Archives For Money
Recent studies show, for example, that wealthier people are more likely to cut people off in traffic and to behave unethically in simulated business and charity scenarios. Earlier this year, statistics on charitable giving revealed that while the wealthy donate about 1.3% of their income to charity, the poorest actually give more than twice as much as a proportion of their earnings — 3.2%.
“There’s this idea that the more you have, the less entitled and more grateful you feel; and the less you have, the more you feel you deserve. That’s not what we find,” says author Paul Piff, a psychologist at the University of California, Berkeley. “This seems to be the opposite of noblesse oblige.”
(MORE: Why the Rich Are Less Ethical: They See Greed as Good)
In five different experiments involving several hundred undergraduates and 100 adults recruited from online communities, the researchers found higher levels of both narcissism and entitlement among those of higher income and social class.
I have had some pretty harrowing experiences with narcissists in my life. I just can’t image someone being so self-focused especially those who call themselves religious. Almost all of religions spiritual documents take a very firm stand against that trait. My definition of a narcissist is someone who has their head stuck so far up their rear-end that they can see nothing but themselves. I simply have no patience or compassion for a narcissist. I know I am told to love them but, with only a few exceptions, I find it almost impossible to manage that feat.
One of the things that often comes with any degree of success in the financial world is ego and that seems be often be a major trait of most narcissists. Those who manage to make a few bucks soon convince themselves that they are the greatest person in the world and that no one knows more about real life than they do. Now before you start piling on I will freely admit that not all, or probably even most, successful money gatherers are narcissists or have infinite egos and thank heavens for that. But I am convinced that they have their inordinate share and the source above seems to re-enforce that belief.
As the study says the wealthier you are the more likely you are to treat others poorly or to donate any significant percentage of your income to charitable causes. I know Mr. Romney ranted about how the 47% of us feel entitled to take money from the real wealth makers but according to this study he simply got it bass-ackwards and the electorate let him know that…..
While the cyclical outlook looks bright, the U.S. will be hampered in the longer term by such structural headwinds as an aging population, a plateauing of educational achievement and increased inequality, Gordon said.
I have always found it strange that my more conservative friends seem to want to see all Democratic administrations fail in one regard to another. They always say that their Republican heroes did it better than any Democrat ever could. When they mention this I just love to pull out the statistic that shows if you invest $1000 in only Republican administrations since 1940 you would now have about $1400 but if you had invested in only Democratic administration it would be $10,000.
I am getting off topic here. What I really intend this post to be about is this very slight quote from the article. Here again some financial author over at Bloomberg want to blame us old folks for keeping our economy from blooming. They say an aging population is partly to blame. I could see that if they went further to say that the reason for this is that all those people who really understand how to create prosperity are retiring and there is no one qualified enough to replace them. Now, before all you guys start jumping on me for this statement please realize that it is said in jest but I expect there is an ounce of truth in that statement. The younger generations just haven’t been tempered as much as we were.
The other reason given is the plateauing of educational achievement. What that really means is that the kids today are just not going into the necessary advanced fields of education to achieve real prosperity. And of course the last thing on the list above is a very serious one for me. Increase inequality is something that has gotten me very fearful of the future. The one thing that I am convinced has made the U.S. great over the last century is equality of condition. That is, there is no aristocracy that gobbles up the majority of our produced wealth. Of course we all know that has been changing greatly over the last thirty years or so. If we can’t turn that around we may just all be in trouble when it comes to our longevity. Teddy Roosevelt took down the robber barons a century ago but there just doesn’t seem to be anyone like him to be found this time around. At least not yet….
The difference between what is legally owed the federal government and what it actually collects in taxes each year is called the “tax gap,” which the IRS recently estimated reached $385 billion in 2006. Other studies have placed that figure higher — at upwards of $600 billion.
So who owes this money and why? The single biggest contributor to the tax gap — accounting for 84% of it — are people who simply under-report their income. This doesn’t usually happen to folks whose employers withholds taxes from their paychecks, as 99% of people in that position end up paying their income taxes in full and on time. The biggest headache for the IRS is collecting business income from the self employed, who must voluntarily report their earnings…
This being Tax Day our current system of taxation is on my mind. When I was self-employed for six years I paid taxes on all the money coming in. I believed I had an obligation to pay my “fair share”. I didn’t want to be a free-loader on society. But I will admit that I took advantage of several tax loopholes offered for small business owner that pretty drastically reduced what I owed.
