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Before the tea party, thank your lucky stars
Old 04-26-2009, 10:43 AM   #1
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Before the tea party, thank your lucky stars

http://www.nytimes.com/2009/04/26/bu...1&ref=business
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Old 04-26-2009, 12:02 PM   #2
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I wonder how poorly reasoned opinion pieces get into the newspapers. If you notice the author only looks at the positive side of luck and by inference generalizes it to all successful people.

Also note how he uses the straw man argument here:
"“Spread your own damn wealth around!” Other protesters contended that the tax system already strains the vital connection between individual effort and reward and warned that further tax increases might destroy it."

I don't know how to classify this observation - ignorance? The skills he mentioned do not infer itellegence. They most likely were learned over years and required in such a "primitive" economic country. If that person were to be placed in NYC with the same skills would the author say the cook was not intelligent because he doesn't have high level skills and successful in NYC? and a subway driver was more intelligent? Why didn't the author look for the "luck" that lead this person to be successful?

"For example, as a Peace Corps volunteer in Nepal long ago, I hired a cook who had no formal education but was spectacularly intelligent and resourceful. Beyond preparing excellent meals, he could butcher a goat, thatch a roof, plaster walls, resole shoes and fix broken alarm clocks. He was also an able tinsmith and a skilled carpenter. Yet his total lifetime earnings were less than even a very lazy, untalented American might earn in a single year. Well-paid Americans owe an enormous, if rarely acknowledged, debt to the social investments that supported their success."

"Well paid" when compared to a 3rd world country? This guy is an economist?

And what about financially unsuccessful tax protestors? Are they blissfully unaware how incredibly unfortunate they are?

"Financially successful tax protesters seem blissfully unaware of how incredibly fortunate they are. To borrow from the late Ann Richards and her description of the first President Bush, they were born on third base and thought they’d hit a triple."
++++++
How does this stuff get published?
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Old 04-26-2009, 05:45 PM   #3
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From the article:

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....For example, as a Peace Corps volunteer in Nepal long ago, I hired a cook who had no formal education but was spectacularly intelligent and resourceful....
Not commenting on the article, but as a Peace Corps volunteer he hired household staff? That just seems so antithetical to the Peace Corps philosophy to me, at least in terms of the people I know who were in the Peace Corps.
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Old 04-26-2009, 06:56 PM   #4
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From the article:

Not commenting on the article, but as a Peace Corps volunteer he hired household staff? That just seems so antithetical to the Peace Corps philosophy to me, at least in terms of the people I know who were in the Peace Corps.
From what I have read, various cultures see no problem with being 'household staff' as long as they are respected. And it helps the local economy.
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Old 04-26-2009, 07:59 PM   #5
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I wonder how poorly reasoned opinion pieces get into the newspapers.
The whole "the wealthy are just more fortunate/lucky/crooked" line of reasoning is very important to certain wealth redistribution political movements that are currently in vogue. Please don't argue with them, it gets them upset.

Another big problem with the article is the implication that the wealth of the country is due to previous contributions by taxpayers, and that high income earners are pretending this isn't so and aren't willing to contribute. The wealth of the country is the result of the individual and collective efforts of millions of productive people who are creating things and trading with others for mutual benefit. The more capital they are allowed to keep and put to work in the private sector, the more prosperity (and tax revenue) there will be.
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Old 04-27-2009, 11:00 AM   #6
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I have seen and heard this arguement a lot. The thing that you have to remember about this type of thinking, is that it is based on the false premise that everyone is born equal, and should therefore have equal. As most of us understand, equal potential does not mean equal outcome. Of couse there is luck in the world! And I think most of us here have been receipients of both bad and good from time to time. But it is the choices that we make much more than luck (good or bad), that determines our outcome.

Does anyone believe that if we gave 100k to someone living on welfare for years that this person would be set for life, and suddenly become self sufficient? Does anyone believe that if you took every dime from a successful business man, that he would not get it back again one day? By and large it is the attitude and mindset that determines where you will wind up. Probably even more important than intelligence, or good looks.

From what I have seen so far, this sort of reasoning (actually lack of reasoning), usually comes from people that feel "cheated" in life. That somehow the whole world has "done them wrong". And never once will any of these folks admit to any mistakes they have made, or things they want to do themselves, to try to improve their lives. That is the telltale sign of the falseness of their arguement. I think successfull people are always looking for ways to improve their situation, and analyze their past actions to find mistakes that were made along the way. Mistakes hopefully not to be repeated again.

