Over the week of Thanksgiving, I traveled to South Korea to spend time with my oldest son, who is teaching English at an elementary school there.
What amazed me most about the experience more than anything else is that capitalism, the bastion of free people everywhere, is alive and well in Korea. Yes, Korea.
As I walked down the streets of Pyeongtaek, Anjung and Seoul, I witnessed a bustling economy with large and small shops everywhere. People even sold their wares on the sidewalk, from garlic to fried fish, vegetables and craft items. During my week in Korea, I ate at several restaurants where my dining mates and I cooked meat on a small grill within the table in front of us. After we determined that the meat was done, we combined the small pieces of beef, pork, chicken and lamb with vegetables and sauces provided by the restaurants into a tasty wrap.
I also experienced a country with very little crime, a country in which one can safely walk down the street at night without being mugged. I also saw a country where families regularly eat meals together and a level of respect is inherent in the culture. Instead of saying "yes ma'am" or "yes, sir" as we did growing up in America, Koreans show respect with gestures such as a simple bow or by receiving something from someone by using two hands.
I also did not see a single person sleeping on the street, or even one person begging for my change. I did see Koreans heading to work early in the morning to factories making automobiles or high-tech products, many of which we purchase in America (i.e., Samsung, Hyundai, Kia). I also saw very small yards in the middle of the city turned into gardens in order to grow cabbage, one of the staples of the Korean diet. I also witnessed Koreans working diligently on a housing project, without the typical "one person working, two people standing around" mentality we see on many projects in America. Clearly, Koreans are very industrious people with a strong work ethic.
As I was experiencing Korea, I began to remember that this was what it was like in the U.S. in the 1950s, 1960s and 1970s, when parents allowed their children to play in their neighborhoods after dark, when people had respect for one another, when people actually worked hard and didn't expect a handout from their government, and when anyone in America could start a business without worrying about all of the government red tape and outlandish lawsuits that are killing our economy today.
What would the county or state health department think about allowing customers to cook their own raw meat until it is safe to eat? What would attorneys think about the dangers of potential lawsuits arising from customers burning themselves on grills or eating meat that isn't properly cooked? Could these restaurants even obtain insurance in America? How would our city leaders treat those street vendors who are simply trying to make a living for their families? What would the unions think about a workforce that isn't bloated?
Sadly, what I witnessed in Korea would not be allowed to occur in America today. Attorneys would close down those restaurants, if health departments didn't prevent them from opening in the first place. Cities certainly would not allow so many street vendors, and our unions certainly would not allow the level of work activity seen on Korean job sites.
While I certainly understand safety and environmental regulations that protect the health and welfare of a country's population, I strongly believe that America has taken them too far. Regulations are so complex and cumbersome today that most small businesses have to hire an accountant and attorney before they open their doors to their first customers.
Sadly, as I was boarding my plane home, I began to wish that America was more like Korea. Yes, Korea.
Showing posts with label capitalism. Show all posts
Showing posts with label capitalism. Show all posts
Sunday, November 25, 2012
Thursday, November 15, 2012
The Voice of Reason: Capitalism for Dummies (or Liberals)
When my youngest son was probably 10, I thought I would give him a lesson in capitalism.
I placed 25 pennies out on the table in front of us, and divided the pennies into five groups of five pennies each. I told my son that each group of five pennies represented a company owned by one person, with each company hiring dozens of workers that receive paychecks.
Next, I added three pennies to each group, telling my son that these additional pennies signified profit earned by those companies. Next, I took one penny away from each group, saying that this represented the taxes paid by each company on that profit. With the profit that was left, 10 pennies in total, I divided them into two additional groups of five pennies each, telling my son that this signified that the owner used the profit to created two more businesses that hired people.
I then added three additional pennies to each of the seven groups of pennies, signifying profit earned, and then took one penny away as their taxes. With the additional 14 pennies of profit left, I created two more groups of five pennies each, and put aside the other four pennies to form yet another company, once we were able to earn enough profit to form another company of five pennies.
We continued the exercise until my son realized that profit was being used to create more profit and thus more businesses, and that with each new company, more and more people were being put to work. I also explained that the taxes paid by the company helped to support government programs for the poor, our military and many other programs that needed money to operate. He learned that as we grew those companies and earned more profit, more taxes were being paid and more people were being put to work. I also explained that each of those workers paid taxes, on top of the taxes that were being paid by the companies.
Next I returned the pennies back to where they were before the first profit was added -- five groups of five pennies each. Once more I placed three additional pennies into each group as profit, but then took two pennies away in taxes from each group instead of just one. As a result, our total remaining profit from the five groups was only five pennies, which I split off into one other company that I told my son was able to hire employees.
