A Little Faith

Most Americans believe they’re smart enough to handle the average, everyday salesperson. Salespeople make a living proving them wrong, or so they claim. Rather than play the referee, let’s see how an average shopper—let’s call him Ernest Mann—might acquit himself in the battle of the prattle.

Ernest Mann lives in a community where public transportation is inconvenient, so he commutes to work. Sadly, his SUV is getting long in the tooth. It has 180,000 miles on the odometer, and it lacks the latest infotainment and safety features.

Ernest would like to listen to Pandora on the way to work, and he’d like to have blind-spot monitoring, too. So, on a fine weekend day, he decides to visit a local dealership. An experienced salesmen named Rob Byers meets Ernest before he’s halfway to the showroom floor and begins to ask him about the type of vehicle he’s looking for, what features he wants, and how much money he’s willing to spend. Ernest is the embodiment of his name. He answers Rob’s questions honestly but warily, because salesmen are slippery creatures with forked tongues.

The tête-à-tête continues until Rob rubs his hands together like Danny DeVito in Get Shorty and says: “Okay, Mister Mann. I’ll tell you what I can do, just for you. I’ll take your SUV in trade today, right this minute. Then, at some future point in time, I’ll bring you a safer, less-expensive SUV that checks every box on your infotainment wish list.”

Ernest is not the kind of man who can be taken for a ride. He responds, “I need my SUV to get to work. If I hand over my keys today, when will I get my new one?”

“I can’t say right now,” Rob replies. “We’ve never made an offer like this before, so we’ve got a few wrinkles to iron out. But I gotta tell ya, nobody’s ever made an offer like this, and nobody ever will, ‘cause we’re the best in the business, bar none.”

“Okay, but how much will my new SUV cost?”

“I love to give you an answer, Ernie, but I can’t. Like I said, this is a new program. We’ve never had a promotion like this before, but it’ll be great. You can take that to the bank.”

“Can you at least tell me what new features my new SUV will have?”

“Here’s the deal, pal: If you want the safest, best SUV ever made for pennies on the dollar, you gotta have faith. Your transportation dreams are about to come true.”

Ernest was taught in sophomore English class to summarize. “Just to make sure I understand: You want me to give you my SUV today, and later, at an unknowable date, you’re going to give me a new, safer, and less expensive SUV.”

“Can you believe how incredible this deal is? I get giddy just thinkin’ about it.”

We have to bring our little allegory to a halt at this point because there are three possible endings:

  • If Ernest is a Republican, he hands his keys to Rob and walks home.
  • If Ernest is a left-wing Democrat, he calls his Congressman and asks for a free SUV.
  • If Ernest is an Independent, he goes home and sulks because he didn’t get the deal he was hoping for.

As a matter of public record, the Republicans have tried to repeal Obamacare more than sixty times, but Agent Orange (aka The Donald, aka President Trump) is now promising to provide better healthcare for less cost at some unspecified time in the future.

Left-wing Democrats, on the other hand, want “Medicare for All,” like Canada, Australia, the UK, and other countries that we used to call allies. Our former friends can afford to offer nationalized health plans to their citizens in part because:

  • Their healthcare is about half as costly as ours, or less.
  • They don’t pay for half the free world’s defense. We do.
  • They have marginal income-tax rates that run as high as 70%. We don’t.

Have you been to Switzerland? Their national debt is tiny (23% of GDP!) compared to the rest of the western world, which means they’re the gold standard for minimizing the cost of government, yet they can afford to provide universal healthcare—through mandatory participation in privately managed insurance plans.

Sound familiar?

The Cost of Corruption

Senator Elizabeth Warren has made reduction of corruption a central plank of her 2020 presidential campaign. Whether or not we believe that she’s a girly reincarnation of Mark Twain, Albert Einstein, or Nelson Mandela, all of whom were avowed socialists, it’s hard to argue the point. The problem is that all but the corrupt agree that corruption is bad, but, apparently, it’s impossible to measure how bad.

