Tag Archives: Capitalism

America’s Vision of Prosperity

I’m pretty sure this explains a lot.  And why I’m continually surprised by conversations that I have with people out and about.  America is changing how she views the path to prosperity and security.

53% of democrats have a positive image of socialism.  While I’m sure few respondents don’t have an accurate definition of the word socialist or socialism, the idea is the same; “Someone else labors to my benefit.”

 

More On The Laws Of Economics

I’m reading an article for an upcoming post when I came across this:

We have a shortage of every kind of doctor, except for plastic surgeons and dermatologists.

It strikes me that plastic surgery and dermatology are both examples of medical “care” not subject to insurance and the accompanying government regulation.

And the prices of plastic surgery?

 

From the report:

Cosmetic surgery is one of the few types of medical care for which consumers pay almost exclusively out of pocket.  Even so, the demand for cosmetic surgery has exploded in recent years.  According to the American Society of Plastic Surgeons, 1.7 million cosmetic surgical procedures were performed in 2008.  That is more than 40 times the number performed two decades ago (for example, 413,208 in 1992).

Despite this huge increase, cosmetic surgeons’ fees have remained relatively stable.  Since 1992, medical care prices have increased an average of 98 percent. The price of physician services rose by 74 percent.  [See the figure.] The increase in the price of all goods, as measured by the consumer price index (CPI), was 53 percent. Yet, an index of cosmetic surgery  prices only rose only about 21 percent. Thus, while the price of medical care  generally rose almost twice as fast as the CPI, the price of cosmetic surgery went up less than half as much. Put another way, while the real price of health care  paid for by third parties rose, the real price of self-pay medicine fell.

When exposed to the free market, commodities and services will respond with cheaper prices and higher quality.

“You Didn’t Build That” – Out Of Context

Obama is taking a lot of heat for his comments in Virgina.  It was in that speech that he made the now infamous, “If you have a business, you didn’t build that.”  The republicans are going crazy with the clip, using it in every ad they can put on TV or the radio.  They’ve got it on Facebook and Twitter.  Obama saying that business owners didn’t build “that.”

And the left is going nuts over context.

First, I’ve always said that the remark IS out of context.  The president clearly was referring to roads and bridges when he mentioned “that.”

Second, this is politics.  These same people who are now fainting over context were no where to be seen when Romney was quoted as saying, “I like to fire people.”  No one was complaining about context when Romney’s comments on self-check out lines was doctored.  It is what it is.

Third, and this is the biggie for me, Obama BELIEVES the message that the republicans are pushing in the out of context quote.  Two months ago, if you were to ask Obama if he felt that businesses were built by their owners or with help from the government, he’d tell you that of COURSE it was built with the help of the government.  Heck, he’s saying that in the speech.

So, here are his remarks:

THE PRESIDENT:  Well, first of all, like I said, the only way you can pay for that — if you’re actually saying you’re bringing down the deficit — is to cut transportation, cut education, cut basic research, voucherize Medicare, and you’re still going to end up having to raise taxes on middle-class families to pay for this $5 trillion tax cut.  That’s not a deficit reduction plan.  That’s a deficit expansion plan.

I’ve got a different idea.  I do believe we can cut — we’ve already made a trillion dollars’ worth of cuts.  We can make some more cuts in programs that don’t work, and make government work more efficiently.  (Applause.)  Not every government program works the way it’s supposed to.  And frankly, government can’t solve every problem.  If somebody doesn’t want to be helped, government can’t always help them.  Parents — we can put more money into schools, but if your kids don’t want to learn it’s hard to teach them.  (Applause.)

But you know what, I’m not going to see us gut the investments that grow our economy to give tax breaks to me or Mr. Romney or folks who don’t need them.  So I’m going to reduce the deficit in a balanced way.  We’ve already made a trillion dollars’ worth of cuts.  We can make another trillion or trillion-two, and what we then do is ask for the wealthy to pay a little bit more.  (Applause.)  And, by the way, we’ve tried that before — a guy named Bill Clinton did it.  We created 23 million new jobs, turned a deficit into a surplus, and rich people did just fine.  We created a lot of millionaires.

