatriotic.

Our 'stimulus package' was put together under the watchful eye of Nancy Pelosi, who encourages government funding of contraception and abortion services under the unapologetic (her words!) claim that we can cut government spending on education and healthcare for children by reducing the number of children. I would never have thought of that solution. My natural preference is to reduce or eliminate government spending by cutting taxpayer programs for children of rich families, but the expansion to SCHIP either has been or will be passed soon.

The changes in the package made to medical spending were put into place by Tom Daschle, who has praised Europeans above Americans for being willing to accept a 'hopeless diagnosis' for a treatable condition on the grounds that it would cost the government too much money to help you.

Robert Reich, another lawmaker who worked on the package, caused a minor stir when he pronounced that guidelines should be created for the infrastructure upgrades to ensure that construction jobs created by the work do not go to skilled construction workers or white men. We must ensure that "women and minorities" who are not construction workers or skilled professionals are the ones who ensure that our bridges are safe to cross.

But don't despair! You'll be getting tax relief, if you don't make what the government deems to be too much money, which is about $75K/year. Yeah, I know Obama said his threshhold was $250K, but then Biden, I think it was, said $150K, and someone else said $120K, so are you really surprised? Anyways, if you are not rich, i.e. making $75K/year, you'll be getting about $25/month back in your paycheck starting in April. Don't you feel lucky? It's a tax credit, not a cut, but it's evenly distributed so that it looks like a cut. Oh yes, and you will get this money even if you don't pay any taxes at all, so it isn't really a 'tax' adjustment so much as a welfare check. Basically, the government is using the IRS to send welfare checks to people who are already working, whether they want it or not, and anyone making over $75K/year, in other words, the rich, will be paying for it.

This is the Democrat definition of hope, you see. The government will be handling the redistribution of wealth. If they decide that you make 'too much' money, you will be forced to pay for the lifestyles of all the people who don't. However, even if this level of financial burden bankrupts you, it will still not be enough. Therefore, all the 'little people' who don't make 'too much' money have to learn to be content with what the government provides. Instead of negotiating your own prices with an HMO in order to obtain the medical care that you need, you must expect that if you are too expensive for the government, you will not be allowed to obtain care. You must learn to accept that which has been rationed out to you instead of seeking your own fortune.

The government will care for all your needs, and if your needs are too many, the government will see to it that the population of the needy is reduced through abortion and lack of care for the ill and elderly until the finances work. In other words, prevent hunger by killing the hungry and prevent poverty by killing the poor. The survivors will revere you for saving them from want.

Ah, let me take a moment and address the jobs situation. The rise in unemployment is actually less of an all-over set of layoffs and more targeted to a couple of specific industries, primarily construction. But don't despair, you who are losing your construction jobs! The benevolent Obama has foreseen your needs! He and the Democrats in Congress are setting up a large spending spree on upgrading roads, bridges, and highways.

Unfortunately, Reich and others advocate restrictions on this spending to ensure that the money does not go to actual construction workers and/or 'skilled professionals', especially if they are white men. That's right, despite the fact that 'whites' make up about two-thirds of this nation's population, we must make sure that they are not getting any government funding, even if that means that we cannot hire the people who actually lost their jobs in this recent rise in unemployment. Don't despair, however. Plenty of money in the stimulus package will go towards hiring biologists to study field mice and climatologists to study 'global warming', even though there is no indication of a high unemployment level among biologists or climatologists.

How will Obama pay for all these non-white non-construction workers, biologists, and climatologists? Well, next up on the agenda is supposedly a 25% cut in defense spending. That's right, since the housing market collapse has caused many lost jobs among various construction workers and associated professionals, we must pay for non-professionals and people who are not construction workers by taking money away from the people who employ carpenters, painters, plumbers, electricians, and welders. With the government refusing to buy military equipment built by blue-collar workers and then refusing to hire those same blue-collar workers with the money they've taken away, I'm afraid we're in for a lot more government-subsidized people lining up for their rationed food and rationed healthcare.

Is this hope? Well, it certainly is change.

Fixing the economy is too expensive, but socialism never has too great a price?

Charles Schumer is an idiot.

You won't often hear me calling people idiots. I tend to not like doing that. I don't call people idiots just for disagreeing with me. You have to have come out with "a real doozy" for that word to apply.

