Americans want ever more Free Stuff as the Founding Fathers feared they would under Mob Rule

Posted by PITHOCRATES - April 27th, 2014

Week in Review

Let’s imagine you buy your groceries a different way.  Instead of going to the store and picking things off of the shelves and paying for them at checkout imagine this.  You don’t pay the store.  A third party does.  Like it does for everyone else that shops at this store.  Sounds great, doesn’t it?  Let’s say people pool their money together for purchasing power.  And have this third party take that pooled money and use it to get better pricing.  Because of the large amounts they will be paying for.

So everyone pays in a monthly amount to their third-party purchaser.  Then goes to the store and takes what they want.  And at checkout they just sign an invoice to acknowledge they took this stuff.  And the store will submit the bill to the third-party purchaser.  Of course, there would have to be some rules.  Because if everyone pays a flat amount each month you can’t have someone picking up steaks every day when you’re buying hamburger for your kids.  So there are limits to what you can buy.  Requiring the third party to review every submitted invoice.  Requiring a very large staff to review every grocery store purchase to approve and disapprove line items on each and every invoice for payment.  To resolve billing and payment errors.  And to bill shoppers for any unapproved purchases they made.  Even if they didn’t understand that these items weren’t covered.

So, included with that monthly payment there must be an overhead fee.  To pay for all those people reviewing those invoices.  Those who bill shoppers for unapproved items.  Those who pay for the approved purchases.  And those who process payments from shoppers.  Still, things slip through the cracks.  People are getting unapproved purchases through the system.  Grocery prices rise.  The overhead costs at the third party grow due to new costly regulations.  Etc.  Such that on occasion the total amount of cash out at the third party exceeds the total of cash in.  Requiring them to raise the monthly amount everyone pays.

Sounds a bit more complicated than just going to the store and paying for what you want out of pocket.  And more costly in the long run.  But if someone else pays the third party for those monthly fees it’s a whole different story.  Say as a benefit at work.  Because without you having to pay anything it’s just free groceries.  At least, to you.  And you will demand that your employer pays for more stuff so it’s free to you.  Even though it’s not.  Because the rising cost of third party grocery purchases will cost your employer.  Which will limit your pay.  And other benefits.  Because in the real world nothing is free.  Even if people think that a lot of stuff is free.  Or should be free.  Like health care (see Nearly 7 in 10 Americans say health plans should cover birth control by Karen Kaplan posted 4/22/2014 on the Los Angeles Times).

Among the various provisions of the Affordable Care Act, few are as controversial as the one requiring health insurance providers to include coverage for contraception. A new survey finds that support for this rule is widespread, with 69% of Americans in favor of the mandate…

Women, African Americans, Latinos and parents living with children under the age of 18 had higher levels of support for mandatory contraception coverage than people in other demographic groups, the survey found…

— 85% of those surveyed supported mandatory coverage for mammograms and colonoscopies.

— 84% supported mandatory coverage for recommended vaccines.

— 82% were in favor of mandatory coverage for diabetes and cholesterol screening tests.

— 77% backed the provision on mandatory coverage for mental health care.

— 75% supported mandatory coverage of dental care, including routine cleanings.

There’s a reason why the United States is a republic and not a democracy.  For the Founding Fathers feared a democracy.  And wanted responsible people between the people and the treasury.  For once people understood they could vote themselves the treasury they would.  And things like this would happen.  Mob rule.  Where the mob demands more and more free stuff while fewer and fewer people pay for that ‘free’ stuff.  And people in government anxious to win elections will keep giving the people more ‘free’ stuff that others have to pay for.  Until one day you end up with the health care system we have in the United States.  All because other people were paying for routine costs people could expect and budget for.  Things that if they paid out of pocket for would cost less in the long run.  Which would keep insurance what it was supposed to be.  Insurance.  And not turn it into a massive cost transfer scheme that only allowed the price of health care to soar.