There are a lot of wealthy, successful Americans who agree with me — because they want to give something back.  They know they didn’t — look, if you’ve been successful, you didn’t get there on your own.  You didn’t get there on your own.  I’m always struck by people who think, well, it must be because I was just so smart.  There are a lot of smart people out there.  It must be because I worked harder than everybody else.  Let me tell you something — there are a whole bunch of hardworking people out there.  (Applause.)

If you were successful, somebody along the line gave you some help.  There was a great teacher somewhere in your life.  Somebody helped to create this unbelievable American system that we have that allowed you to thrive.  Somebody invested in roads and bridges.  If you’ve got a business — you didn’t build that.  Somebody else made that happen.  The Internet didn’t get invented on its own.  Government research created the Internet so that all the companies could make money off the Internet.

And now, finally, the press is getting around to going after Romney over the context of the quote that he’s using.  And his response?  Just like I’ve been saying.

LARRY KUDLOW: “Why do you think President Obama, what did he mean, if you’ve got a business, you didn’t build it, someone else made that happen? He claims it’s being taken out of context. What do you think it means? Do you think this is Obama anti-business, anti-entrepreneur? Or do you think maybe he has been treated unfairly?”

GOV. ROMNEY: “Well, just read the whole speech. I found the speech even more disconcerting than just that particular line. The context is worse than the quote. The context, he says, you know, you think you’ve been successful because you’re smart, but he says a lot of people are smart. You think you’ve been successful because you work hard, a lot of people work hard. This is an ideology which says hey, we’re all the same here, we ought to take from all and give to one another and that achievement, individual initiative and risk-taking and success are not to be rewarded as they have in the past. It’s a very strange and in some respects foreign to the American experience type of philosophy. We have always been a nation that has celebrated success of various kinds. The kid that gets the honor roll, the individual worker that gets a promotion, the person that gets a better job. And in fact, the person that builds a business. And by the way, if you have a business and you started it, you did build it. And you deserve credit for that. It was not built for you by government. And by the way, we pay for government. Government doesn’t come free. The people who begin enterprises, the people who work in enterprises, they’re the ones paying for government. So his whole philosophy is an upside-down philosophy that does not comport with the American experience. And if we want to get people working again–and that’s my priority–if we want to get people working again, we have to celebrate success and achievement and not demonize it and denigrate the people who have worked hard, who are smart, who have made the kinds of investments to build a brighter future.”

The context of the quote is worse than the quote.  Obama’s using the success of the business owner as a lever to force him to pay more taxes.  And he hides behind “they wanna give something back.”

You Didn’t Build That

More and more Americans are waking up to the core beliefs this man has.  He’s a big government statist.  He thinks he can spend your money better than you.  And he believes, honest to God believes, that government builds people and not the other way around.

Each one of these people represents a qualification of leadership and accomplishment that he doesn’t.

Building Codes: Free Market vs. Regulation

So many times you hear the right rail against government regulations as being too tight, too restrictive and representing too large a burden.  We complain that over regulation leads to less risk taking and can dampen growth and creating of companies, products and jobs.

On the other hand, the left will jump up and point out that we all love clean water, fresh air and safe cars, medicines and food.  Without regulation, the saying goes, evil greedy corporations will just do whatever they want in the name of profit.

I suspect that there’s validity in  not just one side, but both.

Take, for example, the case of the BP oil spill in the gulf a number of years ago.  The government regulates oil rigs and mandates certain safety equipment in order to eliminate or reduce the chance of spills.  However, the government isn’t in a place to be experts in oil rig or deep water drilling technology.  Further, the government agencies are subject to politics, lobbying efforts and corruption.

We saw that very problem with the agency charged with developing those safety standards.

Next, take California.  California requires that every house constructed have a sprinkler system installed.  The argument, “certainly homes are safer.”  But no one knows by how much and if the cost of building more expensive homes is worth the gain.  If taken far enough, government regulations can rise the cost of housing far above what an average person can afford.  The very real world examples of this are the land use restrictions found in cities around the country.

