What bugs me more than anything else is the people who had the foresight and the funds to invest in a company that was an inexpensive long shot back in the day. Consider the people who had money enough to but what is now ExxonMobile when the stock price was in the $10 range. The current price of $83.00 yields $1.77 per share. With a large enough initial investment, that single stock could be funding several families' incomes. But my family was a late-comer and did not have the resources at the time to take advantage of the opportunities.
Some families had the opportunity to land bank lots of real estate back when land was still going for "a dollar an acre." That was then. Now that type of investment cannot happen. The opportunities that result in massive wealth are few and far between. One is better off lucky than good at discovering those opportunities.
On a larger economic scale, government action is supposed to provide the investments that will pay off in the future for those people who are not yet able to invest for themselves. We depend on the collective wisdom of the elected representatives to do the right thing. Toddlers and those children not yet conceived are the beneficiaries of our good and bad decisions. If we get it right, our children will be able to receive the dividends even if they do not thank us for our insights and financial contributions now that mature into what they will someday inherit. I, for one, would love to have been able to inherit 1000 acres of land outside the 1948 Pittsburgh environs that my father would have bought, if he could have. Some one else did and are very wealthy now.
If we get it wrong, our progeny will have to pay the price of our selfish intents, lack of insights, or lack of funds to invest. If we don't build and staff enough college classrooms, they will go without educations. If we don't now train enough doctors and nurses, it is they who will not be able to see a doctor when they need to. If we don't build entire infrastructures of utilities, roads, rails, and distribution systems, they will be without. We must be willing to spend our generation's money to do these things because they will need their generation's money for their current needs and their investments in the future of their children.
In the American economic system, the government doesn't own the resources. All of it is in private hands. The USDA estimates that 95% of all the land in private hands is owned by less than 3% of the population. That remaining 5% is mostly the small lots that all the suburban subdivisions are built upon. There are a few Federally owned land resources that are leased to business that derive a small revenue for the Treasury. Therefore, the only method of deriving revenues for the workings of the government and all of its obligations is taxes. Borrowing funds is only deferred taxation with interest.
We can leave unpaid debts or we can leave unaddressed needs to our children. It is up to this generation to make the correct decisions now.
Tuesday, February 15, 2011
Saturday, January 8, 2011
Freedom of Consumption
The world is changing and so is America. The many freedoms we cherish are deteriorating and may soon evaporate all together. Generally these freedoms will not stop with the stroke of a pen or the report of a rifle. They will however slip into obscurity one inch at a time as the forces of nature, human nature, economic marketplace realities, and the march of time all take a bite out of our big sweet cookie.
The political right whines about the potential loss of such Constitutional Rights as Life, Liberty and the Pursuit of Happiness. They fret about the loss of unlimited possession of firearms, the right to do whatever they want on a parcel of land that they bought, whether a fetus is a person before it feels the light of day its head, and whether the union of two men or two women can be a marriage.
The political left does their whining about whether a person who does live and breathe has the right to eat, have shelter, protection from official repression. They fret about people being disenfranchised, marginalized and denied basic human needs such as medical care.
Each time one faction of the government attempts to remedy an inequity or injustice the other factions see it as a limit on freedoms, an attempt of the government to take over the country and rule by dictate. People who do have Health Insurance decry legislation that that tries to provide services to a larger subset of our population. They see those attempts as an expansion of government, an intrusion into their lives, and a possible limit on their own access to medical services. They want government out of their lives. On the other hand, almost no one decries the total domination of road building and maintenance by government who fund all such public works. The only time that anyone gets wrapped around the axle is when the funding source tries to alter the mix of what transportation projects receive funding. It appears that building another road constitutes a freedom of consumption, while supporting public transportation options is an intrusion and limit of those freedoms.
One must not forget that there are millions of people in the US, citizens and non-citizens alike, who do not or cannot drive an automobile. Road-only policies discriminate against those people and constrain their freedoms. Such policies misuse those people's tax dollars. Whether or not an individual pays a tax directly (real estate tax on their house) or indirectly (real estate tax paid through a landlord via the rent) it is all individual consumers who pay all the taxes. When their needs are compromised and marginalized and neglected, a fundamental inequity results. Their lack of access to what they pay for funds the ability of everyone else to get what they want at a lower price.
