It’s all about where you draw the line

I remember a number of years ago (probably a decade or so now…) when a British actor came on one of the late-night talk shows. Frustratingly, I don’t remember the actor, and I can’t recall if the show was Conan’s, or Dave’s, or (less likely) Jay’s. He talked about how he absolutely loved the United States, and had an interesting statement as to why he thought things were better here than in England.

He said (paraphrasing):

“In America, a guy with no money can be walking down the street and he sees a hot sports car parked along the street. He’ll stop and look at it, saying, ‘Oh yeah, that’s awesome. I love this car — one day I’m going to make it big and I’m going to have a car just like this.’

“In England, that car can be parked along the street, and the guy with no money will come along, and he’ll get mad. He’ll say, ‘Screw you you bastard with your fancy car.’ And he’ll pull out his keys and key the car.”

I thought it was an interesting distinction, and it’s really the type of thing that a non-American is more able to observe. Americans don’t see it, because we’re too close to it to realize it exists. We talk about it. We used to see it. We even have a name for it. But in the crush of media manipulation and the politics of class envy, we’ve lost sight of it. That interview was probably over ten years ago, and it’s only gotten worse since. Our name for the phenomenon the actor was describing? The American Dream.

Something that Americans often don’t see about the wide world around them is just how unique this country is in terms of social and financial mobility. A person can be born with nothing and become a multimillionaire, and vice versa. More important is the fact that people in this country aren’t born into “classes”. People are not so segregated into the groups into which they are born. Again, politics (this time of identity) has caused some damage here, but the proof is in a little girl named Condoleeza who grew up in the segregated 60s in a poor Alabama neighborhood, and grew up to become the Secretary of State.

In the story of the sports car, the hypothetical American knows that even though he doesn’t have much today, tomorrow is another story. The course of your life can go in whatever direction you take it. The Englishman in the story sees his life as much more set. He resents that somebody else has such desirable things because he knows that he will never have it. There is a divide between the wealthy and the “common folk” that can’t be crossed, so why try?

What brought this to mind was the recent attacks by leftists against Joe Wurzelbacher, a.k.a. “Joe the Plumber”. I read a lot of blogs, and in the attacks against Joe, the most common I’ve seen is that he’s a liar because he doesn’t make the $250,000 that would cause him to fall under Obama’s take hike on “the rich”. If you’re paying attention of course you know that Joe didn’t say he did. He said that somewhere down the road he was going to buy a business. He was talking about the future. Why is this important?

The attacks on Joe go beyond the simple fact that he doesn’t make that amount of money. I have seen, over and over again, very pointedly statements that he doesn’t make that much money, and never will. That is, he’s a liar because he says that some day he’ll make that much money, when “we” all know damned well that he’ll never make that much in this lifetime.

“In this lifetime”. I see that particular turn of phrase in many of these statements. Apparently they believe very strongly in the lesser model that you are born to a particular station in life. You’re a fool (or, for Joe, a liar) if you think otherwise. What happened to the American Dream?

I personally know a plumber who almost certainly has at least a million dollars to his name. He’s in his 70s now, and retired; but he worked hard for years, invested his money, built a good business, and made good. Need I say that he is an immigrant with a heavy accent? I don’t think the fact that he is foreign-born is a coincidence. People born in this country are in recent years inundated with a message that the rich “got lucky”, whereas those on the outside looking in know that American opportunity — the American Dream — is something you have to jump at, grab on to, and use, actively.

When I was shortly out of college I had a job at a bookstore. I worked full time, quickly became a supervisor, with corresponding pay raise and added responsibility. A co-worker was a woman hired around the same time I was. After we’d been working together about six months, we had a conversation in which she was stunned to learn that I had only worked there as long as she had, and she became angry that she wasn’t a supervisor too. “You work part-time” I pointed out. I then discovered that the reason she worked part time was that she was on welfare, and if she earned more than X amount per week she would lose the government payout. This folks, is not “bad luck”. She had explicitly chosen to keep herself on welfare when there was full-time work for the taking. (Not unrelated, she also had the “bad luck” to be unmarried and pregnant.)

This is why I am so infuriated when I hear politicians such as Barack Obama refer to the wealthy as the ones who “got lucky”, and conversely the poor as the “less fortunate”. America is not a lottery — success is far more likely the result of hard work, and responsibility. As the founder of Jimmy John’s Sandwiches once said, “Tenacity will beat brains seven days a week.” Tenacity. Work. Guts. Luck is in there somewhere; but as in poker, luck will carry you for a hand, but not for the whole game.

When Obama talks about the “fairness” of evening things out between the tenacious and those resting on welfare payments, it is a lie. When he acts as though success is just a result of being “lucky”, it is a lie. When he talks about tax cuts as “giving” something to the rich, rather than letting them keep what is already theirs, it is a lie. When he refers to his plan for writing checks to people who don’t pay taxes as “tax cuts”, it is a lie. It is an offense against reason, and it is a direct assault on the American Dream. His brand of socialism threatens to destroy the very thing that makes this incredible country unique in the history of mankind: the ability to have such dreams, and for such dreams to be attainable by anyone willing to take responsibility for their own fate.

