Monday, August 16, 2004

The Magic Yacht

Why do Democrats (and Republicans, too) think the economy is magical? As my last school semester threatens to start up again, I’ve been spending the past week or so watching reruns of The West Wing, a show about the administration of a Democratic president. So naturally, there are a lot of Democratic-style proposals set forth, not the least of which concerns the virtues of progressive taxes.

The argument goes something like this: rich people use their extra money to buy yachts and middle class people use their extra money to buy college tuition. Since “society” values tuition over yachts, we should tax rich people more and give that money to everyone else. Ultimately, the argument is that this is better for the economy, and by extension, humanity in general.

Here’s the magic. Pervicacious Democrats think yachts come from a genie or some other sort of fairy tale apparatus. When rich people buy yachts (or when anyone buys anything), people have to supply and maintain it; they don’t come from no where. An increase of yacht sales employs people who make them, sell them, keep marinas, repairs boats, staffs boats and manufactures equipment that’s used in boats. These people, in turn, buy resources from those that allow them to do their job: lumberjacks, miners, steel formers, Alcoa employees, computer programmers, the people who make the machines that make the electronics and on and on and on.

Now you could say that college tuitions help people too: professors, writers, maintenance workers, publishers, security guards, construction workers and on and on and on. We could spend weeks trying to track all the people that are helped by one kind or spending versus another and we will never be able to enumerate them all; it’s just too complicated.

The point is saying that either good is a vacuum, having no additional benefits to the average person is a lie. It’s that kind of twisted logic that makes people think banks burn the money corporations put in their coffers instead of what they actually do: lend it out to people for houses, cars, small businesses and yes, even tuition. The ultimate value of a good is what the market demands, not how the average person views it, and considering it’s harder and harder to get a job with just a bachelor’s degree, maybe that’s a signal that we need more yacht buyers.

1 comment:

-Ron said...

Pleasure Yachting in Iowa

Nothing brings more pleasure to Iowa’s elite than cruising the cornfields in their brand new $3M yachts. But then, I suppose there is the old O-I-O. One aspect about luxury spending that is sometimes overlooked is what the very presence of luxury itself reveals about the general standard of living. Let me elaborate.

Having time for luxury has for most of recorded history been something reserved for kings, high priests, and umm, well, kings and priests. 99+% of all people had no clue what it was like to have leisure time. Today, very few people in our society don’t have at least some leisure time, and some money to spend on it. The proof is that we have televisions in every home; that there is almost nobody left out there without a car (even if it is as bad as David’s); and that children spend 20 years of their life as non-productive citizens mooching off their parents’ productivity (who, by the way, miraculously still manage to have a television and a car). Now if this is the poor schmuck, then the farther you move up the ladder the better it gets.

The great thing about the fact that so many rich folks want yachts is not just all of the many and varied economic benefit that David mentions, but also the simple fact that there are so many rich folks means that wealth abounds, and that even a poor schmo can get an education, buy a car, and have the dream of one day buying a yacht and sailing the high seas of Iowa.