Thursday, November 29, 2012

No Work, No Reality

Clearly there are enough Americans who have rejected the libertarian argument against forced redistribution.  You can be opposed to redistribution on the normative grounds of freedom and fairness, and if so there is no need to prove such policies are counterproductive.  But if you think on normative grounds that it is imperative to use government compulsion to help the poor, you are nevertheless on the hook to prove that such policies achieve the intended effects. (Unfortunately, the possibility of expressive voting may mean that in fact you’re never on the hook to prove that the policy that sounds compassionate on its face is compassionate in its effects.  But in the spirit of priming you for some informed retrospective voting next time around, let’s ask ourselves how effective government policies have been in caring for the poor, and how likely it is that their extension or expansion will work as intended.)
A recap on last week’s post: increasing taxes on the rich to supply more bennies to the poor reduces the supply of labor for both the rich and the poor, reduces the demand for unskilled and skilled labor, increases the number of people on the dole, and requires increased taxation for those below the initial rich targets.  We know that increasing the welfare state has negative tax and employment effects for the rich and most likely the middle class.  It also dampens the demand for, and the supply of, unskilled workers.  For all of that, suppose you’ve still come to the conclusion that it’s all worth it given the plight of the poor.  
In order to come to this conclusion, I think you have to believe that prior to the increase in the welfare goodies, there were people who didn’t qualify who were suffering significantly.  The reduction in both labor supply and labor demand for unskilled work means that many of those added to the welfare rolls would have otherwise been employed – to argue for the expansion of the dole, you have to believe that is for the best that these people leave the market and enter the soup line.  But it is more likely that many of these people, via the substitution effect, have chosen to have less income under welfare than what was available to them in exchange for their labor in the market. 

What is lost for these people who will have left the workforce?  First - the dignity of work and the pride of independence.  Second - the learning on the job, the assumption of responsibility, and the potential for advancement.  Third – the example they set for their kids, if they have them, as someone who seeks to earn a living through service to others, rather than through claims to entitlement. Those cut off from work are surrounded more often than not by others with no link to labor market exchange, effectively ghettoized.  I was reading one of the books I referred to in the last post on our current economic situation, and came across the following quote: “work attaches people to reality… without work, there’s little sense of reality.”  I never heard it put in that way before, but it made a lot of sense.  It’s like that old gentle rebuke – you clearly have a lot of time on your hands – meaning you’ve become a little unhinged from reality
What is lost for others as a result of fewer unskilled workers being employed?  Putting aside the tax costs to the wide set of taxpayers who face an increased burden to finance the expanding welfare rolls, there is much that is lost in the elimination of market exchange.  Have you ever noticed the convention, so widespread, of mutual thanks being given between parties to an exchange?  If market exchanges were zero-sum games – i.e. one person only gained at the expense of the other – there would be resentment.  Any market trade, due to its voluntary nature, most likely involves two people who both get some surplus benefit from the trade – the seller usually gets a fee that exceeds the lowest price it would willingly accept, and the buyer usually pays a fee beneath the maximum it would be willing to pay.  This is true for any potential employer of an unskilled worker, and truer still for that employer’s end customers.  By withholding services from the market in favor of the dole, the costs to find an employee to fill that role increases for the employer, causing a rise in prices at the expense of end customers.  The decision not to offer your labor in the market erases the benefits that would flow to those on the other side of the transaction – this loss of benefit is not measured in any GDP figures, but it is as real as any benefit that is.  Likewise, there is much that may also be lost for the poor as consumers on the other side of transactions that involve the middle class and the rich, in cases where these people have cut back their own work efforts. 