But, back to regulating safety.  Is it radical to suggest that people should decide how safe they want to be?  Or, put another way, can we trust individuals to conduct their own cost/benefit analysis?

If so, I would suggest that private industry competing for customers and profit, would solve the solution the best way.  And that method?

Insurance:

CHESTER COUNTY, S.C. —

Hurricane-force winds hit 136 miles an hour inside a massive wind tunnel in Chester County.

105 powerful fans were aimed at two masonry buildings set up to look like small businesses, or a strip mall. The two buildings took a tremendous beating Tuesday.

The two cinder block buildings look identical on the outside, except for their color.

One building is built with a better roof, including reinforced flashing and stronger materials. It also has more rebar running down the block walls and tied together in the corners.

The other building is constructed in the common way most similar structures are built.

During the first test, 95 mile an hour winds pound both buildings. The commonly built structure loses the flashing and part of the roof.   A second test pumps the winds to above 130 miles an hour.  Within minutes, the outer wall of the common building buckles and falls outward, sending pieces of concrete block everywhere. At the same time, the roof shifts as well.

The reinforced building has no visible damage except for a broken front picture window where a two-by-four was shot out of a cannon to simulate flying debris in a storm.

Advanced techniques, both in building and then in testing were undertaken to determine how best to design and construct a stronger more tolerant building in the face of severe weather.

And who conducted this test?  Government regulators?  Not at all:

Julie Rochman heads the Insurance Institute for Business and Home Safety.  Funded by a large group of insurance companies, the group runs a test facility unlike any other in the world.

The implications of this test?

A large crowd of reporters, photographers and insurance and building executives were on hand to watch the power-packed artificial storm.

One of them, Mark Pizzi, is president of Nationwide Insurance.  He flew in from Ohio for the event.  Pizzi said twenty-five percent of small businesses destroyed in a disaster never reopen.

He hopes this test can change that down the road.

“I look at it this way. This test today is about business, staying in business,” he said.

And as a result, the industry advanced the methods of construction and did so in a way that makes sense:

Rochman said the better roofing materials on one of the test buildings only cost about $150. The whole building, which survived the powerful winds virtually intact, cost only $3,000 more to build.

And the whole reason is profit.  The endless desire to make more money.  On one hand, insurance companies now have a better way to conduct risk analysis on the buildings they insure.  Those that are unsafe will be charged a higher rate, those that are built to the new suggestions; a cheaper rate.  But more than that, the insurance companies hope to save money directly:

Rochman told Channel 9 that the education coming out of these tests is having a strong influence on the construction and insurance industry.  The goal, she said, is to prevent loss.

It turns out that insurance companies don’t like the buildings they insure to blow away in the wind.

Problem solved.  And Obama didn’t build that.

 

Obama: Government Invented The Internet

You might have heard by now that Obama gave a speech in Virgina.  And in that speech he made a statement.  He made a statement that individuals can’t claim credit for their successes.  Rather, they must acknowledge that what they have labored to craft is the result of the collective.  And, more importantly, that leading the way is the government.  After all, it invented the internet.

Right?

Maybe not.

Most people give credit to the invention of the internet to ARPANet, a DOD agency.

The Advanced Research Projects Agency Network (ARPANET) was the world’s first operational packet switching network and the core network of a set that came to compose the global Internet. The network was funded by the Defense Advanced Research Projects Agency (DARPA) of the United States Department of Defense for use by its projects at universities and research laboratories in the US. The packet switching of the ARPANET was based on designs by Lawrence Roberts of the Lincoln Laboratory.

But did ARPANet really invent the internet?  Not so fast say some:

In February of 1966 I initiated the ARPAnet project. I was Director of ARPA’s Information Processing Techniques Office (IPTO) from late ’65 to late ’69. There were only two people involved in the decision to launch the ARPAnet: my boss, the Director of ARPA Charles Herzfeld, and me.

