Archive for Finance and money

Two views of economics

In looking at the question of air fares over time, two articles popped up that provided an interesting compare and contrast in how different people see the same thing.

How Airline Ticket Prices Fell 50% in 30 Years (and Why Nobody Noticed) by Derek Thompson 2/28/2013. — “ there was simple reason why flying was absurdly expensive. That was the law.”

Don’t believe the airfare spin: Cost to travel is sky high by Joe Brancatelli 5/8/2014 — “The real price of flying has risen sharply since the dawn of deregulation and far outpaces the inflation rate of the last 40 years.”

That makes it clear that the divergence of views is about markets and regulation. There are clues about this in the titles used and empty claims, insinuations, and innuendo that drip out of one of the views. Brancatelli starts with “don’t believe the spin” which is an assertion that anyone who doesn’t share his view is lying. More in this vein is “we expect nothing less than obfuscation from Airlines for America” (the ‘evil corporation’ thesis) and “fool flyers into thinking that the lobbying group is anything but a front (the ‘stupid and ignorant consumer’ thesis).” A significant indicator is his “The “fare” you pay today isn’t an accurate reflection of your true cost of flying” which assumes price is somehow related to “true cost” which is an assumption that is grossly ignorant of economics. So how does Brancatelli support his thesis? Look at the conditions and qualifications he puts on his price comparisons in order to provide a supposedly even and fair comparison. It’s what is missing in his presentation that is the core of the argument.

In contrast, Thompson points out that managing cost and price is a matter of profitability and Brancatelli’s conditions and qualifications are matters of consumer choice that the airlines can use to find the sweet spot in what the customer values.

What Brancatelli says is that, if you want to fly now like you flew than, the actual price might be a bit higher. What Thompson says is that when you fly now, you have tools and choices at your disposal to balance the price you pay with the service that best suits what you want. 

The core issue? Who makes your purchasing decisions for you and to what extent? This is the same issue at play with Obamacare where the government decides what you must buy and you have no choice about whether to buy or not. The regulation tends to raise prices and that then generates a demand for price controls and that is a deadly spiral into the sort of depths we see in Venezuela right now.

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Watch California and learn what not to do

In the brouhaha about the electoral college, one observer reported that taking LA and NYC out of the election would have put the popular vote and the electoral college in sync. A more common observation just notes that the tilt in California would handle the difference. That means the electoral college procedure worked as intended for who wants LA and NYC or just California to govern the rest of us? A case in point is the pension panic in Loyalton, CA. See Californians See Their First Pension Cut. — “For years, we’ve been warning this day was coming: California pensioners in the small town of Loyalton have just been told that their benefits will be cut in 2017.”

Three years ago, Loyalton pulled out of CalPERS for current employees after being told that its accounts were only 40 percent funded even though the city had reliably paid its dues to the system. Now, CalPERS openly admits it’s punishing current Loyalton retirees for that decision.

This is just the beginning. CalPERS is only 65 percent funded overall, after failing to realize its expected 7.5 percent return.

The pension problem is much more than just a California problem, of course. It is even at the core of the Social Security solvency worries. California is just at the head of the pack and showing how ugly the situation can get. Somebody is going to pay. The state determined it is to be the pensioners in Loyalton right now. This might be a pity ploy to try to get the federal government – you and I – to pay. As can be seen in places like Cuba and Venezuela and many other socialist governments, there comes a point where you run out of other people’s money. 

There is another path, it is to grow more money rather than to print more money. That, coupled with improvements in management and governance, might reduce the pain. The problem is that the Left’s understanding of growing more money is a skewed and misplaces as their understanding of many other issues such as gun control and climate change. 

There are many lessons from history and California is providing such lessons much closer to home. Watch California and learn how to avoid their mistakes.

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Pipeline report: modern ‘social’ protest

The Survival Blog has a report based on information from one of the riot participants.

In talking to one of the “protesters”, he is paid $1500 per week with legal and medical costs covered. In addition, he receives a bonus each time he is arrested. Their encampment receives supplies and propane for free with multiple deliveries each week. He looks on it as a job, and this is not his first protest.

The Indians aren’t too happy but the State is kicking in to make sure that these rioters don’t freeze with on site support. One LEO thinks the state should provide bus service to a nice warm jail instead. 

