Friday, September 19, 2008


The following article is for the lemmings who plan to follow Barak Obama over the cliff of economic depression while taking the rest of us with them. Regardless of how boring or difficult you might have found math or basic economics to be in high school, there are really only a few things you actually need to know in order to understand how the economy works. Consider this article to be your tutorial.

If you comprehend nothing else from this lesson, let it be this: stuff costs money! Once you grasp that concept, it's pretty much all gravy from there.
It's really a very simple formula: PEOPLE - MONEY = NO STUFF

Now that you understand that, we can move on to the rest of our class on economic dynamics 101. There are two main factors that control how the free market operates. One is arithmetic, the other is human nature. Arithmetic comes into play by virtue of the fact that numbers do not lie. They are constant and undeniable. 2+2 either equals four, or it doesn't.
Human nature comes into play by virtue of the way man has historically spent his/her money. This is based on two things; wants and needs. The human factor is not as etched in stone as the arithmetic factor, but it is still a pretty predictable set of circumstances.
We need food, clothing and shelter. We want food, clothing and shelter that we actually like. Liberals like Obama and Biden seem to think that it is this difference that dictates whether a person is morally fit or not. If you want only the amount of food, clothing or shelter that you need, then you are a Saint. But if you desire a higher quality, then you are a scoundrel worthy of scorn by the masses. The fact that you might work harder than the masses is of no consequence to a true liberal. But we're getting a bit off track.
According to the Obama economic doctrine, raising taxes on the rich is good for the economy. Really? First of all, the "rich" are the ones who hire the rest of us who are not rich. The "rich" are also the ones who by the most stuff, and when they do, it's usually the biggest and most expensive stuff. Be it a 150 foot yacht, or a fleet of new trucks for a budding freight company, it is the stuff the "rich" buy that puts food on the table of the American worker.
You see, what Obama's followers don't realize is, the stuff the rich buys does not grow on trees or appear out of the mist on a cool autumn morn. It needs to be manufactured. By people. So when you take the money from the "rich", they buy less stuff (see the previously mentioned formula).
If you are a highly taxed "rich" person, you will in all likelihood spend less money. That means that the small business man who builds yachts for living will have less orders to fill. That means that he may need to lay-off someone. That someone will now have to re-consider that new pick-up he was hoping to buy this fall. That means that the pick-up manufacturer will have one less order to fill. And so on, and so on.
Conversely, a lower taxed "rich" person is more likely to spend his extra dough. Mainly because he will actually have extra dough to spend. Be it a new Gulf Stream Five, or a new locomotive to move train cars at his mill yard, what the rich guy spends will mean jobs and financial security to everyone involved with the manufacture, transportation, warehousing, sales and distribution of of whatever the "rich" guy happens to buy.
The other dirty little secret that Obama doesn't want you to know about, is that taxes are nothing more than another cost of doing business. As such, it is simply passed right on down to the know, you and me. Like the cost of cheese at a pizza shop, printer ink at an office, or fuel at a trucking company, when businesses are taxed more, it is simply added to the price of their product or service. Raise taxes high enough, then doing business is no longer profitable, resulting in bankruptcy, sell-out or relocation to countries that are less tax-oppressive.
So remember this little lesson in economics my little Kool-Aid swilling comrades. When you are shouting through that bull-horn about how evil the rich are, somewhere there's a "fat-cat" bull-horn manufacturer that appreciates your purchase.


JMK said...

Here's the argument from the Left Terry, it goes, "Capitalism (they ALWAYS call economic liberty/freedom "Capitalism") is innately unfair, because it benefits those born to better circumstances, those born more ruthless and clever at the expense of the rest of us "good and decent" (and I suppose altruistic) people."

That's really THE argument from the other side.

The truth is that EVERY system (especially socialism) benefits those "born to better circumstances," in fact, it even narrows down those circumstances down to "those born to political connections."

Moreover, regardless of whether or not economic liberty is "unfair," it cannot be denied that it produces the MOST prosperity for the GREATEST NUMBER of people.

Yes, it can and has been a rgued that a completely unregulated free market (which America HAD, up to around 1910 or least prior to WW I) did indeed come with its "Boom and Bust" cycle and that led to a lot of financial insecurity and instability both for established businesses AND their workers.

Bernard Baruch, along with J P Morgan introduced modern Corporatism (the highly regulated economy) in the early part of the 20th Century and we've had that economy (with some minor tweaking) to this day.

In fact, Corporatism has become so universal (it's also the economy of Japan and Western Europe, pretty much the de facto economy of the industrialized world) that today, many people define both "free markets" and "socialism" WITHIN the Corporatist framework.

That is, many people today consider France's Corporatis economy based more on Keynesian principles (a larger, more generous welfare state, heavier, more intrusive government regulations, etc.) as "socialist" and America's more Supply-Side based economy as "Capitalistic" or simply wrongly call it a "free market" economy, which it most certainly is not.

Ironically enough, G W Bush has been a "Big Government Conservative" (socially Conservative, while seeing the need for more government in many areas - the prescription drug boondoggle, the NCLB Act, etc.) for his entire eight years.

It's the current administration's reckless spending on things like the prescription boondoggle, and education (with the excesively expensive NCLB Act) and lately the "Stimulus Package" and these "Bailouts" that have busted the budget.....and yet, the opposition blames the resulting mess on "a failure of the free market."

SOME of them are really THAT dumb.

Some of them are more nefarious and know that it's actually the failure of too much government, but see the possibility of expanding government even more.

Vee (Scratch) said...

There's one thing in this post that you're not mentioning or stating. The rich and super-rich do not always pay for their luxurious, exorbitant lifestyles. They shift the cost to the middle class.

Here's some specific examples. Private jets. You can look it up or check out this one link here.

Also, there are many developers that use their own money but very often developers use public funds for building projects like a new sports arena. Example: The New York Yankees and many others. I do understand that building new stadiums creates jobs, but the wealth created is definitely not shared.
There are more examples, these are just two quick examples that popped in my head.

Note, while I don't believe in punishing successful hard-working people with more taxes, often that little human trait called greed influences a rich person who may not actually spend his extra dough but other people's money.

Corporations are already doing what they can to become transnational entities evading U.S. federal taxes while reaping the many benefits of doing business in the country.
Quick but very small example. Hollywood regular films in Canada and the Czech Republic because the taxes are comparatively lower. NY's mayor Bloomberg is doing all he can to make his city competitive by offering more and more breaks. Does the Hollywood money trickle down?? I don't know for sure.