Half The Schools in Kansas City, MO closing down!
March 8, 2010
Stumbled across this article tonight:
http://www.huffingtonpost.com/2010/03/07/kansas-city-public-school_n_489145.html
Ever think of moving to Missouri? It’s really nice. I love it here. And man will you be impressed when you come and take a look at our schools! Your kids’ mouths will drop as you tour our campuses.
Olympic sized swimming pools, recording studios, fencing programs… yep, I’m not kidding. Sounds like a private country club for the rich, but no. It’s Missouri’s bloated public schools. Apparently a belief has set in that schools are not about educating kids in government, economics, mathematics, and science, but are instead social clubs.
“School officials say the cuts are necessary to keep the district from plowing through what little is left of the $2 billion it received as part of a groundbreaking desegregation case.”
2 BILLION!!! That’s not million. That’s BILLIONS. We’re talking Bs here. Not Gs. Not Mils. Bs! One city! One school district! And what did they spend it on?
The district went on a buying spree that included a six-lane indoor track and a mock court complete with a judge’s chamber and jury deliberation room. But student achievement remained low, and the anticipated flood of students from the suburbs turned out to be more like a trickle.
Who needs an imagination. I’m sure the kids could never imagine what a court proceeding would look like without a complete mock courtroom and judge’s chamber. Back when I was in school, we had a field trip and visited the courthouse. Man, those were the days!
Hard to remember the old times. Back then I remember the gym coach blowing the whistle and us all running outside around the lawn, and then playing soccer, kickball, and baseball out there. Today? No way. That’s totally old fashioned. Who goes outside? They need an indoor six-lane track!
“This year alone officials expect to overspend the $316 million budget by $15 million and if nothing changes, the district will be in the red by 2011.”
And no matter how much money we pump into our schools, the kids test scores keep dropping.
Kansas City is among the most striking examples of the challenges of saving urban school districts. The city used gobs of cash to improve facilities, but boosting lagging test scores and stemming the exodus of students were more elusive.
So after blowing all the money, now our schools crawl to the Federal Government for more cash. But uh oh, Obama’s administration has blown all that money. There’s trillions allocated for the nuclear missile program to blow up the non-existent Soviet Union. Trillions for the wars in Afghanistan and Iraq. Trillions for Wall Street and the banker bailouts. But schools? Healthcare? Nah.
Close the schools down guys. Don’t have insurance? Can’t afford it even though unemployment is rampant? Sorry!
Kansas City isn’t far from where I live. Our government politicians, school administrators, the whole lot of them. All complete failures. No priorities at all.
One of the youngest speakers at a forum, 9-year-old Richard Fisher III, had tears in his eyes as he begged administrators to keep his school open.
“Why do you want to close down our school?” asked Fisher, still clad in his blue and white school uniform. “We learn, play and have fun.”
There’s nothing more to say.
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A Duck Out Of Water
March 6, 2010
I was looking over my site just last night, and I got to thinking how I’ve failed my goals once again. *Bangs head into desk* …Be emotional. Show love… Emotions… Emotions… Ok, I need to apologize. The other day I was talking about Paul Sameulson’s textbook, and was saying some things about it. I made some harsh comments, particularly when I said if you’re not making money, you have to ask yourself whether you’re providing value to someone else.
That’s unemotional Jason talking, and I need to apologize. I need to be careful how I say things, and clarify things more. I always fail in this area. I say things unemotionally and don’t think about how it may hurt people. I wasn’t implying that people who aren’t earning any money are not valuable in any sense at all. I was referring to value on a per transaction basis. What I was saying is kind of subtle. I meant you only earn money WHEN you provide value to someone, and a lot of that depends on the circumstances. It’s really a complicated issue. I should finish up that conversation.
There’s a lot of talented people who are great at what they do, yet due to all kinds of circumstances find themselves in a difficult situation. Take the freelance computer programming industry for instance. Years ago I could land all kinds of deals for companies, writing software projects for them. Nowadays it’s rare for me to land a small to middle size deal. Why?
Websites such as rentacoder.com have sprung up, where you can hire software developers from India, and other foreign countries, and they’ll do the work for dirt cheap. And I really mean dirt cheap. A job I would charge $1000 for, they’ll do for $45. Obviously it’s impossible for me to compete.
Does this mean I’m not valuable? No, not at all. I could write software code far better than most all of them over there. After all, I’ve been doing it for over 10 years. But, they’re getting the deals because they offer to do everything for so cheap. I used to make all kinds of money doing middle sized projects, but nowadays, not so much.
Ah well. *Shrugs* What can you do? I’m just not the type of person to sit around and whine about things. If we were in a warzone, I’m the guy who sits in the corner, not saying anything, looking out the window. The other guys in the squad start talking about wanting to be home, missing their family, and complaining whether the war is legitimate or not. I’m the guy who glances over, squints and says to myself, “Well, we’re not at home. Won’t be for a while.” … *takes drag off cigarette.* “Might not ever make it home. Well, I sure as hell know I’m not dying here.” Then I put out the cigarette on the floor, cock my assault rifle, stand up, and walk out the room. No use whining. Whatever may have led to this, for now we’re in the warzone, and need to stay alert and start making our action plan.
