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The Rich

Ostentatious living
The Rich Love
Their Big Homes

Posted: February 18,2013

I just want to throw rocks at the TV listening to the continuous theme of the unfair distribution of wealth in this country. The Democrat’s Robin Hood plan only serves to hurt everybody. That plan can only decrease economic activity. An analogy to the Robin Hood plan is to hook up a generator to a motor and expecting the motor and generator to just keep running. But as we all know, that just doesn’t happen.

The economic cycle for money is the same as the motor-generator scenario. Losses in efficiency prevent the generator from propelling the motor just as money cannot circulate on a no-loss basis. There is overhead that must be maintained in order to circulate money. Every handler of circulated money gets a cut of it. When one dollar is taken via tax, part of that dollar gets chipped away by everyone who comes in contact with it. Understand, there are a lot of hands out for that dollar and the government decides its distribution. It pays for defense, all federal salaries, projects (questionable or otherwise), the entitlement structure, foreign aid, corruption, and lastly, tax rebates.

Lately, the government has been spending forty-cents extra for every dollar it takes in. That’s a spending rate of 140% of all revenues. The question a person should ask is where the extra forty-cents come from? There are only five ways the government can obtain the extra spending money. These options are:

  1. Raise taxes.
  2. Borrow the money from other countries. (like China)
  3. Print it and dilute the money supply. (called monetizing)
  4. Grow the economy.
  5. Lease and property sales.

Unfortunately for us, President Obama and the Democrats have opted for the first three of those options. They seem oblivious to the fourth and fifth options. The reason for their choices is varied, but political advantage is their big reward. It is no secret that the majority of Democratic supporters come under the banner of ‘low-information voters' (Phrase coined by Rush Limbaugh). Low-information voters are generally satisfied with less and are happy with the scraps doled out by their ambitious leaders. But this group of voters unknowingly depends upon the rich.

Dependency Penalty

The big hair in the soup for such plans to maintain low-information voter support without economic growth inevitably produces a failing economy. When the Democrats use those first three choices without embracing the fourth, they interfere with the commerce that creates the wealth necessary to provide the scraps they hand out to their supporters. But class warfare is so politically rewarding that Democrats see only an advantage in using it. It doesn’t seem to bother the Democrats that they are dividing this country, and that institutionalizing such policies creates a dependency reminiscent of slavery. Not in the classical definition, but when opportunity and upward mobility are stifled, the resemblance to slavery is stark. The largest difference in the slavery of yesteryear and today is that now the Washington Democrats have taken the place of the plantation bosses.

-Robert-

The following is a revised reprint of my email released 12/16/2012 --

The Wealthy Spend Their Money Class warfare damages the economy by degrees, but a look at how the rich provide real growth is summarized below. Instead of throwing rocks and epithets at the wealthy, take a look below for a sampling of how the wealthy interacts with all of us.

Yachts

Buy Nice Boats and Yachts: -- At first blush, this doesn't seem like much but, it takes skilled craftsmen to build our fleets of luxury yachts. The skills needed for construction of these craft include wood craftsmen, fiberglass craftsmen, electricians, laborers, crane operators, skilled dock and launching specialist, and painters. Not a complete list but hopefully you get the idea. And that list of skilled craftsmen pales in comparison to the many employees of manufacturers who have to supply the boat yards with the necessary components for those boats.

The boats need engines, navigation equipment, winches, anchors, safety equipment, paint, wood and fiberglass just to name a few. Yes, building a fancy yacht requires a lot of production from a lot of different companies, creating a lot of jobs throughout the economy. So the next time you see a wealthy yachtsman, thank him instead of regurgitating demeaning class warfare slogans.


Domestic Palaces

Build Nice Homes: In addition to the standard benefits of housing construction, i.e. appliances, building material, skilled craftsmen such as carpenters, electricians, drywall experts, landscapers, and tile setters, the wealthy kick everything up a notch by requiring the best of quality. The demand for high-end products creates an industry staffed with skilled artisans of all disciplines.

Those fancy wood carvings are not magically produced, nor are those beautiful tapestries. By building with the finest materials available, the rich support the marble and granite quarries, stone masons, and the artists who create the statuary that adorns their gardens. All of which require large numbers of elite craftsmen who demand and receive a lot of money for their services and products.


High End Baubles

High-End Jewelry: -- The wealthy also maintain the industry of fine jewelry. Their willingness to purchase high end jewelry is what keeps that whole industry alive. It takes stonecutters, silversmiths, goldsmiths, and designers of fine jewelry many years to acquire the level of skill necessary to supply the quality of product needed to satisfy this high-end market. Another group that enables the rich to enjoy those rare stones that decorate their jewelry is the thousands who search for and mine those exotic minerals.


