FT137: “There is no affirmative action or liberal policies of fairness in the NFL.” —Old Pithy

Posted by PITHOCRATES - September 28th, 2012

Fundamental Truth

To avoid Bad Press or Legal Action Businesses hire not Based on Qualifications but Based on Diversity

Universities use affirmative action whenever they can during the admissions process.  Giving more weight to an applicant’s race than his or her GPA or test scores.  Guaranteeing that some more educationally qualified applicants are denied admission.  Because these universities believe that diversity is more important than merit.  And that diversity over merit is fairer.

If businesses hire purely on merit without consideration to race they will get bad press.  Possibly even some legal action against them.  Because those on the Left say it is our differences that make us better.  Not our merit.  So to avoid bad press or legal action businesses hire not based on qualifications but based on diversity.  They hire an excellent labor force.  But not the best labor force.  For the best candidate may just be the wrong race.

Some cities even lowered their standards to hire more minorities.  Because sometimes the wrong races edge out minorities on test scores.  Such as firefighters.  Who grew up in more affluent cities with better schools but went to the big city to be a firefighter.  They didn’t live in the city.  But they wanted to work in the city.  And they competed against those who grew up in those cities whose schools may have not been as good.  Adding a lot of competition for a few openings.  So these cities try to make the testing process fairer to those who went through a less quality school system.

Activist Governments pass a lot of Restrictive Laws to make things Fair

Large cities place restrictive requirements in their contracts for construction projects.  Contractors need to meet diversity requirements.  Even residency requirements.  So they have to hire a certain percentage of their workers from the local population.  Even if they are not the best skilled workers for the project.  They often require larger companies to contract work to smaller, minority contractors.  Who can’t really complete a large project because they lack the resources, equipment and experience.  But they make the larger company mentor the smaller company.

Unions like to make things fair for workers.  They do away with merit.  So better qualified and harder working people don’t get paid more.  For in a union they pay everyone equally.  Based on seniority.  And they make it very difficult to fire a worker.  So being in a union is where you don’t have to worry about people who are better than you.  And no one gets ahead by working harder than your coworkers.  Especially those younger workers who are overachievers.  In time they, too, learn.  From senior workers.  Not to be an overachiever.

Activist governments pass a lot of laws to make things fair.  Often requiring companies to hire people and contract companies that aren’t the best.  To give the less qualified a fair shake.  So that it’s just not the overachievers who achieve success.  Which is a nice thing to do for those who need a little help.  But there is cost.  It makes it harder for these companies to do business.  Raising their costs.  As well as their prices.  Perhaps even sacrificing a little quality.  But it is all in the name of fairness.  And that’s important to government.  So they force this on everyone.  No matter the costs.  Because it’s the right thing to do.  To be fair.

Pity Businesses can’t run their Businesses like the NFL runs Theirs

Fair may be good for some people.  But you know where there is no fairness?  In the NFL.  It’s a pure meritocracy in the NFL.  Only the best play.  Even if it means not having diversity on the field.  (The percentage of black players far exceeds the percentage of blacks in the general population.)  Or that others not as good don’t get a chance to play.  Like they make businesses do.  For it’s okay for business.  But not in the NFL.  No matter how unfair that is.  Why, it’s even silly to think about diversifying the teams.  Adding more white players.  More Asians.  Changing the process from making the team from being the best to being the right racial statistic.

But what about all those who need a hand-up?  All those kids who grew up wanting to play in the NFL but were never good enough?  Those in the chess club?  Those who were good in math and science?  The geeks and the nerds?  Shouldn’t we give these guys a shot?  And have the better players mentor them?  We actually had a chance to see what that might be like.  Seeing what it would be like not having the best in the game.  Only it wasn’t the players but the referees.  Because of a contract dispute the NFL recently locked out the referees.  And replaced them with referees who had only a few months to memorize the rulebook.  And the people hated them.

The replacement referees showed us what it would be like in the NFL if there was a policy of diversity on the field.  Instead of it being a true meritocracy.  The games just wouldn’t be that good.  And people wouldn’t want to pay to see them.  And advertisers wouldn’t buy time during a game that no one wanted to watch.  People want to watch great games.  And you get great games by having the absolute best players in the game.  Not by giving someone a fair shake.  No matter how fair it would be.  Pity businesses can’t run their businesses like the NFL runs theirs.

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FT130: “Tax dollars pay the bills. Not tax rates.” -Old Pithy

Posted by PITHOCRATES - August 10th, 2012

Fundamental Truth

Even though we have a Progressive Tax System we don’t have a Progressive Movie Ticket Price System

The average price for a movie ticket is about $8.  A flat price.  In dollars.  Whatever you earn.  If you earn $50 in gross daily earnings you pay $8.  If you earn $100 in gross daily earnings you pay $8.  If you earn $200 in gross daily earnings you pay $8.  Is that fair?  Based on the amount people could pay, no.  Because $8 is a different percentage of each earner’s daily gross pay.  It’s only 4% for those who earn $200 daily.  It’s 8% for those who earn $100 daily.  And a whopping 16% for those who only earn $50 daily.  Is that fair?  Well, if we measure fairness by the way we pay income taxes, no.  This is not fair.

Look, we live in a fair country.  We have a progressive tax system.  So we should have a progressive movie ticket price system.  And someone who only earns $50 a day shouldn’t be paying 16% of their earnings for a movie ticket.  Not when someone who can more easily afford to pay more only pays 4% for a ticket.  These numbers are upside down.  The lower income people should only pay 4%.  The middle income people should pay 8% because they can more easily afford it.  And the high income earner should pay 16% because if they don’t they’re not paying their fair share.  So let’s say the government makes it so.

