Silken Slippers and Hobnail Boots Surviving the Decline and Fall

by R.E. Hannay

  * The typical American federally-defined poor is able to obtain medical care, has a home in good repair that is not crowded, reports that his family is not hungry, and has had sufficient funds in the last year to meet his family’s essential needs.

  If you earn $34,000 per year, you are in the top 1 percent of wage earners in the world. The man who has a Ford but wants a Cadillac is not poor just because some politician, bureaucrat, academic or limousine liberal says he is. The researchers report that the poverty that does exist in America can readily be reduced, particularly among children. There are two main reasons American children are poor: Their parents don’t work much, and their fathers are absent from the home and family. The typical American poor family with children is supported by only 800 hours of work per year, the equivalent of only 16 hours per week. If that were raised to a normal 40 hours weekly, nearly 75 percent of poor children would be lifted out of “official” poverty.

  Nearly two-thirds of poor children live in single-parent homes, and each year an additional 1.3 million illegitimate children are born. If poor mothers married the fathers of their children, nearly three-quarters of the nation’s impoverished youth would immediately be lifted out of poverty.

  Although work and marriage are predictable ladders out of poverty, our welfare systems remain hostile to both. Major programs such as food stamps, public housing, Medicaid and unemployment benefits continue to reward idleness and penalize marriage. Forty-eight million Americans now get food-stamp welfare, but now they get is debit card so others in the checkout line don’t know they’re on welfare. Revise welfare to encourage work and marriage and the nation’s remaining poverty would be quickly and substantially reduced.

  Our politicians, always wanting to give the liberal media material showing that they “care,” have effectively destroyed much of the traditional American sense of personal and family responsibility. Roosevelt, starting the welfare-state trend, said it should be only until the Great Depression was over. But after 79 years of increasing government “programs” to handle our personal and family wants and needs, providing government “safety nets” for everyone has become a religion not just among the liberals but among almost all politicians, bureaucrats and academics. Our seniors own most of the country’s personal wealth but the AARP and American seniors have succeeded in having Congress make the next generations pay for seniors’ medical care, drugs and other personal expenses, giving the wealthiest group the biggest piece of the personal welfare pie.

  Programs implemented as "safety nets" have become hammocks. In his essay, "Dependency on Government," Walter Williams says, "Dependency on government also has the effect of reducing economic mobility among the poor . . . Easy access to welfare has made many individuals, who turned down opportunities, believe they were better off so far as income, leisure time and family time than they would have been by accepting a low-paying job. In terms of short-run economics, many were correct. Welfare reform during the 1990s, despite the dire predictions, moved many former welfare recipients into the world of work and upward mobility. Many who never had a job are now working and are self-sufficient. As such, the tens of thousands of former welfare recipients who moved from welfare rolls to payrolls are proof of the inhumanity of dependency. What's more important is that these former welfare recipients and their families have a greater sense of self-worth." Unfortunately our politicians and bureaucrats have eroded the welfare reform successes. The Obama administration spends millions of dollars each year to try to get more people to sign up on welfare programs – another vote-getting scheme, of course, and the successful welfare reforms that were passed over Clinton's vetos have largely been discontinued .

  Historians Will and Ariel Durant spent their whole lives writing the history of civilization. In a small summation in 1958, “The Lessons of History,” they described a predictable pattern of the decline of all civilizations when a majority of their citizens are not contributing to, but are taking from the government. Historian Arnold Toynbee observed in 1936 that all great nations rise and fall, and that an autopsy of history would show that all great nations commit suicide.

  We are at that dangerous point in America, with more people receiving from the federal government than paying income taxes. People classified as “poor” who pay no taxes are always glad to have the politicians spend more and borrow more; it costs them nothing. As Benjamin Franklin once wrote, "The best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it." Unfortunately, poverty is only getting easier.

  COMPOUND INTEREST

  Economics 421

  The Me/Now, Woodstock generation are just starting to retire in large numbers. Instead of saving and investing for a comfortable retirement, many have already spent that money, much of it on luxuries that they consider necessities. Now many wonder, “Who is going to support us in our golden years? Why doesn’t the government (taxpayers) provide what we need to maintain our current lifestyle in retirement? Social Security won’t even provide enough money for the fuel, maintenance and replacement costs of our two cars!”

  Here is the shocking truth: Social Security was never intended to maintain yuppie-type lifestyles. Since Lyndon Johnson changed it, Social Security has been a Ponzi scheme, an illegal practice if anyone except the government does it. The Now Generation has had a strong tendency to spend as if there were no tomorrow. If they thought about retirement finances at all, many of them appear to have hoped that, with a little luck, they’d be dead before retirement age. Now, “Whoops! That’s in only ten years!” Surveys have shown that the average American family has less than $25,000 in liquid assets. At five percent interest, that would provide a lush monthly income of $104.66 -- $1,250 per lush year.

  Some of the Now Generation's irresponsibility is due to Greatest Generation parents who were determined to give their children “all the things we didn’t have.” Still, much could have been learned from their thrift. For example, instead of paying $3,500 for a new 1970 Olds convertible, if a yuppie had followed the precedent set by his parents and paid $600 for a good used car and invested the difference? If he had invested the extra $2,900 at 6 percent interest compounded for 40 years, that would have grown to $29,829. If he had been very successful and invested the difference at the 15 percent Warren Buffett has averaged over his investing years, that single used-car-saving would have grown to $776,804. If he had simply followed a regular spending/savings/investing/ program for his first 10 or 15 working years, our now-desperate yuppie would be in Fat City.

