Playing Favorites: I’m not in favor of the government further inclining the progressive/graduated tax bracket (which means taking more tax money from the rich simply because they make more money), for reasons that Milton Friedman and Adam Smith, via P.J. O’Rourke, have outlined somewhat adequately- that the whole nation of accidentally altruistic capitalists might help the poor more if they aren’t forced to. I’m also not in favor of the government raising any of a variety of taxes- income, property, gas, sales (for vehicles or for Snickers bars or anything in between), after bridges collapse, or for any of a variety of reasons that for the sake of brevity, (go figure) I will forego the listing of. Nope, until the government is made to discontinue their mis-allocation of funds they already currently receive, not one penny more should be handed over to the government. One possible exception- tax money derived from corporations which I will get to next time.
The blame game: I haven’t tracked the party most responsible for the below list, but keep in mind, since Franklin Roosevelt (democrat) was president, there have been six republican presidents (Eisenhower, Nixon, Ford, Reagan, Bush I and Bush II), encompasing 36 presidential years since 1933, (through Bush IIs reign- 2008) the year in which New Deal programs began to be initiated and I haven't seen them be all that successful in reducing the number government programs. The New Deal programs are thought to have provided the momentum to grow the government beyond the measure that republicans say they are comfortable with. Certainly, a president cannot be held solely responsible for the government’s spending. I have no idea how often any of them employed the veto on bills passed by Congress, that directly or indirectly grew the government. In short, I don’t know that government (number of programs or spending) shrank under any president- republican or democrat, or under any Congress, however it was constituted- (ie. with a democratic or republican majority). And in terms of the national debt, no three “peace-time” presidents grew the national debt more than the last three republicans. (http://zfacts.com/p/318.html). An economics major, or the ghostly apparitions of Friedman or Smith may be able to convince me that comparing excessive taxation to national debt increases under republican presidents is not an apt comparison, but it doesn’t look good and it would look better if a liberal were the one objectively shooting down the significance of any apparent connection- I am not a liberal- or an animal for that matter (my second Seinfeld reference). I might rather be re-circumcized by a blind Chilean witch doctor using dull coconut shards than listen to the average conservative condescendingly qualify everything a republican politician does, while excusing it. Stop with the “yeah but” that each side essentially employs; forget about “real” money, and “adjusted for inflation” increases using decimals and percentages, etc. All of that is cockamamy fine line rhetoric and both sides are masters at it. Enough! In short, democrats and republicans are both to blame; voters cannot be blamed for a reason I will get into next time.
“It is one thing to show a man that he is in an error, and another to put him in possession of truth.” – John Locke
What a Waste: Below is a listing of all of the ways various components of the Federal Government have wasted our tax money. If this money were re-allocated for the building of bridges, border control, rooting out gang-related criminal activity, and put into a fund to pay an independent agency (not necessarily populated with beurocrats) to discover even more excessive misappropriations of our tax money- taxes would not need to be raised. There is no possible justification the reptiles/politicians who “represent” us might provide for the fiscal atrocities listed below. The list is hardly complete- these are just the most aggregious things I could find in a few hours of looking. I haven’t included pork barrel earmarks allocating $350k to the research of the autistic Canadian Whoot Owl, or $1 million to protect a gnat species from extinction, or things like alloting $225k for a mansion in Kansas courtesy of republican Congressman Todd Tiahrt*- in short, things that might be fiscally irresponsible or morally questionable expenditures, things on the state and federal level, things with relatively little justification, compared to say, hm, enforcing a border or two and adequately inspecting and replacing bridges.
Note: the source of the first (10) instances below is courtesy of (The Heritage Foundation, April 4, 2005- http://www.heritage.org/research/budget/bg1840.cfm) The primary source material (footnotes to articles, reports, and audits), which is where the Heritage Foundation gleaned their findings, can all be found within the heritage.org document I cite above:
1) the Pentagon paid nearly $1 million to ship two 19-cent washers to an Army base in Texas. Over six years, C&D Distributors in Lexington, S.C., run by two sisters, collected $20.5 million in fraudulent shipping charges from the Pentagon. (oh, so many sources for this one- try usatoday.com or do a google search on pertinent terms)
2) between ‘97-‘03, the Defense Department purchased, and then left unused, approximately 270,000 commercial airline tickets at a total cost of $100 million. They never bothered to get a refund for these fully refundable tickets.
