moneyFYI
Financial Freedom Is Merely Organized Common Sense
Is Wealth Equity Even Worthy of Thought?
I watched an old video of Thomas Sowell dealing with the idea of Wealth, Poverty, and Politics recently. He makes several points that matter in the discussion. Most are ignored, even denigrated or condemned.
Not everyone starts in the same place.
Equality of opportunity is possible, but because of the different beginnings says nothing about outcomes. The political hustlers have adopted this as their theme but relate primarily to the questions of race and gender. Sowell points out other factors.
Geography – If the rivers in your area don’t run to the sea, you will tend to be isolated and do less well. It makes you wonder about the Covid response, doesn’t it? In Russia, rivers that run to the north reach the frozen Arctic Ocean. That isolates people both from other people and from markets for the goods they can produce. Mountains have the same effect. There are many impoverished Appalachian communities.
Attitude – If you expect to be victimized, you will be victimized. If you think you can, you might. If you think you can’t, you’re right.
Unreasonable expectations – A high school education with a 1.5 GPA doesn’t qualify you to make $90,000 next year. More likely not any year.
An easier short-run method for day-to-day living. – Black families were doing better in America from the end of slavery until the 1960s. Expansion of welfare systems had two effects 1) destroyed the Black family structure, and 2) slowed the rate of their social improvement. You get more of what you reward. Welfare does not reward meritocracy so you get less of it.
Community safety – Harlem in the 40s and 50s was immensely safer than it is today. It was safer than good neighbourhoods in most big cities today. If you must devote a lot of time, energy and resources to being safe, those resources are not available for other things. Like buying a book.
Who loses?
Certainly, the poor do. The problem is you can only spend a given dollar once. If it is wasted on political rhetoric or posturing, or self-advancement by an external organization like a teacher’s union, it is not available for better uses, whatever those may be.
It seems that despite the immense spending, people who are defined to be impoverished don’t win. Certainly not in the long run. Sowell points out that a person on welfare in the United States would, by income and assets, be in the upper middle class in Mexico. Poverty in the U.S. is a state of mind, and yet opportunities dim.
The one guaranteed loser is the one who pays taxes. The money is gone and spent unwisely. Recall Peter Drucker’s admonition. “There is nothing so wasteful as doing with great efficiency something that should not be done at all.” Not every perceived problem must be solved instantly. Sometimes solving it, gets in the way of a better solution that would have evolved if it had been left alone.
Who wins?
Politicians, bureaucrats, special interest groups and charlatans like the race hustlers win, though. Why? That group has one common factor. They need to be needed. If there were no perceived needs, why would you need any government? When real addressable needs don’t exist, a need must be created, and the appropriate entity tasked to solve it to perfection. Without accountability, oversight, or assessment of the effects of their efforts. The easiest way to be needed is to claim to be the solution to an immeasurable but growing problem. In this case, growth is determined by how often the problem is repeated by the media and the do-gooders themselves.
The bits to take away
Wanting the betterment of humanity is not an evil goal. How you go about it can make a particular goal evil. If the need is not self-evident and must be created, you should wonder if it would work better if left alone for a while. President Calvin Coolidge noticed that “When you see ten problems rolling down the road, if you don’t do anything, nine of them will roll into a ditch before they get to you”
Solving problems already mostly solved or made up diverts resources from real issues.
A further Coolidge thought makes a disturbing comparison with what we do.
“In ethics he [Charles Edward Garman] taught us that there is a standard of righteousness. That might does not make right, that the end does not justify the means and that expediency as a working principle is bound to fail. The only hope of perfecting human relationship is in accordance with the law of service under which men are not so solicitous about what they shall get as they are about what they shall give. Yet people are entitled to the rewards of their industry. What they earn is theirs, no matter how small or how great. But the possession of property carries the obligation to use it in a larger service. For a man not to recognize the truth, not to be obedient to the law, not to render allegiance to the State, is for him to be at war with his own nature, to commit suicide. That is why ‘the wages of sin is death.’ Unless we live rationally we perish, physically, mentally, spiritually.”
Notice the last sentence. Do you see much rationality in political and social discourse today? I don’t. I see many people doing what is best for themselves while claiming to help others. Little evidence is presented. If you want respect, too, show your work and your evidence.
I build strategic, fact-based estate and income plans. The plans identify alternate ways to achieve spending and estate distribution goals. In the past, I have been a planner with a large insurance, employee benefits, and investment agency, a partner in a large international public accounting firm, CEO of a software startup, a partner in an energy management system importer, and briefly in the restaurant business. I have appeared on more than 100 television shows on financial planning. I have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, and Banks – from CIBC to the Federal Business Development Bank.
Be in touch at 705-927-4770 or by email at don.shaughnessy@gmail.com.
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