A question not asked: Who is paying and why? 

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The worst. Except for all the others

Jon Evans has been around as a columnist for TechCrunch. What he sees lead him to suggest Three cheers for Valley capitalism.

It’s easy to be critical of the tech industry, and even easier to be critical of capitalism itself. Let us all continue to do so; criticism is valuable. But let’s remember that we do so because they are so important. Capitalism is still what lifts the world’s least fortunate out of poverty, and technology increasingly feels like the last, best hope of a world otherwise dead set on ruining itself.

I frequently complain about the industry myself in this space, but not this week, because I spent much of it in Havana … which basically felt like a picturesque disaster area, still under the thumb of oppressive one-party rule. It’s hard not to strongly approve of capitalism and free markets, for all of their flaws when left unchecked, after you see people excitedly queueing to buy tomatoes on one of the world’s most fertile islands.

For all of its obvious failings and its copious waste, the flywheel that is Silicon Valley and its outposts — spinning out startup after startup to test and experiment with new technology, absorbing their remains if they fail, accumulating their burgeoning energy if they succeed — remains an engine of change and progress unlike any other on the planet, with the possible exception of Shenzhen’s hardware ecosystem.

So let us not cease in our criticism. Let us remember that capitalism is only our least bad alternative, rather than one which is actively good; let’s keep a wise eye out for something better. Let us lambaste the tech industry when it sins, which is often.

But let’s remember to do so with a grudging respect, because there doesn’t seem to be a whole lot else out there offering much in the way of alternatives to various flavors of dystopia.

It appears that he can’t quite come to grips with the big picture. Silicon Valley (and Shenzhen) are only small components of something much larger. He has no clue as to what “actively good” might be and how the capitalism in his favored environment handles “its obvious failings and its copious waste.” He misses the feedback mechanisms and the factors that corrupt them and how the “flaws” are indeed checked and corrected.

There are lessons to be learned and there are examples out there (and in history) to provide this learning. It can be difficult. A grudging acceptance is one step in the right direction.

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The Malthusians and Feynman

Professor Motl was prompted by a Stephen Hawking left wing Malthusian assertion to cite a ‘been there, done that’ of another theoretical physicist who made more sense. Feynman vs Hawking on inequality in the world:

Feynman knew why this stuff was and still is garbage. Poverty is the default state of affairs and on the contrary, it’s growing wealth that is exceptional and requires some conditions to be fulfilled. Most importantly, the growing countries require the concentration of the capital which allows the appropriate people to invest into technology and education which create systems and facilities that are capable of producing the wealth and those are more important than the wealth itself!

So the inequality in the wealth is just a symptom of the actual, much deeper inequality in something else – the infrastructure, the concentration of the capital in the past, a free capitalist system that encourages the work that improves the society, education, and, even more deeply, people’s skills and will to educate themselves and do things that are useful for humans in their environment (e.g. their consumers) and/or mankind as a whole. Most of the mankind’s wealth didn’t exist to start with, wasn’t created by a theft from other humans, and it cannot be produced by redistribution. Redistribution is just a zero-sum game. Well, too much redistribution is really a negative-sum game because it discourages the people from working hard and creating new wealth.

You may see that Feynman has praised the machinery that produces the wealth and the #1 precondition for this machinery is the concentration of capital. But the concentration of capital is basically synonymous with inequality, something that both the Jewish leftist at Feynman’s conference as well as Stephen Hawking present as the #1 illness! So the leftists’ #1 culprit is basically the same as the sensible people’s #1 hero responsible for the progress in the world.

The inequality thing is a bogus construct for social warriors – people who need propaganda rather than substance. Those pushing it are thinking of the great physical discoveries of the archaeologists such as the pyramids and other great works of kings that concentrated capital and flaunted wealth and power but built nothing to improve the human condition. Compare and contrast to the concentration of capital in Western Cultures, especially in the U.S. Wealth was from the voluntary concentration of capital that built and created new wealth. People contributed to create a concentration of capital by choosing the people and their ideas that they thought would return a share of created wealth back to them. 

