Friday, July 18, 2008

The Poor and the Rich

I once heard someone say that if businesses were run more like a family and families were run more like a business both would be better off. This sounded good at first but after thinking about it a while I realized something. That something was that if families were run more like a business they'd realize just how much a business is already run like a family.

Money management is the key to the success of both. People have no idea of how to manage their money. A successful business is guided by a budget. How many families have a budget? I would hazard a guess that not many do. And, in my opinion, this is what separates the rich from the poor. If the working poor were to place themselves on a budget and only spent within the guidelines of that budget poverty would be nearly eliminated on its own.

It isn't so much about the amount of money you earn that determines how poor or rich you are, it is how you distribute the moneys you earn that does. The rich are rich because they have unearned income. The poor are poor because they only have earned income. And as long as the poor rely on earned income alone they will remain poor.

And all of the government programs for the redistribution of wealth in the world will not change this. Governments cannot create wealth, it can only deny wealth to the people through regulation and taxes. And taxes are paid to take care of the needs of government not the needs of those who pay in the taxes.

A man once told me that he felt that every person has a right to a college education even if the government had to pay for it. Well, I say that every person does not take advantage of the education that the government pays for now. In fact there is a growing movement by parents to take their children out of these state run schools. So, why should it pay for something more than it already does?

It was this same man who said that he acknowledged that happiness was not guaranteed but he qualified that by adding that it was the duty of everyone who attained happiness to ensure that everyone in the world attained it also. I'll leave it up to you to understand how something not guaranteed to anyone can be ensured to everyone.

But, of course, there was a time when an act of pity was rejected also. It was a declaration that man would not accept being looked upon or treated as a victim. It makes me wonder who it was that turned this nation of people who had a can do attitude into a nation of people with a can't do attitude. It is the person who has a can't do attitude that is a victim of life for they have had their spirit killed. And those who preach that attitude are the killers of spirits.

We have become a nation where a standard of living is the most important thing in a person's life. We no longer realize people need to make adjustments to that standard at times. It's as if they are afraid of starting over again when the unexpected occurs. It is as if the need to start over again declares you a failure in life rather than recognizing it as a very real part of life. People are afraid of the word failure these days. Failure is an inevitable part of life. It is how you deal with failure that is the real determinant of whether or not you are a success.

Life is filled with rich people as it is filled with poor people. It is how you measure it that is the difference. There are those who you might think as being very poor yet they would consider themselves the richest people on earth. There are those whom we'd think as being very rich yet they'd consider themselves as impoverished. How rich one is or how poor one is can only be dependent upon what a person values most. That is something no man can decide for another nor should he have the right to make that decision.

So, for you who think that taxing the rich and giving it to the poor is being charitable, remember this. You may be taxing the poorest of this nation and giving it to the richest. You are determining for another what he should value most. And that helps no one and hurts everyone.


Crian said...

We have had an extensive argument about some of the things you wrote about today Griper so I won't bring up old issues but on the topic of failure, I am reminded of a finance professor in Ireland who made a general statement that American's are all about positive attitude and starting over again when they fail.

When I think about myself and all my good friends living in Mass. I think people are increasingly worried about failure in a globalized, fast moving world because it is that speed that makes it harder and harder to recover from each failure. Knowing the inevitable difficulty in recovering from failure, wouldn't it make sense that as society changes, the laws and the rules that people demand more from their government in order to take risks?

The Griper said...

good question, Crian.
but what of freedom? freedom can be seen under two lights, the freedom to take risks or the freedom from risks. one declares one's independence, the other, one's dependence.

but if one is prepared for those times of failure, recovery from it is not difficult. it is only when one is unprepared for it that it becomes difficult to recover.

a good example being the economy. it is inevitable that there will be recessionary periods. if one has prepared for these times he will weather it out, if not it becomes a very difficult time of his life and he may lose everything. or if he is really smart he will profit during those times.

so, acceptance along with preparation for it not denial of it is the key.

and that would be a factor to take into consideration when doing a budget.

