Saturday, November 1, 2008

Dilbert gets it

Dilbert gets it.
Robert A. Hall

In the Dilbert strip today, talking about business, Dilbert tells the pointy-haired boss that “most start-ups fail.”


Someone has a business idea. He/she borrows money, going into debt, perhaps putting the house at risk, hires some people, works 80 hours a week—and most start-ups fail.

But start-ups are what create the new jobs and innovations in our economy. Without start-ups, the current economic problems will be permanent.

Dilbert gets it.

Obama does not. His view is that you take the risk to start a business, you borrow the money, you work the long hours, and if you fail and lose everything, well, that’s what you get for being a greedy capitalist. No one from government will care or be there to help. (Unless you are, like Fannie Mae and AIG, “too big to fail.” Then the taxpayers will redeem your bad decisions.)

But if you have a great product or service idea, you hire the right people, you market right, a competitor with a better idea/product/strategy doesn’t kill you off, you survive both the current heavy taxation, and the expensive cost of government regulations on personnel, safety, the environment and a host of other areas, and are lucky, your business may survive. It might even become successful, though the odds of it becoming one if the great companies (that were once start-ups), and you as rich as Bill Gates, are longer than winning the lottery. Which is less work. And most start-up fail.

But if you are a success, and for your long years of long hours, stress, and risk, you now make more than $250,000 a year, President Obama and the Democratic Congress are going to take a larger chunk of the money your earn, and “spread the wealth around,” sending checks to people who didn’t pay any taxes, if you will only vote for them.

He economy runs on incentives. We go to work, we get an education, we start or expand businesses, we seek out better paying jobs, because there are economic rewards for doing so. But that will change. Now you will be punished for taking the risk of starting a business and creating jobs. You will be rewarded for not working hard enough to get in the top 60% who pay taxes (and for voting Democrat). So we will provide a negative incentive for job creation, and people at the lower end will sell their chance of a better job in the future, for a $500 government check now.

Pretty sad when a cartoon character has more economic understanding than a majority of the voters. One thing for sure. ACORN may have registered Mickey Mouse to vote, but they won’t be signing up Dilbert. He gets it.

Update: After I posted this, my friend George wrote in response that he had always thought there were three kind of people: those who created jobs, those who took jobs and those who didn't want jobs. The first category, requiring risk and vision, is the smallest. (He and I are in the second.)

My worry is that the Obama administration is committed to punishing the first group through higher taxes, thus discouraging them from taking the job-creating risks, in order to reward their voters in the second and third groupswith cash payments. Once a majority is getting money from the government, they can continue to vote to increase their benefits by taxing the ever-smaller group of payers by ever-larger amounts. We may reach that tipping point in 2009.

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