The Evil Among Us

“All I want is what I . . . I have coming to me.  All I want is my fair share.”

            —Kathy Steinberg as the voice of Sally Brown in A Charlie Brown Christmas

 

We are surrounded by an unspeakable evil.

Seventy-one members of the House (16%) have been in Congress twenty years or longer; 46 Democrats, 25 Republicans.  Sixteen of them (9 Democrats, 7 Republicans) have more than thirty years.  Many of the names are familiar:  Waters, Boehner, Pelosi, Hoyer, Waxman, Rangel, Conyers. Similarly, on the other side of the Capitol, sixteen Senators have more than twenty years’ tenure (and several of them served previously in the House).  You know many of their names as well:  Boxer, Feinstein, Reid, McCain, McConnell, Baucus, Hatch, Leahy.

That’s a lot of people who have been in the District a LOOOOONG time.  And I don’t for one second buy that anyone stays in office that long out of some unquenchable thirst to serve their fellow citizens.  The job comes with an enormous amount of cushy perks, prestige (or at least faux respect), and benefits.  Pensions, lots of taxpayer-funded travel under the guise of “fact-finding,” and as I’ve reported previously, more than a few somehow manage to accumulate substantial fortunes while spending a lifetime in office.  And as 60 Minutes reported over the weekend, some are dipping their personal snouts into their campaign troughs, as well. 

And, of course, there’s also power.  Naked power.  No, they are not interested in serving you; they’re interested in serving themselves.  They are motivated by two things, and two things only:  (1) living well at your expense, and (2) ruling you.

Life is good for the ruling class in the District, and it’s a huge part of why you see a lot of the insanity there that you do.  To maintain that sweet life, they have to keep getting themselves re-elected, and the easiest way to do that is to promise (and deliver) as much free stuff to as many people as possible.  That’s why our national debt now stands at in excess of $17 trillion.    That’s why the two single largest categories of federal spending (comprising nearly half the budget) are Medicare/Medicaid and Social Security—federally-subsidized medical care and retirement.  That’s why we have 47 million people—one in six—on food stamps.  That’s why the United States federal government is the single largest employer and single largest consumer on the planet.

And that’s why I sometimes refer to the District as The Beast.

So, in the interest of buying as many votes as possible, the progressives sponsor an endless string of spending programs, while the Republican establishment—every bit as vested in the same big-government machine as the Democrats, they just want to be in charge of it once in awhile—never offer more than token opposition.  The outgo is never checked, but at some point someone has to pay for the orgy; the solution is never to cut back, but to tax—read: take—still more.

But that’s not the real evil.

The way government has sold this behavior pattern is to convince one group of Americans—usually couched in flowery talk about the “middle class,” or in the charitable language of ending “poverty”—that the other group has unfairly acquired more wealth than they, and that they’ve done so at the first group’s expense.  The so-called “wealthy” have, simply by virtue of having more, cheated everyone else out of their fair share.  It is from this mentality taught to us by the unholy symbiosis of big government and progressive academia that we get things like the “Buffet Rule” and all the Occupy nonsense.

But notice the perverse morality play at work here.

This “fairness” pitch inherently—and erroneously—assumes that there is only a finite pool of wealth.  Only in a fixed wealth universe can we say that if I have a dollar it means you don’t, such that it’s unfair for me to have that dollar in the first place.  In a world where there is only, say, $1,000 in total wealth, my holding $100 is necessarily to the exclusion of someone else holding it.  I have for all practical purposes taken it from someone else.  My ability to obtain those dollars is thus immoral, and subjects me to the guilt of having deprived others.  And the greater my ability, the greater my guilt and the greater the measure of my associated moral debt. 

On the flip side, that others do not have those dollars—their need—creates a corresponding moral claim upon me.  The very fact that they do not have becomes a check drawn upon the bank account of my guilt, and it is a debt that can never be retired.  This affords them a clear conscience in accepting the government’s largesse at my expense, because they’ve been taught that as the needers—as they who do not have—they have the moral high ground.   

The problem with this moral code is that the zero-sum-if-I-have-it-you-don’t wealth universe upon which its logic rests isn’t the real world.  The wealth I hold is not irretrievably drawn from a permanently static pool to the exclusion of all other holders.  Put differently, the fact that I have is nothing to you, and has nothing to do with whether you have or don’t; I didn’t take it from you, I didn’t cheat you out of it, I don’t hold it at your expense, and the fact that I have it does absolutely nothing to prevent you from gaining as much for yourself as your effort and ability will allow.

To play off the old John Houseman pitch: I’ve made my money the old-fashioned way—I earned it.

What wealth I have has been accumulated, slowly over time, from wages I’ve been paid for my labor; from the minimum-wage jobs I held in high school and college, to the standardized test teaching I did in law school, to my positions as associate, counsel, and partner in private law firms, to the corporate position I hold today.  At each juncture, I traded my labor to my employer in a free, voluntary, mutually-beneficial exchange for the amount my employer was willing to pay for it because my labor represented a good to him: something he needed for his business.   My wages weren’t paid to me from a static pool, but instead were traded to me for what my skill and effort added to the pool of available wealth, because they enabled my employer to do something to further its own business; in the case of the law firms, to sell my effort to the firms’ clients, who needed that service in order to be able to conduct their own businesses.

This is what is known as “producing.” 

What is so monstrously evil about the morality embedded in this entitlement mentality with which so many have been brainwashed is it has turned morality and human virtue upside-down.  It has taken productivity—which should be a good thing—and made it immoral, because holding wealth, which is the measure of one’s ability to be productive, is a guilty debt owed to the rest of society as though you took it from them instead of added it to the global account.  The greater your ability to produce—the greater your virtue—the greater your guilt, and the greater the debt you owe.  But at the same time it has rewarded the lack of ability (or willingness) to produce—the less the virtue of adding to the universe of wealth—with the greater claim on that debt despite the fact (indeed, precisely because) it wasn’t earned.  And all of this is bundled and sold with the fundamental lie of victimhood: that anyone who has wealth didn’t get there by virtue of the value added through their talent and effort, but only because they’ve stolen from a static account that should have belonged to everyone else.

Boiled down to its essence, this moral code teaches that you and your life are not valuable in and of themselves.  Under this code, your only value and moral justification for existing is in your ability to produce wealth to be taken from you for the “needs” of others who do not produce.  And it enslaves both sides of the equation: the needers to the addictive cycle of depending upon taking from others at the expense of the self-esteem that is born of self-sufficiency; the producers to the grindstone of supporting the weight of the needers, all the while their very ability to do so is branded as their shame.  The former are forever parasites, the latter are forever victim-hosts, and neither realizes the fullness of human potential.

All to enable a permanent ruling class to live off you and wield power over you.

That is evil indeed.

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Minimum Wage Whiners Have It Wrong

 

Tyler:              The question, Raymond, was: WHAT DID YOU WANT TO BE?!?

Raymond:      Veterinarian.  Veterinarian.

Tyler:              Animals.

Raymond:      Yeah.  Animals and ssstuff.

Tyler:              And stuff, yeah, I got that.  That means you have to get more schooling . . . I’m keeping your license.  I’m gonna check in on you.  I know where you live.  If you’re not on your way to becoming a veterinarian in six weeks, you will be dead.  Now run on home . . .  Tomorrow will be the most beautiful day of Raymond K. Hessel’s life.  His breakfast will taste better than any meal you and I have ever tasted.

                        —Brad Pitt as Tyler Durden and Joon Kim as Raymond K. Hessel in Fight Club

 

Happy Labor Day.

