Saturday, February 6, 2016

Bernie is simply fooling around with socialist rhetoric-Part-1

Sugarcoated socialist rhetoric against rich class to blame them for the misery of poor is nothing new in the history. Unfortunately history is also clear, such socialist blame game never worked. Let's review what Bernie had to offer against what we know about when such policies were implemented elsewhere. I will analyze it in a series of articles, focusing on each of the sixteen points he made :

 Bernie Campaign proclaimed ( point no-1 in his proposal ) : 

" Demanding that the wealthy and large corporations pay their fair share in taxes. As president, Sen. Sanders will stop corporations from shifting their profits and jobs overseas to avoid paying U.S. income taxes. He will create a progressive estate tax on the top 0.3 percent of Americans who inherit more than $3.5 million. He will also enact a tax on Wall Street speculators who caused millions of Americans to lose their jobs, homes, and life savings. "

  >>>Corporate Tax is already very high in USA. You increase it further, more jobs will be lost. Most of the business in USA are surviving under a hanging sword. Not every business makes money like Google or Apple. 99% business are barely floating. Pointing at a few banks and large corporations which make huge money and then showcase it to show American business is running on huge profit, is simple travesty of facts. Like the way top 1% makes most of the American wealth, similarly  only top 1% companies in USA, makes top profit. Rest are struggling everyday to survive.

  But Corporate tax is fairly flat in structure unlike income tax. So corporate tax increase will hit even mid-sized business which is not in great shape in America.

 So what would happen if Corporate tax is increased?

 A. Increase of corporate tax is completely vague term used by Bernie without any specific details. If he means to say, employment tax to be increased or property tax or tax on profit, then I must say from my experience of running business, in either case most of the business will be hurt and to remain floating, they will do more lay off.

 B. If Tax on profit is increased, then management will pocket more bonus to reduce profit margin. Which in turn will reduce cash reserve for American corporation. Net affect will be reduced expenditure on R&D and marketing/sales. So more R&D and sales jobs will be lost.

 If people start believing in such trash thrown by Bernie campaign, they will simply be paid back by losing their jobs if corporate tax is further raised. 

 However the point is- this suggestion by Bernie is absolute vague and based on voodoo economics. He is simply rallying on unfathomable business illiteracy of extreme left liberals. He never run a business in his whole life. I run 3 business in America. I can clearly say his suggestions are dangerous for Americans.

Increasing the federal minimum wage from $7.25 to $15 an hour by 2020. In the year 2015, no one who works 40 hours a week should be living in poverty.

   >> This is a good goal to have and I support this. But do you know what would happen if average wage is increased? More low wage jobs will be lost in automation. Again, it is good for my business which deals with automation electronics as I have seen, my clients weighs our automation solution against minimum wage workers being replaced. This will fasten automation of low wage jobs-in effect, most of the low wage earners will lose their jobs faster than before.

Wednesday, February 3, 2016

Why I am for Hillary and not fooled by Bernie

Although I am personally upset by Hillary campaign and her notorious coterie, I don't find any other alternative than Hillary to continue on good works laid by Obama. We need a president who will ignore liberal fools like Michael Moore or evangelical rights. We need a president for common American like us who are neither liberal nor evangelical but want to work hard for making a fortune. We want a president who is friendly to both business and labor class. If a politician is promising a divide between business and labor class, he is simply repeating a disaster seen many times before. Bernie is a populist who is trying to sail on common anger of Americans who have seen their life and fortunes stagnated in last two decades. But Bernie has no solution for it except some well known socialist pacifiers which will make us bankrupt. Only way we will rise again, if education, research and entrepreneurship are given priority and state funding for generating wealth and well paying jobs. That's what Obama did and Bernie is trying to destroy that by villifying American entrepreneurs. If elected he will be the biggest disaster for America. If possible I will support Obama for third time but since that is not possible Hillary is only choice. If Bernie is elected in primary, I will be forced to oppose him to save USA going down to path of Greece.
Hailing from state of West Bengal in India before leaving for USA, for first 27 years of my life, I have lived under a Govt which was "communist " ( Communist party of India -which ruled state of West Bengal for 34 years ) and I have seen how their policies which are similar to Bernie-destroyed the most prosperous state to one of the most poorest state in India now in the name of equality and vodo economics of wealth distribution. Sorry guys, business does not work in the way Bernie thinks it should work. If Bernie imposes those corporate Tax-first thing that you will see-more jobs will fly from USA to India and China-middle class of this country will be even poorer. In state of MD, where I live I wont start my manufacturing-I will prefer Tx or Pen state where laws are more conducive to manufacturing business. Business works on business logic and not on political ideology. So if Bernie  is elected president and Dem also wins Senate and Congress ( which is unlikely) and he is able to raise corporate tax [ which is already high in USA], more business will leave USA-more people will lose their job. Historically  labor benefits/wage increase can happen within a capitalist system by imposing more Anti-trust law and supporting more innovative start-up so that Market doesn't see any monopoly. Nowhere in the world, one can show me a single example, where labor laws guaranteed better labor wages. In fact when such thing happened, business left the shore. What we need is strict-antimonopoly law so that business competes to get best talents and thus, wage is increased. From 1880-1910, US has seen 37,000 labor strikes ( historically the most turbulent time for labor unions)  and yet the country has not seen any wage increase. Wage in USA historically increased only after FDR strictly imposed anti-trust laws-which broke monopoly and thus for acquiring talents and quality, salary for middleclass increased automatically. So learn from history instead of being fooled by Bernie. His recipes are for proven failures.

 I am literally scared to hell when I see so many Americans even don't understand or failing to understand Bernie is simply fooling around without any feasible or tangible solution. Increase corporate tax? First thing that would happen, more jobs will leave for India and China.  Free higher education ? Yes, we need that by curtailing Military budget and not by increasing corporate tax which would impact job growth negatively. Wealth creators are enemy ? OK. Then why did I come here leaving my country to chase American dream of creating new business and technology? It is because US allows such a nice capitalist system to reward hard-work and talents. In the process a nation benefits from innovation and new jobs.