Monday, November 3, 2014

Fauxcahontas Fails Finance 101

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Fauxcahontas, a.k.a Lotta Wampum, a.k.a. Elizabeth Warren demonstrated the same economic ignorance that seems to beset leadership in the Democrat party. When I heard it recently, it sounded like she was channeling Barack Milhous Obama's "You didn't build that". But I went back to the (admittedly brilliant) piece I did on what Obama said, "The Platte River President* on Economics", and  I rediscovered what I had forgotten, that Obama was cribbing from Elizabeth Warren when he made those pointedly stupid comments!

Here's the Elizabeth Warren quote from 2012:
“There is nobody in this country who got rich on their own. Nobody. You built a factory out there - good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for."

This must be part of her standard stump speech, up to and including the stilted language usage of "fire forces". But let's examine what the Fauxcahontas flavor of populism has to say.

You moved your goods to market on roads the rest of us paid for. That implies that the factory owner somehow didn't pay, but he did. He paid the same sales taxes and income taxes and property taxes as did "the rest of us", but in fact, he probably paid more than we did. If he's prosperous, he lives in a bigger house than we do and pays more taxes. His income is bigger than ours and he pays more taxes. He buys more stuff - more sales taxes. And because he "built a factory", he's paying additional property tax and one of the highest corporate income taxes in the world. In short, he's part of the "rest of us" paying for the roads, etc.

And are not those same roads free for us to take our goods and services to market? Do we not have the same opportunity to hire those that "the rest of us" (but especially he) paid to educate? Are we not safe because of the police and fire services "the rest of us" (including the evil factory owner) pay for?

So, dear Lizzie, if all of the rest of us have the same access to the roads, and educated populace and fire and police protection, must there not be some definable way in which the man who built a factory did do something unique and valuable "on their own" that the rest of us somehow failed to do?

Drive downtown Anywhere, U.S.A. and drive by shops that are closed and possibly boarded up. Did they not have access to the same roads? Same educated workers?? Same police and fire??? Of course they did. But, unlike government, there's no guarantee that any business will have their doors open this same time next year, unless they are providing their customers with quality goods and services at reasonable prices, or unique goods and services at whatever the market will bear.

Because there is no guarantee of return on their investment, those who start businesses (which, incidentally are those who actually hire people, Hillary!), are putting their time and money at risk. A gamble, if you will. It's funny how liberals make such a big deal about what a "risky scheme" it is to allow people to invest a small portion of their Social Security in the stock market, (where they are almost certainly going to get more than the measly 2% return the government gives them on their money), but begrudge businesses the reward for putting their own money at risk, in order to build the factories which provide goods and services we need and hires "the rest of us" who don't have an idea good enough or the confidence to take that big a risk on our own.

If you purchased 50,000 shares of Amalgamated Buggy Whip, in 1908, when the first Model T's were rolling off the production line, you lost your shirt. If you started a buggy whip or button shoe company in 1908, you probably lost your shirt. But, if you'd bought 50,000 shares of Ford Motors, I'd probably be calling you "boss".

There's something Henry Ford did that the buggy whip manufacturers didn't do, even though they had access to the same roads, and educated workers, police and fire, but the Ford Motor company is still here and Amalgamated Buggy Whip is a distant memory. Ford took risks that others didn't take and he convinced people to invest in his ideas for a share in the rewards. They also shared the risks.

That spirit is alive today, but not does not thrive where the politics of envy prevail. As I pointed out before, If 'You Didn't Make That', then It's Okay for Government to Take It, but to suggest that if someone has a thriving business it is only because they did so on the backs of "the rest of us" is simply not true. As a philosophy of government, it is the first step on the road to ruin, or as we refer to it in most places, the "Obama Recovery".

Original art by John Cox. More at John Cox Art

Cross posted at LCR, Political Clown Parade


  1. Excellent summary and well thought out and presented.
    If I had my own blog, I would be asking for permission to cross post and plagiarize.

  2. Thank you for the kind words. Had you asked, I would have said yes.

    Make you you make your voice heard tomorrow. Vote like your country depended on it.

  3. Great writing and an accurate skewering of the nonsense that passes for thought from the kooky left.

  4. Thank you, kind sir! You guys have got just 48 hours to knock off saying those kinds of things!


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