Minor Thoughts from me to you

Archives for Wealth (page 1 / 2)

Morality Over Money

It seems that America’s Christians want to remember the Trump presidency only as one that was financially rewarding. I saw them, as we got closer to Joe Biden’s inauguration, reminding each other how good they had it.

Seen on Facebook:

Remember this day. No wars in 4 years. Job security. Oil independence . Gas is at under $2.10 gallon. Stock Market above 30K.

Also seen on Facebook:


Copied to my timeline so it will come back up in my memories next year.

Let’s see what happens. I can’t wait to compare!

Today is 1 days before Bidens inauguration... Gas is currently $2.15per gallon (Ivor, VA). Interest rates are 2.25 percent for a 30 year mortgage. The stock market closed at 30829.40 though we have been fighting COVID for 11 months. Our GDP growth for the 3rd Qtr was 33.1 percent. We had the best economy ever until COVID and it is recovering well. We have not had any new wars or conflicts in the last 4 years. North Korea has been under control and has not been testing any missiles. ISIS has not been heard from for over 3 years. The housing market is the strongest it has been in years. Homes have appreciated at an unbelievable rate and sell well. And let’s not forget that peace deals in the Middle East were signed by 4 countries—unprecedented!

Unemployment sits at 6.7% in spite of COVID.

Biden takes over on 1-20-21.

Lets look back next year...

These remembrances whitewash everything that was evil about the Trump presidency. For instance, here’s just a small portion of how I’ll remember Trump:

Remember this day. A racist, law-breaking sheriff pardoned. Children taken from parents. Refugees terrorized. Alliances shattered. 400,000 dead. White supremacists emboldened. Democracy undermined. The capitol attacked, Congress made to flee.

For Christians who claim to be Bible believing, this emphasis on money is unseemly. When measured against lives lost and people broken, who cares how well the stock market is doing, how cheap gas is, etc.? Morality means much more than money.

Jesus made it quite clear that it is far better to be poor and righteous than it is to be rich and unrighteous.

Matthew 6:19-24

Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also.

The eye is the lamp of the body. If your eyes are healthy, your whole body will be full of light. But if your eyes are unhealthy, your whole body will be full of darkness. If then the light within you is darkness, how great is that darkness!

No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.

Matthew 16:24-27

Then Jesus said to his disciples, “Whoever wants to be my disciple must deny themselves and take up their cross and follow me. For whoever wants to save their life will lose it, but whoever loses their life for me will find it. What good will it be for someone to gain the whole world, yet forfeit their soul? Or what can anyone give in exchange for their soul? For the Son of Man is going to come in his Father's glory with his angels, and then he will reward each person according to what they have done.

Luke 12:22-34

Then Jesus said to his disciples: “Therefore I tell you, do not worry about your life, what you will eat; or about your body, what you will wear. For life is more than food, and the body more than clothes. Consider the ravens: They do not sow or reap, they have no storeroom or barn; yet God feeds them. And how much more valuable you are than birds!

“Who of you by worrying can add a single hour to your life ? Since you cannot do this very little thing, why do you worry about the rest?

“Consider how the wild flowers grow. They do not labor or spin. Yet I tell you, not even Solomon in all his splendor was dressed like one of these. If that is how God clothes the grass of the field, which is here today, and tomorrow is thrown into the fire, how much more will he clothe you—you of little faith! And do not set your heart on what you will eat or drink; do not worry about it. For the pagan world runs after all such things, and your Father knows that you need them. But seek his kingdom, and these things will be given to you as well.

“Do not be afraid, little flock, for your Father has been pleased to give you the kingdom. Sell your possessions and give to the poor. Provide purses for yourselves that will not wear out, a treasure in heaven that will never fail, where no thief comes near and no moth destroys. For where your treasure is, there your heart will be also.”

Tax Records Reveal How Fame Gave Trump a $427 Million Lifeline

The New York Times has been looking through the tax records that Donald Trump never wanted us to see. They found that he came very close to another bankruptcy in the mid-90s. The surprise success of The Apprentice bailed him out. And he used that success to enrich himself in ways that preyed on poor Americans, desperate for their own rescue.

Tax Records Reveal How Fame Gave Trump a $427 Million Lifeline

by Mike McIntire, Russ Buettner and Susanne Craig.

With his penchant for using what he called “truthful hyperbole” to play on people’s desires, Mr. Trump had always skated close to the edge of fraud. Soon, he would be accused of crossing the line completely.