Chronically un-successful people are only out looking for someone to blame... and that is anyone or anything other than themselves, and their actions. It is always easier to blame some nameless, faceless group of people, than to take a long hard look at yourself and own up to the mistakes you have, and are still making. Some people including myself, would consider that a sign of maturity, and wisdom. Can someone find instances where people through dumb luck alone achived tremendous success.. sure.... but I can come back and show 10 more examples where luck had NOTHING to do with it.
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Old 04-27-2009, 11:21 AM   #7
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From what I have seen so far, this sort of reasoning (actually lack of reasoning), usually comes from people that feel "cheated" in life. That somehow the whole world has "done them wrong". And never once will any of these folks admit to any mistakes they have made, or things they want to do themselves, to try to improve their lives. That is the telltale sign of the falseness of their arguement.
Talk about lack of reasoning.
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Old 04-27-2009, 12:25 PM   #8
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"The problem with socialism is that you eventually, run out of other people's money.” - Margaret Thatcher
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An Existential Economist?
Old 04-27-2009, 12:55 PM   #9
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An Existential Economist?

Why work at anything, it's all luck, and meaningless. We'll let the Govt loot those "lucky winners", and live off the ever expanding dole. Don't worry, (or strive with any purpose), be happy.

MY DW and I were two of those "Financially successful tax protesters", and we were NOT "blissfully unaware of how incredibly fortunate" we have been to be Americans living in these times. We have both been able to run our own lives, make our own choices, and work towards what we have in life. BTW, my wife's parent were poor political refugees from Ukraine, and lived in a ghetto in Detroit when they came in the 1950's. MY DW is a pharmacist, and her brother is a doctor. No luck of the "silver spoon" with them, just work and determination.

The author skirts the real issues we protested about: How big, and intrusive, should we allow our govt to become? How much of our GDP should the govt take and redistribute? Won't we all pay the bill for the massive govt being created at 'warp speed" right now?

Our founders were rightly afraid of big, powerful central govts. Guess what, that makes the people serfs and subjects, not active citizens.
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Old 04-27-2009, 02:15 PM   #10
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"The problem with socialism is that you eventually, run out of other people's money.” - Margaret Thatcher
Ditto. And running out of people willing to work so the slackers have it as good.

Having lived under the system, it only sounds and looks good from a distance.
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Old 04-27-2009, 02:21 PM   #11
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Ditto. And running out of people willing to work so the slackers have it as good.
My fear is that over time, if the trend continues to provide more means-tested goodies and increase taxes to do it, the "incremental value of work" -- the increase in wealth and/or standard of life that working provides over being on the public dole -- keeps shrinking.

And if that incremental value of work shrinks enough that the number of people choosing to get off the hamster wheel reaches critical mass, if a critical mass of ants choose to become the grasshopper, we're screwed. If we reach a point where people say, "I bust my butt and I barely live better than my neighbor who isn't working," it might be "game over."

In reality, we do need to be careful that we don't go too far in that direction. If there are inadequate incentives to be a producer, fewer will produce and more will choose to consume. There's still plenty of incentive but the trend seems to be toward reducing it. It's important that it not go overboard.
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Old 04-27-2009, 03:20 PM   #12
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My fear is that over time, if the trend continues to provide more means-tested goodies and increase taxes to do it, the "incremental value of work" -- the increase in wealth and/or standard of life that working provides over being on the public dole -- keeps shrinking.

And if that incremental value of work shrinks enough that the number of people choosing to get off the hamster wheel reaches critical mass, if a critical mass of ants choose to become the grasshopper, we're screwed. If we reach a point where people say, "I bust my butt and I barely live better than my neighbor who isn't working," it might be "game over."

In reality, we do need to be careful that we don't go too far in that direction. If there are inadequate incentives to be a producer, fewer will produce and more will choose to consume. There's still plenty of incentive but the trend seems to be toward reducing it. It's important that it not go overboard.
Exactly... very well stated....
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Old 04-27-2009, 08:40 PM   #13
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but I can come back and show 10 more examples where luck had NOTHING to do with it.
10 more?