Numerous untruths have been disseminated about events surrounding the origins of the ARPAnet. Here are some facts.

The creation of the ARPAnet was not motivated by considerations of war. The ARPAnet was not an internet. An internet is a connection between two or more computer networks.

-Bob Taylor

Interesting.

But if ARPANet didn’t create the internet, who, or what, did?

On further analysis we come up with at least five distinct theories, each of which can be credibly discussed. We state from the beginning that we do not personally see the theories as mutually exclusive – we have for many years believed in a multiple origins theory rather than a single point of invention one.

But the theories which need to be examined are:

1. Packet switching represents the origins of the Internet
2. The TCP/IP protocol represents the origins of the Internet
3. A range of telco-led activities from the 1960s represents the true origins
4. The birth of the Internet is best explained through a history of applications rather than the protocols
5. The range of inventions and activities emanating from Xerox Palo Alto laboratories, including Ethernet, represent the true beginnings.

All five theories are interesting.  Personally, I find theory 1 and 3 the most compelling with theory 3 possibly encompassing theory 3 almost completely.  Digital transmission and switching was accomplished in 1962, seven years before ARPANet claimed that accomplishment.    Further, the languages of the internet, C and Unix, were developed not by ARPANet but by AT&T.

Who knew?

In any event, what we CAN conclude is this:

So then, where and when did the Internet begin? The only thing historians seem to agree on is that it was not 1969, or the Pentagon, (or for that matter Al Gore). From there on, there is a wide divergence of views as to when, where, and by whom the Internet may have been invented.

Contrary to what Obama would have you believe, it wasn’t the government that created the internet, it was individuals engaging in business that invented the internet.

Obama’s View Of Government And Business

It’s long been a narrative that Obama doesn’t like the free market.  Titles such as socialist and statist have been thrown at him.  Pages and pages have been written that Obama is a lover of big government, more regulations and higher and higher taxes.  He’s been a target for not understanding how the economy, or even just business, really works.

He’s had to fight the continual drum beat from the right that he’s not friendly to small business and prefers the government to provide.  That’s he’s anti-capitalist and more for ideals of fairness and equality for all.

But I have to ask you, if you owned your own business, worked hard to get it to where it is today, sacrificed soccer games, vacations and new cars.  Set aside the addition to the living room or gave up on the new boat, how do you think you’d feel if you heard this:

You didn’t build that, somebody else made that happen.

 

More Free Market Airline Style

I’ve mentioned in the past that the airlines are employing some unique methods in order to raise additional revenues while protecting passengers who may not wanna take part in higher fares.

One of those examples is paying extra for prime seats.  For example, I’ve pointed out that some airlines are experimenting with charging folks extra for aisle and window seats.

Personally, this makes great sense to me.  I absolutely LOVE not sitting in the middle seat and am willing to pay money not too.  Others, however, are not willing to pay additional fees in order to travel and are thus more than happy to trade a middle seat for money.

We all win.

Well, here’s another example:

…according to a survey by Airfarewatchdog.com, a fare-tracking site that found 16% of respondents were willing to pay to be at the front of the line when their flight lands. Of that group, 10% would pay $10 and 3% would pay as much as $20.

I’m traveling again this week and the example below really happened to me:

An early exit can also give fliers more time to make their connections. Airlines have gotten better at getting passengers to their destinations on time. In the first four months of this year, major U.S. carriers had an on-time arrival rate of 84.54%, their best performance for that period in 18 years, according to the Transportation Department’s Bureau of Transportation Statistics.

But even if their flight’s not delayed, passengers often have little cushion to make a connecting flight. Paying a few more dollars to be first off the plane could be an advantage, Hobica says.

I had one hour to get from my flight to my connection.  It appeared we were gonna be late and I’d rather have the extra time by being in front of the plane rather than in the back.  In this case, I didn’t have to pay extra [I would have], but I DID have to trade an aisle seat for a middle seat.  But I saved 17 rows.  And at 6 people per row, that’s a  lot of time.