I don’t think I am the only one who thinks that our tax system in the country is completely haywire. After decades of special interest loopholes have been added turning the tax code into a 10,000 page document its time to pretty much throw out what we have and replace it with a new system. The simpler system the better. There are all kinds of proposals around but which would be the best? To find that out we need to understand just who is championing each new idea.
It is no secret that lobbies pretty much run the country now. If you have enough money/influence/power you can get just about anything turned into law. (because of that influence it is almost a good thing that our government is in such gridlock). Whatever replaces those thousands of pages of current tax code must be a moral document. It must be seen as fair and compassionate for all of us. Of course there will always be those who are anti-everything that will scream about the government stealing their hard-earned gains. We can do nothing to appease them but for most of the rest of us we know it is our duty to support our government and especially our shared infrastructure. It is important for us to give our fair share.
Here is an excerpt from the New Yorker magazine about this:
Behavioral economists call the cultural tendency to pay duties, “tax morale.” As James Suroweicki of The New Yorker defines it:
We don’t pay our taxes just because we’re afraid of getting caught; we also feel a responsibility to contribute to the common good. But that sense of responsibility comes with conditions . . . we’ll chip in as long as we have faith that our fellow-citizens are doing the same, and that our government is basically legitimate. Countries where people feel that they have some say in how the state acts, and where there are high levels of trust, tend to have high rates of tax compliance. That may be why Americans, despite being virulently anti-tax in their rhetoric, are notably compliant taxpayers.”
How did we get into the problem of insane pay for U.S. corporation leaders? The problem basically originated from the title above. Every board of directors wants to pat themselves on the back for selecting that exception person who will lead their company to outperform all the others. They need to do that so that they can somehow rationalize their board being paid thousands of dollars per hour for their time. So the statement is made:
Our CEO is exceptional so we must guarantee him a paycheck in the top 20% of all CEOs.
On the surface this is a rather innocuous statement that is bound to be true for some. But the problem is that almost every board now makes this statement and backs it up with a iron-clad golden parachute to match. So when 100% of the CEOs are to be paid in the top 20% of all CEOs it becomes an impossibility to actually occur. The only thing that can happen is that CEO pay goes through the stratosphere seeking a never-ending top 20%.
The impossibility that all CEOs can be in the top 20% seems rather easy for most people to understand so why can’t the typical board of directors figure it out? Again there is a again simple answer and that is most CEOs are actually on the board of directors for several other companies. So, when the above pledge is made they also guarantee an ever dramatic increase in their own pay. This is the typical “I’ll scratch your back if you scratch mine”.
There is one simple solution to this dilemma and that is for the shareholders to put an end to it. That is where more greed comes into the equation. Everyone who buys stock in a company want the cost per share to increase dramatically so they can rake in some big profits. In order to do that they must think that the guy in charge is the best in the business. Or at least in the top 20%. You get the idea.
The only way to stop this ever escalating CEO pay is for the stockholders to cause it to end. It will not be an easy matters as the CEO and the board of directors will probably fight tooth and nail for their wealth. But it can and actually does happen once in a while. So, the next time you start complaining about CEO pay remember that you the stockholder are allowing it to happen. Even if you only have one share in a company you have power to cease this ridiculous practice.
But I’m just a simple guy so what do I know.
I know the current version of the Republican party is supposed to be all about fiscal austerity but I have trouble actually seeing them live out that concept. When it comes to the safety net and so-called “entitlement” issues they scream about needing to cut back or at least for total accountability. But when it comes to the bloated military expenses, homeland security and tax breaks for the rich they appear to throw that concept out the window. Of course that means that their austerity programs, if they are implemented as they suggest, will end up being done on the backs of the poor as almost everything else is “off the table”.
We spend more than the other 96% of the world combines on our supposed security. Our military budgets eat up so much of our prosperity as to force future looking programs off the stove. Education, our R&D forces, and our colleges suffer as a result of our insistence that to be safe we must spend so much on our war machine. In fact we throw so much money into the military that they don’t even bother to try to determine if it is going to the best place. For that matter they really don’t even try to categorize where it is even spent. But that doesn’t seem to phase the Republican senators and congressmen in Washington. They continue to demand more and more of our precious resource for this bloated machine.
