Thursday, November 22, 2012

191. What would you rather have?

I am reading a book about the declining wealth of the middle class, entitled, "Falling Behind: How Rising Inequality Harms the Middle Class," by Robert H. Frank and I was intrigued by a couple of sociological ideas about comparative and absolute wealth. I have often considered the difference, but had not succeeded in developing a definitive perspective.

The author asks in regards to absolute wealth versus comparative wealth whether you would rather have a 3000 square foot house when others in your community have a 4000 square foot house, or a 2000 square foot house when in others in your community have a 1000 square foot house?

I immediately thought, as probably most would, that I do not care what other people have, I will take the house with 3000 square feet. It is nicer for me, and considerably bigger than the 2000 square foot house. And, I thought, I do not find any satisfaction in being "better" than anyone else.

However, that seemed too easy, and I knew there was more to consider.

Sure enough, I discovered how this hypothetical fails when I considered a simple experiment that the author informally conducted about comparative "wealth" with his sons. It is an experiment that we know to be inherently true and one we have probably indirectly experienced on many occasions, but never so simply stated.

The author has two sons and one morning gave them both a full glass of orange juice-which of course they enjoyed without complaint. The second day, he gave both of them a half glass of orange juice. Again, despite being only half full, neither son complained. The third day, he gave one son a nearly full glass of orange juice, but gave the other son a glass only three-quarters full. Now we have a problem and the one son asked, "Why did he get more than me?"

No fair, right?

Thus, it was not more or less orange juice that created emotion; it was comparative amounts that raised a complaint. The one son felt there was no reason that he did not deserve the same amount as his brother.

This is what we experience in reality, isn't it? If you work harder than the person doing the same job as you, don't you think you deserve more than him or her-regardless of how much you are being paid. After all, we see football players making millions of dollars willing to holdout rather than be paid less than someone who is less talented. Many of us sigh with envy and disgust--don't they realize how well they have it, we ask?

So our comparative value is as important, even if most of us would say we would gladly choose the 3000 foot square house over the 2000 square foot house. Because, at some point it's inevitable we'd reference ourselves to a neighborhood "slacker" and feel that we "deserve" a bigger house than him or her. In the end, isn't that capitalism defined-rewarding hard work?

Of course, the real world does not work like that. Hard work is important, but there are many other factors that determine wealth-the largest being opportunity through one's family socioeconomic status. Some people have a head start on the path to success, while others are destined to fail. There is also luck and good fortune. Thus, some people are going to get a stellar education, take over the family business, receive a sizeable inheritance or win the lottery. It's the socioeconomic lottery.

While I think most people accept these advantages in life, what should bother people, and is dangerous to our country from an economic standpoint, is when comparative wealth reaches exponential levels. Few argue that that those at the top, with the most responsibility, should not be well paid. The question is how well? Do they deserve to be paid $15 million dollars per year when the average salary of the other employees is $15 per hour?

My argument from a comparative standpoint is that it is impossible to "deserve" that much more than one person. It seems philosophically ridiculous that our society pays our president less than $500,000 per year, but pays 24 year-old quarterbacks upwards of 15 million per season (in fact, Michael Vick, a convicted felon, just signed a six-year $100 million dollar contract). And we have not even mentioned the wealth of the super rich-the four hundred billionaires among us.

Exponential differences in wealth are dangerous to a country--it skews power and influence, and it affects the quality of life for the middle class. It also confuses priorities, creates disconnect and rewards greed-prompting overextension in trying to "keep up with the Joneses." Few are really talking about socialism; we are talking about the difference between an orange orchard and orange peels.

190. Taxes don't follow opinions

In 1846, Henry David Thoreau was arrested and spent the night in jail for not paying his poll taxes over the course of the previous six years. For Thoreau, it was a matter of principle and he refused to pay his tax in protest of the government's role in slavery and the Mexican-American War.

While the incidence in part provided some background to the brilliant essay on civil disobedience, it also offers insight to the accountability of how our tax dollars are spent. Thoreau was not willing to support a government which engaged in activities which offended his conscious.

Many others have made the same connection.

If I could pick and choose where my tax dollars end up, I would certainly prioritize--and likewise, I would rarely approve any of my tax dollars being spent on war.

Since we are not afforded such discretion, all of our federal tax dollars, unless specifically designated, go into a large fund which supports all activities of the government. That means I pay for things I do support and those which I adamantly do not support.

Considering the number of taxes collected by our federal government, the amount of our taxes spent on any one government activity is probably quite small. Sure, I pay the president's salary, and for a bridge, or a tank--but individually it is probably not more than a few cents--or maybe even a fraction of a cent.

So while collectively the American taxpayers fund a lot of government activities, our personal contributions to any one particular activity is relatively small.

This point is particular to the obsessive and largely fiscal conservative disdain for paying welfare benefits to the less fortunate segments of our citizenry. The argument usually stems around the fact that "they got an education and they worked hard for their money," and do not feel that it is appropriate giving it to "lazy people who play the system." The stereotypes, often including offensive racist and prejudicial attitudes, only get worse from there.