  Study those numbers again, burn them into your memory, force-feed them to your children and grandchildren, and remember Einstein’s statement that compound interest is the most powerful force in the universe. Youth is a good time to save and invest for the future, not a time to spend beyond real needs.

  Almost everything in life involves some compromises. In 1954, Waikiki Beach in Honolulu had mostly two types of people: older vacationers and younger people in service and tourism jobs, working for small wages and tips. Today almost everyone over 30 has traveled abroad and gone to beach and ski resorts. They eat in restaurants 10 or 30 times as frequently as the Greatest Generation did, they buy expensive cars that depreciate in value rapidly, and many save little or nothing. With larger purchases, it is not “How much does it cost?” but “What’s the down payment, how much per month and could I get a loan approved?” At the stage of their lives when thrift and wise investing could pay rich dividends later, most of the Now and subsequent generations are spending like rich people and expecting someone else, probably the top one percent of the earners who already pay 37 percent of the income taxes, to pay for maintaining their lifestyle in retirement. Those top one-percenters, most of whom got there by hard work, saving and risking their savings in ventures that provide jobs for others, are the ones the Democrats endlessly criticize for “ not paying their fair share.”

  What America needs now, more than ever, is self-discipli
ne, lower taxes, more incentives to produce and save, and less government regulation and harassing. Don’t hold your breath.

  WELFARE'S LEGAL BASIS

  It is generally believed that the United States is a capitalistic society, a free-market economy at work. The truth is that, thanks to Barack Obama and a liberal Congress as well as many years of lesser evils committed by politicians of both parties, we have become a full-scale welfare state, with the number of people who work for a living outnumbered by the people who vote for a living. Do what the majority of our lawmakers and legislating judges obviously do not do, consider the legal, ethical and rational bases of our federal welfare programs.

  Among the limited powers our Constitution authorizes is in Section 1, Article 8: "… to provide for the common defense and promote the general welfare….". There is no – repeat -- no basis for the federal government of the United States to subsidize or support any of its citizens by providing food, medical care, housing, education, transportation, job training, disaster relief, or any in the endless list of welfare services that comprise most of what our massive federal bureaucracy now provides.

  Could there be a legal basis for federal welfare? Yes, but only by passing a constitutional amendment. To the extent possible, individuals, families and businesses should take care of themselves, and not only just when it is convenient and painless, requiring no change in lifestyle. That responsibility may be quite painful for some, since the net savings rate in the U.S. often has been close to zero, compared with 15 percent to 30 percent of earnings in much of the world. Individuals and families need to relearn the necessity of squirreling away emergency resources, to stop expecting other taxpayers to save them or their businesses when inevitable winters come. Before Roosevelt, there was a stigma in accepting welfare. When a family could not provide for its members, local groups would help -- friends, neighbors, churches, charities, local or state governments. Now it's just a personal and political game with no social stigma attached. Those people and organizations were close enough to each situation to assist appropriately and effectively. By contrast, the federal government doles out uninformed, gratuitous help that is politically motivated and often fosters long-term dependencies.

  On a rational basis, the only kind of welfare policy that makes sense is one that encourages everyone to be as productive as possible. That is a scathing indictment of our whole taxation system. Obama, Reid, Schumer and the rest of the Demagogues rant and rave about the unfairness and greed of the top one percent of wage earners, ignoring the fact that those people are already pay by far the most taxes. The high-earners’ production is not taken away from someone else but is largely new money injected into the economy as a result of their efforts and risk-taking. The capital investments of our more productive, successful citizens provide most of the jobs and income for our population, and whenever income tax rates have been reduced, the economy has grown and total tax revenues have increased.

  Positive incentives are the reason capitalism is a more productive and prosperous system, motivating people to produce and succeed. The best replacement for our monstrous tax code would be a simple flat tax that broadens the tax base and neither punishes success nor rewards failure. The present 77,000 page tax code, with its myriad special provisions and loopholes, has been crafted by Congress to please many voter groups and political contributors. It stifles prosperity with double and triple taxation of income at different levels, penalizes savings, discourages capital investment and unjustly confiscates substantial portions of after-tax accumulated assets upon death, to be distributed by politicians to their favorites.

  Our welfare and tax structures so suppress our national productivity that it would be hard to devise a worse way to encourage people to provide for themselves and their families, to innovate, risk capital, create jobs and strive for success. That striving is precisely what is necessary for national prosperity. Think what we could do if Congress and our populist president removed the wet blanket of political disincentives that now is smothering us.

  FREE ENTERPRISE

  Laissez-faire, laissez-passez, la monde va de lui-meme. (Let us do, leave us alone, the world runs by itself.) -- French physiocrats of the 18th century

  The United States has the natural assets and skills to be preeminent in commerce and wealth, military strength and to some extent, world politics. We have several advantages – our natural resources, seaports, navigable rivers, capital base, technical skills, work ethic, and sufficient productivity to compete with the industrious nations of the world while maintaining a high standard of living. A large percentage of world trade is done in U.S. dollars, and much global business is conducted in the English language. Americans also have the advantage of generally being likeable people, able to get along with most ethnic groups, although there is much global animosity toward the United States because of our meddling in the affairs of other countries.

