EDITORIALS

 

Equal Grounds: Meritocracy versus Racism

by Peter Coe Verbica

Malnutrition, lack of education, devaluation of the currency, lack of property ownership, and the inability to plan for the next generation impede innumerable individuals from breaking the cycle of poverty.  The American underclass has been hindered rather than helped by decades of well-intentioned but poorly constructed welfare policies.[i] This article seeks to acknowledge why certain cultures succeed and why the current civil war in the USA is not partisan, but rather economic.  Reeducating American voters to revitalizing their own quintessential liberties, including the sanctity of property rights, is the solution.

Successful versus Unsuccessful Cultures. 

The truly disadvantaged are those who are bereft of family support to pursue higher education, career training and ownership of real property.  The wildly popular book Rich Dad, poor Dad illustrates that this is a cultural gap, rather than an issue of skin color.  All else is a diversion, a red herring, a means to subjugate, and a ruse to propel Marxist policies.[ii]

Initially, it is a matter of calories and being nurtured.  The family is, at its best, an organism designed to ensure the survivability of the next generation.  If, by way of contrast, a child is raised without proper caloric intake (aka, “malnutrition”), it can significantly affect his or her IQ.[iii]

Moreover, if a child is raised without affection, the probability of neuroticism is high.[iv]  Glaring evidence includes studies that demonstrate that children of fatherless households are statistically more apt to commit suicide, rape, drop out of high school, and have behavioral disorders.[v]

Those cultures which foster the nuclear family, whether they be Hindi, Jewish, Buddhist or LDS, feed and nurture their next-of-kin.  This cultural advantage is not progressive nor conservative, but rather familial.  Finally, well-structured families within certain successful cultures allow for multi-generation planning — including ownership of real property, as well as the education and training of the next generation.

The proverbial “elephant in the room,” often ignored by most polemicists is family support.

Serfdom versus ownership.

The root of the civil war raging in the United States of America is economic, and the root of the economic gap is the profound breakdown of the family unit. This cultural gap is now masquerading as systemic racism, blurring issues and impeding solutions.

It is a civil war best understood between factions of owners and renters.

All too often, permanent welfare benefits create permanent renters. The unintended consequence of a generous welfare program is the creation of a permanent underclass. The American dream of equal opportunity for all Americans can only be addressed by focusing on the causes and solution of the profound breakdown of the family unit.  Otherwise, America will be faced with an unwinnable civil war.

The many fronts of the economic war include:

(a)   the devaluation of fiat currency to pay down trillions in Federal debt,[vi]

(b) the degradation of property rights, including Draconian zoning and “environmental” policies, which artificially restricts supply, perversely drives up the cost of living, and circumscribes liberty, [vii]

(c) immortal buyers versus mortal buyers purchasing traditional single-family homeowners’ inventory and limiting supply[viii],

(d) increasing business governance compliance (through a variety of ad hoc ruses, including anti-competitive ESG policies[ix]) as a tool that benefits large multinationals but disfavors small businesses and individuals (unable to bear the regulatory overhead),

(e) unfair competition by nonprofits versus traditional tax-paying enterprises (i.e., lack shareholder accountability, special tax treatment, lower compliance requirements, etc.) especially as it relates to ownership of real property[x].

These points are, to use the metaphor of a famous US Justice, similar “fruits of the poisonous tree” — briefly described in more detail infra.

Currency.

Devaluation of currency punishes the wage earner, pensioners, and lenders.  It rewards debtors, speculators, and owners.  It also arguably rewards exporters initially, but conversely and perniciously rewards foreign investors who can utilize their competitive buying power against domestic purchasers.  As one prominent US Senator confessed recently, “everyone will receive a check; it just won’t be worth anything.”

Property.

The late Harvard educator Richard Pipes writes with depth and breadth on the inseparable linkage between property rights and freedom.  Degrading property rights impoverishes a society in a myriad of ways, including:

(a)   dis-incentivizing new construction and property rehabilitation (quelling CAPEX),

(b)   thwarting the ability of the industrious to borrow against a valuable asset, and

(c)   government-sanctioned stealing the underlying value of families’ assets (i.e., through down-zoning).  The rise of Third World-type tent cities in US cities is but one side effect, as individuals descend into serfdom.

Work-aged males cluster at bistros to drink coffee and smoke cigarettes not strictly due to their own idleness, but also because their pathway to ownership appears unattainable.

Structure.

Immortals (entities created as limited liability entities, such as corporations or trusts) have an inherent competitive advantage over human beings.   Railing against corporations is traditionally the purview of the Left. However, should modern artificial entities with conceptually unlimited lives be allowed to compete against humans for single-family housing inventory – traditionally one of the foundations of the American Dream?

