An example of why the wealth gap will continue to widen

One day I was sitting around on the internet and I found somewhere in China where you could buy decent quality stuffed teddy bears for 10 cents a piece in lots of 1000. The little 4 inch kind.

Anyway, so I started thinking about this for a minute and during the mind exercise(yes, Conservatives do engage in them) I began to meld this into globalism and I had a theory come to me.

Imagine that a guy living in NYC buys 1000 Teddy bears from China.

Now Imagine that the guy living NYC, has a cousin by marriage twice removed who he facebooks with who happens to live in South Africa.

Now, he facebooks his counsin twice removed and they decide to go into business buying teddy bears for 10 cents a piece in China, and selling them in South Africa at 25 or 50 cents a piece.

They hire a couple S. African Seamstresses to make cool stylish clothes for the bears at 2 bucks a day, and the begin to sell them.

Now this American living in NYC is leveraging technology and globalism to have a group of teddy bears made in china, and sold in south africa, without ever having touched American soil in anyway. He's merely a middle man.

Now, imagine the Teddies take off in America too, and he sells a bunch here in the States. Yes, the American market is nice, but his real market is in Africa, not in the States(unless the bears reach beanie baby fad status)

So this guy without needing a single expensive American worker to make the bears.. is getting rich without creating a single job in America.

Is this business owner a bad man? Why should he be punished for being smarter than the average shlub on the street looking for a job making teddy bears?

It just seems to me, that globalization isn't one of those things that we can "turn off" with protectionism and confiscatory taxation and that seems to be the impulse on the left, to squash free trade.

As long as a man can buy teddies in China and sell them in Africa without ever leaving his NYC flat... the wealth gap will widen in America.

 

And this is why his taxes must be raised. Contrary to what your kind thinks we are not a nation of every man for themself.

 

You are hitting the nail on the head. The middle class is not assigned the 'duty' of serving the wealthy; they are PARTNERS in the whole of this, not "masters".

 

Oh!! So now finally, when confronted with an actual small business scenario that works.. Now this man must be confiscatorily punished?

Just what would you do with this money?

You see, chances are he already pays State taxes.

State taxes cover his roads, his schools, his fire, his police, even his trash(when you lump in local taxes)

Virtually every piece of infrastructure he uses everyday is provided to him by his State, not the Federal Government!

I have never once questioned the level of Taxation in Ohio. It is just and fair, and takes a few hundred dollars a year out of my paycheck. The sum is so paltry that I don't even bother to file a return. I just let the Government keep it.

Now, lets contrast this with the thousands that the Federal Government takes for redistribution on a nation wide scale.

You sir, are and advocate for thievery. I'm not saying this man shouldn't have a modest tax burden from the Federal Government(25% imo). But you advocate outright theft and punishment for him leveraging intellectual property.

He doesn't owe you anything, he created his business on his own without your help or even knowledge. Who are you to demand he pay you? He owes American society nothing for his success, and you are saying he must pay society anyway just for the mere privilege of existing. That is the most disgusting piece of ideology I have ever heard of.

 

The wealth gap that's decried by the Left is not necessarily a bad thing in itself. Wealth gaps mean that there is social mobility and opportunity, especially once it's demonstrated that between the richest rich and the poorest poor there are many levels of success in between. There will always be a gap between rich and poor in every economy, but the gap that's disturbing is the one that has a vacant chasm between rich and poor, which happens in dictatorships and communist nations.

Now what happens in the U.S. is that the gap is artificially aggrandized not because the rich are getting richer, but because the poor are getting poorer. With the unchecked influx of illegal immigrants, the poor are overrepresented because of the millions of poor people that shouldn't even be here. Any discussion about the American income gap is queered because the bottom of the income scale is indefinite. In comparison to other nations that actually enforce their immigration policies, we do look worse, or more greedy.

But if Sweden, held up by the Left as a paragon of working socialism, were to adopt our non-enforcement policies regarding immigration, you'll see their gap widen too.