  Unfortunately, like most other Western people, we have seen 50 years of declining individual initiative, caused somewhat by prosperity but more by the cancerous, debilitating growth of government regulation, our welfare state and reduced incentives to produce. Average federal income taxes for American families are eight times what they were in 1950, up from three percent to twenty-four percent of income, and the Democrat gang of populists continually fights for even more. With an escalating tax rate, the successful pay a double penalty –- more taxable income plus taxation at a higher rate. Add the penalty of death taxes that steal accumulated after-tax savings of thrifty people and kill family businesses built up over a lifetime, and most of those taxes go to less ambitious, less productive, less thrifty people. The incentives to work, succeed and save inevitably decrease.

  In 1980 substantial numbers of American voters expressed dissatisfaction with a stagnant economy, high inflation, ever-increasing governmental interference in their lives and theft of their earnings. With that mandate, President Reagan cut taxes and spending (except for military) and provided new incentives for personal and business saving and investment. As a result, the 1980s saw unequalled and continuing prosperity. However, Reagan spent us into more deficits to counter the Soviet military threat, then George Bush, Sr. and the Democrats raised taxes and continued deficit spending while drastically increasing regulatory harassment of businesses and individuals. Slick Willie Clinton ran for president as a moderate Democrat but then turned left to more welfare-state socialism and passed the biggest tax increase in our history, in spite of his campaign promises to reduce taxes.

  In 1994 the voters again said no to big government and elected a Republican congress whose Contract with America repudiated the welfare state. Predictably, as soon as specific reductions in subsidies and free lunches were discussed –- special favors for farmers, big corporations, small businesses, retired people, ethnic minorities, the "poor" and so on –- people screamed. "We thought you meant cutting the other guy's subsidies! We depend on ours!” George W. Bush and his Republican Congress abandoned conservative principles, increasing government spending and regulations at an unprecedented rate. They expanded “entitlements” as never before with the addition of the Medicaid drug benefit estimated to cost $1.2 trillion over the first decade.

  Then Obama and his anti-business gang forced through Congress staggering new welfare legislation and giveaways, frightened business with his ceaseless attacks on them and new and increased taxes, often hidden in unrelated legislation like Obamacare, mounted a continuing program of new restrictions, new regulations and harassing, all destructive of business and individual incentives to invest and expand as is necessary to revive a sick economy. As a means of achieving their socialistic goals, laws and rights were trampled on by executive orders and bureaucratic attacks.

  Is America still vital? Do we still have the enterprising spirit and conditions necessary to move ahead, to enable our people with talent and ambition to succeed? Not now. That requires restoring incentives to enterprising Americans or the country will
inevitably drift into the entropy and decline of Europe and its moribund nations.

  Liberals call an unwillingness to take from the more productive to give to the less productive "protecting the rich." They also say removing the capital gains tax would protect the rich, but the reality is that taxing capital gains deters the ambitious from starting or expanding the enterprises that create real jobs. New government jobs are just another form of welfare paid by the taxpayers. Taxing capital gains also penalizes the frugal by assessing taxes on fictitious capital gains that result merely from monetary inflation, with no actual gain. Yet the way of democracies is for politicians to pander to the majority for votes. Take from the more successful and give to the less successful, starting the downward spiral. Kill incentives and you kill the vitality that makes great nations, killing the goose that lays the golden eggs. The important question is whether the average Americans will be motivated and permitted to succeed and prosper. It is opportunity and the will to succeed on the part of all the people that cause national prosperity.

  There are many examples of the failed bureaucratic methods that stifle innovation and productivity and inflate costs needlessly. That is the way of bureaucrats: make a rigid set of rules and administer them rigidly. That way, no individual bureaucrat can be criticized for deviation, poor judgment or favoritism, and every bureaucrat can exercise control and show his superiority over the greedy entrepreneurs who are forever trying to get away with something or -- the worst sin -- become wealthy. Mark Steyn: "To open a restaurant in New York City requires dealing with the conflicting demands of eleven municipal agencies and applying for 30 different permits and certificates, not including a state liquor license." Bureaucracies and regulations kill the entrepreneurial spirit and the chances of success for people willing to mortgage their homes and souls to try to create or expand a business. Carried far enough, and Obama is trying desperately to do that, we could go the way of Communist East Germany after World War II.

  Important facts: All men are created unequal. Second, life is not fair and never will be; it’s the survival of the fittest. The tyranny of the majority is a fact of life. Third, soaking the rich is not the way to help the poor. You will never solve the problems of the less fortunate, meaning the less successful, by penalizing the more successful; that will only take away much of the incentive to be productive and succeed. The "rich" provide the funds needed by the enterprises that are the engine of the economy. In seeking votes, Congress has largely ignored these basic economic principles, increasing government and regulations at an unprecedented rate. "The business of America is business", Calvin Coolidge said. Now the business of America is regulation. Judge-made law and bureaucrat-made regulations destroy representative government. Micro-regulation is macro-tyranny.

