Finding the Leaks

By nature, I’m a capitalist. I believe in a free-market where low prices are the result of competition and free trade. I believe that businesses – not the government – should be the driving force behind the redistribution of wealth; that employees benefit from higher wages that result from profitable business; that customers benefit from competitive pricing; and that ancillary industries such as shipping, consulting, and constructing benefit from business growth. I think employees and employers can find a natural balance between living wages and a good day’s work without government intervention. In short, I believe that solid business growth helps everybody – and that greater restrictions by the government hurt businesses more than they help them. I believe that all of these things work perfectly – right up until the point that they don’t. We’ve reached that point. 

Somewhere in the system, we have a leak that has corrupted the natural flow of money. If money is blood, and the economy is our circulatory system, we’re hemorrhaging somewhere and it’s hurting the entire system.

So where are the leaks?

1. The Government. Let’s give the conservatives a nod and agree, to some extent, that the growth of the government under the Bush administration has siphoned a great deal of money out of the system. Earmarks and pork account for $18 billion, but this is the equivalent of less than two months of fighting in Iraq. It costs the American taxpayers an average of $10 billion per month to continue this war, and we’re no better off than we were five years ago. The middle east is less stable than it was when we invaded, and we’re no safer from the terrorists than we were in 2003. Regional instability and a substantial increase in demand have caused oil prices to skyrocket. It’s time to shit or get off the pot.

2. Cost of Living. Let’s give one more to the GOP and confess that protecting the poorest among us has gotten more expensive. Republicans may argue that laziness and a poor work ethic are to blame for the crisis of the working class, but I would suggest that the working class is the first to feel the impact of a drop in our economic blood pressure. Substantial increases in the cost of basic needs such as gas, health care, housing, and food have paralyzed our working class. These industries are showing record profits, while small businesses are dying because the working class no longer has a disposable income.  The poorest among us need only one small crisis – perhaps a broken arm or a broken car – to thrust them permanently into poverty.  Like a million little paper cuts, people in poverty create a one-way economy. They take, but cannot return. If our answer is to blame them for their own demise, they will drag us down with them. Without government assistance to alleviate or offset fuel prices, health care costs, mortgage payments, or the cost of food – we will permanently paralyze a growing poverty class.

3. Banking. To whatever extent, we’ve lost a lot of money to the banking industry. If we need to infuse $750 billion dollars into the system, it’s because somebody (or lots of somebody’s) got rich. This may or may not be a short term problem (maybe more like a sudden nosebleed than an open gash), but it sure doesn’t help.

4. Energy. Now we’re getting closer to the root of the problem. We are hemorrhaging cash to the tune of $700 billion dollars every year. Many argue that offshore drilling is a great solution, and it is – kind of – in the same way that stumbling upon a bottle of prescription painkillers is a great solution for a pill-popping junkie. Our nation doesn’t need new sources of oil as much as is needs new sources of energy. We’ll always need oil for things like plastic and other petroleum based products, so let’s reserve our domestic production for these things, rather than creating a direct pipeline to our gas tanks as a short term fix.

5. Greed. Look, I’m in favor of working hard to make lots of money. I get it. I support it. I love it. But we live in a nation where 10% of us own 70% of the common wealth. That leaves 30% of our common wealth for the remaining 90% of us. It’s here where we start to see that capitalism often works better on paper than it does in reality. Instead of creating a fluid system where money circulates evenly throughout the system, we’ve allowed a disproportionate amount of our resources to pool somewhere within the system. I’m not saying that we need a 1% to 1% solution, but I’m not shy about using taxes as a way to stimulate the economy.  If we don’t artificially pump some of this money back into the bloodstream, we’re risking a lot more than just losing a philosophical argument about punishing people for their success.

So what’s the answer? If we are to achieve the sort of free-market fluidity that allows all Americans to prosper through hard work, we need to make some tough decisions:

1. Shit or get off the pot in Iraq. Our hesitance to withdraw is based on a very realistic fear of the repopulation of terrorists in Iraq, so let’s kill the Hydra instead of watching two heads grow back for every one head we kill. Hint: the Hydra isn’t in Iraq.

2. Tax the rich. Sorry folks, I know how hard you’ve worked to earn all of that money, but it’s time for everyone to make patriotic sacrifices. Don’t think of it as punishing your success, think of it as planting seeds for a healthier crop of customers. Without them, you’ll eventually be one of them.