For that reason I have little confidence that my budgeted minded friends are really serious about budgets but are really more concerned in reducing or even eliminating the very function of government or at least making sure that 47% don’t get things they supposedly haven’t earned. If they were really serious about our current deficits they would be looking at our war machine first not last. When you throw trillions of dollars into a black hole you dictate that much of it will be spent unwisely or even fraudulently. They demand total accountability for agencies supporting our safety net and nothing for our industrial/ military complex. How strange is that???
He (retired Army Gen. David Barno) said the Pentagon’s method of operating is comparable to driving a 1985 Oldsmobile which is leaking oil, “and every time we go out on the highway at 65 miles an hour, we come back after another day, there’s more and more oil on the floor of our garage in the morning. And our solution has been to buy more oil, to put it in the engine and go drive it at 65 miles an hour.”
When Mr. Bush declared in 2002 that he was taking his wars “off-the-books” it looks like he meant it! According to this article there seems to be almost no accountability within the Department of Defense. How can those who hold the purse strings in congress allow such a thing to happen. At least a few generations ago we learned about the infamous $10,000 toilet seats whereas now we have no idea, no even those who are in control, of where the money is even going.
I can’t imagine any other organization that could be run like our military. With basically no accountability it is certain that billions, if not trillions, are wasted on fraud and abuse alone.
- It seems ludicrous how can congress just blindly throw almost half of our discretionary money into a black hole and then go screaming about making cuts to our nation’s safety net because they want to cut the deficit!
- It seems ludicrous that we throw so much money indiscriminately into our war machine while expecting our teachers to supply pencils, paper and art supplies for their classrooms
- It seems ludicrous for our citizens to go without even basic healthcare in order to feed the insatiable black hole.
All of above just seems insane to me. But what is even more insane are those who are allowing this to happen and not hearing a peep out of them. Why are they not screaming their heads off in Washington about this?
I want to bring out one more quote from this article to show at least a glimmer of hope in finally reining in some of these bloated budgets
He (Hagel) added more questions later in the hearing, “Why aren’t we auditing these programs? Where’s the accountability? That’s certainly an area that we’re going to have to take a look at.” And within days Hagel will have his chance to begin that accountability and to reduce the bloat he saw in his department
I pray that Secretary Hagel, now that the Republicans have finally let him take it place, will have the courage to tackle this absurd condition that he is taking over. I pray that he puts the military spending (you can’t really call them budgets as they seem to have none) back “on-the-books” and insists on knowing where our money goes. It certainly isn’t spent on soldiers’ pay as many are at or below the poverty line.
The difference between our rich and poor grows greater every year. Our distribution of wealth is getting more uneven all the time. . . . A man can make a million over night and he is on every page in the morning. But it never tells you who give up the million he got. You can’t get money without taking it from somebody. – 1 June 1930 Will Rogers
As Will points out here the difference between the rich and the poor has always been greater than many of us would like to see but I really don’t think in Will’s day it was even remotely as wide a gap as it is today. The latest statistics show that there is about $58 trillion of wealth in the U.S. But as the chart to the right shows 80% of the population controls only 7% of the wealth. That is about $10,000 per person for 80% of us. The top 1% average $7,000,000/person.
But as Will further points out that there is just so much wealth that can be owned. There has been a twenty fold increase in billionaire in the last twenty years. In order for the money to come to them it had to come from someone else. Of course we all know where it came from. It came for the wages and benefits of the 80% that have actually decreased over that same period of time.
I’m not a financial wizard but it really doesn’t seem like rocket science to me to understand that if we want to grow our GDP we must have citizens who have the money to buy additional goods and services. The 1% can only buy so many jets and yachts. In fact most of their increased wealth is likely just sitting in off-shore accounts accumulating interest. When the elite among us insist on stagnating wages there are no additional resources to grow our economy. It is a Catch-22 and that I can understand so why can’t the big shot economists in the gOp figure it out?
By including the requirement that a congressional budget be passed, House Republicans are acting on their frustration with the Senate, which hasn’t adopted a budget since 2009. Both chambers are supposed to pass one by April 15 each year, then reconcile their differences and pass a compromise. The government has been able to operate without a formal budget for four years only because that document represents non-binding guidance. Actual spending bills are written later.
