Saturday, November 21, 2009
The Healthcare Debate Part 2: Free the Market
Q: Want lower priced healthcare?
**An in-depth look at this idea here: http://www.cato.org/pub_display.php?pub_id=9640
Saturday, July 18, 2009
The End of Healthcare
With Congress and the President seriously considering passing a bill for Government Healthcare, I’ve been pleasantly surprised to see how many people—including former Obama supporters—come out against this policy. However, I’m also unpleasantly surprised as to how many people still support Government Healthcare. In discussions with the supporters, I’ve noticed they have little concept of what Government Healthcare will actually be. They think it will be the same healthcare system we have now, but at no (or much lower) cost to the patient—which is incorrect.
To understand the difference between what Government Healthcare actually is versus what it is perceived to be, consider this simple analogy:
You are 12 years old and having Christmas Dinner with your entire extended family (grandparents, uncles, aunts, cousins, etc). The group is discussing having a family reunion at Disney World the upcoming summer. Although everyone is excited about the idea, several of the individual families say they are out of vacation money—including your parents. In turn, a few lower priced options are then discussed in hopes that everyone will be able to go. But your rich Uncle Samuel overhears the conversation and offers to pay for everyone’s trip. An uproar of excited follows and just as you start to daydream about cruising down the big drop on Splash Mountain and hearing Jiminy Cricket host the nightly fireworks show, you notice your father looks dissatisfied with the situation.
On the drive home, you ask your dad if you guys can take the trip. He says “No. As I said earlier, we don’t have the money right now”. You implore, “But what about rich Uncle Samuel’s offer to pay?!” Your dad then tells you that rich Uncle Samuel’s offer probably is not as good as it sounds and that he isn’t sure how rich Uncle Samuel intended to pay. He warns that there could be conditions and stipulations for surrendering the financing to rich Uncle Samuel. You demand clarification. Your father presents four options that rich Uncle Samuel could take to pay for the trip:
Option 1
You go to Disney World and have a great time. You stay at the coolest hotel; you go to all of the parks (with park hopping option), all of the water parks, watch the fireworks every night, and you get to eat a lot of ice cream. When you get home, you send rich Uncle Samuel the bill. He takes care of everything. Your dad adds that though this sounds like perfect option; it will not be the case.
Option 2
You still get to go to Disney World, but in order for rich Uncle Samuel to pay, you are only allowed to go to two of the four parks, no park hopping, no water parks, you have to pick one of the hotels off Disney property, you don’t get any ice cream, and you are required to bring back several souvenirs for rich Uncle Samuel’s golf buddies—which requires a full day out of the park riding to several strip-mall souvenir shops. This isn’t the best option, but still a free trip to Disney World.
Option 3
You get to go to Disney but Uncle Samuel’s greedy lawyer is planning the entire trip—you have no say-so at all. You’ll most likely only be able to go to one park, only ride a few rides (no roller coasters – too much liability), no water parks, you can’t pick the hotel and fear it will be far down Hwy 192, deep in Kissimmee/St. Cloud. (What Travis and I have named “Ghetto Disney”. Trust me; it’s not a nice area). The lawyer might even screw up the whole plan and just send you to Gatorland instead of going to Disney at all. You’re starting to understand your dad’s hesitation and realize this might be a terrible deal.
Option 4
Your Uncle buys a crappy swing set and builds a few see-saws (with many splinters) in his back yard and hangs a sign above them that says “Disney World”.
Option 4 is Government Healthcare
Option 1 is what the general public thinks “Universal Healthcare” would be—though this isn’t the case. Option 2 is our current system—that is, partially self-determined but heavily regulated. Option 3 is what the president and congress have actually proposed as a plan. However, even though they lack the foresight and understanding to recognize the inevitable, Option 3 would become Option 4 once put in practice.
Option 1: You decide – someone else pays
Just like you got to go to Disney World and plan your own vacation, with this healthcare plan, everyone gets to pick their own doctor/specialist and those who cannot afford the service merely bill back the government—who pays in full. Sounds great right?
The most important point to understand about Universal Healthcare is that “Option 1” is not a blueprint for any models that are under current consideration (or have ever been under consideration) by the president/congress. It is an error, or more accurately a fantasy, for supporters of Universal Healthcare to support such a plan as if it were a legitimate political proposal. If you have supported Universal Healthcare because this has been your impression of what would be implemented, the only honest response is to change your view.
Option 2: Share your personal costs; share your personal authority
The most interesting—and important—point about this option: it is our current system. That is, this is the how healthcare in the U.S. operates right now. It is an inefficient, heavily regulated system. Federal, state, and local governments all have laws and regulations that affect the delivering and receiving of healthcare—which is why healthcare costs are so high.
Just like the “Option 2” for the Disney trip, you do not have total authority over your healthcare decisions. You still have some control, but the government and your insurance provider (who receives their power from the government) greatly influence which doctors you can see, which medicines you can take, and the procedures through which you receive care. In many cases, they not only influence, but determine these factors completely.
When formulating this analogy, I thought it was especially important to integrate this option because it is a real-world example of how Option 3 automatically becomes Option 4. It provides verifiable data that we are already experiencing increased healthcare costs and decreased personal authority due to government involvement in our healthcare. There is no indication that adding more government would reverse the trend. Furthermore, there has never been a case of anything in life becoming cheaper once the government gets involved…ever. 0% is an overwhelming statistic.
Option 3 becomes 4: If the government pays, the government decides
Under this system, the government controls all healthcare operations—this includes dictating what procedures doctors can perform and on whom they will be preformed. The government will make the decision regarding whether or not your medical needs are worth the money it will cost to provide them to you.
