About Those Lazy Freeloading Americans on Welfare

To those who complain about the "47% freeloaders and Americans who are "too lazy to work", a history lesson is in order.

Following NAFTA and WTO in the 1990s opening the floodgates to Chinese and Indian imports, 17 million American jobs disappeared. The losses were not confined to the lowest paid low skilled workers. American skilled workers were also harmed including some of our highest skilled IT workers.

Fast forward to 2008 when the financial industry crashed the world economy. It was not war, drought, earthquake or any other natural disaster that crashed the world economy; the financial industry crashed the economy after they defeated financial regulation and enabled unlimited leverage in pursuit of unlimited profits.

In the years following the crash millions of young Americans graduated with college degrees (and student debt) to find that there was no appropriate job for them. Some took hourly menial jobs, some went back to school to try again to make the American myth work for them. Others stayed home with their parents, disgusted and disillusioned.

In the years since the crash corporate America has recovered and posted record profits. The nation’s GDP has risen to new highs. The stock market indices have hit new highs. But we have persistent large unemployment and underemployment, and by some measures the domestic economic teeters on the edge of falling back into recession.

American workers are not indestructible. After an individual who has done all the things that are supposed to guarantee success (education, hard work) gets screwed by seeing they job transferred to foreigners, or finds that the expectation of a good job for that expensive degree and high GPA was just an empty promise, that individual will most likely never believe in the American economic system again.

We have 49% of Americans on various forms of government assistance because the national business friendly policies of the past 20 years have left the nation without enough jobs and no alternative ways for the displaced individuals to earn a living. (citation: Wikipedia). The bitter truth is that the business-friendly policies have resulted in the highest GDP ever and more billionaires than ever have left tens of millions of American workers out of the fruits of the new economy.

This has created a persistent economic lethargy in America because those American workers who were so cavalierly replaced and discarded were also the American Consumers who supported 71% of domestic economic activity with their spending.(Wikipedia)

The macroeconomic effect of screwing American workers is measured and quantified by the metric “Wage Share” Wage Share is the proportion of the production of American businesses that is paid out to workers in the form of wages and salaries. Wage share in America peaked in the late 1970’s which was the heyday of the American Middle Class. Wage share began declining in the 1980’s with the passage of laws that made it easier to not pay American workers overtime, and failed to raise the national minimum wage to keep up with inflation. Wage share fell more sharply following the passage of NAFTA and adoption of the WTO that subjected American workers to competition workers in low-wage third world nations. (Citation: Wikipedia article on Wage Share).

People are people. We do not have a generation of 50 - 100 million people with defective DNA. The lack of widely enjoyed prosperity by American working people is the result of laws that America passed to make it easier for business to produce without paying wages to American workers. The result is an economic system that lets a very few people harvest the wealth produced by the nation’s workers, and leaves tens of millions of working Americans and their families out of the rewards. The ones at the bottom of the economic finish line – an increasingly large number – turn to the government for assistance with healthcare, food, and housing. In a democracy, the politicians cannot survive if they do not respond to the basic needs of the voters.

So now we have our business-friendly economy. We have more billionaires than ever – 536 according to Wiki – and more Americans receiving government assistance than ever – 151 million in total.

It raises the question: What is our national economic objective? If we want to have the most billionaires and the highest GDP, we have succeeded. We can bask I the glory of the incomprehensibly large amounts of wealth harvested by Gates, Buffet and others, a sort of sycophantic economic system where the workers gain satisfaction by seeing a few kings elevated to riches beyond counting. If on the other hand, we seek to have the highest GDP so that all working Americans share in the resultant prosperity, then we have failed miserably.

It would not break new ground to require American corporations to pay middle class wages to American workers. Through the industrial age corporations have repeatedly found ways to exploit public resources in pursuit of profits, and government has repeatedly stepped in and required companies to internalize the business costs that they would prefer to ignore. Think about the costly changes imposed on business to correct workplace hazards that sicken and kill employees; smog so thick that it kills people and degrades the quality of life for all nearby residents; water pollution so bad that no fish can survive in the rivers adjoining the factories. American workers are a resource in the economic environment. The consumer economy depends on American workers being paid a fair share of the production they produce.

Home Buyers Beware: Master Fees = Master Screw Job!

Corporate developers have adopted an audacious money making scam called "Master Fees" or "Master Development Fees".