3) “Unreconciled Transactions Affecting the Change in Net Position.” This is the unabridged title of a report derived from the “Department of the Treasury’s 2003 Financial Report of the United States Government.” The report explains that the unreconciled transaction totaled $24.5 billion in 2003. This is more disgusting than learning that the average person has between 5 and 22 pounds of fecal matter in their digestive tract . . . but just barely.
4) an audit of Department of Agriculture employee purchases over six months, estimated that 15 percent of a sample of 300 employees abused their government credit cards to the tune of $5.8 million. Taxpayer-funded purchases included Ozzy Osbourne concert tickets, tattoos, lingerie, bartender school tuition, car payments and cash advances. 1,549 USDA credit cards belonging to people who no longer worked at the Dept. of Agriculture were still in circulation (as of 4/4/05).
5) Defense Department (Air Force and Navy personnel) over an 18-month period used government-funded credit cards for entertainment events, gambling, cruises, exotic dance clubs and prostitutes- charging a total of nearly $300k.
6) “Medicare pays as much as eight times what other federal agencies pay for the same drugs and medical supplies.” In 2002 the Department of Veterans Affairs paid $1.02 for 1,000 ml of saline solution and Medicare paid $8.68; the DVA paid $127.72 for a standard wheelchair and Medicare paid $570.68; the DVA paid $762.10 and Medicare $1754.55 for a semi-electric hospital bed.
7) in 2002, the Department of Education loaned $55,000 to three students who didn’t exist in order for them to attend a college that also did not exist.
8) “The Army Corps of Engineers spends $5 billion annually constructing dams and other water projects . . . the Corps has repeatedly been accused of deliberately manipulating its economic studies to justify unworthy projects” because it is in charge of “evaluating the science and economics of each proposed water project.” (That is kind of like a pedaphile running the daycare).
9) the earned income tax credit (EITC), which can be refunded to 19 million low-income families was overpayed by an IRS estimated $8.5 to $9.9.
10) Department of Redundancy Department- the government allows for 342 economic development programs, 130 programs serving the disabled, and 23 agencies providing aid to the former Soviet republics. (No wonder the unemployment rate is so low).
11) the “Special Inspector General for Iraqi Reconstruction concluded that the Coalition Provisional Authority” (those responsible for rebuilding Iraq) “could not track over $8 billion it had transferred to Iraqi ministries.” Numerous Special Inspector General reports have documented a range of problems- including “excessive reliance on sole source contracts” (ie. relying on one contracting company- any chance the Coalition was getting the best bid if they only approach one contracting company?), “instances of contractor fraud.” Just another thing I would regulate- contractors. Has anyone had an enjoyable experience, regardless of how much money it cost? Seriously, root canal work performed through one’s own nostrils by a dentist with tourettes would be more enjoyable. The press release quoted from above can be found on any state senator’s website.
12) Minnesota State Senator Norm Coleman (the chairman aof the Senate Permanent Subcommittee on Investigations) in his annual report addressed findings of government waste: “the subcommittee identified $12 billion in government waste, fraud, and abuse;” “more than 27,000 military contractors owed roughly $3 billion in unpaid taxes-while continuing to do business as usual with the federal government.” Just a thought, how about we hire an independent state and federal money tracking firm and pay them half as much as we pay politicians to police themselves- (see my concluding remark to #8 above). Maybe I could begin by hiring a well-dressed arthropod (think Jiminy Cricket) to whisper into the ears of legislators and governmental consigliares (an Italian word, often associated with the mob; this person serves the role of say chief of staff, or vice president in the current administration to guys like Al Capone, John Gotti, or President Bush) to have a conscience when the politicians figure on misspending our money. Hell, most of the politicians are wooden, so you can see how I could make the connection. And yes, I am making a comparison between plenty of current and former politicians to the mafia, at least in terms of a fiscal abuse of power where it translates to societal irresponsibility (ie. excessive taxation)
13) a United States Coast Guard project known as Deepwater paid $24 billion for water and air craft. $100 million of that was intended to upgrade cutter watercraft, “lengthen them to 123 feet, and extend their service lives [but] has produced 8 cracking hulks that are now tied up in Baltimore, unable to return to service and waiting for the scrap heap” . . . courtesy of two of the world’s largest defense contractors, Lockheed Martin and Northrop Grumman. (see- http://www.tscm.com/deepwaterdoodoo for further information about the project from this April 18, 2007 press release).