Once we make going to the movies fair this is what we can expect at the box office.  Those with daily earnings of $50 pay only $2 for a ticket.  Those with daily gross earnings of $100 pay $8.  And those with gross daily earnings of $200 pay $32 for their movie ticket.  The low-income earners will be very happy with this new fairness.  Those middle-income earners will have mixed feelings but won’t complain because they don’t have to pay any more.  The high-income earners, though, will not be happy with the new ticket pricing policy.  Because sitting in a theater is not worth $32 a ticket.  Especially if they’re taking their spouse and 3 kids.  Making a night at the movies cost $160.  Or 80% of their daily gross earnings.  And that doesn’t include any concession snacks.

The Problem with Fairness is that you can have the Best Intentions and end up with the Worst Results

You know who would love this?  Theater owners.  (As well as movie studios and the actors who share in box office sales.)  They would all be for fairness.  Because they would see greater earnings.  The typical theater seats about 225.  At $8 a ticket that comes to $1,800 in revenue per show.  When they implement the fairness policy, though, they could do better.  Say 40% of theater goers are low-income, 40% are middle-income and 20% are high-income.  Based on the fair ticket price policy the theater owner will increase earnings to $2,340.  That’s a revenue increase of $540.  Or an increase of 30%.  So, sure, the theater owners would all be for fairness when it comes to ticket prices.  (As well as the movie studies and actors.)

Until, that is, when the high-income people stop going to the theater.  If their seats remain empty the theater will not collect their $1, 440 in revenue per show.  Their seats will remain empty.  And half the people watching the movie will be paying only $2 for their ticket.  This will reduce revenue by $900.  Or a decrease of 50%.  Which will change the way theater owners think about fairness.  As they struggle to stay in business.  And if they can’t change the government fair pricing system their costs will exceed their revenue.  They will have to make cuts everywhere they can to get their costs under their revenue.  Lowering the quality of the movie going experience.  To the point people just stay home and watch something they download online while eating microwave popcorn.  Eventually shuttering the theater.  And putting more people out of a job.  (Not to mention making it impossible for a movie studio to make a profit on all but the biggest blockbusters and the cheapest to films to make.  And the big movie stars would all see a hug pay cut.  Which would ripple through the movie industry putting an even greater number of people out of a job.)

This is the problem with fairness.  You can have the best intentions.  And end up with the worst results.  That’s because the ‘fairness people’ think everything in the economy is static.  That a change ‘here’ won’t effect change ‘there’.  But the economy isn’t static.  It’s dynamic.  And a change ‘here’ does effect change ‘there’.  Because people are thinking, rational beings.  While state planners think they know what’s fair the people living their policies often think otherwise.  And change their behavior.  To minimize their costs under their fairness policies.  Because that is human nature.  Just like it is for people every day who shop around to find the lowest price and best value before spending their hard-earned money.

The Rich are more Generous in their Tax Dollar Contributions than the Poor and the Middle Class

The Left wants to raise the tax rates on the high-income earners.  To make them pay their ‘fair’ share.  Foolishly thinking that doing this will bring in more tax revenue.  It won’t.  Because people are thinking, rational beings.  These ‘rich’ people can either invest their money into businesses and create jobs.  Or they can put their money into treasury bonds and create no jobs.  One is high risk (creating jobs).  One is low risk (not creating jobs).  And when you increase the taxes on the high-risk investment you reduce the return on that investment.  And reduce the incentive to create jobs.  So instead of investing in jobs they park their money safely in bonds.  Reducing the income (business owner and employees) the government can tax.  As well as reducing a host of other taxes (sales tax, property tax, Social Security tax, Medicare tax, etc.).  All in the name of fairness.

So why do they do it?  Why are they always imposing fairness on us?  Because when it comes to class warfare tax rates are much more useful in defining fairness.  For they misdirect the people into thinking rich people don’t pay enough in taxes.  Let’s look at a married couple filing jointly who earn a combined income of $125,000.  Based on the 2012 federal income tax rates they will pay approximately $19,470 in federal taxes with a top marginal tax rate of 25%.  Now compare that to a rich person not paying their ‘fair share’ in taxes.  Someone who earns a million dollars in capital gains on investments.  One of those the ‘fairness people’ really dislike.  At a capital gains tax rate of 15% he or she pays $150,000 in taxes.  Now 15% is less than 25%.  And those on the Left will scream, “Unfair!”  Even though that capital gains tax rate will generate $130,530 more in tax dollars.  Or 670% more than the married couple paying a top marginal tax rate of 25%.

So is the ‘rich’ investor paying his or her fair share in taxes?  Well, he or she is sure paying a whole lot more in taxes than that married couple filing jointly.  Even if it’s at a lower tax rate.  Is that fair?  Is that enough?  It depends on how you measure fair.  If you measure by tax rates the rich are tax cheapskates.  If you measure by tax dollars then the rich are very generous in their tax contributions.  More generous than the poor and the middle class.  And that’s what really counts.  Tax dollars.  Because tax dollars pay the bills.  Not tax rates.

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FT114: “One of the most effective ways to get privilege is to force fairness on others.” -Old Pithy

Posted by PITHOCRATES - April 20th, 2012

Fundamental Truth

Voters are so Greedy and Selfish with their Hard-Earned Money that they’re not going to Vote to be Subjugated

History is strewn with people oppressing others to gain privilege for themselves.  Kings, emperors and nobles were always a small minority of civilizations.  But they had the power.  And the wealth.  While the masses suffered abject poverty and went hungry.  Or suffered through famines.    And died.  With early civilizations this was just the way of life.  Because there was no middle class.  No free market capitalism.  And no rule of law.  Life was for the most part subsistence farming.  Where most ate only what they grew.  While the kings, emperors and nobles enjoyed lots of food and drink.  Even enjoyed having a little fun.  Unlike the impoverished masses.  Having privilege made life better.  Which is why the privileged worked hard to keep it.  By forcing others to work hard to provide that better life for them.

