Seriously, though...

There is a very real and growing problem with our archaic social agreements about money and wealth.

There is something horribly wrong and terribly perverted about an economic order that allows anyone to claim that they "own" billions of dollars while every day around the world thirty thousand children die from starvation (a problem that could be easily solved for an entire year with an amount of money less than what is being spent on the war in Iraq every week).

There is a tendency in our economic system for large sums of money to almost automatically grow larger and larger, thus creating ever denser super concentrations of wealth in the hands of fewer people. Over the last few centuries this has obviously led to the wholesale corruption of political processes and democracies all over the world until we have our current situation here in America where, using the formalized legal bribery called 'campaign contributions' as well as the old-fashioned, under-the-table bag of cash type bribes, the super deep pockets of the ultra wealthy elite and the corporate directors allow them to control the government and rewrite the laws to benefit themselves at the expense of the rest of us,.

Super concentrations of wealth and power are intrinsically antithetical to true democracy and widespread economic opportunity and initiative. They are like black holes that suck everything into themselves where it disappears forever rather that being recirculated locally. Sort of like the way Wal-Mart and similar chains come into an area and crush a lot of the locally owned small business (using the unfair extra discounts that can be extorted from wholesalers if you control the flow of massive amounts of money) and then suck the local economy dry until everyone is a working serf and there are few if any opportunities or capital for starting small businesses.

Perhaps we need to think about changing our societies' agreements in this area of wealth, both private and corporate.

As an example of that kind of change of a mass social agreement, there used to be, a few centuries ago, a very widespread belief in the Divine Right of Kings to rule "their" countries with absolute authority. That didn't work out very well for the ordinary folks so eventually there were revolutions and the social agreement changed to one of recognizing only the authority of a democratically elected government and of actively denying the right of any king to dictate to us.

Similarly, perhaps we now need to substantially change our social agreements about "wealth" and set an upper limit on absolute wealth. Of course we need to give people room to strive to better themselves and their families economically but we can, as a society, set limits on the greed. If you've got 20 million, you're set and you don't really need a hundred million or a billion or 40 billion. Unlimited greed is a vice, a socially poisonous vice as well as a personally and morally destructive vice. Perhaps we should stop enshrining it as if it were a virtue, in our TV shows and movies and in our system of economic rewards and in our social pecking orders and politics.

I think it is possible to structure an economic system such that, without this extreme concentration of wealth and ownership in just a few percent of the population like we have now in America, there would be more opportunity for personal initiative and hard work to lead to widespread business ownership and healthy local economies. There could be a very large, strong and vibrantly upwardly-mobile middle class aspiring to the (much larger than now) upper class of millionaires who have 20 or 30 million. Tops. But no super millionaires, no hundred millions, no billions. Unlimited greed is not a natural right, any more than the "divine right of kings', no matter how many people believe in it at some point in time. In terms of having a healthy and enduring society, we can and must do better.

The main argument against allowing the ultra wealthy elites who've been ruling the world to continue to do so is that they have done a incredibly lousy job of it. Our Earth teeters on the brink of planetary catastrophe and the situation demands that we all work for the good of the planet and our children's children. Instead we see the elites like Bush and the oil barons actually fighting wars to preserve their positions at the top of the heap. They would sacrifice our futures for their short term profits.

We Must Change Things Or Perish.

Some facts to consider:

The richest 1% of Americans now own more than the bottom 90% of Americans.

The top 10% of Americans own 71% of all private wealth.

Over 86 percent of the value of all stocks and mutual funds, including pensions, was held by the top 10 percent of households.

In 1998, the top 1 percent of Americans owned 47.7 percent of all stock.

Bill Gates alone has as much wealth as the bottom 40% of U.S. households.

In the 22 years between 1976 and 1998, the share of the nation's private wealth held by the top 1% nearly doubled, going from 22% to 38%.

In 1982 the wealthiest 400 individuals in the "Forbes 400" owned $92 billion. By 2000 their wealth increased to over $1.2 trillion.

If you define rich as someone with over a million dollars in assets, then there were about 7.7 million of them in 2003 holding assets amounting to about 28.8 trillion dollars, up 7.7% over 2002. (Trillion = a thousand billion)

The wealth of the “ultra-rich,” defined as those with over $30 million of liquid assets, (a group of some 70,000 worldwide, or less than 1 percent of those who qualify as merely “rich”) amounts to some 2.8 trillion dollars worth of assets, or nearly ten percent of the total in the hands of the rich.

