‘Tis the Season…to be a Capitalist

Yes, I know, Christmas is the celebration of the birth of Jesus, the greatest Gift of all and the advent of God’s Kingdom here on earth.  But at this time of the year especially, giving reminds us of what capitalism gets right all year long.

  donation fund

Here some quotes from George Gilder’s book “Knowledge and Power:  The Information Theory of Capitalism and How it is Revolutionizing Our World:”

“Capitalism begins with giving.  Free markets and exchanges are characteristic of capitalism, but they are a result of entrepreneurship ~ not a cause of it….

The anthropological evidence, detailed in the original Wealth and Poverty, suggests that capitalism begins with the gift and continues with competitions in giving.

A gift will elicit a greater response only if is based on an understanding of the recipient’s needs.  As any baffled beneficiary of a costly but unwanted Christmas present can attest, giving is difficult and requires close attention to the lives and longings, tastes and talents of others.  In the most successful and catalytic gifts, the giver fulfills an unknown, unexpressed, or even unconscious desire in a surprising way.

A successful gift startles and gratifies the recipient with the unexpected sympathy of the giver. In order to repay him, however, the receiver must come to understand the giver. The contest of gifts leads to an expansion of human sympathies…  

In deciding what new goods to assemble or create, therefore, the givers and investors must be willing to focus on others’ needs more than their own…

 Profit is thus an index of the altruism of an investment….

 The conventional wisdom, whether liberal or conservative regards charity or generosity as essentially simple ~ just giving things away without calculation or continuing concern with their true use.  The hero of this narrative is the anonymous donor, while the investor is seen as a Shylock, extorting usurious gains from lending money, or a Scrooge, extracting his profits from the exploitation of workers.  A welfare system of direct money grants financed by anonymous taxpayers through the choices of their elected representatives is, in this view, the ultimate expression of compassion and charity.

 Dumb money, however, does more harm than good.  It is extremely difficult to transfer value to people in a way that actually helps them.  Excess welfare hurts its recipients, demoralizing them or reducing them to an addictive dependency that can ruin their lives.  The anonymous private donation may be a good thing in itself.  It may foster an outgoing and generous spirit.  But society as a whole is more likely to become charitable and compassionate if the givers are given unto, if the givers seek some form of voluntary reciprocation.  Then the spirit of giving spreads, and wealth gravitates toward those who are most likely to give back, who are most capable of using it for the benefit of others, who are most knowledgeable and best informed, whose gifts evoke the greatest returns.  Even the most indigent families will do better under a system of free enterprise and investment than under a supposedly “compassionate” welfare system that asks no return.  The law of reciprocity ~ that one must supply in order to demand, save in order to invest, considers others in order to serve oneself ~ is essential for a humane society.

 At the heart of capitalist growth, however, is not the mechanistic homo economicus but conscious, willful, often altruistic, inventive man.  Although a marketplace may work mechanically, an economy is no sense a great machine.  The market provides only the perfunctory dénouement of a tempestuous drama, dominated by the incalculable creativity of entrepreneurs, making purposeful gifts without predetermined returns, launching enterprise into the always unknown future.  The market is the conduit, not the content; the low-entropy carrier, not the high entropy message.

Capitalism begins not with exchange but with giving, not with determinist rationality but with creation and surprisal.

 (emphasis mine)

***

Some interesting thoughts about poverty from the British doctor Theodore Dalrymple’s book “Life at the Bottom”:

What do we mean by poverty?  Not what Dickens or Blake or Mayhew meant.  Today no one seriously expects to be hungry in England or to live without running water or medical care or even TV.  Poverty has been redefined in industrial countries, so that anyone at the lower end of the income distribution is poor ex offico, as it were ~ poor by virtue of having less than the rich.  And of course by this logic, the only way of eliminating poverty is by egalitarian redistribution of wealth ~ even if the society as a whole were to become poorer as a result.

Such redistribution was the goal of the welfare state.  But it has not eliminated poverty, despite the vast sums expended, and despite the fact that the poor are now substantially richer ~~ indeed are not by traditional standards, poor at all. As long as the rich exist, so must the poor, as we now define them.

Capitalism Has Got the Goods (and Services) – So Quit Complaining

 

Do You Know a Government That Could Use a Rescue?

bar rescue

Have you seen the TV program Bar Rescue?  The show is in the same genre as the Restaurant Impossible and Hotel Impossible.  Customer service based businesses are failing and someone from the outside comes into to save them.

 Bar Rescue is a favorite show of mine and not because I’m a bar fly but rather because at one time I was one of three partners in a manufacturing business.  I know what Jon is dealing with.

