Wealth

Let's go over this again. Wealth is not money in a mattress. Wealth is a function of value and is created through exchange.

I have five dollars in my pocket. You have an extra hibachi grill in a yard sale. I value the grill more than the five dollars. You value the five dollars more than your spare grill. There is an exchange. Both of us walk away thinking we got the better deal. Net value has increased in the exchange. Wealth has been created. Granted not great wealth, but take it up a notch.

I have $200,000 in the bank (I wish). You have a steady job and weary of paying rent. A loan is made, a lot is bought, a house is built, a mortgage is paid. Net value takes a jump. Wealth is created out of thin air, the breath it takes to make an agreement. This sort of thing goes on every day.

You have a million dollars in mutual funds bearing meager interest because the companies in the fund are not equally brilliant, nor their products uniformly desirable. I have an idea for a product that makes the smart phone obsolete. I exchange an interest in my idea for your million dollars. (Thank you.) A plant is built, people are hired, the product is sold, customers are clamoring to buy. Value is increasing geometrically on a broad scale. Great wealth is created.

This is how it works. This is the only way it works.

But, when taxes are exacted to pay for safety net programs, admirable though their aims, wealth is not created. Transfer is not exchange. Transfer systems work to reduce net value, and destroy wealth. Workers with skills are drawn to the safety net and production is lost. Investors with resources find their returns plundered and decline to engage in the marketplace (or worse, migrate to more favorable markets overseas). Unemployment insurance works to ensure unemployment. How does this come to be called a benefit?

The American economy is getting tired of foundering. As it makes gains in the coming weeks and months recovery will depend on whether our leaders step on the brake or the gas.

Giving It All Away (AB459)

Back in July the Legislature of California voted to award all of California's 55 electoral votes to whomever wins the popular election nationwide. In other words, the Democrat might win the state in a landslide, but the electoral college delegates would vote as a block for his opponent, based on results in the populous east coast. Governor Brown signed this bill (AB459) into law in August.
It is the largest voter disenfranchisement in history, and did not come through
California's well worn initiative system. It was a direct action of the Legislature alone who did not count it wise to refer the matter directly to the citizens. It is important to name the 76 Californians who sold the rest of us out.

AB459 vote 7/14/2011

Assembly votes for the bill:
Alejo Allen Ammiano Atkins Beall
Block Blumenfield Bonilla Bradford Brownley
Buchanan Butler Charles Calderon Campos
Carter Cedillo Chesbro Davis Eng
Feuer Fong Fuentes Furutani Galgiani Gatto
Gordon Hagman Hall Hayashi Roger Hernández
Hill Huber Hueso Huffman Lara Bonnie
Lowenthal Ma Mendoza Monning Norby Pan Perea
John A. Pérez V. Manuel Pérez Portantino
Skinner Solorio Swanson Torres Wieckowski Williams Yamada

State Senate votes for the bill:
Alquist Calderon Corbett Correa De León
DeSaulnier Evans Hancock Hernandez Leno Lieu
Liu Lowenthal Negrete McLeod Padilla Pavley
Price Rubio Simitian Steinberg Vargas Wolk
Yee

Governor Brown signed the bill into law 8/8/2011

Those who voted against are to be commended, few though they be. There
were only 30 across both houses.