  In general, individuals succeed or fail according to their own ambition, self-discipline and abilities. How much tax-paid help can be justified for 35-year-old failures? There are many losers in any society, and most bring it on themselves. Helping them a reasonable amount to help themselves is all the taxpayers should bear, along with trying to help educate and motivate their children toward a more productive life.

  Our focus should be on helping the upperdogs, the achievers who set out to do something and the leaders who motivate others. This doesn't favor the wealthy or the educated or the skilled; it favors those with initiative, self-discipline, self-reliance, guts and determination. It is destructive to penalize those people by making them support free-loaders instead of rewarding them by letting them keep most of what they earn and helping them to reach their goals. They are the people who enable and motivate others to be productive. Their success and whether the government restores the incentives for everyone to succeed and prosper will determine how organizations and nations perform, compete and prosper -- or fail.

  OUTSOURCING AND GLOBALIZATION

  One of the frequent attacks by Democrats on the Bush administration, in their frantic attempts to regain power, involved the loss of U.S. jobs to lower-wage countries. Now, five years into Obama's reign of terror, the liberals heap the blame for lost American jobs on greedy businesses.

  In a competitive, free-enterprise society work will be done wherever combined conditions are most favorable for a business. Local wage rates are only one of many factors, which include the supply, skill, productivity, reliability and work ethic of available labor; the availability, quality, reliability and cost of raw materials; government incentives, taxing, permitting and other regulatory policies; established infrastructure; proximity to markets; and the availability, costs, quality and reliability of transportation and other resources. Outsourcing is often indicated or necessary, whether or not the domestic labor unions, their employees and taxing jurisdictions like it.

  Doomsayers forget the most fundamental reason adjusted per-capita income is many times higher in developed nations than it was one or two hundred years ago: When others can make or do something better or cheaper than you can do it yourself, it makes sense to outsource it, specialize in what you do most productively and trade for the rest of your needs and wants. Specialization creates efficiency and more wealth.

  Craig Barrett, when CEO of Intel, made no apologies for outsourcing. Intel was spending $2 billion to rebuild a Chandler, Arizona plant instead of replacing it offshore, but he was forthright about the global economy as well as our mediocre, expensive educational system. “Other parts of the world, such as Asia and India, are graduating more students with stellar math and science skills. And their governments make it easy to do business, with hefty incentives and speedy permitting. The issue is not how you compare to your next-door neighbor, it’s how you compare to where the action is, and the action is around the world . . . Government should do no harm, [with] fair taxes and a streamlined process.”

  On March 31, 2005, Paul Otellini, who became Intel’s CEO, said Intel may build a $3 billion plant overseas in the next few years, although they were still considering U.S. sites. Testifying at a hearing of the President’s Advisory Panel on Federal Tax Reform, he said that over the 10-year life of the chip plant, the company would save $1 billion by placing the factory in Asia or Europe rather than the United States. He stated that the difference is almost all in taxes, not wages and capital costs. At that time 12 of Intel’s 16 factories were in the United States, while 75 percent of their sales were outside the U.S.

  The Boston Consulting Group, whose clients include many of the nation’s largest corporations, warned that U.S. companies risk failure if they hesitate to shift facilities to countries with low costs, and the largest competitive advantage will lie with companies that move the earliest. Their report said, “Successful companies must ask themselves, ‘What must I keep at home?’, rather than ‘What can I shift to low-cost countries?’”

  We should have learned from the disastrous 1930 Smoot-Hawley Act, which raised tariffs on over 20,000 dutiable items and prolonged the Great Depression. The positive lesson it teaches is that free trade is good for everyone in the long-run, even though it disrupts some workers and industries in the short-run. Economic historian Joseph Schumpeter calls it a process of creative destruction. Free markets constantly replace products, jobs and wealth with superior products, better jobs and more wealth.

  New Zealand was a typical big-government, over-regulated welfare state with a sluggish economy. In a brief period, many major changes were made and the results were dramatic. They decided that free trade was in their own interests and abolished all subsidies on agriculture. New Zealand is an agricultural economy, with something like three million people and sixty million sheep. Rather than suffering, agriculture has grown at twice the rate of any other segment of their economy. There are no tariffs on any parts of the New Zealand economy; they are in love with open markets. New laws freed people to contract their labor to others, and as a result New Zealand now has the highest rate of job growth in the OECD.

  The second reason the scare-mongers are wrong is that, on balance, the U.S
. is gaining more jobs with multinational companies than it is losing to foreign workers. The University of Arizona’s College of Management said, “Forget about global outsourcing. It’s too small to be a factor. The U.S. economy creates as many new jobs in a single month as the cumulative loss to global outsourcing of the past three years. Plus, the U.S. adds several times more jobs through “insourcing;” i.e., foreign-owned company hiring of U.S. workers at their U.S. facilities.”

  Mexico provides examples of both insourcing and outsourcing. Ross Perot predicted a “giant sucking sound” of jobs moving to Mexico after NAFTA. Some low-wage jobs did move, but some jobs returned when companies discovered that the challenges of doing business in Mexico, quality control, transportation costs and delays more than offset the low-wage advantage. Ironically, Mexico is now losing many jobs to even lower-wage countries, particularly China and India, and seems unable to stop it. It is the inevitable pattern.