A simple example of this is when the Public Works Department builds a road without adding pedestrian walkways, the non-drivers receive a paucity of value even as the auto drivers get more roads on which to drive. Attempts to fund transportation and other non-automobile access is met with vocal resistance put up by the people who do own and drive automobiles. Their claims are that it is a waste of tax dollars to do anything other than provide them with lanes on which to drive and spaces on which to park their vehicles. Their freedom of consumption is threatened. So there you have it.
When there is plenty of money available, there is much less opposition to ideas that are not the mainstream and expedient. As resources become in short supply the larger majority population seeks to conserve the remaining amounts for themselves. They seek to protect their freedom to consume. Enter: the Health Insurance issue.
Before the health care reform legislation passed in 2010 we were estimating a physician near-future shortage of 40,000 doctors. That quantity was derived from a combination of a historic shortfall, our longer life expectancies, the population becoming progressively less healthy in general, physician retirement, curtailed income due to constrained payments for services, and fewer men and women choosing to enter the profession due to real and perceived legal and liability parameters. With the passage of the Patient Protection and Affordable Care Act," HR 3590, in March 2010, 31 million additional people will have access to healthcare services. Our freedom of consumption is therein compromised.
The new estimate is 60,000 physicians. A bad situation only gets worse. With one physician for each cohort of 1550 patients, 20,000 doctors are needed for the newly covered 31 million people.
Employees who do get health insurance paid for by their employers do not like the idea that they will have to share their doctors and medical services access until that shortage is resolved. Medicare enrolled people do not like those prospects either. All of these covered people bristle at the idea that someone, anyone will tell them that they cannot have the MRI that they believe they should be given. Whether it is a government bureaucrat or an insurer's bureaucrat making a decision, the patients don't like limits placed on their freedom to consume medical services.
Our world is changing in natural ways that impacts all institutions and civilizations at some point in their existence. The idea that our economy can infinitely expand to accommodate all spending, borrowing and delivery of services is like believing in perpetual motion. To attempt to do so is the same as setting up a Ponzi Scheme where all the new members pay for the older members. Those arrangements always fail because there are not enough humans on earth to support all the higher tier members. The pyramid always collapses. When it does collapse there are winners and losers, there are survivors and casualties. The survivors bury the dead and try to pick up the pieces. How well they do this is dependent on how much they learn from the experience.
The political right whines about the potential loss of such Constitutional Rights as Life, Liberty and the Pursuit of Happiness. They fret about the loss of unlimited possession of firearms, the right to do whatever they want on a parcel of land that they bought, whether a fetus is a person before it feels the light of day its head, and whether the union of two men or two women can be a marriage.
The political left does their whining about whether a person who does live and breathe has the right to eat, have shelter, protection from official repression. They fret about people being disenfranchised, marginalized and denied basic human needs such as medical care.
Each time one faction of the government attempts to remedy an inequity or injustice the other factions see it as a limit on freedoms, an attempt of the government to take over the country and rule by dictate. People who do have Health Insurance decry legislation that that tries to provide services to a larger subset of our population. They see those attempts as an expansion of government, an intrusion into their lives, and a possible limit on their own access to medical services. They want government out of their lives. On the other hand, almost no one decries the total domination of road building and maintenance by government who fund all such public works. The only time that anyone gets wrapped around the axle is when the funding source tries to alter the mix of what transportation projects receive funding. It appears that building another road constitutes a freedom of consumption, while supporting public transportation options is an intrusion and limit of those freedoms.
One must not forget that there are millions of people in the US, citizens and non-citizens alike, who do not or cannot drive an automobile. Road-only policies discriminate against those people and constrain their freedoms. Such policies misuse those people's tax dollars. Whether or not an individual pays a tax directly (real estate tax on their house) or indirectly (real estate tax paid through a landlord via the rent) it is all individual consumers who pay all the taxes. When their needs are compromised and marginalized and neglected, a fundamental inequity results. Their lack of access to what they pay for funds the ability of everyone else to get what they want at a lower price.
