There is Great Income Inequality on the Set of the Big Bang Theory

Posted by PITHOCRATES - September 21st, 2013

Week in Review

It is hard to explain economic fundamentals to the public.  To explain how free market capitalism made this country great.  And how supply and demand set prices.  How unskilled workers are in less demand than highly skilled workers.  So highly skilled people earn more money than unskilled workers.  Which is why doctors earn more money than those working in fast-food.  Because there always seems to be a shortage of doctors.  While there is no shortage of minimum wage jobs.  So doctors are worth more because they are in greater demand.

Those on the left want a living wage for everyone.  Regardless of their skill level.  Unions are trying to unionize fast-food workers and Wal-Mart employees.  So they can force these businesses to pay them more than the market price for their labor.  As determined by the laws of supply and demand.  Like they do everywhere else.  Computer programmers were in high demand during the dot-com bubble.  Raising the salary of computer programmers.  And people went to college to learn how to be computer programmers to get those high salaries.

But try to explain this to the layperson when the left demonizes Republicans.  Calls them greedy.  Saying they want to take food away from children and the poor.  And throw Grandma off the cliff.  That they’re in the pockets of the big, evil corporations.  And that unfettered capitalism is corrupt, unfair and just plain mean.  What makes it especially difficult to explain these economic fundamentals is that the left controls the public schools and our universities and colleges.  And the entertainment industry.  So they’re teaching our children to hate free market capitalism.  And Republicans.  While the entertainment industry mocks and ridicules anyone who tries to advance sound economic policies instead of expanding the welfare state.  Instead they preach egalitarianism.  Where everyone should get a living wage regardless of their skill level.  And where we treat people fairly and with dignity.  Transferring and distributing wealth fairly.  From those according to ability to those according to need.

It sounds nice.  Caring.  And kind.  Despite every country that has ever tried that became a horrible place to live.  For that’s what they did in the former Soviet Union.  The People’s Republic of China.  The former East Germany.  North Korea.  Cuba.  Nations that had to use a brutally oppressive police state to prevent their people from escaping the kind of egalitarianism the left is constantly trying to bring to the United States.

Perhaps the most frustrating thing in trying to teach economic fundamentals to lay people is that their heroes in the entertainment industry are always campaigning for the left.  They attend fundraisers for the left.  Help them win elections.  And they constantly mock and ridicule those on the right.  Despite indulging in some of the most unfettered free market capitalism themselves (see ‘Big Bang Theory’ Stars Seeking Hefty Pay Raises by Lesley Goldberg, The Hollywood Reporter, posted 9/17/2013 on Yahoo! TV).

Sources tell THR that Emmy winner Parsons (Sheldon), Galecki (Leonard) and Cuoco (Penny) will negotiate together — as they did in 2010 — and are looking for a considerable bump in pay from their current deal. According to a TV Guide Magazine report, the trio currently earns $325,000 per episode and may seek up to $1 million an episode…

The new deals for Bialik and Rauch, who joined the series midway through its run and were promoted from recurring to regulars, will see their salary jump from $20,000-$30,000/episode to the $60,000 ballpark, with increases each year taking them to $100,000 per episode by the end of their new contracts.

One million an episode versus $100,000 an episode?  Wow.  Talk about your income disparity.  There is no egalitarianism on the set of the Big Bang Theory.  There’s no fairness.  And just think how much food this could have bought for the children.  And the poor.  If these people were corporate officers they would be hated and despised for their greed.  Especially when the median household income (the income that supports an entire family) has been languishing around $53,000.  And here are actors making more than that each episode they film.  Is that fair?  When others have so little?

Yes, it is unfair.  But is it wrong?  No.  This is free market capitalism.  This is the top-rated comedy on television.  It has great writing.  And great characters.  Which the writers created.  But if you watch an early episode and then a later one you will see how these actors have evolved these characters.  In the first episodes Penny was the pretty neighbor Leonard was smitten with.  But watch her now.  And all the things she doesn’t say.  Her body language and facial expressions.  The little nuances that have transformed Penny into a real life person we look forward to seeing every week.  Kaley Cuoco has made Penny into what she is today.  As Jim Parsons has made Sheldon into what he is.  And Johnny Galecki has made Leonard into what he is.  The rest of the cast is probably the best ever fielded on a sitcom.  But it is the interactions they have with these three that make this show the number one comedy on television.

So, no, we don’t begrudge them from getting these unfair contracts.  More power to them to get as much as they can get.  Sure, it’s unfair to the actors that came before them.  When things were very egalitarian.  Where the actors made far less than they do today.  Even if that show went on forever in syndication.  Like Gilligan’s Island.  Making a lot of money for the owners of that show.  But not the actors.  No, they didn’t get a dime from that syndication.  Worse, none of them made close to a million dollars an episode.  They didn’t get paid a lot.  But everyone made closer to what everyone else made.  Because back then actors were more equal.  Unlike today.  Where there is great income inequality between actors.

So there is nothing wrong with Parsons, Galecki and Cuoco making these huge sums of money.  Or anyone else in the entertainment community.  It would be nice, though, if this community wasn’t publically against the very thing that they benefit so handsomely from.  Free market capitalism.  Which has been very good to them.  As it is very good to everyone.  But yet the entertainment community generally endorses the left.  And attacks the right.  Which helps the left raise taxes and burden business with more costly regulations.  Things that hurt the economy.  And keeps the median household income from rising.  Harming the middle class.  But making no impact on these superrich.  This is the problem we have with the entertainment community.  They’re hogging all the free market capitalism for themselves.  While forcing us to live in the miserable social democracy they helped to create with their endorsement of the left.