There is a glimmer of understanding of these concepts that has been prompted by the president elect’s nationalism and focus on the creation of manufacturing jobs in the U.S.A. The problem is that of negativity. For instance, the reduction in the workforce in agriculture coupled with the increase in output – a classic case of capital concentration creating a wealth that all people share in terms of nutrition – is seen as a reduction in labor and not as an increase in productivity. The result of productivity is seen as a zero sum game: if you produce all that is ‘needed’ then that is the total fixed sum. You’d think everything from cell phones to the gourmet craze to the organic infatuation would be enough to provide a clue otherwise but, no, Malthusian influence is strong with these folk. (see Malthusian Trap and Zero Sum Game on Wikipedia). 

Inequality is not a result but a symptom or indicator. “So the inequality in the wealth is just a symptom of the actual, much deeper inequality in something else. Wealth in aggregate becomes a measure of culture that encompasses the vigor of the people and their motivation to succeed, build, create, and grow. It is the difference between impoverished neighborhoods that are well kept and those that are decrepit. It is the difference between the animal (nonthinking, reactive, selfish) view of humanity of the Malthusians and others on the left and the humanitarian view that respects people and their abilities to behave in a way to improve not only themselves but their community as well.

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Free Range Kids so why not Free Market Medical?

The idea has been under attack much like Uber and Lyft but good ideas are hard to keep down. Taylor Millard provides his take on Changing the medical equation — “An Oklahoma doctor brings the market back to medicine.”

“We thought, ‘let’s just open our own place and get away from these lunatics and not deal with the federal government,’” Dr. Smith said, as he recounted the discussions prior to the center’s opening. “We decided we were going to be honest and fair with our pricing and not deal with the feds. And that was our mission.”

“Dealing with them was the easiest thing in the world,” patient Michelle Ray said. “I called to verify that the price listed on the website was inclusive and accurate. I made an appointment and they told me everything I would need before, during, and after surgery.”

In 2014 he helped launch the Free Market Medical Association, which hooks up patients with like-minded doctors. FMMA holds conferences to show doctors how to make a cash-only system work.

Let the market work!

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Trump keeps coming up right.

An IBD editorial wonders: Clinton Foundation Scandal: A Justice Department Cover-Up Exposed?. Of course, it is Trump’s money that has been subject to allegation but also, as usual, investigation in that direction does not find anything. Looking the other direction is a different matter. The State Propaganda Machine spends more time lambasting Trump’s crude and vulgar and ugly and demeaning and so on comments about the election being rigged or the Russian influence or the other problems he sees that everyone with eyeballs can see too.

One report has it that there are at least five FBI investigations into Clinton related corruption. One of them is has roots going back to the Holder decision to not worry about Black Panthers guarding a voting station. It is about the corruption in the DoJ itself.

Now it appears that Justice has successfully sidelined a critical investigation into the corrupt Clinton Foundation purely for political reasons. If so, then the Justice Department itself is guilty of obstructing justice.

This is the very definition of a “rigged system.”

There is a mad scrambling to defend against the light of day. Trump is getting more of those ‘he was right about that’ judgments as more see that he was talking about the shape of the forest and his detractors are trying to put his comments as talking about individual insect eaten leaves. That only goes so far. Maybe.

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Influence peddling

Instapundit posts a note

The Clintons don’t produce any desirable consumer products, or perform any traditionally useful services like accounting or dry cleaning. They have built no factories, dug no mines, nor worked any farms. They hold no patents and have developed no real estate. They are not medical doctors of rare skill. They haven’t starred in any hit movies or sung any popular songs. They have (allegedly) written and sold some books, but not the kind of bestsellers that get turned into TV shows and make real money.

And yet they have grown rich “beyond the dreams of avarice” since Bill left office nearly 16 years ago, and even richer since Hillary entered international politics just eight years ago.

How?

By peddling influence — an activity which generates great wealth only in a corrupt and overly bureaucratic society.

That’s the swamp that needs to be drained, and it runs much deeper and wider than most anyone realizes.

This cites Clinton Foundation’s Fundraisers Pressed Donors to Steer Business to Former President by James V. Grimaldi and Anupreeta Das at the The Wall Street Journal.

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Chasing El Dorado and burning bridges

An IBT Editorial: Apple Now, Google, Amazon Next? Why EU Hates Successful U.S. Firms.

Taxes: The European Union’s laughably misnamed “competition commission” has slapped a $15 billion penalty on Apple for supposed back payments of taxes. This is nothing more than a cash grab by money-hunrgy Eurocrats, and is Exhibit A in why the EU is failing.