The other day I was talking with my older brother, who owns a PC repair shop. We talked about how it sucked that there’s no way for him to compete with the big companies when selling people new computers. When you study the economics of monopolies, you find that within any industry where prices drop due to the quantity ordered, a natural monopoly is formed.
Take Dell computers for instance. They get their hardware and software cheaper than my brother ever could because they order everything in such huge quantities. I sometimes walk through Wal-Mart in amazement when I see whole computers for $350. How in the world can they make money? Thing is, if they got their hardware at the same prices we do, no, it would be impossible. Windows alone would cost almost $200, and the monitor would be another $100, and we haven’t even got to speakers, or even the computer, much less a year subscription to an anti-virus service! But they bulk order everything and get huge discounts.
Obviously this is very unfair. But what do you do? It’s just one of those markets with an impossible barrier to entry. My brother will never be able to sell new computers and compete.
Is my brother not valuable, because he can’t sell the computer for as cheap as Dell? Not at all. I’m sure the computers he would build customers would be just as good as a Dell, if not better. It’s just he’s not given the opportunity.
The argument for the monopoly arrangement goes something along the lines: well, you like the cheap computers don’t you? If we all go through a handful of big companies to get our computers, we all get our systems for cheap. The consumer is much better off.
But then we come to the socialist argument. Ok, so society goes through a handful of mega corporations for all their computers, and nobody else can compete. Well then, why does a small handful of owners reap all the profits? Michael Dell reaps more and more money, and eventually takes over the computer market and nobody can possibly compete. It’s not necessarily even talent which keeps these mega companies on top any longer, it’s just that they can order in such bulk, the barrier to entry keeps any other company out of the market.
These are the kinds of situations where I’m ALMOST a socialist. I agree it’s unfair. I also don’t think it’s good to break up the monopoly, because sure, we could break up the big computer companies, and make them all compete with one another, but then we can’t get computers for cheap. Prices for a new PC double.
But say we go the socialist route… Ugh, here comes the can of worms. Who owns and controls Dell? Does it become owned by the state? The employees there, in some democratic fashion? Ugh, I don’t like either of those. If it’s state controlled then nobody has the profit incentive any longer, and service quality goes downhill. When you go to order a new computer the website will be horrible, like the government websites. You won’t even be able to find your way around, and then you’ll go to order a new system and it’ll take six months before you get it. Politicians will start borrowing money from it, making cuts because they need more money for their war machine.
If it’s democratically controlled by the employees, you get dumb people moving into decision making when they have no idea what they’re talking about. The workplace would become like the government, with different party factions and standstills. There’d be no nimbleness.
This is where Paul Samuelson’s income inequality arguments become valid, even though his textbook didn’t even bring up any of these arguments, because it sucks so bad.
Day by day it’s getting to where big corporations buy all their stuff in larger and larger bulk quantities, making it impossible for the small guy to start up his own business and compete. These are the kinds of arguments Republicans don’t ever consider. They act like it’s all about hard work and effort, and anyone who doesn’t succeed didn’t try hard enough. That’s not the truth, though it does contain a germ of truth. Effort does matter to an extent, but it isn’t the entire picture.
The big mega corporations are owned by the finance overlords of Wall Street, along with the super rich entrepreneurs. That means all the profits flow to a handful of people in the society, the “owners”, and all of us have to work to earn petty wages. Nobody can ever compete with them because they’re locked in. This is a huge factor in income inequalities in this country.
Sure the monopoly makes prices cheaper, but it also leads to where all the profits go to a handful of people, and none of us make enough money to even buy the cheap computer!
This argument alone troubles me every day. I walk in Wal-Mart to buy a gallon of milk, and think how there’s literally one or two guys who reap the profits from the entire store, and nobody can compete for those profits because they could never buy in such bulk quantities. Where I live, the Wal-Mart is owned by two guys. They pay their workers dirt. Always cutting benefits. Working people more and more. Squeezing every last bit of efficiency out of the poor souls there. And those two owners earn millions a year, and never even show up to the store. Fat cats who live in a mansion, sipping champagne, driving their expensive cars.
So how can you fight back? Minimum wage laws? Labor Unions? Taxing the rich? Well, here’s what happens in the real world. Here, let me search one of my economics texts. Ah, here it is. This is an economics textbook from the late 1990s, so it’s a bit dated, but it’s talking about Germany. The principle it’s talking about still applies today.
“The Market is Mightier Than The Sword
A half century ago, German troops marched triumphantly into Eastern Europe to trigger World War II. German focused economic activity there soon followed. The idea was to use Eastern European resources, mainly its labor, to bolster German industrial output. Germany’s ambitions were thwarted, and its economy was destroyed.