BB-Idaho said...

"unearned income" is an interesting term: could be dividends from oil investments..or
a welfare check. Earned income is thought of as pay for labor:
"Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration." Abraham Lincoln
Times have changed a bit, but I'll
go with Old Abe.

The Griper said...

had to grin when i read your comment. but all you're saying is that the cause is superior to the effect. and that is not true in every case or at least i hope it isn't true.

a much better way of seeing it is that capital is the perceived value that we placed upon our labor. and the real value of that labor is determined by what we do with that capital once we attain it.

Lista said...

Hi Griper,
You have written several thought provoking posts now that I have not had the time to fully respond to and I still do not now. Unfortunately, the time I have on the computer now is going to become less and less. We will be leaving town soon. I wonder how much you will have posted by the time I get back in a couple of weeks. Oh well. I guess I'll just have to pick and chose what to read and respond to.

I've had extensive arguments with Griper as well. The fact that you just said that has caused me to make a note to check out your blog soon.

I agree with you in relation to the government offering more safe guards in order to lessen risks, for the fear of taking risks hurts the over all economy.

No one is totally dependent, or totally free. It is best to be just a little bit of both.

What is so wrong with the government striving to create a more "User Friendly" society. Just because risks are more minimized, does not cause us to be less free. I think that it would make us more free.

Many people do not have the financial resources to set up all the necessary safety nets to protect themselves from all the various types of hardships that can occur.

BB-Idaho brought up an issue that I was thinking about commenting on. The ability to make "Unearned Income", that is Investment Income, is a God given gift that not everyone has. I do not believe that everyone has equal ability in the area of making money.

BB-Idaho said...

Guess, I will defer to Sophie Tucker.."I’ve been rich and I’ve been poor. And believe me, sonny, rich is better" :)

The Griper said...

ahhh sophie tucker, you bring back memories there. lolol

a rich man prepares a banquet and invites all his friends. on the night of the banquet no one comes. that rich man has to go out into the streets and invite strangers to share his banquet with him.

a poor man's barn has burned down and the whole county shows up and they have a barn raisin'.

which man is the richer?

The Griper said...

the founding fathers said in the Declaration of Independence that God gave us the right of life, liberty, and the pursuit of happiness.

those were gifts given unto each of us by God.

liberty is the freedom to take risks not the freedom from risks.

Geo. Washington led us out of bondage of the King who was the government we declared loyalty to at the time. we were his subjects.

do we accept the gift that God has given us or do we revert back to being subjects once more to the government?

by one we are independent of government but dependent upon God.

by the other we become dependent upon the government and independent from God.

we can't be dependent upon both at the same time.

dependency, lista, is like a drug, it is very addictive.

BB-Idaho said...

Passing by the confusion of labor/work, capital/power, wealth/money etc, the effect of
recessionary economics is reviewed
briefly at
..a couple of observations. In my
younger days I did a stint as a chemist in the cosmetics business:
it as altruistic that 'hard times' invariably increased that business; they looked forward to
recession. Not sure about the hows and whys, but it was true.
Another recession-proof area is
said to be health. I wonder about that. Last week, my dentist called, had a cancellation and would I consider coming in rather than wait til my appointment later in the month. In the usual chatter with the staff, I asked if they got more cancellations in the summer with people on vacation:
sure, but this summer cancellations were up three times normal..the office had shut down two days the week prior. Theregular patients could not afford dental care. So,
they are following your advice,
'managing their budgets'..and one consequence seems to be the 'trickle up' customers, business tanks....
the process spreads. There are, of course exceptions to "dependency is addictive"..consider every human infant ever born..they recover from total dependency in short order! Indeed, Lista's observation "No one is totally dependent, or totally free" postdates John Donne's 'No Man Is An Island' by several hundred years. Good job Griper, ya got us think'n agin :)

Lista said...

This is a separate issue from Socialism, dependence on Government and bondage to a King. You have such an all or nothing, black and white sort of view point on this that I've never agreed with you on. The answer's in the middle, not way to one side or the other.

