Go to Top

Sorting Out A Few Issues

by BILL WADDELL

I thought it might be worthwhile to sort out some of the bumbling, blathering nonsense related to manufacturing flowing from the President and President wannabes.

Taxing the Rich

The Democrats think the rich are getting too rich and should pony up more in the way of taxes. Republicans say the rich are the job creators and taxing them will kill the goose that lays golden eggs (although in light of the unemployment rate it doesn't seem as though they have been laying too many eggs of late).  It turns out a couple of guys named Bakila, Cole and Heim, who seem to have no shortage of time and taxpayer money on their hands, studied the matter ad nauseum, and issued a mind-numbing report on it, at least as the data existed through 2006.

I went through the data and sorted it out, putting the rich folks into three categories:  Leeches, consisting primarily of financial sector people, lawyers, government employees and realtors; Techies, consisting of engineers, scientists, doctors and professors; Job Creators, mostly made up of farmers and people running non-financial private sector companies.  I tossed out the rest - less than 10% made up of artists, athletes, assorted oddballs and dead people who somehow are managing to pull down a healthy income from the grave.

I know that the groupings are not very clean and wholly arbitrary but I did the best I could with what I had. The case can be made that real estate folks who are actually building things create jobs, rather than simply flipping property the value of which is entirely the product of the sweat of someone else's brow; and private sector Job Creators include all sorts of dubious enterprises.  I don't think greater clarity around the edges will change the conclusion much, however.  Here's what it shows:

Wealth Data 
That the rich are getting richer is true.  In 1979 the top 1% of the income earners raked in 9.2% of the nation's total income.  By 2006 the top 1% were pulling in 16.2% of all the payroll dough.  The folks who create jobs are still the biggest winners, but less so than they used to be.  The folks who saw the real improvement - going from fithy rich to stinkin', filthy rich at the greatest rate - were in the Leech category.

 Seems to me when Republicans and Democrats over-simplify the issue the whole 'baby and the bathwater' thing kicks in.  Raising the tax rates on job ceators is a singularly bad idea, but most of the politicians aren't smart enough to understand the difference between a leech on American business and the people who actually drive it.  They only see this confusing blur of people who don't work for the government, and they all kinda look the same.  Mitt Romney, for example, who is a pure, dyed in the wool leech, is lumped into the same category as Herman Cain, a Job Creator - both just 'business guys' in the minds of the average politician or Fox News mouthpiece.

The problem is that the average taxpayer agrees that the leeches should be taxed to the max - take it all, in fact, is how most of them feel.  Job Creators, on the other hand should be left alone.  Liberals just plain don't like rich folks, whether they create jobs or not - except of course for the oddballs from the entertainment and sports world I excluded.  Liberals love them because, well, most of the oddballs are liberals and put their wealth into liberal causes.

Industrial Policy

Mr Obama has been hard to read when it comes to his view of manufacturing.  Some of that is because community activists generally don't understand manufacturing in the least - or have much respect for it.  Some of it is because he is a big believer in the more outrageous environmental philosophies and is generally an anti-business liberal at heart.  Mostly, though, the mixed signals are the result of the fact that, more than anything else, he is a Chicago politician, which means everything he controls from the White House is for sale.

I suggest that if you go back and ponder where the TARP and stimulus money went, the whole GM bailout and takeover, the Boeing-NLRB debacle, read this article from the Washington Post - a 'news' source that is about as pro-Obama as it gets, and try to make sense of his $500 million robots and other high tech boondoggle, you will see what I see ... that Obama's industrial policy has a certain logic and consitency:

 Obama Policy

 The proof of my theory is this:  Just about all Evolving Excellence readers are involved in manufacturing in some manner or another.  Just about all of you are in the great big red zone - non-union, not Star Wars high tech.  How many of you are sitting around the break room at work telling each other, "I sure wish the government would borrow some money from China and build me a robot - and, better yet, get me some union guys to run the robot.  Then our business would really boom."?

Share Button

11 Responses to "Sorting Out A Few Issues"

  • LITNE
    27 June 2011 - 6:32 am

    I don’t see much of a future for manufacturing in this country, even with successful implementation of lean philosophies. Maybe that’s why the lean consultancy corps are mostly moving to the health care field. Am I busting my backside trying to save parts of that big red block from dying long enough to achieve retirement? That’s depressing. Oh well, Shakespeare once wrote something along the lines that the true man fights only for the lost cause, realizing all other battles are mere effects. (Cause & effect–get it?)