Of course, no one would ever intend for this to be our healthcare system…but, as Option 3—which sucked to start with—quickly unraveled into an even worse Option 4, this is what it would become regardless: a giant government web of regional hospitals and local doctor facilities where you are assigned to a doctor or specialist —not as a person, but a social security number. Doctors would have no personal attachment to their patients; the best doctors would leave the industry; patients couldn’t leave their doctors if they were dissatisfied with their care; medicines and medical equipment would be judged not on merit, but on the political influence of pharmaceutical suppliers and manufactures; the list could go on…
It is important to understand that this is not some exaggerated dystopian scenario; it is actually what would become and what is becoming of healthcare—as has every government operation. A simple illustration of this is public education. Once the government took over the responsibility of financing education, it immediately took over the content of education—and the government is now the lone decision maker on what educational content will be delivered to American students. As a product, more citizens enter the public education system, but more exit the system uneducated. Government “Healthcare” will be no different. More people will enter the system…fewer people will exit—literally.
All gold the government touches turns to lead.
To understand the difference between what Government Healthcare actually is versus what it is perceived to be, consider this simple analogy:
You are 12 years old and having Christmas Dinner with your entire extended family (grandparents, uncles, aunts, cousins, etc). The group is discussing having a family reunion at Disney World the upcoming summer. Although everyone is excited about the idea, several of the individual families say they are out of vacation money—including your parents. In turn, a few lower priced options are then discussed in hopes that everyone will be able to go. But your rich Uncle Samuel overhears the conversation and offers to pay for everyone’s trip. An uproar of excited follows and just as you start to daydream about cruising down the big drop on Splash Mountain and hearing Jiminy Cricket host the nightly fireworks show, you notice your father looks dissatisfied with the situation.
On the drive home, you ask your dad if you guys can take the trip. He says “No. As I said earlier, we don’t have the money right now”. You implore, “But what about rich Uncle Samuel’s offer to pay?!” Your dad then tells you that rich Uncle Samuel’s offer probably is not as good as it sounds and that he isn’t sure how rich Uncle Samuel intended to pay. He warns that there could be conditions and stipulations for surrendering the financing to rich Uncle Samuel. You demand clarification. Your father presents four options that rich Uncle Samuel could take to pay for the trip:
Option 1
You go to Disney World and have a great time. You stay at the coolest hotel; you go to all of the parks (with park hopping option), all of the water parks, watch the fireworks every night, and you get to eat a lot of ice cream. When you get home, you send rich Uncle Samuel the bill. He takes care of everything. Your dad adds that though this sounds like perfect option; it will not be the case.
Option 2
You still get to go to Disney World, but in order for rich Uncle Samuel to pay, you are only allowed to go to two of the four parks, no park hopping, no water parks, you have to pick one of the hotels off Disney property, you don’t get any ice cream, and you are required to bring back several souvenirs for rich Uncle Samuel’s golf buddies—which requires a full day out of the park riding to several strip-mall souvenir shops. This isn’t the best option, but still a free trip to Disney World.
Option 3
You get to go to Disney but Uncle Samuel’s greedy lawyer is planning the entire trip—you have no say-so at all. You’ll most likely only be able to go to one park, only ride a few rides (no roller coasters – too much liability), no water parks, you can’t pick the hotel and fear it will be far down Hwy 192, deep in Kissimmee/St. Cloud. (What Travis and I have named “Ghetto Disney”. Trust me; it’s not a nice area). The lawyer might even screw up the whole plan and just send you to Gatorland instead of going to Disney at all. You’re starting to understand your dad’s hesitation and realize this might be a terrible deal.
Option 4
Your Uncle buys a crappy swing set and builds a few see-saws (with many splinters) in his back yard and hangs a sign above them that says “Disney World”.
Option 4 is Government Healthcare
Option 1 is what the general public thinks “Universal Healthcare” would be—though this isn’t the case. Option 2 is our current system—that is, partially self-determined but heavily regulated. Option 3 is what the president and congress have actually proposed as a plan. However, even though they lack the foresight and understanding to recognize the inevitable, Option 3 would become Option 4 once put in practice.
Option 1: You decide – someone else pays
Just like you got to go to Disney World and plan your own vacation, with this healthcare plan, everyone gets to pick their own doctor/specialist and those who cannot afford the service merely bill back the government—who pays in full. Sounds great right?
The most important point to understand about Universal Healthcare is that “Option 1” is not a blueprint for any models that are under current consideration (or have ever been under consideration) by the president/congress. It is an error, or more accurately a fantasy, for supporters of Universal Healthcare to support such a plan as if it were a legitimate political proposal. If you have supported Universal Healthcare because this has been your impression of what would be implemented, the only honest response is to change your view.
Option 2: Share your personal costs; share your personal authority
The most interesting—and important—point about this option: it is our current system. That is, this is the how healthcare in the U.S. operates right now. It is an inefficient, heavily regulated system. Federal, state, and local governments all have laws and regulations that affect the delivering and receiving of healthcare—which is why healthcare costs are so high.
Just like the “Option 2” for the Disney trip, you do not have total authority over your healthcare decisions. You still have some control, but the government and your insurance provider (who receives their power from the government) greatly influence which doctors you can see, which medicines you can take, and the procedures through which you receive care. In many cases, they not only influence, but determine these factors completely.
When formulating this analogy, I thought it was especially important to integrate this option because it is a real-world example of how Option 3 automatically becomes Option 4. It provides verifiable data that we are already experiencing increased healthcare costs and decreased personal authority due to government involvement in our healthcare. There is no indication that adding more government would reverse the trend. Furthermore, there has never been a case of anything in life becoming cheaper once the government gets involved…ever. 0% is an overwhelming statistic.
Option 3 becomes 4: If the government pays, the government decides
Under this system, the government controls all healthcare operations—this includes dictating what procedures doctors can perform and on whom they will be preformed. The government will make the decision regarding whether or not your medical needs are worth the money it will cost to provide them to you.
