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November 05, 2006
Wealth Explosions
Here's one for the Big Government files: Under Clinton, cross-county markers of inequality saw inequality increases driven by tech booms in discrete portions of the economy. Under Bush, the tech effect has largely vanished, only to be replaced by defense contracts, which have vastly enriched various counties in the greater DC area. So we've seen the redistributionist effect that liberals are always promising national investment strategies (say, the Apollo Project) will bring, but it's all been to make missiles, and all gone, quietly and unaccountably, to areas that may or may not have needed it. Someone give me a good reason we shouldn't be doing the same, save in a more transparent and targeted manner, for renewable energy. Someone promise me the right won't complain about such schemes -- as they haven't about the under-the-radar wealth transfer to arms producers -- when we try.
November 5, 2006 in Economy, Inequality | Permalink
Comments
Yah, as if. The problem is that no one in the establishment of either party is able to protest this kind of thing as an occurrence. The R's are just able to do it as a partisan exercise because the big money donors think it's fun to kick the Dems.
Posted by: chimneyswift | Nov 5, 2006 5:05:40 PM
Hey, I'm on the right and I complain about such things. Whether it's defense contracts or renewable energy ones money spent by politicians will always be spent to the benefit of getting those politicians more votes. Public choice theory. The solution is to have less money being spent by politicians.
Posted by: Tim Worstall | Nov 6, 2006 8:22:31 AM
The solution is to have less money being spent by politicians.
You are dreaming if you think this crowd will back cutting spending. The Republicans have disappointed conservatives in this area, but you can be damn sure the Democrats won't cut spending. They tell you to your face their plans of increasing spending
Posted by: Fred Jones | Nov 6, 2006 9:10:15 AM
I am really intrigued about some of the comments to this blog - but I have an explanation.
my chosen professional career is to assist people avoid any reliance on government welfare (through residential property investments in Australia) but as society becomes more affluent, most of us lose sight of the simple, basic rules. Such as saving 10% of your paypacket - as suggested way back in the Bible.
now my private clients range right across the social spectrum, however those that have never been to college understand the simple rules of economic virtue far more easily.
it appears to me that if you go to college, you start reading the financial press, about stocks and bonds. And this leads them towards the stock market.
Which was my experience after I earned an MBA back in 1972-73.
But the real wealth is made in property, not on the stock market - unless you list your own company. That's different of course, because then you are just finding ways to make your success more liquid.
People who don't invest in the stock market go into property. And you don't need a college degree to do very well in that market.
The difference is leverage. A bank will lend you 90% on a residential investment property - so a nest egg of $20,000 means you control an asset worth $200,000. Which will double in 7-10 years.
If you put $20,000 into shares, the bank will allow you leverage of 60%. So your portfolio is worth $50,000. Which will double in 7-10 years.
Which would you prefer? You have to go back to basics and dis-entangle yourself from the stock market.
Posted by: Bernard Kelly | Dec 2, 2006 9:45:30 PM
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