Fifty yeas later, the German economic recovery from the war is regarded by many economists as nothing short of remarkable. Some refer to it as an economic miracle. Its standard of living ranks among the highest in Europe, and Germany’s industrial capacity makes it one of the most powerful nations on the continent.
Here’s the irony: Germany’s economic success has created the climate for a new invasion of Eastern Europe! [Note: He's talking about immigrants flocking there in droves, looking for good jobs.] Admittedly, the causes and circumstances are entirely different, and unlike the old, the new invasion is welcomed in Eastern Europe. At the same time, it is causing a growing uneasiness at home. Why? What has happened?
If you combine Germany’s robust economic growth rates with its strong labor unions and the government’s willingness to tax, the resulting high wage rates and taxes make producing elsewhere — where wage rates and taxes are lower — look awfully attractive. The average German wage level of $30 an hour (nearly twice that of the United States and Britain) plus six weeks vacation and an extra month’s salary as a Christmas bonus may explain the large emigration of Germany’s leading industrial firms. This exodus of German capital — including Volkswagen, Mannesmann, Audi and Henkel — employs several million East European workers.
The consequences of this extraordinary exodus on employment at home has been troubling, creating more than 12 percent unemployment. German workers are wondering whether they will be able to hold on to the dwindling number of jobs and to the wage rates and fringe benefits they have become so accustomed to.
A survey by Germany’s Chamber of Commerce and Industry showed that 28 percent of its 6,000 leading industrial firms plan to move their production out of the country over the next three years. Nearly two-thirds of these companies cited high labor costs as the principal reason. Germany’s central bank, the Bundebank, records that investments abroad by German companies nearly doubled in 1995 and rose another 40 percent in 1996, and it predicts the trend will accelerate unless measures are taken to stem wage costs.”
When I go to the Huffington Post online, and read some of their articles, I always hear them advocating the unions and how minimum wage needs to go up up and up!
Problem is, without tariffs, the business owners, out of greed, will relocate to places like Mexico and set up shop there. Especially if the workers require very little skill to operate the machinery. They’ll just exploit cheap labor there, and then sell the same products here in the US. Why pay the high labor costs? Thank you NAFTA!
That’s what’s happened here in the USA. Blue-collar factory jobs have relocated to places like Mexico, where the corporations can get cheaper labor. Factories where our grandpas used to work, and earn a good middle-class living, are now relocated in foreign countries for cheap labor. Those jobs just don’t exist anymore.
I agree, in principle, that minimum wage should go up, taxes on the mega wealthy should be implemented, and so on and so forth. Problem is, if the corporations can relocate, you’ll run off all your jobs, and then won’t have anything but flipping burgers at Burger King!
(Lol. Sorry for the side note here, but it’s funny how any time I want to think of the most god-awful job you could possibly get stuck working, I always think of Burger King! That’s where I worked when I was 16. Oh my god, I hated that job so bad. I can only imagine having to make such a place my career.)
And tariffs are icky business too. Especially with us here in America. We import everything! Borrow borrow borrow, and buy things other people make. Really, economically the more people can trade with one another, including foreign nations one with another, the better off we all are. It provides a greater division of labor and specialization.
This is also why I think we need a one world government, and one currency. Then we could actually do policies such as taxing the rich, minimum wage increases, forcing the fat cats to provide huge benefits to their employees, etc., and it not lead to unemployment. But for now, such things just aren’t in our best interests.
Then again, sometimes I get to thinking about Big Brother, and them micro-chipping us all like dogs, tracking us with GPS. A one world slavery empire ruled by an all powerful government enforcing the will of the big corporations on us all! Puppet leaders, all bought off by moneyed interests. Ugh, that’s just as scary, if not more so.
*Sigh* Why is the real world so complicated?
Thinking on immigration, I get mad when I read articles in the New York Times, acting like immigration doesn’t matter. Floods of uneducated immigrants really do take away low-end jobs and raise unemployment. Whether it’s right or wrong, I’m not really to say. But I hate it when they act like people like me are idiots, when we state that increased numbers of workers pushes down wages in those areas,. It’s simple supply and demand, and common sense.
That same economics text I was quoting from earlier had this to say about immigration:
“The U.S. Constitution guarantees citizens the right to move freely within and between all 50 states. An economics graduate from Purdue University can gather her belongings in West Lafayette and head for the Phoenix labor market, where wage rates are thought to be higher, without having to consider passports, visas, or immigration quotas.
But a graduate of McGill University in Montreal, Canada, with Phoneix on his mind, may get only as far as the international border at Plattsburg, New York. Without a work permit issued by the U.S. Immigration and Naturalization Service, the McGill graduate stays in Canada.
Are the U.S. immigration laws extraordinarily restrictive? Not really. All governments tend to be selective in admitting immigrants, designing laws to meet domestic concerns.