Of course, no one would ever intend for this to be our healthcare system…but, as Option 3—which sucked to start with—quickly unraveled into an even worse Option 4, this is what it would become regardless: a giant government web of regional hospitals and local doctor facilities where you are assigned to a doctor or specialist —not as a person, but a social security number. Doctors would have no personal attachment to their patients; the best doctors would leave the industry; patients couldn’t leave their doctors if they were dissatisfied with their care; medicines and medical equipment would be judged not on merit, but on the political influence of pharmaceutical suppliers and manufactures; the list could go on…
It is important to understand that this is not some exaggerated dystopian scenario; it is actually what would become and what is becoming of healthcare—as has every government operation. A simple illustration of this is public education. Once the government took over the responsibility of financing education, it immediately took over the content of education—and the government is now the lone decision maker on what educational content will be delivered to American students. As a product, more citizens enter the public education system, but more exit the system uneducated. Government “Healthcare” will be no different. More people will enter the system…fewer people will exit—literally.
All gold the government touches turns to lead.
Friday, March 27, 2009
Mankind Hour -- Travis's Hour of Pride
Late yesterday afternoon my friend Travis told me he was creating a Facebook group in protest of the juvenile request for all people to cut their lights for one hour ("Earth Hour"). He is calling his group “Mankind Hour” (please feel free to join). He went on to explain that most of the people in the world are pleading for the most basic resources that we may so flippantly ignore. Travis strengthened his point by emphasizing that this international call for darkness is an all out assault on the mechanism that makes light possible—man’s mind.
After we talked I went for my afternoon jog and, among other thoughts, I pondered his thesis for a while. At first I was thinking a lot about hanging out with Toby in Miami in an upcoming weekend and how stoked I’ll be to stay at the Mandarin Oriental and stroll through Coconut Grove, but then my thoughts started drifting back to this hour of darkness and the larger implications that Travis addressed. I wondered: has humanity become so philosophically bankrupt that it now embraces the idea that it must hate itself? Have people become so philosophically ruined that Americans are so unappreciative of light and energy that we conspire to boycott it?
Before you cut off the lights, think about what makes it possible for you to even have an option to turn them on. As an addendum, notice that you were required to do absolutely nothing to contribute to the process and that this is a gift that has been given to you. For millions of years humans lived in total darkness, both figuratively and literally. Through even some of the richest periods in the history of civilization, there were no lights or electricity. Having a light bulb and requisite electric distribution system necessary to power it is still in its infancy. Both of these were non-existent 130 years ago and were not proliferated until the 1950’s and were only brought to modern standards in the late 1970’s, early 1980’s. If you are reading this, you are older than our nation’s ability to deliver electricity in the capacity that it is today. The smartest minds in Earth’s history contributed countless hours of passion, genius, and ingenuity to provide you the ability to illuminate your entire house by merely flicking your finger. And now the laziest, most spoiled slackers that have contributed nothing to humanity are calling you to cut them off.
Before you cut off your lights think about who is asking you to cut them off and why. It is not the achievers that have come out to request this of you; it is the regulators—the men that, instead of setting out to build a new world, set out to control it. They ask you to cut off your lights because they actually want you to cut off your spirit. Light is the symbol of human achievement and pride. Electric light is the tangible manifestation of the spirit of that is the best within us. What the world’s new leaders want, what they need, is for you to surrender this spirit because it is this spirit that makes you impossible to control. With it gone, you are a sheep waiting to be herded. To cut your lights is to bow in submission.
Before you cut off your lights, think about a world without light and all of the things of which light makes possible. Recognize that to truly “shut out the lights” (and not just be some hour long phony) is to cut off most of your existence and the existence of millions of people that depend on light and energy. If you are truly damning light usage, you are damning your entire existence. You are admonishing everything that light makes possible and has made possible over the years: your favorite movie, your favorite song, your cell phone, your electric stove, your toaster, your car, the computer screen you are now reading. Light has given us everything from machines that save lives to machines that make it a little easier to mix a drink.
So on Saturday night, if you cut your lights out…remember you are cutting off everything that those lights stand for…that you are killing everyone in the hospital, that you are making it harder for that nice old lady to find the pen she dropped in her garage at night, that you are making the streets unsafe to walk at night, that you are choosing darkness over light, that of all evil in the world, you are the second most wretched type of human being toxifying our planet. The second? Yes, it gets worse.
I must add: there is one type of person more wretched than the person that decides to cut their lights out on Saturday night…that is the person that cuts their lights back on. This person is the most deceitful fraud and is the greatest disease our planet faces. The person that thinks it is immoral to live a life of light, but does it anyway…to choose to punish and condemn a lifestyle in which they actively participate. This is the person that would cut off her lights off to kill a sick child, but cut them back on to save herself.
Clear your mind from this turmoil. Refocus your beliefs. It’s not the lights you need to cut off, but your television. Step outside into the warming night air and marvel at the lights of your city. Remember, people are good, life is good, LIGHT IS GOOD. Never condemn your lifestyle and never give in to the idea that the world could ever run out of energy. Human history has shown that mankind always builds a solution. Though every generation, energy has become more abundant. And with each generation of man, it gets cleaner and cleaner. This process will continue forever. Just as email and the internet are eliminating the need to use paper, eventually science and industry will find an energy source to eliminate oil and coal. Just as 200 years ago we stood in awe of the use an engine powered by steam, just as 100 years ago we stood in awe of an engine that used gasoline, in the next few years will we stand in awe again of a new engine using a new fuel and we do not have to punish ourselves in the process.
On Saturday night at 8:30, turn on all of your lights, pour yourself a cocktail and call your best friend, your parents, your romantic partner and take a brief moment to discuss the brilliance of modern technology, the decency of humanity, and most importantly the beauty and splendor of the natural world…and reclaim the belief that we do not have to condemn ourselves to admire it.
After we talked I went for my afternoon jog and, among other thoughts, I pondered his thesis for a while. At first I was thinking a lot about hanging out with Toby in Miami in an upcoming weekend and how stoked I’ll be to stay at the Mandarin Oriental and stroll through Coconut Grove, but then my thoughts started drifting back to this hour of darkness and the larger implications that Travis addressed. I wondered: has humanity become so philosophically bankrupt that it now embraces the idea that it must hate itself? Have people become so philosophically ruined that Americans are so unappreciative of light and energy that we conspire to boycott it?
