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Posted by on Apr 22, 2014 in featured, Politics | 5 comments

Why Republicans Are Wrong On Economic Issues

RepublicanismI have a few friends who are Republicans mainly because they perceive the Republican Party as pro-business. I should add that on social issues most of my Republican friends are still pretty liberal and many of them are even atheists. I mention that in defense of Dave Silverman who was absolutely correct in trying to reach out to atheist Republicans at CPAC.

That aside, one of my friends was a pretty strong Democrat until very recently. He commented on why he is now more right leaning on Facebook and I want to discuss some of what he had to say. I also want to make it clear that this isn’t really about him. I have heard similar arguments from other Republican friends and I really just want to focus on why these arguments are wrong.

1.    Many Republicans fancy themselves as future rich people. The thing is that right now they are not actually rich… but they want to be and they think that it would be horrible if they found a way to become rich and then had to pay more in taxes.

2.    They believe self-empowerment alone will make them rich. Therefore they believe that most of the rich were self-empowered and that they deserve to be rich. Conversely, they believe that if you aren’t rich, that is your fault. This is basically the old pulling yourself up by your bootstraps argument. The reality is that very few people in America actually pulled themselves up by their bootstraps. Most started with privilege and then capitalized on what they started with. Those that did make their wealth often had huge advantages to start with and were also incredibly lucky.

Let’s take Mark Zuckerberg for example. Here is one of the richest people in the world. He is a genius and definitely deserved his success. However, he didn’t pull himself up by his bootstraps. According to Wikipedia, his father taught him computer programing when he was young and even hired a private computer expert to tutor him. Then Zuckerberg went on to Harvard where he was able to network with other smart, wealthy people to create Facebook.

Zuckerberg is a genius and definitely deserved his success. But he had lots of advantages that many working poor don’t have. Poor families can’t afford to hire private computer tutors or send their kids to Harvard. It doesn’t matter how smart someone is, he or she will never be able to create something like Facebook without help and probably money.

This is why it makes sense for the government to find ways to help the working poor. Maybe a smart kid from a low income family will be able to catch a break and become the next Mark Zuckerberg.

3.    Republicans believe that Democrats just give poor people rich people’s money. No, that is not how it works. Everyone pays their dues to the system that we all use. In addition, the system can also provide opportunities to those smart and industrious enough to take advantage of those opportunities. What if Mark Zuckerberg didn’t have rich parents? What if he was a poor kid living in a poor neighborhood? The public schools in that neighborhood might be horrible and Zuckerberg wouldn’t have a fancy computer tutor. Hell, he might not have even owned a computer and the only time he could use one is in ten minute intervals at the public library. Of course, the computers there might be out of date and he might need to use that time to look for a job.

However, the government could step-in in multiple ways. First, the government could make his public education better. This means that public schools in poor neighborhoods need money from richer neighborhoods so that those children could get a similar education and similar opportunities. The government could provide computers to low income households. They don’t have to be top of the line, but in today’s society everyone needs a computer. It is an essential part of our culture. The government can fund free or low cost computer training. It may not be a private tutor, but it might be a step in the right direction. Scholarship programs can also be provided and then maybe poor Mark could go to Harvard and meet up with all the right people to fund and create Facebook.

But all that takes money and you can only tax the poor so much. They don’t have much money to tax. The rich on the other hand do and they won’t even miss it except on paper.

4.    Many Republican friends have ironically whined, “Boo hoo, life isn’t fair!” Yeah, I have heard Republicans say this. What are they thinking? “Life isn’t fair, so we shouldn’t bother trying to treat people fairly and instead just treat them like shit.” Life isn’t fair, but that is what good government can do. It can help to make it more fair by giving the less fortunate a leg up instead of knocking them down and stepping on them. This is also why I think Republicans are wrong about government. Government isn’t some evil authority that needs to be drowned or limited. Sure it can be this (i.e. North Korea), but it can also be a large group of people organizing together to help each other make a better society for everyone. Good government helps the people to prosper and keeps them safe. The trick is to find that balance between good government and Kim Jong Un.