I defy you to show one where luck had NOTHING to do with it.
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Old 04-28-2009, 04:19 AM   #14
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10 more?

I defy you to show one where luck had NOTHING to do with it.
This thread is hilarious. Here is a Wall Street guy arguing for a bit compassion and acknowledgement that luck and the environment (good schools, good legal systems, and a proper infrastructure) have something to do with one's level of achievement, and the rest are arguing that they made it all by themselves. I would like to ask how many of you would have achieved your current level of financial success had you been born in Rwanda?

I find both extremes troubling. Those who take the support system argument too far run the danger of removing the incentives for hard work as Ziggy pointed out. However, those who constantly think that they made it all by themselves are attributing too much of our their success to their own ingenuity and hard work, and, as a result, are constantly looking askance at others as if they are coming after their hard earned dollars. This is not exactly the best attitude with which to engage others because the underlying theme of every interaction is, "I have made it. Stay away from my money."
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Old 04-28-2009, 08:39 AM   #15
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However, those who constantly think that they made it all by themselves are attributing too much of our their success to their own ingenuity and hard work, and, as a result, are constantly looking askance at others as if they are coming after their hard earned dollars. This is not exactly the best attitude with which to engage others because the underlying theme of every interaction is, "I have made it. Stay away from my money."
OK, You have me convinced. Lets expand the reach and scope of govenment some more.
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Old 04-28-2009, 09:26 AM   #16
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10 more?

I defy you to show one where luck had NOTHING to do with it.
First off, it is impossible to prove any negative statement. You cannot prove that someone NEVER ate chocolate ice cream, you can prove that at some specific point in time someone DID. But I will try to better decribe what I was getting at.

If you look at the last Forbes report of the worlds richest people, as I recall, well over 2/3rds of them made their money in a single lifetime (as in non-inheritance). If you look even further into their profiles quite a few actually had businesses that completely failed the first time, sometimes twice. Leaving them in some cases with not much money at all. If luck was the dominant factor in producing their wealth, you would not expect to see such a pattern. As in once they were down.... they should have remained there.

If you read my posting closely, I did say, and will do so again, of course there is luck, both good and bad that visits everyone from time to time. But the thought that luck is the most dominant reason why someone in the US fails or succeeds is false.

The fact is, that in the US, people with the right attitude and mindset tend not to stay in poverty for very long. However, if you adopt a defeatist attitude including luck, astrology, reading of palms, consulting tea leaves, or blame the rich folks for your fate, then yes... you will probably stay just about where you currently are. You cannot control what others do, or what life might throw at you, but I have learned that a little bit of forethought and planning can go a long way. Finding a perfect house for sale for $5000 is a lucky break. But if you did not save $5000 for such a situation you cannot capitalize on it. Luck is what happens when preparation and opportunity meet.

I will be the first to admit that in the beginning I was not very financially savy (still learning new things every day). A friend of mine whom I owe a lot helped to turn me on to 401k's, Roth IRA's etc. And while that certainly was a lucky break for me, it was only through hard work, effort, and education, that I was able to turn a net worth of 3k into well over 200k in less than 10 years. And I can personally assure you the factor luck had to play in it was minor at best.
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Old 04-28-2009, 09:35 AM   #17
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This thread is hilarious.
It might read that way because you read a different article. The author is not a "wall street guy."
The whole concept of luck in the article I read is a red herring.

"Robert H. Frank, a Cornell University economist, is a visiting faculty member at the Stern School of Business at New York University."

He even misleads us about the Outliers book.


Amazon.com: Outliers: The Story of Success: Malcolm Gladwell: Books

Now that he's gotten us talking about the viral life of ideas and the power of gut reactions, Malcolm Gladwell poses a more provocative question in Outliers: why do some people succeed, living remarkably productive and impactful lives, while so many more never reach their potential? Challenging our cherished belief of the "self-made man," he makes the democratic assertion that superstars don't arise out of nowhere, propelled by genius and talent: "they are invariably the beneficiaries of hidden advantages and extraordinary opportunities and cultural legacies that allow them to learn and work hard and make sense of the world in ways others cannot." Examining the lives of outliers from Mozart to Bill Gates, he builds a convincing case for how successful people rise on a tide of advantages, "some deserved, some not, some earned, some just plain lucky."