Before you cut off the lights, think about what makes it possible for you to even have an option to turn them on. As an addendum, notice that you were required to do absolutely nothing to contribute to the process and that this is a gift that has been given to you. For millions of years humans lived in total darkness, both figuratively and literally. Through even some of the richest periods in the history of civilization, there were no lights or electricity. Having a light bulb and requisite electric distribution system necessary to power it is still in its infancy. Both of these were non-existent 130 years ago and were not proliferated until the 1950’s and were only brought to modern standards in the late 1970’s, early 1980’s. If you are reading this, you are older than our nation’s ability to deliver electricity in the capacity that it is today. The smartest minds in Earth’s history contributed countless hours of passion, genius, and ingenuity to provide you the ability to illuminate your entire house by merely flicking your finger. And now the laziest, most spoiled slackers that have contributed nothing to humanity are calling you to cut them off.
Before you cut off your lights think about who is asking you to cut them off and why. It is not the achievers that have come out to request this of you; it is the regulators—the men that, instead of setting out to build a new world, set out to control it. They ask you to cut off your lights because they actually want you to cut off your spirit. Light is the symbol of human achievement and pride. Electric light is the tangible manifestation of the spirit of that is the best within us. What the world’s new leaders want, what they need, is for you to surrender this spirit because it is this spirit that makes you impossible to control. With it gone, you are a sheep waiting to be herded. To cut your lights is to bow in submission.
Before you cut off your lights, think about a world without light and all of the things of which light makes possible. Recognize that to truly “shut out the lights” (and not just be some hour long phony) is to cut off most of your existence and the existence of millions of people that depend on light and energy. If you are truly damning light usage, you are damning your entire existence. You are admonishing everything that light makes possible and has made possible over the years: your favorite movie, your favorite song, your cell phone, your electric stove, your toaster, your car, the computer screen you are now reading. Light has given us everything from machines that save lives to machines that make it a little easier to mix a drink.
So on Saturday night, if you cut your lights out…remember you are cutting off everything that those lights stand for…that you are killing everyone in the hospital, that you are making it harder for that nice old lady to find the pen she dropped in her garage at night, that you are making the streets unsafe to walk at night, that you are choosing darkness over light, that of all evil in the world, you are the second most wretched type of human being toxifying our planet. The second? Yes, it gets worse.
I must add: there is one type of person more wretched than the person that decides to cut their lights out on Saturday night…that is the person that cuts their lights back on. This person is the most deceitful fraud and is the greatest disease our planet faces. The person that thinks it is immoral to live a life of light, but does it anyway…to choose to punish and condemn a lifestyle in which they actively participate. This is the person that would cut off her lights off to kill a sick child, but cut them back on to save herself.
Clear your mind from this turmoil. Refocus your beliefs. It’s not the lights you need to cut off, but your television. Step outside into the warming night air and marvel at the lights of your city. Remember, people are good, life is good, LIGHT IS GOOD. Never condemn your lifestyle and never give in to the idea that the world could ever run out of energy. Human history has shown that mankind always builds a solution. Though every generation, energy has become more abundant. And with each generation of man, it gets cleaner and cleaner. This process will continue forever. Just as email and the internet are eliminating the need to use paper, eventually science and industry will find an energy source to eliminate oil and coal. Just as 200 years ago we stood in awe of the use an engine powered by steam, just as 100 years ago we stood in awe of an engine that used gasoline, in the next few years will we stand in awe again of a new engine using a new fuel and we do not have to punish ourselves in the process.
On Saturday night at 8:30, turn on all of your lights, pour yourself a cocktail and call your best friend, your parents, your romantic partner and take a brief moment to discuss the brilliance of modern technology, the decency of humanity, and most importantly the beauty and splendor of the natural world…and reclaim the belief that we do not have to condemn ourselves to admire it.
Monday, January 26, 2009
Obama’s 3 Million Jobs, Part 1
This is the first of a three part series.
One of the easiest ways to illustrate that Obama is a total phony is analyze his ongoing claims that he will create (or save) 3 million jobs. He has now included this as a major point of his faux-stimulus plan.
As this is more new jobs than has ever been created by any one organization, this would be ridiculous for any president to say. It is especially ridiculous for Obama to say this because—in his entire life—he has never employed one person. He is clearly not adequate to create 3 million jobs and this is not a casual inadequacy.
Don’t you agree? Don’t you agree that it seems preposterous that a person who has never found a way to create one job is going to find a way to create more than any president (or CEO) ever? If you don’t think this is preposterous, how gullible are you? Would you believe anything he said? What if he said he will create 4 million jobs? Or 5 million? 10 million? 20 million? What is your number? Would you still believe at 100 million? What all of these numbers have in common is that they are all equally ridiculous. It’s no more plausible that Obama could create 3 million jobs than 5 million.
Let’s put 3,000,000 into perspective. The largest US corporations employ 250,000 – 300,000 employees (and a only a few employ this many). The smallest employ 50 – 70. The average is just under 2,000 employees. This means that Obama is going to generate enough jobs to create, roughly, one thousand and five hundred new corporations. 1,500!! There are only 2,773 on the entire New York Stock Exchange. But wait, it gets more ridiculous…
The current minimum wage in the US is $6.55. Accordingly, if Obama creates the crappiest jobs possible to “help” these people and pays them minimum wage with no benefits it will cost the economy $19,650,000 per hour to create these jobs. Adding the appropriate payroll taxes and payroll expenses, the number gets above $25 million/hour. Multiply that by the 40 hour work week and the total weekly cost is over $1,000,000,000. For those of you that can’t read between the lines, this means that it will cost over a billion dollars PER WEEK to create or save these jobs.
Analyzing the issue deeper
Though the points above illustrate that it would be unlikely (because of Obama’s lack of experience) and impractical (because the high cost will actually hurt the economy) to create 3 million jobs, the points do not illustrate or prove the impossibility of Obama to create the jobs.
To illustrate that it is impossible, you must examine the economic fundamentals of job creation. You must explore the question: how and why are new jobs created? It should be obvious that employers do not create jobs to be nice and do not purge them to be mean. There are certain economic conditions that must be met to create and maintain a paid position of employment.