But times change.  Privileged ruling classes fall.  And middle classes rise.  Creating vibrant economies.  And representative government.  Then one day the privileged find that they are no longer privileged.  That wealth isn’t automatically theirs.  Instead it belongs to the people who earn that wealth.  And if the once-privileged want wealth then they, too, have to work to get it.  So they, too, can have nice things.  And that they can only have these things if they earned enough to afford them.  Which is a great problem if you don’t want to work.  Don’t have any ability to earn a high income.  Or if you have a feeling of entitlement.  Like in days of yore.  Where you didn’t need anything but a good last name to live the good life.  On the backs of those who didn’t live the good life.

Feelings of entitlement don’t die, though.  They don’t go away once the middle class starts sharing the wealth.  Well, not so much sharing it but earning it.  And keeping it.  Instead of giving it to a privileged ruling class.  Which poses a problem for those who aspire to join a ruling class.  Especially now that we have those pesky elections.  Because voters are so greedy and selfish with their hard-earned money that they’re not going to vote to be subjugated.  They’re not going to vote in a privileged ruling class so they can live like royalty.  While those who pay for that royal lifestyle don’t.  ‘Vote for me so I can live better than you’ is just not a winning political platform.  So that’s why politicians lie.

The Privileged Elite uses Class Warfare to take other People’s Wealth

What do you need to live a privileged life?  Lots of money.  No secret here.  But the secret is how to get that money.  In particular, how do those who don’t want to work or have no talent or have no ability create wealth?  Here’s the secret.  They don’t create wealth.  They take wealth.  By going into government.

Only government has the power to tax.  Which can be a great source of wealth.  Other people’s wealth.  Which is any privileged class’ second favorite kind of wealth.  Second only to the wealth they already took from others.  Because that’s what they want.  Other people’s wealth.  And they’ve found a clever way of taking it.  By making the world a fairer place.  And who’s against fairness?  They’re going to make sure that the poor and children have access to food and affordable housing.  And who’s against the poor?  The children?  You’d have to be a pretty vicious, heartless bastard to be against the children.  And the poor.  They’re going to make sure that women have access to reproductive health care.  For who hates women?  I’ll tell you who.  Anyone that opposes raising taxes.  They hate women.  Children.  The poor.  For the world is full of haters.  And just who are these haters?  Aanyone that earns a lot of money and doesn’t want to pay higher taxes.  These people hate anyone not as wealthy as they are.  Because they hate fairness.  And paying their fair share.  Because they’re greedy.  And hate women and children.  And puppies, too.

This is the way the privileged take other people’s wealth.  Class warfare.  And it’s very effective.  By being the party of the poor, disadvantaged, children, women and puppies, they’re kind and benevolent.  With other people’s money, of course.  But those people are evil so it’s okay.  People hate them.  But they like their kind government benefactors.  Who are looking out for their best interests.  Not rich people.  Or corporate profits.  No, our kind government benefactors make sure those greedy rich people and corporations pay their fair share.  Because that’s all that they want.  It’s all anyone wants.  To be fair.

North Korea is pretty much at the End of the Fairness Road

Later incarnations of the privileged ruling class used the fairness approach to give themselves a better life.  While oppressing their people.  Even killing them.  Through famine.  Or deliberate acts of violence.  All in the name of fairness.  And nothing better epitomizes this than communism.  Where everyone was equal.  Brothers.  Comrades.  There were no profits.  No capitalism.  No competitiveness.  No.  Everyone was equal.  They paid everyone the same.  They dressed everyone the same.  They housed everyone the same.  They fed everyone the same.  Very little.  For one thing you never saw in a communist country was obesity.  Instead you probably heard the rumbling of tummies as most people were hungry all of the time.  There was no income inequality.  No gender inequality.  No.  In communism they had nothing but equality.  Life was fair.  Because no one had anything more than anyone else.  As they perfectly distributed the misery and poverty equally among the impoverished masses.

That was for the masses.  It was quite a different thing for the privileged ruling elite.  Those in the party apparatchik.  And the inner party members themselves.  Who were more equal than others.  These people dressed better.  They had better housing.  Even cars.  They ate better.  Some so well that they grew obese.  North Korea suffers from recurring famines to this day but Kim Jong IL had a bit of a weight problem.  As his son does.  Kim Jong-un.  No, life is very good for the privileged ruling elite.  And hell for those living under them.  Who the ruling elite let die of hunger.  And send to concentration camps if they dare speak of their displeasure.  For only under communism is life fair.  And they just can’t risk the unhappy masses to spoil it for the privileged few.

North Korea is pretty much at the end of the fairness road.  The country is so poor and impoverished and hungry that people will risk their lives to try and escape this land of fairness.  To get somewhere that isn’t so fair.  Like South Korea.  Where they have capitalism.  And inequality.  Where someone can come with nothing, work hard and earn a better life.  Allowing them to pay for housing.  And put food in their rumbling bellies.  For a fair and oppressive government surely cannot.  All they can do is create great inequality between the people and the ruling class.  Far greater than that between the rich and poor in any capitalist country.  For the poor in countries like the UK, Canada and the United States are living far better than anyone outside the ruling elite in North Korea.  This is where the fairness road ends.  But it starts with class warfare.  Where a privileged few live the good life through high taxes.  Taxes they use to force fairness on others.  While those at the top manage that fairness.  Skimming a lot off the top of those taxes for themselves.  And what’s left they spend on the poor, disadvantaged, children, women and puppies.  Just enough to make sure the people love their very rich and wealthy government benefactors.  So they can win the next election.  At least while they still have to deal with those pesky elections.

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The Occupy Wall Street Protesters don’t want Fairness, They want Privilege

Posted by PITHOCRATES - October 9th, 2011

People who hate Capitalism hate America

Those on the Left keep trying to paint these Wall Street protesters as the Left’s version of the Tea Party.  Only better because they are standing up to corporate greed.  But when you step back and look at the broader picture you see some interesting things.  For one, our enemies abroad hate the Tea Party.  And love these Wall Street protestors (see Iran calls Wall Street protests ‘American Spring’ posted 10/9/2011 on The Associated Press).