14) go to: www.taxpayersleague.org/pdf/2006PigletBook.pdf for a listing of 2006 Minnesota state budgetary misallocations according to taxpayersleague.org. Some of what they deem as unnecessary state expenditures could be argued by one person or another as justifiable allocations- but just a couple of examples of what you will find contained in their report: “A new $776 million Twins Stadium to be paid for with a Hennepin County sales tax increase (approved by state legislators with no voter referendum)” and “Becoming an Outdoorswoman – $45,000- A series of workshops and classes for women on hunting, fishing and other activities, including ‘dutch oven cooking’ and ‘food dehydrating.’ These types of classes are already being provided by the private sector.”
*- http://www.pbs.org/nbr/site/onair/transcripts/070706b
Keep in mind: we, the voters, are to blame for the excessive taxation and the misuse of the money excessively taxated . . . (just kidding- there is no such word as taxated; and that first part about the voter being blamed for how much we are taxed and where it is spent- yeah, only complete morons and who think they have their finger on the rash of problems constituting our social ills think that- some of us think that there is an ointment for that rash). Can you imagine what we could do in this country with the money misspent by the federal and state governments . . . run by republicans and democrats? “Ahhh,” you might say, “it is the voter’s fault we are in this predicament.” Only to a point.
Next time: Corporate Welfare, tax shelters and the “consent of the governed.”
Wednesday, September 26, 2007
Monday, September 3, 2007
Middle Class Part 8: The Price of Necessary Costs
"Education is not a problem. Education is an opportunity." -Lyndon B. Johnson
(But I'd add- with the price of tuition, education has been made a problem because of the lack of an opportunity).
Long overdue Note of Clarification: For the remainder of the columns I will be referring to “necessary costs” as- unavoidable purchases/expenditures nearly all citizens would like to be able to afford in order to maintain or grow their futures- their own as well as their children’s, not monetarily but more from an enjoyment standpoint. If we learned anything from Whitney Houston- it would be “that children are our future,” and also to not be pressured into a cocaine habit toward which our husbands likely steered us out of some marital peer-pressure directive. Ok, that was two things. At any rate- “necessary costs” include, but are not limited to- vehicles in good working condition; homes with yards that are suitable environments for the raising of children; paying for swimming lessons, baseball camp, dance recitals; the financing of weddings for said children, and funerals for our parents who once thought of us as the future; home repairs; contributions to a retirement account, repayment of our student loans, infrequent vacations, medical care, child-care, etc. Most of what I mean by the words- “necessary costs” is pretty much contained in point (e) from my May 23rd post. One more thing- I am using “necessary” in terms of what is valued by any citizen who intends to have a satisfying life, and not struggling to obtain fundamental necessary things such as food, clothing, shelter, etc.
First and Foremost: The first and most important necessary cost is a college degree. I am focusing on that one because I see that it is going to be increasingly problematic for future generations of middle class kids to be able to afford a college education, given the price-tag on a college degree and how much it will cost them (in terms of earnings- something I addressed last time) should they be unable to afford to finance one. A college education is the necessary cost that will most determine how obtainable all of the other necessary costs will be. Hopefully, people are, by now, willing to accept these truths:
1) by and large, people with a college degree, earn more money throughout their working careers than those without one (see data from last time);
2) the costs of college tuition are growing each year; (see, letter (c) from my May 23rd installment. If you want the politician’s stance on this go to: http://www.senate.gov/~govt-aff/020900_pressb.htm which addresses the fact that a 2008 republican presidential candidate, Fred Thompson, and a former democratic vice-presidential candidate (turned independent) Joseph Lieberman, went before the Governmental Affairs Committee in 2000 to discuss their concerns about rising tuition costs. Now, politicians feign concern about any number of issues all the time, and it is not until they propose legitimate bills, risk losing elections for taking potentially unpopular stances, and alienate constituencies, in the name of what is right for the country, that I will begin to take them seriously. They know that an appeal to the 80% of the country that considers themselves middle class is a sound political move. At least the two suits mentioned above appeared to be interested in- "bridging an economic divide" concerning the ability to afford a college education, to paraphrase a Lieberman line from the linked press release above. Also, Norm Coleman, Minnesota’s senior senator, writes in his annual report, that “federal Pell Grants . . . no longer yield the same purchasing power as in the past due to rising tuition costs.” I wonder what our favorite radio personality with a proof fixation, would have to say about his national (Thompson) and local (Coleman) republican heroes proving my point;