By way of example: REITs with cheap cost of capital, large war chests and quasi-immortal structures, along with well-funded private equity funds, are buying up large amounts of single-family home inventory in the U.S.  American Homes 4 Rent (ticker “AMH”) reports that as of March 31, 2021, it owned 53,984 homes.[xi]  Invitation Homes (ticker “INVH”) reportedly owns nearly 80,000 homes.[xii]  Tricon reportedly owns 31,000 homes in the US and Canada.[xiii]  Mynd Management, underwritten by Invesco, reportedly plans to purchase at least 20,000 homes.[xiv]

Regulations as an Anti-Competitive Tool for Large Corporations

Tim Worthall, a content contributor to The Adam Smith Institute, explains that big business relishes regulation because they can manage the additional overhead while smaller businesses cannot; large corporations, while seen the pinnacle of capitalism, appreciate the side effects of regulations – quelling new competitors from entering a market and favoring incumbents.[xv]  Some, such as 2ndVote’s management, argue that ESG (“Environmental, Social, Governance”) standards are part of this pervasive ruse – another complicity by big businesses to tip the scales in their favor over individuals or small businesses who are unable to bear the overhead.[xvi]

Growth of Non-profits with political agendas rather than munificence

Non-profits’ stake in the national economy has grown significantly. In 2019, nonprofits were “responsible for 10% of all private jobs in the U.S.”[xvii]  Many rue the migration of nonprofits from their traditional role of benevolence to bald political agendas.[xviii]  As nonprofits absorb more of the US workforce, some wonder whether their competitive advantages should be reviewed.[xix]  By way of example, if the nonprofit acquisition of real estate removes taxable inventory off of the tax rolls, other taxpayers, such as private individuals and commercial businesses must shoulder the burden as the municipality looks to address its declining revenues.[xx]  Higher taxes born by individuals and for-profit entities equates to a higher cost of homeownership and higher rents.

The Solution: Educate Voters to Revitalize Their Own Quintessential Liberties

If individuals are to thrive in the US, a return to our essential liberties is paramount.  If power rests with the people, they must be reeducated to advocate for the inalienable rights underscored by our nation’s founders.

Artificially created competitive advantages of immortals (including nonprofits) versus individuals should be addressed — especially with respect to single-family home inventory and regulations which disfavor small business.

Cultures fostering strong familial bonds thrive — no matter the color of members’ skin; the nutrition, nurturing and education of the young (including lifelong lessons on the importance of delayed gratification, real property ownership, and self-reliance) contribute to the remarkable success trajectories of certain cultures, especially in an equal opportunity society.  For those individuals who triumph over abusive and dysfunctional homes (i.e., by joining the US military and taking advantage of collegiate opportunities at the end of their service), they are outliers deserving the heartiest of acclaim.

To divide a society by race is an anathema to the American way of life.  A far better strategy is to encourage meritocracy, which “promotes equal grounds for people from different races and castes.”[xxi]  Perhaps we should turn attention to the phenomenon of Singapore and learn from a country which takes the best from our past and leaves behind the worst of our present.

[i] https://vtdigger.org/2013/12/18/roper-policies-creating-permanent-underclass/

[ii] https://nypost.com/2021/05/06/what-critical-race-theory-is-really-about/

[iii] https://unu.edu/publications/articles/eating-for-intelligence-iraqi-children.html#:~:text=Our%20results%20show%20that%20nutrition,children’s%20nutritional%20habits%20were%20poor.

[iv] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5403000/

[v] https://blueridgecounseling.org/the-effects-of-fatherlessness-on-children/

[vi] https://www.investopedia.com/articles/investing/090215/3-reasons-why-countries-devalue-their-currency.asp

[vii] https://www.cato.org/blog/richard-pipes-property-institution

[viii] https://www.nytimes.com/2020/03/04/magazine/wall-street-landlords.html

[ix] https://www.afr.com/policy/economy/us-fund-manager-looks-at-australia-to-counter-esg-wave-20210528-p57vz3

[x] https://www.amazon.com/Unfair-Competition-Nonprofits-James-Bennett/dp/0819171808

[xi] http://americanhomes2020rd.q4web.com/home/default.aspx

[xii] https://www.invitationhomes.com/about-us

[xiii] https://finance.yahoo.com/quote/TCN.TO/profile?p=TCN.TO

[xiv] https://www.bloomberg.com/news/articles/2021-06-01/invesco-backs-mynd-to-spend-5-billion-on-single-family-rentals

[xv] https://www.adamsmith.org/blog/regulation-industry/of-course-big-business-loves-regulation

[xvi] https://tennesseestar.com/2021/06/24/2nd-vote-advisers-dan-grant-companies-should-be-inspired-by-the-first-amendment/

[xvii] https://www.fastcompany.com/90305058/these-4-charts-illustrate-how-valuable-nonprofits-are-to-the-u-s-economy

[xviii] https://www.nonprofitpro.com/post/is-your-nonprofit-apolitical-think-again/

[xix] https://www.business2community.com/non-profit-marketing/non-profits-unfair-advantage-business-01692188

[xx] https://www.taxpolicycenter.org/sites/default/files/alfresco/publication-pdfs/412460-The-Property-Tax-Exemption-for-Nonprofits-and-Revenue-Implications-for-Cities.PDF

[xxi] https://www.cleverism.com/lexicon/meritocracy/#:~:text=%20Following%20are%20some%20of%20the%20advantages%20of,for%20promotions%2C%20bonuses%20and%20other%20rewards.%20More%20

No More Taxes. PLEASE.