5.    Many Republicans believe that the rich are job creators and that Democrats are “punishing” these job creators. Yes the rich are job creators, but that isn’t going to change if you tax them more. They aren’t creating jobs because they want to employ people. They create jobs because they want to make money. As long as there is money to be made, they will continue to create jobs. If they don’t have the money to start another business, then as rich people they can do one of two things. Either A. get a loan (which shouldn’t be too hard when you take into account that they are RICH), or B. take Mitt Romney’s advice and ask mommy and daddy for the money. That’s what Mitt, Trump, and Paris Hilton did.

The fact is that if you have a great idea for a business in America, you will be able to find someone who will loan you money to start that business no matter what you credit is. Sure, it is easier if you have good credit or if you have a history or skill that supports your business idea, but then again who needs easy? Shouldn’t you be pulling yourself up by your bootstraps or something? Life isn’t fair remember.

I want to go back to point number 3 for a minute. Republicans have this idea of a “fair tax,” which is funny because they claim life isn’t fair and because the tax isn’t actually fair anyway. The “fair tax” is that everyone gets taxed the same percentage no matter how much or how little they have. That sounds fair, but it really isn’t. If you taxed Mitt Romney 40%, he won’t even notice. It wouldn’t affect his lifestyle at all. But if you taxed someone making $30,000 40%, they would definitely notice. They might have to get an additional job which would mean less time with their families and more stress in their homes. This would affect them physical health resulting in more time at the doctors, more time arguing with insurance companies, and less productive work. The fair thing to do is to tax the poor with a smaller percentage and tax the rich with a larger percentage… and that is exactly what we do. We also have taxes like sales tax which affect the poor much more than it affects the rich for the same reason. Rich people don’t buy that much more food and gasoline than poor people (except Mitt Romney who needs enough gas for all the cars in his car elevator).

Oh, and currently, poor and middle income Americans pay roughly about 33% income tax while the rich pay anywhere from nothing to 10% after all the loopholes, tax havens, write-offs, and bought congressmen.

I also want to point out that there is more to life than money. That isn’t to say that people should be poor, but that people don’t need to be rich. Being rich isn’t everyone’s goal. Being happy is everyone’s goal. Having enough money to live comfortably gives people a better rate of happiness success. So maybe the goal should be to make sure that at least everyone can live comfortably. Sure it is great to have a ton of money, but the important question to ask is, what are you doing with it? It seems that the lowest income Americans spend every dollar they make and put that money back into the economy. The middle class save a little bit, but for the most part also put most of their money back into the economy. The rich on the other hand don’t put their money back into the economy; instead they ship it off the some foreign tax haven. It’s just wealth on paper.

Everyone wants to be rich and many people think they will be rich someday. Rich or poor, we live in this world together and it makes sense to help those who have fewer opportunities to get a leg up and to succeed. This is something that our founding fathers really believed in. Thomas Paine was horrible at making money, but great at making the case for freer nations. Ben Franklin had to use his wealth to help poor Tom become a success. Alexander Hamilton was a poor orphan who would have died without much notice, but George Washington came along and made Hamilton a success.

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  • JS

    I think I need to address the title first since I was the
    one that more or less set this article in motion. I was in sales for a while so
    I read certain books and studies that had to do body language and certain subconscious
    “tells” that we give through speech but in this case writing. This left vs
    right argument is very toxic to most of the citizens of the United States that
    are not “in the know”. It will almost always contribute to a “us against them” mentality
    and is very unhealthy. For example while I am still a registered Democrat I am
    more or less a Libertarian and not a Republican Libertarian but more on that
    later. A large portion of the Libertarian movement would be offended (lol) by
    this correlation because many of us, myself included, support a lot of the Democrat’s
    stances on some issues. Basically if you remember anything from my post it is
    that most things are not black in white in politics and trying to view things
    that way will only lead to confusion.

