Posted June 2, 2011 at 1:00 pm
by Barry Goss
In the best-selling book on the planet, the following line was printed:
“Forgive them, for they know not what they do.”
I’m not sure why I’m quoting the Bible, because I don’t like anything about what the book has come to stand for: lack, limitation, fear, crowd thinking, hypocrisy, exclusionism, etc.
But let me give you the Barry-ized version of that Bible verse:
“Forgive them, for they know not what they think.”
Thinking is powerful. But, thinking correctly is change-making. Not only for cleaning our own lenses, to get a clearer perception of reality (what life is), but for ensuring we don’t let distorted, tainted, and misaligned information control our individual lives.
This all came to mind last summer as I accidentally* read an article by Amy Domini, founder and CEO of Domini Social Investments, in the July/August 2010 issue of Ode Magazine.
[ * It was sent to us as a trial offer, because it was automatically included via another offer we DID intentionally purchase. Anyway, being that it was sitting on our kitchen island looking like it needed to be picked up, and since its tagline "For Intelligent Optimists" was intriguing, I read a few articles. But, Domini's was the most unintelligent do-gooder pitch for income equality that I've ever laid eyes on. ]
Her appalling argument is that the government, in order to dig us out of the financial crisis (the economic recession), should spend more time (yes, even more than it already is) replicating Robin Hood’s favorite meme — “rob from the rich and give to the poor!”
Yup, your eyes didn’t deceive you…
In her quest to enable mediocrity and feel solace for the financially inept, she actually says:
“Our self-interest, indeed the nation’s economic well-being, starts with creating more people who can spend, even at the risk of creating fewer people who can spend billions.”
Wouldn’t you agree that those who spend billions create more value, more opportunity, more jobs, and more opportunity for others to create wealth than the person who is merely spending a little bit on himself?
Domini’s argument is that “Buying a $75 pair of shoes doesn’t create the same level of economic stimulation as buying a $50 pair of shoes and a $25 pair of groceries,” because the former only serves the shoemaker while the latter helps the infrastructures of both the shoemaker and the grocery supplier.
Therefore, she says, we need to get “money into the hands of those who will buy the less expensive pair of shoes and some groceries” by redistributing wealth.
Or, to restate what she’s saying in her article, try this one on for size:
Imagine a blatant broad “income equality” law that said:
“It is our mission to incentivize people — the credit-infused, cash-flowless masses – to be mediocre by somehow handing out somebody else’s time, energy, and effort (in the form of money) to them.”
I know… pretty asinine, huh?
What Domini doesn’t understand is that if you give that $75 to the people she’s referring to, most of them won’t buy the $50 pair of shoes and the $25 worth of groceries; they’ll either hoard it away or blow it on something stupid like lottery tickets or a night out.
Greater achievement (as represented by MORE and MORE people achieving), in a supply-and-demand-driven economy, starts with individual creativity, problem-solving, and failing/succeeding with ideas… then rinsing and repeating some more… until something of value is produced.
Our current tax system, and overly consumption-based economy, is a joke. It punishes people for working, saving and investing.
But there are always folks out there, like Ms. Domini, who will complain that “We [as a nation] are not deliberate about creating new consumers of the right kind.”
Er, what, Amy?… You up for creating the equivalent of a drunken spend-a-holic, with no clue what it means to sacrifice and save (or invest), who’s being deluded into believing his/her shopping spree is actually adding to his/her net worth?
Ms. Domini writes about how she took Economics 101, but I guess she skipped class the day they gave the “value-quotient” lesson:
But ignorant politicians don’t see it that way. People like Nancy Pelosi — somebody who has never run a business, held a regular job, or employed anyone in her entire life — feast on implementing more and more entitlement programs.
They’re programs that rarely can be directly attributed to actually improving people’s individual lives, or the economy as a whole. They sound good initially and make us feel fuzzy all over, but government cannot dictate the laws of economics.
Hope is not a viable economic strategy.
Still, the Pelosis of the world would rather CONTINUE to pay people not to work:
In July, she made the argument that extending unemployment benefits (past the current two-year limit) is the best way to stimulate the economy…”It injects demand into the economy… It creates jobs faster than almost any other initiative you can name.”
She says the money is spent quickly, so it creates jobs faster than any other stimulus.
But, I would argue that, just like more donuts laying around the house doesn’t encourage an overweight person to change a bad “habit,” neither does extending someone’s beloved unemployment benefits.
Coincidentally (if anything is really coincidental), this all reminds me of a blog post Heather showed me that Randy Gage wrote.
“How Much is Too Much?
“Bet you’ve heard that more than a few times. But picture this…
“Someone says, ‘Just look at that George! He has perfect health. High energy, no diseases, and he hasn’t even had a sniffle in months. Don’t you hate greedy people like that? Poor Elizabeth has the flu, and George is hogging all the health!’
“You’d never say that about health. Or love. Or happiness. So why would you say it about money?”
The short post sparked all kinds of commentary both from people supporting it, and those questioning it. The ones arguing say that health is different because it’s not dependant on whether others have it, whereas you can only have money if it’s taken from somebody else.
But the truth is, while money can certainly be taken from somebody to give to somebody else, it’s a hollow exchange with no validity; the person giving is getting nothing in return.
The creation of wealth, on the other hand, is based on quid pro quo, or a value-for-value exchange.
If we give money to someone who will buy $50 shoes and groceries, what are they giving of value to receive that?
Simply existing is not giving value to the world, as feel-goody as that sentiment may be. Stealing money is also not giving value to the world, even if it’s done under the guise of being for the greater good.
And that’s why wealth redistribution just won’t work.
But if you DO want to seemingly create money out of thin air, investing it is a great way to do that. You put in a bit of money (give value) and some time (more value), and you end up getting more money back.
Now you’ve got a paycheck without robbing the rich — or the hard-working PRODUCERS of the world — to get it.
By the way, growing the money you do have doesn’t have to be that hard either. It just takes knowing the right people, and places, to sync it up with intellectual capital, time, and the magic of compounding (more here)…