The supply curve of labor, then, depends not only on the supply conditions in the labor market but also on the government’s immigration policy. A move to the less restrictive immigration policy, for example, could shift the supply curve of labor in the receiving economy to the right, creating downward pressure on the wage rate.“
Hear that? ALL governments tend to be selective in admitting immigrants, designing laws to meet domestic concerns. Golly Gee! That’s because floods of people taking away wages, and not having to pay taxes because they’re not citizens causes problems!
I must also say that this is from a Keynesian textbook! Honestly, I think liberals have no conception of money or economics. At all. When I read the New York Times, they say such bullshit, all the time. Same with the Huffington Post. The crap they spew all the time is against common sense economics.
Progressives and liberals (How I hate those labels), are good about civil liberties, and ending wars, but have no concept of money. No common sense. They live in la la land. They have these vague moral feelings, where they think everyone deserves everything, and we have to help every little cause, no matter the cost. Republicans are war mongers, and have no respect for personal liberties. They could case less if you lack medical insurance. Rep. Grayson said it best. The Republican idea of healthcare is don’t get sick. And if you do get sick, just die.
I don’t like any of them. Probably the guy who holds beliefs closest to my own would be Ron Paul, who is a libertarian/constitutionalist (…more labels), but I don’t agree with him on all things either. I think college education should be provided to all as a right, and also medical care should be provided to all as well. I think the CIA and FBI are up to no good most of the time, and it’d be good to shut most of it all down.
Just the other day I read how Big Brother was collecting blood samples from every newborn baby. They had built up a database of 5,000,000 new babies’ DNA, all stored in a big computer database. Geez! It just never stops.
I’m a duck out of water. I waddle around, not fitting in anywhere politically speaking.
There’s a lot more to say about providing value, and monopolies. Maybe sometime I’ll write about all the different types of monopolies, how they form, and different ways to think about them. I only wrote about one type here. This stuff really fascinates me. I love economics.
There’s so much to monopolies, oligopolies, and the study of the big corporations and their control on things. I’ll write more on it sometime. I just barely scratched the surface.
When I talked about controlling value, this is the kind of stuff I had in mind. The Dell corporation controls the “value” of new computers. They build a high wall around that industry, and guard those profits from anyone ever entering. The control of value, and all its effects, I think is the most fascinating subject there is. In a sense, I suppose you could call it a study of power and control, but power is a bigger thing which includes more than just controlling value.
That’s what runs this world. Control of value.
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Topics: Economics | 2 Comments »
A New Symphony Of Science Video!
March 3, 2010
I think these videos are great.
[Neil deGrasse Tyson]
If you’re scientifically literate,
The world looks very different to you
And that understanding empowers you
[Lawrence Krauss]
Scientists love mysteries
They love not knowing
[Richard Feynman]
I don’t feel frightened by not knowing things
I think it’s much more interesting
[Brian Greene]
There’s a larger universal reality
of which we are all a part
[Stephen Hawking]
The further we probe into the universe
The more remarkable are the discoveries we make
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Wars Bring Prosperity!
March 1, 2010
Recently I’ve been trying to keep my stress levels down, considering that I just recently learned from my neuroscience lectures that stress kills neurons, but even so, I found my blood boiling when I read this today in a history book on the time period inbetween the World Wars: (this is referring to the period shortly after the Great Depression had begun)
“. . . The depression in the United States was also more severe than in the European democracies. Industrial production shrank by about two-thirds. The structure of agricultural prices and of common stocks collapsed. Thousands of banks were forced to close their doors. Unemployment rose to one-third of the total labor force. An attempt to alleviate distress was contained in a program of reform and reconstruction known as the New Deal. The chief architect and motivation of this program was Franklin D. Roosevelt (1882-1945), who succeeded Herbert Hoover in the president on March 4, 1933.
The aim of the New Deal was the preserve the capitalist system, by managing the economy and undertaking programs of relief and public works to increase mass purchasing power. Although the New Deal did assist in the recovery both of individual citizens and of the country, through programs of currency management and social security, it left the crucial problem of unemployment unresolved. In 1939, after six years of the New Deal, the United States still had more than nine million jobless workers — a figure which exceeded the combined unemployment of the rest of the world. Ironically, only the outbreak of a new world war could provide the full recovery that the New Deal had failed to assure, by directing millions from the labor market into the army and by creating jobs in the countless factories that turned to the manufacture of war material.“
Now I don’t think you have to be an economist to realize just how stupid this is. Actually, I think you’d HAVE to be an economist to think something so ridiculous.
So we have a depressed economy and want to know how to turn things around. What should we do? According to mainstream economics, we find everyone who’s unemployed, and then tell them to produce bombs, tanks, machine guns, and missiles. Even better, quit manufacturing things we need and use everyday. Convert your factories toward the production of war munitions! Then find a foreign country and fire away. Prosperity is then on its way!