 

"They hire a couple S. African seamstresses to make cool stylish clothes for the bears at 2 bucks a day, and then begins to sell them. Now this American living in NYC is leveraging technology and globalism to have a group of teddy bears made in China, and sold in South Africa, without ever having touched American soil in anyway. He's merely an ingenious middle man."

You are very mistaken, Montoya

This fellow made his profits in South Africa, not in America. Consequently, he should not have to pay any income taxes here in the USA.

The message is so matter how hard the socialists try to confiscate wealth from working Americas they will work hard to find a way to avoid these taxes and invest their savings back into their small businesses!

 

He lives in America therefore he pays taxes to America. He is a parasite has has taken advantage of slave labor and profited from it. Yes his taxes should be at least 42%. Now the man who does his business in America should pay a lower tax rate. The other man should recieve no breaks, no incentives. He is simply taking advantage of everyone else.

 

Economies, and hence nations, don't run on such lame moral sentiments. It's business, never personal and by paying a couple seamstresses 2 bucks a day, he is raising the quality of their life. That's charity the capitalist way.

 

Fact is everyone wants to do business here. Companies are not going anywhere as contrary to the GOP fear spreading. Setting punishment taxes on those who outsource is completely patriotic and frankly 85% of the entire country wants it done....Or at least higher tariffs. Once again America is not a free for all nation. We are a collective nation weather you like it not.

 

I pretty much agree with you, Silicon, although I would take issue with you saying that the left's impulse is to squash free trade. It seems to me that as often as not it's conservative Tea Party types who rant about how evil China is, stealing American jobs, etc, as otherwise. But I think it's more important to work together on a solution then debate which side of the aisle has more knee jerk protectionists.

We need to make the US an attractive place to do business, and make us competitive with places like China, right? But I don't think trying to compete on the basis of having cheap unskilled labor is a good idea. After all, importing China's poverty so we can export cheap nick-knacks is kind of self defeating, don't you think? If we want to maintain our standard of living, we have to specialize in providing things to businesses that impoverished areas can't. Like a highly educated and skilled workforce. Like world class infrastructure. Like cutting edge research. After all, in your example, what allows your teddy bear tycoon to make money is the US's superior infrastructure (notably the internet) and the skills to use that infrastructure. What we need are major commitments to infrastructure and education and research. And yes, that means levying the taxes to pay for them. Otherwise, we'll just be stuck in a race to the bottom.

 

you are very correct, SiliconMagician.

The socialists who work for the Obama administration what to confiscate the wealth of working Americans so people like Montoya and Johnny-C can sit on their duffs all day, drink cold beer all afternoon and contribute absolutely nothing to the betterment of our society!



For some reason, when the government takes money and personal savings from successful working Americans by forcing them to pay higher and higher taxes, in the mind of a liberal this somehow is not "theft"!

 

You are correct, and the American people (as a whole) will SEE it in due time.

 

This doesn't increase the wealth gap. Indeed, when this man uses the dollars earned in Africa to buy food in his local grocery store he helps pay the wages of the people there. Now the question is why have real wages been falling? That is where the wealth gap stems from, not international trade (although the rhetoric of trade and competitiveness has been used as a stick to beat down wages especially here in Ireland).

 

Because the job of making teddy bears, which would drive their cost to far above a mere 10 cents a piece, is no longer available here in America. So instead all that are left are jobs at the grocer.

That is why. Not everyone is going to win in the Globalized economy, but attempts to tame it will merely destroy the chances of winning for everyone.

 

Absolutely not, Montoya!

If he did not earn an "income" in America, he should not pay "income" tax in America. However, he does pay state sales taxes and that is all he should be required to pay!

Patrick-T said it best!

"You don't understand, Silicon. Parasite like Johnny and Montoya feel quite justified in stealing what the man made. That's way Johnny and Montoya can sit on their ass and drink beer and do nothing."

