San Diego Housing Bubble News and Analysis

This is an audio of a radio show Obama did in 2001. Topic was wealth redistribution.

http://www.youtube.com/watch?v=iivL...ut...

John

Just what is it about human nature that some people feel that they have a right to take what I have worked hard for and give it to someone else? Kind of like the great idea that all of us should have to pay for someone else's bad decision to buy a house they knew they could not afford...we all knew this was coming. Some people just won't take personal responsibility for anything.

Not to be a liberal apologist but the underlying pricinple is that it's not just hard work, but intrinsic capability that determines success. In essence God hands out different quality brains with different capabilities. You ended up with a better-than-average brain, and thus better-than-average earning potential. The kicker is that you didn't do anything to earn it--you couldn't possibly have, unless you believe in reincarnation. So, as a society, those who undeservedly ended up with good brains are obligated to help those who undeservedly ended up without good brains.

Mmmmm... brains....

it's not about brains

it reminds me of my high school, I went to an inner city school with high teen pregnancy and high dropout rates. Not many students went to college.

My high school teachers would always talk about how many of us aren't smart enough for college.

College is not about smarts, it is about work ethic.

My brother in law has been in remedial classes his whole life. He has to study longer, and work harder to learn material. He has a college degree and makes pretty good money. He doesn't have many friends, isn't the brightest bulb, but he works hard, and makes good money. He took 5 1/2 years to complete college, but he finished, he's even thinking of working on his MBA.

Why should I or my brother in law work hard to make a good salary just to get taxed like crazy so my money can go to someone who is hanging out watching tv collecting employment (like my other brother)

Thats great about your brother. Nothing more warming then to hear about someone who overcame barriers to reach their goals.

John

Grapes vs Grape-pickers

In this world there are two main types of people: the grapes and the grape-pickers. Grapes are people who work for their living. They may work 2 or 3 minimum-wage jobs just to make ends meet, they may have worked their way through college like your brother, or they may be a doctor working of $100,000+ in med school loans. The vast majority of grapes earn under $250,000 a year. CEOs of large corporations, and there are about 500 or so of them, are the exception to this.

Then there are the grape-pickers. These are the guys who make their living off "investments", from dividends that roll in. They are the string-pullers, the ones who push for this law or that law, who move millions of dollars around which influences where the grapes can live, where they can work, and even if they get to work a decent job at all.

It was grape-pickers who engineered this subprime/ald-A/CDOs housing mess, and they made a lot of money off the little grapes they picked-- grapes who are now getting laid off, seeing their houses foreclosed upon, or both.

Grape-pickers make up less than 10% of the American population (probably less than 5%, actually) and have something like 50% of the wealth in this country. Obama proposes to "redistribute" the wealth from the grape-pickers to the grapes. The grape-pickers can well afford it-- as Warren Buffett, grape-picker extraordinaire, has happily told the media on more than one occasion.

And quite frankly, both server and homeless guy were grapes in this little scenario. Servers' wages are not much better than minimum wage; they need those tips to survive. The kinder thing in this scenario would have been to give the server his tip and give the homeless guy a $5-spot. Because as is pretty clear from the essay, the guy writing it was a bigger grape than either of them.

We all know by both tax plans that if you make over $112k, you'll benefit more with McCain's plans. Is $112k HOUSEHOLD income consider grape-pickers to you? If you make $112k, you're in the top 85% household income. So you must be wealthy right? I mean, you're richer than 85% of Americans.

Very ironic given the multi-trillion dollar tax-payer funded bailout of Wall Street tycoons.

If your little story reflected how the real world worked, the tip should have gone to the owner of the restaurant. After all, he's giving the waiter a job, the customer dinner and the bum outside gets to eat for free out of the dumpster.

We can talk back and forth about this all but when you historically look at tax plans, whenever there has been an increase in the tax rate there has be a decrease in the revenue brought into the Federal Government. The solution is not taxing the 10% of the population that already pays 70% of all taxes.

Oh and to Mister Grape and Grape-Picker. Obama's idea that $250,000 constitutes a Grape Picker is bull crap.

My GF and I make combined around $250,000. We will be hit by Obama hard. Are we "rich" living here in San Diego? Certainly not. And yes it pisses me off that Obama wants to take money from me and my girlfriend who have worked very hard to get where we are...taking out school loans to forward our careers, chosing to live below our means and not running ourselves into massive credit card debt...and then have it redistributed to someone who doesn't work as hard. Just because that's the "right thing to do".

