Thursday, October 27, 2011

Profits Are for People

The Occupy Wall Street demonstrators are demanding "people before profits" -- as if profit motivation were the source of mankind's troubles -- when it's often the absence of profit motivation that's the true villain.

First, let's get both the definition and magnitude of profits out of the way. Profits represent the residual claim earned by entrepreneurs. They're what are left after other production costs -- such as wages, rent and interest -- have been paid. Profits are the payment for risk taking, innovation and decision-making. As such, they are a cost of business just as are wages, rent and interest. If those payments are not made, labor, land and capital will not offer their services. Similarly, if profit is not paid, entrepreneurs won't offer theirs. Historically, corporate profits range between 5 and 8 cents of each dollar, and wages range between 50 and 60 cents of each dollar.

Far more important than simple statistics about the magnitude of profits is the role played by profits, namely that of forcing producers to cater to the wants and desires of the common man. When's the last time we've heard widespread complaints about our clothing stores, supermarkets, computer stores or appliance stores? We are far likelier to hear people complaining about services they receive from the post office, motor vehicle and police departments, boards of education and other government agencies. The fundamental difference between the areas of general satisfaction and dissatisfaction is the pursuit of profits is present in one and not the other.

The pursuit of profits forces producers to be attentive to the will of their customers, simply because the customer of, say, a supermarket can fire it on the spot by taking his business elsewhere. If a state motor vehicle department or post office provides unsatisfactory services, it's not so easy for dissatisfied customers to take action against it. If a private business had as many dissatisfied customers as our government schools have, it would have long ago been out of business.

Free market capitalism is unforgiving. Producers please customers, in a cost-minimizing fashion, and make a profit, or they face losses or go bankrupt. It's this market discipline that some businesses seek to avoid. That's why they descend upon Washington calling for crony capitalism -- government bailouts, subsidies and special privileges. They wish to reduce the power of consumers and stockholders, who hold little sympathy for blunders and will give them the ax on a moment's notice.

Having Congress on their side means business can be less attentive to the will of consumers. Congress can keep them afloat with bailouts, as it did in the cases of General Motors and Chrysler, with the justification that such companies are "too big to fail." Nonsense! If General Motors and Chrysler had been allowed to go bankrupt, it wouldn't have meant that their productive assets, such as assembly lines and tools, would have gone poof and disappeared into thin air. Bankruptcy would have led to a change in ownership of those assets by someone who might have managed them better. The bailout enabled them to avoid the full consequences of their blunders.

By the way, we often hear people say, with a tone of saintliness, "We're a nonprofit organization," as if that alone translates into decency, objectivity and selflessness. They want us to think they're in it for the good of society and not for those "evil" profits. If we gave it just a little thought and asked what kind of organization throughout mankind's history has accounted for his greatest grief, the answer wouldn't be a free market, private, profit-making enterprise; it would be government, the largest nonprofit organization.

The Occupy Wall Street protesters are following the path predicted by the great philosopher-economist Frederic Bastiat, who said in "The Law" that "instead of rooting out the injustices found in society, they make these injustices general." In other words, the protesters don't want to end crony capitalism, with its handouts and government favoritism; they want to participate in it.



American Imperialism... Please

Jonah Goldberg

And so it ends. The United States is leaving Iraq.

I'm solidly in the camp that sees this as a strategic blunder. Iraqi democracy is fragile and Iran's desire to undermine it is strong. Also, announcing our withdrawal is a weird way to respond to a foiled Iranian plot to commit an act of war in the U.S. capital. Obviously, I hope I'm wrong and President Obama's not frittering away our enormous sacrifices in Iraq out of domestic political concerns and diplomatic ineptitude.

Still, there's an upside. Obama's decision to leave Iraq should deal a staggering blow to America's critics at home and abroad.

After all, what kind of empire does this sort of thing?

Critics of U.S. foreign policy have long caterwauled about American "empire." The term is used as an epithet by both the isolationist left and right, as a more coldly descriptive term by such mainstream thinkers as Niall Ferguson and Lawrence Kaplan, and with celebratory enthusiasm by some foreign policy neoconservatives like Max Boot.

The charge in recent times has centered on the Middle East, specifically Iraq.

The problem is, contemporary America isn't an empire, at least not in any conventional or traditional sense.

Your typical empire invades countries to seize their resources, impose political control and levy taxes. That was true of every empire from the ancient Romans to the Brits and the Soviets.