Those of you who tried to get a Big Mac last Thursday may have seen the impact of a wave of strikes by fast food workers demanding that the minimum wage be increased from $7.25 to $15 an hour.  At least one store in Detroit was forced to close, ironically demonstrating that Detroiters still haven’t connected the dots on the negative impacts of overreaching labor demands.

The argument, so it goes, is that these workers are simply worth more than $7.25 and it’s just not possible to raise a family and make ends meet on that wage.  And, of course, we all know the giant fast food corporations make too much money and can afford it; as one protester in Detroit put it:

“It’s a very uncomfortable lifestyle working for $7.40 at McDonald’s when McDonald’s made like $500 billion last year.”

You know it’s only a matter of time before the President and the Left seize on this as an emergency issue du jour in order to distract from Syria and the various other messes they have brought on themselves.  Washington Post resident nitwit E.J. Dionne was already gushing over the weekend about the need for more income “predistribution.” 

But let’s back up.

In point of fact, McDonald’s Corporation did not make $500 billion last year, or anything like it.  McDonald’s Corporation made $5 billion, not even good enough to crack the Fortune 100 (McDonald’s was #107), and yet that was still by far the largest profit in the food service industry that employs close to half of all those making the minimum wage. 

More importantly, however, if you’re a line cook at a McDonald’s restaurant, the chances are overwhelming that you don’t actually work for the McDonald’s Corporation that you’re complaining is so greedy.  Most likely you work at a franchise owned by someone more or less local, who’s trying to make his profit on a business model that has him selling hamburgers for between $3 and $4 apiece, out of which he has to pay not only his franchise fees, but also taxes, payroll, mandatory benefits contributions, rent, utilities, the cost of the raw materials that went into the burger, etc.  That doesn’t leave a ton of margin to play with on raising wages.

Let’s work through an example. 

Assume you have a Whataburger franchise that during the peak rush has a manager, an assistant manager, five employees working the registers and drive-thru, and five working the fryers and grill.  That’s ten employees and two managers.  Let’s further assume that all ten regular employees are at minimum wage (unlikely), and the managers are at an average of 20% above that (also unlikely).  At a minimum wage of $7.25, ten employees cost you $72.50 per hour, and the two managers cost $17.40, for a total hourly labor cost of $89.90.  If your gross margin on a $3.49 burger is 50% (and I submit that that’s likely generous), you have to sell 51.5 burgers every hour just to cover your labor costs.  Of course, you have all the other expenses on top of that, and bear in mind that when you’re open 24 hours rent and electricity cost the same even though you may go hours at a time in between sales in the middle of the night.  

When we jack up the minimum wage to $15, ten employees now cost $150 per hour.  Two managers now at $18 per hour add $36, for a total labor cost of $186/hour.  You now have to sell 106.5 of those $3.49 burgers per hour just to pay your employees.  But your rent, electricity, and other expenses didn’t decrease to offset your increased labor costs.  It becomes readily apparent that you will either have to cut back on the number of employees, raise your prices drastically, or both.  That $3.49 burger will become something more like a $7.49 burger (fries and a drink will add another $5 or so, and who’s going to be willing to pay $12-$13 for a fast food-level burger combo?) and some of those minimum wage earners will be out of a job.  That’s if the shop can survive at all.

As the President once said, that’s just math, and it doesn’t work.

Moreover, there isn’t a massive problem here making it necessary to jack up the minimum.  According to the Bureau of Labor Statistics, a total of about 3.5 million made at or below the federal minimum wage in 2012.  That figure represents all of 4.7% of the hourly wage population, and something like 2.4% of the working population as a whole.  These are not big numbers.  More to the point, however, fully half of those at or below minimum wage are between 16 and 24, and half of them are between 16 and 19.  The compression of this segment of the workforce into an extremely narrow age cohort indicates that for the relatively few earning minimum wage, that is generally not a permanent condition.  As workers gain experience, training, education, and seniority they tend to move to higher wage levels, either by moving up the ranks or by changing jobs.

And this shouldn’t surprise us, because contrary to the strikers’ verbal posturing, wages aren’t about their value as human beings, but about the value of the work they do.  It doesn’t require any education or any real skill to flip a burger; virtually anyone can do it.  If there is someone willing to do it for $7.25 an hour—and I promise you, there is—then that’s what that work is worth.  If you as an employee have in fact gained additional experience or skill such that your work is worth more, presumably your present employer or another one would be willing to pay you that.  That’s how the free market works: your work is worth exactly the wage you agree to accept and your employer agrees to pay.  If you are among the few chronically stuck at $7.25, the problem isn’t the minimum wage, the problem is you haven’t attained the education or increased skill level to make your services more valuable and thus move up the ladder.

But the minimum wage whiners don’t want to do it that way.  They don’t want to accept personal responsibility for their flat career trajectory, and they don’t want to work by mutual assent.  Instead they want to extract an artificially-inflated wage by substituting government force for the employer’s agreement.  Work is no longer worth what the laborer is willing to take and what the employer is willing to pay, but it is worth whatever the laborer says it is (enforced at the point of a federal bayonet), economic consequences be damned. 

If the “right” to a “living wage” vests someone with a claim upon a business owner wholly divorced from the actual economic value of the work that person performs—which is what a legally-mandated minimum wage does—it’s not much of a stretch then to say that that person is entitled to be paid that living wage—to take that money from the business owner—regardless of whether they in fact do any work at all.  After all, if you have a right to $15 per hour even though you only do $7.25/hour work, aren’t you equally entitled to that $15/hour for doing $5/hour work?  And if that’s so, doesn’t the same logic hold if you only do $3.50/hour work, $2/hour work, and so on all the way down to $0?

You cannot carry on an economy like this forever.  It is impossible to, in the name of “fairness” or whatever Progressive buzzword you want to use, continue to take by force from the productive and entrepreneurial and give to the unskilled and unproductive without regard for the actual economic value of their contribution.  The money to pay that artificial minimum wage doesn’t just fall from heaven.  It has to be generated in the marketplace, and if the labor costs are higher than their economic value, then sooner or later the employer is upside-down on the enterprise.

So strike if you want to.  But I submit your time would be better spent trying to acquire an education or skills that would in fact make your work worth more than you are currently making flipping burgers.    

When Robin Hood Became King

“I got into broadcasting because I like to give.  Sometimes I found myself hurting from giving too much, and I’d say, ‘Stop it.’  I’m always gonna cherish this [humanitarian award, which he subsequently leaves in a taxi], and all of you.”

            —Bill Murray as Frank X. Cross in Scrooged

 

Ah, our Benevolent Leader is at it again, channeling his inner Bill Clinton to assure us that he feels our pain.  In an almost impossibly transparent and shallow gesture, the President announced last week that in order to show solidarity with federal workers being adversely impacted by the effects of budget sequestration, he would be returning 5% of his Presidential salary to the Treasury.

You know, because we’re all in this together.

Superficially this almost appears to be the right thing to do, and no doubt the sycophants in the media will fall all over themselves to praise this latest move by Obama The Great to try to unite the country behind “common sense” ideas and for him to be one with his subjects—er, citizens.  And a good many will believe it.  But a closer look reveals this to once again be nothing more than a crass, juvenile show of form over anything resembling substance.

Many federal workers are facing furloughs—periods of forced unpaid leave.  For some, these furloughs may stretch upwards of four weeks, and amount to a 20% pay cut.  So Obama, in all his empathy, volunteers to take a 5% cut in solidarity with their 20%.

Really?