The Democrats killed (by vote) the Republican alternative to Obama's economic plan. They claimed that the package of mostly tax cuts, including cutting the bottom personal tax brackets, was just too expensive. This comes from the same people whose only hesitation on the collection of pork termed a "stimulus package" is that they 'fear' it may not spend enough money.

The real beauty, however, comes from Schumer's objection to the Republican plan to encourage banks to offer fixed-rate mortgage loans at 4-4.5% with 'jumbo loans' being exempt. This would help an awful lot of people, by the way, especially the minorities that the Democrats claim to favor. Think about it... the Democrats encourage minority home ownership by letting banks offer a $300,000 loan at variable interest rates, for a house that was worth less than $200K just a few years ago. The Republicans encourage minority home ownership by floating a suggestion to encourage banks to lend to them at a 4-4.5% fixed rate. But anyways, back to Schumer's objection.

The plan would provide a windfall to banks charging fees to refinance mortgages.

That's right, that's his objection. Those naughty banks might actually make some profit off the mortgage refinancing fee. We're talking roughly in the neighborhood of $3,000 for the privilege of refinancing a loan. What will that do to the poor consumer? Well, I recently refinanced at a lower interest rate and rolled the cost into the loan, and still saved over $300/month in bill payments. But that's besides the point, really.

Banks might make money by refinancing mortgages. That's the objection.

Remember TARP? It was meant to hand banks some capital in hopes of restoring liquidity. Basically, the government handed them money in hopes that they would start lending again. Guess what the banks didn't do with the money. That's right. This plan got through a Democrat-controlled Congress with ease.

So basically, it's A-Ok for the government to give the banks 'free' money in hopes that they'll start lending again, but it's unacceptable for the government to prod banks into earning some money by starting to lend again.

This isn't about the economy! This is about government control of the private sector! The Democrats aren't after an end to the recession. They want to turn this country to socialism. They're just using the recession as an excuse!

Who will save you more money?

Alright, folks, here's the deal. Obama wants to give working singles $500, whether they pay that much in taxes or not. He wants to give working couples $1,000, whether they pay that much in taxes or not.

The Republicans want to cut the 10% tax bracket (first $8,350 for singles, first $16,700 for couples) to 5% and the 15% tax bracket (to $33,950 for singles or $67,900 for couples) to 10%.

What does this mean for your family?

Well, let's take a family of four making $50K/year. In the state of Connecticut, that's low enough to qualify for several government programs, including fuel assistance and state-funded healthcare. Doing the calculations for taxes in the first and second bracket, I come up with a savings of $2500 under the Republican plan and.. $1000 under the Obama plan.

So let's try someone else. A single person working full-time at federal minimum wage. That's roughly $13,624/year. Apply the tax brackets and he saves about $681 under the Republican plan. Under Obama's plan, he gets handed a check for $500.

Now I know taxes are a wee bit more complicated than that... things like healthcare expenditures, mortgage interest, and such can change the amount of money that you actually pay taxes on. Still, a little math can tell you the truth... you have to be making pretty darn near nothing to benefit from Obama's plan over the Republicans' plan!

So which plan do the actual workers of this country want?
Feel free to pass this on!

The most dangerous word in politics

There's a word I would like to strike from political language today and for the rest of this year. Unfortunately, with Obama's presidency, I suspect this word will only gain strength and importance far beyond it's merit. This single word is what's wrong with our political system, our economic system, and our societal morality. The word is entitlement.

We are, in fact, entitled to nothing. We are born naked, and survive though the love and instinct of fellow men and women. We take nothing when we die. Pure nature scoffs at entitlement. Not even predators have a right to long life, much less the prey. If we live from the prey and avoid or kill the predators, still nothing we can gather is utterly safe from disastrous storms. A volcanic eruption or an earthquake can level the proudest building in seconds, leaving us, yet again, with nothing. Natural law promises... nothing.

All that we have is what we are allowed to have, what we are given, by God. The main overreaching reason why God gives us things is because of His overwhelming love for us. We are not entitled to it. God owes us nothing. We do not deserve anything God gives us. We can't even keep up our end of the easiest bargain, the lightest burden. Despite this, God has chosen to bind Himself with promises toward our greater good.