3) we should feel sorry for hamsters suffering from progeria- a premature aging disease- (just making sure you are awake);
4) if states across the country don’t spend some tax money on education, tuition rates will continue to rise. I'd propose to empower an investigating committee, without infringing on an industry's right to make a profit, should be convened to look into the businesses I suspect are positively fleecing the citizens of the country where necessary cost goods and services are being exchanged for money. The old adage goes- "a fool and his money are soon parted," and I'd add: never so quickly as when a blind eye is cast upon the dubious transaction by the government that could have prevented it. I could include several quotes concerning the waste of time and money usually attributed to a committee and rightfully so (but I'll just choose one: "Committee- a group of men who individually can do nothing but as a group decide that nothing can be done."- Fred Allen) There is a definite basis for monitoring certain industries, as well as justified concern about wasted money spent on the salaries of committees filled with self-righteous highbrows. I think the findings of an objective committee looking into some of the practices and dealings of free market businesses is worth the relative pittance paid to members of the committee in terms of salary compared to how much money they'll save the nation of consumers when they discover what passes for "fair market value prices" (ie. price-gauging). Think of one thing- how many millions CEOs obtain in buyouts for mismanaging a company, while workers are paid a trifling salary. I hate to defer my facts for a later post, but I'll get to that as well- trust me, or fear it- you decide.
Regulation I: I’m well aware of the attempt, and failure, of some form of regulating the private market business industries due to price-fixing issues, among other reasons, when the National Recovery Administration was developed by Roosevelt in the mid 1930s. But unfortunately, the government has seemed to take a laissez faire (hands-off) approach to certain free-market industries rather than to adopt some regulating principles. Big business, and the oil and insurance industries, to name just a few, are positively bleeding the public of necessary cost money that cripples their ability to provide a better life for their children. Perhaps there is some minimal form of regulation in these areas. If there is regulation, given the greed and incompetence of the people in charge of regulating, and the roadblocks that place limits on the types of regulation, any existing regulation is less productive than teaching a hoofless unicorn, who suffers from short-term memory loss how to make a MacGyver bomb to get back at the rhinocerous who insulted the size of the unicorn's horn.
Regulation II: Republicans think that regulating capitalism is akin to socialism, a common republican outcry if you check their greed in any manner. The fact that I have read some Milton Friedman and some Adam Smith (I said some, hell Wealth of Nations is about 900 pages long), and agree that the government should not regulate self-interest in terms of commerce, at least not entirely, proves I'm no socialist. I'm in favor of some, not carte blanche, regulation. But regulating the free market may be necessary in some measure as it is better than the lean toward feudalism that has been coming for some time without regulation- given any number of facts I could cite, and probably will, or have, concerning wage increases negatively impacting the public's purchasing power. Again, more on this in subsequent posts. I've read Friedman and Smith enough to know what kind of slippery slope I'm treading- talking of regulating the free market when the two distinguished economists I just mentioned wrote extensively of the dangers of handcuffing/limiting the freedom of private businesses. While I don't agree with either of them on everything, I'm mostly willing to agree with them on that- I'm sure they're relieved. Anti-trust laws do not even come into play here- the reason: why would two or more businesses in the same industry illegally formalize a pact in order to coerce the public into paying more for less, when many industries are so successful at exorbitantly raising prices to no ill effect, in the form of the public's hesitancy in purchasing such services, (ie. college tuition, toys made in China,** youth hockey, etc) without a formal coercive pact.
5) pay increases from companies, for job performance, even for jobs obtained as a direct result of having a degree in the first place, are not matching the annual rise of college tuition and other necessary costs. The more it costs to attend college, means more money will be borrowed, which means paying more, for longer, on interest. This means there won’t be as much money, or any, for other necessary costs;
An October 2005 Seattle Times article speaks to this point- “Double Whammy: Prices Up, Wages Lagging”: http://seattletimes.nwsource.com/html/nationworld/2002562268_econ15.html- I’d welcome an opposing, objective viewpoint that would state this has substantially changed in the past two years. Not all news contained in the article is bad, and I recognize this- as prices on hotel rooms, computers, and clothing declined (at least as of two years ago) while housing, gas prices and medical care costs rose. Unfortunately, I would classify that as anything but a wash- the prices on the latter three items have risen at rates much faster, and cost far more than the former three.