In his zeal to squeeze ever more dollars out of Mr. Burnett’s golden goose, Mr. Trump signed on to an array of questionable products and services, including some that claimed to sell insights into his business expertise. The first year of “The Apprentice” was barely over when Mr. Trump pocketed $300,000 to speak at an event in Dayton, Ohio, where attendees paid $2,995 to learn the secrets of instant wealth from a company that was later accused in a lawsuit of running a Ponzi scheme.

In his monologues, he made a virtue of his first round of casino failures, portraying himself as a victim whose grit and intelligence saved the day. People ate it up.

“His presence gives me reassurance,” Lillie Moss, who raided her retirement fund to buy an investment kit at the Dayton event, said of Mr. Trump.

The tax records show that another series of speaking engagements, sponsored by the Learning Annex, paid Mr. Trump $7.3 million for events with titles like “Real Estate Wealth Expo: One Weekend Can Make You a Millionaire.” A book he co-wrote with the Annex’s founder, “Think Big and Kick Ass: In Business and Life,” earned him royalties of $1.4 million.

Unmentioned in the mythologizing were the millions in bailout money from his father or the losses he was reporting to the I.R.S. Nor was there any sense of the gigantic payday — revealed only through an examination of the tax data — that Mr. Trump was enjoying in exchange for lending his imprimatur to an increasingly cynical array of business ventures.

As the years went on, and the success of “The Apprentice” made Mr. Trump a household name far beyond New York, the chasm between truth and hyperbole widened. It was one thing to bray about his late mother — a multimillionaire with a maid and a Rolls-Royce — using All laundry detergent. Now, he was flogging things that could hurt people economically.

In what would be his most lucrative side deal, he teamed up with a multilevel marketing company, ACN, whose clients were told they could make a living from home by selling video phones, satellite television and other services. Investigated in several countries, ACN has left a trail of complaints that people were suckered into spending far more than they earned trying to peddle the company’s products.

Regulators in France concluded that “only 1 percent of people recruited could claim a satisfactory income,” and that the rest lost money or, at most, made about $35 a month, according to court records. Montana officials came to a similar conclusion, finding that the average participant in that state paid ACN about $750 in various fees but got back only $53.

ACN, which has never admitted wrongdoing while settling legal actions by state regulators, claims its business model is misunderstood; on its website, it once posted a page helpfully titled “The Difference in ACN and a Pyramid Scheme.” A class-action lawsuit pending against Mr. Trump and his family asserts that the Trump brand became central to ACN’s business strategy, citing one plaintiff who signed up after she “watched clips of ACN appearing on ‘Celebrity Apprentice.’”

ACN sold DVDs of Mr. Trump promoting its products, and devoted part of its website to its “Trump partnership,” featuring photos of him appearing at ACN events and his glowing testimonial: “ACN has a reputation for success. Success that’s really synonymous with the Trump name and other successful names, and you can be part of it.”

By the time Mr. Trump featured ACN’s video phone on “The Apprentice” in 2011, the technology was close to obsolete, and yet he played it up, saying, “I think the ACN video phone is amazing.”

His tax returns reveal just how much the company was paying him for the happy talk: $8.8 million over 10 years, including $1 million in 2009 — the nadir of the Great Recession, when desperate people were drawn to promises of a fast payday. In fact, Mr. Trump actively capitalized on the economic anxiety.

In a separate deal he struck that same year, this one to promote the multilevel marketing of vitamins by a company that was rebranded the Trump Network, he gave speeches that persuaded some people to spend almost $500 for a starter kit and try to recruit friends and relatives. Mr. Trump said in a video that people “need a new dream.”

“The Trump Network wants to give millions of people renewed hope, and with an exciting plan to opt out of the recession,” he said.

Within a couple of years, the company behind the Trump Network, Ideal Health, was sold, and its owners declared bankruptcy. Still, it was long enough for Mr. Trump to make $2.6 million selling hope in a vitamin bottle, according to his tax records.

In 2016, he agreed to pay $25 million to settle litigation over Trump University, an unaccredited seminar that persuaded people to pay as much as $35,000 to learn the real estate trade. But that legal reckoning was the exception in a decade-long run by Mr. Trump and his company, described in the class-action suit, filed in 2018, as a “large and complex enterprise with a singular goal: to enrich themselves by systematically defrauding economically marginalized people looking to invest in their educations, start their own small businesses and pursue the American Dream.”