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The NHS sets up new Non-Emergency Phone Service to Reduce the Overload on the Emergency Phone Service

Posted by PITHOCRATES - March 30th, 2013

Week in Review

Once upon a time Americans worked hard, saved their money and lived austere lives.  Always saving, planning and waiting for the future.  When they could finally enjoy the things they worked so hard and so long for.  Today’s world is a little more hedonistic.  Where few wait for anything.  Or save.  Like that classic Eagles song.  Life in the Fast Lane.  “Everything all the time.”  Especially those on the left.  Who want government to take care of them so they can enjoy life in the fast lane.  Pensions.  Health care.  A college education.  Birth control.  Childcare.  All the things that would take away from their having a good time if they had to pay for these themselves.

This is why they wanted national health care.  And fervently hope Obamacare will evolve into national health care.  So they can enjoy life to the fullest.  Knowing that if they crash the government will be there to take care of them.  For free. Just like the utopian National Health Service (NHS) in Britain.  Where everyone has everything all the time (see NHS 111 line should be delayed, says BMA posted 3/28/2013 on BBC News Health).

The organisation representing British doctors has written to NHS bosses to call for a delay in the launch of a new non-emergency telephone advice line…

Lord Howe has already admitted the new 111 telephone advice service – which the government has said will ease pressure on emergency 999 phone lines – had run into “teething problems”…

Dr Laurence Buckman, chairman of the the BMA’s GP committee, said: “There have been widespread reports of patients being unable to get through to an operator or waiting hours before getting a call back with the health information they have requested,

“In some areas, such as Greater Manchester, NHS 111 effectively crashed because it was unable to cope with the number of calls it was receiving. The quality of advice being given out has also been questionable in some instances.”

He said the “chaotic mess” of 111 was “placing strain” on overstretched parts of the NHS, such as the ambulance service, and potentially placing patients at risk.

Of course it doesn’t work like that in real life.  For free stuff is very expensive.  It is so costly that the NHS cannot put enough ambulances on the street.  Placing patients at risk.

The problem with free stuff is that people see no reason NOT to use it.  So they use it.  And over consume it.  Which is why emergency rooms back up.  And emergency phone lines are overloaded.  The shortage of services is so bad that they have to create a new telephone service to reduce the call volume on the emergency telephone service.

When everything is free people over consume.  Which stretches the resources of the NHS.  Leading to longer wait times.  Rationing.  And service denials.  They don’t even have the resources to staff a non-emergency telephone service.  Which they added to reduce the burden on the emergency telephone service.  Which would hopefully reduce the burden on their emergency rooms.  As well as freeing up the ambulance service.  Just something else they’re adding with things like the Liverpool Care Pathway (LCP) for the Dying Patient.  What some families who had their loved ones placed on the LCP without their knowledge call a death panel.  So these patients die sooner to free up some beds.  And health care workers.  All to try and make their limited resources cover more people.  For you just can’t have everything all the time.  At least not in the NHS.  And if they can’t what chance do we have with Obamacare?

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Undecided Voters, Party Platforms, Capitalism, Socialism, Free Stuff, Taxes, Spending, Deficit and Balanced Budget

Posted by PITHOCRATES - November 29th, 2012

Politics 101

There are Stark Differences between Republicans and Democrats even though many are Equally Worthless

A lot of people listen to opposing candidates before making their voting decision.  The perennial undecided voters.  Who often don’t make up their mind until they enter the voting booth.  Who are swayed by the prevailing political winds.  Who are more susceptible to the lies and misinformation bombarding them during political campaigns.  For these are good people.  Kind people.  Trusting people.  Which is why the Left can lie to them so easily.

Anybody who has to listen to both parties’ candidate make their case before choosing who they will vote for does not follow politics.  Does not understand the platforms of the two major parties.  Does not have an understanding of rudimentary economics.  Or history.  For if they did they would be aligned with one party or the other.  Because all Democrats are basically the same.  And all Republicans are basically the same.