We’ll spare you all the dry technicalities of Apple’s case because, in fact, the EU is going after a whole slew of mainly U.S. companies that do business there — including Google, Amazon, Starbucks and McDonald’s. The reasons in each instance are as varied as the companies themselves.

In the meantime, the EU has investigations going on just about every major successful U.S. company doing business there. But companies will only take so much abuse. Sadly, the EU’s socialist-leaning rulers show no signs that they get it.

It is the quest for gold and burning the bridges on the path to wealth. It is the appeal of socialism. It is the idea that money is found and discovered and must be taken from those that have it. The problem is that wealth is created and taking it from those that have it destroys the machinery that creates more of it. 

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Using the courts as a political weapon

A unanimous SCOTUS ruled on The McDonnell Case: Another Study in Criminal Law as Democratic Partisan Warfare. Clarice Feldman explains.

It’s common for those unhappy with a decision to criticize the partisanship of the judges involved, but the weakness of the case, which was evident when it was argued in the Supreme Court (and during the trial itself), and the fact that it was reversed unanimously warrants a raised eyebrow. It comes on the heels of the reversed prosecutions of then-Senator Ted Stevens, Governor Rick Perry, House Majority leader Tom DeLay, the IRS war on Obama’s opponents in the tea party and other conservative groups, and the outrageous trampling the rights of those who worked for and supported Wisconsin Governor Scott Walker. This case and those matters lead to an inescapable conclusion: With the endorsement of partisan juries and/or judges, the Democratic Party seeks to and will use the power of the prosecution to destroy Republican political leaders and anyone who supports them.

The law was thus rather well settled on this point, and neither the prosecution nor the trial and appellate courts gave it the required deference nor exercised any reasonable (or fair) judgment on the salient issue.

In the meantime, McDonnell’s political career, finances and family have suffered greatly by this strained reading of the law to cover conduct which the Supreme Court and ordinary common sense supports was not criminal , but rather ordinary and perfectly proper official conduct.

What I would bet on is that Democrats will continue to stretch the criminal law for partisan advantage, and that, if elected; Hillary will appoint prosecutors and judges willing to continue to mount such legal warfare.

“Warrants a raised eyebrow?” That seems to be a bit of understatement, especially in light of the previous post about a cohort of partisan AG’s going after the First Amendment for the cause. The Left, and the Democrats, loose many and suffer many casualties but they keep going, keep at it, knowing that there will be an occasional victory and another small push forward in the cause.

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Another unnecessary cost for those who can least afford it

Nicole Raz reports that Nevada has a trash problem — but in reverse.

Throwing trash into a landfill is so cheap in Nevada that it’s posing a challenge for the state to beef up more eco-friendly waste management programs.

In most other states, where the cost of land is higher than Nevada’s, there is an economic incentive to divert waste from landfills and look to other means of more eco-friendly waste management, like composting.

Noack said it largely comes down to demand.

“And there is demand, and we see it even with tourists,” he said, adding that he will get complaints from people about a lack of recycling bins on the Strip.

“Something should be done in that regard, but the way we have made inroads with some of these casinos is through green events, green buildings, zero waste. They themselves want to be LEED Platinum to get an award,” Noack said. “If we can get one going, then you can shame the others into also becoming green properties.”

He added that demand from residents is limited because people don’t want to pay more for their monthly garbage bill.

People seem to forget that landfills are also recycling, just slower (and more natural!). Nevada is getting hit on a lot of these expensive PC fronts these days. Consider the effort to subsidize solar and the response at solar energy fairness.

It Nevada it used to be ‘leave me alone’ but these days it seems that there are those who can’t leave anybody alone and want others to pay for their fantasies.

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Believe it or not (and, no, this isn’t Ripley)

Mark Perry put up another map comparing U.S. state economies to that of foreign countries to try to illustrate just how massive the U.S. economy really is. The comparisons of GDP is only part of the story. There is another, more stunning, statistic about the power of the U.S. IBT comments Just How Crazy Big Is The U.S. Economy?

Economist and IBD contributor Mark Perry recently put together a map of the U.S., with the state names replaced with countries that have comparably sized economies. It is eye-opening.

New York’s economy, for example, is equal in size to all of Canada. California’s is as big as France. New Jersey and Saudi Arabia have comparable GDPs.