a) Having a home, if you have kids is far more necessary than paying for a hotel room, which happens most often when you are on vacation, which true middle class people with young kids can’t afford to do logistically or economically anyway. Businessmen charge the hotel room rate to their place of employment.
b) Gas prices rise and fall for undemonstrated reasons, when the price of a barrel of oil is relatively cheap, and when the number of barrels in stock is fairly high, and when the effects of national or international natural disasters- (earthquakes, hurricanes, etc.) on the price of oil, have not been demonstrated, such as when they occur in countries that don't deliver us any oil.
Concerning a supposed gas use excess by certain people: The fact that gas prices rise for absolutely no reason is especially damaging to the wallet of a person who has to drive more than 30 miles to work, perhaps because people’s employment options can sometimes be limited. If a business was closer to home and paid them a competitive wage, there are few reasons why they wouldn’t have pursued a position in that company. To be fair, gas prices, when you consider inflation, haven’t been terrible, but the gas companies should standardize the prices. There are few reasons for the market to be as volatile as it has been. The reason that the oil industry hasn't been checked in terms of their price fluctuations is because the politicians stand to gain for being kind to oil magnates, and vice versa- the situation is the epitome of political ass-kissing. One note- if we had the ultimate capitalistic economy shouldn't the government allow equal footing to other industries that may provide other viable energy resources, that may be renewable, cheaper, and make us less dependent on other countries? Shouldn't capitalism reign in all industries, even the ones that provide perhaps the best case studies for corruption. In short, should we only have government sponsored capitalism. We complain about the greed of the oil companies, and rightly so, when a gallon of gas goes up to $3 if they do not have a good reason for such a hike. The fact that it is Memorial Day weekend is not a suitable reason. We're not bartering for a shell necklace in Barbados, we're buying a tank of gas in America; the price needn't be determined by the whim of the seller whose level of greed is based on the gullible nature or perceived desperation of the buyer. You don't walk into a convenience store and pay 65 cents for a Milky Way one week, 40 cents the next and 89 cents the next week.
Fill 'er up: So, one cannot say that everyone is overusing gas, plenty of people have to or they would be forced to work at jobs that may not pay as well. And would you be the one telling people with a commute that long where to work and where to live? So, they could tell you where they would like you to work and live? Didn't think so. Those who argue that a lot of gas money is wasted while people sit in traffic must themselves listen to the argument that there would be less traffic if the immigration issue were addressed (see my last posting- date)- which is a much bigger issue than the price of gas, the length of a commute, etc. Again, if you can't see the connection between immigration and the amount of traffic, the length (in time) of the average commute, then you aren't looking hard enough; but, maybe I'm looking too hard. I'll do some leg work to see if there may be a connection between the increase in wasted time spent in traffic jams and the immigration problem, but if you are like me, you probably have never found a good reason why Americans prefered the German version of 99 Luft Balloons over the English version).
(But I'd add- with the price of tuition, education has been made a problem because of the lack of an opportunity).
Long overdue Note of Clarification: For the remainder of the columns I will be referring to “necessary costs” as- unavoidable purchases/expenditures nearly all citizens would like to be able to afford in order to maintain or grow their futures- their own as well as their children’s, not monetarily but more from an enjoyment standpoint. If we learned anything from Whitney Houston- it would be “that children are our future,” and also to not be pressured into a cocaine habit toward which our husbands likely steered us out of some marital peer-pressure directive. Ok, that was two things. At any rate- “necessary costs” include, but are not limited to- vehicles in good working condition; homes with yards that are suitable environments for the raising of children; paying for swimming lessons, baseball camp, dance recitals; the financing of weddings for said children, and funerals for our parents who once thought of us as the future; home repairs; contributions to a retirement account, repayment of our student loans, infrequent vacations, medical care, child-care, etc. Most of what I mean by the words- “necessary costs” is pretty much contained in point (e) from my May 23rd post. One more thing- I am using “necessary” in terms of what is valued by any citizen who intends to have a satisfying life, and not struggling to obtain fundamental necessary things such as food, clothing, shelter, etc.
