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International-UN-NGOs
"Are the Rich Necessary?"
2007-09-16
At a time when a CEO of a large U.S. company is likely to earn in one day what the average worker does in a year, an investment adviser takes the income-disparity controversy a few steps further in "Are the Rich Necessary?"
Nice Tranzi wankfest, here. As you read thru this article, take note of the number of different viewpoints actually encountered.
That question, almost unthinkable in a capitalist society, is one of many that Cambridge Associates LLC co-founder Hunter Lewis poses in his latest book (Axios Press, $20). Lewis, the author of "A Question of Values" and "The Beguiling Serpent," also looks at the profit motive, its effect on democracy and society, and the roles government and central banks should play in wealth distribution.

"Are the Rich Necessary?" offers no simple or even definitive statements on these complex issues. Instead, Lewis presents a cross-section of often divergent viewpoints, in keeping with the book's subtitle: "Great Economic Arguments and How They Reflect Our Personal Values."

These are generally arguments with no clear winner.
Except authors of books and tenured university professors.
Theory #1
On the question of whether the rich are necessary, for example, one school of thought considers them decadent parasites who reap the harvest sown by those less fortunate than themselves.
I think we oughta outlaw that fickle 'luck' nonsense. Luck just isn't fair. Or progressive, for that matter.
Theory #2
But another theory contends that any government seizure and redistribution of the fruits of that harvest would cause buyers to disappear and prices to plummet.
Just like it did in Zimbugabe. Except that inflation there is at least 7,500% and the buyers will disappear when they starve to death.
Theory #3
There's also the concept that the wealthy are both outnumbered and outgunned financially by the rest of society. As a result, the average consumer rules, and millionaires and billionaires are mere public servants, trustees or social agents, although Lewis acknowledges that such a view might surprise even the deep-pocketed.
See: Theory #1
Theory #4
In terms of the profit system, some consider it unfair and inefficient, pitting employers against workers. Others say the quest for earnings leads to increased supply and lower prices, benefiting people who have to watch what they spend.
Not yet seeing much disagreement among any of the "theories".
Many theorists advocate progressive taxation -- in which the rich pay more -- as a way to ease the effects of income inequality, but Lewis sees great promise in expanding the nonprofit sector, an area in which he has decades of experience.
But strictly as a volunteer, yes?
He helped start Cambridge Associates in 1973 after working on a review of Harvard University's investment approach, and nonprofit organizations are still the firm's main client base. He has also sat on board and committees of 15 not-for-profit groups.
Cambridge Associates' stated estimated annual revenue: a few bartered chickens and a solar-powered Juice Tiger $50-100 million
Philanthropic associations could take over many government functions, such as social services, health, housing and education, Lewis writes. The government could either fund these groups directly or encourage the wealthy to do so with tax credits. One scenario, he said, would be a simple income tax with only a few allowed deductions. The poor would be fully exempt, and the initial tax bracket would fund the government.
Thereby balancing the budget on the backs of the working class. Just like EVERY TAXATION SYSTEM IN THE HISTORY OF MANKIND.
There would also be one or two higher brackets for the rich, who could either pay these additional taxes directly to the government or receive a full tax credit by donating the same amount to Cambridge Associates LLC registered charities.
I believe that's what we have in place now, it's called 'tax shelters' and ensures that Ted Turner and Sam Donaldson get fat government checks every year.
An estate tax whose revenues would go to Cambridge Associates LLC nonprofit organizations is another possibility. Enlarging this sector, which now accounts for only about 8 percent of the U.S. economy, would mean more money would flow directly to the needy, Lewis said.
How? Who does the oversight? Maybe oversight isn't necessary. Nobody ever steals the money to buy hookers vacations cars or jihad when they know it's For The Children.
He also sees philanthropic organizations as more creative and responsive to the people they are trying to help. But even here, he is careful to list possible objections, such as an aversion to donations as government policy and concerns that charities could become bloated and inefficient.

Still, he sees the nonprofit approach as one way to bring the various economic factions together.

"An expansion of philanthropic values," he writes, " ... could offer a way forward out of the old, bitter, and often sterile economic quarrels of the past."
Posted by:Seafarious

#17  Without the first, our nation and Western civilization is toast.

Absolutely, DMFD! The other two categories of people you mention ride on the shoulders suck the blood of giants and—not incidentally—ourselves as well. Anyone who wants to argue about this should first read "Atlas Shrugged".
Posted by: Zenster   2007-09-16 19:13  

#16  Is tenure necessary?
Posted by: Excalibur   2007-09-16 19:03  

#15  Zenster - I think the Western rich can be divided into three groups. There are the entrepreneurs who create new companies and sometimes whole new industries. There are the bean counter / bureaucrats who replace them and often enrich themselves while running the companies into the ground. Then there are the children of the rich, some of whom form the core of the loony left (while living on their trust funds).

We can easily live without the second two groups. Without the first, our nation and Western civilization is toast.
Posted by: DMFD   2007-09-16 18:33  

#14  Theory #1: On the question of whether the rich are necessary, for example, one school of thought considers them decadent parasites who reap the harvest sown by those less fortunate than themselves.

