Sunday, February 16, 2014

Right is wrong

On immigration, most talking heads on the right got it wrong.

"They steal our jobs": How exactly does one steal a job? By being ready to work harder and at a price point that works for the employer. It is called competition, no different than when everyone else competes for a well paying job. Employers look for the most talented resource at the most competitive price they can afford. Most of the stolen jobs are in farms, meat packing and janitors, all requiring low skill levels, but a lot of hard work. And they are willing to take those up. "They bring down the wages": Relative wages are revised constantly during economic swings. Private employers always have to find cost savings. Or else, the very employment is threatened. Only way some one will steal your job is when you are unwilling to work harder. If you are not learning a new skill or work harder, no employer will pay you more than the market rate.

When you prevent able, willing labor to take up these jobs, the employers are forced to take difficult positions. In certain fields, outsourcing is the most common phenomenon. Whereas insourcing creates additional economic activity, outsourcing is a net loss to the country. In other areas, costs go up for the consumers. And fewer such consumers can enjoy the benefits.

"They come here for freebies": Only a small number of them do. The 'American Dream' is well known around the world. But equally when known is the difficulty of making it here. And for a lot of folks coming from south of the border, even getting here is treacherous. To think that they go through it for freebies is outright demeaning. If emergency room care is all the freebies you are worried about, we can really move on to a different topic.

"What legal means exist?": Americans know about one federal agency, the IRS, the most efficient. Do you know which is the worst? ICE (Immigration & Customs Enforcement) (and INS before that), it is inefficient, arbitrary and the laws it is supposed to enforce vague. This is the same agency that sent a green card (permanent residency) to Mohd. Atta a week after he crashed his plane into the World Trade Center towers on 9/11. Legal means to emigrate to the US from host countries takes many, many years. And even those here legally, either come here to work or study, aren't guaranteed citizenship and at the current rate takes about a decade or more, during which time they are not allowed to switch jobs or relocate within US. And their (highly qualified) spouses aren't allowed to work.

"Let's deport them": The very best estimates of how many 'illegal aliens' there are is just that, an estimate; no one knows for sure. So, how exactly are we going to find out who they are? Certain racial profiling would be involved. And then you are going to ask population at large to show their documents, without any probable cause. I can guarantee that a great number of our citizens won't have the necessary papers in their position, not because they are illegal, but because they aren't required to possess them. You will have to turn each neighbor against the other to turn them in. It has been done in Nazi Germany. Is that what you really want?

"Demographics": With the aging baby boomers  and falling birth rates, how can you guarantee a replacement rate that is required to assure our quality of living? With the replacement rate in US at 2.06, our economy is destined to be moribund like Europe (1.57) or Japan (1.3). Legal immigration from countries with a replacement rate higher than our own is our only hope. We need at least 3 kids per family.You can't simply deny the facts.

"They are illegal": Yes, they did not follow the most arduous process of entering this country legally. And as a result of that illegal activity, they need to continue  certain activities - such as working and paying taxes - illegally. But beyond that, the vast majority of them don't do anything else illegal. By bringing these folks into the legal fold, you can bring in significant revenue from the shadowy places. By giving them licenses, we can better track them.. Do you obey every law of the land? Do you know a basic, in your face law the majority of the Americans ignore? It is the speed limit, it is posted everywhere. Have you always driven at or below that posted speed? Aren't you illegal too?

Tuesday, January 1, 2013

Bipartisanship

Bipartisanship - media talks about it all the time, rather lack of it.

What exactly is bipartisanship? Simply put, when the two parties agree on something. And media likes it when they agree on everything. At which point, why do we need the two parties?

What is the history of bipartisanship? At the beginning of American democracy, there were no parties. The elder statesmen of different view points had all gotten together for the singular purpose of gaining independence. They brought their divergent view points to bear on the Constitution of the new nation that they had ratified. Would today's media consider that bipartisanship? I doubt it.

During George Washington's second term as President, his bitter critic was none other than Thomas Jefferson who wrote under a pen name that the President had become senile and pompous like King George. It was in fact Thomas Jefferson who started a 'party' system in United States to counter the Federalists of Adams/Hamilton ideology. There was no comity among these elder statesmen. There was absolutely no 'bipartisanship' during those days.