3. Phase out domestic oil as a source of fuel, and phase in renewable energies. Sun and wind and water are free – so let’s rebuild our economy by capitalizing on these free resources. Our growth in this century won’t be driven by fossil fuels, but by major investments in green technologies that we can export all over the world. No other country is better positioned than us.

Well, at least it’s a start. We’ve got to fix the leaks before we can fix the system.

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10 responses to “Finding the Leaks

  1. great post! I am really enjoying your input on politics and the election lately, and this piece was no exception.

    pacer521
    http://culturedecoded.wordpress.com/2008/10/25/the-race-factor/

  2. 1.) Get out of Iraq- 2/3rds of Iraq has been restored to Iraqi control… we are getting out. Say what you want about the beginning of the war, but as of right now, things are going great over there.

    2.) Tax the rich- What is it with you guys and believing that the rich need to pay higher taxes? THAT DOESN’T BOOST THE ECONOMY! The rich Create jobs!!! Why do we have a stimulus? What difference does it make if the middle class are getting the tax credit or not, it accepts the notion that more disposable income develops a stronger economy. Thank God for the rich! Because without them whose hiring for low wage jobs such as landscaping? Whose building more factories, creating more white collar jobs…. THE RICH! They can have all the money they want, because it creates more jobs and more revenue to the government. I’m not saying they should get a tax credit, but they should be able to keep more of the money they earn, same with everybody! The bottom 40% don’t have to worry because they don’t pay any income tax anyway! The Democrats tax and spend doesn’t try to elevate people who are on the lower end of the scale to reach the higher level. What they’re going to do is take away from everybody above and ‘redistribute’ that so that everybody will be equal. Your life is not going to change, but a lot of other people’s will change and they will be brought down to your level. See what people are saying when they find out change does not mean that their own economic circumstance improves. Its Communism, don’t champion as a free marketer when your not. Its ignorance.

    3.) They don’t say how many years it will take to replace all the existing less efficient cars. We have 250 million-odd cars on the road. I don’t know how many we sell every year, ten, 15 million. I’m guessing. But at that rate you can forget 2012, the 13-year illusion. It could take 20 or 30 years to get all those cars off the road, especially if people end up liking them versus the junk that’s going to come out getting 35 miles per gallon….. anyways look, we’re all for alternative energy. We being conservatives. Nobody opposes alternative engery. Nobody! What we oppose is having to pay more for alternatives. If you can make a solar car, wonderful. Invest in more alternatives? Of course! But why can’t we drill. Libs just circle around, “Well thats just a short term fix”, uh okay yeah and we have a short term problem. If we want dependency drilling on our own soil is the only route that we KNOW will help. The others are purely investments hoping make it big. Thats fine, invest, invest, (with what money who knows) but at the same time lets start drilling!

  3. Socialism does not work on its own.
    Capitalism does not work on its own.
    There needs to be a balance.

    Virtually every country on the planet understands this. On the other hand, Americans have found themselves stuck in a situation where any mention of any tax is labeled “Communistic” and “Marxist.”

    This type of reaction is a knee-jerk, ignorant, and cowardly response to approach a serious economic problem.

    Karl Marx is not someone we should be afraid of. Mikhail Gorbachev is not hiding in your closet waiting to steal your religion, kill Nancy Reagan, and rape your poodle of its freedoms.

    Let’s get real. Let’s grow up. Let’s realize that our problems do not lie in commie pinko subversion, but rather in the natural human nature of greed. Just ask Senator McCain and he’ll tell you that was the exact reason he voted for the bailout.

    I’m proud to pay my taxes. Furthermore, I’m proud to live in a country that believes we should all pitch in and-GASP!-spread the wealth.

  4. Every other country on the planet understands it?

    The United States is the greatest, richest country on earth because we don’t “understand” it I guess.

  5. By the way, not every country agrees with Karl Marx.

    Ireland has been listed as the best place in the world to live. They also tax their “rich” at 11%.

    Hmmm….

    You offer no logic to your response other than “Marx is not someone to be afraid of”. Go move to China where they shit in the streets instead of picking up Joe Biden talking points you pile of crap. If the other countries have such a vast knowledge of our economy why don’t you go there instead of tear down our CAPITALIST nation that happens to be the richest in the world, greatest nation on earth. That is until Ireland passes us up.