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North Korea turning to Free Markets to End Famine and Abject Poverty

Posted by PITHOCRATES - June 2nd, 2013

Week in Review

Our public schools are teaching our children that capitalism is evil and unfair.  That government is needed to prevent business owners from making too much profit at the people’s expense.  Our public schools teach our kids this because the left controls our public schools.  And the left hates capitalism.  They would love to replace capitalism with socialism.  An egalitarian system that puts people before profits.  Because putting people before profits is the only way to truly increase the quality of life.  Unless you actually live in a place where they put people before profits (see NKorean farmers planting rice with profits in mind by AP posted 5/31/2013 on Yahoo! News).

Farmers say they have begun working under the new policies, which are designed to boost production by giving managers and workers financial incentives. Foreign analysts say the moves to spur North Korea’s moribund economy suggest Pyongyang is taking cues from Beijing on how to incorporate free market ideas within its rigid socialist system…

Impoverished North Korea suffers chronic food and power shortages and has not released economic data for decades. South Korea’s central bank estimates the North’s gross national income, an indicator of the average standard of living, was $1,250 per person in 2011 compared with $23,400 in South Korea.

In the past, the North Korean state set workers’ salaries. Under new measures announced April 1, the managers of farms, factories and other enterprises have been given leeway to set salaries and offer raises to workers who help drive up production…

Beijing dismantled its centrally planned economy slowly. In the 1970s, it began allowing farmers to keep more of their harvests, giving them an incentive to grow more to sell on newly permitted free markets. Food production soared.

In the mid-’80s, the government gave state enterprises the authority to link bonuses and salaries to better performance. Those changes were mostly aimed at managers, but they cracked a communist-era preference for egalitarianism.

New rules in the early 1990s gave state enterprises full flexibility to set wages, widening the use of performance incentives. In that decade, China truly broke away from its centralized “iron rice bowl” system of guaranteed employment and state-set incomes…

At the Tongbong farm in the eastern city of Hamhung, farmers are in the midst of a busy rice planting season after a long, cold winter.

A long, cold winter?  Guess there’s no global warming in North Korea.

North Korea’s “rigid socialist system” has impoverished and starved her people.  As well as left them in the dark as they don’t have the energy to light up the night.  This is egalitarianism.  Everyone’s life is equally miserable.  This is what socialism gets you.  Countries like North Korea, Cuba, the former Soviet Union and China under Mao.  Countries notable for their abject poverty.  And occasional famine.  This is what the left wants America to be.  Egalitarian.  Where we put people before profits.  Where no one has any incentive to do anything.  Because working harder than the next guy doesn’t improve your lot in life.  So you don’t work harder.  You do the minimum.  Because why work harder when the outcome is always the same?  Misery.

No doubt the American left disapproves of North Korea’s introduction of market forces.  And the profit incentive.  For it puts profits before people.  They’d rather see another layer of bureaucracy.  And another 5-year plan.  Where brilliant government elites think brilliantly to solve the nation’s problems.  Instead of leaving it to the chaos of the free markets.  For what did the chaos of the free markets ever do for the people?  Other than give them an obesity problem while socialism gives her people famine.  Free markets give her people smartphones and the Internet.  While Socialism can’t even light up the night.  And free markets give her people peace and happiness.  While socialism gives her people fear and intimidation.

Of course, the American left doesn’t have a problem giving fear and intimidation to some people.  As the IRS persecution of conservatives shows.  Which is perhaps why the American left admires socialism so much.  Why they insist that we put people before profits.  Because when we do we move closer to a police state like they have in North Korea.  Something the American left no doubt would like.  For it would make it easier for them to persecute their political enemies.

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People sign Petitions to Secede from the United States following President Obama’s Reelection

Posted by PITHOCRATES - November 15th, 2012

Politics 101

Wealth Redistribution requires High Taxes to get the Wealth from those who Create It which reduces Economic Activity

President Obama’s reelection has left the nation bitterly divided.  President Obama won only 50% of the popular vote.  Down from 53% in 2008.  So the president has become less popular with the American people.  No surprise, really, with one of the worst economic recoveries in history.  Despite the trillions in new spending to stimulate economic activity.  Which didn’t stimulate economic activity.  People concerned about this anemic economy are in the other 50%.  Those who didn’t vote for keeping Obamacare law.  Those who didn’t vote for a massive increase in regulatory powers over the private sector economy.  Those who didn’t vote to raise taxes.  Those who didn’t vote for continued record deficits.

With every contentious election some people will say they will move out of the country if their candidate loses.  Few do.  Although some rich people are doing that now.  As they feel they have a bulls-eye on their back.  With the whole Occupy Wall Street thing.  The 99% against the 1%.  The clarion call to get the wealthy to pay their fare share.  Even though the top 10% income earners are already paying some 70% of all income taxes.  So no doubt the wealthy are concerned.  Wondering where this will all end.  Higher income tax rates?  A higher capital gains tax?  A wealth tax?  Confiscation of all earnings over a ‘fair’ amount?  Who knows?  The sad thing is that these things don’t really seem farfetched.  For there is an angry mob out there.  Stirred up by those on the far Left.  Who is telling them that the only reason why they don’t have everything they want in life is because these rich people have taken it away from them.  And that these oppressed should rise up and demand egalitarianism.  Wealth redistribution.  From those according to ability to those according to need.  Which they are.  Because it’s only fair.

Of course wealth redistribution requires high taxes to get the wealth from those who create it.  Higher taxes, though, are a drag on the economy.  And leads to higher unemployment.  So it’s just not the wealthy worried about where this advance of liberal, anti-business policies will end.  Up to 50% of the population voted in favor of the wealth creators creating wealth.  And jobs.  Something most of the people want.  As already high unemployment will only get worse with another 4 years of anti-business policies.  As well as leading this country closer to a European-style social democracy.  That economic system favored by European countries currently wallowing in a sovereign debt crisis that appears to have no end.