In order for an employer to create a job, there must be a market need for it. More specifically, the job must generate enough revenue to support its continuation. For example, if I owned a pizza shop that only served 20 – 30 pizzas a day, I couldn’t hire 50 pizza makers. There would not be enough revenue to support their pay. Even if I wanted to hire them to be “generous”, my money would soon run out, my pizza shop would go under, and the 50 pizza makers would be right back where they started—unemployed, as would now the entire staff of the pizza shop.
What this demonstrates on a conceptual level: 1) The result/output of a job (either it be a good or service) is what gives it value—not the effort put into it and 2) What gives the output value in the marketplace is consumer demand. To lack either output or demand is too lack value. This concept refutes a commonly held misconception that the labor that goes into a good or service is what gives it value. This misconception is called the labor theory of value, which in essence asserts that products are more valuable as more labor is put into them.
An example that easily refutes this misconception: A person can perform several hours of hard labor digging thousands of holes. They can double their efforts filling the holes, yet at no point does this labor generate any value, it's useless energy.
In order for this labor to be valuable, it must produce something people want…the laborer must dig the holes and fill them with fence posts, landscaping bushes, etc. As such, it is the output (the new fence, the attractively landscaped yard) that gives the labor value; not the other way around.
The more important of these two conditions is the second: consumer demand. This portion is a little more complex but it is essential to understand, so stick with me. In the marketplace, even the fence and landscaping have no value if there is no consumer demand for these products and services. Someone must want a landscaping service. Someone must need a fence for their property. So even if one tried to sidestep the “labor” problem by producing infinite goods and services, their efforts are equivalent to merely digging holes if no one wants the goods and services. Perhaps a couple of visual descriptions will help:
A consumer demands a good or service ----> this makes the good or service valuable ----> the effort made to produce the good or service makes the labor valuable
The labor theory of value asserts:
Laborers work hard to produce a good or service----> because so much work/labor has been put into the product or service, the good or service is valuable----> because it is valuable, consumers want it
No matter how many people you hire, you cannot force value into the economy by assigning millions of tasks to day laborers. There is no such thing as “value osmosis”. It is the logical equivalence of sleeping on your textbook to learn Chemistry. (Which I tried my freshman year in Gen Chem and it didn't work.)
Placing this in the context of our current economy
One of the primary symptoms of our current economic state is lack of consumer demand. As explained above: without consumer demand, it is not possible to create jobs—especially such a high number. More emphatically, it is economically ridiculous to state that we could successfully answer a decrease in consumer demand with a surplus of jobs. It is therefore impossible to create 3 million jobs. This principle cannot be modified. Obama is not magic.
Remember the amount of money I referenced earlier…that it would cost a minimum of 1 billion dollars ($1,000,000,000) a week to hire 3 million workers. Hopefully it is obvious that this much spending is not an economic cure. But just in case you need more:
Have you ever heard the adage, “You can’t buy your way out of debt”? When your personal budget is low, do you go on a spending spree? You try to save money. You try to spend wisely. You surely don’t go out buying things that are not necessary in hopes of somehow kick starting your budget. The national budget works the same way.
When the economy is bad, the government cannot spend the nation out of debt. It doesn’t help the economy to spend money on unnecessary “special projects” just like it doesn’t help you to spend more when your personal funds are low. Sure a newly paved Main Street may look nice…just like a new 52” flat screen TV would look nice in your living room and sure the new road might be great income for the guy paving it just like the flat screen purchase would be a great commission for the sales guy at the electronic store. However, the purchase would send you further into debt. Similarly, paying 3 million people to perform unnecessary tasks that answer no consumer demand is an abandonment of unchangeable economic fundamentals.
Even if you took the attitude…“Who cares about the economy? Who care’s about the other 300 million Americans? Let’s try to help this special 3 million!”…even if you took this attitude, these people would not be helped. For what happens once all of the roads are fixed and we have national parks coming out of our ears? Three million people working a full-time work load will be able to get all of this finished quickly. At 40 hours/week, there would be 120,000,000 hours (13,700 years) of labor in one week! What do they do when they are finished? They’ll be right back to unemployment status. Then what? Other special projects? Then other special projects? And once the third round is finished what happens? One can only give people but so many bogus projects before running out of tasks.
This is elementary stuff...
so surely Obama knows this. Right? They are simple to understand…I explained them in merely a few moments. Both theory and practice have proven this to be true for many years. Surely a smart guy like Obama can understand this. Fearsomely, it is most likely he does understand this all very well. So the real question is, why the facade? What is his motive? Obviously this is a malicious political trick. I will explore this trick—this deceptiveness—and its implications in part two of this post:
Obama’s 3 Million Jobs, Part 2: Obama is a Fraud
:::helios:::
One of the easiest ways to illustrate that Obama is a total phony is analyze his ongoing claims that he will create (or save) 3 million jobs. He has now included this as a major point of his faux-stimulus plan.
As this is more new jobs than has ever been created by any one organization, this would be ridiculous for any president to say. It is especially ridiculous for Obama to say this because—in his entire life—he has never employed one person. He is clearly not adequate to create 3 million jobs and this is not a casual inadequacy.
Don’t you agree? Don’t you agree that it seems preposterous that a person who has never found a way to create one job is going to find a way to create more than any president (or CEO) ever? If you don’t think this is preposterous, how gullible are you? Would you believe anything he said? What if he said he will create 4 million jobs? Or 5 million? 10 million? 20 million? What is your number? Would you still believe at 100 million? What all of these numbers have in common is that they are all equally ridiculous. It’s no more plausible that Obama could create 3 million jobs than 5 million.