Here's a verse to consider.

"2) Carry each other's burdens, and in this way you will fulfill the law of Christ. 3) If anyone thinks he is something when he is nothing, he deceives himself. 4) Each one should test his own actions. Then he can take pride in himself, without comparing himself to somebody else, 5) for "each one should carry his own load.." Galatians 6:2-5 (NIV)

We are instructed to "Carry each other's burdens." or help each other and thus are somewhat dependent, yet we are also told that "Each one should carry his own load." and are thus somewhat independent and each have our own responsibilities.

We are both Dependent and Independent, not all one or the other. Just because we occasionally depend on each other does not mean that we stop depending on God.

The Griper said...

bb and lista,
thank you, the both of you for basically saying the same thing. makes it easier to respond. lolol

i'm going to surprise the both of you. lolol

i agree that no man can be totally independent. only God has that power.

it is the type of dependency that counts. when you think about it the word "help" declares a temporary dependency not a permanent dependency.

in receiving help of another,in most cases, you participate in that activity that someone is helping you on. and in cases as these it is because we are human beings and not Gods. in other words i'm saying, i am doing something but, with the help of another. in other words when we ask for help of another or someone offers to help it is usually for a particular task or situation. and once done, help is no longer needed or given.

and that is where the problem comes with government. any aid it gives ends up being of the permanent type. and that no longer can be defined as help.

now, granted, there are a few government programs of the temporary type but i think you both understand my point.

we may be the richest country in the world but our government does not have infinite resourses. its resourses are just as finite as yours or mine only on a larger scale. that is true of any government and every government.

i can see the need of government stepping in to help under certain circumstances but it also has to know when to step back and let the people act independent of it too.

Americaneocon said...

Very thoughtful essay, Griper!

The Griper said...

thank you professor. i take it you give me an A on it huh? lol

Lista said...

To answer a question that you asked. The one with the friends is richer than the one with the money, though my experience has been that struggling to make ends meet is not that much fun and it even can cause marital discord, which is a form loss in the friendship area.

The way economy works is that when the cost out weighs the benefit, people, not only stop buying certain products, but they also stop taking certain risks. Thus, when the risks in a society are too high, the over all economy suffers, not just individuals.

I like your example of the infant recovering from total dependency. From what Griper said about us both saying basically the same thing, I guess we appear to be on the same wave length. That happens surprisingly a lot even though you are a liberal.

I agree that dependency (help) should be temporary and in fact, it should even be reciprocated, just like a balanced friendship involves a constant shifting of roles in which the one who is strong and the one who is weak changes from time to time.

Wouldn't this also imply, though, that temporary governmental assistance, even in the area of risk reduction, is Ok. The person on the receiving end is likely to reciprocate by taking the risk, making money and stimulating the economy.

I basically agree with all that you said in the above comment.

I just wanted to add something in relation to the fact that some people are more gifted in the area of making money. I once met someone who had just gotten divorced and his wife took off with most of what he had, but he made the most interesting comment. He said "Oh that's Ok. Money is easy to make." I was really quite surprised and amazed by his comment.

I also wanted to add something to the verse that I quoted above (Galatians 6:2-5). When I was looking at the Greek definitions of the words, the first one, translated "Burdens", was "baros", which means "Weight", like something weighing someone down and the second word, translated "Load", is "phortion", which means "a Task or Service". In other words, we are to help each other in ways that ease the load or "Weight" of the other person, but we are not to take over and do the entire "Task or Service" for them.