This entry was tagged. Donald Trump Taxes Wealth President2020

On hitchhiking around America via private plane

On hitchhiking around America via private plane →

The most fun is the people I run into. This country is so diverse…it’s like 50 different countries but everywhere I go I encounter helpful people who have interesting stories of their own. The landscape of the US is stunning, particularly in the West.

The most surprising? How much fun flying in small airplanes can be! One flight in New Mexico stands out where wild horses were running below the plane and there were no roads in sight. I was also surprised to discover so many people who are returning to a lifestyle of sustainable living, from urban farms to solar homes and the eco-friendly efforts of the larger cities. I also really dug getting to try out the flight simulators at Dallas’s Aviation Training & Resource Center.

I think I know what I'll do when I retire.

This entry was tagged. America Wealth

Jeff Bezos Is Indulging His 11-Year-Old Self And We Love It

Jeff Bezos Is Indulging His 11-Year-Old Self And We Love It →

If you had asked an 11-year-old Jeff Bezos to let his imagination run wild and think of the stuff that he would most dream to have as an adult, he might have said:

The world's biggest bookstore! Maybe even a bookstore that can beam any book directly to your hand in an instant (and movies and music, too!).

A giant sky computer that can imitate human intelligence

A spaceship.

...And maybe even a robot army

Of course any adult would have smiled slightly condescendingly, patted him on the head and helpfully explained that these things aren't possible. 

This is so great. I love what Jeff Bezos has done for the world.


Stuff →

I just discovered this 2007 article from Paul Graham. He said something that I've vaguely thought of before but I've never even come close to articulating it this well.

We all have lots and lots of stuff. We like to think that it's valuable because we'll use it one day. It's not. It's worthless.

What I didn't understand was that the value of some new acquisition wasn't the difference between its retail price and what I paid for it. It was the value I derived from it. Stuff is an extremely illiquid asset. Unless you have some plan for selling that valuable thing you got so cheaply, what difference does it make what it's "worth?" The only way you're ever going to extract any value from it is to use it. And if you don't have any immediate use for it, you probably never will.

Companies that sell stuff have spent huge sums training us to think stuff is still valuable. But it would be closer to the truth to treat stuff as worthless.

After reading this, I'm ready to go through the house and to start tossing "stuff".

This entry was tagged. Wealth

Milton Friedman on Wealth Redistribution

I'm a sucker for Milton Friedman videos and I'm a sucker for people explaining the secondary effects of economic regulations: the unseen that comes after the seen. Friedman does that here, schooling a student on how a 100% inheritance tax on wealth would destroy our society.

This entry was tagged. Taxes Wealth

Book Review: Against Thrift | Shiny Objects

Book Review: Against Thrift | Shiny Objects →

Megan McArdle artfully skewers an entire genre: books that make us feel bad about buying things.

One of the running themes of the economist Robin Hanson's excellent blog is that arguments like the ones found in these books are actually an elite-status proxy war. They denigrate the one measure of high-visibility achievement—income—that public intellectuals don't do very well on. Reading "Shiny Objects," you get the feeling that he is onto something.

Consider the matter of status competition. Mr. Roberts, like so many before him, argues that conspicuous consumption is an unhappy zero-sum game. But this is of course true of most forms of competition: Most academics I know can rank-order everyone in the room at a professional conference with the speed and precision of a courtier at Versailles. Any competition, from looks to money to academic credentialing, both consumes a lot of resources and makes many of the participants feel bad about themselves. Why, then, does the literature on status competition always tell us that we should redistribute capital gains or inheritances and never tell us that we should redistribute academic chairs or book contracts?


This entry was tagged. Competition Wealth

The Top One Percent Includes You

The Top One Percent Includes You →

Carl Haub, senior demographer at the Population Reference Bureau in Washington, D.C., has estimated that 106 billion humans have been born since Homo sapiens appeared about 50,000 years ago. That means that the richest one percent in history includes 1.06 billion people. There are currently 6.2 billion humans alive, leaving approximately 100 billion who have died. Who among the dead was rich by today's standards? Not many. Royalty, popes, presidents, dictators, large landholders, and the occasional wealthy industrialist, such as Andrew Carnegie and Leland Stanford, were certainly rich. All told, it is difficult to imagine more than 20 million of these people since ancient Egyptian times. This leaves 1.04 billion wealthy alive today, or 17% of the world's population.

