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Tag: Capitalism
The Legacy of Fidel Castro
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Let’s Celebrate Capitalism
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Inequality in America V – Putting it All Together
Surprising answers to questions about inequality in America
By: George Noga – May 29, 2016
Even socialists agree inequality from newly created wealth (even massive wealth a la Gates and Jobs) is an unalloyed benefit to society because it is the best metric for how well an economy is innovating, becoming more productive and responding to the needs of all people. Inherited wealth is mostly dissipated in a few generations, heavily taxed and often used charitably. Last, if Social Security and Medicare benefits were capitalized and included in wealth measurements, inequality would plunge markedly. At the outset of this series, I promised to explore and to answer many questions about inequality in America based on facts and logic. Following are the answers.
It is nigh impossible to get an accurate picture of inequality of income due to deeply flawed statistics based on AGI and household income, inconsistencies between income cohorts and flawed comparisons that don’t track the same people over time. One conclusion is certain. Accurate data would show much less inequality of income. Progressives oppose disparity in pay between CEOs and workers but are okay with similar clefts for athletes and movie stars. Steve Jobs took a nearly bankrupt Apple and created $750 billion of value; he made $2 billion, or 0.27%; was he overpaid?
Data based on spending shows sharply less inequality; the lowest income cohort spends $2 for each $1 of income. There is no inequality based on taxation (including payroll taxes) as America has one of the most progressive tax systems in the world. Nor would a $15 minimum wage reduce inequality; less than 1% earn the minimum and their average household income is $50,000. Young, poor, minorities and the unskilled are harmed by minimum wage laws. The truly poor need jobs not a higher minimum wage. Progressives claim a moral imperative to increase the minimum wage knowing aforehand it creates unemployment. Where is the morality in that?
The chasm between reality and rhetoric is wide. All measures of inequality, Gini, Theil and MLD, are markedly worse under Clinton compared to Reagan and under Obama versus Bush 43. Inequality is fueled by progressive policies including: (1) tepid economic growth; (2) higher taxation; (3) opposition to school choice; (4) energy policies; (5) ObamaCare; (6) opposition to trade; and (7) spending, debt and deficits. It is progressive dogma that creates inequality despite its self righteous rhetoric.
All metrics show less inequality in Europe; however, we must ask if that is a good thing or a bad thing. Many Europeans lead lives of quiet desperation with no economic mobility and a permanently moribund economy; they even refuse to reproduce or to defend themselves. Europe produces no innovations in electronics, software, drugs or even pop culture. The former USSR would have scored favorably on measures of inequality as does Botswana; where everyone is poor, there is no inequality. The Gini coefficient for happiness in America is the highest in the world; that says it all!
There are some things we should do to reduce inequality. Foremost is to stop corporate welfare as wealth created by government is illegitimate. Too big to fail needs to be eliminated as this is but another form of government largess. Capitalism must be based on both the carrot and the stick. Most Americans understand and accept inequality created by the marketplace; their beef is with government playing favorites.
At its beating heart, inequality is mostly an imaginary problem. The vapid dogma of progressivism is incapable of solving real problems; therefore, it creates a series of phony problems for political maskirovka. As demonstrated in this series, progressives have created the very inequality they now hypocritically rail against. In sum, inequality in America is not a serious problem except when created by government.
The next post June 5th entitled “Hurricane Warning” is particularly pithy.
Titanic Myths Debunked
Sinking Was 102 Years Ago Today
By George Noga – April 15, 2014
By George Noga – April 15, 2014
Although Titanic sank 102 years ago today, many myths survive intact. Everyone knows the impact with the iceberg sank the ship, but that was not the cause of the death of 1,513 souls. Books and movies (including the DiCaprio film) lay blame on the greedy capitalism of White Star Lines for not having enough life boats. This is myth. Another myth is that first class passengers received preferential treatment resulting in a much higher survival rate than for lower class passengers. Finally, was male aggression truly responsible for throwing women and children under the bus – – err, boat?
Myth #1: Capitalism and Greed Caused the Loss of Life
No one died when Titanic hit the iceberg; the deaths occurred much later when the ship sank. Historically, most have faulted White Star Lines for not having enough lifeboats – either because of their added cost or objections to their aesthetics. These accounts are either lazy, ignorant, dishonest or politically correct. The real cause was inept (is there another kind) government regulation by the British Board of Trade (“BOT”) that regulated shipping. The designer (Andrews), the builder (Carlisle) and White Star (Ismay) all deferred to the BOT on the decision about the number of lifeboats. No one questioned the government; after all, they were the unchallenged responsible authority.
The BOT had not updated its regulations in 20 years. Its regulations were promulgated at a time when 10,000 metric tonnes was the norm and 20 lifeboats were adequate. That Titanic was 46,328 tonnes did not seem to occur to government. Nothing much has changed in 102 years regarding government regulation – except that we perhaps understand its pathology much better – thanks in part to public choice economics which teaches us:
- Once government becomes involved, common sense and personal responsibility disappear and everything focuses strictly on regulatory compliance.
- Regulated entities (White Star) as well as the ship’s designer and builder are conditioned to comply with the diktats of rules and regulations and not with their goal or intent.
- Government bureaucrats are lazy and inept. They prefer new regulations to updating existing ones. There is little glamour or political benefit in simply maintaining existing regulations.
Myth #2: First Class Passengers were accorded Preferential Treatment
Most Titanic stories flog the class stratification issue; this is a myth as well. In fact, the difference between first class and third class survival rates was slight. Anyone with basic numeration skills and a modicum of analytic ability can quickly cut through the numbers. The relevant fact is that 74% of women survived and only 20% of men. However, 44% of first class passengers were women compared to 23% for third class. After making the appropriate adjustment to account for that difference, it is incandescently obvious the variation in first versus third class survival rates virtually disappears.
Moreover, the slight remaining difference in class survival rates is attributable to third class passengers’ greater reluctance to leave the ship, to part with their baggage and difficulty related to their location aboard ship. When third class passengers reached the boat deck they received the same treatment as anyone else.
Myth #3: Male Aggression was a Key Factor in Male Survival
The number of men who survived via the lifeboats usually is portrayed as evidence of male aggression and as coming at the expense of women and children. But the facts are stubborn. There was enough lifeboat capacity to save all women, children and 550 men. Remember, there were far more men than women on board. Indeed, if the crew had loaded one man for each woman and child, all women and children could have been saved. Furthermore, this would have resulted in loading the boats more rapidly, reducing the fear level, keeping families together and ultimately saving many more lives. Far from being villainous, male behavior resulted in far fewer men surviving than should have been the case.
Lessons of Titanic
The Titanic’s loss of life was, first and foremost, a failure of government, not capitalism. It is far easier to place blame on prominent individuals such as the ship’s designer, builder and owner rather than on an amorphous, faceless gaggle of bureaucrats. The enduring lesson of Titanic, just as in most disasters, is not to place faith in government.
Another lesson is not to repose trust in the media; 102 years later they still get the story all wrong. They continue to portray the loss of life as caused by capitalism, greed and hubris. They also continue to shamelessly flog class warfare and to bash males – all politically correct story lines.
The death toll of 1,513 was tragic. Today however, government is creating disasters affecting hundreds of millions and perhaps billions of people. Government run amok is bankrupting our nation of 313 million and also much of Europe. Government fecklessness has placed the entire world at grave risk by appeasing aggression by Russia, Syria and Iran and encouraging tyrants everywhere. As always, the state sycophant media is government’s handmaiden. The only thing that has changed in 102 years is that the grave harm government causes now affects exponentially more of us.