I think the focus on Obama on the calls to ‘redistribute the wealth’ or making us more socialistic misses the far more important point.

We have been socialistic for decades. Redistribution of wealth has been a part of American politics since the New Deal. It accelerated under Johnson’s war on poverty. And the income tax code has become more progressive under both Clinton and Bush.

Yes under Bush the top 1% went from paying 28% to 36% of the income taxes while the bottom 50% went from paying 6% to 3% of the taxes. Of course you would never know this from any major media coverage.

The current political debate is not about whether we are socialist or not but where on the continuum we want to be. Most of the wealthier 50% would not mind paying something to help the poor. We could understand that perhaps 5% of the people may need help due to the misfortunes of chance. Maybe even as many as 10% may require some help.

Since private charities already help many in need, the government involvement should be minimal.

But when 40% of the people are unable to support themselves or pay taxes then the system becomes unsustainable. When 50% take more from the government than they put in then the entire system is in jeopardy. At that point voters simply vote to sustain themselves at the expense of others. In a global economy the others go somewhere else.

In 30 years in business I have learned that most without a job are in that position because of the choices they have made. Out of 100 prospects 50 will be eliminated due to a drug problem, 30 because of a criminal background, 10 because of horrible work habits and attitudes, and maybe 5 because personal health problems like obesity, depression, or chronic disease. Of the 5 that remain 3 will be mediocre who will do as little as possible to get by and 2 will be quality candidates.

In other words most of the unemployed and the poor deserve their status. These words are harsh, but they reflect a reality many employers understand. When we create a system that gives these people political control we risk killing the golden goose.

I have no problem with a moderately progressive redistribution system, but we have gone too far. I think we should raise taxes on the bottom 50%. I believe anyone who makes over $10,000 a year should pay at least $100 in federal income tax. Everyone should have some skin in the game.

Every tax increase or decrease should apply to everybody. No one should gain from raising someone else’s taxes. It is just legalized theft.

The great Jewish Philosopher Maimonides lived in Spain, Morocco and Egypt between 1135 and 1205. One of his most popular teachings is the eight levels of charity.

The lowest is one who gives unwillingly. Above that is one who gives inadequately but gladly. A better level is one who gives to the poor only after being asked.

The fifth level gives directly to the hands of the poor, but before being asked. The fourth level is when the giver does not know the recipient, but the recipient knows who the benefactor is. The third level is when the giver knows the recipient but the recipient does NOT know who the benefactor us.

The second highest level of direct charity is when neither the recipient nor the giver knows each other. This good deed is devoid of recognition and pride and is thus deemed to be solely for the sake of heaven.

The highest level is to support one with a gift or a loan, or entering into a partnership with him or finding employment for him in order to strengthen him so he is not dependent on anyone. One senses that the Jews see a substantial moral emperative in business.

Because of this hierarchy of charity that I learned in Sunday school years ago, I have been weary of those who publicize their charitable giving. There is a case to be made that such publicity encourages others to also be charitable, but I have a greater admiration for the many generous people who stay quiet about it.

I am bold enough to recommend one level of charity below the lowest; to give in such a way to promote one’s own power while making the recipient dependent on you for life.

That could be worse than no charity at all.

One of the most influential books to my economic and political thinking is Nassim Taleb’s “Fooled by Randomness” and “The Black Swan”.

These books opened an interest in randomness and probability and their application in modern affairs. In the first book Taleb surmised that much of the success attributed to overpriced talent on Wall Street was more accurately attributed to random success. After substantial success as a trader Taleb has become a philosopher of sorts.

as reported in Bloomberg

“The financial ecology is swelling into gigantic, incestuous, bureaucratic banks — when one fails, they all fall,” Taleb wrote in “The Black Swan: The Impact of the Highly Improbable,” which was published in 2007. “The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup.”

Taleb is angry that Wall Street is continuing to use traditional tools such as value at risk, which banks use to decide how much to wager in the markets.

“We would like society to lock up quantitative risk managers before they cause more damage,” Taleb said.

Investors advised by “Black Swan” author Nassim Taleb have gained 50 percent or more this year as his strategies for navigating big swings in share prices paid off amid the worst stock market in seven decades.

Universa Investments LP, the Santa Monica, California-based firm where Taleb is an adviser, has about $1 billion in accounts managed to hedge clients against big moves in financial markets. Returns for the year through Oct. 10 ranged as high as 110 percent, according to investor documents. The Standard & Poor’s 500 Index lost 39 percent in the same period.

Taleb said the current crisis is a “White Swan”, not a Black Swan, because it was something bound to happen.

Tips to Douglass Ott

A few months ago we screamed about high oil prices and the greedy oil companies and how they manipulated the market for their selfish gains. The left howled for an excess profits tax on their ill gotten gains.

Only months later gas is under $2.50 and dropping, oil has dropped by half, and Exxon is selling for one third of its prior price.

Do we now understand that the oil companies do not control the market? If they did would they have allowed it to drop so fast?

The market ignorance of our political leaders is overwhelming.

The Emergency Economic Stabilization Act included a piece of legislation that had nothing to due with rescuing us from the financial abyss we faced. It will, however, raise your and my health insurance cost. It is called the Paul Wellstone and Pete Domenici Mental Health and Substance Abuse Parity Act, and is buried on page 310 of the “bailout”.

The law requires that mental health and substance abuse provisions must be covered on par with major medical coverage. This may mean that I must buy coverage that will give the same limits for drug treatment and mental health coverage as for cancer, liver transplants, heart bypass, kidney dialysis, and other serious disorders.

The reason we have put limits on mental health coverage is to keep premiums and costs low. Being adults we understand that sometimes you have to make adult decisions and allocate resources to the more common and serious illnesses.

We also understood that unlike a heart bypass, mental health treatment seemed to have no end. Therapy sessions tended to go on as long as the insurance would pay for it, which thanks to this law could be practically unlimited. Some of the most abusive billing practices we have ever seen came out of this field; such as billing for recreational therapy for sending a busload of kids in drug rehab to Six Flags Over Georgia.

Could this mean that the limit for mental health coverage may increase from $50,000 to $5 million dollars? I am not sure because the Department of Labor and the Treasury will determine the final regulations; yes people approve laws that they do not understand because they have not really finished writing them. If this “parity” includes equal coverage limits, this will increase our premiums significantly because of the likelihood of such extended coverage actually being used. An option would also be to lower our major medical coverage to contain this cost. There are many government mandates that cause our health insurance costs to be more costly, many of them at the state level.

The end result is far more expensive insurance and less coverage for the important life threatening illnesses.

You are exempt if you have less than 50 employees. Why? If it is so critical that we would force it on larger employers why would we exempt smaller employees? Can they be exempted from covering cancer as well?

When the politicians complain about the high cost of health care, how much responsibility do they take for creating such laws that only make it more costly and unaffordable for more businesses and individuals?

Perhaps they believe that wizards on Wall Street and the moral supremacists in Congress must have been on drugs to have screwed up our financial system as much as they did.