Even workers losing only 10-12 days to furlough are taking about a 5% cut.  So what the President is doing with his little voluntary charade is essentially joining the least impacted of the furloughed federal workers.  In other words, he’s doing as little as he can possibly get away with to still claim the political brownie points.  But it’s really worse than that.

Recall that the President makes a salary of $400,000 per year, plus spending allowance, travel allowance, free lodging in a not-too-shabby joint, free security, free food, etc.  He’s doing more than OK; he’ll be the first to tell you that he’s in that lofty 1% he so loves to demonize, and he’s in exponentially better shape than the very best off of the federal workers being furloughed.  So his salary give-back is doing the least, but doing it from a position of having the most.

Take it a step further.  That $400,000—which is all he’s said he’d be giving back 5% of; he’s not even counting the perks—isn’t his whole income.  In fact, it’s just a little over half of his income.  Remember, he still draws royalties from his books about himself.  He and Michelle reported nearly $800,000 in income in 2011 (the last year for which information is available).  He’s not giving up one thin dime of that.  So that “5%” giveback is really only about 2.5% of his actual revenues.

The generosity and self-sacrifice almost moves you to tears, doesn’t it?

This is the same man who for years has lectured us at every opportunity about the need for the rich to “pay their fair share,” meaning contribute disproportionately more to the collective good than their less-well-off neighbors.  As a refresher:

July 25, 2011:

“Are we a nation that asks only the middle class and the poor to bear the burden after they’ve seen their jobs disappear and their incomes decline over a decade? . . . Before we ask seniors to pay more for Medicare, we should ask people like me to give up tax breaks that we don’t need and weren’t even asking for.”

April 11, 2012: 

“One in four millionaires pays a lower tax rate than millions of hardworking middle-class households . . . It’s just plain wrong that middle-class Americans pay a higher share of their income in taxes than some millionaires and billionaires.” 

January 2, 2013:

“Obviously, there is still more to do when it comes to reducing our debt.  And I’m willing to do more, as long as we do it in a balanced way that doesn’t put all the burden on seniors or students or middle class families, but also asks the wealthiest Americans to contribute and pay their fair share.” 

Time and again he has pounded this populist bullcrap about those with more—who already pay the vast, vast, vast majority of taxes—needing to do more still before they’ve reached their somehow-never-quite-defined “fair share.”  This, of course, is straight out of the Communist credo from each according to his ability, but don’t you dare call him a Communist or you’ll expose your inner Jim Crow.  And Obama has repeatedly given lip service to the notion that he would gladly have this same standard apply to himself.

But isn’t it interesting what happens when the rubber actually meets the road.  The average U.S. household has a total tax liability of about 6.5%—roughly the same percentage as the average pay cut for furloughed federal workers—and Obama’s idea of the wealthy’s “fair share” (at least until he needs even more of their money) is something closer to 40%.  Following that same logic, for him to be showing true solidarity with furloughed federal workers, under his own concept of “fair share” Obama should be giving back at a minimum 40% of his Presidential salary (never mind his total income and the value of all the perks of the office).  Surely he at least should be giving back a percentage equal to the largest pay cut among furloughed workers.  If he were truly trying to share in the sacrifice and contribute his fair share, he should be leading by example and as one of those with the most he should be doing the most, right? 

Nope.

As always with the liberal elites, the need to contribute a “fair share” ends where their own wallets begin; they’re all for more and more sacrifice as long as it’s being done with someone else’s money.  Obama and his surrogates shine a bright light on his “voluntary contribution” in an effort to claim the political high ground, but in reality he’s putting as little skin in the game as possible in order to support that claim.  Meanwhile he plays his golf, and flits from one DNC fundraiser to another in between his lavish vacations.  It’s a sham; a sophomoric veneer intended to fool the gullible into believing that he’s in it for them, that he’s sharing in the sacrifice.

And nobody—but nobody—is calling him on it.

It must be good to be the king. 

Of Moochers And Looters

They found the old man out in the back with a shovel in his hand

Thirteen rusty mason jars was just dug up out of the sand

And they all went crazy and they beat the old man, and they picked him up off the ground

Threw him in the swamp and stood there and laughed as the black water sucked him down

Then they turned around and went back to the shack and picked up the money and ran

They hadn’t gone nowhere when they realized they were runnin’ in quicksand

They struggled and they screamed but they couldn’t get away, and just before they went under

They could hear that old man laughing in a voice as loud as thunder.

            —The Charlie Daniels Band, The Legend Of Wooley Swamp

 

The other day I wrote about the U.S. becoming a nation of moochers and looters, and I want to get a little more into what I meant by that.  Consider those two terms:

mooch  (mōōch)  v.  to get (food, money, etc.) by imposing a burden on another

loot (lōōt)  v.  to take goods by force; to plunder

Now let’s put them in a little context.

There are currently about 313 million people in the U.S.  According to the Bureau of Labor Statistics, as of October we had a total civilian noninstitutional population (basically everyone 16 or older not in the armed forces) of 243,983,000; that’s the theoretical labor pool.  Of that, BLS tells us we have a total labor force of 155,641,000, a labor participation rate of 63.8%.  That figure is down from a high of over 67% in the late 1990s, the culmination of steady gains since World War II.

What this means is we now have over 36% of our population that is theoretically of working age—over 88 million people—but simply isn’t working.  These aren’t the “unemployed,” because to count as unemployed in the BLS statistics you have to have been seeking work.  Those people are included in the 155 million+ workforce.  No, this 88 million represents people in addition to the “unemployed”; 88 million people who are neither working, nor making any effort to work.   True, some of those 88 million are retired or disabled, but that doesn’t account for all of them—in fact, the labor participation rate of those 55 and older is actually increasing.  The continuing decline in labor participation is attributable, in large part, to people just dropping out of the workforce altogether.

In other words, they produce nothing.  They contribute no good in economic terms, and they add essentially nothing to government revenue.

But they do consume.

Which brings me to the flip-side of the equation.  As of June, we had over 46 million people—roughly 15% of the total population—on food stamps.  In 2011 70 million were enrolled in Medicaid, the federally-compelled, state-administered, government-subsidized medical insurance program for indigents.  5.6 million people currently collect unemployment insurance benefits.  4.5 million receive direct federal welfare under the Temporary Assistance to Needy Families (TANF) program, the successor to Aid to Families with Dependent Children (AFDC).  I’m not going to begin to dig up how many millions are receiving some form of state-administered welfare.

But there’s more.

Although the Lifeline program is decades old (as are Medicaid, etc.), under that program there are currently 12.5 million people with free cell phones and minutes, courtesy of the federal government.  As many as 2.5 million have two or more such phones.

81% of those with student loans advocate government-subsidized forgiveness of those debts.  In other words, they took the money and don’t want to have to pay it back; they want the government to pay it back for them.

We have had federal farm subsidies since the Great Depression; subsidies that were intended not only to supplement farm incomes, but to artificially boost prices by reducing supply.  In other words, the federal government bribes farmers not to produce.  Currently we spend $20 billion annually on this.

The Department of Energy has made some $34.5 billion in “loans” to “green energy” companies that in many cases have no market for their products; but a number of them are owned by huge Obama financial backers.  DOE claims that program has “created or saved” 60,000 jobs—even taking that dubious boast at face value, that’s $575,000 per job.  What is undeniable is that that program has seen to date eight bankruptcies, at least two insolvencies, three rounds of layoffs, and at least four companies outsourcing some or all of their business.