In 2004, Forbes magazine listed a record 587 individuals and family units worth $1 billion or more, an increase from 476 in 2003. The combined wealth of this year’s billionaires also reached record levels—a staggering $1.9 trillion, an increase of $500 billion in just one year

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"Everybody's worried about stopping terrorism. Well, there's a really easy way: stop participating in it. " --Noam Chomsky

The main cause of 'Poor'dom' is drug use, and Democrats are the drug pushers.

Methinks someone needs to read Jonathan Swift's A Modest Proposal.

this was a review of P J O'Rourke's book.

Which sucked. He showed his ignorance about the rest of Latin America in his Cuba review.

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http://leftyhenry.blogspot.com

No it is capitalism.

You know, Democrats and Republicans share no differences. They are merely different factions of the same party and ideology.

Poverty is caused by the exploitation of the working class. Wal-Mart could raise the wages of all its workers by 2000 dollars by simply increasing the price of its products by half a penny per dollar IE a $8 dollar product would now cost 8.04

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http://leftyhenry.blogspot.com

Capitalism has produced more freedom and a better standard of living for more people than any other system to date.

Marxism, on the other hand has produced oppression and mass murder on a scale unequaled by any other system.

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"If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your counsel nor your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen.”—Samuel Adams

Where have all the Conservatives Gone?

Righty is like a living joke with (faint) heartbeat. Best to just make fun of, or simply ignore him. I guess the right & proper thing to do is ignore him.

And I agree, in large part, with what I highlighted in red. Though one point that does jump out is, how would you explain poverty in socialist economies??? I understand that you may say there are no purely socialist economies of note. But there are no purely capitalist economies either.

But my main question to you is, would that extra $2000 per year lift them out of poverty? I don't think so. Certainly not if they make poor choices on where the money goes. And quite often, that seems to be the case.

I would say the main cause of poverty (in the U.S.) is ignorance and poor choices. I'm not blaming the poor for being poor. And I'm not using the word "ignorant" in an insulting way - we are all ignorant of something in some way, shape or form. What I mean is, $2000 or $10,000 to someone who doesn't have the knowledge or ability to effectively manage money isn't going to do him much good in the longer term. And many people do tend to make poor life choices at the lower end of the scale. At the upper end, their money can literally buy them out of trouble. But at the lower end, it's another nail in their coffins. A rich girl can have a baby out of wedlock, and daddy hires a nanny for her. A poor girl has a baby at the same time, and her life will be forever changed for the worse, most likely. A rich boy gets hooked on drugs and gets picked up by the cops. His daddy sees the judge at the country club and they get the charges thrown out while he's in rehab. A poor boy does the same thing and he spends time in jail... where he learns to be a REAL criminal by the time he gets out. I will never argue that the system is fair. I've seen too many instances where it is not. But I haven't seen how socialism is fair either.

For the abject poor, I don't know what to say. I accept that they will always be with us (because they always have been), and I accept that our society will (and maybe should) support them in some way. But I don't think we should continue to enable them, by not encouraging them to cease doing things that make certain their continued poverty for generations to come. But for those who feel trapped in the borderline lower-to-lower middle class, there's no reason to stay there. For that class, there are options and opportunities in the United States. Not so much so in certain other countries. But here? Yes, there are. And capitalism is not the answer? Capitalism is THE answer, IMO.

Unless you've ruined your credit, most any living being (including dogs and cats) can get a $5000 credit card. Now... are you going to take that card and buy some (additional) junk at Walmart, or use it for your normal daily purchases... things that you used to pay cash for? Use it for a year or so. Always pay slightly early and in full, NEVER late. Don't pay them to use their money, you use their money and save yours til the last practical moment - already starting to get ahead... though you can't quite feel it yet. Do that for a year or so. Build up your credit. Apply for a personal loan at another bank. Don't spend the first cent! Put the money in an interest bearing account to lessen the net amount of interest that you'll pay. Then pay the loan off in six months or so. Open a free checking account at the same bank - ask for it, they won't just invite you to have it, unless you are thought to be a desirable client. What do you pay for rent? $600/month for a two bedroom... +/-? For S&G's, let's say that's close. Find a duplex/two unit that you can deal with living in for at least a year or so. In many places, they can still be had for less than $150K. With your built up credit, buy it using a state/federal 0 down/low interest mortgage program. It would also help if you had your real estate license when you do this, as you'll get back at least 1.5% of the purchase price when you close. Also, ask the seller to pay the maximum amount of allowable closing costs. You should be able to close with virtually no money out of your own pocket. Your total (PITI = Principal, Interest, Taxes and Insurance) should be around $1000/month. If you were paying $600 for rent, then you can rent your other two bedroom unit for $600, right? Right. So your net payment will be in the $400 range. Look at that, you're $200 per month ahead of where you were before - and now you've got a house. And for the next year or so, manage the hell out of your new asset: collect the rent from your tenant like any business would, and always make your payments on time. Buy a cheap computer as a business asset and set up an auto payment program to help yourself out... keep this whole thing as simple and worry free as possible.