In 1859, a Southern senator had savagely beat up an abolitionist on the senate floor. Must be some bipartisanship.

Other democracies around the world have multiple parties and factions. They all present regional biases and constant coalitions are formed around issues. And the expression "Politics make for strange bed fellows" is so apt - look no further than Israel or India.

And the two party system in US has been fairly stable and kept the pendulum from swinging widely in either direction.

As a citizen, you want these two parties to bring different view points on any given subject so that each is given due consideration and a complete review before a compromise position can be reached.

Typically, whenever there is bipartisanship, you can be assured that they have just agreed to spend your money on something you really don't care about.

Don't let the media fool you. You do not want bipartisanship - it only means one thing, bad law gets made. They have to fight and compromises have to be made in the narrowest terms.

Sunday, December 9, 2012

So, who is "rich"

So, who is rich? Do you know?

In this debate about taxing the rich, so, who are the rich that politicians claim to want to tax. And a majority of the country agrees.

Instinctively, most people think of Rockerfellers and Vanderbilts. Those are historic figures, none that exist in our current midst. And the one we can think of then would be Warren Buffet. But he is the one advocating higher taxes on the rich. Clearly something else is going on.

Let's engage in a thought experiment. How do you know which of your neighbors is rich? Most of us do not know how much someone makes. Let's be honest - we all guess someone must be making based solely on their lifestyle. If someone is spending a lot, then by extension, they must be making a lot of money and hence 'rich'. US personal bankruptcy rate tells us a different story.

So, how is taxing your 'spending' neighbor going to make it better? Lack of any empirical evidence, let's say that you and your neighbor make the same amount of money. And let's also say that your needs are about the same. The net difference is that your neighbor is spending on his 'wants', and you are saving it. Now, taxes are levied on known 'income'. We have established that you and your neighbor have the same income. When you advocate higher taxes on him, you are also going to be taxed the same. Since he is spending his surplus, he is not going to be taxed any further (ignoring sales tax in this exercise). Your savings will generate a tiny sum of income that the government then proceeds to tax. So, who did your tax the rich proposal really affect - because you based it on your perception and jealousy of the other persons spending habit? And when your neighbor has a little less disposable income, if he spends less, the economy is going to suffer. And you get to save less.

This happens at work too. Most employees think that their managers make more money. This isn't always the case. In private companies, what you make is based on what you contribute and your special skills. Managers are dime a dozen, skilled technicians are hard to come by. So, most managers reward their talented resources generously than their own paycheck. When Jack Welch was CEO at GE, he wasn't the most paid - Katie Curic was.

Jealousy should not substitute for a sound tax policy. Or being a good neighbor. What your neighbor makes and keeps is none of your business. Let's worry about our income, how to improve it and how to preserve it from the eyes of the taxman.

Wednesday, November 7, 2012

United States of Socialist America (U.S.S.A.)

On January 20th, 2009, Marx, Lenin and Stalin must all have turned in their graves - for United States has finally elected and sworn in a true socialist to be its President.

Mr. Obama's margin of victory, while respectable, is not a landslide. However, combined with the Congressional elections and the state house elections, a large majority of the Americans have chosen committed socialists into the government. This represents a watershed moment in American society.

Why is this significant? For 230 years, Americans have been entrepreneurial. A majority of the people believed in the American dream - that hard work and dedication combined with perseverance and a little luck would be rightly rewarded with riches. And it has been true. A great many innovations have been richly rewarded. What separates America from the rest of the world is that most of its rich have earned it the hard way. And it was not just a privileged few who could find the riches.

This also mean that risk taking is richly rewarded. Bill Gates, Larry Ellison and Michael Dell are all examples of that. And there are many more. And not just in the technology sector alone. And it is also true that they are many more entrepreneurial people in America than any other country in the world. It is not a slight to the rest of the world, but it is a product of the American system.

Many, if not all of these entrepreneurs originated in the academics. But they left the academics to pursue their dreams and were richly rewarded. And this led to some of the also-ran academics to be jealous, denouncing their very success. And these tend to view it as an injustice. They want equality of outcome rather than equality of opportunity - aka, socialism.

