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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: d.taggart who wrote (247829)	4/14/2002 10:38:04 PM
From: rich4eagle	Respond to of 769670

Wow, that was a run on paragraph, four lines all fuzzy, I deleted half way into line 1, what did it say, may I ask?

To: d.taggart who wrote (247829)	4/15/2002 12:24:37 AM
From: Mana	Respond to of 769670

A good article The more you make, the more you give Stephen F. Brown Sunday, April 14, 2002 - When it comes to news, most media outlets tend to accentuate the negative, which should come as no surprise. After all, life's seamier side makes for choice rubbernecking, higher audience share and more profitable copy. Chalk it up to schadenfreude. Occasionally, though, an "aw-shucks" piece makes the grade. The plot is familiar enough: Some social butterfly endows a distressed nonprofit or hard-luck family in exchange for 15 minutes of backslaps and hosannas. Invariably, the reporter or one of the story's protagonists summarizes the charitable act by declaring that the benefactor is fulfilling his or her societal responsibility by "giving back to the community." And there's the rub when it comes to accentuating the positive. Superficially, this notion of "giving back to the community" seems innocuous, if not complimentary. But upon deeper reflection, it reveals an all-too-prevalent ignorance of basic economic concepts, specifically the concepts of liability and wealth creation. "Giving back," as the term is currently used, implies that wealthy benefactors are repaying debts owed to society for their successes; therefore, charity is to be expected. It also implies that charity trumps commerce when it comes to creating wealth and elevating living standards. Both implications could not be more wrong. Anyone who has achieved any measure of wealth legally owes the community nothing for his or her good fortune because nothing was ever taken from the community in the first place. In a free-market economy, people earn money to the extent that they provide products and services that other people are willing to purchase. Dollars are the perfect quantifier of someone's ability to do just that because the final arbiter of any product or service's worth is another person's willingness to pay for it - and to pay for it at a price that produces a profit. Furthermore, these profits provide the added benefit of enlarging the economic pie because commerce, contrary to populist belief, is a positive-sum game. One person may value a widget at $80 while another person values it at $120. Let's say the two sides negotiate an exchange at $100. Each side is made better by $20, or $40 in aggregate. This is how wealth is created. Thus the vast majority of business transactions are win-win propositions. Personal preferences and differing value systems make such transactions possible. Fortunately, it's common for people to value the same product or service differently. If the case were otherwise, a market for only a select few products and services would exist and we would be a much poorer nation. Devotees of diversity will be pleased to know that our economy cannot function without differences of opinion. Nevertheless, proponents of the "giving back" philosophy will argue that some tribute must be forthcoming because society's structure enables individuals to accumulate wealth. Granted, structure does matter. After all, there are fewer millionaires in communist societies than there are in free-market capitalist ones. But who specifically deserves remuneration for providing the structure? A society does not have a separate identity apart from its members, and that includes government. Benefits and costs accrue to individuals. In all my successes (and all my failures, for that matter), I cannot recall one member of my community lending a helping hand gratis. There was no quid pro quo. In the final analysis, charity, unlike commerce, is at best a zero-sum game. Assets in a charitable transaction are transferred from one owner to another without a corresponding increase in wealth. For the most part, these assets are disbursed to individuals who are unlikely to put them to use in a for-profit free-market business transaction. The act of "giving back to the community" usually takes more from the community than it gives. This is not to say that charity is bad. On the contrary, it can be a much-appreciated act of compassion. Still, if you really want to give back to the community and get the biggest bang for your buck, develop those products and services most in demand. Your profits will best demonstrate your ability to service your fellow man and woman. Put succinctly: the more profits you make, the more value you will have given back to the community. Stephen P. Brown is a chartered financial analyst, freelance finance writer and fee-only financial planner. He can be reached at spbrown@financier.com .