All of this costs money.  Food stamps alone cost over $75 billion in 2011.  Medicaid cost $404 billion in 2010.  Total student debt is $1 trillion, so at a default rate of around 10% that’s another $100 billion.  TANF was down, but still nearly $10 billion in 2011.  Cell phones were another $1.6 billion.  As noted above, there’s another $20 billion in farm subsidies, and $34.5 billion in green energy seed money.

That’s nearly three-quarters of a trillion dollars a year in just these programs I’ve named above.  Where do you suppose that money comes from?

I deliberately left out Medicare and Social Security—what I’ve set out above does not include any programs into which the recipients at least theoretically have “paid in.”  They are programs whereby the recipients are inherently taking money extracted from others.  So to those takers I ask: By what right do you take from those who produce in order to fund your consumption?  What is your claim on the product of the labor of others?  Does the fact of your need impose upon them a debt that they owe?  What have you provided in return?

For those of you who are not recipients but nevertheless support these programs out of some sense of social conscience I ask:  By what right do you seize others’ property in order to fund by force the charity you deem a social imperative?  Does your need for self-righteousness entitle you raid my bank account so you may rest comfortable in the illusion that you have helped your brother (what is really you forcing me to help your brother at gunpoint)?  Is it right that you should feed your sense of moral superiority, or assuage your guilt over having more than others, by taking from me to give to someone else?

I agree that we as people should help our neighbors.  But that help ceases to be alms when its giving is not voluntary.  Suppose the productive simply said I quit and stopped working.  Suppose business owners decided to close their doors rather than employ people who would earn wages for you to confiscate in the form of taxes in order to give it to people who had not earned it.  What then?  Would the takers’ need to consume and your need to feel charitable permit you to force us all back to work in order to fund your programs?

Living at the expense of others, with no value given in return for what you take, is mooching.  Money extracted at the point of a gun is loot, and its extraction is theft, regardless of the alleged altruism behind it.

**********************

BENGHAZI COUNT:  Forget General Petraeus’ affair–it’s a lurid smoke screen intended to distract you from what matters.  It is now 64 days and counting since our consulate and CIA compound in Benghazi were attacked and four Americans killed while intelligence and possibly the White House itself watched live via spy drone, and the President has still not addressed the nation and told us what happened.

Footing The Bill For Tax Cuts

 

When you greet a stranger, look at his shoes

Keep your money in your shoes, put your trouble behind

When you greet a stranger, look at their hands

Keep your money in your hands, put your trouble behind

            —R.E.M., Good Advices

This kind of stuff makes me crazy.

President Obama was in Ohio Wednesday blasting Governor Romney’s proposal to cut taxes for everyone, thus letting everyone keep more of their own money.  Citing a dubious report from the Tax Policy Center—a joint venture of those known independent and bipartisan thinktanks the Brookings Institution and the Urban Institute—Obama told a cheering crowd that all Romney’s plan would do is provide a giant tax break for the evil rich literally at the expense of everyone else:

Who do you think gets the bill for these $250,000 tax cuts?  You do!”

Um, no you don’t.

I confess I haven’t delved into the details of the TPC’s report, in large part because even they say up front they didn’t have enough details about Governor Romney’s plans to do any real analysis, so they made certain assumptions, and ignored other things.  I’ll leave it to others to get that deep in the weeds.  My point here is that you don’t even need to analyze the details of the TPC report, because its fundamental starting point is wrong.

The TPC paper is centered on studying the purported effects of Romney’s plan in a “revenue-neutral” environment.  That is, its core premise is that the U.S. federal government must take in at least the same amount of revenue today that it did yesterday.  And this core premise then leads the authors of the TPC paper to discuss repeatedly the necessary “tax expenditures”—their euphemism for tax credits and deductions—that must be eliminated in order for the government to pull in the same amount of money while reducing marginal tax rates.  Having set up this flawed construct, the conclusion was almost self-selecting; if we’re to generate the same amount of revenue while reducing tax rates for the wealthy, we have to eliminate credits and deductions to make up the difference, and since the wealthy already don’t get those, those eliminations necessarily fall on those at lesser income levels.  Thus, the study concludes, reducing taxes for the wealthy will raise taxes on everyone else.

Of course, the problem is this baseline starting point that requires “revenue neutrality.”  Why is that a requirement?  Will the world stop spinning on its axis if the federal government simply accepts the premise that it’s going to have to operate on less revenue next year than it did this year?

But Rusty, that just means you’re cutting federal programs for the poor, so you’re still putting the burden on them, just in a sneakier way.

Not necessarily.  I’ve written on this subject many times.  The Beast is so bloated with waste and duplicity that you could reduce the budget by $1 trillion or more overnight and no one outside of the unnecessary career bureaucrats you downsized would notice the difference.  It wouldn’t touch the poor at all.  Hell, the inspector general just reported that the IRS is losing over $4 billion a year in paying out fraudulent tax refunds alone.

But the real problem is this mindset that has gotten out of control.  Not only do we start with this assumption that the need for “revenue neutrality” is as sacrosanct as the theories of man-made global warming and evolution, but once again we see that the property ownership equation is stood on its head.  Tax credits and deductions are referred to as “expenditures,” as though it costs the government some of its money to allow those things.  That’s simply not so.  Tax reductions, whether in the form of credits, deductions, rebates, or outright rate reductions are not expenditures; the government isn’t giving the taxpayer the government’s money.  These mechanisms allow the taxpayer to keep money that’s already his.

And that really hits at the essence of Obama’s deceit.  No one is going to get a bill from the IRS for their personal share of this tax reduction for others.  That’s a lie.  The government isn’t going to write Warren Buffet a check drawn on some middle class plumber’s checking account.  No one is taking money from you and giving it to some rich guy.  What a tax decrease means is that the government is going to take less from the rich guy of what’s rightfully his than it otherwise would.

The only way Obama’s premise is true is if you have some claim to a portion of what that wealthy guy has, such that not taking it from him is depriving you of something that’s rightfully yours.  Well let me ask you:  are you entitled to live off another?  Do you have the right to take someone else’s stuff just because they have more than you do?  What if you really need it?  Does it also work the other way, such that someone else who has less than you do has a right to live off of you or to take your stuff?  Now, answer those questions honestly or not, I don’t care, because the real proof is in the answer to this next question (h/t my wife, who loves to pose it this way):

Do you lock your house and car when you leave them?

If someone with less has an entitlement to take from someone who has more, by what right do you lock your house and your car?  You do that, of course, to protect your things.  You would never accept the idea that by locking your door you’re somehow imposing a cost on the would-be thief, or that he’s somehow “footing the bill” for your selfish desire to be secure in your property.  And you’d be right, because it belongs to you.  So you are perfectly legitimate in protecting your property, and there is no cost or burden imputed to the thief in having his theft deterred, because he has no legitimate claim to your possessions.

Unless you simply reject the notion of private property—and there is exactly zero chance that you actually do—it cannot possibly “cost” you anything for someone else to get a tax reduction allowing him to keep more of what was already his to begin with.

They Didn’t Build That?

“We are on strike, we, the men of the mind.  We are on strike against self-immolation.  We are on strike against the creed of unearned rewards and unrewarded duties.  We are on strike against the dogma that the pursuit of one’s happiness is evil.  We are on strike against the doctrine that life is guilt.”