  • Jim Fernandez
    27 June 2011 - 7:52 am

    This post and LITNE’s comment got the gears in my head turning. My wife loves British history and British TV and movies. One striking thing I have learned from watching all of that British history is that the once powerful English culture was based on controlling trade and industry throughout the world. In a sense, most of their wealth came from resources and manufacturing in other countries. And they still exist today.

    And then my mind went to the Roman empire, and other great and powerful cultures that have created wealth by controlling people and resources in countries other than there own. Then of course my mind went to the current Chinese. Who seem to be doing the same thing.

    Maybe it’s inevitable that we must follow the same pattern of other great and powerful cultures. Maybe the correct formula for survival is to go back to the ancient formula that the British had. And seek out resources and industry in other countries and bring the wealth back home.

    We are struggling with trying to maintain U.S. manufacturing. We are trying to keep all of the jobs within the boarders of our country. However, looking at the big picture, when in history has that formula ever worked? When has it ever worked for more than a few of generations?

  • John Buzolic
    27 June 2011 - 4:01 pm

    Don’t forget Jim that in each of those historical cases the wealth brought back to the controlling country remained in the hands of the leaches. Each of these era have been the era of great oppression of the big red box. Lean battles to make the big red box equal partners.

  • Richard Smythe
    29 June 2011 - 5:46 am

    I think broadly grouping government workers as leaches is unfair. Sure, some aspects of government are ridiculously inefficient–sometimes by design. There has been a huge criticism of teachers lately–most of whom are very hard working and have master’s degrees meanwhile, we are criticizing our educational system for falling behind–which we are. There is a connection. If you want quality, smart motivated people to teach the future, you have to pay them and give them autonomy. Not criticize them for making 1/2 as much as a beginning MBA (which maybe a totally clueless 25 year old).

    How are you going to CREATE the job creators if only less gifted want to become teachers?

    Finally, getting rid of government will result in two things–services that someone uses not being done, or privatizing the services which, around here, has been more expensive.

    I would class most politicians as a leaches (or crooks)

    I would deeply agree that some of the services to less financially advantaged need to be rethought–why keep paying people to have babies through AFDC when they can’t afford the ones they have. It’s insane. Idiocracy was supposed to be a satire–not a documentary.

    I was originally an Obama supporter but how he has made running a business pointlessly difficult I can’t now. It’s not that he doesn’t know about business, it’s that he doesn’t seem care. He is clueless the irritation that the extra forms, little taxes and other things that you have to do. His clamping down on contractors has directly affected the time I spend on dealing with stupid government regulations. And the killer is, as a 1099 employee, my employee’s took home the same amount of money as not, the government gets basically the same amount of money (if they don’t it’s their OWN fault) but MY time and irritation is off the scale. Why can’t I deal with one piece of government paper once–not something every month? It’s so inefficient and time consuming…

  • Bill Waddell
    29 June 2011 - 6:23 am

    Richard,

    I agree with you that teahcers (most of them any way) are not leeches. Nor are policemen, firefighters and the ilitary. Keep in mind that this post was about the 1% of Americans with the highest incomes. I suspect there are not many school teachers or cops in that group. The government officials that may be in this elite group are truly of the leech sort – double dipping elected officials, largely loitering around Washington, and holding hig office in goofy California burgs.

  • Rick Bohan
    5 July 2011 - 3:37 am

    I have to assume that the purpose of this silly, wandering rant was to show, with stark clarity, why BW should stick with writing about something he knows (lean manufacturing)and stay away from that of which he doesn’t have a clue.

    I know, I know…everybody has opinions, it’s his blog, and it’s a free country. But you’d think that a guy who spends a lot of his time insisting that folks bring good (or, even, just some) data to the table would feel impelled to do so himself.

    But, no…

    When it comes to politics and economics all BW can do is howl at the moon. Nothing resembling facts or data to see here…move along now.

    Let’s start with just one example: BW says, “Liberals just plain don’t like rich folks, whether they create jobs or not – except of course for the oddballs from the entertainment and sports world I excluded.”