Home buyers are of course usually inexperienced. How would any individual become a professional, experienced home buyer? Developers are exploiting their customer's inexperience by tacking the Master Development Fees onto the price of new homes and pretending that it is normal and reasonable. Buyers who raise any questions are give a well rehearsed theatrical presentation designed to make it clear that the buyer is a hopelessly inexperienced simpleton for even asking such a silly question.

Here is how the scam works:

A developed buys some undeveloped land and pays acre prices. If the land is located close to a developed area and does not have any serious faults, it may cost from $5000 - $20,000 per acre. For this example we will use a midpoint of $10,000 for the cost of the undeveloped land. So our theoretical developer buys 100 acres for $1 million dollars.

The developer completes all of the improvements needed to prepare the land and divide it into building lots for construction of individual residences. They file a development plan and obtain approvals from the municipal authorities. They clear the land and perform any necessary grading and filling to ensure proper drainage. The install the streets, drainage system, curbs, utilities, and all amenities for the new neighborhood like street lights, green areas, recreational areas, and possibly a clubhouse and pool. All of these improvements take time and money. Upon completion the developer has invested $5 million dollars and produced 250 building lots. Total investment is $6 million, or $24,000 per building lot.

The developer could sell the lots for a profit and move on to another project. Corporate developers complete the neighborhood by building the residences to conform to an overall aesthetic theme. They then sell the home and the lot to the retail buyer. For this example we will assume the developer constructs single family residential homes of about 2500 square feet with attached double garage, and sells them for an average retail price of $300,000, which is $50,000 for the building lot and $250,000 for the home. The builder is making a profit on the lot and another profit on the sale of the home.

However, the developer tacks a Master Development Fee encumbrance on each home sold to recover all the money they invested in the land. So on the one hand they are profiting on the markup of the home and the lot. Then they get the home buyer to sign what is essentially a second mortgage that obligates the buyer to pay the developer a monthly fee for about 15 years which will reimburse the developer for all of the land development costs. Its like a car dealer tacking on an extra $100 a month for five years for an "assembly fee".

Experienced Realtors know that this is a screw job. That is why the sales agents you will encounter when touring the developers model homes will usually be employees or captive agents of the developer.

What can a buyer do? The best advice is to refuse to buy a new home that is encumbered by a Master Development fee.You need to consider that you when you sell the home someday you will be unable to find a buyer willing to repay you for the Master Fees that you paid. You might feel like the last and greatest sucker in the deal.

The Greediest Bastard of 2015? You Decide,

For this post I am going to nominate a few individuals as candidates in a contest to decide who is the greediest bastard in the United States in 2015. I will leave comments open so that you can nominate your own candidate and express your vote for a winner.

Bob Iger - Chief Executive Officer of The Walt Disney Company

2015 Compensation: $46.5 Million

In October last year Walt Disney told its American information technology workers that they were being laid off and replaced by foreign workers who are in the United States on H-1B visas. But first, the American technology workers would be required to train their replacements. There is no sense passing up an opportunity to add humiliation to financial ruin when you are screwing your workers.

This isn't the first time Disney has screwed its workers. In May of this year, Disney announced another layoff of American technology workers to be replaced by H-1B foreign workers, but put the plans on hold in June. In 2013, Disney laid off its top hand-drawn animation artists. In 2014 Disney laid off 700 workers in another animation division.

This brutal treatment of the employees who create the products and make the machines run was not done to save the company. Indeed in November, Disney announced record financial results. The driving motivation for screwing these employees was greed. Bob Iger was rewarded for his stewardship by raising his total compensation for 2015 to $46.5 million. Bob Iger's net worth is estimated to be about $80 million, so he is a relatively inexperienced at screwing the people who do the work in order to get rich.

Therefore it is with great pleasure that I hereby nominate Robert Allen "Bob" Iger, Chairman and Chief Executive Officer of The Walt Disney Company as the 2015 Greediest Bastard in the United States of America.

What would Walt say?

Martin Shkreli, CEO of Turing Pharmaceuticals

I have mixed feelings about nominating Martin Shkreli. For those of you unfamiliar with this name, Martin is a former hedge fund manager and current CEO of Turing Pharmaceuticals who made headlines recently when it was revealed that he had obtained in August 2015 a monopoly on production of the generic medicine Daraprim, an FDA-approved therapeutic that is used to treat patients with toxoplasmosis including in AIDS populations. Martin then raised the price of Daraprim from$13.50 per pill to $750, an increase of over 5000%. One wonders why he did not round it up to a neat $1000 per pill, or even $10,000.