            —Ayne Rand, Atlas Shrugged 

As you are undoubtedly aware, a couple of weeks ago President Obama ratcheted up his class-warfare rhetoric by ridiculing successful entrepreneurs with the pronouncement that “if you’ve got a business, you didn’t build that[,] [s]omebody else made that happen.”  Obama claims that success is not so much the result of one’s own hard work, application of talent, or taking of risk, but of some largesse of society as a whole, and therefore if you’ve been successful, society has a claim on part of the fruit of that success.  You *owe* me.  You’ll recall similar “social contract” nonsense being spewed last Fall by Massachusetts Senate candidate Elizabeth Warren.  It seems the Dems are now doubling down on this whole “you didn’t build that” notion by tapping Ms. Warren to deliver the keynote address at their convention in September.

How nice.

I’m sorry, but the fact is this country wasn’t built on societal handouts, and the engine that drives our economy and feeds our prosperity isn’t taking what someone else gives us.  It’s built and driven by the sweat, ingenuity, and daring of individuals who had the foresight or talent (or both) to recognize an opportunity, create something of value, and the drive to make it work.  Consider the largest privately-held companies in the U.S.; the top 20 alone employ over 1.5 million people.  And when you examine their stories, time after time what you find is not some government “investment” or public gift, but one or two individuals risking it all for an idea or a dream:

Cargill

Agricultural giant Cargill began with W.W. Cargill and a single grain storage warehouse in Conover, Iowa.  He had the gumption and the foresight to follow railroad development westward to establish facilities to gather and process grain.  A century later, Cargill innovated grain mass transportation by partnering with the Illinois Central Railroad to pioneer the unit train system of delivering grain via huge, dedicated trains.

Koch Industries

Koch Industries began when Fred Koch entered into a partnership with Dobie Keith and Lewis Winkler in 1925.  Koch spent 1926 so strapped for cash he slept on a cot in the partnership’s drafting room.  It was from Koch’s ingenuity in developing a new method for converting heavy oil into gasoline that the firm first began to enjoy any kind of success.

Mars

Candy titan Mars got its start when polio victim Frank C. Mars began making butter cream candy in his home kitchen in 1911.

Bechtel Corporation

Warren Bechtel spent almost a decade at the turn of the 20th century nearly broke much of the time and moving between jobs as a grader and gravel foreman for Southern Pacific before successfully taking on a risky subcontract to cut a limestone channel for the Western Pacific Railroad.

Publix Super Markets

Publix Super Markets was founded when George Jenkins took the bold risk of leaving his job in 1930—in the middle of the Great Depression—to open a store in Winter Haven, Florida.

Love’s Travel Stops

Love’s Travel Stops began in 1960 when Tom and Judy Love started Musket Corporation with $5000 and a lease on an abandoned gas station.  They later pioneered the concept of combining a convenience store and self-serve gasoline.

C&S Wholesale Grocers

C&S Wholesale Grocers was started in 1918 by Israel Cohen and Abraham Siegel with just three employees, delivering products to retail stores in Worcester, Massachusetts.

H.E.B.

The Texas grocery chain H.E. Butt Grocery got its start when Florence Butt invested $60 to open C.C. Butt Grocery Store in Kerrville, Texas.

These businesses weren’t built on government subsidies.  They weren’t handed down as fully-mature going concerns from on high by the rest of society.  They’re not the result of some collectivist community effort.  They were created from scratch and cultivated through the blood, sweat, tears, and guts of their founders.  Similar stories are found among some of the most well-recognized brands in America:

  • Colonel Harlan Sanders started what became Kentucky Fried Chicken in the front room of a gas station during the Depression; by 1955 he was essentially broke, and had to drive from town to town selling his secret recipe.
  • Coca-Cola was born in an Atlanta pharmacy.
  • Steve Wozniak had no money, no savings, and was on a cash-only basis for his rent when he built the first Apple computers in his California apartment.
  • Southwest Airlines was conceived on the back of a cocktail napkin, originally to avoid federal government involvement by confining service to the intra-state triangle between Houston, Dallas, and San Antonio.

Obama’s arrogant and ignorant assumption that “you didn’t build that” is an affront to everything that makes America great.  But it should come as no surprise from someone who has never gotten anywhere except through someone else giving him something, whether it’s affirmative action admission to Columbia and Harvard, minority-preferential changes to the Harvard Law Review officer election process, or a cushy book deal on race relations reserved for the one lucky enough to become the Harvard Law Review’s first black president.  His life experience is permeated with nothing but handouts from others and the good fortune of being in the right place at the right time.  So of course he’s incredulous that anyone would attribute their success to their own initiative, work, and application of talent.

It’s ludicrous to complain that if someone has a successful business, their success is due to being able to ship goods on roads “the rest of us paid for,” and therefore they owe some kind of public debt as though that success is somehow stealing from everyone else.  The successful paid for the roads and public schools, too.  The fact is everyone has the same access to the infrastructure.  Everyone has the same access to the American free enterprise system, and the same protection of our ordered society.  Almost without exception, success—to the extent we define it in material business terms—is in fact due to an individual’s effort and talent in applying themselves within the context of that infrastructure and system, rather than some infringement upon others’ contribution to those common assets.

People like Harlan Sanders, Steve Wozniak, Florence Butt, and Warren Bechtel didn’t become successful by taking unfair advantage of the rest of us.  That they were more materially successful than most doesn’t mean they did it at the expense or to the detriment of others.  And don’t forget that in every instance, to a greater or lesser degree these people took risk, sometimes of everything they had.  People like Obama and Warren want to claim society’s due share of the profits from these entrepreneurs’ successes, but unless it impacts their union campaign financiers they’re nowhere to be found to share in the loss when they fail, as they often do.  You can’t have it both ways.

When we start appropriating as our own the blessings derived from the effort and talent of others, we disincentivize those who built and drive our society; if what the creators create isn’t theirs, they will cease creating it.  Sooner or later, John Galt will call them home, and then we’re screwed.

Yes, they did build that, and thank God they did.

And no, they don’t owe the rest of us a damn thing.

It’s All About The O

 
Empty prayer, empty mouths,
Combien reaction?
Empty prayer, empty mouths,
Talk about the passion.
—R.E.M., Talk About The Passion
Sorry for my extended dry spell.  I just discovered that my Second Amendment rights afford me a new way to bankrupt myself for fun, so candidly my spare time has been occupied with internet shopping.  That, and nothing in the news has really grabbed me lately.
That said . . .
I see the President is going to force us once again to deal with this nonsense about raising taxes on the so-called wealthy.  Doubling down on a theme he began last Fall, Obama has resurrected his call for implementation of the “Buffett Rule,” intended to cure some alleged inequity in the tax system.  Apparently the most pressing issue now facing the country is the unfairness of our taxes (actually I think I may agree with the President on this point, but in the reverse of what he’s claiming).
How does he continue to get away with pushing the lie that the tax system unfairly allows millionaires to pay less in taxes than the middle class?  They don’t, as I’ve demonstrated here, here, and here.  If you’re talking about taxing wages, the top marginal tax rate—the rate charged on the amount earned above a certain threshold—is 33%, while the marginal tax rate for the median income of about $50,000 is 25%.  If you’re talking about taxing capital gains, that’s taxing risk rewards, not labor compensation.  In other words, capital gains taxes impose a burden on money that’s already at risk through investment; unlike wages, there is no guarantee of an income return at all.  More importantly, while the capital gains rate is 15%, that’s on top of the 35% tax imposed on the corporation in which the taxpayer invested his capital, meaning one who acquires his earnings through capital gains actually has his money taxed twice.  
 