Can’t find work? Come to the loving arms of your government, ready to strap you with a machine gun, helmet, and ship you off to a foreign land to kill the yellow man. I was BOOOOORRRRRNNNN IN THE UUUSSSAAAAAA. I WAS BOOOORRRRRNNNNN IN THE USSSAAAAA YEAAAHHHH.
This kind of thinking is mainstream thought, and is in our history books. It’s right here written on this page, right here on my desk. No matter how many times I read it, I can’t believe it. It’s taught in our universities. I even saw a woman on CNN Finance talk about this years ago.
This is wrong. So wrong. On so many levels. You know, I’d write about what REALLY happened, but I’m too angry. This is poison. People gobble it up, and spout it out, even though there’s obviously something very wrong here. How come the Iraq and Afghanistan wars aren’t producing unlimited prosperity to our nation? Huh? Why is unemployment shooting through the roof even while we have wars, wars, and more wars, and the printing presses running full boar?
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Topics: Economics | No Comments »
Thoughts On Paul Samuelson’s Economics Text
February 25, 2010
If you were to attend an Ivy League university and take economics, they’d hand you Paul Samuelson’s economics textbook. Considering they’re using it, I figured I should read it and see things from their perspective.
Well, I’m very disappointed in this book. I had read reviews by several Austrian economists, saying it was terrible — and I pretty much agree.
I enjoyed the first few chapters, where he gives an outline of what he’s preparing to talk about. He’s clear and concise, and talks about relevant social issues. Shortly after that he dives head first into “economics”, and it’s all equations, no analysis, and no relation to life at all.
It becomes a lifeless, dreary book, and I got to where I couldn’t stand reading but five or six pages a night. When a book is really bad, and I feel it’s my duty to read it, that’s how I handle it. I slowly work at it a few pages a night.
It’s full of things like what you find below: (I’m going to bold certain points, then talk about them)
Two Cheers For the Market, but not Three
We have seen that markets have remarkable efficiency properties. But we cannot say that laissez-faire capitalism produces the greatest happiness of the greatest numbers. Nor does it necessarily result in the fairest possible use of resources. Why not? Because people are not equally endowed with purchasing power. Some are very poor through no fault of their own, while others are very rich through no virtue of their own. So the weighting of dollar votes, which lie behind the individual demand curves, may look unfair.
A system of prices and markets may be one in which a few people have most of the income and wealth. They may have inherited the society’s scarce land or may have valuable patents and oil fields. The economy might be highly efficient, squeezing a great amount of guns and butter from its resources, but the rich few are eating the butter or feeding it to their poodles, while the guns are merely protecting the butter of the rich.
A society does not live on efficiency alone. Philosophers and the populace ask, efficiency for what? And for whom? A society may choose to change a laissez-faire equilibrium to improve the equity or fairness of the distribution of income and wealth. The society may decide to sacrifice efficiency to improve equity. Is society satisfied with outcomes where the maximal amount of bread is produced? Or will modern democracies take loaves from the wealthy and pass them out to the poor?
There are no correct answers here. These are normative questions that are answered in the political arena by democratic voters or autocratic planners. Positive economics cannot say what steps governments should take to improve equity. But economics can offer some insights into the efficiency of different government policies that affect the distribution of income and consumption.
Ok, now I will comment. First off, it’s terrible how he oversimplifies complex problems, and then slants the argument toward some vague sort of socialism, or maybe communism. I can’t tell with this guy really.
Some people are not equally endowed with purchasing power…? And? I don’t really know how to interpret that, as it conflicts with everything else he’d been saying in the book earlier. So if a doctor goes to school for ten years, and then gets paid a lot more than a desk clerk at the hotel, and has a lot more purchasing power, the system is “unfair”? He even mentioned this as an example in his introductory chapters, but then later says things like this. So really, I have no idea what he meant, or even what he believes.
Ok, here’s the real argument as I see it. What percentage of people, under a free market system, end up rich without contributing anything worhwhile to society? List out the biographies of all the wealthiest Americans, past and present, each with a nice fair case study, and tell how they made their money. And then we can analyze and see if they made it through hard work and intelligence, or through other means and go from there.
How many people have become wealthy by inheriting oil fields? Not very many. Your argument is unfair, and you’re applying a blanket accusation to all wealthy people, as if nobody who is wealthy deserves it.
We also need to analyze the daily lives of everyday people, and then also inquire into what money is. We find out that money is an indirect exchange of value. So we have to analyze how valuable people are, as harsh as that may sound.
Lay out different people’s lives. How hard are their jobs? How much education did it require them to get there? How valuable is it to society? How much happiness does it bring to people? Lay out each person as a case study, see how much happiness and value they contribute to society and those around them, and then list out how much money they make. You’ll quickly find a correlation.