I am going to surprise many of you by proclaiming that I agree with the above statement! It is about time that the Democrats live up to their constitutional duties and tell us where they want to spend our tax dollars. In some ways I agree that these guys are the party of “tax and spend” and that is ok as long as it is done responsibly. We depend on our representatives in government to keep our infrastructure in place and to help those of us who temporarily need a hand. Continue Reading…
It seems literally impossible for another Republican to take charge of these types of matters (controlling fraud and abuse). Most of those folks are just too beholding to big business to ever try to reign them in. So, currently that leaves the Democratic party to take up the mantel. I don’t see that as much of a possibility either. Where all this “too big to fail” will end I just don’t know.
I don’t find myself quoting myself very often but when I re-read this post from almost a year ago about how Republicans have been the party of big business in Will Rogers day and are even more so today it got me to thinking. Republicans seem to believe in the innate goodness of our corporations. I don’t know how else you can explain their deregulation fever of the last three decades.
When Ronald Reagan came into office the first thing he did besides firing everyone who belonged to the Air Traffic Controllers Union was to finish up removing almost all regulations from the savings and loan industry. Here is what Wikipedia says about that:
The deregulation of S&Ls in 1980 gave them many of the capabilities of banks, without the same regulations as banks. Savings and loan associations could choose to be under either a state or a federal charter. Immediately after deregulation of the federally chartered thrifts, state-chartered thrifts rushed to become federally chartered, because of the advantages associated with a federal charter. In response, states such as California and Texas changed their regulations to be similar to federal regulations.
Of course we also know that within ten years the S&L industry almost disintegrated with fraud and abuse and it cost us taxpayers billions to bail them out. But that would not be the last time our friends in government showed their belief in the innate goodness of business. Soon after we recovered from the S&L fiasco they went about you guessed it, de-regulating the entire banking sector. Again within a short period of time the banks “too big to fail” cost us about a trillion dollars to clean up their abuse of the mortgage business. After these two meltdowns the Democrats put back a few of the necessary regulation via Dodd/Frank bill but the Republicans fought it tooth and nail. That I just don’t understand. Why do that seem to be totally ignore history, even recent history?
How can these guys in Washington continue to put their total faith in the innate goodness of an unbridled business sector. Profits are approaching all time highs while wages have remained stagnant for the last three decades! Given that fact, how else can you explain how they never seem to see a regulation that they don’t want to eliminate. It seems like they would eventually learn that capitalism depends on brisk and stringent regulations to contain the innate greed, not goodness, that is built into the system.
Before my conservative friends attack me here I want to declare that I believe capitalism is the best system in the world but it only works when it is adequately regulated. To my friends that think I am too critical at times I am really questioning the idea of almost total de-regulation mantra of Republicans. Do they really believe that regulations have no place in our business world? I would really like to know? Their two failed attempts at de-regulating our financial sector seem to say something. Or is that just me?
In order to prepare some posts over at RedLetterLiving I have been studying some about the why the Roman Empire collapsed. Of course everyone seems to have an opinion about that. The anti-Catholic folks say it is the pope’s fault. The maker/taker folks claim it is because the empire became a welfare State. But I kind of align with a majority view that they just had to spend too much money to keep their armies spread out among most of the world. Their military expenses accounted for almost one-half of all their spending and that included building the coliseum and such!
I am a history guy so I like to claim that we can learn from the past in order to keep from making the same mistakes in the future. There have been a few other empires come and go since the Roman one but I don’t think anyone will disagree that the current world empire are us folks in the U.S.
“The devil is in the details” is a well-known quote that definitely applies in all this “fiscal cliff” talk going on recently. The congress in our version of government has the power of the purse. They determine where the money is spent and where it is cut. So, I find it strange that Mr. Boehner insists that the president and not him is responsible for identifying what would be cut from the budget in order to appease the GOP base. As mentioned in the article below Republicans do relatively well with the American people when they talk broadly about cutting spending, but they run into trouble when the conversation turns to the specifics of what they might actually cut. In other words they are good when it comes to complaining but not so good when it comes to solving. :) Mr Boehner seems to be saying he wants someone else to do his job, or maybe it is really that he wants someone to take the blame. Here is an article and some words about that: Continue Reading…
What the government has got to do is live as cheap as the people. 21 December 1932 Will Rogers
Speaking about money not being wisely spent this morning got me to thinking about Will’s quote above. If you have read much on this blog you will know that I am a proud social progressive but also a fiscal conservative. In that light I certainly agree with Will here. Our government needs to learn how to live as cheap as its people. That doesn’t seem to be possible anymore. There is always that new model of military drone the DOD wants to buy in the thousands of course. There is always some other group including many corporations that need some type of incentive to provide jobs. Besides getting the drilling rights at gut cheap prices from government land the money bloated oil companies say they need more bucks to help them find the oil. But when it comes time to sell the oil they will only give it back to us at world prices! There is always someone with their hand out and our government can’t seem to keep their wallet in its pocket. Continue Reading…
But in fact, most Americans in 2010 paid far less in total taxes — federal, state and local — than they would have paid 30 years ago. According to an analysis by The New York Times, the combination of all income taxes, sales taxes and property taxes took a smaller share of their income than it took from households with the same inflation-adjusted income in 1980.