Democrats choose to be Democrats because they believe in and support the Democrat platform.  Republicans choose to be Republicans because they believe in and support the Republican platform.  Not in their entireties.  But pretty darn close.  Otherwise they would not identify themselves with their chosen party.  For there are stark differences between the parties believe it or not.  Even though many candidates from both parties are equally worthless and contemptible.

Republicans lean towards Free Market Capitalism while Democrats lean towards European Socialism

Republicans lean toward free market capitalism.  The Austrian school of economics.  Small government.  Low taxes.  Low government spending.  Sound noninflationary monetary policy.  A business-friendly environment that encourages entrepreneurialism.  And job creation.  They tend to be more socially conservative.  And would prefer to combat the rise in teenage pregnancy and teen sexually transmitted diseases by having teens doing more homework and having less sex.

Democrats lean toward European socialism.  What they call social democracy.  The Keynesian school of economics.  Big Government.  High taxes.  Lots of government spending.  Inflationary monetary policy so they can print the money that they can’t tax or borrow to pay for all that government spending.  They don’t believe that there can ever be too much business regulation (they may talk about creating good-paying jobs but their policies hinder job creation).  They tend to be more socially liberal.  And would prefer to address the issues of teenage pregnancy and teen sexually transmitted diseases by providing free birth control and abortion.  Because teens are going to have sex anyway.  And asking them to do more homework won’t change that.

These aren’t their official platforms.  And it’s not an all-inclusive description of their policy positions.  But it gives you a general idea of their differences.  And as you can see there are differences.  An undecided voter may struggle with their choice between Democrat and Republican.  But that’s a decision few Democrats or Republicans ever have.  Because they know the differences between their two parties.  And really don’t like each other.

Those who vote Straight Party Ticket will know how they’ll vote even before any Candidates Announce

When it comes to wooing the undecided voters both political parties tend to downplay their official platforms.  To keep from confusing the undecided with stuff they don’t understand.  Or, worse, to keep from scaring away the undecided in case they do understand this stuff.  So they make personal attacks.  And promise free stuff to voters who’ll vote for them.  Which Democrats can do a lot better.  As they always want to raise taxes and increase government spending.  Which comes in handy when giving away free stuff.  While Republicans want to govern responsibly.  Which isn’t very conducive to giving away free stuff.

Of course the Democrats don’t come out and say that they will tax people more so they can increase the size of government.  To administer that free stuff.  So they say things like they just want everyone to pay their fair share.  And that those who can afford to pay more (the 1%) should pay more in taxes.  For if only we were fairer we wouldn’t have these trillion dollar deficits.  The president would like to return to the Clinton era tax rates.  Raising the top marginal tax rate from 35% to 39.6%.  In 2010 the top 1% earned about $1.7 trillion.  So raising the top marginal tax rate 4.6 points would raise about $77.5 billion in additional tax revenue.  Sounds like a lot of money until you look at the average annual deficit of President Obama’s 4 years in office.  Which comes to about $1.3 trillion for each of his 4 years.  So the president’s proposal to balance the budget would only raise revenue equal to 5.86% of his average budget deficit.  Which won’t be anywhere near enough to balance the budget.  So we’ll have to do more.  And once we raise taxes on the rich that leaves the middle class.  Which we will have to tax punitively to balance the budget if we don’t cut spending.

Of course, the Democrats don’t tell us this.  This math.  Though they talked about math a lot during the 2012 campaign.  Instead, they just talk about being fair and having the rich pay more.  Which sounds like the decent thing to do.  Especially to the undecided who the Democrats haven’t exactly told the truth to.  Which is why those who understand this math tend to vote straight party tickets.  Either for their special interests and the math be damned.  Those who tend to vote Democrat.  Or those who seriously want to balance the budget before we end up like Greece.  Those who tend to vote Republican.  And unlike the undecided voters these people know who they will vote for even before they know who the candidates are.  Who will ignore whatever the candidates say during the campaign.  And, ironically, these people will probably be more informed than those undecided who study the candidates’ positions up until they enter the voting booth.

