For those of you not normally reading my writings, I was a democrat for 20 years. The dems moved too far to the left, and the right was able to move more centrist on some social issues. I have always been a fiscal conservative….and feel the dems have lost their way on fiscal issues.
For many years, I have supported small business. I earned an MBA, and during the course of this venture, learned a lot about business from an academic sense. One thing that most people don’t think of with small business is “barriers to entry”. There are all kinds of regulations and laws that factor into business these days, and on top of this – most small businesses have higher usage of credit (leverage) to attain their building, buy ovens, etc. These costs must be passed on to the consumer in order to be economically feasible. The more regulations and heartaches you give small business, the greater the likelihood they will fail. So – I’m for the mom and pop stores. I feel they are important to our economies and provides great diversity in products. When you have the Walmarts and Lowes of the world crushing small business…you then only have choices amongst the largest companies.
With this, you also have the large companies sourcing products from overseas. This has decimated production in the USA over 20 years.
Labor unions are late to get the memo on this, and try to bargain with less and less leverage, ultimately leading to these factories being shut down. There is something to say for re-training. There is also something to say about American robotics, and creating goods cheaper here with robotics than overseas with cheap labor. You do need personnel to create/man/fix the robots and provide labor with this. These require skilled workers. And the pay is decent!
The left has moved more towards socialism. Free college! Free healthcare! Free! Free!
Well…it’s not free. The left assumes you can just pay for all of this by jacking up taxes on richer people. The last 3 years, we have taken in all-time highs on tax revenues. Yet we are STILL running at $500 billion deficits. Something is broken.
$15 minimum wages!!!
Nope. That bombed in Seattle, and is doomed to fail everywhere else.
Cheap labor from Mexico! Let’s make them all citizens!!
Nope. That’s one root cause of the issues. Something else I’ll get into below.
The major problems are costs along with under-employment (and cheap labor).
- Costs. We have a $500 billion deficit despite taking in all-time high taxes. The left just says kill our military budget and the right just says take everyone off of welfare. It’s not entirely that simple on either side. The military is used to secure our investments overseas and to protect our trade whereas all forms of entitlements are meant to keep our society from crumbling.
- Under-employment. While unemployment is now 4.3%, take a look under the hood. You may have factory personnel who used to make $70k now making half as much working 31 hours per week and are having problems making ends meet – and can’t afford healthcare, so they pay the penalty instead.
- Cheap labor. So there are 11 million people in this country illegally. They are somehow working, right? Employment law requires documentation that you can work in this country. So, those small businesses you see above…many of them are hiring these people on the cheap. Think about building houses. Why would you pay a carpenter $60k a year when you could hire temp work for half as much? All of your competition is doing it, and if you don’t you’ll be priced out. “But they do jobs Americans won’t do”. Bullshit. Just plain bullshit. Would you be a garbage man? No? Why not? It stinks? The stigma? The pay? What if you could make $100k? Would you do it then? 200k?? 500k???? The point is, people will gravitate towards work if they feel the work is worth the pay. Now, I want you to imagine skilled laborers…carpenters, brick layers – who each make $40-70k. If you can get labor at half that much, and everyone is doing it, why wouldn’t you? Yes, that carpenter who has worked for 20 years at $50k won’t do that for $20k. Because we flooded the country with people who will work for less, you have now displaced skilled workers. What about small landscaping companies?
As a Democrat, I was still leery of unions. They had their place 100 years ago to ensure people were not exploited. Today, I see them as organized groups who are proactively taking away American jobs by making unreasonable demands. Likewise, we have free trade agreements which more or less ensure large corporations will move production to Asia.
Ironically, Democrats embrace:
- Unfettered free trade – this will ensure production is moved when labor costs get too high.
- Labor unions – while they do have a place in our country, they have gone off the rails and are ensuring jobs will be lost.
- Open borders – this has the effect of booting middle class people from their jobs when cheaper labor becomes available. Border controls are put into place to control the supply/demand of jobs to ensure labor costs are not too expensive or too cheap.
- $15 minimum wages – this is insane, and more or less will kill small business and have an effect of making people poorer. If you support $15 minimum wages, please…PLEASE email me so I can talk sense into you.
