cerebral discharge

I imagine that my worldview to those who don’t spend a lot of time with me might come across as a bit odd. I am in the middle of a very long process of starting a non-profit organization with the purpose of educating people about poverty and empowering people who care to make a difference in the effort to rid the world of abject poverty, with particular emphasis on the crisis in Africa, where AIDS, tuberculosis, and malaria are killing millions every year.

At the same time, I speak out strongly against President-Elect Obama’s economic ideas and policy making as unfair, unproductive, and unconstitutional. His ideas about redistributing wealth are offensive to me.

I imagine that these two aspects of my value system can appear to be rahter odd standing next to each other. I’d like to talk about the difference between the two, and why I feel so strongly about both.

We’ll start with the words of John Hancock:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government…

Those words are famous; They open the second paragraph of the Declaration of Independence. There are four mains points in this paragraph that I’d like to highlight.

1. All men are created equal. No one, at birth, deserves any special treatment, whether high-class or low-class. Whether dark skinned or light. Whether male or female.

2. We are promised, as citizens of The Unites States of America, at the very core of being American, three things: The right to life. The right to liberty. The right to pursue happiness. The only time any of these three rights should be restricted is if they infringe upon the same rights of others.

It should be noted that the three rights are in the order they are in for a reason. First of all rights is the right to life. Never should anyone’s right to liberty or the pursuit of happiness be allowed to infringe upon another’s right to life. This is one of the major reasons why I am pro-life on the abortion issue. I don’t believe it is constitutionally allowed for a woman to exercise her right to pursue happiness in a way that infringes upon another human life. Happiness and liberty are only guaranteed insofar as they do not deny life to another human.

Second on that list is the right to liberty. Another person’s right to pursue happiness by living according to their own set of social rules should not infringe upon the liberty of other Americans.

3. Government exists to protect these rights and the power of Government is restricted by the consent of the governed.

4. When Government damages, diminishes, or destroys these rights, the people have the right to stop the abuse and fix the problem. The primary means of exercising this right exists in the form of the House of Representatives and, to a lesser degree, the Senate. This is why non-presidential elections are SO IMPORTANT. (Get out and vote in the off years. Your constitutional right and duty is to do so.)

Ok, lets get back to the topic of Obama’s policy ideas and explore whether these ideas are in step with the ideas that our country was founded upon. (It is important to note that the mindset from which the Declaration of Independence was penned was the same mindset in general from which the Constitution and Bill of Rights also sprung. We should absolutely use them to interpret each other. Any hermeneutic (interpretive method) that does hold the other two documents as extremely important in interpreting the third is irresponsible.)

Obama expressed in dozens of speeches over the last few months that he wants to tax corporations and people making more than xxxx amount (he changed his numbers often, progressively moving down from $250k/yr to around $120k/yr) more so that he could give money and benefits to the rest of Americans that did not meet his magic number in income in a given year.

A simple and accurate way of describing this idea is “wealth redistribution.” Another well known public figure in history phrased the idea this way: “from each according to his ability, to each according to his needs.” Most of you know who said this, but in case you don’t, I’ll spare the mystery: his name was Karl Marx. The idea expressed that everyone should (we’ll talk about “oughtness” later) have the same wealth, or else the government should step in to even the score.

This idea is embraced by two worldviews: socialism and communism. The difference between the two is subtle. Socialism is generally what we saw taking place in Soviet Russia and in China. Communism is essentially an ideal that utilizes socialism in the path to attaining the ideal of a communistic society. No modern society, under strict definitions, has operated as a communist society. Many have adopted a communist mindset, but they always are carried out as socialism, always looking ahead to that communist utopia.

I don’t have the energy to engage in a lengthy side-discussion at this point to refute the viability of a communist society. If you are inclined to think that such a society would be acceptable, I suggest that you consider a few basic thoughts before making such claims. 1. Every society that has tried it has failed. 2. Every society that has tried it has been required to completely trod on it’s own people to make it work. 3. Millions suffer in the effort to make it work. 4. Basic economic theory proves that it will fail.