Personally, I’m all for these free market measures that airlines use to spread the cost of flying to those who want the extras.

Grocery Barons: If Medical Care Delivery Were Like Food Care Delivery

Just got back from the grocery store.  It was 11:10 PM here in North Carolina.  I just finished working out at the YMCA.  I stopped to have a bite to eat and a beer at the local tap room and then decided I needed to pick up some things from the food store.

It was open.  Would be until tomorrow; they sell food 7×24.

The place was well lit, air conditioned and pleasant.  Music even.

Imagine, a warehouse that sells virtually anything you could wanna eat.  7×24.  On your way home.

Then I saw this:

Biscuits and eggs.  Taters and juice.  This would last my family of 4 two whole breakfasts.  That means for $6.99 I feed 4 people twice.  Or, if you carry the 1, eight people for seven bucks.

That’s less than $1 a meal.

Can you imagine what it would be like if we could sell medical care like we sell food?

Capitalism: What It Is Not – Wage Theft

Capitalism Is Evil

I often hear how capitalism is a system that rewards the greedy.  That by use of it, corporations enslave their workers, funnel money from the poor and working class to the rich.  The continuous chants against the system grew especially loud during the growth of the #OccupyWallStreet movement.

To be sure, there are people in this world that have “more.”  There are folks who have become very wealthy at the same time other folks struggle to put food on the table or a roof over their head.  And it’s tragic.  However, when faced with conditions of inequity, it’s an easy escape to simply fall back and blame the system.  Even our President falls victim to that trap.  He’s continually castigating the wealthy, railing against the system and calling for capitalists to distribute their wealth.

We Support Individual Liberty

The concept of  individual liberty, the idea that there are certain rights that flow to each of us from either the divine or form nature, is fundamental to the concept of the market.  It is the bedrock that forms the basis for the system that best produces optimal results.  When a man is free he will labor for his own self-interest, he will trade with another in order that his lot becomes better than it otherwise might have been.  From the concepts of liberty and inalienable rights comes the concept of the right to property.  It is where these values, these beliefs are most held in high esteem that we find the society rich and successful.

And so it must be that we protect the right of liberty and of property.  That when one man produces wheat, that wheat is his own.  To keep, plant, eat, hoard trade or sell.  If a man becomes skilled in building a house, the property that he acquires as a result is his to dispose of as he desires.  In order to protect that liberty, that property, we erect and enact laws preventing fraud and abuse.

And where those cases involving fraud are found, they are properly seen as diametrically opposed to liberty, to the rights of property; to capitalism itself.  The unlawful seizure of another man’s labor that is the OPPOSITE of capitalism.  It is NOT the desired state of it.

Wage Theft In North Carolina

When two individuals enter into agreement, or contract, we expect that contract be enforced.  If you agree to sell me milk in exchange for money, I expect a gallon of fresh milk and you the appropriate sum of money.  Perhaps I trade you corn for your milk.  You would properly expect me to provide a bushel of corn.  Should either of us try to break that contract, say I by adding stones to the wheat basket or you by adding water to the milk, we would be perpetuating fraud.  We would be acting AGAINST the tenants of capitalism, of individual liberty.

And milk and corn are not the only commodities that are available to us to trade.  We are also able to trade our labor.  Commonly we call this a job.  We agree to trade our labor, our expertise our skills in exchange for compensation.  So it is that when one of us breaks that bargain, that contract is broken and again, fraud has been perpetuated:

WASHINGTON — – For nearly a year, unemployed home health worker Leslie Gilbert of Grand Rapids, Mich., has fought to get more than $400 in unpaid wages from her former employer.

After months of promises that the money would be in her “next paycheck,” Gilbert filed a complaint in October with the state. Officials told Focus Care Home Health of Southfield, Mich., to either pay Gilbert by June 1 or face a formal hearing.

Gilbert still doesn’t have her money.

I can see the protests in the street, “Corporations are evil and greedy!  Capitalism is the root of all evils.”  But this isn’t a fair account of the market, a free exchange of commodities or an example of freedom, or of liberty.