Let’s put 3,000,000 into perspective. The largest US corporations employ 250,000 – 300,000 employees (and a only a few employ this many). The smallest employ 50 – 70. The average is just under 2,000 employees. This means that Obama is going to generate enough jobs to create, roughly, one thousand and five hundred new corporations. 1,500!! There are only 2,773 on the entire New York Stock Exchange. But wait, it gets more ridiculous…
The current minimum wage in the US is $6.55. Accordingly, if Obama creates the crappiest jobs possible to “help” these people and pays them minimum wage with no benefits it will cost the economy $19,650,000 per hour to create these jobs. Adding the appropriate payroll taxes and payroll expenses, the number gets above $25 million/hour. Multiply that by the 40 hour work week and the total weekly cost is over $1,000,000,000. For those of you that can’t read between the lines, this means that it will cost over a billion dollars PER WEEK to create or save these jobs.
Analyzing the issue deeper
Though the points above illustrate that it would be unlikely (because of Obama’s lack of experience) and impractical (because the high cost will actually hurt the economy) to create 3 million jobs, the points do not illustrate or prove the impossibility of Obama to create the jobs.
To illustrate that it is impossible, you must examine the economic fundamentals of job creation. You must explore the question: how and why are new jobs created? It should be obvious that employers do not create jobs to be nice and do not purge them to be mean. There are certain economic conditions that must be met to create and maintain a paid position of employment.
In order for an employer to create a job, there must be a market need for it. More specifically, the job must generate enough revenue to support its continuation. For example, if I owned a pizza shop that only served 20 – 30 pizzas a day, I couldn’t hire 50 pizza makers. There would not be enough revenue to support their pay. Even if I wanted to hire them to be “generous”, my money would soon run out, my pizza shop would go under, and the 50 pizza makers would be right back where they started—unemployed, as would now the entire staff of the pizza shop.
What this demonstrates on a conceptual level: 1) The result/output of a job (either it be a good or service) is what gives it value—not the effort put into it and 2) What gives the output value in the marketplace is consumer demand. To lack either output or demand is too lack value. This concept refutes a commonly held misconception that the labor that goes into a good or service is what gives it value. This misconception is called the labor theory of value, which in essence asserts that products are more valuable as more labor is put into them.
An example that easily refutes this misconception: A person can perform several hours of hard labor digging thousands of holes. They can double their efforts filling the holes, yet at no point does this labor generate any value, it's useless energy.
In order for this labor to be valuable, it must produce something people want…the laborer must dig the holes and fill them with fence posts, landscaping bushes, etc. As such, it is the output (the new fence, the attractively landscaped yard) that gives the labor value; not the other way around.
The more important of these two conditions is the second: consumer demand. This portion is a little more complex but it is essential to understand, so stick with me. In the marketplace, even the fence and landscaping have no value if there is no consumer demand for these products and services. Someone must want a landscaping service. Someone must need a fence for their property. So even if one tried to sidestep the “labor” problem by producing infinite goods and services, their efforts are equivalent to merely digging holes if no one wants the goods and services. Perhaps a couple of visual descriptions will help:
A consumer demands a good or service ----> this makes the good or service valuable ----> the effort made to produce the good or service makes the labor valuable
The labor theory of value asserts:
Laborers work hard to produce a good or service----> because so much work/labor has been put into the product or service, the good or service is valuable----> because it is valuable, consumers want it
No matter how many people you hire, you cannot force value into the economy by assigning millions of tasks to day laborers. There is no such thing as “value osmosis”. It is the logical equivalence of sleeping on your textbook to learn Chemistry. (Which I tried my freshman year in Gen Chem and it didn't work.)
Placing this in the context of our current economy
One of the primary symptoms of our current economic state is lack of consumer demand. As explained above: without consumer demand, it is not possible to create jobs—especially such a high number. More emphatically, it is economically ridiculous to state that we could successfully answer a decrease in consumer demand with a surplus of jobs. It is therefore impossible to create 3 million jobs. This principle cannot be modified. Obama is not magic.
Remember the amount of money I referenced earlier…that it would cost a minimum of 1 billion dollars ($1,000,000,000) a week to hire 3 million workers. Hopefully it is obvious that this much spending is not an economic cure. But just in case you need more:
Have you ever heard the adage, “You can’t buy your way out of debt”? When your personal budget is low, do you go on a spending spree? You try to save money. You try to spend wisely. You surely don’t go out buying things that are not necessary in hopes of somehow kick starting your budget. The national budget works the same way.
When the economy is bad, the government cannot spend the nation out of debt. It doesn’t help the economy to spend money on unnecessary “special projects” just like it doesn’t help you to spend more when your personal funds are low. Sure a newly paved Main Street may look nice…just like a new 52” flat screen TV would look nice in your living room and sure the new road might be great income for the guy paving it just like the flat screen purchase would be a great commission for the sales guy at the electronic store. However, the purchase would send you further into debt. Similarly, paying 3 million people to perform unnecessary tasks that answer no consumer demand is an abandonment of unchangeable economic fundamentals.
Even if you took the attitude…“Who cares about the economy? Who care’s about the other 300 million Americans? Let’s try to help this special 3 million!”…even if you took this attitude, these people would not be helped. For what happens once all of the roads are fixed and we have national parks coming out of our ears? Three million people working a full-time work load will be able to get all of this finished quickly. At 40 hours/week, there would be 120,000,000 hours (13,700 years) of labor in one week! What do they do when they are finished? They’ll be right back to unemployment status. Then what? Other special projects? Then other special projects? And once the third round is finished what happens? One can only give people but so many bogus projects before running out of tasks.
This is elementary stuff...
so surely Obama knows this. Right? They are simple to understand…I explained them in merely a few moments. Both theory and practice have proven this to be true for many years. Surely a smart guy like Obama can understand this. Fearsomely, it is most likely he does understand this all very well. So the real question is, why the facade? What is his motive? Obviously this is a malicious political trick. I will explore this trick—this deceptiveness—and its implications in part two of this post:
Obama’s 3 Million Jobs, Part 2: Obama is a Fraud
:::helios:::
Thursday, January 22, 2009
A Brief State of the Union
Nothing especially insightful in this post…just a few points about the Bush administration. Sorry for the lack of entries lately. Thanks to everyone that's been sending requests for more. I'll try to write something a bit more profound this weekend.