An Iranian military commander said Sunday that the protests spreading from New York’s Wall Street to other U.S. cities are the beginning of an “American Spring,” likening them to the uprisings that toppled Arab autocrats in the Middle East.

Gen. Masoud Jazayeri of Iran’s Revolutionary Guard said the protests against corporate greed and the gap between rich and poor are a revolution in the making that will topple what he called the Western capitalist system.

So the Occupy Wall Street people have the support of Nancy Pelosi, Hugo Chavez and this guy.  This Iranian general.  Who hates America.  And would love nothing better than to see its collapse.  There’s a lesson here.  People who hate capitalism hate America.

What strange bedfellows.  Pelosi.  Chavez.  And this Iranian general.

Class Warfare Works because Gullible People are Fed with Misinformation to Produce a Withering, Festering Hate

But they don’t see that.  These Occupy Wall Street people.  All they keep hearing is how the rich are screwing them.  And business owners are getting rich by underpaying them.  Because many of them think gross sales are also net profits.  They’re not.  And have no idea of what it costs to run a business (see Small Business, Occupy Wall Street Is Aimed at You! by T. Scott Gross posted 10/9/2011 on Forbes).

Small business owners, this protest is about money—yours. And if you want to bring a semblance of sanity to the discussion, you had better start showing the money…

So I say you had better show them the money. Gather your employees. Take a handful of coins that add up to a dollar. Swipe away your cost of goods. Take out payroll and then payroll taxes. Follow with utilities, cost of capital, training, advertising, maintenance, insurance, and the rest until you have accounted for all the overhead, leaving those few lonesome pennies of profit that you have risked everything to make.

Been there.  Done that.  The problem is they won’t believe you.  Because they’ve been so brainwashed to believe you are lying when it comes to the money.  Say all you want but someone is telling them, “Sure, they say that, but look at the car your boss drives.  The house your boss lives in.  Are they better than yours?  You bet they are.  And you know why?  Because they’re screwing you.  That’s why.”

This is why class warfare works so well.  You have people who don’t know any better.  Being fed with misinformation to produce a withering, festering hate.  Which is how people like Nancy Pelosi, Hugo Chavez and this Iranian general rise to power.  By exploiting the gullible masses.

The Obama Administration wants us to Hate People Making $250,000 or More

This kind of hate makes it easy to tax the rich.  Which is a very popular sentiment these days.  Because everyone hates the rich.  Especially those who don’t make the rich cut (see Democrats aim to tax the rich — but who are they? by Kathleen Hennessey posted 10/8/2011 on the Los Angeles Times).

President Obama and Democrats in Congress have aligned on a populist, “tax the rich” strategy for the 2012 campaign. Now they have to figure out exactly who that is…

Obama and his fellow Democrats for years have described the wealthy as couples making more than $250,000 and individuals making more than $200,000 — 3% of U.S. households. By shifting away from that number in hopes of benefiting from the sound-bite punch of a millionaires tax, the administration may find it difficult to return to casting the broader net…

Obama’s threshold was based on broad principles, including the desire to leave the middle class untouched by higher taxes while collecting “enough” tax revenue, Bernstein said, although even he quibbles with the president’s cutoff and suggests that a broader tax increase may be needed in the future.

Going in the other direction — aiming for incomes of $1-million-plus — would yield far too little revenue to fund “a recognizable government,” Bernstein said. While the Democrats’ surtax proposal may make sense to pay for a jobs bill, “it’s actually quite important that $1 million does not become the new $250,000 when it comes to the permanent tax base,” he added.

Well, that complicates things.  Who’s rich?  People earning $1 million or more?  Or people making more $250,000 or more?  Who exactly are we to hate?

The Obama administration wants us to hate people making $250,000 or more.  Because there are a lot more of them than millionaires.  So that’s a lot more money they can spend.  But it’s also a lot of people to piss off by raising their taxes.  And with an election year coming up that’s the last thing those up for reelection in Congress want to do.

But if they only settle for $1 million now will that mean it will be harder to hate those making between $250,000 and $1 million later?  Oh me oh my.  Just who to hate?  As you can see this is quite the quandary for the hate monger.

Stimulus is Temporary whereas Tax Cuts and Deregulation are Forever

But there is a bigger issue at play.  You see, the problem with hating those earning between $250,000 and $1 million is that this income range includes our small business owners.  The job creators.  Who tend to not create jobs when things bother them.  Such as people waving their pitchforks at them crying, “Tax!  Tax!  Tax!” (see Poor Sales by Russ Roberts posted 10/9/2011 on Cafe Hayek).

Finally, I would note that while the survey that Invictus cites does indeed list “Poor Sales” as the single most important problem (25% in the September survey (scroll down to “Single Most Important Problem), taxes are listed as the single most important problem by 18% and government regulations and red tape is listed by 19%. So the two combine to 37%. They also happen to be two factors that government can actually control.

The Keynesians look at this and say we need more stimulus.   But if they’re saying this after that $800 billion stimulus in 2009 you can have but one conclusion.  Stimulus doesn’t work.  A big reason for this is that stimulus is temporary.  Like pain.  Whereas tax cuts and deregulation are like pride.  They’re forever.

Sales are complicated.  A lot of things influence people before they depart with their hard-earned money.  And there’s not a lot government can do about that.  But there’s a lot they can do about taxes and regulations.  And they do.  Unfortunately, they always choose to do the wrong thing.

The Occupy Wall Street People are Angry at Capitalism because they weren’t Born into Privilege

There are a few kinds of people in the world.  The informed.  Such as Tea Party People.  Who cite law and tradition in at their Tea Party events.  And the uninformed.  Such as the Occupy Wall Street People.  Who are an angry mob.  Angry at capitalism because they weren’t born into privilege.