The increasing shift to government programs replacing charitable interests have helped to foster a spirit of entitlement among the citizens of this country. Poorer members of society who used to accept what people were willing to give them with a grateful heart now demand what they feel they deserve for no reason at all beyond having been born.

Don't get too confused here in attempts to ream me out for insensitivity. I would prefer that every single person in this world, in the spirit of human dignity and humble appreciation for God's gifts to us, found what aid was necessary in keeping themselves clothed, fed, and sheltered. We are called to generosity and charity, remembering where we would be if not for God's grace. But neither they nor we are entitled to a single thing.

Hard work is honorable and required of Christians, but even it is no absolute guarantee of success, nor a reason to demand that the world responds favorably to you. You can do everything right, and there is still no guarantee. A simple fire set by an irresponsible idiot can destroy an entire lifetime of fortune, and the flames do not care how or when you acquired it. Again, I am not decrying hard work or responsibility. I am just reminding all of us that we are not entitled to anything.

For this reason, I object to government social programs of every sort. I believe charity to be the best replacement, a process by which people are bound together with gratitude and humility, rather than being split apart by entitlement and resentment; of the rich for having their hard-earned goods forcibly taken, and of the poor for the rich not having given them everything they feel they deserve simply for existing.

Responsibility versus Entitlement

I submit for your consideration the following from a Moneynews article today:

“One very troubling point is that, whether measured using 30-day or 60-day delinquencies, re-default rates increased each month and showed no signs of leveling off after six months and even eight months,” said Comptroller of the Currency John C. Dugan.

“This trend of increasing delinquencies underscores the need to understand why these modifications have not been more sustainable.”

I can explain precisely why these modifications have not helped. Many of these mortgages were initially given to people who should not have qualified for the loans. In many cases, they were also used not to allow a working-class worker to move into a small suburban starter home, but to let people who have spent their entire lives expecting the government to provide for them stretch their budget to the limit to build or buy a "McMansion" on abandoned farmland. These are not people who are genuinely struggling to put proper clothing on their children and milk in the fridge. These are people who are "struggling" to keep up with their brand new car payments, their cell phone bills, and still have enough money left over to get their manicures.

I did not watch a lot of the Obama commercial that focused in on "poor families who need help" (from the Democrats, naturally), but I saw enough to remember the woman who said that her kids drank soda because she could not afford milk. I had two immediate thoughts. One was that if her kids drank water like water instead of drinking soda like water, no doubt she could afford a little milk for them. Maybe not a lot, but a little milk and a lot of water is healthier than a lot of soda. The other thing I noticed was her finely manicured nail job, which I asked around about and discovered that $40/month was a very low estimate for upkeep on that kind of beauty product. $40/month will buy a lot of milk... easily two gallons a week. That would give four children a little over a cup of milk each day right there.

My point? These are people who are used to expecting things. They likely got given what they wanted by their parents. They grew up watching commercials that told them what they needed to want. From allowances given for doing nothing to college credit cards gone sky-high, when have they ever learned that they can't have what they "must have"? What kind of standard of living do you have, anyways, if you can't have your hair the color you want it? And if they can't afford it, that's someone else's problem.

So why should they start paying now that they have a more reasonable loan? They've just learned that if they cry enough, banks will do everything possible to accomodate them, to ensure that they aren't (horrors) turned out of their five-bedroom lake-view domiciles. If they continue to cry and don't bother to pay, no doubt in the end they can get what they want for free, especially with a political party in place who doesn't seem to understand that the government does not create wealth... it just takes wealth away from other people.

In the midst of all this nonsense, one family acquired a modest raised ranch on a fixed-rate FHA and have held onto it with all they've got, forgoing cell phones for electricity, forgoing car loans for student loans, forgoing nail jobs and hair jobs for milk and potatoes. They have never missed a payment. It's that kind of attitude, responsibility rather than entitlement, that will bring down foreclosures of modified loans.

Energy Planning

I was on a political forum and the subject turned to electricity. After hearing us shoot down the current efforts of liberals and environmentalists to give us cleaner power by forcing us to accept their methods and proposals, one person asked if we had an energy policy to offer rather than just criticisms. I happen to have one, so I wrote it out for them.