As a quick disclaimer: Though he seems like a swell guy, I am not a strong supporter of the Bush administration. For all practical purposes, Bush was a socialist (I am a radical for capitalism). He frequently used free market language, but in reality the country under Bush saw heavily regulated markets (in agriculture, telecommunications, banking, healthcare, transportation, education, aviation, automobile manufacturing, and just about every other industry that operates in the US) and heavily redistributed wealth.
But looking back on the past 8 years…was it so bad? I took a little time to reflect on some of the claims I heard about Bush and what would become of the country if he served two terms, I would like to post a few tidbits of information.
Below I’ve identified a few issues that popped up over the last 8 years. Now that the time has passed, we have the data available to assess the accuracy of many accusations and dire predictions surrounding the Bush administration.
Abortion
Dire prediction # 1 - FALSE
This is probably the one I heard the most about. In discussions I had in person, saw on television, on the Internet, just about every place imaginable, I heard thousands of claims projecting that Bush would overturn the landmark Roe vs. Wade ruling that legalized abortion. Following, I heard that this would be a major blow to women’s rights and many women gave this issue such importance that no other political issues mattered save this one.
Eight years later, this is safe legislation. Bush never did anything to come close to touching this issue. It’s still legal and can be preformed instantly on request. In many cases, it is even paid for by the government…even by teens without even needing their parents consent.
Gay Rights
Dire prediction # 2 – FALSE
Many claims were made that Bush administration would damage LGBT rights in the country and create a hostile social environment for gays.
The opposite turned out to be true. The Queer Nation should be mindful to notice that though their cause is greatly opposed by the socially conservative branch of the Republican Party, this branch makes up a small percentage of the party overall.
In actuality, the acceptance of homosexual lifestyle has flourished under the Bush administration. The past 8 years has seen the widest acceptance of gay people in the history of the world—even more so than the ancient Greeks (http://en.wikipedia.org/wiki/Homosexuality_in_Ancient_Greece). Under the Bush administration countless pop culture outlets have not only accepted homosexual lifestyles, but actively promoted this lifestyle as desirable. These pop culture outlets have included magazine, film, and television—including even a show, Queer Eye For the Straight Guy, where the homosexual libido was actually admired and emulated by straight men.
Legally, LGBT issues also advanced during the Bush years. No constitutional amendment was made to federally restrict homosexual marriage as predicted by the TV. In fact, all homosexual acts became legal in 2003 with the Lawrence vs. Texas case in the Supreme Court (http://en.wikipedia.org/wiki/Lawrence_v._Texas).
The first country to ever legalize same-sex marriage was the Netherlands in 2001. Six countries have followed this trend, along with two US states—Massachusetts and Connecticut. For a brief period, California also legalized same-sex marriages. During this time, though not legal across the entire country, the United States boasted the largest population able to legally wed the same sex in the entire world (46.7 million, #2 was the Netherlands at 16 million people. Without California, Netherlands is now #1 and US is still ranked #2 at just over 10 million.)
A special caveat: President Clinton, a democrat, has passed the most damaging legislation against LGBT rights when he signed the DOMA into law on 9/21/1996 http://en.wikipedia.org/wiki/Defense_of_Marriage_Act
An American Dictator
Dire prediction #3 – FALSE
Although I would normally not diginify such ridiculous claims by acknowledging them, I will make a special exception to highlight the silliness of the claims that many people made comparing Bush to Hitler (who led the National Socialist party of Germany acronymed as "NAZI" - http://en.wikipedia.org/wiki/Nazi). They claimed that Bushed was either a dictator himself or was trying to establish some sort of political dynasty.
As of 12 Noon yesterday, this was proven false. President Bush politely and without military intervention handed power over to President Obama in the same fashion that all other 42 presidents had before him.
Halliburton
Dire prediction #4 – FALSE
Many claims and accusations were made that Bush and Cheney were in cahoots with corporate America. Much of which was symbolized through a portrayal that they were scoring lucrative contracts to benefit oilfield services giant Halliburton. This Halliburton relationship was then projected to symbolize an overall connection to shady government deals, etc.
In reality, Halliburton turned a less than 2% margin on its work for the government in Iraq. Its stock has underperformed the market (^DJI and S+P500) and its stock price (NYSE: HAL) is down over the period starting with the day Bush/Cheney took office and ending the day they left. (Opening bid 1/20/2001 ~ $20.65; closing bid 1/20/2009 ~ $16.61. A decrease of 20%) Not a good sign of war profiteering (or actually any profiting)
All data from Yahoo! Finance:
http://finance.yahoo.com/echarts?s=HAL#chart2:symbol=hal;range=20010122,20090120;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
As a quick disclaimer: Though he seems like a swell guy, I am not a strong supporter of the Bush administration. For all practical purposes, Bush was a socialist (I am a radical for capitalism). He frequently used free market language, but in reality the country under Bush saw heavily regulated markets (in agriculture, telecommunications, banking, healthcare, transportation, education, aviation, automobile manufacturing, and just about every other industry that operates in the US) and heavily redistributed wealth.
But looking back on the past 8 years…was it so bad? I took a little time to reflect on some of the claims I heard about Bush and what would become of the country if he served two terms, I would like to post a few tidbits of information.
Below I’ve identified a few issues that popped up over the last 8 years. Now that the time has passed, we have the data available to assess the accuracy of many accusations and dire predictions surrounding the Bush administration.
Abortion
Dire prediction # 1 - FALSE
This is probably the one I heard the most about. In discussions I had in person, saw on television, on the Internet, just about every place imaginable, I heard thousands of claims projecting that Bush would overturn the landmark Roe vs. Wade ruling that legalized abortion. Following, I heard that this would be a major blow to women’s rights and many women gave this issue such importance that no other political issues mattered save this one.
Eight years later, this is safe legislation. Bush never did anything to come close to touching this issue. It’s still legal and can be preformed instantly on request. In many cases, it is even paid for by the government…even by teens without even needing their parents consent.