Master Piece Art

Support for the Arts: -- Artistic products that exemplify the finest creations that can be humanly produced are sought out by the rich. Their desire to have only the finest objects of art encourages our most gifted artists. Without the encouragement by those wealthy patrons, we might never have realized the true capabilities of human ingenuity and ability. Our finest artists produced much of their created beauty with commissions from wealthy patrons. Michael Angelo, Leonardo da Vinci, Van Gogh, Rembrandt, Picasso and other greats all benefitted from wealthy patrons. Their art only exists as treasures because of the wealthy. Sometimes it takes a wealthy patron's discerning eye to recognize the raw talent in an artist. Those commissions by the wealthy are the lifeblood for those artists who struggle to produce their creations. Such support for the arts brings out the best in human creativity. Factually, much of the beauty and achievements of humans would not exist without the wealthy.


Investing in New Tech.

Invest in Startup Companies -- The desire for achievement also pays dividends for those with dreams of creating personal wealth. Wealthy people often finance promising startup companies. Many of the startups they finance are only an idea that needs a little help to germinate. Such investments could never be made by an institution; most banks require collateral before they will loan money.

The rich make investments in new technologies and better ideas. Their willingness to invest in such companies is often all that is needed to launch the next big job creator. Investing in a startup company is very risky, but thanks to those with the ability and willingness to take a chance, it can be very rewarding for everybody.


Hotel Palaces

Exotic Trips and Vacations: -- The rich travel around a lot more than most. Because they travel a lot, they support a large private aviation business. The private aviation business is a large diversified operation that includes the private airplane manufacturing industry, private airport facilities, and of course a variety of skilled employees. Pilots, mechanics, maintenance crews, airplane construction employees, and flight controllers are just a few of the employees that make up the private aviation business.

The rich also patronize those large hotel palaces that dot exotic places throughout the world. Luxury hotels and casinos court the wealthy and cater to them. The thousands of hotel and casino employees of the four and five star establishments owe their jobs to the wealthy jet-set who travel the world. The rest of us also benefit. Those luxury places would not have been built without the demand from the wealthy. Building these travel palaces employs thousands of construction workers as well as those workers that produce the construction equipment and building materials. Most of us would have to save for years to be able to enjoy just a few nights in one of these iconic hotel complexes. Once in a lifetime vacations; - vacations that would not even be possible without the wealthy.


The Bleeding Edge

First to Purchase New Technologies: -- If not for the purchases of new technologies, the rest of us would never be able to enjoy them. The bleeding edge as it is called - such as the flat-screen televisions when they were first introduced. The first plasma flat-screen televisions cost between 10 and 15 thousand dollars. It was only after enough sales were made that production techniques and material cost could come down so that the rest of us could afford one. Prices less than a thousand dollars are now common for a really good flat-screen TV. It would have been impossible to enjoy this technology if not for the expensive bleeding edge purchases when they first appeared.


The Transport System

Transport of Products: The transporting and delivering the goods and products to and from manufacturers is a large slice of our labor force. Whether the delivered goods are via truck, airplane, train, ship, or pipeline; there are a lot of jobs at stake. The whole delivery system is really huge and not only supports the transporting of goods but the vast system of warehousing those goods. The transportation industry is made even larger when we incorporate the thousands who build and service the vehicles and methods for transporting our goods. (truck manufacturers, train and locomotive equipment, aviation, shipbuilding, and pipeline and storage tank construction)


In Conclusion: The difference between a working man and a welfare recipient couldn’t be starker. People with an income other than housing and food stamps also contribute mightily to their community and its economic health. The welfare safety net only provides the minimum for survival.

People with jobs have the same basic expenses as those on welfare but also the resources to do other things. Other things like go on an annual vacation, supply their wants, buy clothes, and establish standing through the credit system. With the establishment of a dependable credit record, the door opens a little wider for an individual to improve one’s personal economic position and possibly move on to a more lucrative undertaking such as opening a business.

Success is not guaranteed, but with determination and hard work a person could find himself counted as one of the wealthy. Being wealthy allows a person to enjoy the best products and services that humanity can produce. But one cautionary detail, wealth and having stuff is not a guarantor of happiness. Happiness and fulfillment are the true rewards of life. Whenever you observe the excessive behavior of the rich, be mindful that they, like you are only seeking fulfillment. Happiness and fulfillment are not items that are for sale, but instead, real attainable goals for all.

Happiness and fulfillment are everyone’s unspoken goal. The achieved wealthy make their investment in the physical treasures of this world seeking that which has no price. Thirsting for more and more wealth is like an itch that a person can't quite scratch. But in their wake, they enable all of us a way to begin and sustain our own quest for fulfillment.

Send me your comments, -Robert-

Robert welcomes your comment to this or any other of my commentaries.


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