The fact is in my career I am able to keep 100-200 people employeed just by doing what I do. Punishing me, in the long run, will only punish the people that work for me as I won't be able to expend as much capital, grow the business etc. etc.

since you're not married, you're filing singly. whichever one of you is making more than 160k will get the higher 36% rate, up from 33%. otherwise, you'll get nothing or maybe a little money back. either way, i'm sure you won't be forced into soup lines.

People who make minimum wage won't be forced into soup lines either. While people on welfare will get their soup for FREE. Mmmmm.... yummy soup.

So your brother gets unemployment now.

Yes, you are. If you make a combined 250,000 a year you are rich. I don't care how long it took to get there or how hard you worked. You may not have a private jet, but you are still rich. If you honestly don't think so then you live in a very tiny bubble.

It isnt about that at all. The issue is that these types of people see a public need and want to make life better. They always are able to see what their actions provide, but never what it costs. Obama, the democrats, and most of their supporters have two points of contention for those who support the system the most.

1) You can afford it.
You make alot of money (alot being subjective) and will have to sacrifice only luxeries to pay the higher taxes. So what if your vacation is to Florida instead of Fiji, you still get a vacation right? Some people dont get vacations, so be glad we are not taking more.

2) Everyone has basic rights, and it is GOV's job to expand those basic rights.
They see all the great things they can do, no matter if it is a really expensive (insert social "reconstruction" ideal here) or not. Any way it goes, they see a need and intend on filling it. If they have to fill it with your money, then that is no big deal, they always can fall back onto point #1 above. Remember, they are making things 'better' and will never see the costs their "improvements" really have.

Full disclosure: I am a staunch republican in the libertarian sense. I strongly oppose Obama's socialistic bent.

I will still vote for Obama. Neither candidate wants free markets. McCain stands for more of the same as the Bush administration has given us: deficit spending, sneaky taxation through monetary debasement, expanding militarism, suppression of civil rights, and appointment of complete incompetents (Michael Brown, etc.) to important posts (Sarah Palin).

All the criticisms of Obama are well founded. Those points do not make the valid criticisms of McCain as a horribly inferior alternative any less valid. The point made above that Bush (and McCain) would give the tip directly to the restaurant owner is spot on, except not extreme enough. The tip would go to the owner of the horribly mismanaged restaurant down the street with lousy food and worse fiscal savvy. Of course, this failing restauranteur would be great friends with McCain and would give McCain $1 out of every $5 received...

I've heard it put best: I did not leave the republican party; the republican party left me.

It is not government's job to expand basic rights...read the constitution. Life, liberty and the PURSUIT of happiness...not the guarantee of happiness. Equal opportunity does not ensure equal outcome. Many times, the smart people do not succeed, whereas the people who are not as smart become great successes. I personally know a Orthopedic surgeon that got into drugs and lost his medical license...and yet, when I went to high school, there was a girl in school who was not very bright. No one thought she would make anything of herself...BUT! Just google Shari's Berries and see where my friend Shari is today...one of the largest and best chocolate dipped strawberry companies in the world. It just takes good ideas and a bit of courage, and anyone can do it if they go after what they want. It is not always the smart folks who succeed.

All the rights outlined in the declaration of independence are natural rights. They are rights conveyed to EVERY person by virtue of their birth. The exercise of these rights by an individual does not necessarily affect anyone else and is only prohibited at the point that one person's exercising their rights infringes on another's ability to do so. That is why murder is illegal...me murdering another infringes on their right to life.

However, many of the 'rights' that politicians are touting now are nothing of the sort. There is no 'right' to health care. There is no 'right' to own a house or to shelter in general. There is no 'right' to food. As (an arguably) enlightened society, we may desire to provide these things for as many people as we can, even if they can't provide them for themselves but it is erroneous to refer to them as 'rights'. They are nothing of the sort.

The assertion that these are 'rights' is at odds with the natural rights outlined above. The exercise of these new 'rights' suredly means that someone else has their rights abridged or infringed in order to provide them.

Consider healthcare as a right. It should be provided for anyone regardless of their ability to pay? Who shall provide this care? The doctor or nurse? Shall they work for free? Shall they be told what they can earn or where and how they can work (we already have our quota of doctors in San Diego, you can't practice medicine here)? Shall the doctors, nurses and hospitals be paid by the government? With taxes? That means that someone else has had the fruits of their labor confiscated to provide a 'right' for someone else. This doesn't meet the test for a natural right. Exercise of this 'right' requires that someone else's rights are infringed.