The bottom line according to the IRS is that the average total tax liability—combined effective tax rate plus payroll and other taxes—is less than 7% for median wage earners, but it’s over 30% for the top earners.  There may be isolated exceptions, and I’ll be the first to agree the tax code needs a gross overhaul.  But taken as a group, the wealthy in fact do not pay less in taxes than the middle class, whether in total dollars, or as a percentage of income.  They just don’t, no matter how many times Obama or Warren Buffett say otherwise.
With the underlying premise itself a demonstrable lie, one has to wonder what it is the President thinks he’s accomplishing by continuing to push this, particularly when he and everyone else knows it has exactly zero chance of passing this Congress.  What dire national crisis is he trying to solve by taxing millionaires?  Clearly we have major problems in this country, so name your hot-button issue: is Obama’s “Buffett Rule” going to solve it?
Unemployment/Economy
Obama promised back in 2009 that his “stimulus” would prevent unemployment from rising above 8%.  When that failed and unemployment stagnated well above 9%, he repeatedly told us that he “will not rest until every American who wants one has a job.”  Well, today the official unemployment rate remains above 8%, and 12.7 million Americans are out of work (the real rate, once you include the underemployed and those who have simply given up, is 14.5%, or more like 22.5 million Americans). 
Is raising taxes on the wealthy going to give a single one of those Americans a job?  The answer, of course, is no.  Obama tells us that prosperity has never trickled down from the wealthy, but outward from the middle class; but where does he think those jobs that employ the middle class come from?  Some of the largest non-government U.S. employers include the likes of Wal-Mart (founded by Sam Walton), McDonald’s (built by Ray Kroc), General Electric (founded by Thomas Edison), and Ford Motor Company (Henry Ford).  Half of all non-government employees work for small businesses, the owners of which would be directly impacted by the “Buffett Rule.”   The middle class has jobs because somebody wealthier has hired them to work in their business.  Raising taxes on those people is only going to disincentivize investment in those businesses, which hurts job creation, not helps it.
Budget Deficits/Debt
The current budget deficit is over $1 trillion, a figure it has exceeded every year of this Administration.  The District’s debt is $15.5 trillion and climbing.  Clearly government and its spending habits are totally out of control, a fact to which the Administration is completely oblivious.  Obama submitted a budget this year that increased spending further, and was so bad that it failed in the House by a 414-0 vote.  Not even a single Democrat voted aye.  Not Nancy Pelosi.  Not Debbie Wasserman-Schultz.  Not Maxine Waters.  Not Henry Waxman.  Nobody.  One suspects even Obama himself may have signed the transmittal letter “present.”
With spending this out of control, is raising Warren Buffett’s taxes going to reduce the deficit or debt?  Again, the answer is no.  As I’ve covered a number of times, you can tax the millionaires at 100%—take everything—and it wouldn’t fund the District’s spending for even three months.  Even taxing everyone making more than $200,000 a year at 100% would still leave you nearly $2 trillion short of covering current federal spending, much less touching the debt.  No, the “Buffett Rule” isn’t going to touch the deficit/debt problem.
Belligerent Iran & North Korea
Iran refuses to give up its nuclear program; it pinky-swears that it’s only for peaceful electrical generation and not for weapons, but won’t let anyone see it.  North Korea this week attempted to launch what amounted to an ICBM—they said it was for a weather satellite; I guess they don’t have cable and can’t get The Weather Channel—over the Administration’s sternest possible finger-wagging, and will soon be conducting additional nuclear weapons testing.  I’m pretty sure nobody in Teheran or Pyongyang is sitting around saying if only Obama would raise Warren Buffett’s taxes, we’d be able to give up our nukes.
The truth is not only is the underlying premise that the rich pay less—or even less than their fair sharein taxes than everyone else pure fiction, but raising taxes even further does not move the ball one inch on any of the actual problems we currently face.  It doesn’t help us economically, fiscally, or defensively.  It doesn’t cure the apparent catastrophic crisis in women’s health.  It won’t reduce your pain at the pump.  It won’t make Social Security solvent, save Medicare, or pull Solyndra out of bankruptcy. 
Why, at a time when there are real substantive issues, would the President devote so much time and energy flogging an idea that doesn’t have anything to do with any of those issues?  Let’s leave aside policy debate over how best to solve the problems we face.  Obama’s pushing of this “Buffett Rule” should demonstrate to anyone who’s paying attention (and hasn’t already drowned in the kool-aid) something very disturbing about his character wholly apart from partisan agendas:
He’s not interested in solving real problems.
Obama’s sole interest is in keeping himself in power, and to do that he’s all about creating a pithy and convenient narrative he can use to posture his campaign as an “us vs. them” battle.  So rather than actually do the job he was hired to do, he’s spending his time—and your money—trying to divide and conquer with a meaningless and ultimately counter-productive message.  It makes for a good bumper sticker to stir up his Leftist base, but in the end the most it will do is benefit him, personally.  Our problems will remain.
It’s one thing to agree or disagree on matters of policy.  But it should really bother all of us when a President is more concerned with retaining power for power’s sake than he is with actually dealing with the concerns of the day.  This President likes the trappings of the officehob-nobbing with super-Hollywood types, taking his-and-her matching private 747s on exotic vacation jaunts, and plenty of golfbut he shirks the real responsibility of that office in favor of empty and deliberately divisive rhetoric.
Not everyone can carry the weight of the world.