    My father grew up in Upper Darby Pa with 1 brother and 2
    sisters in a home that is currently valued at around $130,000. In the NE
    section of the US this is a very cheap price to pay for a house…very. His
    father was a delivery drive for a local bread company so extra cash is not
    something they had a lot of. He would do everything from paint house numbers on
    curbs, recycle bottles, and fetch golf balls for extra cash as a kid. When he
    was in his teens he saved up enough money to buy his family a new couch that
    they desperately needed. He never went to college like his brother but rather
    went to the Navy Yard to seek employment. He earned a modest income and worked
    a lot of extra hours. He was the definition, born from and personally embodied,
    of “The Grit” that the US blue collar worker is now known for. He retired at 45
    (with his house paid off) and did some things on the side for extra money. His
    brother is now partially retired after having accumulated a pretty substantial
    net worth in the accounting field and founding his own business. All of these
    things came from hard work and not…not a wealthy family. They simply wanted a
    better life and wanted to provide a better life for their family. My ancestors
    were poor once before there was even a ton a social programs and had to
    allocate their time, little money, and resources efficiently to get ahead. The
    poor don’t do these things as effective as my family and the billionaires do
    them very effectively. Hard work, spending the little money you have wisely, spending your time wisely on things
    that would improve yourself, and hard work is the mix. I am quite sure one of
    my ancestors could have just given up at one point and said “this is very hard
    and I am jealous of the rich so I will just complain instead of doing something
    productive about my situation”. Just keep in mind that these rich families that
    many of us are envious of in one way shape or form were founded by a poor
    person…a poor person without social programs.

    Now my responses to the sections….

    1. If being rich comes along with me running my own
    business then I am all for it. My main goal is to do things the way that I want
    to do them and have a feeling of accomplishment in business. I do not believe
    in letting the poor “fend for themselves” but I do believe in educating people
    to get ahead over throwing just money at the problem. And yes I do believe in limits
    and regulation of money given to the poor and people in need. Everyone’s
    circumstance is difference and should be dealt with in accordingly. Unfortunately
    there will be some people that just don’t get it and that honestly makes me sad
    but it is an uncomfortable fact. We can’t make everyone “want to succeed” to
    even a sustainable way of life and I do firmly believe that these types of
    people are toxic to people that are on the edge of stepping up.

    2. Self-empowerment may not leave you rich right off the
    bat (or at all) but it certainly will make you better off mentally as well as financially.

    There are a lot of rich people that inherited it or won
    it some way. There are a lot of things people deserve and don’t deserve in this
    world. Do I believe that a billionaire heir deserves there wealth, no but I don’t
    condemn them for their good fortune. If you have the tools to get rich in the
    area you want to make your fortune in and choose not to use them then it is
    possible that it is your fault. Part of it is luck like were you around the
    right people and the right place at the right time etc. Or maybe you just didn’t
    try hard enough. I would never fault anyone for not being rich that wanted to
    become rich. As I mentioned it could come down to luck and I think a lot of
    people know that. Basically if you hit a dead end reassess everything and start
    over. Sooner or later after properly adjusting things you have a better chance
    of getting to your end point. Like me for example I worked 70-90 a week in an
    industry that I knew pretty much front to back…but was let go. My downfall is
    politics in the industry I was in and I suck at them big time. For some reason
    people pick people they like over people that are better at their skill. It was
    my fault because I know I suck at work place politics so I need to either improve
    that aspect of myself or move on to something where I fit in better.

    The comment about “most people starting with privilege”
    is very narrow minded and incorrect. In a lot of the very very very wealthy
    families there was indeed a person that started it all with nothing and that is
    a fact. What you are really referring to is the heirs of all this money. And
    yes I agree it is completely unfair. It is also unfair that some people are
    born with disabilities and get hit by a drunk drivers etc. Not everything is going to be fair and I think
    that is something everyone has to realize. Make the most of what you have and
    don’t hold yourself to standards that you can’t possibly reach.