- Obamacare – Many large companies skirt the healthcare laws by only allowing employees to work a certain number of hours. Look at Walmart. Consistently a top earner, the U.S. government essentially becomes their healthcare provider and as tax payers, we subsidize them. These employees who then are not provided healthcare by their employers are then mandated, BY LAW, to pay for healthcare. This may also force them to work a second job and/or go on food stamps. While unemployment is 4.3%, there were nearly 50 million people on food stamps last year. This tells anyone with a brain that while employment rate is higher, wages are down – due to cheaper labor and good paying jobs going overseas.
- High regulations – Because every person needs to be safe, all the time, businesses are required to do costly regulations that companies overseas do not have. This drives up the costs of production and makes American goods not as competitive on the world scene. The dems are aligned with “ambulance chasers” and this also drives up the costs of healthcare to insane levels.
- “Free college”. While in theory this is awesome – the math doesn’t make sense today. I want you to examine the costs of college today…and 20 years ago…and 40 years ago. When the government got involved to provide students cheap money in loans, this began an inflation of tuition everywhere. I feel there needs to be a national “online university” which can be free. This school could provide all of the basics like math, English, history, etc. The cost for this online school would be a fraction of a fraction of a fraction than having the US government write blank checks to these overpriced schools. Students could do 2 years of this school while living at home, then finish up a 4 year degree – IF they choose, at the school of their choice. This would also significantly reduce the costs of college because now schools will be competing for half of the number of attendees. By supporting a Bernie Sanders plan of “free college”, you are passing on the $60k per year tuition for millions of kids to study garbage majors – and this is to be paid for by the evil rich people. The problem with this model is rich people will find ways to avoid this…either by moving or divesting or hiding assets.
When you pick apart each one of these items, you can see really good intentions. Each one of the items above appear to be involved in compassion. I do NOT want to demonize this. I want to say that there is a sliding bar……
Compassionate —-|————————————————-Not Compassionate
I would posit that if this was a video game, you would need to slide these items to the right in order to “right the ship”.
What to do about each of the above?
- Free trade – look over each deal we have. Have deals where there is controlled market entrance. For example, let’s assume there are 5 American TV companies selling 40″ TVs at an average price point of $500. I don’t think it’s good for American companies to have a company come in and flood the market with $300 TVs. It makes sense that two things happen:
- Tariffs can offset the price point. While we want to offer goods from other countries to provide better choices and competition – and help their countries, have tariffs so that price point is then the average of the American companies. So the $300 TV will be sold for $500. If the quality is superior, it will sell well, and may slightly drive down the American TV price points. But, it won’t destroy them.
- Control the number sold. Rather than selling 30 million TVs, you can then put a cap of maybe 200,000 TVs and over 10 years, you can then add more each year. This will gradually allow American companies to compete.
- Labor unions – they need to get back to basics about worker exploitation and protecting workers. They should also be a partner with big business. For example, if a company is talking about moving 30,000 jobs to Asia and converting another 20,000 jobs to robotics – have the unions work on perhaps getting them job training for other jobs, relocating to other plants across the country, or train some of them on building/maintaining robotics. Have them realistically work on wages to keep labor prices competitive.
- Open borders – I’m not anti-immigrant. I embrace legal immigration. I do not advocate for those who sneak over our borders in the middle of the night. First, I can’t vet you. Second, I don’t know if you’re a terrorist, criminal, or worse. Third, you are a danger to taking American jobs by doing labor cheaper than what we have. I am an advocate of enforcing the laws we have. I am also a realist and believe DACA should stand, as these children didn’t come over on their wishes. Everyone that is here NEEDS TO REGISTER. If you have a criminal history, of any kind, *poof*, you’re gone. My compassion is limited. If you register, you also need to be filing income taxes and following labor laws. If not, *poof*, you’re gone. You want to be a citizen? Well…wait in line. There are really, really, really awesome decent people that came to this country legally, waited their turn, applied, waited more….then came here. They did everything right. They learned our language, our history – they assimilated, and they became citizens. They EARNED the right to vote. Illegals did no such thing, and should not be rewarded. I feel if they want to be citizens, it’s a 20 year wait from the day you register. The danger is you have 11 million illegals, that based on current political leanings – may then all vote left and completely change the landscape of this country. This is why we have immigration controls – to avoid being invaded.