We on The Other Side are inexorably drawn to unquantifiable problems. In this particular case, we decided to put one set of expert data side by side with another to see if we could find a way of estimating the cost of corruption.

The first of our datasets is published by Transparency International (TI), a not-for-profit organization devoted to the reduction of corruption worldwide. TI maintains an Anti-Corruption Hub that aggregates their research, authoritative studies, and statistically sound surveys on the topic of corruption. On an annual basis, they produce a Corruption Perception Index that ranks 170 nations around the world on a scale from 0 (purely corrupt) to 100 (breathtakingly honest).

In 2017, New Zealand was the world’s least-corrupt country with a score of 89 out of 100. The US tied Austria and Belgium for 16th with a score of 75. Other notables: Canada and the United Kingdom were tied for 8th with a score of 82, China was 77th with a score of 41, and our new pal Russia was 135th with a score of 29. (We can still trust Vladimir Putin more than the sum of our intelligence agencies, right?)

If you peruse the Transparency International list from top to bottom, you’ll find that your wallet is less likely to be stolen in Chile than Mexico, your subsidiary’s managing director is less likely to be extorted by local police in Botswana than South Africa, and US envoys are less likely to be deceived by Iranian mullahs than Russian oligarchs. But the problem remains: Using TI data alone, there’s no way to estimate the cost of corruption. But, when TI’s corruption ratings are lined up with the World Bank’s per capita income (PPP) data, a clear correlation jumps off the page. (See Note 1.)

The 20 nations with the lowest corruption (highest Transparency International ratings) generated an average per capita income of $57,155 in 2016. The second 20 generated an average of $36,000, or 37% less than the top 20, et cetera, as follows:

  • Top 20:   Average TI rating: 81; average per capita income: $57,155
  • 21-40:     Average TI rating: 64; average per capita income:  $36,000
  • 41-60:     Average TI rating: 53; average per capita income:  $23,329
  • 61-80:     Average TI rating: 42; average per capita income:  $15,236
  • 81-100:   Average TI rating: 38; average per capita income:  $13,327
  • 101-120: Average TI rating: 33; average per capita income:    $9,946
  • 121-140: Average TI rating: 29; average per capita income:    $8,909
  • 141-160: Average TI rating: 23; average per capita income:    $3,711

According to the best data extant, there is a palpable cost of corruption, it is plainly visible, and it is huge. Maybe we should care about how corrupt our nation has become in the last generation or so—and what the trend is.

Notes:

1) Gross National Product (GNP) is an estimate of the value of all final products and services turned out by a nation’s residents over a given period of time.

2) We urge you to visit the Transparency International website, especially if you’re planning to travel outside the US.

An Off-the-Wall Idea

The government shutdown rages on, but the wall or no-wall deadlock will surely be resolved before the number of federal-employee bankruptcies reaches 100,000. In the meantime, we on The Other Side thought we’d step back from the logic-free invective that passes for political discourse these days and take an off-the-wall look at the source of the problem: immigration overload.

Over the last 30 years, the demographics of Hispanic immigration to the United States have changed. Back in the 1980’s, the majority were young men seeking opportunity, legal or otherwise. Today, the majority of Hispanics at our southern border are families seeking asylum from corrupt, fiercely violent regimes in Central America. Some are so desperate that they’re willing to walk 2,000 miles to get here, with children in tow, with little or no money to pay for food and shelter along the way, and with no assurance that they’ll be admitted when they arrive.

In our books, that’s the Outer Ring of the Seventh Circle of Hell. (See Dante’s Inferno.)

It seems to us that two significant things have changed since the eighties. First, the violence and corruption in Guatemala, Nicaragua, El Salvador, and Honduras have gotten worse. Second, smart phones have enabled their victims to see that there’s a better, safer place to raise their children, a “shining city on a hill” that happens from their perspective to be halfway to the Arctic Circle.

From the US government’s perspective, of late anyway, this looks like “The Invasion of the Immigrants.” Our border defenses have been overrun. Our visa application processes and asylum courts are overloaded. Our refugee integration agencies are so overwhelmed that imprisoning thousands of children didn’t make a dent.