And then you have people who love America.  And those who hate America.  Such as Iran.  And Hugo Chavez in Venezuela.  Enemies of freedom.  And democracy.  Who have come out to support the Wall Street protestors.  There’s another lesson here.   Actually, it’s the same lesson as before.  People who hate capitalism hate America.

Here’s a solution to solve their unhappiness.  Let’s ask these protesters which country is better than America.  Whatever nation that is we’ll generously pay for their one way airfare there.  Problem solved.  Everyone happy.

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FUNDAMENTAL TRUTH #62: “The government’s great dilemma is that the middle class has both the money and the votes.” -Old Pithy

Posted by PITHOCRATES - April 19th, 2011

Figures don’t Lie but Liars Figure

Mark Twain said figures don’t lie but liars figure.  And there’s been a lot of that going around.  Lying.  Especially about taxes.  Where the rich just can’t catch a break.  They pay far more tax dollars than the poor/middle class.  Yet you wouldn’t know that based on the political rhetoric coming from the Left.  And the incessant drive to raise the top marginal tax rates.  To make the rich pay their ‘fair’ share.  Or punish them.  For being rich.  So we can lower the tax burden on the little guy.  The working class people struggling to put food on the table for their families.

Of course, anyone taking the time to crunch the numbers, or read a history book, will see something completely different.  And that the Left can only advance their agenda by lying.  Because people with a job want to keep their job.  And they see the Left’s agenda as anti-business.  And job killing.  Anytime you hear government talk about being ‘fair’ look out.  Chances are you are about to be screwed.  For their idea of fairness and equality is truly Orwellian.  The Left’s idea of equality is when they are more equal than everyone else.

So they champion the poor/middle class.  Say they are looking out for their interests.  But they’re not.  They just want their money.  And their votes.  So they’ll say whatever they think they want to hear.  Anything to maintain their positions in government.  The ruling elite.  And one of their most effective tools is class warfare.  At the heart of which is tax policy.

Taxing the Rich Transfers Tax Burden to the Middle Class

There is a fundamental misunderstanding about tax policy in America.  Everywhere, really.  You see, they’ve beaten it into our heads that the way to get the rich to pay their fair share is to increase their tax rates.  You do that and you transfer the tax burden from the poor/middle class to the rich.  The funny thing is, though, when you raise the tax rates on the rich the exact opposite happens.  You transfer the tax burden from the rich to the poor/middle class.  How can this be, you ask?  Well, let me explain.

Consider two income examples.  Someone who makes $50,000 per year.  And someone who makes $1,000,000 per year.  Based on the 2008 tax tables (with a top marginal rate of 35%), the federal income tax each pays is approximately $16,980 and $454,000, respectfully.  Now, what do you notice about these numbers?  That’s right.  The $454,000 is a lot bigger than the $16,980.  It’s over 26 times the amount of taxes the person earning $50,000 pays.  Now think about that.  If only one more person becomes a millionaire (let’s say an entrepreneur quits his day job and creates the next great invention), the government will collect the same amount in taxes it would take from 26 new $50,000/year jobs added to the economy.  Let’s say 2 venture capitalists strike it rich and both become millionaires.  They would add the same tax revenue it would take 52 new $50,000/jobs to generate.  Three new millionaires = 78 new $50,000 jobs worth of taxes.  See a pattern?  The more millionaires there are paying taxes the less the poor/middle class have to pay in taxes.  Or, conversely, the fewer millionaires are paying taxes the more the poor/middle class have to pay.  So the more millionaires there are paying taxes, the more the tax burden transfers from the poor/middle class to the rich.

Well, based on that, the best thing we can do for the poor and middle class is to make as many millionaires as possible.  And how do you do that?  It’s pretty easy.  Sort of like a dog having puppies.  They already know how to do it.  They don’t need any special help.  All they need is for us to get out of their way.  And give them a business-friendly environment.  Where a small business owner will risk his or her life savings on that business to get rich.  Or a venture capitalist will risk his or her money on an untried entrepreneur with a really good idea to get rich.  And how do you get people to take risks and invest large sums of money?  By giving them a chance to get rich in the process.  And you don’t do that with high tax rates.  Because high tax rates increase the ‘cost’ of these investments.  And when the cost gets too high, they look for other things to do with their money.  If the return on investment is taxed to the point that they can make the same return without any risk, they won’t take any risk.  And just leave their money in the bank.

The more Millionaires we have the Less Taxes the Middle Class Pays

Of course this all makes good sense.  But bad politics.  Especially on the Left.  For they are all about fairness and redistribution of wealth on the Left.  And you can’t be fair and redistribute wealth unless you demonize the rich.  Because you have to take wealth from someone before you can redistribute it.  And who has wealth?  Why, the wealthy, of course.  Who are greedy.  Who don’t pay their fair share of taxes.  And profit by exploiting the poor/middle class.  Or so goes the liberal mantra.  So to show how much they care for the poor/middle class, they try to raise taxes on the rich.  By constantly trying to raise the top marginal rates.  Of course, as noted above, doing this actually hurts the poor/middle class.  By making them pay a much larger share of the total tax burden than the rich pays.  Let’s look at some numbers.

We keep hearing about this evil 1% who has the majority of the wealth in this country.  So let’s look at this by the numbers.  One percent is one in one hundred.  So let’s assume we have 100 taxpayers.  One millionaire who earns $1,000,000 per year.  Twenty ‘poor’ people earning $15,000 per year.  And 79 ‘middle class’ people earning $50,000 per year.  Based on the 2008 tax tables, the annual income tax each owes (going from poor to rich) is approximately $4,500, $17,000 and $454,000.  Their total tax contributions (in the same order) are approximately $91,000, $1,342,000 and $454,000.  Or, as a percent of the total, 4.8%, 71% and 24%.  Please note that it’s the middle class that pays the bulk of the tax burden (71%).  Even though they each pay only a fraction of what the millionaire pays.  Because one millionaire can pay only so much.  But the ‘fraction’ 79 middle class people pay adds up.  The sum total of their taxes equals approximately three times what that millionaire pays.  Which proves the point that the fewer millionaires there are the more the poor/middle class has to pay in taxes.