We continued the exercise, taking two pennies of profit away each round, watching our companies grow much more slowly this time and thus fewer people being put to work by those companies.
I asked my son what was the difference between taking two pennies away and taking one penny away for taxes.
"You don't have as many pennies left to form another company," he said.
"And what happened to the number of new jobs we were able to create?" I asked.
"You only were able to form one instead of two and the companies didn't grow as fast, so there were fewer jobs," he replied.
He also recognized that fewer employees meant fewer people actually paying taxes, on top of the taxes that the companies paid.
With that small pile of pennies, I was able to give my 10 year old a lesson in capitalism. He now understood that more money taken away to pay taxes means less money to build and grow businesses and thus fewer employees.
For some reason, most Americans today don't understand what I was able to explain very clearly to a boy who wasn't even a teenager.
I have to think that if more Americans understood the basic principles of capitalism, Barack Obama would never have been reelected because of his "make the rich pay their fair share" platform, which seems to be his only plan to improve our economy. More people would understand that higher taxes means less money to grow businesses and hire more employees.
If this lesson worked with a 10 year old, maybe it will even work with liberals? The only problem with this simple demonstration is that it would have to be dumbed down even further for Harry Reid and Nancy Pelosi.
I placed 25 pennies out on the table in front of us, and divided the pennies into five groups of five pennies each. I told my son that each group of five pennies represented a company owned by one person, with each company hiring dozens of workers that receive paychecks.
Next, I added three pennies to each group, telling my son that these additional pennies signified profit earned by those companies. Next, I took one penny away from each group, saying that this represented the taxes paid by each company on that profit. With the profit that was left, 10 pennies in total, I divided them into two additional groups of five pennies each, telling my son that this signified that the owner used the profit to created two more businesses that hired people.
I then added three additional pennies to each of the seven groups of pennies, signifying profit earned, and then took one penny away as their taxes. With the additional 14 pennies of profit left, I created two more groups of five pennies each, and put aside the other four pennies to form yet another company, once we were able to earn enough profit to form another company of five pennies.
We continued the exercise until my son realized that profit was being used to create more profit and thus more businesses, and that with each new company, more and more people were being put to work. I also explained that the taxes paid by the company helped to support government programs for the poor, our military and many other programs that needed money to operate. He learned that as we grew those companies and earned more profit, more taxes were being paid and more people were being put to work. I also explained that each of those workers paid taxes, on top of the taxes that were being paid by the companies.
Next I returned the pennies back to where they were before the first profit was added -- five groups of five pennies each. Once more I placed three additional pennies into each group as profit, but then took two pennies away in taxes from each group instead of just one. As a result, our total remaining profit from the five groups was only five pennies, which I split off into one other company that I told my son was able to hire employees.
We continued the exercise, taking two pennies of profit away each round, watching our companies grow much more slowly this time and thus fewer people being put to work by those companies.
I asked my son what was the difference between taking two pennies away and taking one penny away for taxes.
"You don't have as many pennies left to form another company," he said.
"And what happened to the number of new jobs we were able to create?" I asked.
"You only were able to form one instead of two and the companies didn't grow as fast, so there were fewer jobs," he replied.
He also recognized that fewer employees meant fewer people actually paying taxes, on top of the taxes that the companies paid.
With that small pile of pennies, I was able to give my 10 year old a lesson in capitalism. He now understood that more money taken away to pay taxes means less money to build and grow businesses and thus fewer employees.
For some reason, most Americans today don't understand what I was able to explain very clearly to a boy who wasn't even a teenager.
I have to think that if more Americans understood the basic principles of capitalism, Barack Obama would never have been reelected because of his "make the rich pay their fair share" platform, which seems to be his only plan to improve our economy. More people would understand that higher taxes means less money to grow businesses and hire more employees.
If this lesson worked with a 10 year old, maybe it will even work with liberals? The only problem with this simple demonstration is that it would have to be dumbed down even further for Harry Reid and Nancy Pelosi.
Saturday, August 25, 2012
The Voice of Reason: Election of 2012 Will Be Our Second Most Important
The Presidential Election of 2012 will undoubtedly be viewed by historians in 100 years as the second most important election in American history.
The first election, of course, was the most important election in our country's history. A young nation was willing to award king-like power to our first President. Fortunately, the leader of the Revolutionary War, George Washington, won the election and became the model for future Presidents. Instead of grabbing for the almost-unlimited power available to him, Washington cautiously navigated the separation of powers outlined in the Constitution, realizing that the fledgling nation needed to move toward the democratic vision of our founding fathers, instead of the monarchy model found in England.
Just as the outcome of the first election determined whether or not America would resemble a democracy or monarchy, this year's election will determine whether America moves towards a European-style democracy that borders (or crosses into) socialism or will return to being the country our founding fathers envisioned when writing the Constitution.
