Monthly Archives: September 2011

Elizabeth Warren gets it wrong

Over the past few years,  I have watched examples of Elizabeth Warren’s plain speaking and her willingness to stand up for the downtrodden with admiration. However, a recent quote of hers has got me to thinking, and now to writing. Here’s the quote:

“There is nobody in this country who got rich on his own. Nobody. You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

It makes for a great soundbite, but I have to disagree.

Ms. Warren’s central thesis seems to be that every successful business somehow owes society some kind of a debt. Sorry, but… no. It sounds quite altruistic and wonderful, but business doesn’t work like that. A business owes:

  • Its suppliers (for the goods and services they provided)
  • Its creditors (for loans outstanding)
  • Its employees (the agreed salaries and benefits)
  • Its customers (the goods and services promised)
  • Its shareholders (a share of the profit)

The person who built a factory took a huge risk, investing their time, money and treasure to build the business instead of finding a nice safe job with a steady paycheck working for someone else like the rest of us. We did not take that risk. Neither did the government. And yet Ms. Warren believes that we are somehow entitled to a share of the reward.

Most businesses fail within the first five years. But against the odds, this one succeeded, they employed people; from the factory workers to the truck drivers to the sales force to the managers – and all of those paid taxes. The workers were already educated — and if they weren’t, many businesses offer educational grants, internships etc. to grow the skills they need. The Police were most likely already on the payroll.#The roads, the infrastructure that Ms. Warren mentions were almost always already in place; if they required special roads or rail-heads to be built specifically for them, she might have a case. But otherwise… no. Also, Ms. Warren failed to mention that the infrastructure benefits the rest of us as well; we, the people, drive on the roads too — roads which, by the way, are paid for by Gas Taxes (assuming the Government aren’t misdirecting the funds). So her “no-man-is-an-island” theory falls kind of flat.

But let’s say she’s right – the business should be taxed more. But taxation does not occur in a vacuum, it has to come out of someone’s pocket. And when the tax bill arrives, it means that some money won’t get spent elsewhere. So the owner/manager has two ways to make that happen; cut back on expenditure (cancel the new plant or maybe fire some employees) or raise prices. And that’s where it all falls down.

This is a classic example of “Small-pie” thinking; that there is a fixed amount of money, and when somebody makes a dollar, somebody else has to lose one. In the real world, this is simply not true; most businesses create value where there was none before. And that is what makes the economy grow.

Should the rich pay more taxes? Perhaps, though I believe that the problem is not the tax rate, but the myriad loopholes that the gang-of-mostly-lawyers that we elected put into place. But so should some of the 51% of taxpayers who pay no income tax – and half of those pay negative tax (they get money FROM the government, at the expense of the rest of us). After all, they enjoy roads, markets, products and services as well, so why shouldn’t they pay their “fair share”?

At the other end of the economic scale, Warren Buffett may complain that he pays less tax than his secretary… but I didn’t hear anything about him writing out billion-dollar checks to the Treasury. He didn’t fire his accountants — the ones who are paid to look for loopholes — either. And Bill Gates is saving lives by the thousand across the globe. I wonder if he would be doing that if we had taken some of his earnings “for the greater good”.

Looking at Ms. Warren’s bio, it seems to me that she has never worked in the “real world”, and this kind of “Ivory Tower” thinking now makes sense. If she had invested years of her life building a business in the real world, perhaps her opinion might be different. But she is, after all, running for election to a Senate seat.

There is a grave disturbance in the Force. Ms. Warren, your roots are showing.

And they’re Socialist.

Advertisements

Ten Years On

Unless your time machine broke down next Thursday, you can’t have helped but notice that today is September the 11th… a day that will live in infamy.

Most of us remember exactly what we were doing that fateful Tuesday morning. I was in — of all places — an airport, putting my Sister-in-law on a plane.

Back in those halcyon days, security was, with tongue firmly in cheek, at a low level. We walked to the gate together. There were no identity checks, no million-dollar scanning machines, no Thugs Standing Around, no Homeland Insecurity. Those were better times.##And then the planes hit. And everything changed.

At first, we were (mis)informed that a bomb had gone off at the World Trade Center. Then the second plane hit, and suddenly everone and his dog was getting out their cellphones and trying to call someon who cared.

Naturally, the cellphone system designed for perhaps a dozen or so active calls at any given time, promptly collapsed under the strain. Everyone was looking around to see who was hogging the few available connections, and those who had one seemed reluctant to give it up.

The ground stop went into effect. The planes that had just taken off landed and returned to their terminals. The passengers getting off were furious… until they were informed what had just happened.

Many were in shock. Some were weeping. A few were angry.

With no flights planned for anytime soon, we went home.

It is hard to believe that ten years have passed. It seems like yesterday. But it is also easy to believe; so much has happened.

1. Air Travel is no longer fun

2. Pointless war #1: Iraq. A tragedy in  six parts.

  • Enforcing UN Resolutions
  • Weapons of Mass Destruction
  • The Hunt for Saddam
  • “Making the world safe for democracy”
  • Regime Change
  • Exit Strategy

3. Pointless war #2: Afghanistan. There is a reason that this war-torn, barren country is known as The Graveyard of Empires. The Russians who went there called it “The Meat Grinder”. And we know what happened to them…

4. Homeland Security/The TSA/The Patriot Act. Nuff said.

Looking back at ten years of Post-9/11 changes to the American way of life, I am forced to admit that in some ways, the Terrorists have won. They have gotten us to change how we live and how we view others. And more important, they have made us frightened.

Goodbye for now

At 18:10 GMT today, my Dad slipped quietly into eternity.

Although I do not bear his name, I call him “Dad”. He is not my natural father, but he has been there for my brother and I for more than three decades. It was only last year that I realized that most of my sense of humor comes from him. Such are the echoes in history that we leave behind.

When last I saw him, on Tuesday evening, he was lucid, but unable to speak or write. The following day, as I headed homeward, he finally got his voice back.

It seems that God granted him one last day of clarity to get things right. During that day, he spoke at length with my Mum. More important of all, she prayed with him, and he accepted salvation. And that changes everything.

He was then transferred to the Hospice Word, where he spent the next two days under sedation; his light fading until it finally went out.

There are many things about him I will never know; many questions that will not be answered this side of Heaven. But I can now accept as a fact that I will see him there.

And if I know him, he’ll probably be sporting a cheery grin, wearing a clown suit, and eating a generous portion of fish and chips.

Dulles

I’m on my way home.

Washington Dulles airport is HORRIBLE! For one thing, it boasts the loudest PA system in Christendom. Every time an announcement was made, I had to cover my ears.

As if that isn’t bad enough, it seems that all of their announcers are non-native-English speakers. In particular the Gentleman staffing Gate C18 should be singled out for special attention. He spoke with a very thick Indian accent and had some difficulty stringing together coherent sentences, which made it very difficult to follow is announcements.

While I bear him no ill-will and do not question his competence, in my opinion he should not be allowed near a microphone. Apparently I am not alone in this sentiment; some people were actually laughing as he struggled to get the words out.

The news is not all bad, though… Washington Dulles has FREE WIFI! Unlike SDF, ORD and LHR, which all offer that paid Boingo Crap.