So in just a year, you might have that same crappy job at Walmart, that you had going in. But now you've got improved credit and a $150,000 asset, that's costing you less (out of pocket) than when you were renting. Then, depending on where you want to go with it, life can get interesting at this point. Because you're running more substantial funds through your accounts, all of a sudden, the bank has decided that you're a "desirable client". They like you now. Go do the same thing as before. You're not a first time buyer any longer, so the first time buyer program won't be available to you. But you can still get a good rate (because you have good credit). But now you need a downpayment. Hmm... still short on cash? What to do? Have the seller take back a note for the maximum that the lender will allow. For the rest, remember that credit card that you got before? Max it out and put that cash in your checking account at least three months before you enter this transaction or apply for this latest mortgage. Combined with your 1.5% commission and the seller's note, the $5K should have you well covered to go to closing.

So let's see where you are at roughly two years: same crappy job at Walmart. Ah well... But now you own two pieces of income producing property. Assuming the same $600/month in rent per unit, the first one is now netting you $200/month (you've moved out and the gross rent is $1200/month - $1000/month payment). And on the second... the PITI payment will be another $100/month or so higher. So at $600 for the rent, your share on this one is $500/month, if the total payment (PITI) is around $1100... so you're really only up $100 from the first one. And then there's that credit card that you maxed out. Time to get an after closing equity loan and pay that off. At roughly 9%, you can have that taken care of in five years at $100/month. So there goes your extra 100 bucks. On net, you're break even on cashflow (though $200 better off than when renting). But you've now got two pieces of income producing property worth at least $300,000, plus the benefit of $1800/month swirling through your (now) business checking account. You've got excellent credit and you're still paying $200 a month LESS in total costs than when you were renting.

If one is somewhat ambitious and remains focused, this can be done every couple of years. At some point, one might want to move onto bigger units, where the lending rules allow for more "liberal" lending practices ($500K and above). You can get into things with NO money out of your pocket, or even money back in your pocket. You can do that with sub-$500K properties too, but the transactions can become somewhat complicated and dicey for the average newbie. Let's say by Year 5, you've made your way into a couple of 6 unit properties. Now you've got assets probably worth at least $1.25 million. Even if you made some so-so deals, your positive cashflow should be in the $1000-$1500/month neighborhood now. At that point, you're probably either going to need a management company, or you're going to be working your azz off. Orrrrr... you could walk into Walmart at the end of Year 5, pull down your pants and tell the store manager where he can plant a kiss. If you were taking a few classes (doesn't even Walmart offer tuition assistance?) along the way, you are ready to leave them anyway.

I apologize for the incredibly long post. I just wanted to lay out a realistic display of capitalism on a one man model. And yes, I know that conditions of life and circumstances hamper some people from doing what I described above. But for a LOT of people (too many, IMO), the cause of their poverty is their inability to make the best choices. Anyone with basic calculator skills can do what I roughly laid out above. I could easily show a person of average intelligence how to gather total assets of over $1 million in ten years or less. A million in assets is not THAT much... it's certainly not what some people seem to think. Because it's not necessarily cash that you can spend. But if that's what you want, you have to be, and remain, focused. You have to be self-disciplined. And the only methodology or philosophy that I would know to give that lesson or move someone along is capitalism. What I described above is realistic. Though not point for point, dollar for dollar or property to property, that's roughly what I did while I was finishing college - and no, I didn't have a bag of money from mummy & dada. It's not so hard, but it's not so easy either. If you ask, well, what if a person doesn't want to do that? Well, I guess get used to saying, "Welcome to Walmart... how may I help you?" If you have the option of moving up and YOU choose not to take it or work for it, that's your own fault. Whether it be drugs, drink or general laziness, I know a lot of people from my youth who were f'ups. All I can say is... I guess it sucks to be them. Sad, but true.

I'm not married to capitalism. Find me a better system for the individual, prove it out and I'll try to work with that.

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"Tweeter was a Boyscout before she went to Vietnam and found out the hard way... nobody gives a d@mn."

Two Communists engaged in mutual masturbation, what a disgusting sight.