Our NSF Government

On the outside, underneath the wall
All the money couldn’t buy
You’re mistaken, no one’s standing there
For the record, no one tried
Oh, I try to
What if we give it away?
—R.E.M., What if We Give It Away?
I know I’ve hit this before, but because I have yet to hear anyone, particularly among the GOP Presidential candidates, articulate and explain the point very clearly, I’ll keep banging away. 
Thomas Jefferson famously warned us:
A government big enough to give you everything you want is big enough to take everything you have.
Well, let’s just put that into practice for a second.
As a starting point, let’s recognize that the U.S. federal government currently spends at about a $3.6 trillion dollar annual clip.  That’s $3,600,000,000,000 spent per year.  Now, with all the haggling over the supercommittee and resolving the growing debt and annual spending deficit, there’s been considerable debate over whether, and to what extent, we should reduce spending vs. increasing revenues.  But what no one seems to be able to say out loud in this discussion is that the problem cannot be that we don’t raise enough revenue, because as a matter of basic mathematics there simply isn’t enough revenue to be raised, even if you allow the government to take it all.
Raise taxes on the rich!  We are the 99%!
OK.  Let’s say we do that, in the interest of making sure the rich pay their fair share.  Consider the following.  As I’ve pointed out previously, if you took those making $1 million and above—that’s the top 0.17% of tax returns, for you “occupiers”—and taxed them at 100%, according to the IRS you’d generate about $735 billion.  And just so we don’t get into any unnecessary debates over deductions and credits and loopholes, that’s based on 2009 total income figures.  In other words, I’m not talking about adjusted gross income (as I have in prior posts), and I’m not talking about taxing income above $1 million; I’m talking about taking every dime they made.  No credits.  No deductions.  Do that, take it all, and you’d fund a grand total of 20% of total federal spending.
Ah, but, Rusty, you know perfectly well that you don’t need $1 million to be rich!  You’re not making enough of the wealthy pay their fair share.
Quite right.  Let’s expand our experiment to everyone making $500,000 and above.  That more than doubles our base to the top roughly 0.5% of total tax returns.  Tax that total income at 100%—again, take very last nickel.  You’d generate less than $1.1 trillion, or less than 30% of total federal spending.  You’ll have to do better than that if you want to correct the deficit problem by increasing revenues.  We could drop down to everyone making $200,000 or more—that’s about 2.8% of total returns, so we’re now dipping into the upper income levels of the 99%.  The federal government could take every penny made by everyone making $200,000 or more, and still that would generate less than $2 trillion, or a little better than half of what it spends.  Taxing the rich ain’t gonna get you there, because they don’t make enough money, even if you take it all.
But, but, how can that be if we’re just making them pay their fair share?
How indeed.
Taking everything from the wealthy doesn’t get it done.  So we have to start dipping into the sacred “middle class.”  Clearly we can’t tax the middle class at 100%.  That would be unfair and just silly, right?  But what if we took, say, half of what they earn?  We could raise taxes to 50% on all income for those making between $50,000 and $200,000, and keep the tax at 100% for the “wealthy” as discussed above.  That would net you about $3.9 trillion, enough to cover current federal spending—but just barely, and just for now.  But this, of course, is a moot exercise, because nobody’s going to let you tax a unionized teacher or government clerk making $50,000 a year at 50%.  And taxing at those rates immediately adds about a third of the population to those already below the poverty level—over 4 million filers would go directly to ZERO income net of taxes, and even millionaires need something to live on.  Even for someone like Paul Krugman this is obviously not a practical solution to anything.
But what if we just dictated a livable wage and taxed everything above that?  For example, let’s say we decide in our infinite wisdom that the current median income of about $50,000 is really all anyone needs for a decent standard of living, and the rest they earn above that should be committed to the common good.  So, every dollar earned above $50,000 is taxed at 100%.  You could do that, and you’d generate about $3.6 trillion, or just enough to cover current spending. 
Of course, for 50 large a year you may be able to hire a barista at your local Starbucks, but good luck getting Jay-Z to cut a record.
Or Michael Moore to make a movie. 
Or a doctor to treat you (even if you have federally-funded health insurance).
Signing an NBA point guard?  Fuggheddaboudit. 
Most of us in professions where incomes tend to exceed the $50,000 threshold by any significant margin would quit altogether, or would work part of the year until we earned our $49,999, then take vacation for the rest (for those needing a more detailed explanation, read Atlas Shrugged), thus eliminating most if not all of the wealthy tax base altogether.  In other words, there would cease to be any high wage earners to tax, because there would no longer be anything to be gained by working more to earn more.  Real revenue under this system would end up being substantially less than I describe here, and certainly wouldn’t come anywhere near covering existing spending levels. 
That’s crazy talk.  You don’t need to tax the middle class, and you’re leaving out corporations.  Tax the millionaires and the evil corporations!  People before profits!
OK.  The most current IRS data for corporations is 2008, so it’s a bit of an apples to oranges comparison.  But for 2008, corporations had net income of not quite $1.9 trillion.  You could tax that at 100%, and add that to taxing all the million-dollar earners at 100% as discussed above.  You could take every red cent made by the corporations and millionaires, and it would only generate about $2.7 trillion, still leaving you nearly a trillion dollars short of covering everything the federal government spends.  Never mind what would happen to business development in the U.S. if the corporate tax rate went to 100%.  No, adding corporations to the mix doesn’t get you where you need to be, either.
Slice it however you want.  You can talk about raising taxes to close the deficit until the cows come home.  The basic point remains, and it’s not complicated:  At any practical level there simply isn’t enough revenue in this country to cover federal spending at its current levels, even if you taxed it all.  Like Monopoly, there’s only so much money in the box, and the District is waaaaaayyyy over the limit.
Apparently a government can be big enough to give you everything you want.  But it can’t pay for it all, even if it takes everything you and everybody else has.

The Disastrous Decline In The American Standard Of Living

 
Wouldn’t it be good to be in your shoes, even if it was for just one day?
Wouldn’t it be good if we could wish ourselves away?
Wouldn’t it be good to be on your side?
Grass is always greener over there.
Wouldn’t it be good if we could live without a care?
—Nik Kershaw, Wouldn’t It Be Good?
Apparently, life for the average person in the U.S. really, really sucks.
 
At least, that’s the impression one is left with from any number of media reports over the last few weeks discussing census data revealing that the median U.S. income—presumably that income level at which 50% of the population is above it, and 50% is below it—has been relatively flat over the last decade.  USA Today ran a two-full-page piece last Thursday highlighting this data as a key underpinning of the “occupy” fad. 
 
To make this point—and to cast the “occupiers” as normal folks who just want their honest chunk of the American Dream—the article sifts through the inane “Tax the Rich” and “Arrest Tea Baggers” signs to focus on young Kate Wolfe, a very girl-next-door type who has $50,000 in student loans, and a $30,000 medical bill for which she has no insurance.  Ms. Wolfe says, “I’m not anti-capitalist . . . I just want some kind of hope for young people starting out, who think the deck is stacked against them.”  One suspects that Ms. Wolfe might find the deck a little more playable if she weren’t—as the USA Today article leads off informing us—spending her time trying to land parts as an actor in New York.  I don’t begrudge anyone chasing their dream, but don’t ignore the statistical and talent realities that say your chances of becoming Johnny Depp or Angelina Jolie are exceedingly slim and then claim the system is unfair.
 
Let’s note first that this income comparison is based on incomes indexed for inflation.  Unless you indulge in the fantasy that real incomes should normally be expected to show constant and substantial increases forever, it should come as no surprise that the buying power of the median household—particularly in the throes of the current ongoing recession—hasn’t changed that much over the last ten years.  Indeed, this is the basic hedge theory behind investing in gold.  In 1920, an ounce of gold as worth $20, an amount that would buy a fine men’s suit; that same ounce today is worth $1,600 (+/-), an amount that would buy . . . a fine men’s suit.
 
Interestingly, the USA Today piece goes on to cite Columbia economist Jeffrey Sachs, who traces the stagnant median income growth to 1973, and in researching the data on line I found that 1973 is a common cutoff point for analyzing relatively flat median income growth.  But even that 38 years is a relatively limited time sample in the grand scheme of things, and one suspects that over a broader time period median income would show better growth.  Indeed, a University of Arizona article shows that looking back at 1950 to present, median income (adjusted to 2008 dollars) has more than doubled.  Other online data shows average income—not quite the same thing as “median,” but it should be predictive of at least the direction of change in median income, if not the specifics—increasing fourfold (adjusted to 2004 dollars) from 1929 to 2004.  So to say that median income is flat would appear to be taking too limited a time frame to be meaningful.
 
As an interesting side note, the 1973 starting point for the flattening of the median income growth curve coincides almost exactly with the elimination of the gold standard in 1971 (thus allowing the Treasury to print money), and with the beginning of federal peacetime (yes, I know Vietnam dragged on into early 1975) spending routinely and significantly exceeding revenues as the true costs of Medicare and Medicaid kicked in. 
 
I’m not saying, I’m just saying.
 
The bigger question here is, even assuming that the median U.S. household income has been relatively flat on an inflation-adjusted basis, why anyone thinks this is necessarily a bad thing.  Consider the plight of that median household in the 21st Century.  According to statistics compiled in an article published by The Heritage Foundationalthough its real income hasn’t changed much, the median U.S. household as of 2005 had, among other amenities a PC, Internet access, a home printer, two color TVs, cable or satellite service, and a cell phone, none of which even existed in 1973.  UPDATE 11/1/11:  Yes, I know we had color TV.  Try to keep up with my point here.
 
Yep, life’s going downhill in a hurry.
 