Out of this disgruntled academia and the New Deal emerged a political class that embraced socialism - especially because it gave them enormous power over the lives of people. Despite the most spectacular failure of socialism in the former Soviet Union, most of the Academics and the socialist politicians think that if only if they had the chance, the would do it differently and better than the soviets.

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I wrote this 4 years ago and never published. And the day after the 2012 elections, it is still fit to be published.

Majority of Americans have chosen government handouts to individual effort and betterment. America has suffered irreparable damage, it is going to hurt future generations.

Greece, here we come - America joins your path.

Saturday, October 13, 2012

Pro Choice - what's that?

Over the years, the media has come up with many monikers for different issues. Some are catchy, while others have been duds. But none is as controversial as Pro Choice.

Pro-Choice: a woman's right to choose. Not just anything, only her right to choose an abortion.

So, what's the other side of this debate portrayed as: Pro-Life.

In the realm of opposites, some one who is opposed to Pro-Life is anti-life, right!? I can't imagine anyone admitting to that. But in the fiercest of debates, many pro-choice supporters have expressed anti-life views. This is tragic.

The central issue is abortion. It is neither pro-choice or pro-life. It is not one's opinion or faith, it simply is a medical necessity. Like all medical procedures, it should only be performed when absolutely necessary and no other options exist.

Left media's arch enemy, Former President George W. Bush had put it elegantly - Abortion should be safe, legal & rare. Can any rational person argue with that?

Apparently, they can. And they have - through many law suits to such basic requirements as parental consent for under-aged minors, guidance counseling, etc. This is quite a travesty.

So, if a woman wants to say since it is my choice, I want to abort any pregnancy any time I want, I think we have a larger social dysfunction in place.

Pro-Choice is probably the worst moniker there is.

Thursday, October 11, 2012

Big Bird

It has become a campaign issue. We are all supposed to be outraged by Romney's position on funding for public broadcasting. Really?

As we all know, commercial media reacts to financial incentives. Viewer preferences are conveyed through two means - ad revenues and Nielsen media survey. Discounting the small sampling of the survey compared to the ad revenues, we can be pretty sure that media execs know which shows are selling and which are not. We see this in action all the time as many shows fall bathe way side - if something is not watched, so are the ads not generating the revenue.

PBS has many quality shows. I watch them all the time. But we all are paying for it in entirely different fashion - forced through our tax dollars. Some are implying that that is the only way to have quality shows. That tells us something else about the society at large - that our priorities are misplaced.

And that is also the crux of this election year - our core values. This is about 2 very different paths we could choose. If we are too dumb to pick quality TV shows for our kids, are we smart enough to vote?

Wednesday, September 19, 2012

Energy Independence: Why should I care?

It is a hobby horse of both political parties and media of both persuasions. But why should I as a customer really care?

Globalization and free trade, the defining traits of American capitalism - why do these not apply to oil?

What ever the product, it is best to produce where ever it is cheapest to produce. Consumers benefit from it and the source countries benefit from an overall uplift. Yes, there are too many barbarians as rulers out there, but even there, rising tide lifts all boats - not as fast, but certainly does.

When it comes to oil, US imports majority from its North American neighbors - Canada and Mexico, followed by Saudi Arabia, not the most despicable of all the rulers. So, why does this topic poll well? Ignorance has got to be the first order. The concern is that in the event of a war with the oil producing nations,  we will have a shortage. We use international markets and international pricing, and our oil companies are privately owned and operated with global operations, not government entities.

National security experts have argued over the years that our fight with Islamists is due to our dependence on Mideast oil. Boy, if that were true, it shouldn't be too hard to find another source that can source the 18% that we currently import from Saudi Arabia. What they argue about is world energy security? That has nothing to do with energy independence.

The thought that one of our adversaries would cut off our oil supply during the time of war - either a direct conflict or due to an alignment of forces. Once again, unlike many other nations, we get our supplies from a fairly wide number of nations. Besides, this is perceived risk than a real possibility.

The left berates us on our dependency on oil, foreign or domestic. And the right belly aches about oil imports. Neither concern is about the consumer. So, why do consumers care? And why does this poll so well?