Trickle Down Economy

"Trickle Down Economy" - This word is almost always used in a negative fashion. Many on the left refer to capitalism this way.

Apparently, there are 2 types: 1) Trickle Down Economy 2) Spread-the-wealth Around Economy.

More well known, real names, for these two types are: Capitalism and Socialism.

Lately, every professor of economy is writing to news papers declaring that capitalism is dead. And these are the same guys who don't admit that socialism was dead with the end of the evil empire. So, let us examine.

Under capitalism, I work hard and save. And then buy a house with those savings. Remember I did not build the house nor did any community group built it for me. A large number of different hard working individuals built my house. And as part of the process earned a living themselves. And yes, I have a lawn. And I hire a landscaper to do it. He is a small business and he has a small crew who take care of my lawn. And thus each one of them earned a living.

Under socialism, I work hard - but can't save, because I only earn a "living wage" - I will only get enough "bread" for my family, a community multiplex (read: Slum) apartment, use public transport and no lawn. So, the guys that built that multiplex also get the same. And there are no landscapers. So, there is no incentive for me to work hard nor for the guy building the multiplexes. Whether he builds one or many, whether be builds it well or not, he gets the same "remuneration".

I have seen both types first hand, lived in both systems.

To many lefties living in the west, Soviets did not know how to "implement" socialism. If only we allowed these folks, it would "work". Yeah, sure!

To me, the only type of economy there is, is the "Trickle down" type. Because, without the rich guys and their parties, vital segments of the job market would disappear. Without these guys cruising in their yachts, there would not be any boat builders. If it is not for their lavish houses, there would not be any groundskeepers. Because, in any society, different people can do different things better.

For "Joe the plumber" to get ahead in life, he has to have some incentive. God bless this guy and everyone else like him who is creating opportunities for others to get ahead. I am not an "entrepreneur". But I certainly appreciate all they do  for the economy - the trickle down type.

Rising tide lifts all boats. And the inverse is true too. But, in the current economic environment, it is easy to jump on the bandwagon and claim that the "rich" had their unfair advantage. But during the boom time, I don't think I heard much of that. Federal government was raking in lots of tax revenue and everyone was in favor of the party to keep going. And of course, the trickle down economy worked too well, I should say.

As far as I am concerned, there is only one kind of economy and that is always the "Trickle Down Economy". I don't think it is such a bad word to say after all.

Greed

You have been hearing a lot about Greed lately - as to how Wall Street's greed got us into this financial mess we find the world in. Let's examine.

According to Merriam-Webster:

Greed (Noun): A selfish and excessive desire for more of something (as money) than is needed

And yet in the history of human existence, it is greed that has propelled mankind to its current form. (And you can make the case with animals too).

In its simplest definition, it is "a desire for more of something". "selfish" depends on the point of view. It could be just that individual, a group, a class, a race or a nation. "excessive" and "needed" also depends on the point of view - the individual or the one looking at the individual; they are both very subjective.

Our sensibilities prevent us from admitting that "greed" is what motivates most of us. That does not mean that we all value money alone. We are all greedy for different things - fame or fortune. Celebrities try for fame (with it comes fortune too), but most of us would take fortune over fame.

Manny Ramirez's $160 million dollar deal is propelled by his 'greed'. And in return he livened RedSox nation with his bat. There have been many others during the same period in RedSox roster that did not quite have the 'greed', but neither did they entertain the crowd . (This is not a point about highly paid athletes.) 

And on Good Morning America (when she was with NBC), Katie Curic lit into the supposed retirement package GE offered its retiring star CEO Jack Welch. And I am certain she has not appreciated the irony. At that moment, she was the highest paid executive at GE, not Jack; NBC being a fully-owned subsidiary of GE. If it were not for Jack's "greed", GE would not be what it is. And neither would Katie. And there in lies the rub.

We are constantly reminded by the anchors about Wall Street's greed. And it is their own greed that got them into that seat in the first place.