The mutual benefits from trade more often than not leads to an appreciation and tolerance for those we might otherwise not see eye to eye with – we don’t fret the politics of a person who can sell us something we want for cheap (or at least we shouldn’t).  Market exchange is a vital link between classes, and it may be the only possible link, once beyond the schooling years, between the poor and those in the middle and upper classes. 
As an aside, I was doing some research on this issue over the internet, and found an Urban Institute study in the wake of the welfare reforms signed by Clinton. The study bemoans the fact that while the reforms changed eligibility requirements for certain forms of welfare, many who became ineligible for one form were nevertheless still eligible for food stamps, and yet many did not continue to receive such benefits:
Participation rates for very low-income families (below 50 percent of the poverty level) that left welfare were particularly troubling—only half continued to receive food stamps. Our 1999 results also show a significant increase in the share of families that reported that they left the FSP because of administrative problems and a decline in the percentage that left because of employment compared with 1997. Finally, we found that families that reported incomes below the poverty level and did not continue their food stamps were significantly more likely to own a car and to have moved in the previous 12 months than families that stayed in the program.
Why did car ownership matter? It mattered because the fair market value of your car affected your eligibility for food stamps. If you own a Lexus, it turns out you couldn’t receive food stamps. When given the choice between owning a nice car and receiving free food, people chose to own a nice car. Did they do so at the expense of starving? Apparently not, because people starving to death in nice cars would make for a great reality TV show, and so far none has been forthcoming. (Of note in the study is the fact that the authors at the Urban Institute find it troubling that many who are eligible choose not to collect – the question to them is not how to convince others similarly situated to reject the food stamps, but how to get these people back on them.)  Personal pride is the one factor than can help people avoid being sucked intot the maw of dependency, and the government agencies in charge of these programs, as well as their supporters, view such pride as a problem.

Monday, November 19, 2012

Express Yourself

There is an excellent book by the economist Bryan Caplan called The Myth of the Rational Voter, which I highly encourage you to read in the aftermath of this last election.  He cites the work of some political scientists who came up with “expressive” voting theory:

“In expressive voting theory, voters know that feel-good policies are ineffective.  Expressive voters do not embrace dubious or absurd beliefs about the world.  They simply care more about how policies sound than how they work.”

You can indulge in expressive voting in cases where there is little to no personal cost in doing so, and within the institutional structure of democracy, political irrationality is a “free good”, as your vote is one of over 100 million, and has little true material value – its value is almost entirely psychological. 

There is a flip-side to the “expressive” coin – polite company almost requires opinions that wholly ignore economics.  Caplan:  “In economics, there is an intrinsic motivation to get things wrong.  If you think the right answer, you feel insensitive and unpatriotic; if you say the right answer, you feel like a pariah.”  In the case of the topics I’ve been stressing in these latest posts – redistribution, taxation of the rich, and middle class entitlements – surely expressive voting has some role in people simply ignoring the arguments that these policies make us all poorer.  In contrast, the policies of the Obama administration – “Who can I give sh&^ away to?” and “Who can I take sh^* away from?” – have an obvious attraction to expressive voters when the answer to the first is the poor and the middle class, and the answer to the second is the rich.  Combine that with a presidential run against a guy who is rich, and you have the perfect expressive voting storm. 

Romney’s essential campaign platform – stop hampering businesses through excessive regulations and investors through excessive taxation, and the jobs will come back due to increased business investment – has the appearance of a hand-out to the rich; Obama’s essential campaign platform – it’s time for the rich to buck up to pay for the rest of us – has the opposite appearance being compassionate.  The onerous nature of expressive voting is such that even if you understand that these appearances are a crude caricature, you are still reluctant to be seen as the Scrooge, and prefer instead to cling to a belief in Santa Claus.  Expressive voting is also why there is a payoff to crying racism for every conservative policy that a liberal opposes.  Whether or not it is true, it puts more people in the position of being potentially perceived in that light, and can therefore influence voting behavior.

(As an aside, if you doubt the importance of expressive voting, ask yourself why it is viewed as such an important poll question as to which candidate “cares more about me.”  Recall my prior post on the laziness of the human mind, and the tendency to substitute an easy question we can answer for a complex question we are too lazy to consider. The fact that “who cares more” has become a consideration of voters is a measure of how much we’ve already infantilized ourselves relative to our government.  The government, like the parents of a newborn, exists for the primary purpose of caring for our needs.  Not protecting our liberties, not securing our freedom, just caring for us.)

Being provided the opportunity for expressive voting also arguably leads to the crowding out of private charity.  In his book Who Really Cares?, Arthur Brooks details the patterns of charitable giving in the U.S.  Brooks found that those who were the primary advocates of forced redistribution were far less charitable:

… before I started the research for this book, I assumed that those people most concerned and vocal about economic inequality would be the most likely to give to charity. But I was wrong. Instead, I found a large amount of data all pointing in the same direction: For many people, the desire to donate other people's money displaces the act of giving one's own. People who favor government income redistribution are significantly less likely to behave charitably than those who do not. Even if the policies they support do not come into effect, they are still far less likely to donate to charity. For many Americans, political opinions are a substitute for personal checks; but people who value economic freedom, and thus bridle against forced income redistribution, are far more charitable. (Emphasis added).

