The Case Against More Redistribution: It's Redistributive INjustice

Caught up in the passion of the civil rights era, I quit a medical research position at the prestigious Rockefeller University to become a drug counselor in an inner-city New York City junior high school.

There, I used every IQ point, every bit of passion and drive I had, to help those kids. Yet after two years, feeling I hadn't made much difference, I quit.

I blamed myself and hoped that if I learned more, I'd be more effective. So I went and got a PhD from Berkeley with two specializations: educational psychology and the evaluation of innovation. Alas, I found the educational psychology tools puny, unlikely to make much difference with low achievers. And my evaluation training made clear to me that efforts to help the at-risk have--despite politicians' and advocates' rhetoric--made no significant enduring difference, with Head Start being a prime example, not withstanding politicians' rhetoric to the contrary.

After completing the PhD, I did take one more good shot at helping the disadvantaged. For three years, I taught inner-city kids in predominantly low-income Richmond, CA but quit when again, despite most of my students insisting I was the best teacher they ever had, I felt I made no enduring difference, certainly less than if I had directed my efforts to helping people who faced less daunting obstacles.

Since then, I've been career and personal coach to 4,000 less problemed people and am confident I've more abetted their lives and, in turn, society than if I had spent my career helping "the least among us."

Alas, today it seems that society's core belief is that we must redistribute yet more human and fiscal resources to the have-nots. Every time financially prudent countries bail out countries that lived beyond their means like Greece, every time we pass a law to help low achievers, every time we donate to a nonprofit that helps the illiterate, every time we choose to devote our career to the less fortunate, we are practicing redistribution. A few more specific manifestations: No Child Left Behind, affirmative action, progressive taxation ((The top 5% already pay 59% of the federal income tax.) , Disparate Impact legal theory, the World Bank, foreign aid to developing nations, choosing a career as a social worker, in public administration, as public health nurse, executive in an anti-poverty program, etc.

While well intentioned, I believe that such choices are short-term feel-goods that, long-term, are worse for society than if the human and financial resources were invested elsewhere. As every triage medic knows, when you have limited resources and time, you save more lives if you focus not on the worst cases but on those with greater potential to benefit. 

A civilized society should provide a basic safety net for all people but we've gone well beyond that and the trend is to go much further still. 

For example, consider the wisdom of spending yet more of our tax dollars on yet another education "innovation," job retraining program, or extending 99-week unemployment checks to more people. I believe that less societal benefit will accrue from such investments than for example, from investing in top biotech companies. In the latter, some of that investment will go to developing cures for diseases afflicting enormous numbers of people and their families. With regard, for example, to extending unemployment checks, every time they do it, most of my clients become less motivated to look for work: "I'll start looking when my unemployment checks are close to running out." Not one has said they feel bad about taxpayers subsidizing their sitting around.

Even the disadvantaged would ultimately benefit more from investment in high-quality companies. More innovation leads to more jobs, more cures, more quality of life enhancers. Today, even most of the poor have access to life-saving medication, televisions, a cell phone, the Internet and Google.

There's an additional negative side effect of redistribution. One of psychology's most agreed-on postulates is that you get more of what you reward, less of what you punish. If we punish successful people by forcibly taking money from them (that is what taxation is) to give to a pool of people who, net, contribute less to society, we'll get fewer societal contributors to and more takers. Can it ultimately be good for society for people to feel they have the right to take a "fair share" of what other people have earned? Yet that is the message of liberals, the 99ers, The Occupiers, etc.

I invite you to reconsider the wisdom of today's largely unquestioned core belief--that it's wisest to redistribute yet more from the haves to the have-nots. Beyond providing a basic safety net,I believe it's wiser to invest additional time and money in what will make the biggest difference: for example, in Apple than in the at-risk. 

Thus, net, I believe that additional redistributive "justice," is redistributive injustice.

1,000 of Dr. Nemko's published writings and sometimes controversial blog are are on www.martynemko.com. His 6th and 7th books were published in 2012: How to Do Life: What they didn't teach you in school  and What's the Big Idea? 39 Reinventions for a Better America

Shoestring Businesses: Low-Risk, High-Payoff Ideas

I thought you might enjoy an advance look at my next column in the Mensa publication, The Intelligencer.  

It is an adapted excerpt from my book, How to Do Life: What they didn't teach you in school.

