Need deep reasoned approach to running country

GUEST COMMENTARY

GUEST COMMENTARY

GUEST COMMENTARY

By George Templeton
Payson, Arizona

There once was a wealthy entrepreneur who owned many pickle factories. He liked to drop by unannounced, pull a jar of pickles from the carton, and grade the product for smell, color, crispness, and taste. But in one of his factories he opened a jar and pulled out a dead mouse. The Forman argued that this was the only one like that. Can you guess what score the owner gave that factory?

The Tea Party’s mouse is the claim that Toynbee’s six volume work on the laws of the rise and disintegration of civilizations is about overspending. Instead it is about sowing seeds needed for future harvest. Toynbee holds that any scheme or attempt to return to the good old days will fail. Only birth can conquer death – the birth, not of the old thing again, but of something new.

An example is the clash between Islam and modernity and the decline of the Ottoman Empire. For 1000 years Islam provided a set of rules and principles for the regulation of public and social life. The world of Islam was in the forefront of human achievement, leading in art, science, military conquest, and economics. European advancements were ignored because they were considered the work of heathen infidels. Eventually the Islamic world was overtaken, overshadowed, and dominated by the West.

Keynes claimed that “Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist”. Tea Party Republicans claim that they will not accept the status quo but their policies align with the establishment. Power and control seem to be more important than the welfare of the little man. Unlike our founding fathers who were compromising pragmatists, they are intent on getting their way or no way. But the truth is that even proud powerful nations ultimately have to bow to the dictates of economic law.

Imagine three graphs with personal wealth along the horizontal X axis and benefit to society along the vertical Y axis. The curve on the graph expresses how dollars of personal wealth on the X axis benefits society on the Y axis.

EQUALITY GRAPH

The first graph is the “no envy” stimulus. It has a straight line at a 45 degree angle passing through the origin. Imagine you are going to give 600 dollars to everybody regardless of their personal wealth. According to this graph, the 600 dollar gift produces a 600 dollar benefit to society regardless of whether the donation was made to a rich or poor person. It all depends on how personal well-being translates into the social value of well-being. In other words, how the money is used.

SAFETY NET GRAPH

The second graph is the “wealth redistribution graph” (implying that the poor could be distributed out of their rightful earned poverty and that prosperity can be engineered through incentives to the less fortunate). On this graph the line is curved and rises nearly vertically near the “poor” origin. But as we move farther along the X axis and higher in personal wealth the slope of the line flattens out and becomes nearly horizontal. On this graph, a 600 dollar change in the wealth of a poor person transfers to a much higher benefit to society than the same 600 dollar increase in wealth of a rich person. Any fixed magnitude of gift amounts to a lower percent of the rich person’s worth. They have what they need and are less likely to spend. Alternatively the graph could be called the baby boom generation retirement graph. Many will be getting too old and sick to work and will not be financially able to fund their health and retirement costs. The Republican unregulated stealth real estate rip-off and banking bail-out has destroyed the value of their biggest asset. The Republicans are not contrite.

FREE ENTERPRISE GRAPH

The third graph implies that the rich use their gift to expand and meet consumer demands and uplift society. Mankind’s progress is driven by an elite minority, but since 1970 the luxury liners have floated up while the tugboats sank. In this graph the curve starts out slowly and nearly parallel to the X axis but then like a fighter jet rockets up nearly vertically as it proceeds towards the wealthy. A 600 dollar gift to the poor has hardly any incremental benefit to society. The same 600 dollar increase in the rich person’s wealth is greatly magnified by the transfer curve to many more dollars of benefit to society. Unfortunately the rich won’t hire without demand for their products. . America’s problem is that we seem to be evolving away from a country with a dominate middle class. It is reported that in 2009 the top 25 hedge fund managers’ combined salary combined came to 25.3 billion dollars. That’s an average of a billion each. If we tax those people a little more do you think that it would destroy their incentive? Middle class people have discovered that their wealth was imaginary. Reality may involve a near permanent slow down requiring people to find satisfaction and fulfillment by living more simply and within their means, limiting the amount they consume.

This graph could also be called the “field of dreams” graph. The Federal government funds fundamental research critical to economic development that companies alone cannot afford. Sputnik shattered American pride but provided the impetus for many American scientific, engineering, and manufacturing careers. Our government provided student loans and developed curriculum. Accelerated courses in Math, English, Biology, Chemistry, Physics, and Electronics laid the foundation for the replacement of vacuum tubes with transistors, Jet planes, the personal computer, optical fiber, the internet, lasers, landing on the moon, and our parent’s retirement. Industrial standards groups participated cooperatively with the government to prevent misunderstandings, law suits and disasters such as airplane crashes, electrocutions, and fires. Quality control theory, first used in government military standards and later in industry, was adopted around the world and helped to do the job right the first time.