In the aggregate, expressive voting can lead to the strange perpetuation of policies that most voters (even those who were on board) view as being either ineffective or even counterproductive.  What can counter expressive voting?  Well, there is the theory that “retrospective” voting can lead people to see the wreckage of certain policies, and discard them.  But judgments about outcomes can be biased.  As Caplan puts it: “ ‘Believing is seeing’ – people may wear rose-colored glasses if and only if their preferred policies hold sway.”  (I once had a guy claim to me prior to the 2008 election that he was worse off economically as compared to 2000; in the course of those eight years he had struck out on his own and was obviously very successful.) 

In one respect, the Obama campaign was premised on retrospective voting, with the constant refrain that “their policies” led to the problem.  Which policies in particular are never pointed out – the only policy that you ever hear them discuss is tax policy and banking deregulation.  First, the tax cuts enacted during the Bush administration were extended through every year of the Obama administration at its discretion.  Second, Bush tried and did tighten reserve requirements for banks in his first term. Perhaps you think that the correct policy would have been to go further, but if the Dodd-Frank financial regulations are a panacea, why is it that their implementation was purposefully delayed until post-election?  The political demand for such regulation was the result of an incorrect but compelling caricature of Wall Street screwing Main Street, which does not lead to any confidence that the resulting regulations will address the real problems.  I would recommend the book Unintended Consequences: Why Everything You’ve Been Told About the Economy is Wrong by Ed Conard to cure you of any confidence you might have in the popular diagnosis of what went wrong, as well as the likely effects of Dodd-Frank and other changes in policies. 

Post-financial crisis, the Obama administration has been fully in control of economic policy from the outset of the recession, and has presided over the slowest post-recession economic recovery since WWII.  There are multiple books that decry the adverse economic effects of his policies, including:

·         The Redistribution Recession: How Labor Market Distortions Contracted the Economy by Casey Mulligan at the University of Chicago;

·         Government Policies and the Delayed Economic Recovery by Lee Ohanian, John Taylor, and Ian Wright; and

·         Getting Off Track: How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis, by John B. Taylor.

The bad news: these same lines of research have shown the New Deal policies of FDR to have been a disaster for the economy for similar reasons, and yet he was re-elected 3 times over.

Tuesday, November 13, 2012

The Dole and How to Swing It

I’ve given you the libertarian argument: screw you, it’s my money, and redistributing it according to your preferences rather than mine is robbery, plain and simple.  I’ve also given you the empirical economic argument that a larger welfare state makes us all poorer by leading us all to work less, as is the case in Europe.  This perhaps overstated the case –one might argue that an expansion of the welfare state, financed by taxing the rich, could leave the rest of us in between no better or worse off, and amount to a simple transfer from rich to poor.  That proposition seems to me to be the chief domestic policy promise of the Obama campaign.  If this proposition is true, and we are somehow unmoved by the libertarian argument that redistribution is theft, then the middle class can buy its virtue on the cheap by simply supporting the welfare state.  A vote for Obama establishes that you care; at bottom all you care about is having other people support the poor, but of course you get credit beyond this.  To the extent that middle class may have just done precisely this – bought its virtue on the cheap – it is about to find out that it will be a lot more expensive than it anticipated.

Raising taxes has 2 possible effects on labor supply decisions: 1) you work more because you need to work more to achieve the same standard of living (income effect); or 2) you work less because leisure, which cannot be taxed, becomes relatively more attractive (substitution effect).  A few posts ago I discussed the economic research that indicated the second effect dominates when the extra tax revenues finance transfers that provide to us things we would otherwise purchase for ourselves by working more, and therefore the tendency is for all to work less.  This is a dynamic that affects not just those at the bottom – it affects the vast set of people who receive middle class entitlements, such as education and retirement benefits. 

But the extent to which this dynamic is in play for different income groups is a function of how the taxes and benefits are distributed across groups, and of course the doling out of benefits is not uniform across income classes.  A new tax that is levied on only the rich to finance transfers to the poor does not change the tax picture for the poor, but it does change the tradeoff between work and leisure.  An unskilled laborer who can find a job in the market for $10 an hour views staying idle more and more attractive if the effective wage for staying idle increases.  To paraphrase Milton Friedman, the surest way to increase the supply of unemployed people is to pay them more money.  In my experience, I think that many liberals simply reject that such incentives really affect the labor decisions of the poor.  In their view, all people are earnestly seeking employment to earn a living and be self-sufficient.  That is, many liberals I know seem to think that such pride among the poor is there, and that the simple economic calculus does not apply to their labor decisions. 