Shoestring Businesses

No-Brainer Businesses that Can Make a Smart Person Rich

When I look back on all my clients, two things most often keep smart people from succeeding in business: the urge to innovate and the desire for status.

Don't innovate; replicate

Smart people love coming up with ideas. Alas, even Mensans' new ideas are more likely to fail than are proven ones because, for example:

• The market doesn't like it
• The market stops liking it before you've recouped your investment, let alone made enough money
• The new product or service works less well than you'd hoped
• The R&D costs of an innovation eat too much profit.

That's why guinea pigs so often die, why the leading edge so often turns out to be the bleeding edge. Deep-pocketed corporations can afford to risk innovations--they make profit even if only a fraction succeed. But last I checked, your pockets aren't that deep, so you need to maximize your chance of success on Try One. 

You're more likely to do that by replicating a proven business that costs little to start, what I call a shoestring business. That way, even if you fail, you may have money left for a second shot. It is an MBA-program-promulgated canard that you need money to make money. Below, I'll offer a half-dozen examples of proven shoestring businesses that require only a small investment.

But you protest, "When you replicate, you have lots of competitors!" That's okay. Take, for example, gourmet food trucks. There are a zillion already but here's how you could well succeed with number zillion and one: Play detective at a half-dozen that have long lines: Incorporate their best features into your truck, buy your equipment used, for less than half price, from one of the many failed food truck businesses, open up shop it in a great location, and your chances of success are far greater than if you try to come up with a winner out of thin air.

Note: In choosing a retail business, you accrue the advantage of being able to see which ones are successful and incorporate their best ideas into yours.

Status is the enemy of success

If you choose to start a high-status business, for example in high-tech, biotech, etc., you're competing with very capable people. In contrast, if you start what The Millionaire Next Door author Thomas Stanley calls a dull-normal business, your competition is more likely to have a two-digit IQ. That, of course, makes you more likely to succeed. 

Here are examples of low-cost, weak-competition businesses that also bear little risk of going out of style. Of course, you needn't do the low-level work yourself. These days, you can hire good people for $10-15 an hour.

• Diesel repair shop 
• Help singles write relationship ads. Photograph them for their profile.
• Mobile home park cleaning service
• Clean out basements and garages, then install shelves and cabinets. 
• Install and remove home-for-sale lawn signs
• Place and maintain laundry machines in apartment buildings
• Own well-located carts selling food, flowers, scarves, knockoff- designer purses, French soap, sandwiches, or coffee.

Let's flesh out the latter. Let's say I wanted to start a business selling soup from a cart emblazoned with a catchy name like Souper! I'd take the time to find a great location: next to a train station, stadium, big-box store, movie theater, office high-rise, or other high foot-traffic area. Or even better, I'd make it mobile, for example, park it in front of a high school or college at lunchtime, move it next to a movie theatre for the evening, and near a stadium on Game Days. A cart business requires minimal rent, offers high profit margin, is a simple business, and isn’t a fad--soup, nor soap, nor flowers, nor coffee, are going out of style. Worried about its lack of status? You can tell your status-impressed friends that you're the president and CEO of the California Cappuccino Corporation, with branches throughout the state.

The secret to wealth: cloning

You may be thinking, "But I can't make enough money from such a simple business." You certainly could. Key is to clone it. For example, the simplest business I can think of is a shoeshine stand. Of course, I'd locate the stand on a high-foot-traffic street where people wear lots of leather shoes, for example, San Francisco's financial district. The stand would have prominent signage with a catchy name like Dianne FineShine. Once I learned the art and business of shoeshining, I'd set up a trusted friend with a clone of that shoeshine stand, asking for a small percentage of sales. I'd keep cloning Dianne until I was making enough money. 

A Three-Point Plan for a Better America

Here's the three-point plan I wish a presidential candidate would propose for rebuilding America:

1. W.P.A.-like jobs for the people unlikely to be sustainably employed in the private sector, paid for by dramatic cuts in the size of government.

2. Ethical entrepreneurship as the "4th R." which would create jobs and boost the economy. To reduce environmental degradation, the emphasis should be on creating businesses that provide services rather than products.

3. Teaching people to live less materialistically.  

This is a distillation of ideas from my new book, What's the Big Idea?: 39 Reinventions for a Better America. 

Finding a Job in Tough Times: Keynote address at Lighthouse for the Blind's annual conference

I gave the keynote address at the Lighthouse for the Blind's annual conference. Here is the video of it.

