Economics

One of the most intelligent discussions I’ve heard in years.

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The Age of Envy and Whining

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America and Europe are now reaping what has been sowed for the last 50 years in Western society.  Our psychiatrists, parents, teachers and even religious teachers inundated us with our “specialness”, carried on about the uniqueness of each person, and generally robbed us of any sense of bad and good, success and failure, better and best.

Liberals accuse conservatives of being slaves to corporate greed.  Greed is taking more than one deserves or needs at the expense of others. In the cases where greed has damaged America, such as the housing industry, our country paid the price.  But it was not only corporations and banks that were greedy.  The people who purchased homes with variable rate mortgages while working low wage jobs were also greedy.  It is not only the rich that are greedy.  Most people who are doing well are not being greedy.  They are receiving the just benefits of hard work, education, frugal and wise spending, and paying their dues.

Growing up, I didn’t have much.  I lived with my grandmother until I was 7 years old.  My grandfather died when I was 5, and my grandmother had a tough time supporting me, but she never complained.  A hard life was just the way the world was, to her.  She lived through the Depression and her family and my grandfather were all blue-collar: welders, mechanics.  They never asked for a handout, not once.  That’s not to say that if friends offered to help out with some work that needed to be done, or offered some extra food for the pantry, that my grandparents would not have accepted it.  Only that you never would have seen my grandfather carrying a sign protesting the well-to-do.  I do not make a mythical hero of my grandfather.  He was human and possessed a withering temper at times.   But he was never brutal, only steadfast when pushed.  He even held a streak of racism, common in his day.  He was from New York and didn’t like Jews, as I remember it.  But the man worked like a horse.  He was in the machine shop every day, coming in with grease-stained fingers.  Our sink held a good supply of Lava soap, but his fingers were never free of darkened creases.  He would sit up at night and carve, draw, or sharpen his knives at the kitchen table, or any other form of “tinkering” you can think of.  He never complained that he had to support his grandson.  I would sit on his lap during the sessions of tinkering, or perhaps be ordeed by my grandfather to stand on a stool behind him and scratch his head.  An avid outdoors-man, rifles adorned the walls, suspended on the antlers of trophy game.  Later, it was not uncommon at all for me to carry a rifle in the woods alone at the age of 10 or 12 years old.  I think this is why my favorite books growing up were Where the Red Fern Grows and  Summer of the Monkeys.

I never remember envy directed at the rich.  My grandparents had it much tougher than any of the Occupy Wallstreet crowd.   They grew vegetables in a garden, washed clothes by hand, and had no microwave.  They did not have a designer child at 40.  They had four sons.  They also had a girl, who passed away to God when she was less than two years old.  Life was this:  Grandfather goes out to the shop to work all day on machine parts that people brought to him to fix.  He also repaired firearms.  Grandmother cooked and cleaned and cared for the children.  Grandfather endured Maine’s blistering winters, working outdoors, wrapped in a wool jacket and hat.  The family car was an Oldsmobile Delta 88.

There was Hee-Haw and Lawrence Welk at night.  A TV boxing match maybe.  A trip to Pat’s Pizza, or maybe over to Dysart’s truckstop or the 95er.  This was life and it was accepted. There was no time to envy.  There was certainly no time to march up and down the street carrying declarative and mocking signs.  The idea of recruiting once’s children to take part in protests would have repulsed both of my grandparents.

You earned what you worked for.  If you did not work for it, you did not earn it.  If something was given to you without your labor, it was because of the good graces of the giver, not because the receiver deserved it.  I’m trying to imagine my grandfather having the time to protest economic injustice.

No one was special “just because”.  You were special because of what you did.  You did not search for yourself–you made yourself.  Pat Farnsworth, the owner of Pat’s Pizza, and good friend of my grandfather, worked for about 70 straight years at his restaurant.  He sold 250,000 pizzas a year.  He began his restaurant with $150.  He never thought of retiring, right up until he passed away at 93 years old in 2003.  He never felt the government owed him a thing but freedom.  Let him do his thing, and Pat would put his nose to a grindstone until he succeeded.  That was America.   Pat had a fighter’s heart.  In his 80s, he was mugged by two young men as he closed up shop and stepped outside his business holding a sack full of the day’s earnings.  the men pepper-sprayed him and thrashed him about.  But he fought back and they ran off empty handed.  Pat was a millionaire when he passed away.  No one who ate at Pat’s Pizza during my grandfather’s day hated or envied Pat for his success.  They wanted to learn his secrets, they wanted to be like Pat.