The poor in the United States, by contrast, live on up to $23.50 a day. Except for the few hundred thousand who are homeless, the Americans whom the U.S. government defines as poor live exceptionally rich lives. In most ways, their lives are better than those of kings and queens just 200 years ago. Consider the quality and quantity of our food, clothing, refrigerators, televisions, washing machines, stereo systems, and automobiles. King Louis XIV of France had a greenhouse so he could eat oranges. The poor in this country can eat an orange every day, regardless of season. King Edward III of England could summon the royal musicians to play music. The poor in this country have a wide variety of music at their command, 24 hours a day, played note-perfect every time. Edward III lived in a dark, smelly, cold castle. Even the worst houses in this country are more comfortable and have electric lights, too. Care to live without showers and flush toilets? The kings of England and France had to. Next time you see a Shakespeare play in which kings and princes cavort, remember that royalty in Shakespeare's day had rotten teeth, terrible breath, and body odor that would make you keel over.

This entry was tagged. History Wealth

The Rich Can't Pay For It

The Rich Can't Pay For It →

The grand total of the combined net worth of every single one of America's billionaires is roughly $1.3 trillion. It does indeed sound like a "ton of cash" until one considers that the 2011 deficit alone is $1.6 trillion. So, if the government were to simply confiscate the entire net worth of all of America's billionaires, we'd still be $300 billion short of making up this year’s deficit.

That's before we even get to dealing with the long-term debt of $14 trillion, which if you're keeping score at home, is between 10 to 14 times the entire net worth of all of the country's billionaires, combined. That includes the all-powerful Koch brothers ($40 billion between them), the all-powerful George Soros ($14.5 billion), all the Walton family (of the Wal-Mart fortune), Steve Jobs, Oprah (at a paltry $2.7 billion), the Google Founders, Michael Bloomberg, and the Mars family (of the candy bar empire).

This entry was tagged. Fiscal Policy Wealth

An example of private property helping the poor

I finished listening to an old EconTalk podcast, during my commute this morning. Russ Roberts was talking to Karol Boudreaux about her fieldwork on property rights and economic reforms in Rwanda and South Africa. They spent the first half of the conversation talking about Rwandan reforms and the second half talking about South African reforms. I was most fascinated by the South African portion. (It starts at about 30 minutes into the podcast.)

Karol talked about Langa township in South Africa. It was established as a place for blacks to live, but they weren't given any rights to the properties whatsoever. They had to get permission from the city government even to paint or repair their homes. By 1994, the government had started to turn over ownership to the people who lived in the homes.

I was thrilled to hear the story of Sheila, a very entrepreneurial woman in Langa township. (Her story starts about 39 minutes into the podcast.) Sheila had been a domestic helper in Capetown when she saw a receipt for two glasses of wine and a plate of cheese. She was stunned to see that that sold for more than she got paid in a month. She knew she was worth more than that. So, she decided to prove it.

After a few false starts, she hit on the right business plan. Tourists had been driving through Langa Township for years, to see the results of apartheid. But they never got out of their tourist buses. Sheila decided to give them an opportunity to start getting out. She opened up a restaurant in her house (after she'd received the title to it). She now serves meals to tourists, while telling them the story of her life and her experiences under apartheid. Her restaurant is well known for "authentic" South African food. It's primarily advertised through word of mouth and bloggers (how great is that?). The restaurant doesn't just support Sheila. She also employs five other people to keep things humming along.

Does South Africa have more economic freedom than the U.S.? In some ways, it does. Try opening a restaurant out of your home and see how long it lasts before the local authorities shut it down. But, in South Africa, Sheila was able to use her home to create a living for herself, create income for others, create something for tourists to see and do, and educate many people along the way. And it all happened because she had the economic freedom to use her property in the way she saw fit. Her tourist guests use their freedom to eat where they see fit and her desire to keep her restaurant's reputation protects her customers as they eat.

Sheila's story is a perfect example of the win-win results that come from letting people make their own economic decisions and bear both the profits and losses that they generate. It's also an example of how far you can go if you decide to change your circumstances instead of complaining about them.

Destroying "Clunkers" for Cash

Does this make you sad, or is it just me? I think there's something incredibly barbaric and degrading about destroying a perfectly good piece of machinery. A well maintained engine can run for more than a hundred thousand miles. It seems almost sacreligious to just destroy it out of hand.