Now let’s say nine people prospered very well and moved from the middle class to the rich.  There are still 20 ‘poor’ people.  But with the 10 people that now earn $1,000,000 per year, there are now only 70 middle class people earning $50,000 per year.  This changes the total tax contributions (going from poor to rich) to approximately $91,000, $1,187,000 and $4,538,000.  Or, as a percent of the total, 1.6%, 20.4% and 78%.  Now the rich are paying the vast majority of all taxes (78%).  Which proves the point that the more millionaires there are the less the poor/middle class have to pay in taxes.

Figures don’t Lie but Liberals will Figure

Well, sure, you can use all your facts and figures to show things that make sense.  But making sense doesn’t necessarily apply in politics.  Because tax policy is a lot more than just funding the government.  It’s about winning elections.  And the one great dilemma in all of politics is this.  The people with the most money to tax are in the middle class.  Because of their numbers.  They may pay less per person than the rich but their numbers add up.  And they are the largest voting bloc.  Because of their numbers.  Which presents quite the problem.  Politicians want their money.  But if they take too much of it they may lose their votes.  So what to do?  You take their money.  While making it look like you’re punishing the rich.

The more government spends the greater this problem gets.  Deficits grow larger.  Which adds to the national debt.  Interest payments on that debt take up an ever larger part of the federal budget.  Add that to out of control growth of entitlement spending and what do you get?  A big problem.  And greater deficits.  Which are getting harder and harder to finance.  Soon you’re borrowing money to pay your borrowing costs.  You need cash.  Or you need to cut spending.  And you know you’re not going to do that.  Because cutting spending doesn’t help win elections.  So you look for more cash.  And you can’t go the easy route and just create more millionaires.  Not after demonizing them so much.  Doing that would be tantamount to saying you were wrong and/or lying all these years.  Besides, the anti-business environment currently in place doesn’t encourage any risk taking by the rich.  So they’re sitting on their money.  Which leaves the middle class.  So we start hearing code words.  Fair share sacrifice.  Tax the rich.  It’s not fair to give millionaires and billionaires tax breaks paid by the poor and middle class.  This means the poor/middle class is about to get screwed.  Either by higher taxes (or reduced tax breaks and credits).  Or they’re going to raise the top marginal tax rates which will transfer more of the tax burden from the rich to the poor/middle class.

Of course, screwing the poor/middle class is what it’s all about.  The Left uses them.  All of the time.  Through lies and deceit.  For our lives would be better if we had a lot more millionaires.  And less progressive tax rates.  That encouraged more economic activity.  And created more jobs.  But the liberal left could care less about that.  Based on the evidence.  And history.  When they run for office they run as moderates.  Because they know they can’t win elections running as liberals.  Barack Obama was the most liberal senator in the Senate.  Yet when he ran some were comparing him to Ronald Reagan.  And you only lie like that for one reason.  To hide who you really are.  Tax and spend liberals.  Who have made the middle class the bank for their tax and spend policies.

So while figures don’t lie, liberals will figure.

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FUNDAMENTAL TRUTH #58: “Presidents with aggressive domestic agendas tend to have inept and naïve foreign policy.” -Old Pithy

Posted by PITHOCRATES - March 22nd, 2011

Feeding their Egos with Illusions of their own Grandeur

First there were progressives.  Then there were liberals.  Self-proclaimed super geniuses.  Regular Wile E. Coyotes.  Smarty-pants know-it-alls.  You can’t tell them anything.  Because they know everything.  While you aren’t even smart enough to know what’s good for you.  But that’s okay.  Because they have taken it as their personal mission in life to run our lives.  To protect us from ourselves.  To tell us what to eat.  What to drink.  How to raise our kids.  How to educate them about the important things in life.  Fairness and multiculturalism.  Not math and science.  They teach us about the evils of greed.  Our greed.  Not theirs.  They can keep raising taxes to take our money so they can play with it.  But if we complain they say we hate teachers.  And children, of course.

These people start their government careers in the Ivy League.  Where they don’t learn anything useful.  They get law degrees.  Or some degree in the social sciences.  Public policy.  Philanthropy.  Degrees where they learn how to take other people’s money without providing anything useful in return.  All the while feeding their egos with illusions of their own grandeur.  They develop the cutting edge of progressive/liberal thought.  Most of it nonsense to you and me.  But in their little Ivy League world they’re saving the world.  Even though they have no idea of how the world works.  Understand things economic.  Or the role of energy in a developed economy.  They haven’t the foggiest idea about any of these things.  But they feel that only they are qualified to regulate these things.  Because they care about us.  And the planet.  Not profits.

Liberals are also not the manliest of men.  They get in touch with their softer, feminine side.  Get in touch with their feelings.  Some even cry.  Cowboys they’re not.  They’re into conflict resolution by diplomacy and timeouts.  They can be mean and nasty.  Partake in some of the worse character assassination.  But never alone.  Or without the power of the state to protect them.  You won’t see them get into any fights.  Because when it comes to actual fisticuffs, they’re not as brave as their words.  They’re the worse of bullies.  Weaklings that have others bully for them.  That’s why these people watch soccer instead of football.  Why they don’t hunt.  Why they hate the military.  They don’t like any manly behavior.  Or manly men.  No doubt from growing up in a childhood full of wedgies and swirlies.

Big Government and High Taxes

Much of a progressive’s/liberal’s life is spent getting even.  And the best revenge is living well.  And they sure do that.  Live well.  Better than most of us.  And with our money.  Either money gained through some frivolous lawsuit.  From the ‘overhead’ costs of the charitable organizations they ‘work’ for.  (Some keep more than 50% of all donations for their ‘operating’ expenses.  While the new healthcare legislations allow insurers to use no more than 20% of their premiums on their operating expenses.  How’s that for fair?)  High taxes.  Or kickbacks from the industries they regulate.