Congressional Democrats and candidates joined in a call for an investigation. But this is mere showboating. They all know that what Martin did is legal in America.  In America, it is and has always been perfectly OK for health care providers to charge as much as possible for medical care. Restraint based on the health provider's need for revenue or the patient's ability to pay are gone, discarded anachronisms of a a bygone era when the weakness of a conscience was not considered a character flaw. This noble capitalist model is the reason we have the most expensive healthcare in the world. We can all be proud of the fact that the American capitalist healthcare system has created far more wealth for healthcare providers than in any other nation.

On the one hand, he is obviously a predator using his capital and intelligence to obtain a monopoly on a medicine that is necessary to preserve the life and health of certain individuals and raising the price over 5000% to enrich himself and his backers. There is no doubt that Martin has the intellectual capacity to predict the adverse effects his actions may have on patients, insurance companies, and government healthcare programs that are funding care for some of these patients. Another point in favor of Martin’s nomination is that he has not provided any useful product or service or funded research that may eventually do so. Martin is executing a pure monopolistic money grab leveraging the patient's wish to stay alive to maximize Martin's personal wealth beyond an amount that any person could possible spend on their personal needs in a lifetime. 

On the other hand, Martin’s money grab was so blatant and callous that he has become a poster boy for greed and the evils of mixing free market capitalism with the healthcare business. Perhaps that is due to his youth and inexperience and immersion in the Wall Street culture where there is no right or wrong, only rich or not rich. His egregious example may eventually provoke constructive reform which would imbue his actions with a constructive social purpose thereby seriously weakening his qualification to be the Greedy Bastard of the Year. Another mitigating factor is that Martin did not invent this particular predatory practice; an activist group found that at least 19 other pharmaceutical firms have done the same thing. They make money the old fashion way: monopolies. Unlike J.P. Morgan, the new generation of monopolists see no need for forbearance or moderation, because when you have a billion dollars no one else matters.

Does The Islamic Revolution Have a Modern Trojan Horse?

Donald Trump is being condemned by domestic and international leaders for supposedly calling for a ban on legal immigration of Muslim people to America on the grounds that he is calling for blatant discrimination based on the religious beliefs. I suggest that the condemners need to put more thought into their position before their make their next public comment on the matter.

The Islamic Revolution arose in Iran and overthrew the government of that nation and replaced it with a dictatorship consisting of various levels of Islamic clergy and headed by a Supreme Leader who holds the ultimate power and authority over the government and the people. It has been anything but tolerant of views diverging from the strict interpretation of Islamic law by the....Supreme Leader. Although the Islamic Revolution began and was initially confined to conquering Iran, there has been persistent evidence that the leaders of the new Iran plan to extend their rule over far more than the territory of Iran.

Lest there be any doubt, the bold and thus far effective leadership of the new Islamic military organization known as ISIS (Daesh to some) recently announced its formal plan to extend Islamic dictatorship to territory that now includes large areas of Africa, Europe and Spain, and India and beyond.

Thousands of innocent American citizens have been killed by what are called terrorist acts, which are acts of first degree murder against civilians carried out by followers of Islam in the name of Islam, often justified by quoting text in the Quran that advocates killing non believers. Among the often cited verses is this one: "Kill the idolaters wherever you find them, and capture them, and blockade them, and watch for them at every lookout..." (Quran 9:5). Apologists and defenders claim this verse is taken out of context. But the murder of innocent people continues and they are not isolated incidents. They are acts of war committed name of Islam.

This brings me to the point of this post. America is at war. American leaders say we are at war against terrorism because they are too neutered by their political correctness to speak the truth and say we are at war with Islamic terrorism. The enemy is Islamic terrorists and everyone who gives aid and comfort and support in any way to the ones doing the killing. In the same way that German people were motivated by Hitler and NAZI propaganda to slaughter innocent civilians, the warriors of the Islamic Revolution in all of its movements are motivated by the Quran and the Islamic religion. It is unfortunate that our leaders have quailed and obfuscated the truth that the terrorists are Islamic because that has allowed the enemy in this war to empty their hands of arms and identify themselves as persecuted members of a religion when it is convenient to their purposes.