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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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President Obama is “the Best Food-Stamp President in American History”

Posted by PITHOCRATES - October 21st, 2012

Week in Review

Newt Gingrich called President Obama “the best food-stamp president in American history.”  Because, Gingrich said, President Obama has spent more on food stamps than any other president.  Supporters of the president have attacked Gingrich’s comments.  Calling them untrue.  And racist.  So is Newt Gingrich a lying racist?  Or is President Obama the “the best food-stamp president in American history?”  All we can do is look at the numbers (see Report: Welfare government’s single largest budget item in FY 2011 at approx. $1.03 trillion by Caroline May posted 10/18/2012 on The Daily Caller).

The government spent approximately $1.03 trillion on 83 means-tested federal welfare programs in fiscal year 2011 alone — a price tag that makes welfare that year the government’s largest expenditure, according to new data released by the Republican side of the Senate Budget Committee…

The data excludes spending on Social Security, Medicare, means-tested health care for veterans without service-connected disabilities, and the means-tested veterans pension program…

CRS reports that food assistance programs — the third largest welfare category behind health and cash assistance — experienced the greatest increase in spending, with 71 percent more spending in 2011 than in 2008. The agency explained that this spending increase was largely due to the growth in the Supplemental Nutrition Assistance Program, or food stamps.

Well, apparently President Obama is “the best food-stamp president in American history.”  At least, based on his 71% increase in food assistance programs spending.  Where most of the increase in spending came from food stamps.  So it would appear that Newt Gingrich is not a lying racist.

Total 2011 defense spending (military defense, veterans, foreign military aid and foreign economic aid) was $964.8 billion according to us government spending.  Or $0.9648 trillion.  Which is less than $1.03 trillion in spending on means-tested federal welfare programs.  Now here’s an interesting side note.  The Constitution calls for defense spending.  While it doesn’t call for any welfare spending.  So this is quite the deviation from our Founding.  And one the Founding Fathers would probably not approve of.  As you can enrich some defense contractors with that defense spending.  But you can’t buy a lot of votes with it.  Not like the votes you can buy by giving people lots and lots of free stuff.   And $1.03 trillion can buy a lot of stuff.

When you have an economic record that is an abject failure you can’t run on your record.  Because most people are not better off after 4 years of President Obama.  Unless, of course, they got some of that $1.03 trillion in additional federal spending.  Which is about all a failed presidency can hope for.  Grateful benefits recipients.  As long as there are enough of them.  And when you increase some federal spending by $1.03 trillion there just may be enough of them.

One final note.  We’ve had trillion dollar deficits in each of President Obama’s 4 years in office.  Deficits that we had to finance by borrowing from China.  Excessive spending and borrowing that caused the first credit downgrade in US history.  All, it would appear, to create more grateful benefits recipients to help with the president’s reelection.  Because his 4 years in office have been an abject failure.  With his only success being the expansion of the welfare state.  Leading to the aforementioned credit downgrade.  And a bleak future of a new normal.  High unemployment.  Low GDP growth.  High taxes.  Stagflation.  And Malaise.

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FT116: “Free stuff is rarely good stuff.” -Old Pithy

Posted by PITHOCRATES - May 4th, 2012

Fundamental Truth

Free is Nice but Sometimes it’s just worth Paying for Something Nicer

Often times when someone offers us something for free some of us say, “If it’s free it’s for me.”  Because we like free stuff.  Who doesn’t smile when they see the free samples in a grocery store?  Who doesn’t like getting the free swag from a visiting salesperson?  Sure they have a corporate emblem on them but free flashlights, pens, coffee mugs, baseball hats, etc., are nice.  Because they’re free.  But not everything free is nice.  Those free samples in the grocery store are.  Because they want to get you to buy some of that stuff they’re giving away free.  And if it doesn’t taste delicious that isn’t going to happen.  But the swag is often not high quality stuff.  Or something you would not necessarily buy yourself.  Sure, you’ll use a coffee mug at work with a corporate emblem on it.  But if you have to pay for that mug chances are you’re going to get something you like.  And when you do chances are it’s not going to have a corporate emblem on it.