If the Nation broke down into Two Confederacies Steve Jobs would probably have moved to Conservative America

So people are concerned about the direction the country is going.  So concerned that there are actually secessionist movements popping up across the nation.  Where people are signing petitions to advance the secession of their state from the union.  For the growth of federal power has far exceeded the limits envisioned by the Founding Fathers.  And the federal government is only going to get bigger.  European big.  So big that even Alexander Hamilton would have joined his sworn enemy, Thomas Jefferson, in opposing this federal power grab.  For Jefferson’s greatest fear appears to be coming true.  The federal government has reduced the states to little more than federal districts of a consolidated federal nation.  Where all power is consolidating in Washington.  In the hands of a few people.  Who rule over the masses.  Much like a monarchy.  The kind the Founding Fathers fought against to win their independence.  Something this other 50% understands.  Which is helping fuel these secessionist movements.

So people in some states with a historical understanding of our Founding are concerned.  And they’re signing petitions for secession.  While the Left mocks them as whiny sore losers.  When they threaten to leave the union Jon Stewart on the Daily Show mocked them with a line from Willy Wonka & the Chocolate Factory:  Stop, don’t, come back.  That Gene Wilder delivered in a tone of voice that basically said, “Go and good riddance.”  Much to the delight of the Daily Show audience.  Not fully understanding what that would mean.  For it wouldn’t just mean that they would get a country of free health care, birth control, abortion, legal marijuana, gay marriage, open borders, etc.  The Liberal utopian dream.  No, succession would probably result in regional confederacies.  The Northeast, the Midwest and the West Coast would probably join together in a liberal confederacy (Liberal America) where they pass all their liberal policies.  While the remaining states would probably join together in a conservative confederacy (Conservative America).  Which would pose a great problem for the Liberal America.  How?  In a word, egalitarianism.

Business owners who oppose excessive regulations and taxes would probably pack up shop and move to Conservative America.  If they weren’t there already.  So you would have a net movement of businesses, and jobs, from Liberal America to Conservative America.  Where government policies are less anti-business.  Even the liberals would admit this would happen.  As they blame business for outsourcing jobs to foreign countries to escape the high cost of regulatory policies and taxes.  So businesses will move.  Leaving a reduced tax base behind.  Where fewer workers would be paying all those taxes to give everyone all of those free government benefits.  And the best and brightest of our entrepreneurs would head to Conservative America, too.  For they will go where it is easier to realize their dream.  If the nation broke apart into these two confederacies it would be highly probably that if he were alive Steve Jobs would move to Conservative America.  Just as he outsourced his manufacturing to more business-friendly China.  Don’t think this would happen?  Well, it would.  Because it has always happened in the past.

If America divides into Two Confederacies People will flee the Liberal Paradise for Jobs in Conservative America

At the end of World War II the German capital, Berlin, lay in Soviet occupied Germany.  What became East Germany.  Berlin, however, was occupied by the Soviets, the French, the British and the Americans.  Giving those living in Berlin access to the West.  As long as they got to the French, British or American sectors.  Which became a real sore spot for the Soviet Union.  Because East Berlin was a communist paradise.  Located in East Germany.  Also a communist paradise.  The height of egalitarianism where the state provided everything for the people.  It was everything the American Left wanted.  But nothing those living there wanted.  East Germans headed to Berlin en masse to escape to the West.  Especially the best and brightest.  It was a brain drain of the East.  So the Soviets did the only thing they could do.  They built the Berlin Wall.  To prevent their people from escaping their Communist paradise.

West Berlin bounced back after the war quickly.  Becoming a rich and exciting city to live in.  Because they had free market capitalism.  Providing a business-friendly environment.  That created jobs.   While across the Berlin Wall people were stuck in time.  In a dark and dreary existence.  Where they waited in line for their basic needs.  Often hungry.  And cold.  With nothing to look forward to.  For the government didn’t allow anyone to leave their paradise.  Why?  Because the few who did rarely went back.  So they worked.  And sat at home.  Dreaming of how to get past that wall.  To freedom.  And a better life.

If America divides into two confederacies people will flee the Liberal paradise.  For jobs in Conservative America.  Leaving Liberal America with a reduced tax base.  Making it harder to pay for all of those government benefits.  As the benefit-consumers will flock to Liberal America for all that free stuff.  But the people who pay for all of that free stuff will be going the other way.  So fewer people will be paying for more stuff.  Which, of course, will make it impossible to provide all of that free stuff.  Unless Liberal America also builds walls to keep their people from fleeing their utopia.  Keeping the wealth creators on their side of the wall.  So they can tax them.  To pay for their Liberal paradise.  Which will have a close resemblance to East Berlin.  So the liberals should be careful what they wish for.  For if these states secede life will get worse for those dependent on government benefits.  How worse?  Behind the Iron Curtain worse.

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FT93: “Those who don’t want to pay more taxes are greedy yet those who want more free benefits are not.” -Old Pithy

Posted by PITHOCRATES - November 25th, 2011

Fundamental Truth

Income Gaps are a Bad Thing when our Own Income is at the Low End of the Gap

Greed is a tricky word.  A lot of people say it’s bad to be greedy.  And a lot of people believe that it is.  There is a level of wealth out there.  If you’re below it and you want more it’s okay.  You’re not greedy.  If you’re above it and you want more then shame on you.  Because you’re greedy.  But can you name that line of wealth?  Probably not.  Why?  Because it isn’t a fixed amount.  It moves.  And it’s relative.