Plainly, our system isn’t working, so let’s ask an off-the-wall question: Is there a more humane, passably affordable alternative to shutting our borders?

Our off-the-wall idea: Develop a second haven that’s less violent, less corrupt, and more closely resembles a democracy than Nicaragua, Guatemala, El Salvador, and Honduras. Our candidate: Panama! It’s a lot closer; it’s a representative democracy with actual elections; and Panamanians speak the same language. The country is larger than West Virginia and sparsely populated, so there’s plenty of room.

Panama is hardly Denmark, of course, and there would be challenges, but let’s be solution–oriented. Let’s channel billions in foreign aid to Panama that we normally shower on our staunchest allies like Pakistan, Iran, Nigeria, and Venezuela. Let’s motivate US corporations to invest in Panama, and let’s subsidize the establishment of Panamanian immigration and assimilation systems. In other words, let’s pay Panama to help us stem the tide by creating a second haven.

Maybe $5.7 billion would be enough to get the ball rolling. Or we can wall off 2,000 miles of border (not counting Canada), mine 12,000 miles of coastline, and litigate this issue until the next Ice Age.

NOTES

1. The right of asylum was formalized by the United Nations Universal Declaration of Human Rights in 1948. The US government routinely ignores it.

2. Rene Descartes fled to the Netherlands, Voltaire fled to England, and Thomas Hobbes fled to France because the sovereign nations above provided asylum to persecuted foreigners. We got Ivana and Melania.

3. Circa 39 million people live in Nicaragua, El Salvador, Guatemala and Honduras. If 100,000 flee every year to the US or Panama or Uruguay or wherever, it will take more than 500 years for the four countries to empty out. (Their populations are still growing.)

4. If we were European, we’d be talking to Jordan and Botswana.

The Wage Gap

If Nancy Pelosi’s post-coronation comments are a useful indicator, then one of the Democrats’ 2019 priorities will be to reduce the pay gap between lower-income workers and America’s CEOs, hedge-fund managers, famous entertainers, and cosmetic surgeons (to name a few). In all fairness, reducing the pay gap sounds like a fine idea, but we on The Other Side are loath to jump on any bandwagon until we test the thesis.

For illustrative purposes, let’s assume that our low-end wage earner is a retail salesperson who makes $20 per hour (circa twice the minimum wage depending on the state), and our high-end wage earner is a large-company CEO who makes $100 million per year.  (See Notes below.)  If our exemplary CEO works 80 hours per week 50 weeks per year, then he or she makes $25,000 per hour.

That’s a pretty big gap, so let’s grow a conscience and fix it. Because we’re politically aware, therefore incrementalists, let’s increase the retail salesperson’s hourly wage by 6% per year, or about two times inflation, and the CEO’s by 1.5% per year, or about half the rate of inflation. (That seems awfully unfair to the CEO and is contrary to recent history, but let’s run the numbers anyway, just to see what happens.)

In the first year, the salesperson’s wage increases by $1.20 per hour. The CEO’s income increases by $375 per hour, so the wage gap increases by $373.80 per hour.

Lest we forget, though, we’re raising the salesperson’s wage four times faster than the CEO’s, so the gap will eventually begin to close. In this instance, it takes 134 years.

Fortunately, there are other ways to close the gap. We could, for instance:

  • Pay everyone the same wage, which sounds a lot like communism before the usual corruption sets in.
  • Freeze CEO wages until retail salespeople catch up, or for about 123 years (using same-case assumptions).
  • Replace inflation with deflation. (Ask your local economist about that idea!)
  • Increase taxes on the one percent, which has been politically impossible in this country since the rich were rebranded the “Donor Class.”
  • Declare war on a well-armed sh*thole country, draft the rich, and send them to the front lines in orange jump suits.

The bottom line: In the absence of draconian measures, we’re not going to close the wage gap. It’s math.