A simple example of this is when the Public Works Department builds a road without adding pedestrian walkways, the non-drivers receive a paucity of value even as the auto drivers get more roads on which to drive. Attempts to fund transportation and other non-automobile access is met with vocal resistance put up by the people who do own and drive automobiles. Their claims are that it is a waste of tax dollars to do anything other than provide them with lanes on which to drive and spaces on which to park their vehicles. Their freedom of consumption is threatened. So there you have it.
When there is plenty of money available, there is much less opposition to ideas that are not the mainstream and expedient. As resources become in short supply the larger majority population seeks to conserve the remaining amounts for themselves. They seek to protect their freedom to consume. Enter: the Health Insurance issue.
Before the health care reform legislation passed in 2010 we were estimating a physician near-future shortage of 40,000 doctors. That quantity was derived from a combination of a historic shortfall, our longer life expectancies, the population becoming progressively less healthy in general, physician retirement, curtailed income due to constrained payments for services, and fewer men and women choosing to enter the profession due to real and perceived legal and liability parameters. With the passage of the Patient Protection and Affordable Care Act," HR 3590, in March 2010, 31 million additional people will have access to healthcare services. Our freedom of consumption is therein compromised.
The new estimate is 60,000 physicians. A bad situation only gets worse. With one physician for each cohort of 1550 patients, 20,000 doctors are needed for the newly covered 31 million people.
Employees who do get health insurance paid for by their employers do not like the idea that they will have to share their doctors and medical services access until that shortage is resolved. Medicare enrolled people do not like those prospects either. All of these covered people bristle at the idea that someone, anyone will tell them that they cannot have the MRI that they believe they should be given. Whether it is a government bureaucrat or an insurer's bureaucrat making a decision, the patients don't like limits placed on their freedom to consume medical services.
Our world is changing in natural ways that impacts all institutions and civilizations at some point in their existence. The idea that our economy can infinitely expand to accommodate all spending, borrowing and delivery of services is like believing in perpetual motion. To attempt to do so is the same as setting up a Ponzi Scheme where all the new members pay for the older members. Those arrangements always fail because there are not enough humans on earth to support all the higher tier members. The pyramid always collapses. When it does collapse there are winners and losers, there are survivors and casualties. The survivors bury the dead and try to pick up the pieces. How well they do this is dependent on how much they learn from the experience.
Saturday, December 4, 2010
Sustainable Unemployment
Everyone in this country seems to be under the influence of a major case of Denial. Fifteen million people are unemployed. The demographic "typical family of four" means that 60 million people are without a means of support. No job means no health care coverage. It is nonsensical to think that anyone facing long term unemployment will be able to cover the cost of COBRA extensions of their former employer policies.
It is equally nonsensical to think that these people will some how disappear. They will be lined up to get every job that is offered anywhere. Some people will have an easier time of being proximal to such a job when it is open. Although these people will not eat as much or as often, they will eat. They will be visiting the Food Pantries, applying for "Food Stamps" and otherwise obtaining something to eat for themselves and their dependents. All of these sources of food do cost money. TINSTAAFL. Taxpayers and charitable givers will pay the cost to feed these people.
As we do right now with hundreds of thousands of low-income people, emergency rooms will serve the needs of families and individuals who cannot pay the cost of a physician's attention. Taxpayers and everyone who sees a doctor, enters a hospital or needs a prescription will be paying the cost of those visits.
Just refusing to provide income for people who have been laid-off will not make them more willing to seek replacement employment or employment at a reduced income. First there needs to be jobs to have. They need to be in the location where people need jobs and those jobs must pay a "living wage." In this case, a living wage must be enough so that tax funded services are not needed. Rent subsidy, food subsidy and emergency room medical services must not be needed as the result of the limited employment or the wage is not a living one.
Every month over 100,000 new eager people enter the prospective workforce. They are graduating high school, college and trade schools with the hope and expectation that they too will have a place in this economy. That number extrapolates to 1.2 million jobs per year. First we have lost 12 million jobs during the recession, then we add 1.2 million every year due to our maturing children. This means that we need to generate 3.2 million jobs per year over the next five years in order to recover to the 2007 employment levels. Meanwhile these unemployment statistics need to eat.