Consider someone in that low-income set, with little education, busting to scratch out a living at a low wage rate, who sees a neighbor living at a similar standard with no hassles.  I think it would take a rather admirable level of pride for someone in that situation to eschew the easy path; we can all understand the frustration someone in that situation would feel in thinking that all of his efforts get him nowhere.  The only break against giving in to the obvious incentive to not work is pride – the desire to be self-sufficient and not dependent on others.  Rather than celebrating those cases where such pride has kept people off of the dole despite their hard work providing them little or no benefit over the dole – the federal government actively engages in efforts to argue people out of such pride.  There should be a stigma to being dependent – and indeed there is a stigma, otherwise the feds wouldn’t have to run around convincing people otherwise.

A too generous safety net, on pure economic grounds, creates a clear incentive to not seek employment – increasing the benefits derived from not working is equivalent to increasing the effective marginal tax rate for working – few of us face a situation with as steep a marginal tax rate as those at the lowest rung of the economic ladder.  For these people, there is basically no “income” effect from the decision not to work, and of course there is a huge substitution effect.  In supply and demand terms in the market for unskilled labor, the supply curve shifts to the left.  If demand is unaffected (a big if, as I will discuss), the wage rate for unskilled labor goes up, but total employment for unskilled labor goes down.  This may not show up as increased unemployment, because to be considered unemployed you have to be seeking a job.  Nonetheless, many people who are capable of learning on the job, becoming more skilled, and growing in income simply step off the ladder.   When you increase the benefits of the welfare state, you increase the number of people seeking to be beneficiaries via the reduction in labor supply. 

For those who pay – in this example the rich – there is nothing coming back to them in the form of a recycled benefit.  For them, both the income and the substitution effect are equally in play, and therefore there is a chance the income effect will dominate so that the rich do not decrease their work input, and tax revenues go up.  This is clearly the hope of the current administration.  I have made the argument that the substitution effect will dominate in these cases – that the rich will simply work less, and that the increased welfare state will require that the taxes trickle down to the lower income categories.  When I’ve made this argument to liberal friends, they reject that this is a likely response to increased taxation.  In this view, either the rich cannot scale back their labor (i.e. due to employer’s not allowing it), or their sense of vocation in their work makes them unresponsive to such incentives. 

If you consider a high paid employee of a bank, as an example, the increased tax rate may have no effect – he cannot say to his boss that he would like to cut back from 60 hours to 40 hours a week, otherwise he would simply be let go.  But in many cases that same banker will have a spouse, also well-educated and highly skilled, whose decision to work is much more malleable.  Entering the workforce, that person faces the 15 percent payroll taxes (yes, I know, the employer “pays” half of this – but this is the statutory incidence of the tax, not the economic incidence – it comes out of your pocket) right off the bat, in addition to coming in at the top marginal tax rate for federal (currently 35 percent) and applicable state taxes (let’s say 5 percent for arguments sake).  Prior to any tax increase from the current status quo, this person works half of the year to pay taxes.  But it’s worse than that, because that couple faces costs that it could otherwise avoid if one person stayed out of the labor market: child care or a nanny, increased commuting costs, increased wardrobe costs, increased stress, the likelihood of dining out more often, landscaping and other routine house maintenance costs.   The marginal tax rate for a well-to-do two income family can easily be over 75 percent – there is not a huge incentive for the spouse to work under those circumstances.  As a result, trying to inch up the marginal tax rate on this couple may eek a few more dollars out of the bread winner, while giving up all of the tax revenues it might otherwise receive from the spouse. 

So we have two problems right away – we’ve caused some people to drop out of the labor market to go on the dole, with the promise of having to increase only the taxes of the rich.  But the rich don’t play ball, and are likely to cut back their own supply of labor, which leaves tax revenues insufficient for the promised benefits.  There seemed to be only one platform objective of the Obama campaign – increase the taxes on the rich in order to finance the enlargement of the welfare state.  This is based on fantasy.  In order to finance the increased benefits, the taxes have to trickle down.  This trickle down can lead to yet more decisions to become a one income family, further reducing the tax base.