You see, we judge wealth by comparing another’s wealth to our own.  Anyone wealthier than we are already has enough and should not object to paying more income taxes.  So these taxes can buy more free government benefits for those not as wealthy.  Namely ourselves.  So we can have more without having to work any harder to get it.  For we believe income gaps are a bad thing.  At least when our own income is at the low end of the gap.  And we believe the government should level the playing field.  Make things fairer.  By redistributing the income of those who already have enough.  To those of us who don’t.

At least that’s the mentality.  Because few people in the world would ever believe that they already have too much.  Even rock stars and professional athletes who have more wealth than most could ever imagine believe this.  Because neither continues to play for free after earning ‘enough’ wealth.  And neither would ever consider themselves greedy.

Wanting a Free College Education somehow isn’t Greedy

No one illustrates this better than the college student.  Fresh out of our public school system.  Where they’ve learned the evils of capitalism.  The fairness of socialism.  And the benevolence of Big Government.  These kids are all about equality.  Egalitarianism.  And sticking it to Big Business and corporate America.  All while enjoying their products.  Cell phones.  Cars.  Clothes.  iPods.  Air conditioning.  Heat.  The Internet.  Reality television.  To name but a few.

But life isn’t fair.  And favors the rich unfairly.  So they become politically active.  Vote the anti-capitalistic ticket.  And participate in the occasional protest.  Making it ever harder for Mom and Dad to foot the bill for their carefree life of self-discovery.  By voting for the party that raises their taxes.  But these kids don’t care.  Mostly because they don’t have a clue about the things they’re protesting.  But protesting is fun.  So they protest.  And, of course, because greed is bad.

But greed is relative.  And somehow their greed isn’t greed.  First of all, they’re going to college.  Why?  To make a lot of money.  Because they’re greedy and want the latest cell phone, car, style, iPod, etc.  They want all the best toys.  And party at all the best clubs.  But having that kind of money often requires a college education.  Which isn’t cheap.  And requires some sizeable student loans.  That they don’t want to repay.  Because it isn’t fair to burden new college graduates with the cost of their education.  And yet somehow this greed (wanting a free college education) isn’t greedy.

It’s Easy to Think of the Righteousness of Egalitarianism when you’re not Paying the Bills

College kids may think their parents are greedy for not wanting to pay more taxes.  For not believing in the righteousness of egalitarianism.  Like they do.  Then again, it’s easy to think that way when you’re not paying the bills.  It’s a whole different story when your bills don’t go to Mom and Dad anymore.

And if you got a high-paying job with that college degree you may lose even more of your brotherly love.  When you start paying your own bills.  You discover you can’t have everything you ever wanted simply by having a college degree.  And you make an even more startling discovery.  The more you earn the more the government takes in taxes.  And that just isn’t fair.  Now that you’re on the other side of that income gap.

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FUNDAMENTAL TRUTH #66: “In socialism you don’t get what you want. You settle for what you get.” -Old Pithy

Posted by PITHOCRATES - May 17th, 2011

Beggars can’t be Choosy

Imagine if you will some outdoor summer event.  By the lake.  Or the beach.  Someplace nice.  But a long way from any restaurants or stores.  It’s a day of fun and games enjoyed by all.  A rather long day at that.  And the people get hungry.  Lucky for them there’s food.  Over at the concession area there are two lines.  One long.  One short.  At the long line it says free food.  The short line says $250 per plate. 

There are also menus.  For $250 per plate you can get almost anything you want.  New York strip steak.  Crab legs.  Lobster tails.  BBQ ribs.  Corn on the cob.  Baked potatoes.  You name it and it’s there.  The free line is serving watery, lukewarm macaroni and cheese.  And they make it with an artificial cheese product.  One cup per person.  It tastes horrible.  But, hey, it’s free.  And you know what they say?  Beggars can’t be choosy.  Oh, and they run out before everyone is served.

Now everyone would rather have the steak, ribs, crab, lobster, etc.  But not everyone can afford $250 per plate.  Or wants to pay.  Some say it’s not fair.  But the people enjoying their steak aren’t complaining.  The line’s short.  And there’s plenty of food for them.  It’s just those who can’t or don’t want to pay the $250 per plate that complain.  Because they not only want something for free, they want something good as well.  But life doesn’t work that way.  Because everything costs.  And it’s just too expensive to give away steak, ribs, crab, lobster, etc.  But by selling these at a high price allows them to give away the macaroni and cheese to everyone else.  Which allows everyone to eat.  Until they run out.

As an interesting exercise, substitute ‘health care’ for ‘food’ in the above exercise.

The Free Market is most Efficient 

We can get a broad understanding of economics from this example.  In free market capitalism you can pretty much buy whatever you can afford.  Innovation and the profit incentive provide a lot of competition for your money.  Giving you a lot of choices.  There’s always a new company out there saying, “Hey, look at me!  Look at the new thing I have to sell!”  And if we like what we see we just may buy it.  Perhaps making another millionaire entrepreneur in the process.  While making our life better to boot.  Not too shabby.  This would be the ‘short’ line in our example.

Socialism is a command economy.  ‘Smart’ government bureaucrats direct the economy to maximize market efficiency.  And its objective is egalitarianism, not profits.  Because people should come before profits.  So the socialists decide who gets what resources and what prices should be.  Of course, when you do this, ultimately someone has to decide for the masses.  Because you can’t put 60 million people into a room and ask them what they want.  Sports cars or fuel efficient hybrids?  More tractor parts or more toilet paper and soap?  Grain crops used for food or fuel?  So not only do they decide how to do things more efficiently, they decide our choices for us as well.  This would be the ‘long’ line in our example.

