The unrest in Greece over the austerity programs the Greek government needed to implement is a harbinger of things to come in the United States and the rest of Europe. The problem is the idea of entitlement by too many citizens—promoted by the very governments who they are rioting against.
This was evident by the recent remarks by Speaker Pelosi before a group of musicians and artists. The speaker’s intention was to justify the recent health care reform bill. She said the bill would allow all of the would-be musicians to quit their jobs and devote their full attention to their artistic endeavors because the government would provide for their health care.
Great, so for every Elvis Presley or Madonna there will be thousand of musicians whose chief source of income is the money they earn performing in front of subway station. But at least they won’t have to pay for their medical expenses. I do not oppose anyone wanting to pursue a career in music or acting—I just don’t thing I should have to pay for them to do it.
Speaker Pelosi also talked about all the jobs the bill would create because thousands of entrepreneurs would leave their current jobs because they won’t have to worry about health care expenses. This is not exactly true. If they intend to only have one employee—themselves—then they might be better off due to the bill. But if they want to hire any additional workers, they would be saddled with their health care costs. Not exactly the ideal situation.
This notion of entitlement was also evident today as there were hundreds of protestors marching in Washington. Their grievance was corporate greed and the need for greater job creation. Many were wearing shirts embroidered with the words Service Employees International Union (SEIU). Over the weekend some protestors gathered at the home of a Bank of American executive in Washington, protesting the handouts the bank received from the government.
My question is how different is Bank of America and SEIU in terms of corporate mentality? Both have a board of directors and shareholders. For Bank of America, the shareholders are the ones who invest their own money in bank stock; for SEIU, the shareholders are the union workers who may or may not willing pay dues.
The difference between the two is Bank of America provides benefits to the economy and its shareholders. If they make a profit, the shareholders receive dividends. What do the SEIU shareholders get? The union does not create any wealth—they main function is to redistribute existing wealth. SEIU executives—who make six figure salaries—will say they work to get union members higher wages and better benefits. Why does a worker need a union for this? If they work hard and strive to become more productive, they will receive higher earnings. Demanding higher pay for doing the same amount of work only reduces the profits of the employer and the higher costs passed on to the consumers.
I find it ironic that today’s protestors complained about corporate greed but demanded they create jobs. Long-term economic growth comes from investment and savings, which increases the capital stock of the economy and in turn raises the demand for additional labor. Yet these protestors favor government policies which do the exact opposite—i.e. higher government spending and greater debt, which crowds out private investment and stifles job creation.
All this boils down to one thing, a sense of entitlement. Too many people think they should be handed high paying jobs without having to work for them. In turn politicians—who feel entitled to their positions of power—give the people what they demand, regardless of the consequences. At some point the federal government has to stop the spending. When they do the hundreds of protesters will turn to thousands and politicians will have no one to blame but themselves—though I am sure they will find a way to blame corporate America.