That was never the case with Iraq. For all the blood-for-oil nonsense, if America wanted Iraq's oil it could have saved a lot of blood and simply bought it. Saddam Hussein would have been happy to cut a deal if we only lifted our sanctions. Indeed, the U.S. oil industry never lobbied for an invasion, but it did lobby for an end to sanctions. We never levied taxes in Iraq either. Indeed, we're left holding the tab for the liberation.

And we most certainly are not in political control of Iraq. If we were, we wouldn't have acquiesced to the Iraqi government's desire for us to leave. Did Caesar ever cave to the popular will of Gaul?

Some partisans will undoubtedly say that the key difference is that Barack H. Obama, and not George W. Bush, is president.

But this lame objection leaves out the fact that Obama acceded to a timeline drafted by the Bush administration. Moreover, Obama has moved closer to Bush than anybody could have predicted.

Consider Libya. Obama pursued exactly the same policy goal -- forcible regime change -- that critics of the Iraq war routinely denounced as the heart of American imperialism. There are significant differences between the two adventures, to be sure, but at the conceptual level there's little difference at all, and neither has much to do with imperialism.

More important, for the imperialism charge to mean anything it needs to describe something larger than mere partisan policy difference. If our imperialism can be turned off and on like a light switch with the mere change of parties, then how imperialistic could we have been in the first place?

The word "regime" has been defined down in recent years to mean nothing more than presidential administrations. "What we need now is not just a regime change in Saddam Hussein and Iraq, but we need a regime change in the United States," Sen. John Kerry said in 2003.

Regime actually describes an entire system of government. And if the American regime is imperial only when Republicans are in power, then it's not a serious claim, it's just a convenient and partisan slander.

In many quarters of the Middle East, the war on terror is cast as a religiously inspired front for crusader-imperialism. This nonsense overlooks the fact that America has gone to war to save Muslim lives more often than any modern Muslim country has. Under Democrats and Republicans we've fought to help Muslims in Somalia, Kosovo, Bosnia, Kuwait, Afghanistan, Iraq and now Libya. We've sought the conversion of no one and -- with the exception of Kuwait -- we've never presented a bill. When asked to leave, we've done so.

To say we did these things simply for plunder and power is an insult to all Americans, particularly those who gave their lives in the process.



The Shocking Trend In U.S. Individual Income Inequality 1994-2010

Perhaps the most common measure of income inequality in a nation is the Gini Coefficient (aka the "Gini Ratio"), which ranks the amount of inequality there is in a country on a scale from 0, which represents perfect equality, where everyone would have an equal share of the nation's income, to a value of 1, which represents perfect inequality, where one person would have all the income, but everyone else has none.

So now, thanks to so much media attention being focused on the Occupy Wall Street "movement" (aka "politically-oriented publicity stunt"), where many activists (aka "not-too-bright people") appear to be upset at "the Top 1%" (aka "really high income earners"), who they claim have "gotten too rich" (aka "earned a high income by doing things that satisfy other people's needs"), we thought we'd use the "Gini coefficient" (aka "a well-established mathematically-based method for measuring inequality") to find out how out of whack things have become in the United States over the years.

Or more specifically, the years from 1994 through 2010, for which the U.S. Census has published detailed data related to the incomes earned by Americans based on their annual surveys of the U.S. population. Our chart showing the trend in income inequality for all individuals as measured by the Gini ratio for these years is below:

Gini Coefficient for the U.S. Population, 1994-2010

We were shocked to see the overall trend from 1994 through 2010 take the path it has, because it's so completely contrary to what we keep hearing in the news.

We only ask that someone ask the media for their reaction to this disturbing data!



DOJ Tips The Scales Of Justice For Muslims Again

The head of the Department of Justice’s (DOJ) Civil Rights Division, Tom Perez, is taking strong steps to protect the rights of Muslims in America “because they are being targeted for abuse.” A new alliance between the DOJ and Equal Employment Opportunity Commission (EEOC) is apparently giving him firepower to do just that.

First-year Muslim math teacher Safoorah Khan of the Berkeley School District in Illinois, insisted on 19 days off during grading period to go on hajj, or pilgrimage – and she has won her case without ever having to go to court. The small-town school district “cried uncle” after a three-year fight with the combined forces of the DOJ and the EEOC. Khan, who had resigned her position when both her requests for unpaid leave were denied by the school district, received $75,000 in back pay, compensatory damages and court costs. The settlement, which is subject to federal court approval, poses many disturbing questions for a society based upon rules and processes of law - rather than government-selected minority causes.