It contains as many lessons for the sighted as for the blind.

And I reveal quite a bit about me personally, including negatives.

Seven Blunders of the World

1. Wealth without work

2. Pleasure without conscience 

3. Knowledge without character

4. Commerce without morality

5. Science without humanity

6. Worship without sacrifice

7. Politics without principle

—Mahatma Gandhi

America's Most Overrated Product: Higher Education. A Redux

A friend, Scott Lubbock, sent me one of many notes I've received that describe college graduates's unemployability. (Not to mention the half that drop out.)

He writes of his college-graduate son: "He's not much more employable beyond the restaurant work he has done the past five years."  Scott included a June 2012, Harper's column excoriating colleges.

I responded with this:

Beyond the dollar cost, one of higher ed's enormous underconsidered costs is the opportunity cost: what your son could have been doing with his time if he wasn't at college being taught and not remembering endless arcana in that four-to-six-year-long summer camp we call college. 

Then there's the decrement to self-esteem that accrues from not understanding significant percentages of what those brilliant esoterica-obsessed, often poor-communicating professors teach.

Yes, I agree with much of the Harper's article but it downplays how the government's continuing to raise the amount of taxpayer-funded financial aid encourages colleges to raise tuition more. Colleges think, "Ooh good, the government is providing more financial aid, so now we can raise tuition more."  If government provided no aid, colleges would be forced to reduce their prices because far fewer than the 70% of high school graduates who now attend college could afford to pay their sticker price. Can anyone reasonably think it requires anywhere near $100,000 of student money to educate a student for four years at U of O on top of the enormous taxpayer-paid subsidies that it gives to public universities? Could it cost anywhere near $250,000 that brand-name private colleges charge a student? (And private colleges too receive tremendous amounts of government financial aid.)

Higher ed is business at its worst--a horribly overpriced product providing remarkably little value other than the piece of paper, with unconscionably little and usually hidden information on total four- and six-year charges, let alone how little students actually benefit in learning and employability. 

I do like the article's only slightly tongue-in-cheek summary of the conservatives' view of higher ed:

 College is a gilded re-education camp, where innocent children of the entrepreneurial class are turned into brainwashed Maoist cadres, chanting slogans and grinding away the hours in a sexual frolic. The university's scholarly departments they believe are filled with political extremists; its graduates are snobs; its concern with diversity is a form of censorship; its scientists tell lies to further the "global warming" power grab.

The best antidotes to higher education's robbing and damaging our children, our future, would be to educate the high school counselors about alternatives to that ripoff, yes ripoff, we call college, and to force colleges to provide consumer information, just as we require food to contain nutritional information and tires to bear a report card in its sidewall.

Indeed, I strongly advocate colleges continuing to receive our taxpayer-paid largesse only if they post on their home page a consumerist College Report Card that would shine a light on how much people actually pay for how little. One of my TheAtlantic.com columns makes that case. Click HERE to read it.

On Father's Day, An Ode to Men

To the blue-collar men, who, to earn extra money to support themselves and their families, forgo a comfortable desk job in favor of jobs few would do: from cleaning our sewers so we can flush our toilets and eradicating rats from our basement so we don't get diseases to precariously trying to stop our roofs from leaking.

To the men who protect us. For example, the media is careful to call firefighters "firefighters" rather than "firemen" but I've now looked at dozens of photos of the firefighters attempting to stop the 55,000-acre Colorado fire. All are men. And in the 9/11 terrorist attack, 343 fire (ahem) fighters died. All were men.  

To the white-collar men who, to earn extra money to support themselves and their families, endure long, difficult technical training and/or uproot themselves to some God-forsaken place every few years.

To the professional men like physicians who, to earn more money for themselves and their families, choose a high-stress, highly demanding specialty such as surgery, where they often must be awakened in the middle of the night for an emergency surgery rather than choose one of the more pleasant specialties with regular hours like pediatrics or general practice.

To the men who serve and die in the military. Their modest extra combat pay doesn't compensate for the risk. Although the media is careful to always say the men and women serving in the military, 98% of the military deaths are men.

Yes, women earn 77 cents on the dollar, but there are reasons other than "We live in a sexist patriarchy that suppresses women."

To all the hard-working men that must endure the media's and colleges' endlessly portraying men as overpaid and inferior to women, today on Father's Day at least, and at least from this writer, I salute you.