Even the vast, vast majority of the “poor” in the U.S. have many of these same amenities, and the fact is that in our modern state of entitlement we don’t define poverty in terms of lacking the essentials for survival, but by the extent to which one has access to conveniences that are unknown to people in many parts of the world.  Over 99% of all U.S. households have a refrigerator and TV.  75% have air conditioning.  65% have cable or satellite service.  Over half have a cell phone.  Virtually none complain about not having enough to eat. 
 
Try finding those things in Zacatecas, Mexico.  Or Bangladesh.  Or Darfur.
 
To return to the median U.S. household, the USA Today piece wraps its thesis around the proposition that what it calls “two of the most common expectations of middle-class life, health insurance and college” are less affordable (query whether this affordability issue would be at least mitigated if the median household wasn’t choosing to spend its flat real income on the new amenities discussed above that it wasn’t spending on in 1973).  But leaving that aside, the roughly tripling of the cost of college since 1980 and doubling of health insurance premiums since 1999 cited in the article aren’t problems with the median income, but problems with the rising cost of those two products; it’s not that the median household doesn’t make enough income, it’s that the cost of these two specific items has grossly outpaced inflation.  Isn’t it interesting that for all the “Occupation” calls for free education as a basic human right, no one as far as I can tell is attacking the universities for raising tuition and fees?  And although it’s a subject for more detail another time, the increase in health insurance has as much to do with Americans generally being too fat, over-scanned, and over-medicated as it does anything else.
 
One wonders, if the standard of living at or below the median in the U.S. is so bad and plummeting off the cliff, why so many thousands a year risk life and limb and spend everything they have to try to get here.  By any sane measure, life in the median U.S. household, and even for the “poor” in the U.S., is better than it is for those in other parts of the world, better than it was in the U.S. in 1950, and exponentially better than it was in the U.S. in 1900.
 
For those of you on the Left who still believe things are so terrible, I’m happy for you to move to Europe where you can drown yourself silly in “free” government benefits, at least until the creditors come to collect.  Maybe Ms. Wolfe can land a part there.

The Politics Of Division

Brian:       Brothers!  Brothers!  We should be struggling together!
Francis:    We are!  Oh.
Brian:       We mustn’t fight each other!  We should be united against the common enemy!
Crowd:     The Judean People’s Front?!?
Brian:       No, no!  The Romans!
Crowd:     Oh, yeah.
—Graham Chapman as Brian, Michael Palin as Francis, and cast of Monty Python in Life of Brian
If you want to see one of the roots of why this country is so badly divided, you need look no further than this.
According to an article published October 11 at foxnews.com, there’s a fight brewing in Nevada over redistricting and its impact on Hispanic voters in that state.  In an odd reversal of the usual battle lines, this time it’s actually the Republicans supporting the creation of Hispanic majority districts, and the Democrats insisting that the districts be drawn to distribute the Hispanic vote throughout the state, rather than vice-versa.  We’ve had a similar fight-now-lawsuit here in Houston over Republican efforts to redraw the precinct lines in Harris County—lines that already bore a closer resemblance to a complex jigsaw puzzle than any natural geography.
The stated rationale for these redistricting fights is always the same: ensuring that the minority group at issue has “fair representation”—read: is able to elect one of its own.  In discussing the Nevada situation, Fox quoted “Hispanic Republican activist” Alex Garza:  “We should have the opportunity to elect the candidate of our choice.”  In a September 7 article on the lawsuit over Harris County redistricting, the Houston Chronicle reported that “[t]he plaintiffs argued that the maps prevented minority voters from gaining a sufficient number of new seats[.]”
Somewhere we developed this mentality that different ethnic groups are entitled to at least one of their own on every elected body, whether it’s the House, the State Legislature, the County Court, or what have you.  We’re just one step shy of simply dedicating seats; this is the Hispanic seat, this is the Black seat, etc. 
I’m searching and searching the Constitution, but I don’t see anything about every subgroup of Americans being entitled to elect one of their own.
 
More to the point, where does it stop?  Do we have to have at least one representative from every nationality-hyphen-American simply for the sake of having them?  What about gays—do we need a dedicated “gay” seat (don’t even bother with the joke, Beavis) in the statehouse?  And if there’s to be a gay seat, don’t we also need representatives from every other behavioral variation and fetish by which some group may define themselves?  Not only does this logic quickly devolve into the absurd, its only real solution is total democracy, because the only way to have every possible permutation of human individuality represented is to have each individual represent himself personally.
Further, the minute you begin attempting to create a district designed to permit, say, Hispanics to elect a Hispanic, you are—assuming your underlying premise that Hispanics will and should vote for Hispanics is valid—inherently devaluing the vote of non-Hispanics in the redrawn district.  The U.S. Seventh Circuit Court of Appeals put it nicely in Gonzalez v. City of Aurora:
“[N]either § 2 [of the Voting Rights Act] . . . nor any later decision of the Supreme Court speaks of maximizing the influence of any racial or ethnic group.  Section 2 requires an electoral process ‘equally open’ to all, not a process that favors one group over another.  One cannot maximize Latino influence without minimizing some other group’s influence.  A map drawn to advantage Latin candidates at the expense of black (or white ethnic) candidates violates § 2 as surely as a map drawn to maximize the influence of those groups at the expense of Latinos.”  (emphasis original, citations omitted)
 
The real problem, of course, is that both parties in this kind of debate are pandering to the lowest common denominator.  They are not genuinely interested in assuring that this group or that group is “adequately represented.”  They are interested in one thing, and one thing only, and that gaining or remaining in power, and in this vein they are acting on the inherently racist and elitist assumption that this group or that group is likely to support the party’s policies and will vote for a candidate solely based on the color of her skin.  So what they’re telling the Hispanic community (or blacks, or whoever) is we assume you can’t think your way through the issues so we’re going to color-code the ballot for you.  Possibly worse, this thinking also assumes that a Hispanic household cannot be adequately represented by their white next-door neighbor, or at least not as well as they could by a Hispanic who lives across town.
 
I vote for the candidate I believe is most likely to act in my best interest.  Yes, I have voted for white Anglo-Saxon males.  But I’ve also voted for women, blacks, Jews, Catholics, Hispanics, Vietnamese, and Indian candidates for various offices.  I’ve voted multiple times for Texas Attorney General Greg Abbott, who is a paraplegic, and unlike FDR, takes no measures to hide it.  I’ve probably somewhere along the way voted for at least one gay candidate—I don’t know, because I don’t ask and I don’t much care.  But I don’t just vote for the straight white guy because I’m a straight white guy.  If you do that—or if you vote for the black because you’re black, the Hispanic because you’re Hispanic, etc.—instead of voting substantively in your best interest, you are a racist and a fool.
Article I, Section 2 of the Constitution mandates that we redraw the maps after the Census in order to apportion seats in the House of Representatives.  But allowing these districts to be redrawn in any conceivable shape inevitably leads to the temptation to craft districts that technically include the requisite number of people, but are bizarrely laid out in order to maximize the drawing party’s political power (so-called “gerrymandering”).  The potential for mischief is almost endless, and it has been abused by both sides.  An easy fix, it seems to me, would be to mandate—probably by Constitutional Amendment—that all voting districts take the form of a polygon with, say, six sides, thus inherently limiting the degree to which it can be artificially manipulated. 
In advocating on behalf of the Republicans in Nevada, University of Texas at Dallas political science professor Thomas Brunell says that the artificial creation of “minority-majority” districts is necessary because “[w]e are not post-racial yet.”  Well, we’re never going to be post-racial if we can’t stop worrying about race and allow ourselves to be post-racial.
 
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Editor’s Note:  I will be traveling on business next week, 10/17 – 10/21, so may be unable to post.