To receive government reimbursement, auto dealers who offer rebates on new cars in exchange for so-called clunkers must agree to "kill" the old models, using a method the government outlines in great detail in its 136-page manual for dealers: Drain the engine of oil and replace it with two quarts of a sodium-silicate solution.

"The heat of the operating engine then dehydrates the solution leaving solid sodium silicate distributed throughout the engine's oiled surfaces and moving parts," says the National Highway Traffic Safety Administration publication. "These solids quickly abrade the bearings causing the engine to seize while damaging the moving parts of the engine and coating all of the oil passages."

Over the weekend, half a dozen mechanics gathered around three clunkers marked for death at Jim Clark Motors in Lawrence, Kan. As Loris Brubeck Jr., the dealership's president, held a stopwatch, the sodium-silicate solution took two minutes flat to kill a 2002 Ford Windstar, and just a few seconds more to kill a 1999 Jeep. But a 1988 Dodge van lasted more than six minutes.

"Sometimes those old engines, they're the hardest to kill," says Mr. Brubeck.

I can't get over what an incredibly wasteful program this is.

Cash for Bonkers - John Hood - The Corner on National Review Online

Automobiles represent a significant share of the nation's capital stock. Even used cars often have years of life left in them, years during which owners can use them to get to work, perform work, or transport themselves and their families for education, recreation, or consumption.

"Clunkers" don't play much of a role in the lives of upper- and middle-income Americans, I suppose, but they play a major role in the auto market for low-income Americans. What the federal government is now doing is using taxpayer dollars to subsidize the large-scale destruction of functional cars that would otherwise exchange hands one or more times in the used car market. This will make it harder for poor folks to purchase cars in the future. It's an income transfer up the income distribution, at the behest of so-called progressives.

Barack Obama's Clunkernomics by Rich Lowry on National Review Online

The fundamental mistake is to think that the government can magically induce economic activity with no countervailing downside. The Clunkers program is really just shifting around sales, creating the illusion of a demand for cars conjured out of nowhere. To the extent the program has enticed people to speed up or delay their purchases to take advantage of the rebate, it has borrowed demand from earlier this year or the future for a burst of sales in the summer of 2009.

The car-buying guide Edmunds.com reports that as many as 100,000 buyers delayed their purchases, waiting for the Clunkers program. And some of the roughly 60,000 trade-ins that take place in any month anyway were rushed to gobble up the rebate. "We have crammed three or four months of normal activity into just a few days," Edmunds.com CEO Jeremy Anwyl writes in the Wall Street Journal.

The Clunkers program demands that the old cars be disabled. In a ritual repeated in dealership lots across America, sodium silicate is being poured into car engines to kill them. Many of these cars have value and could be sold on the used market. They are being destroyed senselessly in a diktat reminiscent of Franklin Roosevelt's slaughter of livestock during the New Deal. Decades later, we still haven't learned that the wanton destruction of goods is scandalously wasteful economic policy.

Gwen Ottinger - When 'Clunkers' Are Greener - washingtonpost.com

But these consumption-promoting policies are not necessarily a boon to the environment.

First, even when new cars and appliances are more efficient than the ones they replace, the act of replacing them entails environmental costs not accounted for in the stimulus programs. Building a new car, washing machine or refrigerator takes energy and resources: The manufacture of steel, aluminum and plastics are energy-intensive processes, and some of the materials used in durable goods, especially plastics, use non-renewable fossil fuels as feedstocks as well as energy sources. Disposing of old products, a step required by most incentive and rebate programs, also has environmental costs: It takes additional energy to shred and recycle metals; plastic components often cannot be recycled and end up as landfill cover; and the engine fluids, refrigerants and other chemicals essential to operating products end up as hazardous wastes.

Policies that encourage purchases of energy-efficient products may also increase, rather than decrease, energy use by confusing efficiency with consumption. For example, Energy Star refrigerators, which now qualify for rebates in many states, are certified to be 10 to 20 percent more efficient than "standard" models. Yet the Energy Star rating is awarded overwhelmingly to refrigerators far larger than would have been the norm two decades ago, and smaller models of refrigerator, which use less energy simply because they have a smaller volume of air to cool, were not even included in the Energy Star program until 2002. Consumers who wish to benefit from environmentally friendly stimulus money, then, are pushed toward purchasing "efficient" but relatively large models rather than being encouraged to opt for the smallest refrigerator, with the smallest energy demands, that meets their needs.