[Update: Brian links and responds.]

This is all kinds of awesome. Possibly my favorite political piece of the entire year. I’m not going to quote it, just go read: Joe The Plumber: American with a Capital A

I’ll plan to do a follow-up post later this evening….

Or “How to give tax cuts to people who already don’t pay taxes”

That has been the big question of the Presidential campaign, and one puzzlingly unasked by McCain — How can Barack Obama, as he claims, give a tax cut to 95% of Americans when roughly 40% of Americans already don’t pay a penny in taxes?

The answer: You massively expand welfare to include tens of millions of new recipients, and call it a “tax cut”.

The Wall Street Journal explains it nicely:

For the Obama Democrats, a tax cut is no longer letting you keep more of what you earn. In their lexicon, a tax cut includes tens of billions of dollars in government handouts that are disguised by the phrase “tax credit.”

…Here’s the political catch. All but [one of his tax credits] would be “refundable,” which is Washington-speak for the fact that you can receive these checks even if you have no income-tax liability. In other words, they are an income transfer — a federal check — from taxpayers to nontaxpayers. Once upon a time we called this “welfare,” or in George McGovern’s 1972 campaign a “Demogrant.” Mr. Obama’s genius is to call it a tax cut.

The clincher? As with all things government, it would start out huge, and grow…

The total annual expenditures on refundable “tax credits” would rise over the next 10 years by $647 billion to $1.054 trillion, according to the Tax Policy Center. This means that the tax-credit welfare state would soon cost four times actual cash welfare.

Who would pay for this? Ostensibly the evil rich, of course. Obama’s proposed tax hike on those making over $250,000 would be the largest tax hike in American history. The primary government program it would fund would be to simply turn around and divvy that cash out among everyone else.

This is not freedom — it is socialism, plain and simple.

The real problem is that while theoretically the rich would pay for it, it would actually hurt practically everyone. For those under the $250,000 line, it would hurt in the form of an income-based dropoff in handouts that would act as a massive disincentive to work harder for that 3% raise…

Because Mr. Obama’s tax credits are phased out as incomes rise, they impose a huge “marginal” tax rate increase on low-income workers. The marginal tax rate refers to the rate on the next dollar of income earned. …[T]he marginal rate for millions of low- and middle-income workers would spike as they earn more income.

Some families with an income of $40,000 could lose up to 40 cents in vanishing credits for every additional dollar earned from working overtime or taking a new job…. The tax credits are sold in the name of “making work pay,” but in practice they can be a disincentive to working harder, especially if you’re a lower-income couple getting raises of $1,000 or $2,000 a year.

Translation: That $1.50 an hour raise blue-collar Joe just got? Under Obama’s tax plan, it would become $1.10. Why? Because Obama is all about “fairness”, and his idea of fairness is that you should be punished for making more money.

Hat tip: Brian Dunbar

Straight from the plumber’s mouth:

PM: You’re a plumber, and you’re looking to buy your own plumbing business?

Joe Wurzelbacher: Correct.

PM: Would that plumbing business employ other people or would it just employ you?

JW: Eventually it would employ other people. Right now it’s a two man shop and it’s got a very good footprint and a very good reputation, so eventually I would want to put other people out there. I don’t want to get huge because if you get too big your quality goes, but I definitely wouldn’t mind having two good plumbers out there with me working.

PM: So a potential tax increase – how do you see that affecting your ability to hire more people to work with you at your company? [...]

JW: Essentially what that would do is, I’d have to see how much money is available after everything else is paid, to see if I can one, afford a new vehicle, two, outfit it, and then three, pay a good salary. And if I’m being taxed too much, one of those three things is going to get shorted. One, I won’t be able to buy as good a good vehicle or I won’t stock it as well, or the guy I hire – if I’m able to hire somebody – is not going to make as much as he should.

JW: [...]I believe in working for what I get. I don’t want to say it’s a handout, but essentially that’s what it comes down to. You’re going to tax someone else more that’s been working hard to fulfill the American Dream and you’re gonna give it to other people who – I’m not saying they don’t work as hard, but I’m sure some of them don’t – and I don’t think it’s right just to give it to them or reduce taxes on their part and hike it up on my part like a teeter totter to bring it back even. So no, that wouldn’t – well, let me rephrase that. It would appeal to me because back then I was struggling. That kind of thing appeals to me – anybody wants to cut my taxes, I look at it very seriously, it’s like, it sounds great. But you gotta see what the other hand is doing too.

I love this guy. It’s funny, but this guy might just be the game changer. McCain should put this guy on the stage, bigtime.

Go read the whole thing.