 In my role as Vice President of Engineering I had to make business decisions on a 24/7 basis. I had to hire and sometimes fire engineers and designers. As VP I had to make sure that the equipment we designed and sold worked. I interfaced with customers, employees and technical issues on a constant basis.

 As partners we dealt with cash-flow issues on a weekly or even daily basis. We would meet in our board room and hammer out the details.  The three of us each had our specific roles to carry out.  Each role carried responsibilities that supported the entire framework of the business. 

 I regularly made business trips across the U.S. and outside of the country to start-up the equipment.  I was (and had to be) a major force behind our businesses’ multi-million dollar sales revenues. That was the only way to keep the business afloat and more than just a blip on the market place map we covered. So, I understand where Jon is coming from.

 Jon Taffer is the force behind a Bar Rescue.  You can tell that he knows his stuff.  He knows what it takes to make a bar successful. He knows when to finesse and when to pound his fist to get a response. He will raise his voice to grab people’s attention away from their egos.  As you watch the show you will see bar owners and their business partners who have no clue as to what to do.  And because of their in-the-way egos they are deeply in debt when they call Jon in. 

 From appearances these bar owners seem to think that the bar will run itself, that people will naturally just come in off the street for a drink.  But the numbers, the businesses’ accounting books Taffer shows them does not project wishful thinking.  The numbers show reality. And that is why I like this program and why I like business – numbers don’t lie. Reality is the key ingredient to any success.

 Now, our government is like a huge bar that needs rescuing from its managers.  We the People, sadly, are like its troubled and overworked employees who do not have the say or the power to make the changes needed.  We see the mess and try to do everything we can to make it better.  But we reach a point where we see that management does not have a clue.  Management wants the perks but not the responsibilities.  If we speak up we are patted on the head and then kicked in the butt by our representatives.

 Yes, there are voices of reality in government just as there are on the Bar rescue program.   But those few voices are drowned out by huge political egos.

 Now, I wish that we had a Government Rescue program. Washington’s decisions degrade our lives, our liberty daily.  Those decisions wear us out.  The U.S. government is out of control and rapidly growing deep into debt.  Help!

 To fix the debt issue Obama, like a poor business manager, wants to publicly litigate for more tax revenue from Americans by using words and phrases like “fair share,” and “social justice.” Just work harder he tells us.

  Obama is not a hands-on guy ~ he is an attorney ~ a one-time professor of Constitutional law ~ with no clue as to how to run a business let alone a national economy. Elizabeth Warren is of the same cloth ~ all hyperbole and ego but no substance ~ both are true politicians.

 As a nation we have more attorneys than business people in lead positions in our government.  Is it any wonder that these attorneys are more concerned about “rights” and about jabbering on about what they can do for us if we hand over our liberty and our money? 

 What about the liberation of our human flourishing by embracing economic reality and making wise business decisions? Instead of new laws which constrain each of us and kick us in the butt we should be set free to do what we do best thereby generating increased revenues through successful and time-tested business practices.

 The Free Market ~ people like you and me ~  already know how to deal with reality.  What we need now is for someone to come in and toss the current “Progressive” management and to help us turn this nation around.

Exactly!

Here is Father Robert A. Sirico making it perfectly clear why capitalism is GOOD.  (There is a surprise at the end of the video, too.)

Where Do You Start?

A Tale of Two Foot Races

Race Number One:

Eight men enter a race.  They are roughly about the same height and weight but come from very different backgrounds. The eight men enter the race knowing that there will only be one winner.  It was for this outcome that they had prepared themselves with rigorous discipline during the past four years.

Months prior to the track meet the eight men are told of the rules:  A runner must run in qualifying heats. If the runner is successful in those heats the runner will then be allowed to compete in the final race with the other qualifying runners;  a runner who jumps the gun twice at the starting line will be disqualified as having a “false start”;  the commands “Ready”, “Set” and a gun shot will be used by a track official to start the race fairly;  each runner must stay in his lane or he will be disqualified;  runners will be timed and the first runner to cross the finish line will be the winner of the race.

The runners all agree and sign off on the rules before the race.

On the day of the race, after running in the heats, the eight qualifying runners come to the starting line.  They know that they must run straight ahead in their own lane to reach the one-hundred meter line. They know that if they jump the gun twice they will be disqualified from running. They know that they must sprint as hard as they can to cross the finish line first. They are knowingly competing for first place. The race before them has now become the culmination of years of exhausting training and dedication to finishing the race and receiving first prize.