Those in government hate those in business.  Just like they hate the jocks and bullies in high school who tormented them.  But they hate business people for a different reason.  Because they have talent.  They’re able to create something people willingly pay for.  They can’t.  Of course they can play god over these people who have talent.  And they do.  Which makes up for their feelings of inadequacy.  It’s sort of a love-hate relationship.  They love taking their profits.  But they hate them because they have profits.

People need to feel a purpose.  And so it is with progressive/liberals.  Sure, having our money is good, but floating through life in the lap of luxury leaves them with an empty feeling.  Normal people may feel guilt over taking so much of our money. They just feel bored.  Like rich kids who get in trouble because they have too much time on their hands.  Bored rich kids get in trouble.  Bored liberals write legislation.  Exploit class warfare.  And go about redistributing our wealth.  They take money from the ‘rich’ people who have jobs or own businesses and give it to the needy.  And the more of these people you support with other people’s money, the more they will keep voting for you.  This allows the liberal to live a long life in politics.  Strokes their ego.  And fills that empty feeling they have from being the worthless waste of spaces they are.  And this is why they do what they do.  Keep government big.  And taxes high.

Projecting Force to Protect National Security Interests 

Liberals want power.  They want to expand government.  And expand the welfare state.  They always have big plans when they run for office.  They are never content to sitting back and let the free market work.  Because that’s no fun.  They want to control that market.  Using some bad economic theory (i.e., Keynesian Economics), they do.  They say it’s to make the markets more efficient.  But that’s not the reason.  It’s the power.  The getting even.  And getting their hands on all of that money. 

When presidents come out of the Ivy League, their heads are filled with a lot of progressive/liberal thoughts.  Ideas about income redistribution.  Fairness.  Multiculturalism.  But little about business.  Or the real world.  And as leader of the free world, that can be a problem.  Constitutionally speaking, the president’s responsibility is the real world.  The president is the commander in chief of the armed forces.  The president treats with foreign nations.  And appoints and receives ambassadors.  Nowhere in the Constitution will you see the president being responsible for income redistribution for fairness in a multicultural welfare state.

When a president goes in with an aggressive domestic agenda he comprises his Constitutional responsibilities.  It’s like a kid playing video games instead of doing his homework.  It’s fun.  But there is a cost.  The U.S. is a superpower.  And leader of the free world.  The president’s tools include military force, foreign aid and diplomacy.  And a powerful domestic economy that makes all of this possible.  If a president focuses on domestic policy over his foreign policy, both suffer.  The high taxes reduce economic activity.  Which reduces tax receipts.  And this makes budget deficits.  The progressive/liberal will not want to cut the domestic spending.  So they cut military spending and transfer it to the domestic side.  And borrow money.  Or print it.  Weakening both the military.  And the economic well being of the nation.  Which weakens the president’s ability to project force to protect national security interests. 

An Inconvenient Truth:  We Need Oil Flowing at Market Prices  

Of course, with the liberals’ disdain for the military and the military industrial complex, they don’t care.  They don’t believe there are any dangers out there.  And, if there are, it’s because we brought them upon ourselves.  For being bullies.  I mean, who are we to be a superpower and leader of the free world?  That’s just sticking our nose into other people’s business.  It’s time we stop.  Let other people live their lives.  Besides, it’s a different world today.  We don’t need standing armies or aircraft carriers.  Who’s going to invade us?

True, the chances of a D-Day type invasion landing on our shores is remote.  But there are other ways to attack our country.  9/11 comes to mind.  And there is economic warfare.  Have you enjoyed the Great Recession, the greatest recession since the Great Depression.  Probably not.  Do you remember how it started?  With $4/gallon gasoline.  Do you remember how horrible that was?  People were demanding Congress do something about it.  Amazing, isn’t it.  How high gasoline prices can trigger a recession (of course, the subprime mortgage meltdown changed that recession into the Great Recession).  Keeping oil flowing at market prices, then, is a U.S. national security interest.  Because a spike in gasoline prices will crash the healthiest of economies into recession.  Of course, this goes contrary to everything a progressive/liberal holds true.  But it’s an inconvenient truth they need to learn.

That’s why we’re in the Middle East.  We may get more of our oil from Canada, but we get some from OPEC.  More importantly, our trading partners do, too.  If that oil supply to the Western economies gets shut down, we will suffer a recession closer to the Great Depression than the Great Recession.  Oil is important to national security.  Income redistribution isn’t.  Or using the military for humanitarian purposes.  As bad as the suffering was in Darfur, Rwanda, Sri Lanka, etc., we can’t help everyone.  It would stretch our military too thin, cost more than we can afford and risk the lives of those in the military on a mission that doesn’t impact national security.  And all of this would impede the president in carrying out his constitutional responsibilities.  Protecting our national security.

We need Grownups in Charge of our Foreign Policy

Presidents often hailed for their great domestic agendas (FDR and LBJ, for example) have created economic messes that future generations have to clean up.  And because their real interests were in domestic policy, they bungled their foreign policy.  FDR may have rallied the nation to win World War II, but his naïveté gave us the Cold War.  And LBJ’s Whiz Kids mismanaged the Vietnam War so badly that the fallout nearly ignited a civil war in America.  The country changed.  And it’s never been the same since.

Kids don’t like doing their homework.  They’d rather play their games.  In this respect progressives/liberals are very much like children.  They, too, like to play their games.  And don’t like to do their homework.  But the world is a dangerous place.  We need to do our homework.  To learn the lessons of history.  More importantly, we need grownups in charge of our foreign policy.

