The Uses of the Rich

[rcweir]

So the latest idea from our President is to create jobs by government subsidies of public works project and to pay for that with an increased tax on millionaires. This certainly will have populist appeal. But will it actually create jobs?

I think the key question is this: what do the rich do with the money they earn? I assume they are not hoarding piles of cash in sacks under their bed. I assume most of it is either put into savings or investment accounts, or spent on goods and services. If the money is saved/invested, then that money is pumped back into the economy, to support growing companies, make credit available to companies and for mortgages, etc. If the money is spent, then that is sustaining jobs. This is true even if spent on luxury goods. The billionaire's yacht is built by a small company, using craftsman and labororers. Their homes are maintained by gardeners, electricians and plumbers. Their purchase of first class plane tickets subsidize the fare of those of us sitting in coach.

I'm not saying that the Buffet and Gates are moral giants. But having a lot of money and spending a lot of money go together, And spending money creates jobs. Merely shuffling the money around does not create net jobs. It just loses jobs in one part of the economy (waitresses is Las Vegas) and creates jobs elsewhere (construction workers in electoral "swing states"). Income redistribution does not create jobs. It replaces individually-directed spending and investment with Washington-directed spending and investment.

The most useful thing that the rich do is to pay ridiculous amounts of money for cutting edge technologies, and by doing so fund the early R&D that gets the technology (over time) to become mainstream.

Here's an iconic example:




Humphrey Bogart in the 1954 film "Sabrina", an industrial magnate, mega rich, with a limo with a radio phone and stock ticker. It illustrated his immense wealth, as well as how he was never away from work. This was probably the first time the average American realized that anything like this was even possible.



The other example, we all remember, is the Motorola DynaTAC used in "Wall Street" (1987) by Gorden Gekko on the beach. This phone was available to the public. But adjusting for inflation cost the equivalent of $9000 today, So it was a luxury good, an icon of the filthy rich.

But today? Everyone has a cell phone. Rich, poor, grandmothers, children, everyone. And they are affordable. And they are far more powerful. The capabilities of an iPhone could not have been bought, for a king's ransom in 1987.

Much of what we consider to be advances in our standard of living have occurred just this way. My grandparents grew up with an outhouse. Indoor plumbing was once luxury of the rich, as was air conditioning, refrigeration, microwave ovens, home computers, etc. One of the primary uses of the rich is to invest in such advances, through their own spending decisions.

I don't think that Washington spending has that same effect. They do not spend as smartly. Why? Because it is person A (a government bureaucrat) spending person B's money (a taxpayer) for the benefit of person C (recipient of stimulus). Their is no incentive in that case to spend the money wisely. Compare that to keeping tax rates low for everyone. The taxpayer spends their own money for their own benefit. They have every incentive their to compare alternatives, spend wisely, take intelligent risks, etc. Sending the money to DC ensures it is immediately tossed into the sausage grinder with lobbyists, patronage and electoral politics.

[Tony1941]

I don't think that Washington spending has that same effect. They do not spend as smartly. Why? Because it is person A (a government bureaucrat) spending person B's money (a taxpayer) for the benefit of person C (recipient of stimulus). Their is no incentive in that case to spend the money wisely. Compare that to keeping tax rates low for everyone. The taxpayer spends their own money for their own benefit. They have every incentive their to compare alternatives, spend wisely, take intelligent risks, etc. Sending the money to DC ensures it is immediately tossed into the sausage grinder with lobbyists, patronage and electoral politics.

It appears to me that the Washington bureaucrat is a frugal person in comparison to the Westford High Spender club composed of town officials, LWV and public employees, some who draw state tax free pensions in excess of $87,000.

For the 2011 October STM, a petition article by the high spender club proposes to purchase a residence next to Town Hall to be used for town offices.
We just finished upgrading and expanding the Town Hall.

For the 2012 ATM, the Westford Library Trustees have asked the Board of Selectmen to join forces and run rough shod over the FinCom and Capital Outlay Committee. Some of the reasons given are that the bathrooms smell, the building is ugly, not enough room to children books, etc, etc, etc...
I would think that the days of physical public libraries would be numbered much like the Post Office has seen a decline of over 25% in first class mail.
The USPO is scaling back services, laying off people and closing unneeded facilities. The Westford High Spender club will saddle the town with at least a $20 million palace and double the library staff. Of course when the Westford High Spender got the 2011 ATM to support the expenditure of $570,000 for a non-ADA required elevator for the Abbot school , by having the Moderatrix and her group of useful idiots to limit debate, it sent a message for the swine to line up at he feeding through.

[west4]

This will go down as all the other fiscally irresponsible expenditures have in the past. We will first have a LWV meeting, run by you know who, where it says "The event is open to the public and will be strictly informal with no videotaping or live broadcast. This is an opportunity for the average voter to raise issues about the warrant away from the glare of the public eye typically found at Selectmen’s meetings or town meetings." Away from the glare of the PUBLIC EYE! This meeting will be packed with the elites so it can clearly show that the town is all for spending money on their pet projects. Next will be town meeting which will be overrun by the elite's minions. All talking about how we need to spend more money on this foolishness. Let's upgrade the Library. With technology, librarys should be shrinking not growing but fear not! The home that is being bought will provide more parking in Town. It has nothing to do with housing the IT department. Why do we need parking in the center of town? With the upgraded town hall and its expanded parking lot what has changed? Oh yeah, that would be illegally allowing new business to run on residential lots creating thier new business zone.