I’ll address number four quickly, and then we will move on. Adam Smith taught us in “The Wealth of Nations” about the fundamentals of modern economics. We have learned from him and through his thoughts that ideal results for a group spring from the individuals having the opportunity to act in their own best interest. This theory is as true as gravity. Free market economics will ALWAYS outperform government mandated economics. The market will always act in it’s own best interest, but governments will almost always develop affinities for special interests, because appeasing special interests is how one gets votes.

Every political speech contains some variation of this statement: “I will do (insert something sounding helpful) to help (insert special interest.)”  I’ll give you an example: “I will cut taxes on hospitals to help self-sacrificing people serve the injured.” In this case the special interest is the hospital, and the “something sounding helpful” is cutting taxes. The above sounds great for hospital workers, and they vote for said candidate. The above should sound bad to everyone whose taxes increase to offset said tax-cut.

Let’s return to the original issue, since I’m rabbit-trailing significantly.

Obama’s plan to redistribute wealth by taxing the wealthy (middle class are apparently wealthy now) to give more money/benefits to the poor promotes socialism. Obama himself has not refuted that his ideas are socialist in nature. In a speech in October, he had this to say: “John McCain calls it socialism…well, where I come from, we call it “being fair.” Notice that Obama did not try to refute that redistributing wealth is socialism. He simply called it something much more appealing to the average Joe (who couldn’t define or recognize socialism anyways) and moved on.

Here is an interesting piece of news that you might not have heard: Barack Obama, in his 1996 campaign for State Senate in Illinois, associated himself with more than one political party. On top of being connected with the Democratic party, Obama also connected himself with the Democratic Socialist Party, sometimes referred to as “The New Party.” Several articles from the New Party’s newsletter showed Barack posing in pictures with New Party leaders, and he was listed as a member of the New Party regularly.

Twelve years later, Mr. Obama’s worldview has not changed. He associated himself with Socialists then. He maintains their political ideals today.

I oppose on a constitutional basis the governments right to infringe upon my rights to life, liberty, and the pursuit of happiness. Mr. Obama’s ideas of wealth distribution do more than just “give a helping hand” to those that really need it. They are a government mandated program designed to reach into the pockets of those who earned something to put it into the pocket of those who did not. In most circles, this is called stealing, and I recognize Mr. Obama’s policies as such.

Let’s talk briefly about what the effects of such ideas.

1. Minimum wages will rise. This is a bad thing. Not every job in America should be considered valuable enough that a person should be able to feed their family doing that. Consider the 15 year old who is applying for his first job. If minimum wage is enough to support a family, why would anyone want to pay a 15 year old kid that much to do a simple task?

Consider the McDonalds store owner. He only has so many dollars to pay his workers. If he was allowed by the government to do so, he could distribute them as he pleased. But if there is a minimum wage established, let’s look at the results. Without minimum wage, he could afford to hire a good manager at, say, $15/hr and keep 6-8 workers making between $4/hr and $8/hr, depending on experience, ability, etc. There is a significant wage gap between the manager (who has significantly more responsibilities and requires significantly more skills) and those who work making french fries (which takes almost no skill whatsoever.)
If we introduce minimum wage into this equation, suddenly, the boss has to pay all of those workers $8/hr, including the newest hire. He has less dollars to work with. So he can’t afford to pay the people who have been with him for a long time any more than he can pay the new hire on their first day. Furthermore, he can’t afford to pay the manager as much. Now the manager makes $10.50/hr, and on top of that, the boss needs to cut one of his minimum wage workers.

He’s paying out the same number of dollars every month, but everyone has to work harder since he can’t employ as many people. There is less of an incentive to do well, since raises are not coming to those who earn them. (those missing raises have instead been given to the guy who’s really only worth $4/hr, as required by law.) Furthermore, the boss is only making a little bit more than the new hires. There is not much incentive to take on the responsibilities necessary to only make just a little bit more. It’s become not worth it to be the boss anymore.

Productivity at this McDonalds has decreased, hard work is no longer being rewarded, and everyone makes just about the same amount, despite the enormous difference in skills and experience.

As you can see, the result of raising minimum wage is that hard work, experience, and skills are not able to be rewarded. Instead, in the name of fairness, we have taken away the ability to fairly pay someone who works harder, smarter, and faster.