- $15 minimum wage. *Laughs*. This is emotional policy at its peak, and has no basis in mathematics. Price ceilings and floors have problems. I DO believe minimum wage should increase yearly based on inflation. I DO believe that this is a state-based and locality-based wage, as $15 in NYC is different than $15 an hour in Bumfuck, Iowa. This should not be a national rate because you would destroy the local economy in Bumfuck. I also believe that minimum wage jobs are NOT career destination jobs, they are career ENTRY jobs. If you CHOOSE to stay at the bare minimum, it’s up to you. YOU chose that life. I CHOSE to do more, and therefore I am paid more than the minimum. I do not feel it is a good idea to make entry level jobs the same pay as much higher skilled workers – because suddenly you now drove up the costs of labor for 980 jobs….and all of these wages are now passed on to the consumer. So…you make more, but everything costs more and there are less jobs. This now has the government doling out more welfare as a net result.
- Obamacare – It’s a mess. The biggest problems I don’t get are the state-run exchanges. I don’t understand why a healthcare company based in Philadelphia couldn’t be offered nationwide. More competition drives down costs, period. Second of all, I don’t understand how legally hospitals can pass off the cost of an aspirin as $100 a pill or the like. I feel the government should open up clinics/hospitals in cities everywhere. Major insurance companies are honored. Costs are what they are…$.15 for the aspirin. The building/doctors are paid for by the government, insurance companies would flock to these because it drives down their costs. Lines may be longer, but it’s CHEAP. Private hospitals still exist for those with better insurance and want better services. Health “pools” are created for insurance companies. You are tested and placed in pools, and the cost of your healthcare is based off of your pool. While there is no denying healthcare, a life of smoking and drinking doesn’t mean you should have cheap insurance. You want cheap insurance? Quit smoking, lose weight, exercise.
- High regulations – I am all for truncating regulations. Find the most costly items (pareto) and address. Drop some, re-work some, keep some. Try to make our businesses product goods cheaper to be more competitive.
- “Free College”. As I mentioned above, we have this problem in the country where we have $60k for colleges to study Philosophy. This was a product of cheap cash given to students who don’t have to pay for school for 30-40 years. Colleges kept jacking up costs because they were flooded with entrants. I strongly believe under this administration, more emphasis will be placed on trade jobs, technology jobs, etc which do not require a 4 year degree. This may reduce the number of entrants to college and bring prices down. I am also strongly in favor of a “national online university”. I have not seen this idea anywhere, and feel this is needed to provide basic education on the cheap, to all who want it. MIT and other schools allow you to do classes online, for free, but you don’t get credits. Can you imagine that your child could do his/her first 2 years of college from home, online, prior to then picking what major they want and applying to schools for the last 2 years? No cost to you, and the cost of the university might be a few billion per year – which is offset by the grants/loan costs we are providing through the department of education now. So, no net cost. Today, you can get a laptop for $300, and most households have internet. If you fall below a certain income, sure, we could help subsidize. This can also help single young mothers get an education at their pace without having to have a sitter/daycare.
So – the democratic fiscal policies are not the work of the devil. They are compassionate. However, they are not funded, and usually villainize the wealthy. Ironically, most of the billionaires you see today….are leftists. You could then, in theory, ask Mark Zuckerberg to pay for free college for all students. See how he reacts. Bill Gates is spending a ridiculous amount of money in his Gates Foundation and is walking the talk. But are you getting anything from it? Has he paid for your healthcare? Should you write him and ask him to give you money?
The problem is that rich people aren’t the devil, either. They are not emotional with their money, usually, and they spent a tremendous amount of effort to get that money. In this country, if you want it…there are ways to get it, you just need to work harder.
I feel the democrats need to slide the scale a little – and realize that a large portion of the country feels these scales above need to slide to the right. Without the dems moving more centrist with fiscal policy….mid-terms will not be kind to them.