A world of love would never ask such questions or submit one another to such an analysis. I don’t know if it’s even right to ask such questions. I really don’t like it, but in the real world it’s how things operate. I myself seem to be a contradiction at times. I like Gandhi’s quote of being the change you want to see in the world. In that case, I’d never analyze a person’s value, or put a little tag on their head showing their current “worth.” But then again, I have a practical side of me that sees the real world, and being a business man, I have to reward people based on their efforts and the value they bring to the table.
So from the practical Jason, I ask you – If you yourself don’t have much money, ask yourself that same question — what value am I providing to others? What have I done to deserve someone handing me their money? A man works as a scientist for an aviation company, designing aircraft. He works 8-5, and comes home. He earns $8,000 a month. He’s taxed and then that money goes to you. What have you done for him, or for society, to deserve his money? Say you live in a country that provides assistance programs and you get $2000. Why do you deserve an entire week’s worth of this man’s labor, which is what that money represents? His labor provided value, and that value was taken from his employer, and given to you.
It is kind of hard to think about the idea that so much wealth today is concentrated in so few people’s hands. But I don’t think we can necessarily jump toward the conclusion that they don’t deserve it. Also, socialism may be more of a problem than a solution. With a lot of rich people too, we might wish to inquire whether they have special perks and inside deals with the government, giving them an edge. Did they lobby Congress and land some big contracts? With capitalism, let’s not throw the baby out with the bathwater.
Then there’s also inequalities in effort. And what about inequalities in provided value toward society?
It is not a simple dilemma, and I hate it when such a complex thing is not discussed properly. Like every rich man blows millions on his pet poodle, uncaring and unsympathetic to the world around him, providing no real value to anyone. Such a shallow argument and it’s obvious what his intention is.
I think it’s irresponsible to make a great claim, and condemn so many people, yet not back the argument with solid evidence. It really results in nasty name calling and gets us nowhere.
There are a whole lot of people who contribute little to society, and don’t even make a serious effort to do so. In fact, very few people I meet believe in contributing value to society. Instead, their job is about their own personal fulfillment. I’ve even been harshly criticized by others when I talk about business projects I’ve done simply for the money, not because I wanted to do the work. I’m looked down on.
It makes me sad when I hear this, but there’s nothing I can do. I can’t make money doing what I truly want to do. There is no such job. I think it has to be asked though – Why does anyone owe you anything? Why should someone carry you, and let you live your dreams, while they drive the trash truck, and work all day in the unconditioned warehouse, and stocking shelves in the supermarket? Just drive around your town and look outside your car window. Look at everyone doing things. Who paved that road? Who assembled that car? Who designed the street lights? Who put them up? Who built all the buildings? Who is cooking the food in the kitchens in the restaurants?
When you’re given money, those people are in a sense enslaved to you. Why should that cook make you a burger? What have you done for him? That’s a core moral question. That’s certainly something to consider when dealing with issues on “fairness” and income distribution.
In the past I wrote a software project for a network of ambulance services. You call 9-11 in that area, my software is part of what handles the event, and integrates them with the hospital. That software was not fun for me to write. But I got in there and did it. And when you call 9-11, and everything goes smoothly, and all the records get processed, and the bills paid, just remember that I was a large factor behind why it went so smoothly. That’s in the mid-western United States.
The Nobel laureate economist Fredrich Hayek once said that one his favorite things about capitalism was its incentive for people to produce things not for themselves, but for others. That incentive is being paid money.
When I was young I didn’t dream of writing software like that. The work isn’t exciting. But I don’t look at employers and say, “I want to live my dream, and you’re going to pay me to do it!” My dream is to save up money and have leisure time to study my books. But nobody owes me a life of ease and leisure. I don’t believe anyone owes me a living. So I do crap for society, and then it takes care of me in return. That’s my value exchange with society. That’s the barter.
That’s also why this Keynesian economics in this textbook pisses me off. To them, saving money is evil. The “paradox of thrift.” Money is like blood and has to circulate. So they believe in printing money, and spending it in stimulus programs. All that printed money destroying my savings.
Samuelson talks about “fairness”, but I think it’s very unfair to me when the government prints money. I did honest work and earned my money through free trade. Then they devalue it in their pet projects. There is no job out there which pays me to do what I want to do. Economic output is not prosperity. People being happy is what we’re going for. Samuelson’s economics in some ways is the opposite of freedom. In my case it destroys it. All in search of some vague notion of “equality”, which I don’t think exists.
Speaking along these lines, it’s really hard sometimes to find your place in the world, and find a way to earn money, doing something you like, which also benefits society at the same time.
I believe in doing everything possible to help people get on their feet, and get their lives moving where they want. But a lot of people don’t try, nor do they want to. That in itself produces income inequalities.
I believe in giving everyone access to a university education, and providing for their daily needs while attending. Democracy depends on it, and the contributions people make with their new skills will be far more valuable than what we had to pay to educate them. I also believe in taking care of any person’s medical bills as well. No questions asked. People should always be treated if they’re sick or injured. There has to be a point though where people stand on their own.