Now, the  Occupy Wall Street  types cry about “fascism” and “police state” when they get pepper-sprayed after refusing to comply with lawful police orders.  Pat and my grandfather would have fully endorsed the pepper-spraying of people camping outside their businesses and homes for months.  They would go on working and the Occupiers would go on whining.

Our horrendous ideas on  parenting  are  partially responsible for the cretinous complainers, with their IPads and Powerbooks, sporting their Ralph Lauren glasses, protest signs (with poor spelling) exclaiming the injustice they face, and a lot of time spent not filling out applications.  This is the “A” for effort generation.  You tried (sort of). And you’re breathing. So the system owes you, but you owe the system nothing.  It’s like expecting a car to run without putting fuel in it.  Or maybe we just expect everyone else to buy the fuel for our car.

America was made, as Max Weber stated, on the Protestant Work Ethic.  That, more so even than Democracy was America’s secret.  Now, our secret is how much we can get from the system, not how much we can accomplish before we die.  We must game the system until the system cracks, and then blame the system.

To all you Occupying cry babies:  Until your calluses have calluses, until you’ve earned your Master’s degree in something other than Art History, until you’ve gone into the military as a well-paid officer, don’t complain.  Walk into the local recruiter’s office with your Bachelor’s degree, sign up as a 2nd Lieutenant, have the US government pay for your college loans and find out what real responsibility looks like.  Until then–shut up.

Demographics is everything

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Greece, now Italy.  Next may be Spain.  Russia, too is dying.  Much of their problems are demographic and there’s almost no hope in fixing it.  Huge cultural and economic shifts are taking place and the next 20 years are likely to be very, very ugly.  I expect more wars, more poverty, and more political upheaval.  I’m serious.

To service members protesting in the Occupy Wallstreet movement: Get Real

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On today’s front page of the Stars and Stripes paper, a “sailor” sporting lug-nut sized earrings marches proudly beside a “soldier” whose chin is carapaced under a bushy goatee.  The article carrying this photo says that military veterans have joined the Occupy Wall Street movement and some are protesting the much higher wages that “corporate contractors” made in relation to what service members made while in war zones.

First of all, if money is the primary reason that someone is in the military, they should get out.  There’re easier ways to make money outside the military.  Secondly, the complaint about the contractors is ridiculous, at least in the context of what these protests are supposedly about.  Most of the contractors–a huge majority–are former military personnel with specialized skills.  The military hires them to fulfill two needs: 1) The specialized, technical skills those contractors possess aren’t easily found in 22 year old E4 Specialists.  2) Force Caps, or the maximum number of troops that Congress allows in Afghanistan and Iraq, hinders operations, and in order to get around that, the billets are filled with contractors whom have to pay for their own insurance, their own house back home.  With the contractors level of experience and college education, they’d be making similar money in the military if we counted benefits such as housing, training pay and TRICARE insurance.  Plus they could look forward to federal retirement pay.  And did military pay go down when we began paying a lot of contractors? Not to my knowledge.

These contractors also almost always have college degrees, or decades experience in a specialized field, such as law enforcement persons training foreign national troops.

I’m assuming that the two people marching in the protest are not currently in the military, because neither met the grooming or dress standards for anyone in the US Navy or Army.  And since they are protesting, it may be safe to assume that they are having a difficult time with finances.  In fact, below the photo in Stars and Stripes, the writer cites a complaint about service members having a difficult time after service.  Why did they leave the military? Even if the military is not the best situation for many people, it would seem better than being unemployed.  But I guess our government has made unemployment so comfortable an existence that it’s preferable to a real job with great benefits.  And you can always protest in hopes the government will give you the benefits you had when you were working.

Speaking of which.  The protesting service members should know that one of the things the Wall Street mob wants, is a free ride through college, and all their college debts paid off by–who else–the government.  Otherwise known as all the people who aren’t protesting but are actually working so as to generate taxable income.  As military veterans they have access to a fantastic thing called the GI Bill.  Have they used it?  Or did they throw away a job with no plan for the future?

To tell the truth, I have no idea if the two people in Stars and Stripes are really current or ex-service members.  Since ACORN got caught paying people to protest, it would actually be pure genius to pay some people to pose as disgruntled vets, just begging for more dole.

But if they are real, I’m embarrassed for them and by them.  If they’re not in the military anymore, I’m glad.  If they are they should spend more time studying for the next promotion board so they can make more money. And they got more free stuff in the military than they’ll get anywhere else.