 

Nonsense, look up comparative advantage.

Those people who would have made teddies now find different employment.
Sure there are winners and losers, some losers may even be long-term losers but this is not necessarily connected to the wealth gap and is not a major determinant.

In the U.S., due to the p-iss poor condition of the labour movement, poor social protection and a large amount of low-skilled labour we would expect to see rising income inequalities. However, in countries like Germany (where trade counts as a higher percentage of GDP) we expect to see either no major effect or perhaps equalisation.

http://www.cepii.fr/anglaisgraph/workpap/pdf/2005/wp05-17.pdf

Abstract:
"This paper reconsiders the evidence concerning the influence of international trade on
income distribution. Our analysis is based on a theoretical model which does not make any
restrictive assumption about how trade specialization is linked to factor endowments. In this
framework, the influence of international trade changes on income distribution is captured
by a specific definition of the factor content of net export changes. Our main empirical
finding is that the factor content of net export changes, expressed relatively to the country's
factor endowment, does have a significant impact on income distribution, but the sign and
magnitude of this impact is conditional on country’s income level or on the share of noneducated
in the population."

 

Absolutely correct James.... but you are missing the mentality behind it. People that think as Montoya does, believe in what they call a level playing field. But what they really mean by that, is that no one beyond average intelligence, average strength, and average ability, is allowed to play.

Deep down, they believe it is inherently unfair that some people were born smarter, faster, more good looking, or just more able... than they are. Rather than pushing themselves to achieve in some area or another in their lives, they have taken the complete opposite point of view. Not that they should endeavor to become smarter, more business savvy, learn more skills (via education, hard work, etc), but others that are more able, are brought down a peg or two... so that they... and everyone else can "keep up".

They honestly believe that anyone that has more than they do has "stolen" something from them somehow. As if me earning more money than they do, I have taken money that should be theirs.

It always comes back down to this simple question. If the "workers should run the factory" then how come the workers do not go off and start companies of their own? It would be a lot more profitable right? Why would someone make less money on purpose? The fact is.... that they can't do it! They are not intelligent enough, or brave enough to do it. So they remain in the jobs that they do. No one is stopping anyone from going off and starting their own companies. No boss is keeping any worker hostage. If the worker can find a job making more money somewhere else he will leave, and there is NOTHING the business owner can do about it. If the worker does a crappy job, and the business owner fires him, there is nothing the worker can do about it. It is completely voluntary to both parties.

Stop whining about it, and if you do not like it.... start a company of your own! And then you really can run it any way that you like! If you want to start a company and give each employee a share in the stock... go for it! No one will try to stop you.... I promise....

It really is laughable sometimes. Do the construction workers get to set the price of the homes that they are building? Do the yard people that I pay to maintain my yard, get a share in the profits (or losses) if I choose to sell my house? So why should the workers in a company get to tell the management how to run THEIR business? They do not own it.... and that is the difference....

 

We are all on the train with the Corporations/Business to the race towards the bottom. All Aboard! The first nation who gets down there wins! America is in the lead too

 

You are very correct, Raskolnikov.

Are you familiar with the "broken-window fallacy"? Unfortunately, Obama and most of the socilaists who work in his administration believe in this fallacy.

"In his 1848 essay, "What Is Seen and What Is Not Seen," French economist Frederic Bastiat termed this the "broken-window fallacy," a reference to a local myth that breaking windows would stimulate the economy by creating window-repair jobs. In reality, the window-repair spending comes out of funds that otherwise would have been spent (and created jobs) elsewhere in town. Today, the broken-windows fallacy explains why thousands of new stimulus jobs are not improving the total employment picture."

These reviews were also very good!

 

Cessna, while I generally abhor your posting style, I will respond.

The broken window fallacy is interesting but it relies entirely on Say's Law. If we are in a liquidity trap it falls apart. There are also other considerations.

 

You are very correct, armor99!

Your remarks are very sincere, directly to the point and well crafted!