Gay Rights
Dire prediction # 2 – FALSE
Many claims were made that Bush administration would damage LGBT rights in the country and create a hostile social environment for gays.
The opposite turned out to be true. The Queer Nation should be mindful to notice that though their cause is greatly opposed by the socially conservative branch of the Republican Party, this branch makes up a small percentage of the party overall.
In actuality, the acceptance of homosexual lifestyle has flourished under the Bush administration. The past 8 years has seen the widest acceptance of gay people in the history of the world—even more so than the ancient Greeks (http://en.wikipedia.org/wiki/Homosexuality_in_Ancient_Greece). Under the Bush administration countless pop culture outlets have not only accepted homosexual lifestyles, but actively promoted this lifestyle as desirable. These pop culture outlets have included magazine, film, and television—including even a show, Queer Eye For the Straight Guy, where the homosexual libido was actually admired and emulated by straight men.
Legally, LGBT issues also advanced during the Bush years. No constitutional amendment was made to federally restrict homosexual marriage as predicted by the TV. In fact, all homosexual acts became legal in 2003 with the Lawrence vs. Texas case in the Supreme Court (http://en.wikipedia.org/wiki/Lawrence_v._Texas).
The first country to ever legalize same-sex marriage was the Netherlands in 2001. Six countries have followed this trend, along with two US states—Massachusetts and Connecticut. For a brief period, California also legalized same-sex marriages. During this time, though not legal across the entire country, the United States boasted the largest population able to legally wed the same sex in the entire world (46.7 million, #2 was the Netherlands at 16 million people. Without California, Netherlands is now #1 and US is still ranked #2 at just over 10 million.)
A special caveat: President Clinton, a democrat, has passed the most damaging legislation against LGBT rights when he signed the DOMA into law on 9/21/1996 http://en.wikipedia.org/wiki/Defense_of_Marriage_Act
An American Dictator
Dire prediction #3 – FALSE
Although I would normally not diginify such ridiculous claims by acknowledging them, I will make a special exception to highlight the silliness of the claims that many people made comparing Bush to Hitler (who led the National Socialist party of Germany acronymed as "NAZI" - http://en.wikipedia.org/wiki/Nazi). They claimed that Bushed was either a dictator himself or was trying to establish some sort of political dynasty.
As of 12 Noon yesterday, this was proven false. President Bush politely and without military intervention handed power over to President Obama in the same fashion that all other 42 presidents had before him.
Halliburton
Dire prediction #4 – FALSE
Many claims and accusations were made that Bush and Cheney were in cahoots with corporate America. Much of which was symbolized through a portrayal that they were scoring lucrative contracts to benefit oilfield services giant Halliburton. This Halliburton relationship was then projected to symbolize an overall connection to shady government deals, etc.
In reality, Halliburton turned a less than 2% margin on its work for the government in Iraq. Its stock has underperformed the market (^DJI and S+P500) and its stock price (NYSE: HAL) is down over the period starting with the day Bush/Cheney took office and ending the day they left. (Opening bid 1/20/2001 ~ $20.65; closing bid 1/20/2009 ~ $16.61. A decrease of 20%) Not a good sign of war profiteering (or actually any profiting)
All data from Yahoo! Finance:
http://finance.yahoo.com/echarts?s=HAL#chart2:symbol=hal;range=20010122,20090120;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
The World Hates the USA
Dire prediction #5 – FALSE
Although one could argue that this is impossible to qualify, the best I could do is point to a few indicators—namely immigration and tourism. Foreign tourism in the US during the Bush administration reached on all time high, as did US travelers vacationing aboard. The only people that seem to hate the US are Islamic terrorists and trendy European hypocrits who actually are obsessed with America and are trying to fit into the popular anti-US sentiment perpetrated by our own media and celebrity culture.
Immigrants also poured to our shores during the Bush years. People seem to love America and the whole world wants to live here. We saw a spike in immigrants seeking permanent residence under the Bush administration, seeking temporary work visas, and students studying here aboard. The US higher education system hosts the most international students of any country (for both undergraduate enrollment and study aboard enrollment)
Official stats: http://www.dhs.gov/ximgtn/statistics/publications/yearbook.shtm
Notice on the chart, not only did Bush have more people wanting to move to the US than under Clinton (Bush beats Clinton without even adding his 8th year), but more people increase during the later years—that is after each had several years to “shape” American life.
Immigration data for the Clinton and Bush administrations:
Education
This isn’t the refutation of a dire prediction, but an interesting element I thought I’d throw in. During the Bush years, more people started school, graduated high school, enrolled in college, graduated college, enrolled in post-graduate education, and completely post-graduate education.
Gradeschool:
http://usgovinfo.about.com/od/censusandstatistics/a/schoolboom.htm
Most in college, most college graduates, most post-graduate degrees:
http://www.census.gov/population/www/socdemo/school/cps2006.html
In summary, the Bush years weren’t so bad and to most people these years were probably really great. Chances are you have enjoyed the past 8 years immensely and I would guess for most people reading this, they have been, to date, the best years of your life.
Other things originating during the Bush years
These are things Bush obviously had no participation in and I am completely disinterested in several of these things so I’m not promoting them. I’m merely identifying the fact that our country has celebrated a pop culture frenzy in the past 8 years and many of the things that shape our current pop culture have originated during the Bush administration.
Introduction of: Facebook, Gmail, Digg, iPod, Pirates of the Caribbean movie series, Chappelle's Show, Lord of the Rings trilogy, Tiger Woods dominates PGA, Coldplay’s “A Rush of Blood to the Head”, American Idol, Tory Burch, Roy Williams replaced Matt Doherty, OutKast’s “Hey Ya!” (regarded as the most diversely accepted singles of all time receiving record airplay from rap, hip-hop, alternative, adult contemporary, rock, and even country stations), Ali G comes to HBO, Mozilla FireFox/Apple Safari (both 2003), flat screen TV (at least ones that are consumer feasible)
Not invented, but proliferated: DVD player, digital camera, cable internet, ebay
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