    Yes we should help out the working poor. There is no
    reason why a child should have to suffer by not reaching his full potential. This
    is however easier said than done and that is unfortunate. This is where I
    believe in empowering kids and support it 100%. They may not pick up habits as
    a youth that will be vital to their success because of their surroundings and
    parents. This is where I firmly believe a lot of money for social programs
    should be targeted. Help the youth out so they are less likely to be in their
    parents shoes. In fact I always said that when I become wealthy one day this is
    where I will donate money. In every sense of the phrase they are the future.

    3. I am not honestly sure how to respond to this part. I
    think I covered the other viewpoint pretty extensively by now. One thing is
    clear the government does give the poor “everybody’s money” not just Republican’s
    money. In some ways I feel as though it isn’t spent correctly is all.

    4. No it does need to limited for many reasons and you of
    all people should understand this based off of our founding fathers beliefs. I
    see this mainly because they completely screw up capitalism as well as some
    other reasons which include being too involved in my life and an inept way they
    handle things.

    5. This is another things that frustrates me about the Democrats
    and alike. Most of the small business owners that provide a crap load of jobs
    DO NOT HAVE A BOTTOMLESS PIT OF MONEY. It comes down to the very well-known risk
    versus reward theory and sometimes ROI (risk on investment). Hair stylists can
    make over $100,000 and not even own the salon they work in. Why would a small
    business owner take out a loan against his house (risk losing his house) to
    open a business to make 70 or 80 grand a year? Another myth (not mention here)
    is how big corporations make a ton of money that is pure profit. Fact, those
    very large companies are often times only large because of other people’s money
    and those people want a return on their investment. If they don’t get they will
    pull their money out a lot of the times.

    What you are mainly bothered by it sounds like is the
    capital gains tax. I honestly think we agree on that point. Income is income
    and should be taxed accordingly. That is a tremendous part of the problem and
    would solve a ton of problems.

    If you have an idea that proves to be beneficial for an
    investor to invest then they will indeed invest. Not sure about your argument
    here because you had to pull yourself up to get that business idea running in
    the first place.

    About the 40% thing and Romney… Who is anyone to say what
    another person’s value of money is? It is their money and this what makes me
    upset. Again this is about the capital gains tax being so low and I agree. But
    lets not start acting like well they have more so we should distribute it.

    To sum this all up you have a problem with inequality or
    I guess the growing amount of inequality. I don’t like it either but I believe
    it has to be dealt with the following ways.

    A.
    It needs to be dealt with at a mentality level first
    of the have nots and allow them a fair playing field. This does not mean keep
    giving and giving and giving like we do now.

    B.
    I also believe that the capital gains tax should
    be higher.

    Rich people don’t put a lot of their money back into the economy
    because lets face it you can only eat so many steaks before that money becomes
    savings. The 99% spend their money thus increasing the need for jobs for the products
    and services that we use. It is basic economics really. But see now we are
    trying to fix things at the end when it should have been fixed in the
    beginning.

    So lets start at the beginning and agree that higher capital
    gains taxes are needed. But most importantly lets empower people to be better
    and not completely enable them to depend on social welfare. There will be the
    ones that that will never get ahead and you need to come to terms with that
    fact. We can support their children to get ahead and end that vicious circle of
    poverty. However I would never be okay with a constant stream of income for
    people that never take advantage of it and better themselves. Call it selfish
    but it is my money and I believe that is not a good investment. This paragraph
    sums up my beliefs in a nutshell.

    In closing I just want to say this. You simply undermine,
    maybe not the current generation, but past generations of hard workers that
    brought wealth to their family. And frankly in a lot of cases it is really not
    going to change anything in the long term. I am sorry but that is indeed a
    fact. It was the mentality that inspired grit and hard work and thus the money
    at the start of everything. You can’t make people have that mentality by simply
    giving the “haves” money to the “have nots”. The lack of that mentality will
    make a lot of the artificial “haves” (formerly have nots) become “have nots”
    again in no time flat. Why? Because they never had the mentality to keep it
    going and then we are back at square one. It reminds me of what an old friend
    of mine said to me once. He came from a decently well off family but in no
    means rich. He started a landscaping business in his late teens and was pretty successful
    the last time that I spoke with him. One time he told me that if he lost everything
    tomorrow he would just find a way to buy a cheap lawnmower and start everything
    back up again. It is that mentality that I admire and that mentality that makes
    things great.