To those who believe strongly in the Constitution, the choice should be crystal clear. But for those who are the beneficiaries of a strong federal government and its numerous social programs that support them, the choice may be more difficult.
Currently about half of the country benefits from big government programs, while the other 50% pay for them. While a little more than 50% of Americans pay income taxes, nearly 50% do not. President Barack Obama's policies to "redistribute the wealth" have only encouraged more Americans to apply for unemployment, disability, welfare, food stamps and numerous other government programs. For many, the monetary compensation and benefits they receive for not working is close to the compensation and benefits they would receive for working. Why would anyone work if they could stay at home and live nearly as well, especially when the horrific Obama economy has limited their opportunities for a decent income?
The sad part is that many Americans have simply given up trying to improve their lots in life. Many have found it easier to maintain a minimal standard of living -- and the Obama Administration has encourged this through the expansion of numerous social programs. The result is that more and more Americans are living on less than they were before President Obama was elected. A recent report recently revealed that the median household income for Americans of all ages was 4.8% lower in June 2012 than it was when the recovery technically started three years earlier, in June 2009.
http://www.startribune.com/nation/167272875.html?refer=y
America is quickly becoming a country that encourages mediocrity instead of exceptionalism. In fact, in a recent speech, President Obama downplayed the importance of intelligence and hard work in determining one's success. His views about how government -- not intelligence and hard work --determine the success of Americans provide an excuse for any American who is not successful: They simply haven't received enough support from government to succeed.
President Obama's policies, attitudes and actions have strongly communicated that America is no longer the place where an individual can save money, build a business and become an overwhelming success. To the President, if someone is successful, it is because the federal government, not the individual, made it happen. To President Obama, the American dream is dead, unless the government gives you that dream.
Very early in a second Obama term, more Americans will be supported by the government than those who are supporting the government through taxes. President Obama has made it very clear he wants the most successful Americans to pay even higher taxes, which will provide them with a financial disincentive to suceeed. More American businesses and high net worth individuals will move offshore, avoiding America's regressive tax policies, which will create even more unemployment. As a result, more Americans will determine that it's easier to stay at home and receive a check than to head out to work every day. Those lucrative benefits offered by the government will eventually have to be cut dramatically, or taxes will have to be increased on more Americans to pay for them. The middle class, dwindling because of the loss of American jobs, will not be spared from the dramatic tax increases. In order to pay for these programs, even with higher taxes, America will plunge more deeply in debt, creating a Greece-like financial disastor in our country within the next four years and eroding the standard of living for all Americans. The interest alone on the national debt will soon consume the majority of the federal budget, so much so that other countries will no longer loan us funds to continue our spending spree.
President Obama is a proponent of big government, more social programs, government takeovers of business (i.e., GM and the healthcare system) and the government, not the free market, picking winners and losers (i.e., trying his best to kill the coal industry through EPA regulations, while supporting alternative energy companies like Solyndra). In other words, he believes in a European-style of democracy that is more like socialism than a capitalistic, democratic society.
The antidote for this imminent disastor is for America to grow its economy, get people off their couches and back to work, provide incentives for Americans to succeed and build businesses, get its federal budget under control, and slow the growth of entitlement and social programs so that they don't bankrupt the country and are available for future generations of Americans. In other words, America needs to become America again, allowing the principles of capitalism to determine winners in the marketplace, while limiting the powers of the federal government.
The Obama Administration has shown no indication whatsoever that it's willing to promote pro-growth, pro-business policies; provide incentives for Americans to grow businesses; or to slow the growth of entitlement programs. In fact, President Obama appears to be diametrically opposed to making any of the difficult choices necessary to prevent the impending financial disastor.
In contrast, Republican nominee Mitt Romney and his running mate, Paul Ryan, are proposing pro-growth, pro-business policies; incentives for people to grow businesses; and a revamping of entitlement programs for those 54 and younger so that these programs are available to future generations of Americans.
While many Americans see the choice in November between Democrats and Republicans, others see this election as a pivotal decision point in American history. The fact is that if America continues down its current path in a second Obama term, it will never return to a free-market system of capitalism with limited federal government.
Americans voted wisely in 1789 and set our country on a course that would allow it to dominate economically and militarily for over 200 years. Are Americans just as wise today, or will they succumb to the appeal of government programs that allow them to have a mediocre standard of living while doing nothing?
We will find out on November 6.
The first election, of course, was the most important election in our country's history. A young nation was willing to award king-like power to our first President. Fortunately, the leader of the Revolutionary War, George Washington, won the election and became the model for future Presidents. Instead of grabbing for the almost-unlimited power available to him, Washington cautiously navigated the separation of powers outlined in the Constitution, realizing that the fledgling nation needed to move toward the democratic vision of our founding fathers, instead of the monarchy model found in England.