The important thing to realize is that everybody WANTS clean, inexpensive, plentiful power. The only reason why coercion has to be involved to make it work currently is because what the environmentalists keep proposing is simply currently unfeasible. (Hybrid cars, for instance, don't even have the gas economy of a simple stripped-down 15-year-old station wagon.) What we have to do is take the shackles off.

Drill drill drill! Though it would be nice if we were independent of all other countries oil-wise, it isn't really necessary. We have two reasons for drilling NOW. First, we want to get in enough oil to stop buying altogether from countries like Saudi Arabia, freeing us in matters of economic diplomacy to criticize their barbarism the same way we do places like Iraq.

Second, right now I'm seeing in the news that Iran and Russia are scaling back on military operations and buildup because the price of oil is low enough to starve out their economies. We want that. We want them in a position where they have to focus on their economy and not on making themselves big and strong. We can turn coal into oil with technology we've had since WWII and make it profitable at $35/barrel. We have the biggest coal reserves in the WORLD. That injection into the worldwide oil community would really throw prices off.

Note: I haven't said we have to fulfill ALL our oil needs ourselves. It would be nice to do if we can. But it's most important just to get us away from depending on people who "don't like us very much". It would also be nice to work the market against them, forcing them to reduce their military operations without having to fire a single shot!

Of course, there's more to it than just getting more oil out. I favor reducing our oil and coal usage by switching as much of the electrical grid as possible over to nuclear. Nuclear power is safe and effective. It's been proven by now. I think all hospitals over a certain "podunk town" size should have their own mini-nuclear generator as well. If nobody else knows how to do it, they can go ask Electric Boat, who powers submarines so safely that one sub recently crashed full speed head-on... and the mini nuclear reactor didn't even have a single problem.

Lower restrictions on vehicle manufacture. Yes, we need to know that you can survive a crash at 40mph. You don't need 50 different airbags, power windows/locks, A/C, or cruise control to do it, and all of those things weigh down a car. Actually, I would like to see enough restrictions lowered or removed for any handyman to build his own vehicle capable of passing standards and being given a license plate. You'd see plenty of fuel economy and alternate-fueled engines popping up in even greater quantity than they do now. Some of them may become commercially viable.

Save the oil for our vehicles (including airplanes) and use nuclear for our stationary electricity. Keep the prices down. That will in turn keep the prices of goods down (transportation) and the people will have more of their own money to spend.

Why is this important? Because friends and family of mine are ALREADY eying geothermal and/or solar enhancements to their house. They already want this. Why don't many of them have it? Well, right now, since the price of food went up, this household has no money to spare each month and a solar setup costs $12,000 to start.

Sure, the price isn't quite enough to offset the energy savings in money yet, but there are other reasons to want solar. For instance, in an area where winter storms knock out electricity, it's AWFULLY nice to have heat and running water in the home. None of that matters, though, if you can't afford to put the system in, and taking even more money away from the people to government-spend on doing it is not nearly as efficient as removing the artificial economic restraints that keep people from doing it themselves.

Nobody needed to be forced to adopt flat-panel TV's, DVD players, designer jeans, or Lexus's. Nobody needs to be forced to adopt personal alternate-energy systems. Just make them affordable, by lowering the cost of living and/or the cost of the product. Once the market gets out of Teh Elites and into the middle class, you won't need to pay anybody to find a way to produce a cheaper and more effective system, either! A 40" 1080p HDTV cost $3,000 a couple of years ago. This holiday season it's dropped below $1,000.

To summarize: We didn't get into cleaner and more efficient oil-burning by forcing people to limit their wood-burning usage, and we won't get into nuclear/wind/solar by forcing people to limit their oil usage. We'll do it by being prosperous enough to afford the Next Step. In the process, as an extra bonus, we may be able to turn the tables on the unfriendly countries who currently have us, as my husband so neatly puts it, 'by the short and curlies'.

On a similar subject...

I've been explaining issues like taxation, social mores, and charity from the perspective of a Christian Conservative, which is a bit different than just the straight logical conservative view. As a Christian Conservative, I am quite free to use theology as well as logic in explaining my stances. However, let me set that aside for a moment, and offer the reader a chance to learn something from a purely logical-political point of view.

These videos explain the Laffer Curve and it's effects on taxation.

The Laffer Curve, Part I: Understanding the Theory



The Laffer Curve, Part II: Reviewing the Evidence



The Laffer Curve, Part III: Dynamic Scoring