    • http://skepticink.com/dangeroustalk Dangerous Talk

      There is certainly a lot to comment on here Jeff and there was a lot of stuff I actually left out of this article because it was getting too long as it is. I don’t have a lot of time right now because I have to get ready to go to my slightly above minimum wage job where despite getting a super excellent review I only ended up getting a .38 cent raise.

      First, I thought I touched on the right/left thing in the first paragraph. Very few of my right leaning friends agree with the Republicans on social issues and I know you don’t agree with them on those issues either. But when it comes to the economy, you have drank the Republican kool-aid. You are not my only friend who has and I have been having similar conversations with others. So while your post inspired this blog post, it really isn’t about you alone.

      Second, the past was different than the present. Back in the day, many wealthy Americans felt a greater responsibility to the poor than the Koch Brothers do today. Also, the super rich had less control over legislation than they do today. It was much easier for hard working people to get ahead with more hard work and less luck involved (although luck is always involved).

      Third, privilege plays a huge role in people’s economic advancement and opportunities. You can’t minimize this. There was a great study dealing with this that Paul Piff discusses in his TED Talk: http://www.ted.com/talks/paul_piff_does_money_make_you_mean

      It isn’t about stealing money from the rich or being envious of the rich, it is about how to help society. We have to fund the government and we do that through taxes. Everyone has to pay their dues. Those dues either come disproportionately from the poor who don’t have the money and need the money or more of it comes from the rich who won’t even miss it and certainly won’t re-invest it into the economy.

      Now you can say that the government should spend less and I agree, but the question is spend less on what? I think we spend too much on military and on bailouts for the rich. I think that money would be better spent on helping the working poor. When I was at my last company, the executives would sometimes buy the workers a pizza party if we did a great job making a product. The executives would always complain about how they didn’t have enough money to give give the workers a raise. Then they would turn around and have executive meetings at fancy restaurants. A lot of the workers thought that instead of the pizza party and the fancy business meetings, they should just give the workers a small raise. But the executives loved their fancy business meetings so that never happened. It is about priorities. I think social programs that give the working poor some help are better than no-bid contracts at inflated prices to rich business owners.

      Finally, I want to discuss your quote here: “I would never be okay with a constant stream of income for people that never take advantage of it and better themselves. Call it selfish but it is my money and I believe that is not a good investment.”

      People are always a good investment. They may not return money for that investment, but they are worth the money in and of themselves. Like I said in the blog post, not everyone considers money to be their goal. Some people just want enough money to live comfortably without having to worry about whether they can pay the rent or mortgage next month. They aren’t lesser people, they just have different priorities. Money isn’t everything and it shouldn’t have to be everything. Not everyone should be forced into the role of cut throat business person or live in poverty. Teaching is one of the best professions, but no one becomes a teacher expecting to make it rich. Could you imagine a world where everyone only worked for the goal of making it rich? What a sad world that would be.

      • JS

        And we both know that you are worth more than a “slightly
        above minimum wage job” buddy. There is a market out there for almost every
        skill. I think ratemypoo.com has proved that lol. I think the market for your
        skill that you choose to use is very small hence you being outside of your field.

        I am not sure that I have drank the kool-aid as much as I
        have taken everything into account to form an accurate opinion for myself. I
        think it is dangerous to only listen to one side of any debate or issue. I
        welcome opposing viewpoints because I love challenging my own opinions.

        I am well aware of the Koch brother’s attempts to
        manipulate things and while I don’t agree with it I can’t solely blame them.
        They want to make money and they are doing everything they can to make more. Should
        they be allowed to do many of these things is the question and I would say no.
        However we do have to remember that their job is to make money and our government’s
        job is to protect us from such things. So in my opinion I blame the government
        more than them. Even though you already no this about me I will state it again.
        I am completely against corporations etc. controlling our government with
        bribes/donations etc. I think it is criminal but again I believe our government
        is mainly to blame and so are the citizens for not be outraged enough to toss
        them out on their ass…literary.