Beyond these concrete environmental drawbacks, product-replacement policies also send a message that old things are dirty and inefficient, while new ones are necessarily green and efficient. Under the Cash for Clunkers program, for example, old cars must be traded in for new ones. Yet plenty of used cars exceed the required 22 mpg: The Toyota Prius hybrid, on the market since 2001, gets upward of 40 mpg, and even a 15-year-old Honda Civic gets 28. By assuming that only new products can be environmentally friendly, these policies lead us to discount the environmental gains that could be made through well-established and low-tech means, such as smaller refrigerators. They also reinforce the idea that all products, even "durable goods," quickly become obsolete -- a notion that leads to overwhelming amounts of environment-despoiling waste.

More Cash for Clunkers III - John Stossel's Take

Another unintended consequence of the Cash for Clunkers program is that poor people who can't afford new cars - or expensive used cars -- will be crushed along with all those clunkers. If you can only afford $500 - $1,000 for a car, you'll find many of these vehicles are now unavailable. They have been sent to the junk yard thanks to this program.

The Blogger News Network points out that junk yards that demolish the clunkers aren't allowed to pull engines and other parts before they're crushed, making parts for older cars harder and more expensive to get.

"Cash for Clunkers" benefits New Car Dealerships primarily, by increasing sales, and the upper and middle class possibly, by giving them an extra few hundred dollars. But it's not good news at all for lower income people. We can't afford a new car, and we won't be able to continue fixing our older cars at an affordable price, if we can find the parts at all. This isn't good.

In fact, the Obama administration knew they were taking away our options to keep our vehicles running. They want our cars off the road, and they really don't care how it affects those of us with very little money. The little guy isn't a priority. Obama pretended to champion the little guy in order to get their vote, but it's becoming more and more obvious that special interests - those that have received the bailout money and those industries he is choosing to socialize - are what he really champions. Politics as usual.

Who Are the Rich?

David Bernstein talks about the rich:

My friends in this income bracket [$250-380K] tend to have have high mortgages, work 60-80 hours a week, pay 40-50K or more a year for child care (a nanny is necessary when you often work into the late evening--and even day care for two kids in the DC area costs close to 40K a year), and have six figures worth of student loans, primarily from professional school, that they are still paying off. In other words, approximately 100K of their pretax income is taken up by their student loans and child care costs, which are the equivalent of "startup costs". Their mortgage costs may seem excessive, but you don't easily make six figures in low-housing cost cities like Des Moines, and living in outer suburbs is very difficult when you work 12 hour days.

If a hypothetical couple's initial income is a total of $300K, and they work an average of 70 hours each, and assuming two weeks vacation, they are in effect getting a grand total of $28.57 an hour for their labors, and a fair percent of that is going to pay interest on the mortgage. I'm sure they are glad to know that they are rich enough to be taxed at over 50% of their marginal dollar.

I wonder how many people think about that when they think about soaking the rich?

Don't Fear the Rich

Who should you fear more, rich people or your local government bureaucrats? That's an easy question. You should fear the nice lady down at Village Hall. She has far more control over your life than any member of the upper class.

Walter Williams states it beautifully.

Warren Buffett and Bill Gates, with about $60 billion in assets each, are America's richest men. With all that money, what can they force us to do? Can they take our house to make room so that another person can build an auto dealership or a casino parking lot? Can they force us to pay money into the government-run retirement Ponzi scheme called Social Security? Can Buffett and Gates force us to bus our children to schools out of our neighborhood in the name of diversity? Unless they are granted power by politicians, rich people have little power to force us to do anything.

A GS-9, or a lowly municipal clerk, has far more life-and-death power over us. It's they to whom we must turn to for permission to build a house, ply a trade, open a restaurant and myriad other activities. It's government people, not rich people, who have the power to coerce and make our lives miserable. Coercive power goes a long way toward explaining political corruption.

I don't fear the rich. I fear a President and Congress who think they know how to run my life better than I do. I fear state and local governments that have the power to fine and imprison me if I don't live by their prejudices. I fear the government.

Do you?

Working Hard -- But Not at Home

Many people like to point out how Americans work harder -- and longer -- than the rest of the world. Many leftists like to point out that America's work / life balance is out of whack and that we need to spend more time at home and less time at the office.