The story so far is all about the effects of the change in policy on labor supply for both rich and poor.  But that is not the whole story – recall the “non-tax” elements of the marginal decision for the spouse – all of the added expenses of going to work.  By dropping out of the labor force, the loss of the take home income is partially offset by avoiding exactly those transactions – the family commutes less, fires the nanny and housecleaning service, cooks at home, cuts the lawn themselves, etc.  All of these decisions reduce the demand for low-skilled workers.   This reduction in demand leads to yet lower employment numbers for the low-skilled workers, and increases the number of people on the dole.  And, of course, this requires yet more tax revenues.

The demand effects of trying to tax the rich are limited to low-skilled workers.  As a quasi-entrepreneur in a service business, scaling up and hiring employees is a decision that is affected by marginal tax rates.  The hope in any such hiring decision is that I can bill sufficient hours of the employee’s time so that I earn some profit.  The risk is that I cannot; and contrary to the Scrooge like image of businessmen firing employees as soon as things look grim, in my experience quite the opposite is true – the entrepreneur will hold on in the hopes that things will improve and delay the firing decision - especially for a well-liked employee.  That means that every employer understands there is a significant risk of loss in hiring an employee; you increase the taxes on the employer in cases where he makes a successful hire, and you’ve reduced the potential payoff to taking such risks.  Ergo, you take fewer risks.  This scenario is worse yet outside of service businesses, where significant capital investments are required as a precursor to hiring more people, and the risks of expanding employment increase significantly.  With less demand among business owners for laborers at all levels of skill, everyone is impacted negatively.

Rich people are like the rich kid whose parents get him the brand new leather basketball. You play by that kid's rules, or the kid takes his ball and goes home, and you don't play at all. If you tell him that half of his points won't count, or will count for the other team, he will surely pick up his ball and go home. You may not like that rich kid, but the game depends on him. If rich people don't invest, because they are rightfully afraid that any gains from the risks they take will be taxed away, we not only are deprived of the ball, we don't even have a court to play on.

There is a point where you can kill the golden goose.  Every communist country killed it long ago; the socialist welfare states of Europe haven’t entirely killed it, but they have it by the neck held under very cold water.  And yet such policies have an unbelievable degree of persistence, attributable to the simplistic Marxist view that the rich are in opposition to the poor.  As the simple logic of what I just conveyed plays itself out, people will double down on their strange belief that the rich are ripping them off.  It is the persistence of crappy economic policies that we need to fear. 

Wednesday, November 07, 2012

It's Going to Hit the Fan

Several years ago I worked for a small firm that got acquired by a public company.  The acquisition was a windfall for all of the senior people in the firm relative to what they could otherwise have expected.  Acquisitions were extremely rare in our industry, which is dominated by partnerships rather than corporations; to this day ours is the only real acquisition.  Prior to rumblings of being up for sale, it was a fairly cohesive and comfortable place to work.  Some of that cohesion was starting to erode independent from the impending sale of the company, due to too many people knowing too much about how each was paid.  This problem was exacerbated significantly with the actual sale on the horizon, to the point where people really couldn’t stand each other, and there were mutual resentments in many combinations. 

The problem stemmed from the power of the founding partner to make compensation decisions in a unilateral way.  This unilateral decision making was unavoidable, and existed before it came time to divvy up the sale price, but the windfall from the sale increase the stakes, and with it the feelings that decisions were being made without reference to true value.  Without a sale, arbitrary deviations in salary from what the “market” would pay would have worked themselves out, as people would have left or such decisions would have come more into line with the market reality.  By cutting everyone in on what for the buyer was a laughably silly deal, suddenly the market didn’t matter – there were ways to split the cash that made everyone better off than what the market could offer.  All good, right?  No, now we all hate each other.  No one, predictably, agreed about claims of comparative worth once the market was thrown out of the equation. 

I think of this often in the context of our country’s current path.  There is an old joke about presidential elections among conservatives: when a conservative wins the presidency, liberals express the ardent wish to leave the country; and when a liberal wins the presidency, conservatives express an ardent wish for liberals to leave the country.  The problem for conservatives is that we are in the most conservative country on the planet, so there is no other viable alternative.  As much as we may feel like we are getting screwed in the good old US of A, staying here still leaves me better off that the alternatives, much as sticking out the acquisition left me and all others involved better off than the alternatives.  We don’t have the ability to vote with our feet.  And, even if there were a more conservatively governed country, the accident of geography makes us inclined to stick by our birthplace and our neighbors.  We’re stuck.