And then there are the academics - the arm chair pandits. "Greed" does not even describe them. And all of them got to where they are because of 'greed' - they just don't call it that. They call it professional rivalry or passion or ego. They claim they do it for 'fame' and not 'fortune'. Once again, I am not knocking them down. They deserve richly what they have worked hard for.

Back to Wall Street. So, there were some "greedy" CEOs. And they invested in these shady 'credit default swaps'. Did we as investors stop them? No. Why not? Because of our "greed". And to say that their 'greed' is bad, but our 'greed' is good is down right hypocritical.

We are often told, "they need to give the money back because the company is not doing good now". Fair enough. But what money should they give back? The compensation they received during their good years? How fair is that?

All of us, in our routine jobs make a lot of mistakes. And some of them are costly to our business. Would it be fair then for our employer to want to 'garnish' our wages for our mistakes? If we make too many costly mistakes, we could lose our jobs. And even CEOs do.

And then, Barney Frank, Chris Dodd, Nancy Pelosi, Barak Obama, John McCain,.... The list is endless. No, they are not in it for public service. They are in it for pure greed. Otherwise, most, with the exception of Obama (he hasn't been around long enough), should accept term limits and retire after 2 terms. Obama will be constitutionally forced to honor term limits (if and when he becomes the President).

So, I urge the rest of us "Average Joes", to not condemn "greed". But instead have the "greed" for any "thing" you desire. There is no satisfaction in not having the "thing" you desire - unless it can only be obtained through malice.

God Bless America.

Windfall Losses

Just a few months ago, our politicians were screaming about "Windfall profits" of the Big Oil. They claimed that the greed led to the huge profit margins of the big oil and how they need to pay their fair share back to the American people.

Now pretty much the same politicians are claiming that Wall Street greed is causing those catastrophic losses.

So, is it fair to ask if Congress deems that Windfall profits be taxed, should windfall losses be compensated?

While our pols were hyperventilating about Windfall profits of Big Oil, oil quickly moved below $100 a barrel. And nary a peep about how that happened.

Republican Ticket

A lot has been said about the Republican ticket since the Gov. Palin was nominated the VP candidate. And most of it negative attacks from MSM and the Democrats. I do not add or subtract from what has been said. These are simply my opinions about the Republican ticket.

• Fiscal conservative: Not easy being a governor and a fiscal conservative. And especially if you are from Alaska. Even more if you are Republican from Alaska. Vice Presidents don't always sway the administration's fiscal policy. But Dick Cheney changed what a Vice President does (This might only be a GW legacy that might not last in a McCain administration).
• Social conservative: Her family is a testament to that. And here, many play Gotcha about her pregnant teen daughter. But what you are does not always prevent such things. Even in the most closeted families, kids spend inordinate amount of time with their peers. This is a scenario most parents dread. And Gov. Palin's choices are commendable. And definitely not the ones left-coast liberals align with. A lot of us do agree with those choices and values that they represent.
• Normal: She is normal. She is hard working. She did not go to Ivy league colleges. She has funny names for her kids. She sounds like most of my neighbors.

McCain is the original maverick. A lot has been said about how the Republican base is angst at his maverick tendencies. But most forget, he won the Republic nomination in Republican primaries (only hardened base voters vote in primaries). But picking Gov. Palin was the first thing he has done to acknowledge the concerns of the base. And it is good politics. (MSM will say, how dare he play politics?)

McCain's economic policies are good. His pronouncements are awful - just listen to his latest campaign ad. Thus giving us a pause as to which one he believes in. In these times, it is hard to say the right thing. We sure hope he knows the right things to do. I think his congressional record pretty much confirms that he knows them.

Over lunch today, one of my colleagues brought this topic up. And before I could say anything at all, another colleague pounced upon the topic - essentially declaring that all Republicans are fools for having made up their mind - because they vote for the party. In the same sentence he claimed that they are only voting because of Gov. Palin.

He was so condescending of my choices and essentially my intelligence that I decided to write this post. May be this is why we are rallying behind Gov. Palin's candidacy more than McCain's.