First and Foremost: The first and most important necessary cost is a college degree. I am focusing on that one because I see that it is going to be increasingly problematic for future generations of middle class kids to be able to afford a college education, given the price-tag on a college degree and how much it will cost them (in terms of earnings- something I addressed last time) should they be unable to afford to finance one. A college education is the necessary cost that will most determine how obtainable all of the other necessary costs will be. Hopefully, people are, by now, willing to accept these truths:
1) by and large, people with a college degree, earn more money throughout their working careers than those without one (see data from last time);
2) the costs of college tuition are growing each year; (see, letter (c) from my May 23rd installment. If you want the politician’s stance on this go to: http://www.senate.gov/~govt-aff/020900_pressb.htm which addresses the fact that a 2008 republican presidential candidate, Fred Thompson, and a former democratic vice-presidential candidate (turned independent) Joseph Lieberman, went before the Governmental Affairs Committee in 2000 to discuss their concerns about rising tuition costs. Now, politicians feign concern about any number of issues all the time, and it is not until they propose legitimate bills, risk losing elections for taking potentially unpopular stances, and alienate constituencies, in the name of what is right for the country, that I will begin to take them seriously. They know that an appeal to the 80% of the country that considers themselves middle class is a sound political move. At least the two suits mentioned above appeared to be interested in- "bridging an economic divide" concerning the ability to afford a college education, to paraphrase a Lieberman line from the linked press release above. Also, Norm Coleman, Minnesota’s senior senator, writes in his annual report, that “federal Pell Grants . . . no longer yield the same purchasing power as in the past due to rising tuition costs.” I wonder what our favorite radio personality with a proof fixation, would have to say about his national (Thompson) and local (Coleman) republican heroes proving my point;
3) we should feel sorry for hamsters suffering from progeria- a premature aging disease- (just making sure you are awake);
4) if states across the country don’t spend some tax money on education, tuition rates will continue to rise. I'd propose to empower an investigating committee, without infringing on an industry's right to make a profit, should be convened to look into the businesses I suspect are positively fleecing the citizens of the country where necessary cost goods and services are being exchanged for money. The old adage goes- "a fool and his money are soon parted," and I'd add: never so quickly as when a blind eye is cast upon the dubious transaction by the government that could have prevented it. I could include several quotes concerning the waste of time and money usually attributed to a committee and rightfully so (but I'll just choose one: "Committee- a group of men who individually can do nothing but as a group decide that nothing can be done."- Fred Allen) There is a definite basis for monitoring certain industries, as well as justified concern about wasted money spent on the salaries of committees filled with self-righteous highbrows. I think the findings of an objective committee looking into some of the practices and dealings of free market businesses is worth the relative pittance paid to members of the committee in terms of salary compared to how much money they'll save the nation of consumers when they discover what passes for "fair market value prices" (ie. price-gauging). Think of one thing- how many millions CEOs obtain in buyouts for mismanaging a company, while workers are paid a trifling salary. I hate to defer my facts for a later post, but I'll get to that as well- trust me, or fear it- you decide.
Regulation I: I’m well aware of the attempt, and failure, of some form of regulating the private market business industries due to price-fixing issues, among other reasons, when the National Recovery Administration was developed by Roosevelt in the mid 1930s. But unfortunately, the government has seemed to take a laissez faire (hands-off) approach to certain free-market industries rather than to adopt some regulating principles. Big business, and the oil and insurance industries, to name just a few, are positively bleeding the public of necessary cost money that cripples their ability to provide a better life for their children. Perhaps there is some minimal form of regulation in these areas. If there is regulation, given the greed and incompetence of the people in charge of regulating, and the roadblocks that place limits on the types of regulation, any existing regulation is less productive than teaching a hoofless unicorn, who suffers from short-term memory loss how to make a MacGyver bomb to get back at the rhinocerous who insulted the size of the unicorn's horn.
