Showing posts with label wealth. Show all posts
Showing posts with label wealth. Show all posts

Tuesday, October 22, 2019

Outrage of Nobel Proportions



If you can believe the Bloomberg Headline


Taxing the Rich to Fund Welfare 

Is the Nobel Winner’s Growth Mantra


You will be enraged by the paradigm of keeping poor people shackled to poverty by keeping poor people shackled to poverty programmes as a pathway to closing the gap.

And I haven't any Nobel Aspirations.  My outrage is a moral one, not a personal one.

And I don't know which is more repugnant.

The economic legerdemain or the linguistic legerdemain.

As the article reads I must focus on two points

1.  Giving tax cuts to the rich to create jobs is a fantasy because the rich have massive funds available and they will only invest the money to make more money.

2.  I never said anything about giving tax cuts to the rich to create jobs.

Years ago I emphasised this.

"Mr. Widget will not hire one additional widget maker until he has an order for one widget more than he can produce when operating at maximum capacity and optimal efficiency."

The Quotations of Slim Fairview © 2019

One of the few things Robert Reich ever said on the topic of economics that I believe makes any sense:

If you want to close the gap, you give tax cuts to the people who spend money.

This was adequately demonstrated by Henry Ford who doubled his employee's wages from $2.50 a day to $5.00 
a day.  And cut the work week to 40 hours.

In so doing, Henry Ford made it possible for his employees:

To buy a Ford
To buy a washing machine
To buy an ice box
To buy a radio
To buy a Sears Roebuck house. Some assembly required.

He, in effect, launched the middle class.

Needless to say, the African American community was left out.  Racism, segregation, and discrimination were operating in full vigor.  And still are.

Robert Reich is also the fellow who extolled the virtues of the 93% tax rate.  He told of how well the country was doing. Peace, employment, factories humming away....

What Reich did not say about the 93% tax rate is another example of economic smoke and mirrors.

When the tax rate was 93%

A Black man earned half of a White man's wage.
Women were kept barefoot and pregnant.
Mexicans and Filipinos were picking lettuce and grape for pennies a day.
There was no EPA and those factories were polluting the environment.
We were rebuilding Europe after WWII.

The 93% tax rate is a celebration of 
Racism
Sexism
Xenophobia
Pollution
Imperialism

Throughout the Obama administration, we heard about creative, innovative, high-tech entrepreneurs.

Richard Nixon had a plan for promoting entrepreneurship within the African American community.  Congress would not fund it.

Not too long ago, a Black civil rights leader said, "When White people die, they leave their homes to their children. This keeps the wealth in the family."

So, too, "When White people retire, they leave their businesses to their children. This keeps the wealth in the family."

A solution to closing the wealth gap is to close the income gap. Help the disenfranchised start their own businesses. Make profits. Grow their businesses, Buy their own homes, and, ultimately, keep the wealth in the family.

You can't leave Public Housing to your children.


Let's now focus on Slim's Paradigm:

Capital Investment + Economic Stimulus =
Economic Development + Growth

When people who spend money buy things
People who make things must make more things.
To make more things, they must hire more people.
They make more money.
At this juncture they can afford to pay hire wages. That or end up subject to competition, regulation, institutional investors dumping their stocks.

This is the paradigm established by Henry Ford.

When China elevated 700 million people from poverty to the middle class, China 
Created a consumer class.
Created an investor class.
Gave the Chinese people a buy-in.  A vested interest in the success of the Chinese Economy.

The alternative would be for big business to continue as it has with stagnant wages and ultimately triggering a backlash. Routinely at the polls. 

However, before you worry, there is little evidence that Congress ever raised taxes on the rich. Or that they will.
The ruling party notwithstanding.  

Conventional Wisdom: The Democrats don't want to tax the rich. They just want to blame it on the Republicans.
~ Slim Fairview

Well, how do we move from here?

If you want to close the gap you redistribute the money.
Henry Ford did not redistribute his wealth.  He redistributed the money.

Wealth is what you have.
Money is what you make.

One idea, which needs some economic modelling, runs like this.

A corporation gives its employees an immediate $5. an hour raise.  In exchange, the corporation takes a $10. write-down for labor costs.

The benefit to this is the multiplier effect.  
The multiplier effect is NOT trickle down economics.

In the illustration on PowerPoint on SlideShare, I created such an illustration.  Caveat: This has nothing to do with an $800. coat.  The $800. coat represents all the small purchases of the middle class, the working class, the working poor, in a one month period to coincide with that $5. an hour raise. 

(40 hours a week x $5. an hour = $200. x 4 weeks = $800.)


There are several other articles on the matter.







Sincerest regards,

Slim

If you find anything here to be helpful, please don't hesitate to send me a really tricked out Mac Laptop and, in lieu of a Nobel Prize, tuck a few dollars as a gift into the envelope along with the thank you note.  Slim

Bob Asken 
Box 33 
Pen Argyl, PA 18072

Copyright © 2019 Robert Asken
All rights reserved.



Wednesday, June 26, 2019

If You Really Want to Close the Gap...