I totally agree...when they ask me to pay for someone else's healthcare, I want to be able to monitor what they eat, drink and smoke. I'm not paying for someone else's gluttony. I also want to make sure they spend at least 30 minutes a day excersizing, don't drive motorcycles...the list goes on and on. Health care is not a right, it is a personal responsibility.

That's the problem. Because healthcare is so expensive now, it prevents people from preventative care. So it ends up costing us more in the long run anyway (via higher premiums).

The idea is that if we have less un-insured, more people will be seeking healthcare so that problems can be caught and treated early - before they are terminal and/or exponentially more expensive to treat.

But that's not really how it played out in real life. Just look at Canada to see what happens when everyone have free healthcare. People know it will cost them nothing to go to ER and since the wait is so long to get an appointment with a PCP, people just go to the ER for just about anything. Which causes over crowding in ER. I also hear horror stories of people waiting in the hall ways of the hospital waiting for a room because the hospital are also overcrowded. Some even get treated in the hall way and some even died in the hall way. If you want to see a specialist, I hear you'd have to wait 3-6 months after you see your PCP to see a specialist.

I blame the lawyers as one of the main reasons for our high healthcare cost. It doesn't make financial sense to become a regular doctor anymore. Even when you make $200k/yr, your malpractice insurance are in the 6 digits. If you get sued once or twice, you can no longer practice. Imagine if you spent hundreds of thousands and over 10 years to get your MD, only to render it useless after a few years. My wife is in the healthcare field and she's worried that by the time we're old, we won't have many good doctors to choose from. The only lucrative MD are surgeons, so everyone want to be a surgeon. It's not cost effective to be a regular MD. So you have less regular doctors and increase amount people looking for healthcare since it would be free. You can draw your own conclusion.

asia,

Isn't there a free market solution to that problem? Build more hospitals, hire more doctors, etc..

How can you hire more doctors if no one want to be a doctor? You can't create doctors out of thin air. Building more hospital is a definitely solution. The question is though, if it's so profitable to build hospital, why don't we already have more hospital and single bed rooms. Unless the government also want to go into the business of building and running hospitals. It's neither cheap, easy, or cost effective to build more hospitals quickly.

Here's a novel idea, offer health insurance for catastrophic illness only...cancer, accidents, major surgery, etc. Everything else we pay for out of our own pockets. We would then be inticed to shop around for a good general doctor at a good price. General docs would not have to haggle with the insurance companies, bringing down the cost of the office. Make it OK for a nurse practitioner to diagnose things like kid's ear infections, most of the doctor's visits I had when my kids were little were ear infections...that would save a lot of money. If they have to refer you out of the general office, then insurance would be used.

The solution to health care is relatively simple - redefine the role of doctor, and pubicly fund it.

For 80% of all medical procedures/visits, a nurse practicioner is adequately trained. 10 years of med school and residency is not required to set a simple fracture, or treat a cold. Reduce the investment in "Dr." and reduce the price.

Private medical insurance has not lived up to the high ideals of "privatization". We have seen no innovation, no cost reductions through productivity increases, nor any capital efficiencies pushed into the industry. Each year we are seeing cost increases of 25% and more. This is hardly a great track record. The state could not be any worse.

When you start to look at the embedded capital costs created by privatization of true "Non-profit charitable Hospitals" you see where the giant increases in costs comming from. As a child I broke my arm. The doctor at the hospital emergency room set it and put on a cast after x-rays at a total cost of $100.19. This was done at a church hospital run by nurse/nuns Recently when my nephew did the same, the cost was closer to $10,000.00 The hospital for my nephews treatment was a former community hospital sold to Blue Cross, then resold three more times to "Private" non-profit entities owned by Caremark among others. Each time the "profit center" was repriced upwards creating new debt to be loaded on the "non-profit" entity. The end result, 25% year over year price increase to service un-necessary capital ocsts.

It's funny. Everyone wants free education and free healthcare; when's the last time you REALLY appreciated something you got for free?