I understand the rat race. I’ve lived in it a long time, and it’s been a real struggle for my projects moving. I get it. But oversimplifying the arguments, and bringing vague moral sentiments into this won’t fix anything. And if we really want to talk fairness, let’s discuss that.
The nature of money is to flow toward value. The more value you can control, the more money you’ll make. That value can be lots of things. Sometimes it’s intrinsic, such as being good looking. Sometimes it’s cultivated, such as your education and skills. Other times it’s inherited and owned through private property. Whatever value it may be, whoever controls such things controls the flow of money and getting things from other people.
The unfairness in life comes about because not all value can be cultivated by effort, and not everyone has the same opportunities presented to them. Some people are beautiful, and others aren’t very handsome or pretty. That is truly unfair. I’ve never liked that myself. Others are born into a rich family, with good loving parents, and have opportunities granted to them others never have. It’s very unfair and sad.
But what do you do? Do we lay down and die? Is that the only thing life has to offer? Is there no hope for us?
Though it doesn’t always seem like it, our lives are not completely dictated by fate. A lot of things can be changed by effort, and to at least some extent your actions will determine where you end up in life. Some people have it easier than others, I’ll agree on that point. But that does not mean “fairness” can be equated with everyone having the same amount of money. That’s literal Marxist communism, and doesn’t work.
Samuelson doesn’t seem to like inheritances. But what a sticky situation that is. So if I one day have children, and leave behind my assets to them, whereas others have reckless parents who die broke, or even worse, in debt, did I something wrong? My kids don’t “deserve” that money? Ok Dr. Samuelson, who does?
Who inherits my businesses after I fall over dead? Who gets the money in my bank accounts? I can’t have a will, and leave my things to anyone? Would that be “unfair” to leave my things to those I love? It doesn’t seem that they “deserve” it. It certainly gives them an edge over everyone else.
If that’s the case, we’re all morally bankrupt. Almost everything in this world has been handed to us from past generations. We owe everything to them.
When I closely examine his notion “fairness”, I can’t even really understand what he’s talking about. His discourse is shallow. Philosophers have a very hard time defining justice and equality, especially in relation to society. He doesn’t even try. He slants his arguments, giving the worst possible examples, and avoids the critical arguments. Yeah, it’s true it’s “unfair” when some guy strikes oil in his backyard and becomes a millionaire, even though he didn’t really do anything worthwhile for society. Yeah, some people may control patents, and make a lot of money off them. But what about the guy who made millions by providing real value to society and working hard?
I get the feeling he doesn’t like private ownership of anything, but he avoids the consequences of such thinking. He conveniently dodges it. How is he going to get around the problem of motivation? If everyone gets paid the same, regardless of what they do for society, then what motivates someone to excel or do things for others? Our brains and happiness, in our limbic system, are built around reward. If we can’t better their lives through effort, and there’s no social mobility, economically we’ll suffer, because people won’t work as hard as they would have otherwise.
Sadly, without motivation, humans are generally lazy. If you’ll get paid the same amount of money, regardless of the work you do, you’ll probably put in as little effort as possible, unless you enjoy your job — and most people don’t like their jobs.
With him there’s this vague notion of “too much” money. And when you talk to people who feel this way, the “too much” amount seems to vary from person to person. To Barack Obama, it’s $250,000 a year. Others it may be far less. To another it may be $10,000,000 in the bank. None of this is objective at all. Besides that, he never shows the other sides of the argument.
Lately I’ve been watching neuroscience lectures. The professor was talking about morals and how we can’t make moral decisions without involving our limbic system, which is where our emotions take place. I plan to write about the brain sometime soon. These economic justice questions will never be solved through rational thought because we start to get into love and emotions. Depending on how much love we have for one another, for good or ill, will dictate what policies get enacted. Though as many economists will tell you, sometimes harsh policies are what we need.
Let’s give an example of love and applying it toward the economy and our policies.
His earlier chapters talk all about supply and demand, and he applies it to products and services. Depending on the demand for a product and the supply, the prices vary and an equilibrium is found between the supplier and the consumer. When he talks about intervening in markets for the little guy, he seems to want to disrupt this system for “fairness”, but man oh man, is that a can of worms! Really what he wants the government to do is screw with the value system in order to promote a subjective sense of “equity” which nobody will possibly agree on.
If a strange hair came over all the American children, and they all wanted to become barbers, then after they all graduated high school, barber shops would open everywhere. But there’s only so many people needing haircuts, producing an environment of insane competition among the barbers to get your business. The price for a haircut would drop to next to nothing. All these barbers would be desperate for customers.
On the other side, if nobody wanted to be a barber, and there was only one guy in the world who cut hair, he’d be booked in advanced for years. It’d cost a fortune for each haircut, because demand would be so high.