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LESSONS LEARNED #30: “Liberal talk radio is not successful because liberals are not deep thinkers.” -Old Pithy

Posted by PITHOCRATES - September 9th, 2010

CENSORSHIP BY ANY OTHER NAME IS STILL CENSORSHIP

When an oppressive, totalitarian regime seizes power, they shut down the radio and television stations.  It’s at the top of their ‘to do’ list.  Because it’s the fastest media.  Then they turn to the newspapers.  Once they control the content they open for business again.  We call it censorship.  The people only hear what they want the people to hear.  And they kill/imprison those who persist in trying to distribute anything other than the state’s propaganda. 

When you control the media, you can tell any lie.  You can report the state has increased food protection while millions die from famine.  You can report the great economic success of the Five Year Plan while people wait in lines for hours to get their rations of soap and toilet paper.  You can report the success of your Keynesian economic policies while record numbers of people go unemployed.  If you have control of the media you can tell any lie.  And prevent the telling of any truth.

When government pursues policies that are not popular, the telling of lies and the controlling of truths becomes policy.  Enter the Fairness Doctrine.  JFK used it to muzzle the Right when they debated the Nuclear Test Ban Treaty.  LBJ used it to muzzle conservative radio stations (who were attacking his Great Society policies, not the Vietnam War).  Nixon tried to use it to silence his enemies (it doesn’t work, though, when your enemies are liberal media outlets). 

Ronald Reagan, a supporter of First Amendment rights, revoked the doctrine during his administration.  And the Left has been trying to bring it back ever since.  (They even want to extend it to the Internet – another medium the Left does not control.  But that’s another story for another time.)

FAIR IS NOT FAIR

The liberals say it’s not fair that a Rush Limbaugh can go on the air for 3 hours a day 5 days a week without an opposing viewpoint to ‘balance’ his views.  Bill Clinton said it’s not fair because there is no ‘truth detector’ to separate fact from fiction (he said that before he was impeached for perjury).  When they talk about ‘fairness’ it’s code for censorship.  What they want is to silence these alternate viewpoints. 

If you want to talk about being fair, let’s be fair.  Do conservatives have an unfair advantage in media?   The Culture and Media Institute (a Division of the Media Research Center) published a special report for the Media Research Center titled Unmasking the Myths Behind the Fairness Doctrine.  It’s 30 pages but well worth your time in reading it.  On page 5 of this report they cite audience reach and circulation statistics for the top 5 sources of information liberals and conservatives use:

Broadcast TV news, millions/day   Liberal  42.1     Conservative  0.0
Top 25 newspapers, millions/day   Liberal  11.7     Conservative  1.3
Cable TV news, millions/month     Liberal 182.8     Conservative 61.6
Top talk radio, millions/week         Liberal  24.5     Conservative 87.0
Newsweeklies, millions/week        Liberal   8.5      Conservative  0.0

When you look at these numbers, you see a dominance of liberal sources.  In fact, talk radio is the only source in the list where conservatives make up a larger percentage of the audience than liberals.  And yet talk radio is the only source that liberals cite as needing a fairness doctrine.  What does that tell you?  The only bias that exists in the media is against conservatives.

FOLLOW THE MONEY

Air America, the all-liberal national radio network (now there’s fairness), went belly up.  Chapter 7 (liquidation).  They tried Chapter 11 (reorganization) earlier but the reorganized business couldn’t make any money either.  By contrast, Rush Limbaugh has been on the air since the late 1980s.  And, according to him, he has never had a down year or had to lay off a single employee.  Why?

Radio is free.  To us.  The listeners.  Others pay so we can listen free.  Advertisers.  Do they do this out of altruism?  No.  They do it out of greed.  They advertise to increase their sales revenue.  It’s a win-win.  They promote their products and services.  We listen for free.  And broadcasters make enough money to cover their bills and earn a profit.  (Well, I guess that’s more of a win-win-win.  There’re three winners.  But I belabor the point.)  It’s really a simple formula.  There’s only one catch.  Advertisers only want to advertise where people are actually listening.

And that was the problem with Air America.  No one was listening.  Weak ratings equal weak advertising sales.  Liberals can exist in the realm of National Public Radio (publicly funded no matter how few people listen), but if their revenue is tied to their popularity, they’re screwed. 

LIKE READING BOOKS

FOX paired liberal Alan Colmes with conservative Sean Hannity on Hannity and Colmes.  The show had a successful run.  Sean Hannity still has that timeslot.  Alone.  As well as the #2 radio program behind Rush Limbaugh.  Colmes has not gone on to such bigger or better things.

Colmes blamed the failure of Air America on unfair treatment.  The conservatives got the best stations and time slots.  So Air America never had a chance.  Despite having big on-air talent like Al Franken and Janeane Garofalo.  But it wasn’t unfair treatment that favored conservatives.  It was advertising revenue that favored conservatives.  If the liberals could have delivered the ratings conservatives did, they’d be on the best stations in the best time slots.  But they couldn’t.  So they weren’t.

Liberals like to be entertained.  They’ll tune into SNL and The Daily Show.  For they love a good personal attack on a conservative.  They’ll watch the network news that is full of entertainment news.  They’ll buy The New York Times and read the Arts section.  They’ll tune in and listen to the shock jocks on FM and satellite radio. But they don’t like thinking about serious issues.  To them listening to talk radio is like reading a book.  And where’s the fun in that?

FARTS ARE FUNNY

Liberal talk radio will never have the numbers conservative talk radio has.  Not in a center-right country.  The intelligentsia (liberals in the media, college professors, etc.) is a very small minority.  The other liberals are just children who haven’t grown up yet.  And how many children do you know that eat their vegetables?  Wash behind their ears?  Read a book?  Or engage in deep, philosophical thought?  I don’t know any.  The kids I know think fart jokes are funny.  Think about that the next time someone laughs at a fart joke on TV.  I’ll bet you it’s a child that’s laughing.  Or a liberal.

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