Perry’s map doesn’t show this, but you’d only have to combine Texas, Florida and Indiana to have a GDP that’s bigger than all of the U.K.
Overall, he notes, the U.S. produces 24.5% of the world’s economic output, but with less than 5% of its population.

There’s a lot of wailing and gnashing of teeth at how much the U.S. consumes and a lot of this is in the zero sum game paradigm where what one has was taken from somebody who now doesn’t have. As with nearly every such manufactured crisis about how the world is going to run out of something, the paradigm is palpably wrong.

Perry points out that wealth is created and the U.S. does a better job of this creation than nearly another other country on the planet and by usually quite a large margin. Despite the numbers, many citizens don’t believe it. This may be because they are too close and cannot gain a broad perspective of just how good they have it. That provides opportunity for politicians. Sanders wants to emulate one poor producing country and Trump wants to protect against those who can’t compete.

Believe it or not, the U.S. is a big country in very many ways.

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Cowperthwaite and Hong Kong

Every now and then there is a civil servant who makes a difference. The Most Powerful Wealth Generator There Is is the story of one such colonial administrator.

At some point during our first conversation I managed to irk him by suggesting that he was chiefly known “for doing nothing.” In fact, he pointed out, keeping the British political busy-bodies from interfering in Hong Kong’s economic affairs took up a large portion of his time. Throughout Sir John’s tenure in office, the British political elite tried to impose its own ailing socialist economic model on Britain’s colonies, including Hong Kong. Sir John managed to quash all such attempts and Hong Kong benefited as a result.

The answer to growth is as simple as that. Liberty, the ability to own your own property, make your own mistakes and chart your own destiny is the key to growth for everybody. When you are free to pursue wealth, wealth happens. That’s because when people make free exchanges, both sides benefit from the exchange. When that happens, business and civilization thrive and grow.

and then there’s Venezuela…

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When you tax something more you get less of it: CT v GE … and SB

It’s in the news. GE is moving its headquarters from Connecticut to Boston. Lawrence Kudlow calls this A Sad Marker Is Set As GE Quits Connecticut in Wake of Tax Hikes.

Who suffers from anti-business tax and regulatory policies? Middle-class families.

One of the key points in the Connecticut disaster is that while big corporations can get $100 million in tax credits, the woman running a small struggling business in Naugatuck gets nothing. But she’s paying for GE’s tax credit.

Connecticut’s high-tax policies do not soak the rich. The rich leave. Meanwhile, exorbitant tax and regulatory burdens slam the middle-class wage earners who have been losing take-home pay for years.

Nevada is following suit. Tesla and Amazon have been lured in with the promise of massive tax breaks but business taxes, license fees, sales taxes, and bureaucratic burdens are increasing and it is the little guy, the small business, taking up the brunt of the burden. 

The effort to get the money for all the government goodies is a big issue in campaigns. The effort is to get the needed money from someone else. Successes in that area are what lead to the observation about socialism being a good thing until you run out of other people’s money (e.g. Soviet Union, Cuba, Venezuela, etc). For the left, the underlying presumption is that wealth is stolen, not created and that there is a fixed amount of wealth that should be dispersed equally. That rather ignores the lessons of history that those closest to the money flow tend to tap more of it. That is why socialist dictators tend to get rich and good salesmen get high wages.

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Perfect storm for solar

David Bergeron explaines: Why I’m Still Not a Member of the Solar Energy Industries Association even though he runs a solar oriented business in Arizona.

The more I learned about this new artificial solar industry, the more disturbing I found it to be. On-grid solar is nowhere near a break-even economic proposition. It is a very expensive and futile means of reducing CO2. Its job-creation argument is hollow in terms of opportunity cost given that there is no free lunch in the real world of economic scarcity.

Solar is a great field. Many hardworking entrepreneurs have and will continue to strive in free markets to make products that meet real needs. My own company is on a high-growth mode from niche off-grid applications; we have no rooftop business that will inevitably go through a boom/bust cycle according to political favors or a retrenchment thereof.

On-grid solar is a perfect storm for taxpayers: concentrated benefits for the industry, diffuse cost for ratepayers and taxpayers, and, yet, a strong positive public sentiment for solar created by energy Malthusians.