  The Organization for International Investment tracks the number of job opportunities coming from other countries to the U.S. and says the greatest beneficiary of outsourcing is the U.S. itself. We are importing many more jobs than we export, with countries from around the world attracted to our stable political environment, industrial innovation, trained labor supply and productive American workers. Foreign companies manufacturing in the U.S. also do a substantial amount of exporting, helping our balance of payments problem.

  Jack Kemp says we are our own biggest problem. “The enemy of American jobs is not Japan, India or China, but rather stupid policies made in Washington, D.C. Therefore, a more apt metaphor is refugee CEOs who are fleeing punitive government policies that hurt both capital and labor.”

  Several factors discourage more American insourcing than exists today. Current tax rates and bureaucratic harassment discourage business. U.S. corporate tax rates are the highest of any developed country in the world. As Ronald Reagan put it, “If you want less of something, tax it; if you want something to slow down, regulate it.”

  Another deterrent is the high cost and regulation of medical care. The trial lawyers have a stranglehold on Congress and work against important reforms to reduce medical costs, now at 16 percent of GDP compared with 8 percent in the next-highest country. Unless Obamacare is cancelled and replaced with needed reforms, medical costs and restrictions will be much worse.

  Education reform is badly needed, starting at home. It is shocking to compare high school graduation requirements today with those of 100 years ago -- back when parents demanded performance from their children and teachers and before the teachers’ unions, liberals and the ACLU took control. Our higher education is badly in need of reform, but the high-cost, tenured faculties effectively resist needed changes.

  American workers must have marketable skills and be competitive, all factors considered, with global competitors. The Boston Consulting Group found that 40 percent of companies surveyed expressed significant concerns about the erosion of skills in the U.S. workforce, while stating that many low-cost countries provide large pools of skilled workers who are eager to apply their talents.

  The problem is not outsourcing. The problem is that we need to get our act together to attract more business, to provide government taxation and regulatory policies that encourage business rather than stifle it, enact tort reform to get the trial lawyers off the backs of the business and medical worlds, reform our education systems, and stop the unconstitutional theft by taxation that punishes success. Make those changes and the world will want to do more business here, while concerns about outsourcing would diminish.

  GLASS CEILINGS AND JOB DISCRIMINATION AGAINST WOMEN

  We hear and read many claims of unfair treatment and discrimination involving female employees, including many individual and class-action lawsuits for damages and management changes. There is a history of discrimination in many parts of the world. In the past, women have been denied voting rights and opportunities in most countries and treated as mere chattels in others. In many Muslim countries and elsewhere, that is still the situation.

  Lions are physically stronger and lionesses get pushed around, but they counter with significant prowess of their own. Similarly, women have countered men and substantially improved their situation during the last hundred years. In this country, most discrimination against women is gone except in the opinion of the militant “feminists,” their trial lawyers and the anti-business liberals and academics who brainwash our young people on the subject. Among these groups, there is a general failure or unwillingness to recognize the essential differences between male and female employees and the challenges employers face in selecting employees, assigning duties, compensating and rewarding, promoting, demoting and discharging employees. Most critics probably have never had to find and sustain the capital and shareholder support necessary to fund, operate and expand a business, to find, train and manage capable employees, work to attract and satisfy customers with useful goods and services at competitive prices, to meet a payroll, and fight the bankers, politicians, bureaucrats, lawyers and journalists who want to tell a business how it should be run -- people who don't know all the facts involved and have nothing to lose if they harm the business.

  The primary assignment and responsibility of any manager in a private-enterprise economy is to provide products and services chosen by enough customers based on usefulness, quality and price to cover the costs of doing business and return adequate profits to risk-taking entrepreneurs and shareholders. That is Economics 101, a course in which most liberals, mainstream media, university professors, militant feminists, trial lawyers, bureaucrats and labor-union leaders have never received a grade higher than "D", if they ever took the course.

  In making personnel decisions, managers must consider many factors. For one, male and female brains tend to work differently. An interesting study by Catalyst, a New York research organization, found that girls outperform boys from kindergarten through graduate school in grades, admissions and even extracurricular activities, but the study also found that the traits which propel girls to the head of the class -– diligence, organization, carefully following instructions –- often aren’t enough to propel women up the corporate ladder, and may even hold them back. Men typically demonstrate the aggressiveness and ability to promote themselves and the firm's products that wins promotions and customers, while women tend to show good student behavior, working hard based on the assumption that they will win recognition. The study found that women tend not to ask for what they deserve.

  Employers are accused of paying women less for doing the same work, but on the average, women work fewer hours, cutting back their time after having children. A study of M.B.A. graduates of Chicago’s Booth School found that only half the women with children were working full time ten years after graduation compared with 95 percent of men, and it was the choice of the women, who reported they were happier with part-time work.

  The study also revealed that, in 2002, women held only 15.7 percent of corporate officer positions and comprised 5.2 percent of top earners at Fortune 500 companies. Women held only 9.9 percent of corporate officer jobs, where they would be running the businesses or departments, compared with 90.1 percent for men. This may be partly due to the fact that some men, particularly older men, do not work well under a female supervisor. Consequently, a woman who is a capable supervisor of other women and younger men may not succeed as a supervisor of older men. It may not be the woman’s fault, but she should not be put in that position if it doesn’t work.