Americans are proud of their government. There is no conspiracy here, just empathy and teamwork. Without a shared government America could become more like some foreign countries I have visited.

IMAGINE

A starving girl clothed in tattered rags with a baby waits just outside the pizza restaurant a few feet from your window begging for a slice of the pizza she can see you eating. You were offered a micro-insurance policy from street urchins to watch your car while you ate at the restaurant. When you stop at a street light the poor rush out, give your car windows an unrequested wash, and beg for money. Can you stand to see their pain?

Children are obliged to take care of their aging parents, manage their finances, medications, doctors, meals, and take care of personal cleanliness. They are social security and Medicaid. It is a life-style changing responsibility.

The hospital is an open awning with monkeys playing just outside. It looks like a landscaper’s warehouse with all the tree saws hung where they can be easily accessed. We conjecture that health care consists mainly of amputation of the infected body member, and we suspect that nature takes its course without much expense. Would you want to get sick there?

Ladies fulfill their personal responsibility to their neighborhood by sweeping the street in front of their home. There is no garbage collection service or for that matter garbage cans. Trash is pushed into large piles that are periodically burned and left to rot in the rain. Would you sweep your street? Can you stand the smell?

An unregulated food industry provides very low cost food for the poor. Anyone can take the left-overs from their meal and take it out to the street to sell to passersby without any license. Food stamps are unnecessary. You purchase a drink from a street vendor. Another thirsty individual comes. The vendor gives him your glass, without washing it. He could afford only 1 glass and there is no soap or water to wash it. They don’t have refrigerators. Fish and meat, covered with flies, hang in the warm open air all day before sold. Alley cats roam within a high class restaurant. One jumps up on your table, wandering between the dishes before you shoo it off. The bathroom in a restaurant empties through the wall into the open air and an open shallow sewer outside. Birds live in the company air conditioning ducts. One lands on your table for a grain of rice. You notice that the entire second page of the newspaper is an ad showing a picture of mom, dad, and the kids with a reminder to take worm pills every day. That’s a solution for public health.

There are crews of people along the road with sledge hammers making little rocks out of big ones so they can be piled (without cement) into homes better than the discarded cardboard boxes that the lower class use for homes. There are no building codes for fires and earthquakes.

Visiting an industrial city, we notice that the smog is so thick the sun does not shine and it hurts to breath. You retire to the hotel and find a 3 foot by 3 foot skull and crossbones displayed over the sink. The city’s water is poison. There is no Environmental Protection Agency.

We drive along a rutted dirt road lined by rice paddies at speeds as high as 15 mph on our way to dinner with the corporate executives. We note their 150 mph V12 German cars in the dirt parking lot at the restaurant making a stark contrast with the bicycles that the workers ride through the typhoon rain. Prosperity has not yet trickled down.

You can buy pirated CD’s and movies at 1/10 the price in the USA. The copy work is professional and indistinguishable from the USA original. This is without copyright, patent, and trademark laws.

At night the big city goes completely dark. There are no stop lights, street lights, signs, or even electricity in homes. The electric power goes to industry. Headlights diffuse through clouds of vision obscuring dust boiling off the unpaved road ahead. Cars maneuver to avoid hitting the holy cows that wander there. There is no Rural Electrification Administration.

It is O.K. to run stop lights, straddle the center line, and drive on sidewalks. Freeway traffic comes to a screeching stop because there are no interchanges or overpasses. You won’t get a ticket because the police are tied up with traffic jams. Who needs a department of transportation? We don’t use those new roads in other states! Make them all toll roads! Because trusted business is completely ethical and efficient and government is wasteful and evil, privatize social security, our schools, forests, national parks, and the Federal Aeronautics Administration.

CHOICES

We are the government. It reflects our values and way of life. It is not just about consumption and materialism. It is about an ethos admired by the rest of the world. It is about our ability to rise to the challenge, to make sacrifices when needed, to compromise, and to be fair, just, and constructive. It is about having a level playing field that does not destroy the chances of any man. We reject those who characterize Obama’s administration as “gangsters”. Such talk reveals disrespect for our intelligence. We require a deep reasoned approach to running our country, not hatred and fear mongering, and not an undue concern with trivialities like fluorescent light bulbs, and “press 1 for English.”

Our taxes are not wasted money. They stimulate the economy, grow the middle class, and enable our future. Respected economist David Stockton says that our financial problems cannot be resolved by just cutting spending and that tax increases for the wealthy are necessary. We will make adjustments, plan for the future, and not destroy what we have worked so hard for so long to build.