People without income can hope and pray that their health remains good. They do have opportunities to share a dwelling at a higher occupancy than is traditional. They cannot, though, share food.
Republicans say "CUT SPENDING", "BALANCE THE BUDGET", "LOWER TAXES." Democrats say, "WE CAN'T CUT PEOPLE OFF", "WE CAN ONLY BALANCE THE BUDGET WITH HIGHER TAXES."
Denial leads us to believe that spending cuts will result in smaller government, lower taxes and less debt. Spending Cuts and smaller government are euphemisms for laying off more people. In almost every business enterprise, payroll is the single largest line item in the annual budget. If you don't spend money on education, teachers and administrators get laid-off and our children are less prepared to take over when their turn arrives. If you don't fund police and fire departments, people get laid-off, criminals go unstopped and houses burn. If you don't fund public transportation services, people get laid-off and others can't get to work.
If Medicare and Medicaid are not funded, people who are sick and injured do not get adequate treatment, they suffer as the result, and some die. If you want to talk about Death Panels in the health care legislation, all you have to do is look at who wants to limit spending on Medicare and Medicaid. We can all support less fraud and unnecessary procedures and treatments, but first we need to figure out how to tell the difference.
We have gotten ourselves into a real pickle. When we could have been solving our future budgetary shortfalls during the last 50 years, we preferred to stay in a state of denial and do little or nothing to avert this financial crisis. Now we are called upon to pay for yesterday, when we were young. Roy Clark fans might remember his song...
Every year that goes by without proactive action to resolve our failures makes them that much more difficult to manage. There is a mathematical "point of no return" that we may have already reached. War cinema is full of the tales of the bomber pilot who insists on finding his target even as the Navigator tell the pilot, "Capt'n even if we reach our target, we won't have enough fuel to get back to the landing field." Everyone gets a misty distant look it their eyes as they realize this is now a suicide mission. The Captain and his crew can make that call for themselves, but we resent our leaders making that decision for all of us, especially when they are siphoning our fuel so they can get home.
No matter what we do, there will be a massive lack of jobs for Americans to do for at least a decade and we need to figure out how we will address that dilemma. Other populations have mitigated their unemployment problems with waves of emigration to America. Is it time for Americans to do the emigration? Only the most highly educated will be welcome in those countries.
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It is equally nonsensical to think that these people will some how disappear. They will be lined up to get every job that is offered anywhere. Some people will have an easier time of being proximal to such a job when it is open. Although these people will not eat as much or as often, they will eat. They will be visiting the Food Pantries, applying for "Food Stamps" and otherwise obtaining something to eat for themselves and their dependents. All of these sources of food do cost money. TINSTAAFL. Taxpayers and charitable givers will pay the cost to feed these people.
As we do right now with hundreds of thousands of low-income people, emergency rooms will serve the needs of families and individuals who cannot pay the cost of a physician's attention. Taxpayers and everyone who sees a doctor, enters a hospital or needs a prescription will be paying the cost of those visits.
Just refusing to provide income for people who have been laid-off will not make them more willing to seek replacement employment or employment at a reduced income. First there needs to be jobs to have. They need to be in the location where people need jobs and those jobs must pay a "living wage." In this case, a living wage must be enough so that tax funded services are not needed. Rent subsidy, food subsidy and emergency room medical services must not be needed as the result of the limited employment or the wage is not a living one.
Every month over 100,000 new eager people enter the prospective workforce. They are graduating high school, college and trade schools with the hope and expectation that they too will have a place in this economy. That number extrapolates to 1.2 million jobs per year. First we have lost 12 million jobs during the recession, then we add 1.2 million every year due to our maturing children. This means that we need to generate 3.2 million jobs per year over the next five years in order to recover to the 2007 employment levels. Meanwhile these unemployment statistics need to eat.
People without income can hope and pray that their health remains good. They do have opportunities to share a dwelling at a higher occupancy than is traditional. They cannot, though, share food.
Republicans say "CUT SPENDING", "BALANCE THE BUDGET", "LOWER TAXES." Democrats say, "WE CAN'T CUT PEOPLE OFF", "WE CAN ONLY BALANCE THE BUDGET WITH HIGHER TAXES."
