It's Profit, Not Jobs

I'm growing increasingly dismayed with Mitt Romney over one issue that might seem merely semantic, but is, in reality, incredibly important. Mr. Romney roams the country telling us how at Bain capital he "created jobs". The President then tries to convince us that he "lost jobs".  All of this works to reinforce the growing economic ignorance of the public. One does not investment in a business to create jobs. One invests to increase its profit. The President, may not understand this, of course. He's never done anything that generated a profit and believes that the most noteworthy consequence of the ATM is that it suppresses the number of bank tellers hired. Undoubtedly, Mr. Obama also bemoans the fact that there is no longer an AT&T monopoly to employ hundreds of thousands of long-distance operators.

Now, in aggregate, more profit results in more jobs, but that's rather like observing that having more children brings about greater production of dolls and bicycles. You can't create jobs by demonizing profit any more than you can increase production of toys by scolding fertility. It's time Mr. Romney started to educate the public. Investors put money into firms like Bain because Bain has been highly successful (reportedly at the 80% level) in increasing the profitability of its portfolio companies. Whether or not those particular companies employ more people is irrelevant (though it appears that they have). Their enhanced profitability and efficiency is a net benefit to the economy as a whole. If not, then, by all means, lets abolish ATMs, bring back telephone operators and issue paper & pencil to those who utilize computers. What this country needs, clearly, is more community organizers and fewer profit-driven businessmen.

The Entitlement Culture in One Picture

The chart below shows how fast government payments have expanded over the last 30 years. Now ask yourself which of these two explanations is the more likely:

A. The portion of the population that just can't survive without government assistance is 60% higher than it was in 1983.
B.  Incumbent politicians realized that creating a very large class of government dependents enhances their reelection prospects.





Won't life be grand when that number reaches, say, 90%? When we can all sit around the table passing money to each other while the House takes a cut?

Debt/Deficit Problem Explained in One Picture

Does this look like a problem of too little tax revenue? Or too much spending? Is it likely that the solution to the deficit is more taxation of The Rich?





Source: Congressional Budget Office

Social Security Problem Explained in One Picture

A lot of people seem to be confused as to how Social Security came to be based on such financially unsound practices. The answer is told by this lady. Congress paid her (and millions of people like her) 1000 times what she actually contributed in Social Security taxes. In simple terms, they bought her vote with money they stole from succeeding generations. Unfortunately for us, as with all Ponzi schemes, this arrangement couldn't be sustained forever. Fortunately for the politicians that created this liability, they're all dead, and it's now our problem -- exactly as they planned it.