First, this extraordinary result suggests a new standard for other government workplace religious observance requests, since the longest religious leave previously championed by the EEOC and the DOJ was a 10-day period for the Worldwide Church of God. The Supreme Court has generally been unsympathetic to these employee petitions, denying them as demanding too much of employer business considerations. As these cases have had full hearing in the courts - rather than being hammered out between behemoth government agencies and a village school district - respect for the employer’s right to deny requests that impose “undue hardship” on business operations are factored into the legal determination.

Another critical legal consideration that this settlement seems to have skipped over is the necessary test as to whether the employee request is a reasonable one. Judicial deliberations over how to apply the Title VII of the Civil Rights Act anti-discrimination provisions turn on what is deemed a reasonable balancing of the employer concerns and employee’s “sincerely felt religious obligations.”

This DOJ-driven settlement fails both legal and sociological reasonableness tests on grounds other than Khan’s lack of tenure and her request to leave during grading period. First, her demand of 19 days for hajj, one of the five pillars of Islam and obligatory just once in the lifetime of most Muslims, was excessive according to Islamic website guidance suggesting a minimum of eight days vacation period for the four to five day ceremonial rituals in Mecca, with an outside recommended time off of two weeks.

Second, the hajj is observed during the last month of Muslim lunar calendar, so hajj rituals would have occurred during summer vacation approximately a decade from now. There was no reason that Khan had to go during her first year of teaching.

However, what is most disturbing about this case and its portent for preferential treatment of Muslims under Attorney General Eric Holder’s DOJ is the degree to which the federal government’s heavy hand is seen tipping the scales. This unusual DOJ intervention on behalf of a Muslim complainant fits right into the DOJ’s Civil Rights Division’s official Muslim outreach program. As featured on the DOJ website, the program is described as placing “a priority on prosecuting bias crimes and incidents of discrimination against Muslims” and others “perceived to be members of these groups.”

Even the fact that this was the first partnership demonstrating “closer collaboration” between the EEOC and the DOJ “to vigorously enforce Title VII anti-discrimination laws against state and local governmental employers” is an ominous development. When two fully funded federal agencies staffed with armies of the nation’s most zealous attorneys land on local agencies waving this settlement as the prototype for Muslim religious accommodation, the results will likely be driven by placating the Justice Department, rather than a pursuit of legal processes designed to provide justice.

It is even more alarming to consider that this official outreach program specially recognizing Muslims is overseen by a spokesperson for Khan’s hajj case, Assistant Attorney General for the Civil Rights Division of the DOJ Thomas Perez. Perez’s potential for activism is underscored by former voting rights section DOJ attorney J. Christian Adams’ account of the Assistant AG’s role in burying the Black Panther voter suppression scandal.

In fact, just days ago, Perez and other DOJ officials dialogued with Islamist activists who lobbied “for cutbacks in anti-terror funding, changes in agents’ training manuals, additional curbs on investigators and a legal declaration that U.S. citizens’ criticism of Islam constitutes racial discrimination.” Perez notably ignored the call for restraint on First Amendment free speech rights and was quoted as saying, “There will be times where we have honest differences of opinion, but if we don’t talk and don’t actively listen and if we don’t reflect and recalibrate where necessary, then we won’t be doing our job, and you have our continuing commitment to that end.” At the end of the session, Perez is said to have “climbed the stage to embrace Imam Magid, who was born in Sudan and trained at a Saudi fundamentalist seminary.”

Another exhibit in this demonstration of agenda-driven DOJ priorities, is the explosive revelation earlier this year detailing whistleblower reports that political appointees at the DOJ were responsible for nixing the prosecution of CAIR and other un-indicted co-conspirators implicated in the government’s successful case against Hamas financiers in the Holy Land Foundation trial.

When the top government law enforcement agency becomes a lobbying arm for grievance factions, the rule of law takes second place to the pursuit of political ends and social justice agendas. Holder’s DOJ seems to have been captured by ideologues who best serve aggrieved minority Americans. It is beyond time for President Obama to fulfill his duty to restore the DOJ’s stated mission of “ensuring fair and impartial administration of justice for all Americans.”



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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


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