As Thrineng Munster6911 observes, this is pure zero-sum balderdash. Those who become rich by genuinely creating wealth deserve every penny of it. Bill Gates is a poor example due to his success having relied upon monopolistic and predatory business models. However, the issue of CEO overcompensation is one that really does need to be addressed. A standard practice among newly hired CEOs is to cut expenses by immediately eliminating the most senior—read: highest paid— workers. This supposed cost-saving measure is one of the most damaging there is to the vast majority of businesses.

It remains a simple fact that an overwhelming number of companies have poor quality documentation. Too often it results from an attitude of; "Get the job done and worry about documentation later." This sort of shortsighted management is incredibly toxic to real productivity as it inhibits expedient streamlining of manufacturing processes. This in turn inhibits ROI (Return On Investment) based upon legitimate increases in productivity and decreased cost of manufacturing. It remains a simple fact that—in nearly every case—the cost of labor is a tiny fraction of overall expenses and even a significant reduction in workforce generates little to no actual increase in true profitability.

Lack of adequate documentation automatically engenders the growth of "tribal lore" amongst workers with respect to methodology and solutions. This knowledge usually concentrates in senior employees and is forever lost in the usual initial round of cost-cutting layoffs. While a CEO may appear to have reduced expenses—excepting his own, of course—in reality this attempt to weather economic downturns leaves companies completely crippled once the marketplace recovers. Bereft of seasoned talent, labor costs and operating losses soar due to poor outgoing quality, expensive rework to correct the mistakes of new-hires and NRE (Non-Recurring Engineering) costs related to recapturing the manufacturing knowledge lost by reductions in the experienced workforce.

None of this stops the new CEO from being awarded lavish stock options and bonuses despite having gutted the company's talent pool. Even incompetent CEOs are rewarded by massive "golden parachutes" inserted into hiring contracts to lure them into joining the firm. Anyone who doubts this need only examine how Michael Ovitz was given a 90 million dollar severance package for 14 months service at Disney Studios.

Any significant compensation to top executives must be tied to long term profitability and viability. This is rarely the case and thereby encourages artificial "turnaround" strategies like the one mentioned above. The damage done to the working class and society in general by CEO overcompensation cannot be overstated. It is absolute poison to the growth of overall wealth and is a direct byproduct of a corrupt and self-shielding “good old boy” network that exists within the top echelons of America’s executive and political community. Through their collusion they have become a traitor elite that threatens the very survival of our nation’s economy.
Posted by: Zenster   2007-09-16 16:24  

#13  The problem with this is that these people believe this crap. At some point, the moonbats will have to be dealt with. The West will not be able to settle with Islam until it sorts out the moonbats.
Posted by: SR-71   2007-09-16 15:57  

#12  From my quote file. No attribution and I'm too lazy to search. It seems appropriate here.

"In a perfect world, we'd all lie blind and motionless in stacked coffins filled with pudding. It would be dark and warm and nobody would have to compete with anybody and also the government would pay for the pudding."
Posted by: SteveS   2007-09-16 14:38  

#11  Al, honey, they never do.

It's so much easier to just feel superior whine and theorize and pontificate.
Posted by: Barbara Skolaut   2007-09-16 13:34  

#10  The advocates of these theories have obviously never tried to put one of their "great ideas" into action.

The luck involved in creating a multi-million (or multi-billion) dollar businss is just about zero.

Al
Posted by: Frozen Al   2007-09-16 13:28  

#9  As I ponder this question, I see the title of the book is actually:

Are the WESTERN Rich Necessary?
Posted by: Seafarious   2007-09-16 10:15  

#8  Viva la revolucion!
Posted by: Matt   2007-09-16 10:09  

#7  I wouldn't use Bill Gates as an example - him and his company gained their rise through theft and lies. He has more in common with Carnegie and the other robber barons of the Gilded Age than any real entrepreneur.
Posted by: gromky   2007-09-16 08:32  

#6  Personally I like geonomics.

It solves these problems,
with
a) No punishments for financial success.
b) Land value tax to fund a citizens dividend.
Posted by: Bright Pebbles   2007-09-16 08:07  

#5  In some people's worlds, it'll always be July 14, 1789.
Posted by: no mo uro   2007-09-16 07:03  

#4  The profound idiocy of the titular thesis can best be exposed by the counterargument that the level of wealth in the world is not zero sum - it is expanding in the aggregate due to the extraordinary efforts of individuals who seek extraordinary profits in return.

To take one of the most glaring examples, Bill Gates has not stolen money from others to amass his fortune. He has been disproportionately rewarded as a byproduct of making a great many people wealthier as a result of his efforts.

This type of argument also sounds like a precursor to the complete government confiscation of wealth upon death, just another step leading back toward the vassalization of the citizenry in thrall to the state.
Posted by: Thrineng Munster6911   2007-09-16 04:00  

#3  Deuteronomy 15:4
Posted by: Besoeker   2007-09-16 01:16  

#2  "also looks at the profit motive, its effect on democracy and society, and the roles government and central banks should play in wealth distribution"

I think they should start by completely redistributing any wealth Mr. Hunter Lewis has - as well as all the wealth of anyone who agrees with his claptrap philosophy.

I'm sure he'd agree that the fruits of his $20 book shouldn't go to him when there are far more Deserving Folks™ out there like me, for instance - and definitely Fred ....
Posted by: Barbara Skolaut   2007-09-16 00:26  

#1  Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.
This is known as "bad luck."

-- Robert Heinlein
Posted by: DMFD   2007-09-16 00:24  

00:00