So… Let’s stop raging about the wage gap and focus on what matters, which is raising the incomes of workers on the lower rungs of the ladder. If we can find a workable solution, they’ll be healthier, more productive, and less dependent on Medicaid, SNAP, and other government programs––and a handful of CEOs may feel less guilty about the fact that they earn 2,000 times more than some of their less fortunate employees.

Notes:  

1) The top 200 hundred wage earners in the US had an average income of slightly less than $97 million in 2017.

2) Also in 2017, top 1% incomes grew 4 times faster than bottom 90% incomes. That’s not counting the tax break.

3) We checked the dictionary. Incrementalist is not a word, but it seemed to fit the bill, so to speak.

4) SNAP stands for Supplemental Nutritional Assistance Program, formerly known as food stamps. About 1 in 8 American workers qualify for the program.

Fear of Immigrants

From our aerie atop Mount Whatever on the island of Sardonica, it’s easy to see why millions of Americans are so afraid that the “caravan” of asylum-seeking immigrants will destroy our country. Luckily, we have access to the Internets here, so we thought we’d take a look into how ruinous they’ll be.

Here are the dreadful facts:

1) According to the latest estimates from the UN, there about 7,000 immigrants in the “caravan.” A lot of them are children and many are barefoot (those numbers are yet to be confirmed by embedded US Census takers), but let’s assume that all of them make it here anyway, and they’re let in by the thousands of border guards and army personnel who eagerly await their arrival. If so, then the US population (approximately 325 million) will increase by 0.002%.

2) There are about five million full-blooded Native Americans living in the United States. The other 98.5% of us are partial or full-blooded immigrants or their descendants.

3) First- and second-generation immigrants are less likely than the rest of us to commit crimes. (See Note 1 below.)

4) First- and second-generation immigrants added an estimated $2 trillion (that’s trillions with a “t”) to US GDP in 2016.

5) The impact of immigration on US wages is small but positive over the long run.

6) From the years 2000 to 2011, unauthorized immigrants paid $35 billion more into the Medicare fund than they consumed. (See Note 2.)

7) Two of Donald Trump’s three wives are immigrants, and he’s a “Birthright” citizen.  (As far as we know, there’s no truth to the rumor that The Donald shops for wives on Tinder.)

So why are so many Americans afraid of the “caravan” and immigrants in general? Our theory: a) A large portion of us are grossly misinformed by Republican politicians and right-wing media; and b) The Democrats, as usual, are too dumb to tell us the truth; even though; c) More than 70% of Latinos voted for Hillary Clinton in 2016.

We on The Other Side love democracy and will continue to do so for as long as it lasts.

Notes

Note 1: Many of the figures above were excerpted from a 2017 report by the Center for American Progress, which sounds like yet another PAC funded by secretive billionaires, conspiracy theorists, immigrant cabals, or Russian oligarchs. It’s not, and all their figures are referenced. We urge you to visit their website.

Note 2: If you follow the train of thought from 6) above, then one of the best ways to fund Medicare is to let more immigrants into the US.

The Tippling Point

Suppose you’re a dedicated aficionado of bourbon and, over the years, you’ve grown so attached to a prized Kentucky brand that you’ve become a shareholder in the company. The idea of buying a lesser bourbon never enters your mind, and scotch whiskeys offend your sensitive palate. They taste like liquefied cardboard.

Then the distiller of your beloved bourbon announces the appointment of a new Chief Executive Officer (CEO) named Ian McMillan. Over the course of the next 18 months, the Lexington and Louisville newspapers report the following:

  • The master distiller has been replaced by a pharmacist;
  • A thousand employees have been laid off, salaries of blue-collar workers have been frozen, and shareholder dividends have been increased;
  • The company has borrowed $600 million from the Bank of Scotland;
  • The company’s hundred-year-old secret recipe has been “reformulated”;
  • The new CEO and his management team are being investigated for obstructing the inspection of the company’s distilleries;
  • An undisclosed percentage of the company’s shares have been bought by an Edinburgh-based hedge fund;
  • Three executives in McMillan’s inner circle have been indicted for tax fraud;
  • The company’s online marketing operation has been outsourced to a media-relations firm located on the Isle of Skye;
  • The CEO has been accused of inappropriate sexual behavior by 17 former employees, most of whom are female;
  • McMillan used a subsidiary slush fund to pay for a $130,000 fishing expedition to Loch Ness;
  • The company has implemented a program to purge whistleblowers, immigrants, and self-supporting mothers from its employment rolls;
  • The CEO has hired a team of private investigators to find out who leaked the fake news about Scotland’s involvement in the company.

In the meantime, the directors have taken no action except to rubber stamp the CEO’s initiatives and downplay his inexplicable fondness for single malts.

We on The Other Side are left with several questions:

  1. For how long do you believe that the new boss is the same as the old boss?
  2. When do you begin to send angry emails to the Vice President of Customer Relations, a former investment banker named Jamie McGregor?
  3. At what point do you try a Tennessee brand of bourbon?
  4. When do you give up hope that the old recipe will be brought back?
  5. When do you sell your shares and begin to recommend your new bourbon to friends?

Or do you shrug your shoulders, cash your next dividend check, and buy a $75 bottle of imported scotch?

 

Fresh Faces

If the latest polls are a fair indication, Americans of voting age are less than enthused about the legislative gridlock in Washington and the direction of our country. According to a recent survey conducted by The Economist, 9% of Americans approved of Congress, 71% disapproved. In the same survey, 38% of Americans believed the country was moving in the right direction; 53% believed the country was on the wrong track. Both results correlated highly with a recent survey by Reuters.

Voters are registering their dissatisfaction at the polls:

  • In November of 2016, Donald Trump, hotelier, reality-TV star, and archetypal un-politician, was elected President of the United States. He defeated Hillary Clinton, a former First Lady, US Senator, and Secretary of State.
  • In a special election held in March of this year, 33-year-old Conor Lamb, a Democrat, defeated 60-year-old Rick Saccone, a Republican, in a Pennsylvania Congressional district that Donald Trump won by 20 points. Mister Lamb was a federal prosecutor but had no legislative experience. Mister Saccone was an eight-year veteran of the Pennsylvania House of Representatives.
  • In June, 28-year-old Alexandria Ocasio-Cortez, a publisher and educator, defeated 56-year-old Joe Crowley in the Democratic primary for New York’s 14th Congressional District. Mr. Crowley was a 19-year veteran of the US House of Representatives. (See Note 1.)

Inexperience, it seems, is in vogue, and that’s intriguing because it’s the opposite of what we value in the workplace. For a moment, imagine that you’re a businessman or businesswoman:

  • If you need a lumberjack, would you hire a florist?
  • If you need a ranch hand, would you hire a mechanic?
  • If you need a surgeon, would you hire a barber?
  • If you need a carpenter, would you hire an arsonist?

That’s not to say that we on The Other Side are steadfastly opposed to inexperience. Steve Jobs had no management experience when he founded Apple, neither did Larry Page nor Mark Zuckerberg. (See Note 2.) But Jobs, Page, and Zuckerberg were products of a well-financed, highly refined system that produces nine failures for every success.

By all means, vote for honest, donor-independent candidates with a strong sense of duty, respect for the rule of law, and an understanding of history––like Conor Lamb and Alexandria Ocasio-Cortez. But remember what we got when too many of us voted for a TV celebrity named Donald Trump.

Don’t vote for fresh faces just because they’re fresh faces. Vote for fresh faces because they’re a better bet than the stale faces.

Notes

1) Alexandria Ocasio-Cortez was purged from the New York voter rolls, thus unable to vote in the 2016 Democratic primary.

2) Steve Jobs was CEO of Apple for 17 years. Larry Page founded Google (now Alphabet) with Sergey Brin in 1998 and has been CEO since 2011. Mark Zuckerberg founded and has been CEO of Facebook since 2004.