In our example, the free market capitalists are happy.  And sleepy after eating a huge and delicious meal.  The socialists on the other hand are not so happy.  The food wasn’t that good.  And they had to ration it at the end of the day to feed everyone.  And yet they still ran out before everyone ate.  And this happened why?  Because it is the free market that is most efficient.  Not the command economy.  The free market is what fills up store shelves with things we want to buy at affordable prices.  Not the command market of socialism.  If you don’t believe me, talk to someone who lived in the Soviet Union.  Ask them what was on their store shelves.  They probably saw more tractor parts (which they didn’t want to buy) than toilet paper or soap (which they did want to buy).

Egalitarianism leads to Low Quality and Rationing

In theory, socialism sounds wonderful.  Egalitarianism.  Income redistribution.  From those according to ability to those according to need.  Sticking it to the rich.  What’s not to like about that?  I mean, if you’re not rich.  And that’s the catch.  Rich can be a relative term.  If someone has more money than you they’re rich and should pay more in taxes.  And those who make less than you will feel the same way about you.  Which, of course, you’ll probably reply by saying something like, “Hey, wait a minute.  I’m not rich.”  But anyone poorer than you would disagree.

So the middle class will only want to tax the ‘rich’ rich.  And the poor will all be for taxing the middle class and the rich.  Ultimately, though, because there are so many ‘poor’, you have to tax the middle class in any income redistribution scheme.  Because even though the middle class is far from being rich, they are far more numerous.  And the numbers add up. 

Besides being taxpayers, the middle class and rich also have something else in common.  Jobs.  The rich provide startup capital for new businesses.  That creates jobs.  And the middle class start up most small business.  And they, too, create jobs.  In fact, small business creates the majority of the jobs.  So high taxes on these people provide a disincentive to do what they do best.  Create.  Jobs.  And things people want to buy.  So higher taxes reduce incentive.  And this reduces economic output.  Less stuff on the market means higher prices.  Lower quality.  Or simply less stuff.

Some People are more Equal than Others

And this is why beggars can’t be choosy.  Egalitarianism sounds nice but there is only one way to achieve it.  You can’t give everyone steak.  It’s just too costly.  So you give everyone watery, lukewarm macaroni and cheese.  Everyone is equally miserable.  And hungry.  But you don’t complain.  Because it is either that.  Or nothing.  Unless you’re part of the inner circle.  The ruling elite.  For them there is always steak and lobster.  For it’s a small price to pay for all the selfless service they do giving us our egalitarian society.  They have a lot of stress in their life optimizing market efficiency.  So they need a little pick me up.  I mean, who could begrudge them fine steak and caviar after all they’ve done for us?

Socialism is not about market efficiency.  It’s about lowering quality (to make things cheaper).  And rationing.  So you can try to spread less stuff around to more people.  But taxing the creators raises costs.  And reduces economic output.  Which means there is less stuff to distribute to the people.  Which means they have to raise taxes to keep giving the people the same stuff.  Or reduce the quality further.  Or ration more.  It’s an endless downward spiral. 

And once you’re in the system, you are dependent on the system.  You beg and plead for less rationing and cuts but to no avail.  Sure, there’s enough steak for the ruling elite, but not for everyone else.  So there has to be fair-shared sacrifice.  By everyone.  Everyone that’s not in government, that is.  For in an egalitarian society, all people are equal.  Only some are more equal than others.  (A little George Orwell there.)

As an interesting exercise, substitute ‘health care’ for ‘food’ in the above exercise.

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FUNDAMENTAL TRUTH #65: “The only thing the market is inefficient at is funneling money to anti-business politicians.” -Old Pithy

Posted by PITHOCRATES - May 10th, 2011

The Natural Order and a good Last Name

There are two types of people in America.  Those who work.  And elitists who want others to work for them.  It’s been this way since the dawn of civilization.  One group asserted their power over the masses.  The masses then worked.  The ruling elite didn’t.  They just gave the work orders.  The masses dutifully followed their orders and grew the food.  The ruling elite took in the bounty and ate until they were full.  And then some.  While famine thinned out the masses.  It was the natural order once upon a time.  And those who held dominion over the land liked it.

Land, then, was key.  The aristocracy owned the land.  Hence we called them the landed aristocracy.  They owned the land, the food and the wealth.  And the people.  In European and Russian feudalism there were serfs.  In the antebellum American South there were slaves.  The landed aristocracy may buy and sell land and move.  But the serfs/slaves stayed on the land.  Forever.  As their parents did.  As their children would.  It was the natural order.

Your name was very important in the landed aristocracy.  For land was hereditary.  As was wealth.  As was political power.  And it stayed this way for a long time.  While everyone who worked farmed.  But over time, something happened.  People got smarter.  They were able to grow food surpluses.  And they took these surpluses to markets.  Which became cities.  Where we saw the rise of artisans.  Skilled people who made tools and crafts that further improved our lives.  Allowed people to leave the farms.  And create a middle class.  Greatest thing that ever happened for the masses.  It allowed a way out from the back-breaking toil of working the land.  Even if you didn’t have a ‘good’ last name.

Representative Government changes the Natural Order

Of course, not everyone was keen about this.  Because it disrupted the natural order of things.  And threatened the old power structures.  Some adjusted.  Some shared the power.  Like in England.  Where there was a representative government.  There was a bicameral house.  The Parliament.  Representing all people.  The rich in the House of Lords.  And the common people in the House of Commons.  And, of course, the king.  Who represented the king.  And the state.  Now, kings like to wage war.  Conquer.  And add to empire.  But it takes soldiers and sailors to fight.  And money to pay for armies and navies.  Which the king didn’t have.  The rich people had the money.  The landed aristocracy.  The Lords.  So the king just couldn’t wage war unless Parliament consented.  Pretty nice thing this check on power.  This representative government.  It made for happy subjects.