Regulation II: Republicans think that regulating capitalism is akin to socialism, a common republican outcry if you check their greed in any manner. The fact that I have read some Milton Friedman and some Adam Smith (I said some, hell Wealth of Nations is about 900 pages long), and agree that the government should not regulate self-interest in terms of commerce, at least not entirely, proves I'm no socialist. I'm in favor of some, not carte blanche, regulation. But regulating the free market may be necessary in some measure as it is better than the lean toward feudalism that has been coming for some time without regulation- given any number of facts I could cite, and probably will, or have, concerning wage increases negatively impacting the public's purchasing power. Again, more on this in subsequent posts. I've read Friedman and Smith enough to know what kind of slippery slope I'm treading- talking of regulating the free market when the two distinguished economists I just mentioned wrote extensively of the dangers of handcuffing/limiting the freedom of private businesses. While I don't agree with either of them on everything, I'm mostly willing to agree with them on that- I'm sure they're relieved. Anti-trust laws do not even come into play here- the reason: why would two or more businesses in the same industry illegally formalize a pact in order to coerce the public into paying more for less, when many industries are so successful at exorbitantly raising prices to no ill effect, in the form of the public's hesitancy in purchasing such services, (ie. college tuition, toys made in China,** youth hockey, etc) without a formal coercive pact.
5) pay increases from companies, for job performance, even for jobs obtained as a direct result of having a degree in the first place, are not matching the annual rise of college tuition and other necessary costs. The more it costs to attend college, means more money will be borrowed, which means paying more, for longer, on interest. This means there won’t be as much money, or any, for other necessary costs;
An October 2005 Seattle Times article speaks to this point- “Double Whammy: Prices Up, Wages Lagging”: http://seattletimes.nwsource.com/html/nationworld/2002562268_econ15.html- I’d welcome an opposing, objective viewpoint that would state this has substantially changed in the past two years. Not all news contained in the article is bad, and I recognize this- as prices on hotel rooms, computers, and clothing declined (at least as of two years ago) while housing, gas prices and medical care costs rose. Unfortunately, I would classify that as anything but a wash- the prices on the latter three items have risen at rates much faster, and cost far more than the former three.
a) Having a home, if you have kids is far more necessary than paying for a hotel room, which happens most often when you are on vacation, which true middle class people with young kids can’t afford to do logistically or economically anyway. Businessmen charge the hotel room rate to their place of employment.
b) Gas prices rise and fall for undemonstrated reasons, when the price of a barrel of oil is relatively cheap, and when the number of barrels in stock is fairly high, and when the effects of national or international natural disasters- (earthquakes, hurricanes, etc.) on the price of oil, have not been demonstrated, such as when they occur in countries that don't deliver us any oil.
Concerning a supposed gas use excess by certain people: The fact that gas prices rise for absolutely no reason is especially damaging to the wallet of a person who has to drive more than 30 miles to work, perhaps because people’s employment options can sometimes be limited. If a business was closer to home and paid them a competitive wage, there are few reasons why they wouldn’t have pursued a position in that company. To be fair, gas prices, when you consider inflation, haven’t been terrible, but the gas companies should standardize the prices. There are few reasons for the market to be as volatile as it has been. The reason that the oil industry hasn't been checked in terms of their price fluctuations is because the politicians stand to gain for being kind to oil magnates, and vice versa- the situation is the epitome of political ass-kissing. One note- if we had the ultimate capitalistic economy shouldn't the government allow equal footing to other industries that may provide other viable energy resources, that may be renewable, cheaper, and make us less dependent on other countries? Shouldn't capitalism reign in all industries, even the ones that provide perhaps the best case studies for corruption. In short, should we only have government sponsored capitalism. We complain about the greed of the oil companies, and rightly so, when a gallon of gas goes up to $3 if they do not have a good reason for such a hike. The fact that it is Memorial Day weekend is not a suitable reason. We're not bartering for a shell necklace in Barbados, we're buying a tank of gas in America; the price needn't be determined by the whim of the seller whose level of greed is based on the gullible nature or perceived desperation of the buyer. You don't walk into a convenience store and pay 65 cents for a Milky Way one week, 40 cents the next and 89 cents the next week.
Fill 'er up: So, one cannot say that everyone is overusing gas, plenty of people have to or they would be forced to work at jobs that may not pay as well. And would you be the one telling people with a commute that long where to work and where to live? So, they could tell you where they would like you to work and live? Didn't think so. Those who argue that a lot of gas money is wasted while people sit in traffic must themselves listen to the argument that there would be less traffic if the immigration issue were addressed (see my last posting- date)- which is a much bigger issue than the price of gas, the length of a commute, etc. Again, if you can't see the connection between immigration and the amount of traffic, the length (in time) of the average commute, then you aren't looking hard enough; but, maybe I'm looking too hard. I'll do some leg work to see if there may be a connection between the increase in wasted time spent in traffic jams and the immigration problem, but if you are like me, you probably have never found a good reason why Americans prefered the German version of 99 Luft Balloons over the English version).