    Any reference or supportive data you can provide for this statement? Anything? I’ll be right here until you get it (but I won’t be holding my breath). While you’re looking, I’ve got a little trivia quiz for your readers that, I think, is relevant:
    Which party controlled both houses of Congress when the tax cuts during the early Reagan years were passed? During the rest of his term, how many tax increases did Reagan sign? What happened to the economy (and to the rich) after Clinton signed small tax increases on the wealthiest Americans? What happened to the economy (and the deficit) after Bush II signed huge tax cuts for the wealthiest Americans? Under which administration was TARP initially proposed and passed? How many tax increases on anyone has this administration signed?

    Found that reference yet, BW? Didn’t think so.

    The rest of the post is full of similar ideological baloney, all of it easy to counter and refute. But there’s so much baloney there that it’ll be tough to find time for it all…maybe I’ll come back and take it a bit at a time. It’ll be like shooting fish in a barrel.

    Meantime, BW, better to stick with what you know.

  • Bill Waddell
    5 July 2011 - 4:59 am

    Rick.

    You might want to get off the blogs and check out a news site for a few minutes, as you seem to be the last remaining American unaware of the crux of the debt debate in Washington vis a vis the opposing attitudes toward the wealthy. It frankly did not occur to me that there would be folks like you who are in the dark as to how they feel about the wealthy who would need supporting data.

    Most important, however, is your statement that I spend a lot of time insisting people bring facts and data to the table. Where did you get such a notion? I am always interested in an interesting opinion. I even posted your opinion even though it is nothing more than the desperate, increasingly humurous attempts of the left to avoid accountability for the utter failure of Obamanomics, and to blame their debacles on Bush two and half years after he faded into well deserved obscurity.

  • Rick Bohan
    5 July 2011 - 11:58 am

    Bill,
    You made some points in your original post, however content-free. I refuted them with examples and illustrations. You responded with more-content free…stuff. (I have a question…why is it you right-wingers always pout when your positions are shown to be so much hot air?)

    Looks like what I said in my first comment is still good…you don’t have anything to bring to the table on this topic, so you should stick with lean, a topic about which you’re knowledgeable.

    And read something besides NewsMax. That darn stuff will rot your brain.

  • Bill Waddell
    5 July 2011 - 12:58 pm

    Rick,

    Actually what you offered was the obvious – Bush initiated TARP, Regan cut taxes, Clinton raised them, Bush2 cut them …. blah, blah, blah … all stuff that is well known to everyone, and has been thoroughly aired years ago in Evolving Excellence.

    You made a big deal about me not citing ‘facts’ concerning the left’s attitude toward the rich and taxes. If you need proof of that you are a sorry soul indeed.

    How about this one, Rick: In the Philadelphia Presidential debate Obama was asked why he wants to raise the capital gains tax rate to 28%, after Clinton reduced it to 20% (contrary to your simple-minded assessment of comparative tax records), and Bush reduced it further to 15%, which in both cases increased the dollar amounts of capital gains tax paid to Washington. Obama’s answer: “What I’ve said is that I would look at raising the capital gains tax for purposes of fairness … Those who are able to amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That’s not fair.” He is willing to take money away from Washington by raising the capital gains tax rate in order to punish the wealthy because their wealth violates his view of ‘fairness’. Proof enough of his attitude toward the wealthy?

    Why don’t you read a few posts I have written over the years:

    http://www.evolvingexcellence.com/blog/2009/03/a-quick-note-to-betty-blue-and-rudy-red.html

    http://www.evolvingexcellence.com/blog/2009/03/homozygosity-thats-the-problem.html

    http://www.evolvingexcellence.com/blog/2010/09/by-bill-waddell-and-then-strange-motions-will-abound-yet-lets-be-content-and-the-times-lament-you-see-the-world-turnd-up.html

    http://www.evolvingexcellence.com/blog/2009/03/we-have-crossed-the-rubicon.html

    Then see if you actually have anything other than hack, generalized, worn out criticisms of Republicans to add to anyone’s understanding of the issues.

  • Rick Bohan
    15 July 2011 - 6:02 pm

    “If you need proof of that then you are a sorry soul indeed.”

    That’s funny. I’ll remember that line next time I’m asked to back up something with sources or data.

    Of course, I’ve usually got the sources and data to back my statements up. You should try it, too.

  • Bill Waddell
    15 July 2011 - 6:25 pm

    But I did offer up support for my assertion, didn’t I Rick? Obama’s statement in Philadelphia … quite convenient of you to ignore it.

    Seems apparent that you are not about to let any facts stand in the way of your liberal fervor.; but then liberalism cannot be supported by facts and reason.