  6. By the way Anderson, don’t misunderstand my earlier comment, I think this was a great post…

    I was just giving an alternative to your “fixes”. But I mostly agree with you.

  7. The Republicans also believe in redistribution of wealth. The evidence? Look at what has happened over the last eight years. The rich have gotten much richer, the poor even poor and the middle class is disappearing.

    I have long believed that what makes America great is our large middle class. These are generally W2 employees who work hard, try to give their children a future, while still enjoying their achievements with cars and houses and movies and so on.

    The job losses being reported come at the expense of the middle class and often while the CEO are paid millions and the stockholders and investment bankers demand more. A relative of mine at a high level in a health care company told me that in his discussing the company’s result and their long term capital plan with investment bankers was told directly that they don’t give a damn about the long term, only the next quarter. That company was bought out by another smaller health care company and all of their workers, including my relative laid off.

    It is what my friend J Stat refers to as trickle down economics. “The rich provide the jobs, not the poor.” The Laffer Curve or as some of us educated as economists call it the Laughter Curve.

    Take Capital Gains for example. It is taxed at 15% So someone who makes their living on trading assets (including stocks) pays less as a percentage than many middle class workers who pay 7.65 % just in FICA and Medicare plus another 20 to 25% in income taxes.

    McCain screams about wealth distribution but in the same breath wants to lower Capital Gains tax more. How is lowering taxes for all below $200K and raising it on those above more of a redistribution than offering the most wealthy more tax breaks?

  8. Spreading the wealth does not create jobs. Prove me wrong!

    FYI: The Middle class is shrinking, yet the upper class brackets have grown. I wonder what is happening…

    The poor get poorer because, at least the vast majority of them, are still doing the same things to get them poor to begin with.

    You moan about investors, you could become an investor anytime you want.

    The difference is spreading the wealth socially takes away money earned from one class to give to the class at the bottom. When that happens the class that earned it doesn’t grow, and the class at the bottom can only grow as far as the earned class can give them. Eventually, everyone becomes equal. (hmm..) Your redistribution argument, is that those who have earned millions are not entitled to those millions. Right…

  9. But I have a huge problem with your argument that the poor get poorer because they are doing the same things that got them poor to begin with. Sometimes what got them poor to begin with was something beyond their control. Have you ever read Ruby Payne’s “A Framework for Understanding Poverty”? I would highly recommend that you do.

  10. (I said this in another post as well)

    The facts are in the Bush years, as opposed to the Clinton years, the middle class, the upper class they are both stronger and fuller than they have ever been at any time in the last 20 years. There are less people below the poverty line then in the Clinton years. That’s a fact. Now the people who ARE below the poverty line are truly struggling, I agree.

    BUT I would much rather there be more people in the middle and/or upper class than more people below the poverty line, and no system is perfect. And furthermore, redistribution of wealth in terms of socialism has never worked, will never work, and only makes things worse. Herbert Hoover rose taxes, it didn’t work. FDR, didn’t work (before WWII). Eisenhower, he did basically nothing with taxes. JFK wanted to cut taxes. LBJ rose taxes failed. Nixon didn’t do anything significant, Ford did nothing, and Carter rose taxes. Notice every president who rose taxes (Bush 41 as well) made the economy worse. The economy improved only when taxes were CUT! When Reagan came in he said okay this top bracket which we’re taxing at SEVENTY PERCENT, this has to come down. He brought it down to 28. He brought the RICH taxes down to 28. And wealth skyrocketed, we had the longest peacetime economic growth in American History.

    Bush 41 rose taxes under Democratic pressure, led to a recession. Bill Clinton rose taxes, and the economy kept sinking. It wasn’t until the conservative revolution in 1994 that forced Clinton to drop CAPITAL GAINS taxes that the economy at last began to grow at a strong pace, and Clinton left office at the beginning of a recession with a horrific national security infrastructure.

    The point here is socialistic policies DO NOT WORK. and Obama is submitting the ultimate NEW DEAL 3 that will be the greatest socialist surge in policy, that will only make things worse.

    THink of it this way also, Obama wants to give those who pay NO INCOME TAXES a tax REBATE for 2,000 dollars. Thats an extra 0.94 cents an hour. Do you think that those below the poverty line, do you think 2,000 dollars suddenly brings them above the line? It doesn’t! It puts a ceiling on what they can achieve, it crushes the creation of jobs, all for an extra dollar an hour!

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