While traveling in Tennessee once I stayed at one of those hotels that is just a little more than a motel.  One of those multi-floor things that’s longer than it is tall.  One of the hotel amenities was a free continental breakfast.  Consisting of coffee, tea, orange juice, rolls and jam.  Mmm.  Good.  But I passed.  Because within walking distance from this hotel sat a Waffle House.  And if you’ve ever eaten at a Waffle House you’ll know why.  The All Star Special breakfast.  With Pecan Waffles.  And, of course, hash browns scattered ‘all the way’.  Enough to put you into a food coma.  A comfortable food coma.  And I chose to pay for this delicious breakfast instead of eating the free one.  Why?  Because on a scale of 1 to 10 the free continental breakfast is about a ‘3’.  While Waffle House is a consistent ’11’.

I owned a full-size sedan that was pretty loaded.  It wasn’t a luxury car but it pretty much had everything a luxury car had in the way of comforts.  One day I had to take it back to the dealer for some warranty work.  Being a new car under warranty they gave me a free loaner to use while my car was in for service.  Talk about service.  The car they gave me, though, was a subcompact with no amenities.  Unless you call a roof and a couple of doors amenities.  This car didn’t have power locks or windows.  Or air conditioning.  And it only had an AM radio.  Which made for an unpleasant 45 minute commute one way during the dog days of summer.  I returned the free loaner the next day.  And rented a car with air conditioning.  It cost more.  But for me it was worth it.  Because I didn’t like getting drenched in sweat on the drive in to work.  Free is nice but sometimes it’s just worth paying for something nicer.

For-Profit Utilities pay Premium Wages for Electricians to Go Out in Storms to Start Repair Work for Profits

They say you get what you pay for.  They say that because you do.  Things you pay for will always be better than the things you get for free.  As noted above.  But in other ways as well.  Take your electric utility, for example.  Some people would like to get free electricity.  To have the government nationalize our utilities.  Then tax the rich to pay for both the installation and the maintenance of the electrical infrastructure.  So we the people can get free electricity.  But let’s take a closer look at this idea.  And see how free electricity can be worse than the kind we pay for.  By looking at something that happens all too often.  The electric power outage.

Consider two electric utilities.  One owned and operated by the government.  And one by a for-profit utility.  Which one do you think would have a greater incentive in getting that power restored?  The one that pays for that utility with taxes whether you use it or not?  Or the one that will lose money when those electric meters stop turning?  The one charging by the meter, of course.  Because they lose money during an outage.  Unlike the government.  Where the electric utility is just one of the many things they pay for with the taxes they collect.  And if they roll those taxes into your property tax bill you will pay those taxes at most twice a year.  Well, most of us.  Which means there will be no correlation between paying your taxes and using your free electricity.  Unlike with the for-profit utility. 

If the power goes out for a large section of the for-profit utility’s customers there will be an immediate interruption to their revenue stream.  So much so that they will pay premium wages for electricians to go out in storms to start the repair work.  To get those meters turning as soon as possible again.  Because time is money.  And the more time that passes with those meters NOT turning the greater the lost money.  Money that they can never get back.  Because people don’t have to buy extra electricity to make up for the electricity they didn’t use while sitting in the dark.  So people are much better off with a for-profit utility.  Because the for-profit utility and the people both want the same thing.  To restore that power as quickly as possible.  Albeit for different reasons.