When the race is announced the runners shed their sweats and come to the starting line. They will then position their legs into the starting blocks and place their hands stretched just hugging the starting line.  Seeing the runners in place behind the line the track official then says, “Ready”.  Then after a moment he says “Set”.  The runners then come up to a set position waiting for the starting pistol to go off.  When it does the eight men jolt from their starting blocks and run down the track as fast as their feet will carry them.

At the finish line the winner is the one who breaks the tape. There is also a second, a third and fourth place finisher. The runners-up congratulate the winner for his speed and, implicitly, for his fidelity to the rules and his commitment to the sport of racing.

The first three finishers receive medals, adulation and wreaths of honor from the thousands who have come to watch a fair race between those who have so vigorously prepared themselves. The experience of the race has bolstered each runner’s self-esteem. The cheering crowd is also moved by each runner’s self-sacrifice, dedication and self-discipline. This spectacle has confirmed the crowd’s understanding of playing by the rules and aspiring to excel within those rules. Everyone who witnessed the race that day is stirred to motion – a motion to go home and try harder.

All eight men later return home.  They are now more dedicated than ever to prepare for another day of racing and to receiving the crown of victory.

Race Number Two:

Eight men enter a race.  They are roughly about the same height, weight but come from very different backgrounds. The eight men entered the race knowing that everyone will be a winner.  It was for this outcome that they saw no need to prepare themselves with rigorous discipline during the past four years. They just had to show up.

Months prior to the race the eight men are told the rules.  They are told the rules are subject to change at the time of the race based on the current ad hoc articulated reasoning of one superior intellectual with unquestionable virtue.  A runner must run in qualifying heats but this will not be a constraint. Whether or not a runner is successful in those heats he will also be allowed to compete in the final race with other qualifying runners; a runner who jumps the gun twice at the starting line will not be disqualified from running. Instead he will be given another chance; the commands “Ready” and “Set” and a gun shot will be used by a track official to start the race fairly, though any sincere attempt to cooperate with the official will be accepted; each runner must stay in his lane or he will be disqualified unless, of course, their background is such that they have never stayed within the lines; runners will not be timed because such keeping of minutes would be discrimination against slower runners.  The first runner to cross the finish line will wait at the finish line so that everyone will be considered a winner of the race. This must be done at any personal cost to the first one crossing the finish line.

The runners agree and sign off on the rules before the race.

On the day of the race all of the runners come to the starting line.  They know that they should sincerely try running down to the finish line. There will be prizes and the appreciation of well-wishers to look forward to. They are knowingly going to try for this reason. This race is now the culmination of years of knowing that the battle is just showing up.

When all the runners are in their starting blocks and their hands are behind the starting line the track official then says, “Ready”.  After a long moment of reasoned judgment the official says “Set”.  The runners come up to set position.  When the race official shoots the starting gun the eight men come out of their starting blocks and run down the track as fast as their preparation has trained them.

At the finish line everyone becomes a finisher, even those who left the race due to being out of breath. There are congratulations all around for having showed up to such an event.

At the awards ceremony all the runners receive medals and kudos from the thousands who have come to watch a race between people who have showed up for a race where the outcome was predetermined to be fair – fair as defined by a few judges of superior intellect and of unquestioned virtue.

Later, all the runners returned home and rested from another day of showing up.

*****

A Tale of Two Foot Races:  Equal Opportunities vs. Equal Outcomes by Sally Paradise © Sally Paradise, 2011, All Rights Reserved

It’s Time to Cut the Crap

Get your shovels ready. 

Until we get a president in the White House and while BO is out playing with himself and passing the buck here is what I think should happen to kick-start the economy and downsize the national debt:

 1.  Stop government funding of public TV and radio immediately. I am not renouncing TV or radio.  Instead, I am saying that these communication vehicles can be funded via commercials or donations from viewers/listeners who want what they put out.

 2.  Stop government funding of the National Endowment for the Arts and Humanities immediately. I am an ardent fan of all the arts (except ballet, “Twinkles Down” *on that).  Art, in all its forms, should be subsidized by those who want it.  e.g., I support my local artists by buying their original art work.

 3.  Abolish all public education within the next five years.  All schools should be privately owned and operated. Remove the NEA teacher’s unions from the classroom. The government can provide vouchers for the very poor. Aspirations are what people need to go forward and not the never-ending government hand outs.

 4.  Abolish all minimum wage laws and all other unfunded mandates immediately so people can go back to work.

 5.  Put a five-year moratorium on all EPA regulations. Then, dispose of the EPA altogether in the sixth year.

 6.  Create a personal income flat tax of across the board on two income levels. Below a yearly income of $40,000.00 (this is an arbitrary number up for discussion) the flat tax rate would be 5% (e.g., $2000.00 for a $40,000. income).  For incomes of $40, 000.00 and above the tax rate is 15% (e.g., $6000.00 for a $40000.00 income).