Outliers can be enjoyed for its bits of trivia, like why most pro hockey players were born in January, how many hours of practice it takes to master a skill, why the descendents of Jewish immigrant garment workers became the most powerful lawyers in New York, how a pilots' culture impacts their crash record, how a centuries-old culture of rice farming helps Asian kids master math. But there's more to it than that. Throughout all of these examples--and in more that delve into the social benefits of lighter skin color, and the reasons for school achievement gaps--Gladwell invites conversations about the complex ways privilege manifests in our culture. He leaves us pondering the gifts of our own history, and how the world could benefit if more of our kids were granted the opportunities to fulfill their remarkable potential. --Mari Malcolm
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Old 04-28-2009, 11:00 AM   #18
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But the thought that luck is the most dominant reason why someone in the US fails or succeeds is false.

The fact is, that in the US, people with the right attitude and mindset tend not to stay in poverty for very long. However, if you adopt a defeatist attitude including luck, astrology, reading of palms, consulting tea leaves, or blame the rich folks for your fate, then yes... you will probably stay just about where you currently are.
Hmmmm, another strawman argument that descends into nonsequitur.

In my lifetime, I have never met anyone successful in life who did not ascribe a certain degree of luck (whether it be pedigree related or just a "chance opportunity") to his good fortune. "There but for the Grace of God, go I." Perhaps, the very successful display greater degrees of humility when they somberly reflect on their status in life. On the other hand, people mired in poverty, many of whom I have also met, rarely if ever blame their status in life on "bad luck." I think what you describe as a "defeatist attitude" is simply psychological damage caused by the absence of "hope." There are many people who have just given up hope and given up life.

The "self-made man" is more myth than accurate is the point of the article, when you consider that the determining factors in many cases for success are genetics and environment, two factors which are primarily the luck of the draw! I think most of us would rather be "good" at something than "lucky" but "good luck" frequently has a significant role in success.
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Old 04-28-2009, 11:12 AM   #19
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Old 04-28-2009, 12:50 PM   #20
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I defy you to show one where luck had NOTHING to do with it.
I don't know what luck means.

I have two brothers. One elected to drop out of high school. He's had low level jobs for much of his life (e.g., dishwasher). I can remember him telling me that he puts in only 25 hours/week because he doesn't like to work. My other brother graduated from high school and has been employed in typical blue collar jobs for 35-40 years. Historically, he puts in a solid 40 hours/week. I have a PhD. I've been putting in 60-80 hours/week, either at school or on the job, since high school (the last 35 years). I've taken 10 days of vacation in the last 18 years. I can only guess as to what my two brothers earn. One probably earns $10K/yr; the other perhaps $35K/yr. I earn a little over $185K/yr.

Yes, all three of us are very lucky that we live in the United States and not Rwanda. But that doesn't explain the difference in our incomes. Here are three brothers coming from the same gene pool, or so my mother claims. Presumably, we possess similar innate abilities and intelligence. We've been blessed with similar opportunities in life. We had many of the same teachers in public school.

I didn't win the lottery. 99% of the income difference between me and my brothers is due to the work, dedication, focus, and sacrifice each of us elected to put into our own lives and careers. It's as simple as that.

While an ethical argument can be made that the United States should redistribute its wealth to people in Rwanda, I don't see why the government should force me to redistribute much of my income to either of my brothers. If I choose to do so, fine, but I don't see this as the governments call.

My marginal tax rate is approaching 50%. I paid about $60K in taxes last year (all taxes). And then the government tells me that it needs more and that I'm not paying my fair share. On the other hand, my annual expenses are about $30K/yr. That's $15K for mortgage and property taxes, $5K for charity, and $10K for everything else (food, clothes, utilities, gas, home and auto repairs, insurance, recreation and entertainment, etc). Put simply, I pay more than twice in taxes than what I spend on myself. If I can live within my means, why can't the government?

I work for every penny I earn. And then I pay my taxes. Work doesn't pay, which is a main reason why I will soon take early retirement. If the government wants to create an anti-incentive for me to work, fine, I won't work. And when I retire, my taxes will drop from $60K/yr to well below $10K/yr. And when I'm relaxing on the beach, I'll start complaining that others aren't paying their fair share.

Back to work.
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