The fact is, when you figure out the total cost of a typical residential on-grid solar plant before subsidies, rebates, incentives and other ‘crony capitalist’ artifacts, the rate of return on the money spent usually exceeds the normal power bills. And that doesn’t include maintenance and repair costs over the lifetime of the solar plant.

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Get a life. Think about pros and cons. Consider the context. How unusual an idea!

Jon Evans has an interesting post on a modern delemma: Is Uber The Root Of All Evil? There is a lot of nuance in the ride share business ranging from ideas about employment and workers to impacts of technology to the encrusted regulation as a means to protect business classes to matters of relativism and choice making based on evaluation of risk versus benefit.

Allow me to humbly propose that the pendulum has perhaps swung too far into backlash. Allow me to suggest that “Uber is evil / represents the worst of capitalism!” is not just wrong, but actually dangerous. Allow me to submit that perhaps Uber is the lesser of two evils.

It may be too soon to say that “the full-time job is dead,” but I think it’s clear that a growing fraction of workers will find themselves working a fragmented panoply of gigs and contracts, rather than pursuing a full-time career with benefits. Yes, this isn’t near as stable and secure. Yes, many-to-most of these people may find themselves living in the precariat for much of their lives, barring the hoped-for eventual introduction of a basic income.

Consider the concern for Uber’s “exploited” drivers today; will we be quite as concerned for them when they are no longer being exploited, because they have been replaced by self-driving cars? Somehow I doubt it.

Whenever defenders of the status quo object to a new idea on the hallowed grounds of security, you can be pretty confident that they are lying. So it is with Uber.

Does Uber knowingly violate local law in cities they enter? They sure do. Is knowingly violating the law always an evil thing to do? …No. Not if the law itself is manipulative, exploitative, and written only to benefit a small class of rentiers — which, alas, is all too often the case.
,,,
But just because Uber’s evils are front, center, and spotlit, doesn’t mean that they are the worst of all possible alternatives. I still counsel to ride Lyft instead, when you can. But when your choice is between Uber and the local taxi cartels, please think at least twice, hard, about which is actually the lesser evil. The answer may not be as obvious as it seems.

Think about the context? What a novel idea in this era of absolute ideologies that ban and even deny anything not in line with desires and fantasies! Note how much the propaganda machine has infiltrated the language and biased the discussion. precariat, renters, exploited, — where’s Marx when you need him?

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Income Inequality Insight

A request from a student doing research for an assignment got Patricia L. Dickson thinking: Liberals’ income inequality concerns built on false premise. The conclusion should not be surprising considering where all the noise about the issue is sourced.

I now realize that the issue of income inequality is based on a false premise. A premise is a proposition upon which an argument is based or from which a conclusion is drawn. A false premise is an incorrect proposition that forms the basis of an argument – since the premise (proposition or assumption) is not correct, the conclusion drawn may be in error.

The false premise behind income inequality complaints is that income is distributed instead of earned.

In other words, employment and income is something like an entitlement such as a poverty program provides to the left. Income inequality allegations are really just about the idea that some people are cheating the system. Instead of looking to the government for their ‘income’ they use their own skills, education, and capabilities to get their own income and that is what is considered cheating by the left because the government has no control over what they get.

Another perspective on this is that the state of Nevada has now decided that fantasy football is gambling despite a federal court ruling. That means the state wants to control the income anyone might get by being sharp in building a fantasy football team. The battle that Uber and Lyft are fighting is also about government control over income. 

A false premise is a straw man and, it seems, easy to dress up so as to disappear in the background. Building an argument based on such a foundation lacks intellectual integrity and will result in collapse when the weight of the issue gets to be too much for the straw man to bear.

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Overstep. And stumble? Alarmists misstep

When someone doesn’t realize a high profile is probably not a good idea, it lends credence to the hypothesis that maybe they don’t know that what they are doing is not so good an idea either. The IGES RICO allegations provide An Instance of Warmist Corruption.

We have often written about the fact that the world’s governments pour billions of dollars annually into the global warming project, the object of which is to increase the powers of government. And yet governments, the main parties that stand to benefit from the warmists’ campaign, pretend that their money is somehow innocent, while any private entity that supports climate research is suspect.