It wasn’t like this in France. While the English were checking the king’s power, the French monarchy was absolute.  It  could do whatever it wanted.  And did.  Spent a lot of money.  Ran up great debts.  Fought a lot of wars.  Including the Seven Years’ War that lost much of French North America to Great Britain.  And helped the Americans in their War of Independence.  Helping them to gain their independence from the British monarchy.  Which proved to be a deadly game for the French monarchy.  For the French people grew fond of representative government themselves.  And they thought if the Americans can overthrow king-rule maybe they could, too.  So they gave it a try.  The French Revolution was a bit bloodier than the American Revolution, but it got the job done.  France, too, had a representative government.  Until Napoleon declared himself emperor, of course.  And then he did a lot of kingly things.  Waged war.  Conquered.  Built empire.  And added to the debt.

Great Britain gave up on minority rule.  France tried to hang on to it, lost it then Napoleon got it back.  The reason minority rule failed in these countries is because a minority ruling power needs money.  And it was easier to get money in an agrarian economy.  When all the wealth was concentrated in the few who owned the land.  The rise of a middle class changed all of that.  Artisans and merchants made a lot of money.  Some even without ‘good’ last names.  The people who didn’t have to kiss any royal ass to get or maintain their wealth.  It was a whole new game out there.  Minority rulers needed to find another way to amass money and power.  And they found it.  In the ‘lie’.

Lies from Marxism to Socialism

A ruling power lying wasn’t anything new.  But some of the lies were.  Marxism, for example, was a new brilliant lie.  It made those the ruling elite wanted to oppress ask to be oppressed.  In the name of egalitarianism.  Rise up you miserable oppressed factory workers.  Attack the industrial bourgeoisie (i.e., the middle class).  You have nothing to lose but your chains.  Karl Marx may have believed the claptrap he wrote.  But those who used it could care less about the underlying philosophy.  They just liked the power it gave them.  So those who aspired to rise to power and rule over the majority led worker revolutions.  And after they won, the workers went back to suffering just as they had before.  Only they had less.  Because the communist commissars knew jack squat about the means of production.  But that was okay.  For it just helped to enslave the masses more.  Well, that.  And the brutal police state that discouraged any inappropriate behavior.  Or thought.

It was a good run for the communist powers that be.  While the masses suffered they lived a very comfortable life.  Just like the landed aristocracy of old.  Unfortunately for them, their ruling policies sent their economies into nosedives.  And they suffered recurring famines.  Marxism was a failure.  The ruling elite knew it.  And most of the people knew it, too.  Often, those who could escape from their communist utopias did.  Because they were anything but utopian.  So those aspiring to ascend to the ruling elite needed a new lie.  And they found it in communism-light.  Socialism.  Which appealed to the people they wanted to oppress for the same reasons Marxism did.  It would stick it to the rich in an egalitarian utopia.

But there was little difference between Marxism and socialism.  Both systems tried to manage the economy.  And both did a horrible job.  Why?  Because state planning is not about improving the lives of those they rule over.  It’s about maintaining power.  An economy left alone will always outperform a managed economy.  Everyone knows this.  But if they leave the economy alone, how can the ruling elite amass power and wealth?  It can’t.  Ergo, the lie continues.  Not to improve the lives of the masses.  But to improve the lives of the ruling elite.  The minority power.  Who only ascends to power by a good lie.

Wealth Redistribution Killed the Golden Goose

The free market does have one inefficiency.  It does not enrich those who do not partake in it.  The ruling elite aspire to be in a minority rule for a couple of reasons.  First of all, when you’re stealing from and oppressing the people, the fewer people in the ruling elite the wealthier each member gets.  Which is what they want.  Wealth.  And being in the ruling elite gives them access to wealth.  Because they are so completely untalented that they could never make any wealth in the free market.  So they use the lie to acquire their wealth.  To live the good life.  Like the landed aristocracy of old.

So they become the champion of the working man and woman.  And promise to deliver that egalitarian society via wealth redistribution.  They promise to tax the rich.  And give to those who will vote for them.  It has proven to be a very effective system.  And in its heyday they were reaping in the money.  Even found a way to funnel tax money directly to them via public sector union dues.  But they just got too greedy.  Pulled too many people into the new aristocracy.  And too many people out of the work force who paid the taxes that paid for their comfortable lives of plenty.

The taxes and policies of the ruling elite have grown so anti-business that it’s reduced economic activity.  And tax generation.  So not only have they bloated the public sector with nonworking people and reduced the taxpaying workforce, they killed the golden goose as well.  And no lie may change the mess they created.  They may have no choice but to unfetter the free market.  And get real jobs.

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LESSONS LEARNED #36: “Politicians oppose across the board tax cuts because they are not politically expedient.” -Old Pithy

Posted by PITHOCRATES - October 21st, 2010

No King Ever Ruled Without the Consent of Money

There were kings.  And there were wealthy landowners.  Kings may have been sovereign.  But the wealth lies with, as you may guess, the wealthy landowners.  Kings needed money.  Because doing king ‘things’ got expensive.  War, armies, navies, festivals, feasts, castles, palaces, churches, etc., were very expensive.  So kings taxed their subjects to raise the money they needed to be king.  And when it came to money, the vast majority (i.e., the peasants) had little.  It was the peasants’ landlords who had the money.  And it was they who paid the bulk of the taxes.

But it was a two-way street.  Because it was their money, they, the wealthy landowners, had a say in how the king spent that money.  This was a restraint on the king’s power.  There were laws to protect the property rights of these landlords.  Now.  And in the future.  Property owners could pass their property on to their heirs.  As well as their political standing with the king.  Thus the rich and landed aristocracy passed on both their property and their nobility through inheritance.  Thus kings and Nobility lived by the consent of the other.  And they each lived by the consent of money.