Denial leads us to believe that spending cuts will result in smaller government, lower taxes and less debt. Spending Cuts and smaller government are euphemisms for laying off more people. In almost every business enterprise, payroll is the single largest line item in the annual budget. If you don't spend money on education, teachers and administrators get laid-off and our children are less prepared to take over when their turn arrives. If you don't fund police and fire departments, people get laid-off, criminals go unstopped and houses burn. If you don't fund public transportation services, people get laid-off and others can't get to work.
If Medicare and Medicaid are not funded, people who are sick and injured do not get adequate treatment, they suffer as the result, and some die. If you want to talk about Death Panels in the health care legislation, all you have to do is look at who wants to limit spending on Medicare and Medicaid. We can all support less fraud and unnecessary procedures and treatments, but first we need to figure out how to tell the difference.
We have gotten ourselves into a real pickle. When we could have been solving our future budgetary shortfalls during the last 50 years, we preferred to stay in a state of denial and do little or nothing to avert this financial crisis. Now we are called upon to pay for yesterday, when we were young. Roy Clark fans might remember his song...
Every year that goes by without proactive action to resolve our failures makes them that much more difficult to manage. There is a mathematical "point of no return" that we may have already reached. War cinema is full of the tales of the bomber pilot who insists on finding his target even as the Navigator tell the pilot, "Capt'n even if we reach our target, we won't have enough fuel to get back to the landing field." Everyone gets a misty distant look it their eyes as they realize this is now a suicide mission. The Captain and his crew can make that call for themselves, but we resent our leaders making that decision for all of us, especially when they are siphoning our fuel so they can get home.
No matter what we do, there will be a massive lack of jobs for Americans to do for at least a decade and we need to figure out how we will address that dilemma. Other populations have mitigated their unemployment problems with waves of emigration to America. Is it time for Americans to do the emigration? Only the most highly educated will be welcome in those countries.
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Wednesday, November 3, 2010
Euphemistic America
Are You a Euphemism?
I heard the presumptive Speaker of the House, John Boehner, say that now that the GOP is in control of the House, "we will be listening to America." I wondered exactly what he meant by Americans. Did he mean all Americans or just some subset of the population.
Throughout the 2010 mid-term election campaign interval we were pounded with the idea that Americans were over-taxed, not listened-to, and angry at how the government was intruding into their lives, wasting their hard earned money on frivolous things. Oh, the Pork! Oy, the debt! Argh, the jobs that went overseas and the bankers who got a bailout!
I think that both political parties listened to America but were focusing on different Americans. The GOP listened to what they define as an American. These are the folks who have it all and want to keep it. They must have everything they need because they do not feel that they should pay for anything else.
The GOPAmerican has an annual household income at least 3 to 5 times the poverty level. The income comes from a job because the money they have is in "hard earned dollars." The job comes with health insurance coverage for the family and has no upside limit, covers all pre-existing conditions and doesn't need psychiatric coverage because no one in a GOPAmerican family ever has a mental or behavioral challenge. The family house has a fixed rate mortgage and 50% free-equity. Every licensed driver in the GOPA household has access to a car or truck. Grand mother and granddad don't need that Social Security or Medicare because they saved enough over the last 30 years to have their private savings decimated three times and still have plenty to live on to a ripe old age.
If this sounds at all like you, then you are the Euphemism that Boehner and the GOP speak of. And he is going to listen to you.
Other Americans
There is another America that has Americans in it too. Those Americans have low income jobs. They work hard but need rent subsidy, food subsidy and emergency medical care at the ER because the job they have doesn’t include health insurance so that the employer can make good on the "lowest price guarantee." These Americans rent an apartment or house from someone who has a lot more money than they do. They might have one car but more likely a handful of transit passes. As we learned in the 2010 mid-term election, and as the result of a Supreme Court ruling, money has free speech. If you don't have enough money, you don't get heard.
Formerly GOPAmericans
People and whole families who used to be GOPA have found themselves speechless and unheard. They had jobs and health insurance, a mortgage and plenty of disposable credit. But due to their slackness and ineptitude, they find themselves looking in from outside at the patrons in the restaurant. They discover that the GOPA they counted as friends no longer want to associate with them. They have been shunned. Boehner will be listening to the GOPA not the Other Americans and former GOPA. He knows where the financial support will come from in the next election.