Free education? Who cares if you don't study or get crappy grades? You're not paying for it. No parent's can nag you to do better in school or they'll cut off their funding. There's no incentive to accel. I know that when I was paying my tuition in grad school that I paid a hell of a lot more attention in class than when I was in school as an undergrad and was getting loans and grants. Something about having to sit down and write those multi-thousand dollar checks shocks you into reality. I wanted my fricken money's worth.

Similarly, since I am paying for my own health insurance now (full freight) and have a high deductible health plan to qualify for an HSA, I pay the whole nut on doctors visits, not some $10 copay. As such, I don't waste my time and money (as well as the doctor's) going to see him if I have a cold or flu...unless it degenerates into something more serious or doesn't go away within a week or two. If he prescribes something that won't help me get better faster or is solely for 'pain' or something else, I have to weigh whether I can live with the pain until I'm better or if it is worth $50 for the prescription because I'll be paying for the whole thing.

In other words, when you are spending your own money, you tend to be a little more discriminating than when you are either a) spending someone else's money or b) getting something for free.

More than anything, I feel that people need to have some 'skin in the game' with regards to these things or they'll typically abuse them.

And, frankly, if you can afford to have a flat screen tv, $100 sneakers and $200 jeans, you can usually afford to buy health insurance, if that's your priority. I see way too many people complaining that they can't afford health insurance; it's not that they can't afford it, it's that they'd just rather spend the money on other things. Yeah, me too. I'd rather spend my money on other things than paying for your health insurance because you have different priorities.

manmom, I think this is right on target. Excellent approach to the healthcare problem. Wish it would received more consideration.

With regards to the 'Obama is a socialist' line being explored here, would any of the GOP types on this board like to explain the difference between socialism and government re-distribution of oil revenues in Alaska?

Hard to reconcile the contradictions, isn't it?

I go to a PA and the one I go to has excellent skills. You would have to limit malpractice suits because if you give primary health care for routine matters over to PA's then they will begin to get sued as Docs are now. We have to get the lawyers out of health care if we ever want the costs to be reasonable.

I say do away with insurance, get rid of lawyers and let the Docs compete on price and service.

I had disc surgery in 2001 on my lower back. I had no insurance. The Doctor had his secretary call around and get bids on use of an operating room and a 24 hour stay. I got the MRI at half price because I paid cash and the Anethesologist also gave me half off since I paid him up front. The Orthopaedic did it for $2k, the fee under insurance would have been $5k.

All total the operation cost $6750. It was $3350 for the room. When I paid the clerk upon admittance she told me that I would be getting a bill for $10k in the mail because that is what they would have billed the insurance company had I had insurance.

If I had paid insurance rates the whole thing would have been around $20k.

I say just let everyone compete and get rid of the stupid lawsuits and insurance companies.

John

My idea for wealth distribution.

Every tax bracket gets a 10% (i.e., if you are paying 10%, now you pay 11%) increase, except the lowest one.

Everyone that files a tax return gets a quarterly bonus drawn from the 10% pool of income taxes of the bracket above them (except the uppermost bracket).

You can do whatever you want with the bonus, buy health insurance, eat fancy food, drink booze, invest it, give it to charity, whatever.

This accomplishes a couple things:

One: it gives an incentive for the lower classes to get at least one legit job so they can get the bonus check. It disincentives illegal labor and encourages payment of taxes.

Two: It leverages the free market to optimize social services. I can choose to buy whichever medical/dental plan I want with the bonus, for example.

Three: It improves the economy, by keeping wealth circulating domestically; as opposed to going overseas. The lower classes will tend to spend their bonuses pretty quickly.

LOL so you are going to vote for Castro Jr even though you are libertarian?? Socialism is the opposite of libertarianism. Something doesn't add up with your post.

John

This is a comment regarding the original thread post.

If anyone thinks that insulting someone who serves them food is a good idea, I laugh at what stuff you have eaten in your life.

During college, I worked as a waiter. Make no mistake. The one who handles the food you put in your mouth has the ultimate control.

If someone gave me bad service I would give them 15% instead of 20% and mention it courteously and briefly. If it was terrible service, I would stiff them and then never eat there again.

If you think that going to a different server is a good enough measure, think again. Servers tend to party, drink, and sleep together. They certainly know which clients are pricks.

I recall one rude gentleman that thought it appropriate to lecture our staff on wine tasting and etiquette. He drank nothing but red Gallo cooking wine (in Chateauneuf-du-Pape bottles) for a year. He never knew about it but we got our revenge and usually a tip afterward.