The Griper said...

how do you aid temporarily in the area of risk taking? as far as i know you can only pass the risks off to another person. and when you do that that person also get the pleasures of the benefits of that risk also.

you can't know if you benefit from a risk or not until after you take that risk. the only person without risks is a dead person. it is only after we take the risk that we know if we need help or not in that task.

as for the case of the baby, remember this, a baby never knows it is dependent. curiosity leads a baby into independence. and it takes risks without even realizing the risks involved. we, as parents, only step in when that risk becomes too great in our eyes to allow it to go farther.

as for investing money, lista, remember this, there are people out there whose only purpose is to advise others in regards to investing. and until you can afford one there are safe investments.

savings accounts are the safest way but earn little money. then bonds are another safe investment. the idea is to build a nest egg that you can fall back on during hard times.

a good budget will have savings in it with catagories. one catagory might be one that assumes a loss of work. and it is built up to a few months of what your expenses are. another catagory will be one that takes care of yearly expenses like taxes or insurance payments. another catagory might be for buying a car in case something happens to the one you got. and you add to these catagories each month until the time they are needed.

this is how you lessen the risks involved financially. if you don't do this you are taking the risk that something will happen without the means to solve the problem.

taking risks primarily can be defined as "not preparing for the negatives in life." in expectation that those negatives will not occur. but unfortunately they do for everyone.

once you have your negatives covered then that is the time to accept the risks for the positives of life.

WomanHonorThyself said...

if businesses were run more like a family and families were run more like a business both would be better off. ...good quote Griper!

Lista said...

Actually, risks can be measured statistically. If the statistics are bad, people are less likely to take risks.

The way that government can decrease risks for people is by doing things that stabilize the economy. Now that I'm thinking about it, this isn't really an individual dependence on the government thing. It has more to do with just making things better for everyone. For example, there are safe guards built into the stock market that didn't used to be there.

Curiosity may be what leads a lot of people into independence, yet after a few failures, fear can over ride curiosity and hope and people remain dependent whether than risking failure again. A baby is too nieve to realize that exploring is risky, which is why they need supervision. I guess that's exactly what you said as well.

I was thinking of a bigger risk than just investing. The biggest risk is that of starting your own buisness, whether than working for someone else. It takes a really gutsy person to do that.

Or investing in your own invention or art or writing or whatever. Investing in oneself can be a very big risk.

A lot of people just live day to day, the essentials of life take up almost every penny they make and the little that they are able to save gets eaten up by a broken down vehicle, appliance or some other similar expense. It's hard to get ahead enough to invest.

I'm a little surprised that you didn't just talk about insurance. That is the most obvious risk eliminator, yet it's gotten so expensive that for some people, it is really hard to afford it.

When we were first married, I had persuaded my husband to let me budget our spending money. Apparently, I budgeted it too tightly and he didn't like it, so we don't do it any more. I had a lot more control over the financial decisions when I was doing that. Maybe that's why he didn't like it. I don't know.

We could probably go on and on in this topic, but unfortunately, this is probably going to be my last entry, for my parents are coming tomorrow.

The Griper said...

when making a good budget, goals must be set. and all persons affected by that budget process must be involved in the making of a budget. then when a budget is agreed upon each person must agree to abide by that budget.

then they need to sit down periodically and review it. that way, everyone will have a sense of accomplishment at seeing that goal being reached and any adjustments can be made if needed. it can't just be done by one person and imposed on everyone else.

family decisions must be made by the family. even the children of the family should be a part of this discussion and process.

government control over the economy is a myth. they cannot control it. they can influence it but not control it. and that influence can only be a reactionary influence. the economy works a lot like water works, it is always trying to seek it's own level but it never can.

that is one factor in the socialists philosophy that is flawed. for socialism to work there must be absolute control over everything and everyone.

i didn't say anything about insurance because a poor family can't afford it. that would have to be one of the positive goals that is set to be achieved after you have achieved the goals concerning the negatives.

yes, investing in one's self can be risky as you put it but that is exactly what we do each and every day.
but in regards to a business those risks can be minimized by starting out small. you don't need to go into business full tilt. you can start a part time business also. and as you gain confidence, expand until that day you are confident enough to tell your boss to take his job and shove it, as the song says. it doesn't take guts to start a business it takes confidence in yourself.

in closing, all i can say is enjoy your trip and bring back a lot of good memories to talk about. then he chuckles and says, looks like the guys won out huh? lolol

Lista said...