The mortgage will go unpaid when the jobless interval get to be too long. A GOPA bank will lose funds due to that slacker. A GOPA landlord will have to evict the deadbeats in order to preserve the right to do so and make room for someone else.
Business America
We all know that government doesn't create jobs, only private business does that. We have to make the environment conducive to business making money in order to have employment. This means fewer regulations, lower or no taxes, the ability to pay whatever wage the non-GOPA are willing to work for.
While business may create and supply jobs to America, many of them are directly funded by government money raised by taxation and borrowing. If we cut out all the government spending, who is going to pay for all that non-government employee government work?
The newly elected Republican House of Representatives will need to listen to more than just the Euphemistic America. If they forget about all the people who need food, shelter and medical services, the anger we allegedly saw in the 2010 election will be a lot more emphatic the next time. Hunger is motivational.
I heard the presumptive Speaker of the House, John Boehner, say that now that the GOP is in control of the House, "we will be listening to America." I wondered exactly what he meant by Americans. Did he mean all Americans or just some subset of the population.
Throughout the 2010 mid-term election campaign interval we were pounded with the idea that Americans were over-taxed, not listened-to, and angry at how the government was intruding into their lives, wasting their hard earned money on frivolous things. Oh, the Pork! Oy, the debt! Argh, the jobs that went overseas and the bankers who got a bailout!
I think that both political parties listened to America but were focusing on different Americans. The GOP listened to what they define as an American. These are the folks who have it all and want to keep it. They must have everything they need because they do not feel that they should pay for anything else.
The GOPAmerican has an annual household income at least 3 to 5 times the poverty level. The income comes from a job because the money they have is in "hard earned dollars." The job comes with health insurance coverage for the family and has no upside limit, covers all pre-existing conditions and doesn't need psychiatric coverage because no one in a GOPAmerican family ever has a mental or behavioral challenge. The family house has a fixed rate mortgage and 50% free-equity. Every licensed driver in the GOPA household has access to a car or truck. Grand mother and granddad don't need that Social Security or Medicare because they saved enough over the last 30 years to have their private savings decimated three times and still have plenty to live on to a ripe old age.
If this sounds at all like you, then you are the Euphemism that Boehner and the GOP speak of. And he is going to listen to you.
Other Americans
There is another America that has Americans in it too. Those Americans have low income jobs. They work hard but need rent subsidy, food subsidy and emergency medical care at the ER because the job they have doesn’t include health insurance so that the employer can make good on the "lowest price guarantee." These Americans rent an apartment or house from someone who has a lot more money than they do. They might have one car but more likely a handful of transit passes. As we learned in the 2010 mid-term election, and as the result of a Supreme Court ruling, money has free speech. If you don't have enough money, you don't get heard.
Formerly GOPAmericans
People and whole families who used to be GOPA have found themselves speechless and unheard. They had jobs and health insurance, a mortgage and plenty of disposable credit. But due to their slackness and ineptitude, they find themselves looking in from outside at the patrons in the restaurant. They discover that the GOPA they counted as friends no longer want to associate with them. They have been shunned. Boehner will be listening to the GOPA not the Other Americans and former GOPA. He knows where the financial support will come from in the next election.
The mortgage will go unpaid when the jobless interval get to be too long. A GOPA bank will lose funds due to that slacker. A GOPA landlord will have to evict the deadbeats in order to preserve the right to do so and make room for someone else.
Business America
We all know that government doesn't create jobs, only private business does that. We have to make the environment conducive to business making money in order to have employment. This means fewer regulations, lower or no taxes, the ability to pay whatever wage the non-GOPA are willing to work for.
While business may create and supply jobs to America, many of them are directly funded by government money raised by taxation and borrowing. If we cut out all the government spending, who is going to pay for all that non-government employee government work?
The newly elected Republican House of Representatives will need to listen to more than just the Euphemistic America. If they forget about all the people who need food, shelter and medical services, the anger we allegedly saw in the 2010 election will be a lot more emphatic the next time. Hunger is motivational.
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