But we don't really work all that much more. We just work differently.

Recent studies show that Europeans work much harder than most people think, and some, such as the Germans, work every bit as hard as we Americans do. An analysis of why makes it tough to say that one culture is somehow wiser than the other.

The key to the research is a simple question: What's work? The statistics we usually see focus on jobs that people get paid for, and by that measure Americans do indeed toil much more than Europeans. But that measure overlooks all the cooking, cleaning, lawn mowing, and other home-based labor that most people do. We don't get paid for it, but it's just as real as other work. When we count it as well as paid employment, the whole picture changes.

A thorough study by Richard Freeman of Harvard and Ronald Schettkat of Utrecht University found that Germans and Americans labor almost exactly the same amount. (The researchers note, "While our data deal with Germany and the U.S., our findings reflect the difference between EU and American models of capitalism more broadly.") The difference is that we do more market-based work, and Germans do more home-based work.

Now, I'd much rather do work that I get paid for than work that I don't get paid for. I'll take my leisurely home life over the Europeans leisurely vacations any day. Not to mention: America's model produces more jobs for women and low-skilled workers.

An important result is that we create far more service jobs than Germany does, and that nation's much smaller service sector is the main reason Germans are less likely to be employed, with an unemployment rate consistently higher than ours for the past 20 years.

New research by Richard Rogerson of Arizona State University finds that "almost all of the difference [between Europe and the U.S.] in hours of [paid] work is accounted for by differences in the service sector." Some people denigrate burger flipping and the like as dead-end jobs, but for young people whose skills aren't yet highly developed, they're gateway jobs that are the best economic use of their time.

Now carry the analysis a step further. The difference between Germans and Americans in work profiles is much greater for women than men. American women are far more likely to hold paid jobs than German women, and those who do are far more likely to earn higher pay.

The conventional wisdom is actually hilariously wrong in this instance. Americans only appear to work harder because we get paid for a higher percentage of the work we do. Americans can have just as much "free" time as Europe only if we agree to actually work for free!

No thanks.

This entry was tagged. Wealth

Age of Wonders

Bill Quick sends an e-mail to Glenn Reynolds:

So I'm out on my bike today - it's gorgeous in SF - and I stop by the Bay for a breather and just to sit and watch the sailboats gliding under the Bay Bridge.

I open my backpack and drag out my 3 lb Lenovo with builtin EVDO, fire it up, and check my blog. Then yours - and see your post about The Mirrored Heavens. I click the link and check it out at Amazon. Sounds right up my alley. So I open my Sony eReader, connect it to my laptop, and buy the book for ten bucks, download it, and watch it join the 400 or so other books sitting in my reader.

It's next on the "pile," after I finish crunching my way through Peter Hamilton's endless, but fascinating trilogy.

Speaking as a SF writer, I can tell you that intellectually this shouldn't amaze me (and intellectually, I expect the process to be a lot more seamless in a couple of years), but as a 62 year old person who can remember when phones were black, tvs had tiny round screens, and the "network" was The Lone Ranger on CBS radio, there are times it seems downright miraculous.

Thanks for the recommendation.

This entry was tagged. Science Fiction Wealth

Aston Martin DB6 Couch

Here's another symbol of how rich our country is: the Aston Martin DB6 Couch:

db6couch.jpg This couch is an exact replica of an Aston Martin DB6 rear end. It's painted in a classic Aston Martin color, Silver Birch. The red leather is finished off with a Y-stitch on each cushion. Polished to perfection, this couch would look good in a garage full of Astons. You might not want to put this work of art in the garage though, at over $7,300 the thought of accidentally getting a little grease on the car couch might make you think twice. The limited edition couch comes with an engraved number plate and is available in any color scheme you would like. Matching headrests are not included.

We're rich enough that someone can make a couch that looks like a cars. Not only can the bright entrepreneur sell said couch, he can make a profit on it as well!

Next up: If enough people to buy the couch, competitors will enter the market in search of similar profits. As supply rises, prices will decrease. Soon, everyone can own their piece of an Aston Martin DB6. Start buying people -- I want my cheap DB6 couch!

Why Are We Rich and They Poor?

Mary Anastasia O'Grady wrote in the Wall Street Journal about the findings of the latest Index of Economic Freedom.

