Tuesday, May 18, 2010

"Enough Money"

"Enough Money"
Thomas Sowell
Tuesday, May 18, 2010

One of the many shallow statements that sound good-- if you don't stop and think about it-- is that "at some point, you have made enough money."

The key word in this statement, made by President Barack Obama recently, is "you." There is nothing wrong with my deciding how much money is enough for me or your deciding how much money is enough for you, but when politicians think that they should be deciding how much money is enough for other people, that is starting down a very slippery slope.

Politicians with the power to determine each citizen's income are no longer public servants. They are public masters.

Are we really so eaten up with envy, or so mesmerized by rhetoric, that we are willing to sacrifice our own freedom by giving politicians the power to decide how much money anybody can make or keep? Of course, that will start only with "the rich," but surely history tells us that it will not end there.

The French Revolution began arbitrary executions among the hereditary aristocracy, but ended up arbitrarily executing all sorts of other people, including eventually even leaders of the Revolution itself, such as Robespierre.

Very similar patterns appeared in the Bolshevik Revolution, in the rise of the Nazis and in numerous other times and places, where expanded and arbitrary powers were put into the hands of politicians-- and were used against the population as a whole.

Once you buy the argument that some segment of the citizenry should lose their rights, just because they are envied or resented, you are putting your own rights in jeopardy-- quite aside from undermining any moral basis for respecting anybody's rights. You are opening the floodgates to arbitrary power. And once you open the floodgates, you can't tell the water where to go.

The moral bankruptcy of the notion that third parties can decide when somebody else has "enough" money is matched by its economic illiteracy. The rest of the country is not poorer by the amount of Bill Gates' fortune today and was not poorer by the amount of John D. Rockefeller's fortune a century ago.

Both men were selling a product that others were also selling, but more people chose to buy theirs. Those people would not have voluntarily continued to pay their hard-earned money for Rockefeller's oil or Gates' software if what they received was not worth more to them than what they paid.

The fortunes that the sellers amassed were not a deduction from the buyers' wealth. Buyers and sellers both gained from these transactions or the transactions wouldn't have continued.

Ida Tarbell's famous muckraking book, "History of the Standard Oil Company," said that Rockefeller "should have been satisfied" with the money he had acquired by 1870, implying greed in his continued efforts to increase the size and profitability of Standard Oil. But would the public have been better off or worse off if Rockefeller had retired in 1870?

One of the crucial facts left out of Ida Tarbell's book was that Rockefeller's improvements in the oil industry brought down the price of oil to a fraction of what it had been before.

As just one example, oil was first shipped in barrels, which is why we still measure oil in terms of the number of barrels today, even though oil is seldom-- if ever-- actually shipped in barrels any more. John D. Rockefeller shipped his oil in railroad tank cars, reducing transportation costs, among other costs that he found ways of reducing.

Would the public have been better off if older and more costly methods of producing, processing and shipping oil had continued to be used, leading to prices far higher than necessary?

Apparently Rockefeller himself decided at some point that he had enough money, and then donated enough of it to create a world-class university from day one-- the University of Chicago-- as well as donating to innumerable other philanthropic projects.

But that is wholly different from having politicians make such decisions for other people. Politicians who take on that role stifle economic progress and drain away other people's money, in order to hand out goodies that will help get themselves re-elected. Some people call that "social justice," even when it is anti-social politics.

To read another article by Thomas Sowell, click here.


Children and Finances
Rebecca Hagelin
Tuesday, May 18, 2010

In a recent survey on personal finances, only 27 percent of parents surveyed said they feel well informed about managing household finances. Fewer than half believe they are good role models for their children regarding saving and spending.

Yet, 94 percent of students say their parents are their primary teachers on financial matters.

Oops. We have a problem. We've totally messed up our finances, and no one is teaching our children how to unravel it.

Our national debt is unsustainable. Our government is promising programs and services that it can't possibly deliver, but that will bankrupt our children in trying. Add that to the reality that today's teenagers haven't the slightest clue about how to manage their personal finances, and you realize that the future of America's economy is not just bleak, but headed for a melt down.

The economic problems we face are obvious. The question is: What are we going to do about them? While a strong alliance of policy experts and Tea Party activists around the nation join hands to try and reverse out-of-control government spending, we also need to be educating the younger generation about how to be personally fiscally responsible.

A good first step is to teach children and teens how to handle their money, rather than allowing their money to handle them.

Helping them understand how to be wise stewards is a gift that can free them from the emptiness that comes with materialism, the depression that comes with debt, and replace them with the peace that comes with financial stability and the fulfillment that comes with philanthropy.

The Bible addresses economic issues with surprising frequency. As a matter of fact, as Crown Financial Ministries points out, there are 2.350 verses on money and stewardship, making it "second to the subject of love as the most discussed subject in the Bible. In fact, two-thirds of the parables Jesus taught are about money, possessions, and stewardship."

Regardless of your faith, the wisdom of this all-time best seller is undeniable - and incredibly applicable to our world today. Here are a few examples of profound principles you and your children can start memorizing - and putting in to action - right away:

- "The wise man saves for the future, but the foolish man spends whatever he gets." (Proverbs 21:20)

- "The wicked borrow and never repay but the godly are generous givers." (Psalm 37:21)

- "The rich rules over the poor, and the borrower becomes the lender's slave." (Proverbs 22:7)

-"A good man leaves an inheritance to his children's children." (Proverbs 13:22)

-"Steady plodding brings prosperity." (Proverbs 21:5)

One of the very best resources to use in teaching your children how to practice the principles above comes from Crown Ministries at www.Crown.org . Entitled, Discovering God's Way of Handling Money Teen Study, this 10 week study guide "is designed to practically help teens create habits that will set them on a lifelong journey of handling money responsibly." If you need personal help to get your own finances in order Crown also offers free local counseling for you with what they call a Money Map Coach.

And then there is the great Dave Ramsey - noted author, radio host and "all around" genius on finances. Dave has a fabulous website filled with great tips, and he also offers one of the most life-changing programs for teens I've ever seen. It's called, Generation Change, and you can order it at www.DaveRamsey.com . Dave also offers curriculum for educators at the elementary, high school, and colleges levels. His turn-key programs are engaging and comprehensive, and will build a sound economic foundation in the lives of our young people. They are designed to be used in a school or home setting, and are exactly what we need to build hope, and financial security, into the lives of the next generation of adults.

If enough young people learn sound financial principles, perhaps they will also one day run government in a way that promotes prosperity and personal responsibility too.

1 comment:

Anonymous said...

I agree that Dave Ramsey's teachings are wonderful for teenagers, and probably college students as well. This is when the teaching needs to happen. His teachings, which are far from genius, are nonetheless very practical and down to earth. He has effectively packaged very basic common sense. I don't know that it's possible to teach common sense, but it's definitely worth a try!