Posted by
bob's my uncle on Wednesday, October 29, 2008 4:41:42 PM
A Free Market Economy
For now, we have what is known as a Free Market Economy. That is, the way this economy works, millions of people, called consumers, make, perhaps, 100’s of millions of decisions every day about how to spend their money. They make decisions regarding the products and services they need: food, clothing, shelter, transportation; the products and services they want: entertainment in all its forms, communication devices, electronic gizmos that make all of our lives easier and more pleasant; and some, those who are wealthy enough, buy expensive and extravagant products that most of us can only dream about. Each decision made in the economy is a democratic "vote", in favor of one product or another. In a free market economy, more choices are better. Informed choices are better. Educated consumers make better decisions and obtain greater value for their purchasing dollar.
Now, on the other side of this picture are the producers and suppliers of all of these products. Those who are in the business of providing products and services have usually risked something; property, savings, a personal fortune, a line of credit, in order to produce what they produce, their goal being, profit. And in pursuing profit, they more often than not benefit the greater society by hiring people to help produce their product and paying them a salary. They also benefit society with their product assuming that the aforementioned consumers find enough value in it to make a purchase. That, in a nutshell, is how a free market economy works; and it could be argued that nowhere has it worked better than in the United States of America. Nowhere else are there more opportunities to become entrepreneurs than in this country.
The Moral Component
In my description of a free market economy, I did not make any moral judgments about the businesses, products, or consumers involved in the free market. That is because the consumer is the ultimate judge in the market. They discriminate, making judgments about the products. The market itself makes moral judgements, naturally. The morality in the market is that good decisions are rewarded, bad decisions are punished. At this present time, specifically in the housing and mortgage sector, that is not the case. The natural laws of the market have been skewed by fraudulent practices, and now bad decisions (sub-prime mortgages, government backed securities etc.) are being rewarded, and good decisions (responsible home ownership, saving and investing) are being punished. Clearly, consumers and banks who engaged in risky loans and home purchases are going to be rewarded because the Federal Government has elected to bail them out. Clearly, consumers and banks who made promises and kept them, who did not overextend themselves in borrowing or lending more than could be afforded, will lose out. Their debts will, most likely, remain in place without modification. This is possible because the only entity that can exempt itself (and others) from the judgments of the free market is the Government.
In turn, they (elected officials) can choose whom they wish to reward in exchange for electoral favor, and they always choose themselves, first. Here is the crux of the whole matter. Many of our representatives have established a scheme that rewards millions for bad decisions, aided, abetted, and encouraged by those elected officials, in return for votes, thus increasing and entrenching their power. In a pure democracy, all it would take is 50.1% of the electorate to vote in favor of taxing those who have money in order to give it to themselves. Basically, mob rule. Since we have a Constitutionally instituted Representative Republic, not a pure democracy, it's a little more difficult to do than that, but possible, nonetheless. Given a large enough majority that wants to do such a thing and control of all three branches of government, it can be done. This is a fearful thing.
Karl Marx wrote, "From each according to his ability, to each according to his need." This is the basic tenet of Marxism, Socialism, and Communism. I will say that these are three different shades of the same color. It is basically a wealth redistribution scheme and extreme egalitarianism. Taking money from high-level producers, and giving it to low-level producers, not requiring the low-level producer to produce more so that he can support himself. Human nature tells us that the high-level producer will slack off and match the production of the low-level producer. Why should the high-level producer carry the load of the slackers? As a socialist worker is reported to have once said, "We pretend to work, and they pretend to pay us." But that's okay in a Socialist Society, because everybody is the same.
Now, How Does This Affect You and Me?
My boss, who hired me to help him produce his product, is a small business man. He pays me well for the work that I do and I try hard every day to give him what he is paying me for. He is also a great guy, and I consider him a friend. Now, I don't know how much money he earns with his business, I don't know what his profit margins are, but I suspect that he earns in excess of the magic $250K, ($200K or $150K, depending on what day it is), income level that Barack Obama wants to increase taxes on. I do not begrudge him his “wealth” at all. I'm glad he's got it because his wealth provides a certain amount of security for me. As long as his business is doing well, and I am doing my job, I will have a source of income from him. I know he works very hard to make his company a success. I also know that he has often sacrificed, foregoing his own paycheck, to ensure that his employees got theirs. I think my boss is the best boss in the world.
Barack Obama wants to increase the tax burden on my boss, so the government can give more money to some people who haven't earned that money in the free market. At the same time, Barack Obama wants to increase the tax burden on thousands of other small businessmen like my boss to the same purpose - giving it to those who have not earned it. This will cause my boss to, most likely, reduce his overhead, tighten his budget, and have to work even harder to keep his business profitable. All of the other small businesses, many of which he relies on for his business, to constrict their activities as well, and probably not be able to give my boss the business he needs to keep me working. If you work for a small businessman, like I do, you and I could possibly lose our jobs and our incomes, then we will probably be forced to rely on government to provide our living. My boss may be forced to close his business. Ultimately we will be enslaved to the government since there will be no place else to go, and no opportunities for improving our lot in life. The revenue to the government decreases with the downturn in business and income. As this condition continues, there are fewer and fewer resources that the government can use to pay the "workers" that do not produce. At some point, after all the money has been absorbed and spent, the government must force the people to work (enslave them) and produce for the state and the people.
The goal of Socialism is Communism. V. Lenin