Taxes hurt.  Taxes hurt bad.  Even socialist Bernie Sanders does not want to pay taxes.  Bernie earned $1.1 million dollars in 2016 and 2017, but when he was asked if he paid extra taxes to support his socialist agenda, he deflected the question and rationalized that other rich people do not pay extra taxes. Typical response from big government legislators – “Do as I say, not as I do.”

I understand taxes are necessary to pay the debts and provide for the national defense and general welfare of the United States of America, the greatest country on Earth.  But the expansion of “general welfare” has been blown out of control, especially in our beloved state of California.  Irresponsible tax-generating legislators have found creative ways to hide their methods of taxation on us.

In California, we are taxed, surcharged, assessed, and fined from a myriad of sources, many of which we are unaware. Besides the highest income tax in the country at 13.3%, California charges a 1% lumber tax on qualified wood products, a paint fee of 75 cents per gallon, a Tire Fee when purchasing each new tire as well as a disposal fee when you return the old tire, an automotive battery fee, an Electronic Waste Recycling fee on purchases of laptops, televisions, and computer monitors, and even a $10.50 mattress recycling fee.  Los Angeles county sales tax comes in around 9 %.  My cellphone bill collected seven different state taxes and one L A county tax.  My property tax bill had the 1% general tax levy but added another $1400 in annual taxes for community college, schools, sanitation district, sewer, vector control, flood control and many more itemized fees. Check out your bills, you may be surprised.

California also has extreme taxes on tobacco products, alcoholic beverages, and cannabis.  The tax for one pack of cigarettes is $2.87 with other tobacco products being taxed at 56% of the wholesale cost.  Cannabis has 15% excise tax rate of the average market price plus 60% markup for arm length transactions.  The California Liquor Tax is $3.30 per gallon.  Of course, there are licensing fees for all persons or businesses making sales of these products.

In 2017, California legislators passed Senate Bill 1 which was the infamous gasoline tax that has increased state excise taxes to 50.5 cents per gallon. California state sales tax on gasoline adds on average another 10.7 cents per gallon.  The federal government charges an excise tax of 18.4 cents per gallon.  That total comes to 79.6 cents per gallon.

Harder to find fees include:

  • Underground Storage Tank fee of 2 cents per gallon
  • Fuels Under the Cap fee currently charges another 14.3 cents per gallon
  • Low Carbon Fuel Standard fee varies but estimated to be 22.6 cents per gallon.

These fees add an additional 38.9 cents per gallon for a total of $1.185 per gallon in taxes and fees. Congratulations, California has the highest gas prices in the country.

Vehicle registration also increased dramatically with all the revenue promised to improve state and local roadways.  But in stepped Governor Newsom to sign Executive Order N-19-19 which directed the state to spend money on projects “to help reverse the trend of increased fuel consumption and reduce greenhouse gas emissions associated with the transportation sector.” In response, the California Department of Transportation proposed delaying funding for three highway widening projects in San Luis Obispo County and the Central Valley, instead setting aside $61 million in SB 1 funds “for priority rail projects and other priorities aligned with the Executive Order.”

And Now

President Biden has outlined a two-part economic plan that will cost between $3 trillion and $4 trillion over the course of a decade.  The president says the first is the “American Jobs Plan” and the second is the “American Families Plan.” Some considerations in the plan include $621 billion in transportation infrastructure, $400 billion for expanding access to quality, affordable home- or community-based care for elderly and people with disabilities, expanding health insurance coverage, extending the child tax benefit, building 500,000 electric vehicle chargers, and numerous mentions of investments in technology addressing climate change.  But President Biden assures us that our taxes will not increase because these plans will be funded by raising the corporate tax rate to 28%, an increase of 7%. This massive infrastructure proposal is a vehicle to advance far-left wing policies.

We cannot afford the policies of these tax grabbing elected officials.  Our children cannot afford these costs.  Our national debt is greater than $27 trillion, and America’s federal debt is set to exceed the size of the entire U.S. economy this year for only the second time since the end of World War II. The cost of living in California is already too high and forcing many of our young people to move out of state where they can buy a home and live a middle-class lifestyle. Big government is not efficient and is extremely expensive. Help the California Congress of Republicans elect more fiscally responsible legislators. We cannot afford any more bigger spenders.

Mark Hershey

Resources:                 

  • The Epoch Times
  • California Department of Tax and Fee Administration   cdtfa.ca.gov
  • National Debt Clock, Peter G. Peterson Foundation,  pgpf.org/national-debt-clock
  • Property Tax Statement for author, Los Angeles County Tax Collector
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