We’re ‘the other guys’

How many of us–in our childhood– searched in vain for the Goodrich Blimp ? Or saw the Goodyear Blimp and mischaracterized it as the “Goodrich Blimp” ?

As BF Goodrich would constantly remind us (in our founder’s generation at least) “We’re the OTHER guys.” Although both companies made tires in “Rubber City” — Akron, Ohio.

It’s an election year so we expect to get bombarded by continuous rhetoric of who has a ‘plan’ to make something out of nothing all based on some obscure government plan. We all know this is impossible, but many dupes, drones, and Keyensians like to believe in the tooth fairy and believe that you CAN get something for nothing. Which is economically impossible; the only thing “free” in life is the grace of God.

We caution our clients not to get suckered in. When they have someone pounding “tax the rich,” “tax those greedy corporations’ profits,” “hike the corporate tax rate,” “windfall profits tax,” “fair share,” “sustainability,” “stakeholder,” “DEI,” or “climate change” — we advise they not walk but run away from the person espousing it for they are a parrot, dupe, drone, or miscreant. And they belong nowhere near public service.

It dismayed us during the Obama regime when Warren Buffet came out as a shill; Buffet is certainly a brilliant investor with a great track record — but his willing prostitution to curry favor with the regime is something he obviously knew better about. As he lamented his secretary paid too much in taxes (and he paid not enough), rather than suggest she pay less he argued for an increase in passive income tax. Money which was already put at risk to invest and grow the economy. By millions of lower to middle income level Americans trying to grow money at a rate greater than inflation. Obviously he knew this was wrong and would particularly hurt small investors as well as act as a disincentive for growing our economy. And that he was free anytime to write a check to the treasury to decrease public debt if he wanted to really put his money where his mouth was.

It’s a staple of politicians making speeches that they will claim the resources to fund their magic doesn’t touch YOU. It’s directed at “the other guy.” The ‘rich,’ the ‘greedy corporation,’ that evil coal plant spewing ‘pollution’ into the environment. YOU will escape unscathed and they’ll simply fund themselves by shaking that huge money tree of ‘the other guy.’

But who IS ‘the other guy’ ?

That’s right–‘the other guy’ is YOU.

A company exists to make money for its investors. Period. We at D-J are strong believers in corporate ethics, capital investment, and long term company health (and believe sleazy companies or sleazy corporate leadership–without government intervention–will ALWAYS go out of business because the market punishes them; no one can treat their customers poorly and expect to survive). So when a politician seeks to target corporate profits; money that’s already been taxed who are they going after ?

You.

Corporations don’t really pay taxes (although they are taxed). What do they do with the money they make ? They pay their cost of making or doing whatever they do, invest in capital and equipment, hold cash reserves for market downturns, and distribute profits to shareholders. So when they’re taxed, this money comes out of capital reinvestment, shareholder distributions, or they simply raise prices to make up for the increased tax. If you buy something from Amazon and they get a profits tax imposed, you pay more for stuff you buy there. So it’s YOU paying this tax–YOU are ‘the other guy.’

Perhaps you believe they can simply take this money out of shareholder distributions. Maybe. But who ARE these shareholders ?

Got a 401K ? IRA ? Money market fund ? Do banking ? Have a close look at what those fund invests in. We’ll bet you’ll see that “greedy” Exxon, Shell, Apple, Exelon, Goldman-Sachs, Chase, Ford, United Healthcare, and hundreds of other corporations in there. So, IF those profits are taxed, guess who’s paying it.

That’s right–YOU. YOU’RE ‘the other guy.’ That money is getting pulled out of the economy (and your pocket) to fund some pork-barrel politician’s pet project. Giving him and his cronies in ties high on the hog living as they take their substantial cut of YOUR money. Writing intricate laws on paper and reports no one will ever read to justify their theft of YOUR cash. And leverage massive amounts of public debt. Which YOU pay for again because the only way to fund this is to inflate the currency; we’ve seen this massive inflation over the past 4 years. ONLY a government–through monitizing debt in collusion with the Fed–can cause inflation.

And are you so naive as to believe that that the same politicians who get massive donations and go to the country club with the Uber-rich are actually going after THEM ? Individuals with armies of lawyers to circumnavigate and circumvent a wholly unworkable and cumbersome tax code ? Nope….They’re going after YOU.

Even so, let’s say that Uber-rich guy decides to buy a corvette or personal airplane. Where does that money go ? To all of the folks working on the assembly line making the Corvette. To all the folks making the parts for the car. To the 401Ks of those investing in Chevy. To the workers building the Williams (or GE or Pratt and Whitney) engines on the jet. To the pilots flying the jet. To the fuelers fueling the jet. To the individuals (like one of our founders) who train the pilots to fly the jet safely. Do you REALLY think it better–even if you don’t like that Uber-rich guy–to take that money away from all the people he employs and benefits by living his lifestyle and give it to some useless bureaucrat in a tie ? Working people that might be YOU ? So that fancy suit bureaucrat can write some useless laws and dictate how you live YOUR life ?

The REAL money–the REAL resources–lay in a broad spectrum of working Americans. Those folks working jobs and buying things. That’s YOU.

How many of you have actually read the various disclaimers when you update the software on your iPhone ? How many of you scroll through the litany of jargon when you purchase something ? How many of you now have an additional step when accessing websites of ‘accepting cookies’ which makes just about everything more cumbersome ? How many of you fill out endless forms when showing up at the doctor ? ALL of these take time and resources to generate (and input and log your data), most have been generated by law, and none of them actually do anything good. Multiply this by a thousand and THIS is the collateral non-value added cost of where your hard earned taxpayer dollars are going. Not to mention the quagmire of bureaucratic rules and regulations that hike the cost of everything you buy from gasoline to electricity to food. Generating busywork for an army of bureaucrats all funded by you; serving no purpose but to take your money and make your life more difficult. Would these idiotic rules not be in place, everything you buy would be at least 35% cheaper.

Certainly there ARE governmental justifications for taxes. If another country raids yours and takes everything by force, you’re screwed. So banding together to provide for Defense is a good idea. Police and fire services are traditionally a government role. Funding a national airspace system (and airports) through fuel taxes can work remarkably well if given an altruistic and faithful steward. Same as for a highway system; fuel taxes are a remarkably equitable and efficient way to build roads provided the management of the funds (and elimination of silly regulations) is overseen by a trustworthy person. These ALL share the element of ‘simultaneous consumption’ — that is it’s tough to exclude one house from a country wide raid by the Soviets so you can benefit without paying if governmental intervention doesn’t happen. Dams and other infrastructure are essentially the same. But in our want to micromanage and cower from some boogeyman somewhere, we’ve gotten away from actually making and building things to writing reports about the hazards of making and building things. Which YOU are paying for.

So we implore our clients–as well as the general public–to realize that when a politician is ‘targeting’ something or other–presumed to be ‘the other guy’ — that they actually are targeting YOU.