These comments were very good and indicated a lot of insight on your part!

 

~_~ How exactly did we go from discussing free trade to ranting about the social safety net?

The states generally do a crap job of maintaining the infrastructure. For that matter, the states generally do a crap job of most everything. In my experience, if the agency's acronym doesn't start with US-, you can forget about competence. The incessant budget cutting in Washington for decades has resulted in a major drawback in federal funding for infrastructure, and the result is that the American Society of Civil Engineers gives US infrastructure an overall grade of D, and estimate that it'll take at least $2.2 trillion over 5 years to get things up to a level of minimum acceptability.
http://www.infrastructurereportcard.org/
This also results in things like the I-35 bridge collapse in Minneapolis in 2007. Just a reminder, the I stands for interstate, which means it was built and maintained by the federal government, and it was a lack of federal money for basic maintenance that led to the collapse, even though the bridge was known to be structurally deficient.

It was the federal government that sponsored the transcontinental railroad. It was the federal government that did rural electrification. It was the federal government that built the interstates. It's the federal government that keeps the airports running. Heck, if it were up to the states, the best way to get from the East Coast to California would still be by Conestoga wagon.

Sorry, I'm done ranting now.

If you don't believe in a social safety net and think that social security and medicare and medicaid and unemployment insurance and food stamps and all the rest should be abolished, fair enough. But come out and say it, don't hide behind code words and slogans like smaller government and lower taxes. And don't conflate it with things like infrastructure spending.

Incidentally, your teddy bear tycoon doesn't really have a working business plan. Unless the person is South Africa is dead stupid, they'll undoubtedly figure out how to get the bears directly from China without the middleman. Granted, it's just a thought experiment, but still...

 

It's too bad that the rest of the world do not simply make teddy bears. Technology is hitting the high seas as well, so the trickle up poverty is creeping into the middle class along with the lower class. The leftists aren't for any sort of protectionism, they've had their chance to do something and haven't done a thing, proving they are also global megacorporate tools.

Take for example how they attack southerners who say "Mexicans ar taken ar jobs." Why yes, they are. Also consider how much the left values the UN, the EU, and globalization in general, mostly involving environmental regulations at this point.

Screaming "protectionism" about any ideas that would attempt to keep jobs in America is just a cop-out when there are numerous ways that we can cripple the offshoring. Globalization is the #1 detriment to the American standard of living.

 

Conservatives want to “lift” the human spirit. Liberals just want to give people a free government handout! This policy only keeps these people beaten down and despondent because they know they are parasites and leeches who have produced nothing and contribute nothing at all to the rest of society.

We used to be a constitutional republic. Today, given the amount we spend on entitlement programs, we more or less resemble a government-owned and government-directed plantation estate!



Uncle Sam's Plantation 1939-2011 Democrats have been running our inner-cities for the past 30 to 40 years, and blacks are still complaining about the same problems. More than $7 trillion dollars have been spent on poverty programs since Lyndon Johnson's War on Poverty​ with little, if any, impact on poverty. Diabolically, every election cycle, Democrats blame Republicans for the deplorable conditions in the inner-cities, then incite blacks to cast a protest vote against Republicans.

In order to break the Democrats' stranglehold on the black vote and free black Americans from the Democrat Party's economic plantation, we must shed the light of truth on the Democrats. We must demonstrate that the Democrat Party policies of socialism and dependency on government handouts offer the pathway to poverty, while Republican Party principles of hard work, personal responsibility, getting a good education and ownership of homes and small businesses offer the pathway to prosperity. Conservatives want their taxes to grow the economy. This creates new jobs so people on welfare can go back to work.

 

NetworkCitizen, are you aware the liberal Democrats and the Leftists in our country also believe in and support "trickle down" economics?

Yes, it is true. They truly believe if we raise taxes on the wealthy to a sufficiently high rate, some of the money the government collects from them will actually "trickle down" and help the poor!