The Roman emperors spent so much money near the end of the Roman Empire that they brought their advanced civilization to an end.  The landed aristocracy survived, though.  They just served a different sovereign.  The masses (i.e., the poor peasants) still worked the land.  The landlords still held the wealth.  Kings would come and go but this way of life (feudalism) remained.  Kings ruled as long as the landed aristocracy didn’t object too much.  Which they did in England in 1215.  The landed aristocracy met King John on the field of Runnymede.  Seeing his power was not absolute, the king reluctantly set his seal to the Magna Charter.  Constitutional monarchy would reign in England.  And England would reign supreme in the Old World.  And in the New World.

No Taxation Without Representation

The constitutional monarchy that developed consisted of the Crown and a bicameral Parliament.  The two houses of Parliament represented the needs of the few (the House of Lords) and the many (the House of Commons).  Thus the needs of the one (the sovereign), the few (the rich) and the many (the not rich) were balanced against each other.  It was a pretty good system.  The best in its time.  An English citizen had a better and more comfortable life with greater liberty than citizens of most other countries.

This liberalism unleashed a flurry of economic activity.  It created an empire.  International trade exploded.  England became a leader in farming and agriculture.  This knowhow spread throughout her empire.  As did her representative government.  Which they established in their North American colonies.  Perhaps a bit too firmly.  With the costs of world war came the need for higher taxes.  The British had just defeated the French and took possession of all their possessions in North America.  Her English subjects there were now free from French aggression.  And Parliament wanted these subjects to pick up a large part of that war tab.

Well, this didn’t go over well in the colonies.  For they had no representation in Parliament.  They had their own representative governing bodies in the colonies.  But they were subject to royal governors appointed by Parliament.  Without a vote in Parliament, they had no say in matters of taxation.  This was very un-English.  For the English nobility consented to taxation in exchange for having a say in how the king would spend those taxes.  As the landed aristocracy protested in 1215, the Americans protested this taxation without representation.  Eight war years later and America left the mother country.  Another few years later they ratified the Constitution and created the United States of America.  Which came to be because a governing body violated the sacred covenant between a king and his subjects.  A king may only rule as those who pay the kingdom’s taxes approve.

Universal Suffrage Increases Our Suffering

Because the new American government taxed property owners, property ownership was a requirement to vote.  In other words, those with the most to lose (those paying the taxes) had a say in how the government spent their taxes.  It kept the government honest.   By limiting the vote to those who had ‘skin in the game’ it made it hard for government to build palaces for themselves.  Because there was a direct connection between the source of funding and what that funding was used for.  The government may persuade the tax-paying voter for the need for a national postal system.  But a palatial palace was a much harder sell to the one footing the bill.  Especially when that person would never enjoy its benefit.

Such a system led to responsible government.  It minimized political corruption.  And if there is anything a politician doesn’t like it’s this.  They like corruption.  They thrive on it.  It’s their raison d’être.  And this responsibility thing just didn’t cut it.  They need people to vote who have no skin in the game.  People they can buy.  So they can live the good life.  Like in days of old.  Enter universal suffrage.  Where a politician can promise people other people’s money.

Wait a minute, you mean I can have a say in how other people spend their money?  Sweet.  Gimme gimme gimme.  I me mine.  Tax the rich.  Health care is an entitlement.  I mean, as long as someone else is paying, I’m for sale.  Promise me whatever I want and I will vote for you.  And forget what Benjamin Franklin warned us about: 

When the people find they can vote themselves money, that will herald the end of the republic.

Money Talks; Egalitarianism Walks

It probably started with Martin Van Buren.  Creator of the Democrat Party.  He created the party machine.  Patronage.  Payoffs.  And buying votes.  Dirty, filthy politics began with him.  And the Democrat Party.  Beginning with the campaign for Andrew Jackson, politics have gotten worse ever since.

It’s about the money now more than ever.  With the power to tax, government has a near unlimited source of money.  And with it they can get power.  By promising money to people that don’t have money.  Lots of it.  Thanks to universal suffrage, they can bus as many poor, indigent and government-depended people to the polls as possible.  And the more of them the better.  For they will vote for whoever promises to give them the most free stuff.  And why not?  They have no skin in the game.

And by voting themselves a permanent entitlement, they will make themselves a permanent underclass.  Where they will remain poor, indigent and government-depended.  As government spending continues to grow unchecked, it will push people down the economic ladder until the middle class disappears.  There will be only the rich (the government and the government-connected).  And the poor.  Just like in days of old.  Which is the goal of our tax policy.  You see, across the board tax cuts do not enhance the dependency-power relationship.  But targeted tax cuts do.  That’s why Big Government favors a complicated tax code.  It enhances the dependency-power relationship.  That empowers Big Government.  Throws egalitarianism out the window.  And makes life good for the ruling elite.

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LESSONS LEARNED #18: “Man-given rights are only privileges allowed by the privileged elite.” -Old Pithy

Posted by PITHOCRATES - June 17th, 2010

GOD WAS HERE before the Marine Corps. So you can give your heart to Jesus, but your ass belongs to The Corps.

(From the movie Full Metal Jacket, 1987.)

In Roman Catholicism, this is the doctrine of the two swords.  The spiritual sword is the Church.  The temporal sword is the state.  Martin Luther had the doctrine of two kingdoms.  The religious and civil.  Going back to the source, Jesus Christ put it this way:

Render unto Caesar the things which are Caesar’s, and unto God the things that are God’s 

The original separation of church and state.  Of course, back then, this was all intended to limit the state’s interference into spiritual matters.  Today it’s reversed.  It’s the state that is trying to hold the spiritual sword at bay.