Just as the outcome of the first election determined whether or not America would resemble a democracy or monarchy, this year's election will determine whether America moves towards a European-style democracy that borders (or crosses into) socialism or will return to being the country our founding fathers envisioned when writing the Constitution.
To those who believe strongly in the Constitution, the choice should be crystal clear. But for those who are the beneficiaries of a strong federal government and its numerous social programs that support them, the choice may be more difficult.
Currently about half of the country benefits from big government programs, while the other 50% pay for them. While a little more than 50% of Americans pay income taxes, nearly 50% do not. President Barack Obama's policies to "redistribute the wealth" have only encouraged more Americans to apply for unemployment, disability, welfare, food stamps and numerous other government programs. For many, the monetary compensation and benefits they receive for not working is close to the compensation and benefits they would receive for working. Why would anyone work if they could stay at home and live nearly as well, especially when the horrific Obama economy has limited their opportunities for a decent income?
The sad part is that many Americans have simply given up trying to improve their lots in life. Many have found it easier to maintain a minimal standard of living -- and the Obama Administration has encourged this through the expansion of numerous social programs. The result is that more and more Americans are living on less than they were before President Obama was elected. A recent report recently revealed that the median household income for Americans of all ages was 4.8% lower in June 2012 than it was when the recovery technically started three years earlier, in June 2009.
http://www.startribune.com/nation/167272875.html?refer=y
America is quickly becoming a country that encourages mediocrity instead of exceptionalism. In fact, in a recent speech, President Obama downplayed the importance of intelligence and hard work in determining one's success. His views about how government -- not intelligence and hard work --determine the success of Americans provide an excuse for any American who is not successful: They simply haven't received enough support from government to succeed.
President Obama's policies, attitudes and actions have strongly communicated that America is no longer the place where an individual can save money, build a business and become an overwhelming success. To the President, if someone is successful, it is because the federal government, not the individual, made it happen. To President Obama, the American dream is dead, unless the government gives you that dream.
Very early in a second Obama term, more Americans will be supported by the government than those who are supporting the government through taxes. President Obama has made it very clear he wants the most successful Americans to pay even higher taxes, which will provide them with a financial disincentive to suceeed. More American businesses and high net worth individuals will move offshore, avoiding America's regressive tax policies, which will create even more unemployment. As a result, more Americans will determine that it's easier to stay at home and receive a check than to head out to work every day. Those lucrative benefits offered by the government will eventually have to be cut dramatically, or taxes will have to be increased on more Americans to pay for them. The middle class, dwindling because of the loss of American jobs, will not be spared from the dramatic tax increases. In order to pay for these programs, even with higher taxes, America will plunge more deeply in debt, creating a Greece-like financial disastor in our country within the next four years and eroding the standard of living for all Americans. The interest alone on the national debt will soon consume the majority of the federal budget, so much so that other countries will no longer loan us funds to continue our spending spree.
President Obama is a proponent of big government, more social programs, government takeovers of business (i.e., GM and the healthcare system) and the government, not the free market, picking winners and losers (i.e., trying his best to kill the coal industry through EPA regulations, while supporting alternative energy companies like Solyndra). In other words, he believes in a European-style of democracy that is more like socialism than a capitalistic, democratic society.
The antidote for this imminent disastor is for America to grow its economy, get people off their couches and back to work, provide incentives for Americans to succeed and build businesses, get its federal budget under control, and slow the growth of entitlement and social programs so that they don't bankrupt the country and are available for future generations of Americans. In other words, America needs to become America again, allowing the principles of capitalism to determine winners in the marketplace, while limiting the powers of the federal government.
The Obama Administration has shown no indication whatsoever that it's willing to promote pro-growth, pro-business policies; provide incentives for Americans to grow businesses; or to slow the growth of entitlement programs. In fact, President Obama appears to be diametrically opposed to making any of the difficult choices necessary to prevent the impending financial disastor.
In contrast, Republican nominee Mitt Romney and his running mate, Paul Ryan, are proposing pro-growth, pro-business policies; incentives for people to grow businesses; and a revamping of entitlement programs for those 54 and younger so that these programs are available to future generations of Americans.
While many Americans see the choice in November between Democrats and Republicans, others see this election as a pivotal decision point in American history. The fact is that if America continues down its current path in a second Obama term, it will never return to a free-market system of capitalism with limited federal government.
Americans voted wisely in 1789 and set our country on a course that would allow it to dominate economically and militarily for over 200 years. Are Americans just as wise today, or will they succumb to the appeal of government programs that allow them to have a mediocre standard of living while doing nothing?
We will find out on November 6.
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