In the end, I had to leave the conversation by saying that, of the three only I could vote this November.

5 million new jobs

The Ad says:

"The hands that built this nation can build a new economy. The hands that harvest crops can also harvest the wind. The hands that install roofs can also install solar panels. The hands that build today's cars can build the next generation fuel-efficient vehicles."

...

"Create five million jobs developing home-grown energy technologies because America's future is in our hands"

But if my roofer can actually fix the solar panels and more than likely my electrician can hook it up, where are the 5 million new jobs? Aren't they the 5 million existing jobs?

I guess that would be "Audacity of Truth".

$4

I don't think I need a more descriptive title - everyone knows exactly what I mean. But most don't understand its direct message(s).

1. Conserve: No, most people don't get this message. They are quick to lash out at some "greedy" corporation increasing the price at whim. And of course, somehow the Bush administration is to blame. And the media does its round of disinformation.
2. Weak Dollar: Oil is dollar denominated. So, a weak dollar demands more of them for the same gallon. I don't expect general population to understand the economics behind it, what's with the Fed!!!

Conserve: Let's see. This weekend, during the "heat wave" in the north east, I drove to a local Best Buy. In an otherwise empty parking lot, I could find parking upfront. I parked next to a fairly late model Jeep (large) - noticed that the engine was running but no driver. I noticed couple of passengers inside. They must be enjoying music and the air conditioning. I went in, browsed for half-an-hour or so. When I drove off, that Jeep was still running - parked. What a colossal waste? If it is just air conditioning, store was very comfortable. And it wasn't crowded either. Aren't there better ways of generating electricity for that air conditioning than running a Jeep 4x4 (6 or 8 cylinder engine) idling in a parking lot? And I am sure this indigent driver would be happy to mouth off into a microphone if a reporter were to approach him/her about the price of gas - blaming some "invisible" corporation. Why are we so stupid?

And my favorite pet peeve - speeding. Especially, speed up to catch up with the car in front of you. Most modern cars come equipped with Gas Milage display. And it is pretty obvious that you get the most milage when you are driving steady. And yet people are constantly revving up to catch the next car ahead and put the breaks on to slow down. Each time burning more gas than the engine needs to keep the same pace. Most internal combustion engines (what every car has) operate optimally around 60-70 mph. Even if you don't drive a hybrid (I don't), by driving steadily on a highway, you can still get a respectable milage. I get 30 mpg on most days - driving about 60 miles round trip. I am often amazed how few people use cruise control.

Weak Dollar: What's with the Fed? Weak dollar has a huge following domestically - for all the wrong reasons. Its politically very popular. With a weak dollar, our exports are cheaper and hence more in demand overseas. So congressmen pressure both the Fed and the administration - both of which accommodate those popular items. The flip side of this is that all our imports, including oil is more expensive. And as American's are by far the largest consumers in the world, we are net importers of foreign goods. All of which is more expensive due to a weak dollar. Administration thinks that its public statements about "strong dollar" policy is enough to fool currency markets, which are closely monitoring administration's deeds.

And the Fed's easy money spigot. Is there any adult supervision going on over there? And everyone is defending the indefensible - the link between easy money and the weak dollar. All you need is common sense. But these guys are economists for crying out loud.

$4 gas is better than $10 that the Europeans pay. And our commodity markets do work. And prices do come down eventually. Not quite so in many other parts of the world.

Lapel Pin

Check out the definition in Wikipedia. So, why has it become a controversy on the campaign trail?

Turns out, the media did not make it a big deal. Obama campaign made it a big deal. He was merely asked a question. And he could have chosen one of many benign responses. However, he chose to denigrate every one who puts on a display of their patriotism. And now he is the one complaining that it is being blown out of proportion.

Every time he is asked to answer some of his troubling associations and actions, he accuses every one else of blowing it out of proportion - anyone remember Rev. Wright.

So, what's next. If he is elected president, he would join anti-American protestors with a spontaneous display of flag burning!