That seems to me to be the core factor that sets wages – the value you either provide directly to customers, or your employer. Or put more concisely – the subjective valuation or your services, abilities, and private property by a particular set of peers within that society. Money certainly isn’t governed by “fairness”. A harsh but very practical question to people is, “What value do you provide to the man next door?” I’ve never met a poor person who could answer that question. Money is an exchange of products and services.
But Samuelson did make a good argument for intervention for the small guy, which is what I wanted to share. Even though we lose efficiency, we gain a more equal distribution in wealth. He gave an example of this in his book. He talked about farmers, and governments subsidizing family farms to keep them going. The big farms would run them all out, so the government in those states artificially props them up, and sets various price controls.
The inefficiency here is small farmers working farms, even though we don’t need them to be doing so at all. Some of their crops are literally burned, or buried under the ground, just so prices don’t drop too low. The handful of big farmers could provide everyone with all we need. And as technology progresses, the more inefficient this intervention will be.
But this is where a human sort of kindness steps in. It’s not like once the small farmer loses his farm he can just get up and start selling something else. It’s very hard to find a place in this world. Very hard. If he’s unskilled he’ll be flipping burgers, and that’s no life. He’ll need to provide immediate money for his family, and if he doesn’t have any savings, he won’t even be able to go to college in order learn something new. He’ll have to immediately start working some job to get income coming in. He’ll spin wheels and his family will be thrown into poverty. (Another reason why I believe college should be free, and families and individuals provided for while going. There must be an opportunity to escape the rate race of spinning wheels.)
So Samuelson believes we should interfere here, and artificially prop up demand for the small farmer’s crops, so he can continue to earn a living.
Here’s where things blow up. Once one guy gets bailed out, everyone wants bailed out. Joe Schmo’s used furniture store wants their bailout, Joe the Plumber gets on Fox News with Hannity and causes a ruckus, and then we have Sally of Sally’s shoes demanding a bailout of her failed venture. A lot of businesses go out of business because they provide horrible service, stock bad inventory nobody wants, don’t know what they’re doing, etc.
Ugh, what a mess. *Pulls out hair*
Samuelson’s solution is worse than mine. He wants to keep propping up things we don’t need. Thing is, we have to close down these useless farms eventually. What will happen 30 years later? Will the kids inherit them, and keep them going? The kids should’ve learned something new, and made a new life for themselves, not continued on the family farm.
I would only make one exception to this. If the farmers are old, let them keep their farm. But don’t let young men continue this. Make them learn something new, and help them with the transition.
We should do all we can to help the farmer learn something new, but we can’t prop up what Greg and I call “bad basis.” There’s no reason to continue those farm operations. The more we do, the more we’ll hold back our own progress. Imagine if we do this sort of thing in every industry. We’d still have plants producing Model-T cars, just because we were worried someone would lose their job with changing times.
Money is a system that’s very messed up. Very messed up. I don’t like a lot of things about it. It’s harsh in too many ways.
Everything in this world is about value, and controlling value. And value is valuable because it’s in some sense rare and special, and difficult to attain. Otherwise people wouldn’t pay you for it. That’s why things get nasty. Everyone fights to control value so they can secure themselves a place in this cruel world. What people dream of is controlling some exclusive renewable source of value, which can be produced on hand with very little effort, and can be exchanged for other people’s value.
The oil well is such a source. It can be pumped out of the ground easily, and then sold for a lot of money. Then this money can be used to purchase a mansion, whatever car you desire, and everything else that society produces. You can sit back and let that pump earn you millions, while you sit and watch TV, enjoying everything life has to offer.
I’ve been reading a lot of history lately. Mankind’s history is a struggle over who controls what’s valuable. Wars are fought over controlling value. Back in the 1600s everyone wanted to set up a colony to exploit, so they could get cheap sugar, spices, and other resources to sell. They wanted to use those as valuable bartering chips with other nations. This greed created all kinds of naval battles in attempts to control various trade routes. Or take World War I. The big economic super powers were all rushing to Africa to set up their colonies. It was the race to exploit Africa, and take their valuable resources, and then use them to build things, or sell them to get ahead. The entire war was economic, and due to nations only thinking of their own self interest. Who was going to control the land and the wealth and dominate the world? So everyone loaded up their guns and blasted away at each other.
It’s dumb. It’s very very dumb. Everyone wants to control someone else by controlling something valuable, and “owning” it exclusively. This is what the big corporations do today. They control their markets, and bully anyone else out. Nobody is going to come inbetween them and their profits.
But I have no idea how you fix it. When I look at this world, everything is run by value. Everything. Not fairness. Not morals. Not by governments or laws. It’s run by value.
When I read history, I just see men trying to squirm their way out of the the natural order of this world and controlling value is the best means to do so. That’s what money and power is. Sex can only partially be controlled, as you can’t control your genetics or aging. I’ve wrote about these things on my blog here many times.
I was also planning to write about some of the worthless mathematics found in Samuelson’s textbook, but I doubt anyone really cares, so I’ll spare you all the trouble.
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