If you want to close the gap, you redistribute the money.

When Henry Ford doubled the wages of his workers, he did not redistribute his wealth. He redistributed the money.

"Wealth is what you have. Money is what you make."
Slim Fairview

What Henry Ford did was to launch the creation of the Middle Class.


What Really Created the Gap?

Some of the contributing factors to the wealth gap have taken place over the course of decades.

1.  Planned Obsolescence:  Forcing consumers to buy shoddy products to replace the shoddy products they bought the first time.

2.  Sending Jobs Overseas: Any one, two, or ten companies can outsource to cut costs to increase the bottom line.  However, as a national policy, this is bad.

No matter how much you cut costs, you won't sell a lot of Oldsmobiles in a country where people make $5, a day.

Witness Japan:  Japan sent jobs overseas.  The Japanese auto companies built Japanese cars in America.  They labeled the cars "Made in America". They sold Japanese cars to American consumers. (To American auto workers.)  The Japanese paid American workers American wages and still made a profit.  Those profits went to Japan.

"Those who forget history are doomed to repeat it."
Santayana.

"Those who remember history are able to repeat it."
Slim  Fairview.

The Japanese did what Henry Ford did.  Made it possible for American workers to afford to buy Japanese cars.

China also created a consumer class.  
China created an investor class.
China gave 800 million Chinese people a vested interest in the success of the Chinese economy.

3.  NAFTA :
NAFTA was bad for the Economy.
NAFTA cost American jobs.
NAFTA was a disaster.
Nancy Pelosi on 
Reliable Sources on 
CNN before the election.

4.  Conspicuous Consumption and the vulgar displays of wealth as consumers celebrated the lifestyles of the rich and famous.  (And embraces a television show by the name, Lifestyles of the Rich and Famous.)


SOLUTIONS:

Tax cuts for the rich to enable them to invest money doesn't work.  It can't work.

The American Widget Co. will not hire one additional Widget Maker until it has an order for one widget more than it can produce when operating at maximum capacity and optimal efficiency.

"If you grow faster than your market, you tie up capital. If your market grows faster than you do, you lose market share."
The Quotations of Slim Fairview (c).

Tax benefits to companies for increasing wages will do more to close the gap by increasing wages and benefiting the economy. Through increased economic activity business will recoup the outlay.  But there is a twist that will make this work.  That is why I wrote

Tax Policy to Increase Wages $5 an hour. Now!


Invest in people starting their own businesses because small businesses (SMEs) create jobs.

A worker makes a paycheck.
A worker with a raise makes a bigger paycheck.
The owner of a business makes a paycheck and a profit.

Profits grow the business.
The business hires more people.
and so on.

The Multiplier Effect

And this only scratches the surface.  The reality of the economic benefits will illuminate the rest.

Ascribed Value 

Limiting Demand

Another Hidden Inflation



Regards,

Slim


If you find anything here to be helpful, please don't hesitate to send me a really tricked-out Mac Book and to tuck a few dollars into the envelope along with the thank you note.
Slim.

Bob Asken
Box 33
Pen Argyl, PA 18072



Copyright  © 2019
Robert Asken
All rights reserved.














Tuesday, August 4, 2015

The Next Challenge is Here





First:  This in an Economics Lesson.  
Focus on the Economics ONLY!


The haves are increasing arithmetically. The have-nots are increasing geometrically.

The real challenge is not the difference in the number of dollars between the haves and the have-nots.

The real challenge is the difference between the number of people between the haves and the have-nots.

This is not a sustainable model. Period!

What Politicians discuss is only what Western Nations can wrap their brains around.

Politicians say Mexicans take jobs Americans don't want.

Politicians say people in the Middle East are escaping war, genocide, and starvation.

Politicians say that migration in parts of Asia is the results of ethnic groups escaping ethnic based violence.

And of course, the scourge of the Earth, human traffickers.


Now, Remember when I said the real challenge is the difference in the number of people between the haves and the have-nots.

To grasp the concept, we will reference a few principles of physics to establish the metaphor.

We are witnessing an incontrovertible law of physics.

1.  People are moving from a greater concentration to a lesser concentration.  The high-density impact on emerging nations.  Populations are increasing--land mass is not.

2. Money. Money in the industrialised nations will reach  a saturation point if it has not done so already.  At this point, it will be necessary to move money from industrialised nations to emerging nations.

This was one of the proponents in my article Greek Proposal. The article is located here along with Dear. Mr. Varoufakis, and Antigone Defeats Merkel. To understand Europe, one must read Antigone Defeats Merkel and, by extension, Antigone. To understand Merkel and Germany, one must read The Anatomy of Human. Destructiveness. by Erich Fromm.  


Solving the Emerging World Crisis

Forming an E 20 

Emerging Nations Economic Union

Third World First. Okay? 

Micro-Finance: $10. to the Road to Prosperity

G - 20 Summit! E - 20 Invited?

Warmest regards,

Slim

slimfairview@yahoo.com   

Copyright © 2015 Bob Asken
All rights reserved