Households earning more than $200,000 benefited from the largest percentage declines in total taxation as a share of income. Middle-income households benefited, too.
Everything is relative. I learned that in college in a physics class way back in the 1960′s. Another lesson I learned is that everything is a shade of grey; nothing is totally black or white. So when I hear people complain about how all their hard Continue Reading…
“Fiscal cliff” this “fiscal cliff” that; I am really getting tired of all the rhetoric. It is almost as if some evil empire dropped the “fiscal cliff” viciously into our laps. This reminds me of all the gloom and doom associated with Y2K. Does anyone remember that one. That happened in 1999 when some wise guru decided that the world was going to end when the calendar turned to January 1, 2000. The reasoning was that computers would get the date confused with 1900 as we only use the last two digit in most of our year designations. Of course when the date actually happened it was as mundane as the year before. No the “fiscal cliff” wasn’t dropped down on us by some evil empire, it was a result of a big majority vote by those same folks in our congress that are so upset about it now.
Now that the national elections have finally played out there is much talk about the financial cliff. That is the mandated 10% budget cuts and letting the Bush administration tax cuts expire. It seems most of the media treats this event as some sort of catastrophe but in my usual contrarian ways I just don’t see it that way. Even though I am strongly a social progressive, I am also a fiscal conservative. So here is my take on this matter. Continue Reading…
There are thousands of civilian jobs related to the war effort, and cutbacks in defense spending have already led to reductions in these defense-related jobs, including direct government positions or those with defense contractors.
Outside of slightly more federal money spent on citizen’s safety nets the defense budgets are the biggest use of our tax dollars. We spend more on our military than the rest of the world combined. As shown by the quote above and the source article one of the arguments our hawks give us for maintaining our military spending is that it creates much needed jobs. The graph below provided to me by my friends at the American Friends Service Committee show that the same money could produce many more jobs if spent outside of our military complex. The only reason we spend as much as the rest of the world combined on our military is because our politicians and generals have chosen to make us the policemen of the world.
[Republicans] take care of big money for big money takes care of them. – 20 September 1931 Will Rogers
I don’t think that even Will would have dreamed that we would one day have something called “Citizens United”. That is the Supreme Court decision that opened the money spigot in today’s politics. There are now dozens of groups both Republican and Democrat, but mostly Republican, that go by various innocuous names that put out much of the mud in today’s politics.
Since these guys can hide behind noble sounding names and don’t have to say what their political bent is it is hard to know where they stand without a program. So I took the effort to track down the top fifteen pacs for you. It is shown below. In case you are interested the totals add up to
Republican – $263 million
Democrat – $48 million Continue Reading…
I know there is a lot of fury going on now about how President Obama has increased the national debt. So, when I came across this graph it got my attention. I have had several ranters here lately who proclaim that “that idiot Obama is bankrupting the country”. They go on and on about the increased deficit and how it is their sole reason to drive that “idiot” out of office. I am going to try and give you some insight into this situation but as President Clinton said recently you are going to have to pay attention…
I was a small business owner for six years after I retired from the big business corporate world. But being a sole proprietor with no employees I really don’t have a good view of just what small businesses are really about. The Republican political leaders say small businesses are the growth engine of our country and we shouldn’t tax them by taking away the Bush tax cuts for those making over $250,000 annually.
How many of the so-called small businesses were like mine just a guy in a shop building things for customers? How many hire more than a handful of employees? I decided to look into this.
Here is a link to a bunch of numbers in this area: http://www.census.gov/econ/smallbus.html
- Of those 29 million about 22 million are business with no employees
- Only one million firms have more than 9 employees
- Only 90,000 (0.3% have more than 100 employees
- Across the United States, small business failure rates rose by 40% between 2007 and 2010
- Only about one if five small businesses will be in existence five years after its creation