Monday, October 24, 2011

Questions for Warren Buffett

Do you remember when reporters used to ask tough, probing questions in an effort to get to the bottom of the issue of the day, rather than simply regurgitating the talking points they are fed? Today, however, the media unquestioningly repeats the President’s mantra as established fact, never bothering to raise the glaring questions to the source of those claims, Warren Buffet.

There are so many questions which need to be asked about Buffett’s claim that his secretary pays a higher tax rate than he does.

Mr. Buffet, who exactly is your secretary and what percentage of her income does she pay in Federal income taxes? What would her tax bill be if she hired your team of accountants and tax attorneys to fight the IRS on her behalf? How is your secretary’s income tax equivalent to your capital gains taxes paid on growth of money you have already paid income taxes on?

Mr. Buffett, if you believe that you should pay more in taxes, why did you spend the last decade fighting to avoid paying a billion dollars in back taxes?

Mr. Buffett, exactly how much do you feel you should pay in taxes, and why have you not voluntarily contributed that amount to the Federal Treasury? They do accept donations.

More important than probing into the untruthfulness and hypocrisy of Warren Buffett’s claim is a query into the flawed philosophical assumptions behind it.

Mr. Buffett, does a nation become more prosperous because of bigger government or more private sector investment?

Mr. Buffett, who is responsible for creating more jobs, you or your secretary? Who is responsible for creating more wealth, you or your secretary? Can you name one poor person who has brought prosperity to more people than you have? Can you name one government entitlement program which has produced more innovation, more goods and services increasing the mean standard of living more than you have by your investments in American corporations?

Mr. Buffett, your claim that the rich should pay higher taxes is being used by the President to support raising taxes to pay for his stimulus bill. Does the economy benefit more from you investing your money in growing, profitable businesses or from the government taking your money and distributing it to failing companies such as Solyndra? Do the companies you invest your own money in create more jobs than Solyndra? Which are the better criteria to determine which companies will most effectively use the money they receive to create jobs and boost the economy: a solid business model producing profitability and growth potential, or political cronyism?

Mr. Buffett, if the government confiscated all of your wealth and distributed it equally to every American citizen, giving every American roughly $127, how many jobs would we create with our $127?

Mr. Buffett, you are famous for earning a consistently high return on investment. What is the return on investment of the Federal Government?

Mr. Buffett, if the government confiscated 100% of your income from last year, would the deficit be reduced by even one one-hundredth of a percent?

Mr. Buffett, you have pledged to give 99 percent of your wealth to charity. Why do you think that money confiscated from you by the government will do more good for mankind than if you gave it to a charity of your choice?

Mr. Buffett, in a free market economy where buying and selling transactions are voluntary, the only way to make a profit is to produce goods or services which are worth more to the buyer than the price for which you sell them. Thus earning a higher income indicates that you have produced more value for more people than someone who did not earn as much. Why should producing more value be punished by higher taxes?

Mr. Buffett, did you invest your money in Solyndra? Why not? If you determined that Solyndra was not a good investment, why would you want the government to take your money and give it to Solyndra?

Mr. Buffett, the President's first stimulus bill spent nearly a trillion dollars and cost $412,500 per job created, and two years later, unemployment is higher than it was before the stimulus. Would you invest in a company which produced that kind of return on investment?

If not, why would you want to pay more taxes for the wasteful Federal Government to squander?

Saturday, October 22, 2011

Occupy a job!

How does the 1% get to be the 1%? Does being the top 1% make them evil and greedy? Does it mean that they owe a debt to society? Do they need to "give back" some of what they have "taken?"

In a free market, most of us are not born into the 1%, but we all have the opportunity to use our minds, to work hard, to learn, grow, and innovate, and become part of the 1%. I find that to be a very noble goal. In a free market, all transactions are voluntary trades. A voluntary trade is, by definition, win-win. Both parties are trading for something they value more than what they are giving up. When I buy something, I am choosing one product out of millions of options, and one seller out of many, and I am freely choosing to trade my money, representing the product of my labor, for that product. That means I believe that the product is worth more to me than the work I put into earning that money. If someone is in the top 1% of income, it means that he has produced more value than the 99%. He doesn't need to "give back to society". The act of honestly earning money benefits society more than it benefits you.

Liberals get all wound up over how much corporate executives earn. What is important to remember is that all of the transactions up and down the chain which lead to that executive's pay are voluntary. If the board of directors think that they are getting their money's worth, what is that to me? It is their money, not mine.

But the fact is we have not had a free market economy for a very long time. Everything changes when the government subverts the free market. Some people are a part of the 1% because they play the system and benefit from government tampering rather than earning their way by trading value for value. Bailouts, stimulus, corporate welfare, Halliburton, Freddie Mack, Fannie Mae, Government Motors, Solyndra, etc. People call it "crony capitalism", but that is an oxymoron. Cronyism is not capitalism at all. In capitalism, decisions are based on economic self-interest. Cronyism means that decisions are based on political pull. If the government mandates that everyone must buy a certain product, then the seller no longer has to trade value for value. When government bails out a failed bank, every taxpayer becomes a stakeholder in that company. If they pay their CEO a huge bonus, we have reason to be upset about that. When government gives huge amounts of money to special interests, that is not wealth created by the recipient.

Occupy Wall Street would be right to object to people who get rich off of government corruption, but their demands indicate that ending government redistribution of wealth is not their objective. They are not demanding that top-down command and control economics stop. Instead they are demanding their piece of the pie. They want in on the action. They are going cap in hand looking for some more of the largesse to come their way.

As part of the 53% of American's who pay Federal income taxes, I object to Occupy Wall Street claiming to speak for me, with their mantra of "We are the 99%". Perhaps if they were to Occupy a Job they would get further.