"The evidence is piling up that neither government nor multilateral spending on education and infrastructure are key to development. To move out of poverty, countries instead need fast growth; and to get that they need to unleash the animal spirits of entrepreneurs.

The nearby table shows the 2008 rankings but doesn't tell the whole story. The Index also reports that the freest 20% of the world's economies have twice the per capita income of those in the second quintile and five times that of the least-free 20%. In other words, freedom and prosperity are highly correlated.

Why are some countries so poor? Why is the U.S. so much richer than countries like India? Is it because the U.S. gobbles up the wealth of the world and doesn't play nice with other countries? Not really, no.

In "Narrowing the Economic Gap in the 21st Century," Stephen Parente, associate professor of economics at the University of Illinois at Urbana-Champaign, debunks several World Bank myths by showing that it is not the resources -- land, workforce and capital -- of an economy that play the most important role in explaining higher income countries. Instead it is "the efficiency at which a society uses its resources to produce goods and services."

Mr. Parente cites the microeconomic research of McKinsey Global Institute, which estimates that modern industry in India could take a huge bite out of its productivity gap with U.S. competitors by simply upgrading production techniques. India doesn't need another multilateral education project. It needs to tap into knowledge already available in successful economies -- the information and technology is out there. The trouble is that it is unavailable in many countries like India, because government barriers and constraints to limit competition make access difficult or impossible.

In other words, the U.S. is richer because American workers do more with what they have, not because they have more to do something with.

Don Boudreaux puts it quite nicely.

As Julian Simon taught us, the ultimate resource is the free human mind. A land rich in petroleum, arable land, and iron ore and other minerals is useless to a society of humans incapable of rational thought and intolerant of change. Nor would such a land of potential plenty realize its potential if its inhabitants are restrained by tyranny or by widely shared misconceptions that individual enterprise, innovation, profit, and the pursuit of worldly pleasures are degrading or sinful.

But unleash people from the countless foolish and rent-seeking constraints imposed by government and from constraints imposed by their own superstitions and they will create resources. They will flourish and prosper, not only materially but also culturally and intellectually. A free people can and will build a dynamically prosperous society in even relatively barren and inhospitable places such as New England, Arizona, and Hong Kong. An unfree people will languish in poverty even in lush paradises such as much of Central and South America and in lands teeming with 'natural' resources such as Congo and Russia.

(Via Cafe Hayek: Freedom and the Ultimate Resource.)

Reverse Imperialism

I was just flipping through my newsreader and saw an interesting headline: Tata Pulls Ford Units Into Its Orbit:

Tata Motors said that it was entering detailed talks with Ford about the takeover of Jaguar and Land Rover, confirming what investors and analysts have anticipated for months.

I've been reading The Downing Street Years by Margaret Thatcher lately. Early in her prime ministership, Lady Thatcher had to decide what to do with Land Rover -- at the time an ailing government owned company. I haven't yet read what her ultimate decisions were, but somewhere along the line it was sold at least once and now Ford owns it.

According to this article, Ford may sell Land Rover to Tata Motors, an Indian owned company. It wasn't that long ago (cosmically speaking) that Britain "divested" itself of India. Now, in a manner of speaking, India may be taking over a part of Britain.

I find that both slightly amusing and a great symbol of how much richer the world is becoming.

Everyone's Getting Rich

Everywhere I turn in the media, I hear that the economy is horrible. I hear that our parents had it better than we do. I hear that my generation may be the first ever to be poorer than my parents generation.


First off, my parents never had iPods growing up. In fact, they didn't even have cassette walkmen. Surely that's a form of wealth? Second, my daughter will grow up in a home with multiple computers; flat screen high definition televisions; cars with automatic windows, doorlocks, and airbags; wired and wireless networks; video chat with grandparents; cellphones for all; and more. Isn't that also a sign of great wealth? Isn't that also far more than my parents ever had? (Yes.)

Secondly, even if new technology didn't indicate an increased standard of living, rising incomes would. Check out the the National Data Book's spreadsheets for Money Income Of Families--Distribution by Family Characteristics and Income Level.

Between 1970 and 2004, annual median income increased from $9,867 to $54,061. After adjusting for inflation, annual income increased from $41,568 to $54,061. That's quite an increase! Incomes were adjusted using the Consumer Price Index Research Series, to that even takes into account increases in the cost of healthcare.

Sounds to me like we're doing pretty good.