  Personnel decisions involve many other considerations. How effective is the individual at supervising the other employees involved? How dependable a supervisor is he likely to be in the ever-changing future with its challenges, opportunities and inevitable restructuring? How wise is investment in this person for the medium and long term? Is he likely to be a dedicated, passionate long-term employee who thinks of the business as his own business, or does he work as if it is simply a job, putting in h
is time for a paycheck, benefits and the possibility of future promotions?

  Given these criteria, women who have, or might have, at-home children pose a different problem for employers. Many are capable, dependable, effective workers or supervisors. but what if the potential exists of the woman leaving the organization once, or repeatedly, for extended periods for pregnancy, childbirth and beyond, having to leave or miss work to care for sick or troubled children? What is her likelihood of leaving the company because of a husband’s transfer, or simply deciding that she wants to be a full-time mother or at most work part-time? Her employer probably has a substantial investment in her.

  All these factors and more must be considered in making personnel decisions. No politician, bureaucrat, judge or jury has a constitutional or equitable right to second-guess management decisions unless they are obviously unfair and discriminatory. Major considerations include not only the “him-compared-with-her” facts, but all the medium and long-term factors involved. Pitney Bowes and other corporations have found that women outperform men in some situations and insist on hiring more women and giving them a level playing field. The results have been not only positive for women, but have created more competition among their men and raised their performance. Career-minded women should seek employment in organizations that provide the opportunity to compete on an equal basis, where the company culture has already evolved for them. In some organizations, men are reluctant to offer women certain jobs for business reasons, and some women choose not to take those jobs for personal reasons. In either case, it’s nobody else’s business.

  In recent years, more women have become upper-level executives, CEOs and heads of state. The new CEO of General Motors is a woman. Generally, the ceilings are being removed, but sometimes unwisely, as in the military services where there is a history of some "politically correct" unjustfied promotions of women. Transitions are always painful, with winners and losers, but this transition is over the hump and time will sort it out.

  SOCIAL SECURITY, SIMPLIFIED

  Conservatives say we must reform our doomed Social Security program, now. Most Democrat congressmen and their allies in the liberal news media say there is no crisis. They say we have decades to make a few little changes, that the Republicans are trying to ruin Social Security and endanger recipients with risky private investments instead of maintaining a safe Social Security trust fund. Everyone has access to the same facts, so what is happening?

  Those pleading for reform have done a poor job of explaining the facts, and the Democrats, AARP, mainstream media and others opposed to reform have done a good job of frightening the public. The facts are kindergarten-simple. Unless substantial changes are made quickly, there will have to be significant reductions in promised benefits or big increases in either Social Security "contributions" or general taxes to pay benefits as scheduled now. The data published by the Social Security Administration for the fiscal year 2012 shows a $47.8 billion deficit – cash brought in less benefits and overhead expenses paid out. In fiscal 2011 the S.S. deficit was $7.975 billion, in fiscal 2010 $36.8 billion.

  Proponents of reforming Social Security focus on boring statistics and discussions on solvency, transition costs, unfunded liabilities and rates of return. Ed Crane of the Cato Institute pointed out the mistake in that approach:

  The idea of an Ownership Society is brilliant … something integral to the essence of America. That essence is a respect for the dignity of the individual, which is axiomatically enhanced when one has more control over one’s life. That is what personal [S.S.] accounts provide.

  FACT: The Social Security “Trust Fund” the Democrats and AARP pretend to be protecting simply does not exist. Lyndon Johnson engineered the change. Now Congress spends Social Security net contributions any way they choose, then simply puts electronic I.O.U.s on the federal books, calling them a trust fund. The benefits paid now to retirees are paid by workers paying current Social Security (FICA) contributions. Social Security is run like a pyramid scheme; the first participants are paid by the second, the second by the third, and so on. Pyramid schemes are illegal, except when the government does them.

  In 1960 the U.S. Supreme Court, in Fleming vs. Nestor, decided that Social Security promises are not an individual asset and that the payroll taxes paid today guarantee nothing in the future. Politicians are free to change their schedule of future benefits at any time. They have done so in the past and they will have to do it in the future or raise general taxes substantially. Already 80 percent of Americans pay more in Social Security and Medicare taxes than they do in income taxes. If present trends continue, John Goodman at the National Center for Policy Analysis estimates that workers will have to give politicians between 25 and 30 percent of their wages just to pay the Social Security and Medicare benefits now promised. Many of today’s politicians want tomorrow’s politicians to get the blame, instead of heading off the disaster now. The longer we wait to reform the doomed system, the more painful will be repudiating their scheduled promises.

  FACT: When Social Security started, male life expectancy was 61. The average 65-year-old retiree had been dead four years and his FICA payments kept by the politicians before his benefits began. Now male life expectancy is 78 -- 17 additional years to pay S.S. benefits. In 1945, 10 years after Social Security began, there were 40 workers paying in for each retiree receiving benefits. By 1960 the ratio was 10:1. The official SSA data for fiscal 2012 show only 1.67 Americans working full time in the private sector for every person collecting SS benefits. The first baby boomers are now eligible to receive benefits and the number of retirees will rise rapidly for almost 20 years. On average, they will have many more years to live than when the present benefits were scheduled and the income/benefits deficits will be dramatic.