The projection of exaggeration seemingly insinuates that these hard working people are each supporting dozens of lazy families for years on end. Understanding that each of our tax dollars is spread thin across the federal budget, I wondered how much people are really paying for welfare benefits. My inclination was that indeed it was severely exaggerated, but I wanted to understand.

Fortunately, the federal government now has a website which projects how each of our tax dollars is actually spent. The website entitled "Your 2011 Federal Taxpayer Receipt" allows users to put in their financial information to estimate how much of their taxes go for generalized federal expenditures.

Not surprisingly, and again depending on individual income and deductions, around 25% of our taxes is spent on national defense. This includes costs like military wages, operating expenses, research and weapons.

Job and Family Security, which includes a host of social programs, including what is commonly known as food stamps and temporary assistance for needy families, totals about 19%. The food stamp and temporary assistance programs, which many find most offensive of the social programs, only totals $44 for a family of three making $50,000 per year.

While these are just estimates and the actual amount moves with changes in income level, it is hardly the individual burden that many suggest. I have always considered this expenditure of my tax dollars to be a worthy social cost. After all, there may be a time in which I ask for the same consideration of my neighbor.

Certainly, I understand there are people who abuse the system--lazy folks who do not deserve the help. While opportunity and good fortune may fluctuate, all of us should be asked to make an effort. I would also protest my dollars being spent on those who do not at least try. Unfortunately, this determination is made on a sliding case-by-case basis, and I am willing to provide the support however it ends up.

And, to the parallel fiscally conservative argument about the wealthy paying more taxes, if I am ever very wealthy--through either hard work, or risk investment, or good fortune--I am happy to pay more taxes. Personally, and regardless of how much I pay, I would rather that more were spent on food stamps and less on national defense, but I am not ready to spend the day in jail to insist upon it.

In fact, to rest the conscious, I will take someone else's share of the job and family security--and he or she can pay for the tanks.

Thursday, November 8, 2012

189. The big pitch job is ridiculous

I have added my name to the long list of people who just want this election to be over with.

Whereas 2008 brought tremendous excitement, starting with the Democratic primaries and through the general election in which we saw some welcomed diversity in both parties, the 2012 election will be remembered as bitter and hostile. It is not to say that 2008 was not exhausting, it was, and the nomination of Sarah Palin added some heated conversations. The distractions and passion of that election nearly cost me a year of law school--as I was glued to the political television networks and had many time-consuming debates with family and friends.

But, this year it seems different. While there is still passion, the arguments have become cliché and exaggerated. Every campaign comment is analyzed, spun and reanalyzed. Very few minds will change and I often throw up my arms in despair when people insist on voting against their own interest.

I have been less engaged and often avoid social media and political conversations. Others have shared the same sentiment.

Leading the discontent is the seemingly never-ending string of political advertisements. With a total cost of the election approaching maybe 6 billion dollars, up to 2.5 billion will be spent on the presidential election. Often the commercials run back to back--Obama, Romney, Mandel and Brown--and they target the small percentage of undecided voters. For the rest of us, the commercials have become background noise and largely ignored. The particularly vicious and deceitful commercials, often funded by political action committees, will round out the last week leading up to the election. For example, and of particular annoyance, are the disingenuous advertisements of the National Rifle Association (NRA).

I have to admit that I was wrong in that I thought the political advertisements, specifically the money spent by corporations for Republicans, would have more of an impact. It seems that even the undecided voters might be tuning them out-there are just too many of them and I think people are unsure of what to believe.

In addition, I think people are starting to believe that the process is just too long. With the maneuvering for the Republican nomination beginning last year, the primaries in the spring, the conventions in late summer and the debates in the fall--people only have so much time to invest. The political junkies love it, and I share some strong opinions, but the road is long--with campaign peaks and valleys, and controversy, and polls--and more polls. And it is a disturbance to the job duties of the President and members of Congress--they have to spend too much time campaigning.

It also seems that people have lost faith in the system--the promises and broken promises; the political spin and gamesmanship. Many are beginning to realize that politics and politicians are subservient to corporations and their lobbyists--and the polls and their financial supporters. Voters have little to say after the ballots have been cast. The hypocrisy and lack of principle is often blinding and discouraging.

Finally the issues--we have heard enough about jobs, taxes, healthcare and debt. The economy is an incredibly complex and intricate system. To think that one candidate, despite the claims of both candidates, can simply flip a switch and make everything okay is ridiculous. Supporters make arguments they do not even understand. How many can name five economic factors-let alone explain what they mean? Taxes, healthcare and the debt are real issues, and they separate many of the candidates, but we have heard it all already. Either you are for asking the wealthy to pay their fair share, or you are not. Either everyone should have access to healthcare or they should not. Either you believe the debt reduction numbers work, or you do not.

Either way, I am tired; I just want this to be over. In the presidential and senatorial races, I strongly believe that the Democratic candidates, from a character standpoint, are much stronger than their Republican challengers. But people vote like they do for a variety of reasons.

Whoever wins, I am ready to cast my ballot and move on. There will be more battles to fight, more causes to advocate-I am not giving up on those things I believe in-but I am ready for this election to conclude.