THE FOUNDING FATHERS were gentlemen of the Enlightenment.  This makes them complex.  The Enlightenment was the Age of Reason.  And guess what we did during the Age of Reason?  We thought.  Rationally.  There was a philosophical revolution going on in Europe.  Simply put, things weren’t what they were because the Church said so.  There were other explanations.  Other laws.  And the Church could be wrong.

So, if the Founding Fathers had lived in the 20th century, they would have probably been fans of the rock group Rush.  And Ayn Rand.  Who influenced Rush.  Thomas Jefferson probably would have an iPod filled with their songs, including Tom Sawyer:

No his mind is not for rent
To any god or government

They questioned ALL authority.  And some may have been Deists.  But they were not atheists.  Even Jefferson.  He may not have believed in the Trinity or Christ’s divinity, but he still believed in God.  And he worshipped Jesus in his own way.  As the world’s greatest philosopher, with his Sermon on the Mount being the best philosophy man could ask for.

THE FOUNDING FATHERS were gentlemen of the Enlightenment.  Now the other part.  The thing that makes them complex.  The gentlemen part.  What did this mean in the 18th century?  Here are some adjectives that describe a gentleman.  Honorable.  Virtuous.  Reputable.  A gentleman strived to achieve moral excellence and righteousness.  He was ethical.  His life was a steadfast adherence to a strict moral code.  And when he served in public office, it was with selfless disinterest.  He would go out of his way to NOT gain personally from his time in public office.  Some did it better than others.  But all tried.  And when they fell short, they at least put on an appearance of disinterest.  It was that important.  And expected.

In a word, restraint.  This is what a gentleman practiced.  George Washington exercised this restraint to such a degree that many found him cold and aloof.  Few saw him smile.  Few saw public displays of emotion.  What they did see was an exemplary life of virtue, honor and moral excellence.  And they would forever look at him with awe and reverence.  We do to this day.

These students of the Enlightenment, then, espoused Judeo-Christian ethics.  They questioned all authority oppressing man, whether it be Church or state.  But they did not throw out the baby with the bath water.  They remained religious.  They just wouldn’t yield to it unconditionally.  Not to the Pope.  To a bishop.  Or any other tyranny of a minority, privileged elite.  Even after their Revolution.

And they would extend this restraint to the new nation they would found.  It would be a government that would govern with the consent of the people.  But it would not be mob-rule.  Not a true democracy.  It would be representative government.  The idea was to restrain the extreme passions of the people.  They would not exchange one tyranny for another.  There would be no tyranny of the majority.

FRANCE HAD PROBLEMS in the late 18th century.  The toll of war was bankrupting the country.  Their financing of the American Revolution didn’t help either.  Food was scarce and expensive.  Famine and malnutrition were commonplace.  Among the Third Estate (the poor).  The First Estate (the Church) was doing well.  The Second Estate (the nobility), too.  Unemployed and hungry, the poor looked at the clergy and the nobility who were not. 

The Church was largely exempt from paying taxes. And the Church was the largest landholder in France.  The Church levied a 10% tax (i.e., a tithe) on the general population.  A lot of that was collected in-kind (food crops).  So the Church had more land, money and food than the starving, suffering masses.  Who became an angry mob.  That demanded democracy.

The people stormed the Bastille.  Confiscated Church property.  Overthrew the monarchy.  And sent the king and queen, and many others, to the guillotine.  Maximilien Robespierre and the Jacobins unleashed the Reign of Terror.  They executed political enemies, including priests, and displayed their severed heads to the angry mob.  They de-Christianized France, destroying churches and religious symbols.  They tried to do away with the Church altogether and replace it with civic and community events and organizations.  It was a revolution against Church and state.  Against law and order.  Against restraint.  They would send Robespierre himself to the guillotine at the end of his terror.  Then another terror followed to avenge the previous terror. 

There’s more to the French Revolution.  But that should suffice for now. 

FRANCE WAS IN the epicenter of the Enlightenment.  Some of the great minds of the Enlightenment were French.  But France was older than America.  And more populated.  With centuries of wrongs to right.  It was anything but a blank canvas.  Egalitarianism soon devolved into angry mob rule.  Democracy.  They went from the tyranny of a minority to the tyranny of the majority without stopping in that fertile middle ground.  As was the case in America.  Why?

It’s that blank canvas thing.  We weren’t overthrowing our history to start anew.  We had little history.  Maybe a century or two of English colonists who literally started with raw earth.  There wasn’t a rich and privileged Church.  So there wasn’t a festering resentment against the Church.  No, the early colonists escaped religious oppression and came here for religious freedom.  Which they found.  And enjoyed.

The American Revolution was more restrained.  There were no bloody reprisals after the War.  There were isolated instances of mob violence during the War, but the ‘mob’ was never in control.  The ‘gentlemen’ were always in control.  Gentlemen steeped in Judeo-Christian ethics.  From the Declaration of Independence to the Constitution, the Founding Fathers built a new nation upon the Rule of Law.  And at its heart were the God-given rights enumerated in those documents.  That no man, or minority, or majority, or mob, could take away.

GOD WAS HERE before the United States.  So we can give our heart to Jesus.  But our ass belongs to the Rule of Law.

Or something like that.  We are a secular nation with a de-emphasis on the religious part.  Yes, legal punishment may dissuade you from doing wrong.  If you think the cops can catch you.  But it’s our morality that will keep us from doing wrong in the first place.  And the people at our founding were moral.  And Christian.  Or deists with Judeo-Christian ethics.

And to those who fear antidisestablishmentarianism, don’t.  I doubt the Catholics and the Protestants could agree on what an established church would be, let alone the myriad other religions peacefully coexisting with each other.  No, more religion would not result in an established church.  It may, though, result in government leaders who fear God and, maybe, they would be better leaders for it.  It sure beats us living in fear of them.

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