  FACT: The annual “returns” – more electronic IOUs - given by thieving politicians on Social Security accounts are miserable, barely over one percent per year. If those funds were in private accounts and invested, the accumulation of assets would be substantially higher. R.W. Rahn, in Economic Growth for Washington Dummies: “In both Chile and the United States, employers are required to set aside a little more than 12 percent for the pension program, but in Chile, someone with the same earnings as an American will be getting $55,000 as an annual pension, while the American, working the same number of years, just gets $18,000.” The difference is that in Chile the Social Security accounts belong to the workers. Each has his own passbook and their contributions are invested in the economy, not spent by politicians. The Democrats, AARP and the media fight private investments, for several wrong reasons.

  Most people, particularly the spend-it-now generations, don’t understand the multiplier effect of compound interest. Its impact over a working lifetime is enormous. From 1928 through 2002, Standard & Poor’s broad stock index, the S & P 500, shows an average annual return of 11.9 percent. Over 40 years, $100 in the government’s hands becomes only $181 at 1.5 percent, but $8,978 at 11.9 percent -- 49.5 times as much! Assuming a more conservative 7 percent average return, the difference in a worker’s portfolio would still be 8 times as much, and he and his heirs would own those assets, not the big-spending career politicians. Nobel-prize economist Edward Prescott says a single male born in 2000 with average earnings would expect real annual returns on his contributions averaging only 0.86 percent, while a worker earning $80,000 would have a 0.72 percent negative annual return.

  FACT: A March 23, 2005 report of the Social Security and Medicare Trustees makes clear that, in the next ten years, $2.2 trillion will be taken from beneficiaries; that is the difference between the amount of payroll taxes to be paid and the amount to be spent on retiree benefits. Unless something is done now to get those funds out of the hands of politicians and in the control of the beneficiaries of the system, the politicians will just continue to spend those receipts.

  FACT: Chile’s pioneering program of privatizing Social Security, influenced by Milton Friedman and University
of Chicago economists, has been operating for over 30 years and shows what we should have been doing. When offered as a voluntary alternative, it was quickly approved by unions and the general public, and almost everyone chose to participate in the program, with good results. The private investment accounts belong to the workers and their heirs, not the politicians. Each participant has his own passbook, just like a bank savings account. In the U.S., the government steals all accounts on death. In Chile, the returns have averaged 10 percent per year, and pension funds have already accumulated eight trillion U.S. dollars. Their workers contribute 10 percent of their wages before taxes, but can contribute more. They know they have a stake in their economy; they watch what the government is doing and they get involved. The typical Chilean’s main asset is not his house or car but the capital in his social security account. Because of that personal interest and knowledge that their savings are being invested in Chile’s economy instead of spent by politicians, their economy has boomed. They have effective safeguards to protect their accounts, and Chile offers over 30 years of case history of privatization for us to study.

  What is happening? How can the Republicans, Democrats and others have access to the same facts, yet be so polarized in their opinions of what to do? The reasons are simple. If Congress gives up their ability to spend Social Security income, they would be admitting they have been stealing and spending our S.S payments for decades. President Bush’s proposal to offer the voluntary opportunity to put only four percent of Social Security taxes into individually-owned accounts would have taken away from the politicians’ spending income an estimated $664 billion in 10 years, an unthinkable loss to politicians. They can buy a lot of votes with that. The Democrats cherish the power and vote-buying position that controlling “entitlements” gives them, and they fear the loss of another of the cherished “Great (Welfare) Society” programs, whose $16 trillion costs have largely been wasted. The Democrats’ institutions of socialism wouldn’t survive with informed, prosperous citizens who have more secure financial futures, the way Chile's citizens do.

  The link between ownership and voting patterns is clear. In a poll conducted after the 2004 election, Public Opinion Strategies found that people who owned securities directly or through mutual funds voted for Bush over Kerry 52 to 46 percent, while non-investors voted for Kerry over Bush 54 to 45. Most significant was that the investor-Bush link was strong at all levels, but at incomes below $40,000 – the Democrats’ stronghold – non-investors voted for Kerry 57 to 36 percent. There is also a strong Republican correlation to home ownership. The reason for the panic of the liberals is obvious: Dependency means votes for Democrats.

  But why the AARP? They’re supposed to look out for the seniors, but what they have done is to declare war on younger Americans, who don’t seem to know that they’re being robbed by the seniors who already own most of the personal wealth in the country. AARP leaders say conservatives are proposing to cut their benefits and “play the slots” with their “trust fund,” in spite of President Bush having said repeatedly that there would have been no change in benefits or the functioning of Social Security for people over 55. Conservatives have proposed that participation in private accounts should be strictly voluntary, but that fact is lost in the hysteria. Why? The AARP has a large business income from seniors. The leadership wants to retain and increase their membership and business income by making them feel threatened.

  The AARP has been turned into a big business, with 35 million members and their own zip code at their headquarters in Washington. They are selling mutual funds and investments as well as all kinds of insurance, playing travel agent and operating other businesses. Privatizing part of Social Security might hurt their business, which is not supposed to be a business, by potentially reducing their sales of insurance, mutual funds and other products. They call private Social Security accounts “a risky gamble,” but their website offers their members 38 mutual funds, including “Technology Fund,” “Gold and Precious Metals Fund,” and “Emerging Markets and Latin America Fund.” Stocks and bonds are a risky gamble if purchased with Social Security funds, but a sound investment if purchased from AARP.