The People Paying for Free Stuff have no Incentive to Pay for High Quality

Beggars can’t be choosy.  If you’re getting something for free the people giving it to you expect you to be grateful.  And they don’t want to hear you complain.  For however bad the quality is that they’re giving you it sure is a lot better than what you had before.  Nothing.  Worse, you’re now in their debt.  If they ask you for a favor it’s hard to say no after they’ve given you something for free. 

If you’re buying something for your family you’re going to make sure you get the best quality your money can buy.  If you’re barbecuing for your family it may be steaks and Italian sausage.  If your nieces and nephews are coming over it may just be hot dogs and hamburger.  If you’re buying for the kids in little league you may just buy the hotdogs.  Or volunteer to bring snacks.  And show up with one large bag of potato chips.

When it’s free you get what you pay for.  Not great quality.  Which is why free stuff is rarely good stuff.  Whether it’s swag, breakfast, a rental car, electricity or food at a picnic.  The people paying for your free stuff have no incentive to pay for high quality.  Which is why we should never expect high quality for anything we don’t pay for.  Including public education.  Public housing.  And, of course, public health care.  To name a few.  Each of which has a higher quality private counterpart.  For when we pay we have choice.  And because we have choice the private sector competes for us by offering higher quality.  Why?  For the same reason a for-profit utility provides better quality than a nationalized utility.  Because profits make things better.  And making a profit is the only thing that will get an electrician to climb a pole during a thunderstorm to restore our electric power.  Something we’re all grateful for.  Especially if you’re taking care of a sick child in bed.  Or a parent.

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FUNDAMENTAL TRUTH #15: “Most people would rather hear a pleasant lie than an unpleasant truth.” -Old Pithy.

Posted by PITHOCRATES - May 25th, 2010

“DO THESE JEANS make my ass look big?”  Men don’t like this question.  And when their wife or girlfriend ask it, they know to tread lightly.  Unless the relationship is on the outs.  In which case they may answer with something like, “No, it’s your fat ass that makes those jeans look big.”

If the man cares for the woman.  If he loves her.  If he ever expects to have sex with her again, he’ll say something nice.  No matter how much more of her there is to love back there.  It’s called a white lie.  Normally, we don’t base our relationships on lies.  But when it comes to the butt, though, lies are good.  They spare hurt feelings.  Should a person’s genes not bless them with a heavenly derriere to display in a tight pair of jeans.

White lies don’t hurt people.  In fact, we use them in order not to hurt people.  Such lies don’t have consequences.  And people may know you are lying.  Even expect you to lie.  It shows you care enough to make someone feel better about something you know they’re sensitive about.  Like her big butt.  Or his performance in bed (“Whew, that was the best five minutes of my life.  Really.”).

WHEN YOUR CHILD IS learning a musical instrument, he may make more noise than music.  But you encourage him.  Or her.  You tell them they’re good.  That they’re getting better every day.  And, yes, you would love for them to play in front of your visiting family.  And when they do, the family applauds and tells them they’re good, too.  Your child is encouraged.  And he or she keeps practicing.  A little white lie and no one gets hurt.

Suppose your daughter wants to sing.  She listens to the reigning pop queens and sings along.  Only thing is, she’s tone deaf.  She doesn’t sing well at all.  In fact, when she does sing, you start looking for a hurt cat because you’re sure no human could make such inhuman noise.  But you don’t want to hurt her feelings.  And you’re sure it’s just a passing phase.  So you tell her how wonderful she sounds.  No one gets hurt.  Nothing can go wrong with that, can it?

Well, suppose her school is having a talent show. Anyone can simply walk up to an open mike and do whatever they want.  And she wants to sing.  In front of her friends.  In front of her classmates.  In front of the 2 kids that always tease her.  Now the issue is a little more complex.  Do you tell her the truth about her singing and hurt her feelings.  Or do you let her sing.  And risk the kids laughing at her.  And teasing her about it afterwards?