In America our 1st Amendment to the Constitution prohibits the government from enacting any law to favor or inhibit the exercise of a religion. All developed nations have similar laws. The separation of church and state is a fundamental principle that is necessary to establish a stable prosperous nation.

The Islamic terrorists are using their religious affiliation as a Trojan Horse: By wrapping their cause in a religion, they are pursuing a strategy that uses the 1st Amendment to protect their organization by preventing the American government from taking legal action against the Islamic invasion and the Islamic Revolution.

When World War II broke out no patriot could object when the government revoked the visas and deported NAZIs and suspected NAZI sympathizers. That was the right thing to do to secure the nation and protect our citizens. Defense of the nation, the government and the citizens is paramount because if the government falls all of the constitutional rights and freedoms it protects are lost.

Americans have waited in vain for the Muslim community of America and the world to speak out and condemn Islamic terrorism, expel the killers from their religion and their community, and to support law enforcement efforts to identify the killers and their supporters. We have waited in vain for a supposedly civilized and tolerant mainstream Muslim community to forcefully distinguish itself from the supposedly minority faction doing the killing in the name of the religion. If the words of the Quran are taken seriously, there can be no tolerant Muslim community. According to the Quran, Islam does not tolerate non-believers; it states that Muslims have a duty to banish and kill non-believers. This inherent intolerance is why so many areas of the world inhabited by significant numbers of Muslims rarely enjoy peace. Only when they are a small minority will Muslims quietly tolerate non-believers.

Innocent Americans continue to be killed. Our government has a duty to protect our citizens and defend our nation. Since there is no certain way to distinguish an Islamic person who is in any way sympathetic to Islamic terrorism and terrorist causes, it is wrong for our government to allow any person known to be affiliated with the Islamic religion into our country, and when they do, and the immigrants kill innocent Americans, the politicians and bureaucrats to allowed it to happen share the guilt. It is insane for the American Government to put innocent American civilians at risk of murder and mayhem for the sake of respecting the supposedly innocent foreign Muslims who come from nations where their true identify often cannot be reliably determined, much less their political affiliations that they wish to hide.

So to all those who so quickly and loudly spoke out to condemn Trump’s supposed plan to ban Muslim immigration (and thus ennoble themselves), I say to you: If the NAZIs had called their beliefs a religion, if they had compiled Mein Kampf the Wannsee Protocol and The Final Solution as books in their Holy Bible, and if the NAZI leaders clothed themselves in turbans and robes and called Hitler "Der Ayatollah", would we have been noble and wise to respect their religion and let them and their supporters remain in America?

Welcome!

Welcome!

I created this blog to publish articles on public policy issues in order to to provide information and stimulate constructive discussion. 

Some of my posts may suggest that pure free market capitalism is not the ideal solution to a particular public need. That does not mean I am a Socialist or a Communist. I have never been affiliated with any Socialist or Communist organization. And I am certainly not anti-capitalist. I am an investor and I enjoy benefits from my capitalistic investments every month. 

Americans benefit every day from government programs that serve public needs. The concept of a developed nation means a place where people can live their lives and do business in an orderly and secure manner. Therefore we have laws and regulations to ensure that streets and highways are constructed according to uniform standards. Homes and building are constructed according to sound engineering standards. Commerce is conducted according to a Uniform Commercial Code. Goods and services are bought and sold using a uniform widely accepted exchange currency whose liquidity is guaranteed by the government. Production and sale of food and medicine is supervised to prevent needless poisoning and death.

Americans are subjected to a great deal of misleading anti-government propaganda from factions that either do not want to pay taxes or do not want to be regulated. There is no organization charged with the duty to correct such statements. Your county building department, for example, does not have a public relations budget to publish information and give speeches reminding the citizens why the building department is necessary. 


This is not to say there are not valid criticisms of our government agencies. If you have government, there will be some government corruption; graft, kickbacks, abuses of power, and sometimes a government agency can exhibit extraordinary inefficiency. I have personally witnessed all of these problems. Problems with our government should be exposed, factually and without hysteria or hyperbole, to promote corrective action. One does not eliminate the police because one officer is caught in wrongdoing. 

If a reader cares to submit a thoughtful post on a topic under discussion I will consider posting it. 

Your constructive thoughtful comments are welcome. 

Tom C.