Alarmist scientists have gone so far as to urge the Obama administration to prosecute criminally scientists who disagree with them. The premise for this proposed RICO investigation was that “corporations in the fossil fuel industry and their supporters”–i.e., scientists who don’t buy the global warming hype–are deceiving the public for financial gain. This despicable effort, which we wrote about here, is led by Jagadish Shukla of George Mason University and several of his colleagues.

That inspired curiosity about Shukla’s own funding. The results, while incomplete, are striking. Shukla is remarkably well paid by George Mason, for a professor. His salary is currently around $314,000 a year. But that isn’t the half of it. Steve McIntyre writes that Shukla set up a “non-profit” entity, the Institute for Global Environment and Security, Inc. (IGES), to which the federal government has funneled millions of dollars. IGES operates as a slush fund for Shukla and his family; not only is Shukla on the payroll, apparently double-dipping in violation of university regulations, but his wife and daughter also draw substantial income from the “non-profit.”

Generally, when you know that bringing attention to yourself might reveal problems, you avoid doing doing things that spark attention. The climate alarmists appear to be beyond this. That leads to wonder about just what blinds them so.

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Understanding socialism and the religion of the left

Mark Perry uses what What four previous popes had to say about socialism as a contrast and as a view of economic systems not often considered. Besides a contrast to the current Pope, the selections indicate that his predecessors were much more aware of the deeper issues involved in economic systems.

Pope John XXIII (1958-1963) … Socialism is founded on a doctrine of human society which is bounded by time and takes no account of any objective other than that of material well-being. Since, therefore, it proposes a form of social organization which aims solely at production; it places too severe a restraint on human liberty, at the same time flouting the true notion of social authority.

Pope Paul VI (1963-1978) … Too often Christians attracted by socialism tend to idealize it in terms which, apart from anything else, are very general: a will for justice, solidarity and equality. They refuse to recognize the limitations of the historical socialist movements, which remain conditioned by the ideologies from which they originated.

Pope John Paul II (1978-2005) … The fundamental error of socialism is anthropological in nature. Socialism considers the individual person simply as an element, a molecule within the social organism, so that the good of the individual is completely subordinated to the functioning of the socio-economic mechanism. Socialism likewise maintains that the good of the individual can be realized without reference to his free choice, to the unique and exclusive responsibility which he exercises in the face of good or evil. Man is thus reduced to a series of social relationships, and the concept of the person as the autonomous subject of moral decision disappears, the very subject whose decisions build the social order. From this mistaken conception of the person there arise both a distortion of law, which defines the sphere of the exercise of freedom, and an opposition to private property. A person who is deprived of something he can call “his own,” and of the possibility of earning a living through his own initiative, comes to depend on the social machine and on those who control it. This makes it much more difficult for him to recognize his dignity as a person, and hinders progress towards the building up of an authentic human community.

Pope Benedict XVI (2005 – 2013) … The State which would provide everything, absorbing everything into itself, would ultimately become a mere bureaucracy incapable of guaranteeing the very thing which the suffering person—every person—needs: namely, loving personal concern.

These ideas do not often surface in arguments about socialism vs capitalism. They delve into the depths of human nature and, in that, provide us an opportunity to examine our own beliefs and how they can be corrupted by desires and fantasies.

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Measuring global poverty

John Hinderaker says it’s a dose of reality for the Pope.

I really don’t like Pope Francis. Some popes have been positive, world-historical figures, like John Paul II. Others have been clueless tag-alongs with the intellectual fashions of their time. I am afraid that Francis falls into the latter category. His hostility toward free enterprise is the fruit of ignorance, not holiness. His best defense is that as a citizen of Argentina, he has no experience of the benefits of free enterprise. But as the leader of a world-wide church, he is obliged to inform himself before he pontificates.

A reader passes along this graph, from EconLog, which plots on the horizontal axis a person’s position in his own country’s income distribution, and on the vertical axis, a person’s position in global income distribution, as of 2008. The poorest Americans (points 1 or 2 on the horizontal axis) have incomes that put them above the 50th percentile worldwide. Note that 12% of the richest Americans belong to the global top 1%:

The graph only shows the U.S., Russia, Brazil, China, and India in citizen position on a global versus country income distribution. It has much of interest. The exceptional nature of the U.S. is quite evident in both position and in the shape of the curve. If you want to address either poverty or income inequality, you need to look in places other than the U.S. if you are serious about addressing the issues involved.

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