Health Care Costs

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I did some research on medical costs yesterday and found some interesting things.  I’m quite familiar with the medical system; I’ve had 5 knee surgeries after tearing both ACLs playing football.

A few things of note.  I read a blog by a medical physician to get his opinion on why medical costs are so high and have been rising.  His opinion was that it was primarily a result of choice of the patient.  In other words, people are choosing more expensive procedures and equipment.  Some of this is the result of marketing.  Also, he said that when people have insurance, they tend to choose the most expensive thing that insurance will cover, even if it doesn’t do a better job.  Also, people would choose prescription medication instead of over the counter meds because insurance paid for the prescriptions.    If people are constantly choosing more expensive procedures, it seems this would inevitably result in higher insurance premiums.  In other words, it seems that health care is no more expensive than it ever was, it’s just that when studies are done showing people are paying more, it’s the people themselves that are choosing to pay more because most of them have insurance.

My first two knee surgeries were covered by Medicaid because I was a college student.  I paid for my others.  I can’t remember the exact amount, but I think the total was somewhere in the range of $10,000, total.   The hospital allowed me to pay in very small installments; some months I only paid 5$, but I kept paying and eventually paid the bill in its entirety.  This got me to thinking: Since we know that insurance companies are profit driven like other companies, they know that in all likelihood, most people will pay more to their insurance companies than the insurance companies will ever pay for medical bills.  If the hospital allows me to make smaller payments than an insurance company does each month, why do I have insurance?  And here’s the key:  With insurance, I’m paying to make sure two businesses make a profit–the hospital and the insurance company.  If I have no insurance, I’m only paying the hospital and they always seemed easier to work with than any insurance company.  When I worked for the police department in Bangor, I was astounded at how much the city paid in insurance costs for each officer.  I paid a small percentage of the total cost.   The insurance companies were making huge amounts of money, something I have no problem with except that I think much of the profit is driven by hysteria.  Maybe those companies create some of the hysteria to sell their product, I’m not sure.    The problem with having no insurance is that the uninsured must pay prices determined by the majority of people who have some sort of medical coverage.  The market is completely distorted.

I’d also like to point out that in almost all my interactions with the medical system, I had no idea what I was going to be paying when everything was said and done.   I didn’t really know what my insurance would cover.  Sometimes I walked out amazed at how little I had to pay, and other times I was surprised that I had to pay a large chuck of money.  I think that someone should sit down with people going in to have surgery and go over each cost, line by line, just like they’re buying a car.

The reason I started looking at medical costs was because I’ve always wondered why medical costs would rise more than other costs within the economy.  Medical costs should be controlled by supply and demand, just like the costs, of say, roller skates.  I believe that medical costs are artificially inflated because of insurance.  People buy products that they have only minimal demand for simply because they can.  Medical companies and hospitals can soak the insurance companies, who have near bottomless pockets, and the cost gets back to the consumer, even those that don’t try to game the system.   To tell the truth, since we have mixed our economy to the point where we actually have damaged the natural process of determining value, we may be better off just allowing the government to fix prices within the medical field.  Of course, this greases the already slippery slope of centralized control.

Things haven’t changed much have they?

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This speech by The Great Communicator sent chills up my spine. You can feel the audience is enthralled by words they’re never heard before.

Compromise: A little evil at a time

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There’s a lot of talk about compromise these days.  If you don’t compromise, you’re hard-headed, partisan, or stupid, right?  That’s the message that’s being sent to Americans by President Obama regarding the current budget and debt ceiling.  The President wants to raise the debt ceiling, and raise taxes on the rich; the Republicans are resisting both ideas.  Some people are arguing that the Republicans and Democrats need to compromise; the debt ceiling should be raised and taxes should be increased.  How is this a compromise?  This sounds like the Left winning  both counts and it seems to be the continued digging of America’s grave.   

Should the alcoholic compromise?  Just a few drinks today.  The drug addict?  Just one more needle…This is exactly the kind of compromise that got us where we are.  Just a little more spending…

At some point people of character must stand up to this madness.  The Declaration of Independence was a statement against compromise.  The Emancipation Proclamation, too, stood starkly against sitting the fence. 

all persons held as slaves are, and henceforward shall be free

Studies of countries that have faced budget problems similar to America’s show that the most effective way to balance a budget is to reduce spending, not increase taxes.    

We should not let the perfect become the enemy of the good.  But we are facing an existential debt crisis.  America is dying for all her decades of compromise.  And for that, we’d best put people in power who know how to stop hedging.