6) Homes- the prices on houses are declining, unlike the interest rates.
I'm not stating that mortgage protection legislation is the answer, because if someone was talked into buying a home, outside of their means, with a large payment and a teaser interest rate, and they charge a lot of unnecessary items on their credit cards, they deserve their fate- for they are wasting their own money (something I'll nail the government for next time- course the government is wasting someone else's money). I'm saying, home buyers accepted the arm/flexible/teaser/sub-prime interest rate because they couldn't afford a house without having done so (assuming of course they don't buy things they don't need). Will this type of necessary cost issue resolve itself when middle class kids are looking to own a home 20-25 years from now? Not likely. (See the Associated Press article- "House moves to expand Mortgage Protection" http://www.msnbc.msn.com/id/20837318)
6) if all of the above are true, even the one about the hamster, (#5 is as much about minimal wage increases as about the constant increases in price of "necessary costs"), then can’t we conclude that only the rich will be able to fund a college education, because they won’t go into debt, or into as much debt, paying back the interest derived from such a hefty loan, BECAUSE THEY WON’T HAVE TO TAKE OUT A LOAN to begin with? Rhetorical question. Again, keeping this in perspective, see my second post for what I'm thinking is the most important concern- the kids. Shouldn't we be concerned about the continual rise of all types of necessary costs and the effects of excessive taxation (the latter point I haven't much addressed as yet).
7) if #6 computes, won’t that mean that only rich people will be populating the higher paying jobs, further perpetuating the pay scale issue that has been proven in #1 because middle class kids won't be able to afford an education? As I've demonstrated, I'm far from a genius, but I wrote the preceding before having read Milton Friedman's thoughts on the subject: PLENTY of individuals are restricted from being trained in the more expensive professional programs, and are part of a " 'non-competing' group sheltered from competition by the unavailability of the necessary capital." (Capitalism and Freedom: University of Chicago Press, pg. 107)
Look for it: Anyone can find these things out for themselves: I could spend five blogs revealing my findings based on results obtained from any number of Google searches, but I suspect that reasonable middle class people living through the weekly management of their finances already know how difficult it is to juggle money and justify expenditures over which they have little control, besides that would be redundant and I can be redundant without too much effort.
To wit: a June 26, 2007- msn.com article-
http://articles.moneycentral.msn.com/SavingandDebt/SaveMoney/MiddleClassLivingOnTheEdge.aspx
Google it: Key a search into google- “average cost of a middle class home”* (replace home with wedding, with funeral, with health care, with just about anything you can think of). Try "vacation" for example. Say you wanted to head to DisneyWorld (they raised their prices to $71, up from $67 for admission to one park for one day- that's a 6% increase). Start looking for a new furnace, or a roofing company, and see where all the money you expected to start saving after you've paid off a vehicle will be going for the next year, when the furnace breaks down or the roof leaks, or regrettably, a child is diagnosed with an illness where the insurance company doesn't cover all of the treatments or the medications. Further, comparing the rising prices on necessary costs, like the aforementioned, among others, to what things cost 10 and 30 years ago, and whether the prices on necessary costs have risen at a rate that meets or beats inflation is also not necessary, because we know things are more expensive. If someone claims this to not be true, that would be more disgusting to me than sitting next to a mouth-breather who has eaten half a bag of corn nuts with a warm milk chaser. Oh, and go tell them to wake up, because they're dreaming.
*- Obviously, the housing market is pretty good right now if you haven't a house to sell, so first-time buyers are feeling pretty good, but those who must sell in order to buy are not.
**- A recent Associated Press article "Safe Toys to Cost More - But not this Christmas" (September 13, 2007), indicates that toys will cost 10% more because of improved testing standards stemming from the lead-tainted toy uproar which led to the recall of more than 3 million toys.
Next time: So far, I have addressed the problem of the rising prices of necessary cost goods or services as being outside of the price range of middle class people in the future as they pertain to the amount of money to be made depending on one’s level of education. Next up- Government waste- which will lead me into the topic of excessive taxation. Ah, why would we- rich, poor, or middle class want to be taxed more, if PLENTY of the money we're already giving the beurocrats is being spent unwisely? Rhetorical question.
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