Simplify the tax code to one or two sentences:  “You shall pay 15 % of your income for the year XXXX” if you made $40,000.00 or more in that year.

 State Sales taxes would be tied to the previous year’s income tax paid as one-ten thousandth of what you paid in income taxes the previous year. (e.g., you made $40,000 last year.  You paid $6000.00 in taxes. You next year’s sales tax on any item is $0.60.) A card would be mailed by the government to show what your maximum sales tax would be on any item. (This amount is given that the state should no longer fund education or social programs).

 (BTW:  These are just some ideas about taxation. The tax code must be simplified.  How many tax bureaucrats does the taxpayer pay for by using the current tax code nightmare? We have to think outside the box.)

 7. Cut corporate taxes in half for three years and then abolish all corporation taxes. Corporations provide jobs and benefits for people.

 8.  Abolish all tariffs

 9.  Immediately repeal the onerous Obamacare and Dodd-Frank Acts and all over-reaching Federal and State regulations so that the economic engine of America can fire properly. Currently, Obamacare is an unfunded mandate.

 10.  Give each Congressman a six-year term and one term only.  Doing this will make the Congressman concentrate on his job and not on creating populist programs that will win him re-election while costing the taxpayer mega-dollars. Term limits would also be devastating to any lobbyist trying to buy the Congressman’s power via re-election campaign monies.

(BTW:  The only expertise that long-term Congressmen and Congresswomen receive is how to craft a re-election. Let’s not give power-hungry people more power.)

 11.  Did it say it already?  Abolish the EPA.

 12.  Privatize the mail delivery system.

 13.  End social security in five years for those under fifty.  Those people can use IRAs or 401k plans instead (These people will make more money and more secure retirement money with these financial vehicles).

 14.  Limit the use of FEMA to national security emergencies such as 9/11. People living in hazardous locations can buy flood insurance, hurricane insurance, etc or they can move to a safer location.

15. Illinois house cleaning:  remove Pat Quinn (D-governor), Dick Durbin (D-senator, his wife is a lobbyist for Government Affairs Specialists, Inc.,in Springfield!), Mike Madigan (D-speaker of the house) and Rahm Emmanuel (D-Chicago mayor) from office ASAP.Illinois has the worst credit rating in the union thanks to the tax and spend Democrats. (And, the most felonious governors)

 16. Drill our own natural resources for natural gas and oil.

17.  Leave Afghanistan immediately and rebuild our own national fence.

18.  Never send another dollar to Pakistan or to the UN, for that matter.

19.  Get government out of the housing market.  Tear down those Fannie and Freddie walls. (and, remove Democrat Senators Barney Frank and Nancy Pelosi  from office)

20.  Tie government spending to 1.1 % of GDP or better, pass a balanced budget amendment.

 21.  Eliminate all Social/Economic Tinkering:  all of the laws passed (using Stage One thinking*) in order to help Americans (e.g., Dick Durbin’s debit card price controls & the $5 BofA debit card charge) do not operate in isolation. These laws, in the aggregate, affect us negatively and hurt Americans more than they help. You will have to pay more for the use of your debit card in other ways. What goes around comes around, ipso facto.

 (* as Thomas Sowell, economist, defines thinking that does look at all of the possible ramifications of a proposed law.  Laws do not operate in a vacuum.  I highly recommend his latest book, The Thomas Sowell Reader, copyright 2011.)

 22.  We need free trade agreements passed now.

23.  Breakup the monopoly of the US government and Federal Reserve Bank. Better, get rid of most of government and shut down the Federal Reserve Bank.

24.  Because lobbyists are voters with lots of campaign money attached and because we have a representative government we must make congress accountable to the people and not solely to lobbyists and special interests. I propose a full disclosure statement be written and posted online every time a representative interacts with a lobbyist. This statement would disclose the date and time of contact, the means of contact, the purpose of contact, the information exchanged and our representative’s disposition to said matter. This statement must be signed by both parties and posted online.  This disclosure statement must be done every time – pre, post and during office, night and day, during working hours and during their free time.  To not disclose interaction with a lobbyist (I will need legal language here to define lobbyists and special interests.) whether via phone, email, texting, in person or via a third-party would be considered a felony and would be punishable by a minimum of 30 years in prison. This law would affect aides and family, as well.