Hat tip: Cold Fury

An interesting passage from Clayton Cramer’s blog on what happens when the government tries to “stick it to the rich”:

There is one problem driving not just HP, but a lot of other U.S. companies to constantly slashing workers. In 1993, Democrats in Congress showed how much they hated "rich people" by passing a law that prohibited corporations from deducting as business expenses any annual salary exceeding one million dollars–and the salaries of the next four highest paid officers. So large corporations started to compensate officers with stock options instead. This created a strong incentive for officers of the corporation to keep the stock price rising for the next few quarters–even if it destroyed the long-term viability of the company. Note that this didn't actually prevent corporations from compensating their officers quite generously. And in truth, Democrats weren't really trying to prevent that–they were just pretending to be on the side of the little guys, while continuing to cozy up to corporate fat cats. It just created perverse incentives for how to run a large corporation.

A company that is developing complex products will need several years from the start of the process to the point where the product starts to bring in revenue. Think of this as a tunnel: you put money in one end of the tunnel in 2004; it turns into a return on investment in 2008. The products that you start developing in 2005, won't give a return until 2009. Ditto for 2006 to 2010, 2007 to 2011, and 2008 to 2012. If your focus, because of your stock options, is driving up the stock price over the next several quarters, the temptation to go for short-term improvements is very, very strong.

Cutting spending this year may impair profitability in 2012–or maybe it won't. It's hard to tell. But you can almost guarantee that cutting spending on long-term projects this year will drive up the stock price for the next quarter or two. This is why layoffs often lead to higher stock prices. Corporate officers whose primary income is derived from stock options have a strong incentive to cut costs right now. I don't think that stock options are necessarily a bad thing. But it does encourage a short-term view of how to run a company.

On a different note (but from the same blog): Holy Crap. How is this guy a major party nominee?

Ah, what our wonderful welfare state has wrought.

A New York woman, pregnant with her fourth child, is so sure of her inherent right to demand that others provide for her that she has threatened to blow up her local welfare office after they told her she was ineligible for more benefits.

Deep breath. Repeat after me:

You cannot call something a “right” if someone else has to give it to you.

This just in: Hillary has yet another remarkable new plan to redistribute wealth:

WASHINGTON (AP) - Democratic presidential candidate Hillary Rodham Clinton said Friday that every child born in the United States should get a $5,000 “baby bond” from the government to help pay for future costs of college or buying a home.

…or a car, or a kewl new stereo, or to party like a rockstar for about five minutes. Handing something to somebody does not teach them responsibility. In fact, getting something for nothing generally promotes irresponsibility.

Oh, and is it safe for me to assume that “every child born in the United States” includes those born to people who are here illegally? Hey, we’ve got a problem — let’s encourage more of it!

The New York senator did not offer any estimate of the total cost of such a program or how she would pay for it. Approximately 4 million babies are born each year in the United States.

Well, lessee… four million births times five thousand dollars is twenty billion dollars. Every year. Forever. Oh wait, my bad. The birth rate does tend to rise over time….

Clinton said such an account program would help Americans get back to the tradition of savings that she remembers as a child,

You know, the way Social Security taught everybody to save for their own retirement? The way Welfare taught the poor how to get themselves out of poverty? Just like that.

and has become harder to accomplish in the face of rising college and housing costs.

And five seconds after the law is passed, the Democrats will suddenly realize that it won’t provide enough money to entirely pay for college, or a house, and immediately decry how it therefore exploits the poor and subsidizes the rich (See also: school vouchers). Naturally the amount will have to a) be raised enough to pay entirely for college, and b) taken away from the eeeevil rich folks who don’t need it anyway, and c) clearly this awful disparity is all the Republicans’ doing, as it’s all about them buying votes from Big Corporations (’cuz, y’know, corporations can vote), and the principled pure-as-the-morning-dew Democrats must stop these destructive politics.

She argued that wealthy people “get to have all kinds of tax incentives to save, but most people can’t afford to do that.”

Actually, I’m impressed. I didn’t realize Hillary supported the Fair Tax!

“I think it’s a wonderful idea,” said Rep. Stephanie Stubbs Jones, an Ohio Democrat who attended the event and has already endorsed Clinton. “Every child born in the United States today owes $27,000 on the national debt, why not let them come get $5,000 to grow until their [sic] 18?”

Yeah, you moron. Now every kid will owe $32,000 on the national debt. Or did you imagine that the money would magically appear out of thin air? If somebody owes me five dollars, it makes no sense to loan them five more dollars so they can pay back the first loan.

This proposal is two things to me:

1. One of the dumbest political proposals of my lifetime, and
2. The most blatant attempt to purchase votes I have ever encountered

…unless of course you’re a politician who is far more interested in your own personal power than in actually doing some good for the country; in which case it all makes perfect sense.

Hati Tip: Space4Commerce

[Update: From YoungGoGetter: "She says it will help Americans get back into the swing of “savings”. I think it will get Americans back into the swing of abusing government funds." A-Yup.]