  President Reagan restored a sick economy to vitality and a discouraged nation to optimism. He lowered income tax rates from 70 percent to 28 percent, but total tax receipts increased in the revitalized economy. He also reduced regulatory harassment, restoring to the people a feeling of being in control of their lives. But subsequent politicians of both parties raised taxes, increased regulatory harassment and returned to runaway spending. Now conservatives are trying to restore the ownership society, including actual ownership of your payroll contributions to build your own retirement assets. Like employees who feel the company they work for is “our company,” citizens who are part owners in a nation’s economy show improved attitudes and performance, and the economy thrives.

  President Bush 43, when facing massive opposition to the needed Social Security changes and knowing that major changes in any federal program usually involve years of bickering, proposed lowering the benefits to higher-income participants. In effect, he proposed changing it from an annuity program to another welfare program -- another way to penalize success and reward failure. A poll conducted for the Associated Press found that 56 percent of respondents are not willing to give up some promised benefits, while only 40 percent said they would. Majorities of both Democrats and Republicans were opposed to reducing any benefits.

  President Obama tries to avoid the issue. It is certainly not part of his big-government agenda to relinquish federal control of Social Security funds and permit America's citizens to have control of their own pension assets. We can only hope that there will be enough public pressure to revive the important Social Security debate and get the true facts to the public to counteract the misinformation broadcast by the Democrats, the media and the AARP.

  Condensed, this debate is not complicated:

  1. The present system is a future economic disaster. Today’s workers pay the benefits of retirees, and a shrinking number of workers are supporting a growing number of retirees who are living longer.

  2. The puny return the politicians arbitrarily allocate to the I.O.U.s in the non-existent “trust fund” is much lower than the historic average return payroll taxes could be earning if invested in the U.S. economy. If contributions were invested now, future benefits probably would not have to be reduced nor payroll taxes increased substantially.

  3. Do workers want to continue letting career politicians spend their Social Security payments for anything they choose, or would they prefer to start putting their payroll taxes into private investment accounts that actually belong to workers and their heirs? The real argument is about the ownership of Social Security accounts. Should they be individually owned or belong to politicians?

  It is urgent that we press Congress to engage in the Social Security debate, or the Ostrich Coalition will kill Social Security before the public really understands what is at stake. If we can accomplish that, our next objective as American citizens must be to consider carefully whatever reasonable proposals are made and involve ourselves in the political process. Social Security is too important to leave to career politicians to decide based on lobbying pressures and their own striving for the next election.

  U.S. ENERGY INDEPENDENCE

  Executive Summary

  Energy independence is possible. Recently, only 37 percent of our oil consumption came from unfriendly sources, and that amount could be replaced with domestic sources if President Obama and Congress would stop obstructing it. Our dependence on foreign oil is aided by the same Democrats and environmentalists who blame others for high gasoline prices while blocking proposals to maximize domestic fuel sources -- drilling for oil and gas in our continental shelves and Alaska, developing our vast oil shale resources, utilizing clean coal technology, enabling nuclear power plants, and building more pipelines and refineries.

  Our biggest challenge is develo
ping alternative fuels. The liberals and environmentalists promote so-called renewable energy sources that are still in uneconomical early stages of development, impossible to sell without large taxpayer subsidies, limited now in probable future market share, and most produce only electricity, not reducing the demand for foreign oil for liquid fuel and gas. Their favored hybrid cars are expensive, mostly suitable for urban use, and appear likely to make up less than six percent of the future market. Natural gas vehicles work well for urban fleet vehicles, have further potential and should be encouraged, along with diesel.

  The Al Gore hysteria over global warming and greenhouse gases is a giant political, semi-religious canard, discussed in the article.

  Obama continues Bush’s and Congress’s favorite mistake, pandering to the farm lobby by mandating use of corn-based ethanol for fuel. It uses large amounts of an important world food product and has already resulted in higher global prices for a variety of food products in addition to corn itself. Compounding the felony, the U.S. has continued heavy tariffs on Brazilian sugar-cane ethanol in addition to giving a federal subsidy to our own corn-ethanol producers. It is a corrosive pollutant in engines, cannot be transported by pipeline, uses large amounts of water to produce and uses almost as much energy to manufacture as it produces.

  Real solutions to our energy-dependence problem are:

  * Drilling for large known quantities of oil and gas in our offshore continental shelves, now blocked by Obama and Congress.

  * Drilling in the ANWR and Beaufort Sea areas of Alaska.

  * Developing our enormous sources of U.S. oil and gas shale.

  * Developing coal-to-liquid and coal-to-gas synthetic fuels. The U.S. is the Saudi Arabia of coal.

  * Unlocking the huge Utah coal deposits that Clinton declared a “national monument” as a political payoff, with no local or congressional discussions.

  * Encouraging the use of diesel vehicles, which are about 30 percent more efficient than gasoline.

  * Encouraging new refineries and pipelines, blocked by not-in-my-backyard lobbying. None have been built since 1976.

  * Encouraging the riskier deep Gulf and Arctic drilling with tax-credit incentives on success.

  * Encouraging the development of biomass fuels from non-edible plants, recycled cooking oil, waste fats, methane gas from landfills and other sources.