This afternoon, as I was driving to pick up a sandwich for lunch, I was listening to the Tony Kornheiser show. Kornheiser's show is my favorite. It airs on Sportstalk 980 AM, not that he talks that much about sports. He has movie reviewers and a heavy dose of political figures. One of today's topics was the presidential candidate's views on pay equality for women. When you see the term, equality, you should immediately know math is involved. If you aren't eligible to vote under my plan, go grab an eighth grader for the rest of this post.
One of Tony's studio monkeys, a female, quoted the statistic that women make about 80% of what men make for the same jobs. I hereby disqualify her from voting for a lack of math ability. The statistic she quoted says nothing of the sort when you look at the details. The statistic ignores some really basic factors, like number of hours worked per week and industry. Across the entire economy women work fewer hours than men. They also concentrate in lower paying industries.
Is this statistic really comparing a female software engineer working forty hours to week to a male software engineer working the same hours? Of course not. The statistic is essentially total pay for women divided by number of women versus total pay for men divided by the total number of men. After controlling for hours worked and industry differences, other studies show that women receive a little over 90% of what men make. Even that statistic doesn't control for years of experience or years spent out of the work force during child rearing.
Tony's mouthy stooge isn't capable of such analysis. You have to be competent at eighth grade math to undertake this analysis. The need for math knowledge applies to almost all of the economic problems facing the world.
The Social Security crisis is another fine example where lacking basic financial and math knowledge makes people susceptible to ridiculous arguments. Almost every night, I see some moron in a political ad tell me that the money he paid into Social Security is his money and he's entitled to it.
Here's a little known fact, unfortunately. Social Security is nothing like a pension plan. The money withheld from your paycheck isn't deposited into a bank account with your name that earns interest over the years until your retirement. Social Security is a welfare plan not much different from Aid to Families With Dependent Children, which is the program most of us think of as welfare.
The money withheld from your paycheck is combined with the money from everyone else paying into the system. Then it is paid almost immediately to people receiving Social Security benefits. In some years, but not often, the program has a surplus. The surplus is invested in US Treasury bonds and helps fund the federal deficit – sort of.
The problem with the statement that current retirees have earned their benefits is twofold. First, they contributed to the fund at much, much, much lower levels than today's workers. Second, even if their contributions had been invested in something earning market rates of returns, they would not get anything remotely close to the current level of benefits. If you know a little about compound interest, the argument is laughable. Our elders lament the lack of math skills by today's generation. That's total bullshit. They have no math skills either, or maybe they do, and choose to be ignorant.
My generation will get screwed. We contributed at much higher levels over longer periods of time, and won't receive anything near the return received by current beneficiaries. I've been paying the maximum amount of Social Security taxes since the early 1990's. You're welcome.
Another idiotic argument spewed by current Social Security beneficiaries is that they were promised the benefits. Who promised them? They elected the people, who promised them the benefits. They voted for the politicians who are taking money from their grand children. So much for the financial responsibility they taught us. Do as they say, not as they do.
Current retirees are mooching off current workers. All of this is well known in political and economic circles. Of course, you can't expect any politician wanting to keep his job to tell the truth. We have far too many voters who can't understand the simple math behind the Social Security mess.
Here's one last rant before I blow a gasket. Most people think Mitt Romney's comment about 47% of people being dependent on the government was insensitive. What happens when that number becomes 51%? That is known as a majority, if you know anything about percentages.
What happens when the 47% grows to 51% is Greece. The majority, who are now dependent on government, taxes the hell out of the 49%, who pay the taxes. That sounds like a good deal if you are part of the 51%. However, pretty quickly, the people with money to pay the taxes leave. Then you have Greece, a country where everyone is on the dole with no one to pay the taxes to support them. You can't borrow for very long without a source of income.
So Mitt may be insensitive, but he's correct. The country has to be run for taxpayers. If not, you end up with a massive deficit. Oh, that's right. That's where we are now. Sensitivity is overrated in presidential candidates. Math ability is underrated. President Obama knows this as well. He's not an idiot. He's just pandering to the math illiterate.
Thanks for reading. Feel free to bust me up with comments for this semi-political rant. I deserve it. You also deserve some full disclosure. I voted for President Obama in the last election. I don't regret that vote. Sarah Palin shouldn't be allowed to run a pay toilet let alone the U.S. of A.
My name is Frank Stitely, and I approved this message. Until next time, let's do it to them before they do it to us.
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