Hi Griper,
I'm really surprised that I'm on the computer this morning. I'm actually up and going earlier than expected and am going to spend the extra time on the computer.

It sounds like a good budget requires a good marriage between two people who know how to both communicate and share. In other words, those who are rich in ways other than money, should be able to budget and improve on their finances. Some people, though, are poor in more ways than one and it's not always as much any particular person's fault as one may think.

I like your philosophy of involving the entire family. That is really neat!!

I never said that government controls the economy. You are correct that it can only influence it, yet I'm not so sure that the only influence that they have is reactionary. Excessive taxes and regulations hurt the economy and that is a cause, not a reaction. Tax cuts and minor regulations should be designed to stimulate, not hurt the economy.

How are people who can't even afford insurance supposed to come up with the funds needed in order to protect themselves from risks?

Maybe confidence in oneself and guts are the same thing. Another word for it is faith. Some people have it more than others and it also helps if other people have faith in us too.

BB-Idaho said...

After pondering "if businesses were run more like a family and families were run more like a business both would be better off." I clearly need to fire a couple of the kids and hire three
new wives. :)

The Griper said...

ahhh polygamy, now you're talking. lolol

Crian said...

Griper, I disagree that a government can only react to economic changes. Most governments run like a business and one of the prime principles of business is prediction or to plan for all foreseeable market changes. Governments can and do create economic policy to influence an economy in a desired direction rather than reacting to a current event. One example would be lowering the corporate tax rate to induce FDI.

I know this is a bit late but regarding preparation, certain economic and financial events you cannot be prepared for as a typical citizen or investor. For example the failing of Enron and the sub-prime Crisis. My older brother used to work in senior position within UBS in London, even within the company he was unaware of sub-prime debt until the rumor bounced around the company that they were going to write off a couple billion.

The point I am making here is that you can only prepare so much, beyond that it becomes the federal government's responsibility to regulate and the help people out in times of massive economic failure.

The Griper said...

"Most governments run like a business and one of the prime principles of business is prediction or to plan for all foreseeable market changes"

i accept your idea of government for this reply. when a prediction is made and it comes true then you react to it. that is what planning for it means. if that prediction does not come true there is no reaction to it.

"Governments can and do create economic policy to influence an economy in a desired direction rather than reacting to a current event"

and what is that except a reaction to the direction it is going now?

The Griper said...

"...beyond that it becomes the federal government's responsibility to regulate and the help people out in times of massive economic failure"

if people can't prepare for it then how can government be prepared for it? if regulation is the answer then that proves that government was not prepared or it would have regulated prior to the failure to prevent it.

and if there is ever a massive economic failure government won't be able to help anyone. it will be too busy trying to stay afloat itself.

BB-Idaho said...

"and if there is ever a massive economic failure government won't be able to help anyone. it will be too busy trying to stay afloat itself." We had one of those out of control downward spirals back in 1929. It was worldwide, and almost every government attempted to take action. When people are in desperate economic straits, they
support any politics which offer relief..hence the attraction of communism for the poor, or
around 1929 the attraction of that
Adolf fellow. From a conservative standpoint, gov't need assist to
maintain it's legitimacy, eg. capitalist-based to keep from going
communist. Arguably this is what we did during the hard times of the 30s. On the other hand to stand by and do nothing is a great equalizer: everyone loses and all become poor. Which, according to
Matthew 19:24 would be a good thing. :)

The Griper said...

he grins at bb, no comment.

Mike's America said...

Does it strike anyone else as odd that the same folks who have been whining about the erosion of civil liberties in the war on terror would be the first to suggest we give up our freedom for the safety of cradle to grave government care?

The Griper said...

not odd Mike, just biased and prejudicial in regards to what they think we should give up.

BB-Idaho said...

It is hard to be as free from bias and prejudice as ol GOP Mike is. :)

The Griper said...

nobody is free of of biases, bb. mike's just opposes yours.

dcat said...

I hate giving up my hard earned money to taxes!!!


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