BUT IT’S NOT just the white lies we want to hear.  Say your husband is staying later and later at work.  You call to see what time to expect him for dinner but there’s no answer.  When he comes home late you tell him you were worried.  You called and there was no answer.  He apologizes for worrying you and says he was with a client.  You’re relieved.

Or you come home from work and your wife isn’t there.  Concerned, you call her and there’s no answer.  When she comes home she says she was at the gym with a friend and left her cell in her gym bag.  You’re relieved.  Then she goes upstairs to shower.  Funny, you think.  She usually showers at the gym.

Learning about infidelity is not easy.  And it’s painful.  You ignore signs as long as you can.  You believe the lies.  You want to.  You need to.  Then you find an earring in the car that isn’t yours.  Or you bump into your wife’s friend who says she misses her now that she quit going to the gym.  Soon, the evidence forces you to face the awful truth.  And it kills you inside.  Divorce.  The children.  It’s just the beginning of so much bad to come.

SO WE LIKE it when people lie to us.  At times.  For the truth can be disagreeable.  Ugly.  Painful.  And we’d rather not have that pain.  No, we’d rather live life in a sitcom where there is always a good laugh and rarely anything bad ever happens. 

Politicians know this.  They know that most people don’t like the harsh realities of life.  So when they need to get elected, they lie to us.  No one wants to pay more taxes.  So the politicians promise that only the rich will pay any new taxes.  But massive government spending requires massive taxation.  And taxing the rich just can’t pay for it all. 

George Herbert Walker Bush promised no new taxes.  He said, “Read my lips.  No new taxes.”  He raised them.  Didn’t want to.  Said he had to.  To balance the budget.  Because he and Congress didn’t want to cut spending.  Same with Bill Clinton.  He promised there would be no middle class tax increase.  But there was.  He said he tried as hard as he could not to but had to.  Again, the spending thing.  No one wants to cut spending.  It doesn’t help win elections.

But we wanted to believe the lie during the campaign.  They promise us everything and say it won’t cost anything.  That’s what we want to hear.  We don’t want to hear the intricacies of monetary and fiscal policy.  That increased taxation dampens economic activity.  Decreases incentive for risk takers.  So they take fewer risks.  Create fewer jobs.  Which increases unemployment.  But we don’t want to hear this.  We just want the free stuff.  Just promise it.  Tell us it’s free.  And we’ll vote for you.

LITTLE WHITE LIES have little consequence.  We say them because we care about someone.  Other lies, though, do.  Big ones.  If we fall for them.  If we believe in an ever-expanding welfare state, we’ll keep voting ourselves the treasury.  Until we’ve emptied it.  And when there’s no more money, we’ll say, well, it was nice while it lasted.  But all good things must come to an end.  Or we’ll riot.

Or we’ll cut spending elsewhere to fund our insatiable appetite for free stuff.  Maybe we won’t build a new aircraft carrier.  Or we’ll close an overseas Air Force base.  Or we’ll reduce the size of our conventional forces.  Because we’ve been lulled into a false sense of security, we may think a large standing army is not necessary anymore.  But it was that large projection of force that gave us that sense of security.  It scared the bad guys.  Because the ability to project force, and the will to do so, will create consequences if the bad guys do act. 

During the dot.com boom of the 1990s, times were good and we got complacent.  During those good times, though, the bad guys hit Americans in a series of attacks (World Trade Center bombing, Tanzanian Embassy bombing, Kenyan Embassy bombing, Khobar Towers bombing, the USS Cole attack).  We didn’t fight back.  We lied to ourselves.  We didn’t want to believe that America was under attack.  Head in the sand, we wanted to continue to enjoy the good times.  This only emboldened our enemies.  They saw that America didn’t have the will to fight back.  So they upped the ante.  And in 2001, they attacked on 9/11.  And that attack was just too great not to awake a slumbering giant.

WE MAY NOT like the unpleasant things in life.  But they are part of life.  And we have to deal with them.  However unpleasant they are.  They are what they are.  No matter how we try to rationalize them away.

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