The fact that we’re stuck makes us subject to being screwed by unilateral decisions completely outside of our control.  Every tick away from free markets – where you are rewarded for the exchange of your labor and capital based upon the free and voluntary choices of those purchasing your services – and toward big government – where your ultimate reward for the exchange of your labor and capital is altered from the implicit judgment of free and voluntary choices by unilateral decisions made by people you didn’t vote for – makes the feeling that you are getting screwed all the worse.

We all feel entitled to something.  There are basically two choices regarding what we actually get – either we get what others are willing to pay us in free and voluntary exchange, or we get what we can finagle for ourselves through the force of government.  If you are getting less than what you think you are entitled to under a system of voluntary exchange, your own assessment of your worth may be inflated.  Nevertheless, your only option is to supplement what the market is willing to give you voluntarily with a forced result – i.e. taking someone else’s income or property for yourself.  You can do this with robbery, or you can do it with Big Government.  The first option everyone understands to be completely illegitimate, the second option we are currently celebrating. 

I think many of us have lost that moral clarity; we have a feeling of entitlement that extends beyond what people are willing to pay us freely, and seem to have no problem taking what we think we deserve by force of government.  This feeling of entitlement is complicated by the fact that most of us are both contributors to the U.S. Treasury, and recipients of the goodies, especially subsidized education, social security, and medicare - all middle class entitlements.  We have the sense that we are already paying more than what we’re getting.  Clearly, many people must be net beneficiaries of Big Government, but I would bet you that most who are net beneficiaries feel they are getting screwed.  We all recognize that the decisions are out of our control, and even if we are better off, much as I and others were in the course of the acquisition, we all think we are getting screwed in favor of others.  Once you legitimize government trumping the market with respect to such things, people take on a mindset wherein their sense of entitlement has less and less to do with what they can offer to others in exchange, and more and more to do with arbitrary factors that there can never be consensus over. 

Big government does various insidious things.  First, it has led many of us away from concentrating on what we can do to improve our ability to serve others in market exchange, which impoverishes both those sucked in as well as those who would otherwise benefit from such exchange.  Second, in the place of such concerns, many have self-identified as part of a victimized group (minorities, women, union labor, etc.)  and identified others as part of a victimizing group (Wall Street, corporate America, rich people in general).   Naturally, the subset within such groups who really have very little to offer in a system of free exchange will latch onto the notion that they are part of a victimized group.  Having identified yourself as a victim gets you over the hurdle of forced redistribution in your favor.  On the basis of such grouping, the preferred redress among those thought to be victimized is not to stop the perceived victimization, as justice would require, but to use government to turn the tables.  Finally, the last problem, and the one that is perhaps most severe – is that there will be very little consensus between and among people regarding real versus perceived victimhood, real versus perceived victimizers, and what such claims imply for entitlements.   If you, like me, believe that most perceived victims have illegitimate claims, you will clearly resent those claims being forced on you via government.  This is true even among those who self-identify into different victim groups – blacks, who are culturally very conservative, take great offense at the GLBT population comparing their historic plights.  They do not see the GLBT community as entitled to the same things they are entitled to.

There will never be a consensus that government should be in the redistribution game.  There will never be a consensus as to the ranking of claims among those who believe that government should be in the redistribution game.  All of this has led to some divisiveness in our political culture, but it has been fairly restrained in comparison to where I think it is headed.  What will make the kettle boil over is this fact: the current status quo – where the promises of the government have largely been perceived as something the government could deliver on with some minor tweaking to the tax rates of the richest among us – is about to be seen for the lie that it is.  Promises will be broken, and in the scramble to preserve what has been expected, there will be an ugly reckoning.  Whereas animosities were built between and among me and my colleagues over the division of what was essentially manna from heaven, what we face in the near future is the Government taking away what it has promised and what most everyone in society feels they are entitled to, and the manner in which it allocates the pain from that broken promise will likely cause violence.  The Government will accept no responsibility for this state of affairs – it will fuel the flames by blaming others.

One other aspect of my business experience bears mentioning.  Within one year of being acquired, I left the firm and struck out on my own.  Though grateful to have been a part of the sale, it was liberating to be going out into the market, where what I earned I earned, in contrast to the feeling that I had been gifted something in the acquisition.  There is a pride of independence – of taking ownership of your life – and the corollary is that there is a resentment in being dependent on someone else.  Such independence used to be recognized as an achievement, and a stigma was attached to dependency.  Even if we are getting what we think we are entitled to from government, there is a latent resentment.

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