 25.  Elect Presidents with business savvy, leadership and management experience –  “Twinkles Up”.  Do not elect “buff” spoiled brats who spend most of their time looking in the mirror, blaming Bush and playing golf. That would be “Twinkles Down”.**

(**For everyone who is working and NOT a OWS protestor, “Twinkles Down” means “bad” in protestor speak.)

Outsourcing

 The radio message came at 22:01:44.9 Martian time:  “The Community-Organizer-in-Chief has left the Washington DC Bureau of Breadlines and has fled to his Martha’s Vineyard compound.”

 It was to be expected. The People’s Economy had turned on him. Unfed jobless (and tattooed) masses were walking the streets looting, robbing and killing for food. Washington, the center for The People’s Economy was no longer safe.  But, we felt safe in our star-ship Gorforit. That is, Friedrich and I felt safe.  My name is Milton.

 You should know that there were many Capitalists in The People’s America when the Hope and Change Desolation began ten years ago. But, since that time, there is now only a small remnant left.

 Back then we were called the “Free-Market-eers.”  As such, we were constantly booed and jeered by The People’s Media.  Flash mobs of union workers, guided by The People’s Media, attacked us. And though we were peace-keeping people, many of us were battered and some lost their lives.  At one point it became so bad that corporate jet owners were being hung openly on the Mall, right in front of Lincoln Memorial.

 How did this all begin? A Progressive candidate (The Candidate) won the presidential election in 2008. This newly elected president began to stir up class warfare among the people.  He incited people to turn against each other, neighbor against neighbor, because of money. The People’s Media joined in.

 In 2011 a “Lean Forward” campaign was launched by the People’s Media.  Soon, the slothful, the dimwitted and the envious began to call themselves “The Forward Thinkers” or the “Lean-Forward Thinkers” – commonly known as the “LFT”. Their numbers, mostly union workers and unemployed college graduates with useless degrees, grew rapidly.

 The People’s Media which had once campaigned for The Candidate in 2008, now campaigned for the Lean-Forward group.  The campaign encouraged these marauders to take from the rich (those who had a job and some income) and to give to the “under-privileged” – those who saw what others had and wanted the same things.

From the Oval office the president, via regular People’s Media broadcasts, told the citizens that government was the best mechanism to handle society’s problems.  So, with the help ‘elected’ representatives he began to take away the people’s money through taxation. People were no longer able to donate to charities or to directly help their neighbor.  Every dollar was excised from the people for the people in The People’s Economy.

 The People’s Media, rousing the animal passions of the LFT members, encouraged demonstrations to take place against Free-Marketeer businesses.  Soon, though, the demonstrations were replaced with random looting and pillaging of stores.  Strife increased between merchant and customer, neighbors and friends.

 Our nations’ economy, once strong and vibrant because of free-market exchange, was now subject to the whims of recalcitrant, angry mobs and inept tyrannical leadership.  It quickly deteriorated until our present time.

 So, a plan was decided at our last Capitalist conclave held in a secret hiding place near Mount Rushmore.  Two of us would go to Mars and begin a free market economy on a new planet. Both Friedrich and I volunteered to go.  We were the oldest in the group.  If something happened we were both prepared to die.

 We had the star-ship Goforit but not the fuel.  The People’s Economy rationed both fuel and food. So, we had to put our heads together to find a solution. Now, we had done similar things like this before so we were not overly concerned but time was running out.

There was no IPO for this venture, no influx of cash.  The US dollar had folded.  Instead, we had to learn to create fuel out of gold bullion.  And, as it turned out, a small amount of this fuel would take us all the way to Mars. Once there we could also use it to barter with the Martians.  They have no gold on Mars but they do have good underground living quarters for the two of us. We could set up shop very quickly. In fact, it was the Martians who had offered to help us.  They would benefit from us. It would be a mutually beneficial relationship, something no longer found in The People’s America.

 We all believed, the Free-Market-eers, that is, that there would be defectors from the People’s Economy but we didn’t know when. Things were getting nasty in The People’s America.  So we decided to plan ahead and get ready for the influx of homeless and hungry. We had to start somewhere new.  Somewhere that wouldn’t be affected by The People’s Media. 

It seemed to us that Mars was the best option since there was a significant time delay for any radio signal to reach that planet. And better yet, The People’s Media Broadcasts would easily get lost within the noise of space radiation and our own Sun’s solar flares. “Bingo,” I said when I heard this.

*****

 “Milton”, Friedrich spoke glancing out Goforit’s small window at the silent Martian orb, “soon you and I will be able to start our booming life again, but this time, on the Red Planet!”

Milton replied, “A laissez-faire world at last. To Mars or bust, my friend, to Mars or bust.”

© Sally Paradise, 2011, All Rights Reserved