        Of course privilege plays a large part in people getting
        ahead or at least ahead in the short run. But I believe your statement was more
        of a blanket one stating that most people that got ahead did it this way. It vastly
        undermines the hard work of others that didn’t have that privilege.

        Again, people need to stop being nonchalant about giving
        other people’s money away. Comments like “won’t even miss it” is taken as “I
        don’t care if it is your money and I feel it could be spent better” and is
        never going to be accepted by the 1% or other higher income earners. It is
        doubly offensive when you consider the 1% pays 40some % of the taxes and at a
        much higher rate. I say that because there are a lot of people in the 1% don’t
        derive any significant income from capital gains honestly. I think we have
        established that I believe in raising the capital gains tax already and that is
        a very liberal/democratic view. I think we have established that I also agree
        with the fact that the 99%’s money moves this economy so we agree there as
        well.

        Of course we all would like them to spend less honestly
        is this even possible? I am more concerned about the distribution of this
        money. I am pretty much a purist when it comes to capitalism and I can assure
        you that none of the purists agree with the handouts. Capitalism was designed
        weed out the weak businesses and bailouts heavily screw up that system. They
        should have all fallen honestly but they all knew the unofficial corporate welfare
        program would bail them out. See what I mean about unregulated and shortsighted
        welfare programs?

        This argument about the executives goes back to the “what’s
        fair” argument. Whether it be cronyism, nepotism, or an underling that just
        does not fit the needs of the management doesn’t matter because you (anyone not
        in the circle) just isn’t involved. It especially and personally hurts when it
        is cronyism or nepotism because you know it has nothing to do with your skills
        but either way a person was not included and honestly…they don’t have to be. Their
        court and their rules.

        People are always important yes and a good investment
        when it comes to time etc. I was talking about enabling people with other people’s
        money. That is not a good investment. Enabling people to not improve themselves
        hurts them, it doesn’t help them. There are many groups of people that need
        public assistance. We need to spend more time tailoring programs to help them
        get ahead. Not what we do a lot of which is “here is rent and food money…enjoy”.
        We need to diagnose why they need that money. No job, Okay lets figure out why
        and build you up etc etc etc.

        My main goal is success in family and business. I am “wealthy”
        (happy etc.) on my family side so now I am concentrating more on the business
        side. I respect a person’s mind more than anything so I don’t judge people that
        don’t want to be wealthy. On the same page I greatly admire people that want to
        influence things on a grand scale more than I do small minded people.

        I think Democrats and liberals defeat themselves in
        winning any rational debate about raising taxes on the wealthy when the whole
        mind set is “you will not miss it because you have a lot of it”. Spend more
        time concentrating on the specifics which is that capital gains is a form of
        income and should be taxed accordingly. I am in complete agreement and I guarantee
        that a wealthy person would have a more sensible debate when they didn’t think
        the person they are debating was being nonchalant with their money.

  • guerillasurgeon

    Actually, the rich are not job creators apparently. I’ve lost the link but it has been shown by scientific research that they don’t actually create jobs as much as people in small businesses do. Other research has shown that the overwhelming factor in how rich you get is luck rather than hard work. As one of our more idiotic politicians once said – about the only thing I agreed with him on – “My cleaning lady works hard.” Which is why I get pissed off when rich people justify their wealth by saying “I work hard.” Yes, after you inherited millions from daddy. :-) And bugger that ‘us versus them is bad’ paradigm. That’s what they want you to believe. Because let’s face it, it’s only class war when we fight back :-).

    • Nerdsamwich

      You know who really creates jobs? Customers that can afford to buy your product. The more of those a business has, the more people they have to hire to keep up. Remember that a business makes money by eliminating jobs, so the only way a responsible owner creates a job is if he’s forced to by the market.