2. Education is not worth as much.

I’ll be the example for this one. When I was young, minimum wage was $5.25. I was not satisfied with the idea of trading all of my hours on a Saturday morning, or a Tuesday night for only $5.25. Instead, I developed a skill that was worth much more: I became a certified USA Hockey referee. I got paid $15/hr when I was 15 years old. I worked between 15-25 hours per week, mostly in evenings and weekends, and made very good money.

Upon graduating high school, being an ambitious, smart, capable young american with a gleam in my eye and a dollar in my pocket, I decided to go to college. This was not cheap. I spent around $80 thousand to finish a bachelor’s degree. I actually finished an entire semester early by taking between 18-22 credits per semester, which is simply staggering, and taking summer classes almost every year.

There I was: $80k in the hole, but with this degree instead. Those two letters after my name need to add $80k to my pocket in order for this to be a worthwhile ideal. (We’ll ignore the fact that I invested 4 years of my life to achieve it, which could have been spent working.) Within months of graduation, I got a job at a company that needed what I had to offer, making $11/hr. Not quite what I was used to from reffing hockey, but it was a start.

But before I knew it, minimum wage laws were changing, and now the lowest wage out there is $7.25. All those jobs that used to be worth $8-9/hr were now making minimum wage salaries, which isn’t fair to those people who developed the skills necessary to pull a higher wage. Many people are discovering today that if they have the choice to make $8/hr doing something difficult, or make $7.25 to do something ridiculously easy, they will take the easy choice. The question of which is more valuable comes up: $0.75/hr or all the hard work that makes their job harder than any random minimum wage job.

For me, with the cheapest labor only a few bucks below what I make, it becomes incredibly enticing to take a much easier, lower paying job at gamestop selling nintendos to people rather than work extremely hard doing something extremely noble.

You should notice something here. I spent $80k to get an education that qualified me for a job. Someone else didn’t spend any money on an education, and they get paid almost the same money that I do, for FAR less work.

Who in their right mind would spend the $80k on the education? The effects of wealth redistribution by means of minimum wage increases is that the value of education goes down significantly. The decision to go to college is only on the table for the wealthy, as rising education costs combined with small wage gaps make it a NET NEGATIVE decision.

3. The productivity of the American worker is reduced.

Read the above two sections for an overview of this idea. I’ll add a bit.

When taxes increase for people who make more than a certain threshold, it becomes very expensive to cross that threshold. Let’s say that I’m a genius. (It happens that I literally am.) Let’s say that I already make $90k and that threshold is $100k. I am not going to feel terribly inclined to work a little bit harder because if I do, all the rules change about who can put their hands in my pockets. I’d rather just stay at $90k and keep my own money.

That decision is a GDP Loss for the nation. I may have the ability to create more wealth, but the prospect of paying all the extra wealth and then some in taxes leaves me less well off than if I do nothing. So I do nothing, and instead play more video games and the world is worse off because of it.

I intended to be brief in this first section, but I ended up typing all day between working hard at my job. (still making $11/hr…it’s been 5 years.)

Anyone that really knows me knows that I care deeply about educating people about poverty. It is one of my life goals to eventually make my living educating people about the issue, and helping people understand what they can do to make a difference.

So if I want to fight poverty, why don’t I agree with Obama’s idea of giving poor people money?

1. Throwing money at problems does not solve problems.
2. Charity should be an option for people, not a government mandate.
3. The poor in America are wealthy compared to the poor in Africa.

I don’t know whether offering expensive help to millions of Americans will help, since a vast majority of them are making irresponsible financial decisions that won’t be fixed by handing them money. However, the millions of children dying of Malaria in Africa this year can be helped with VERY LITTLE money, and absolutely didn’t do anything irresponsible that put them into poverty. I don’t know if I can help most of the poor in America, but I KNOW we can help 1billion Africans with FAR less money, and that the change will stick.

In conclusion, I want to keep as many of the dollars I earn as possible so that I can choose to give them away to whomever I want. I don’t want Barack Obama to decide for me who deserves my money.