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Rethinking Redistribution of Wealth

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Our president has said “spreading the wealth around is a good thing”. And it is … IF it’s done via the charitable heart of the individual. But when the middleman is in Washington, DC the inherent flaws of socialism rear their ugly heads. In the words of founding father James Madison, “Charity is no part of the legislative duty of the government”.

I was watching television the other night and I came to the conclusion that maybe this “redistribution of wealth” policy of the current administration could be tweaked a little to make conservatives like me more amenable to it. Currently the goal is to take from those who earned their money and give it to those that have no interest in earning it. That is inherently a bad policy. It sounds all well and good but there are countless reasons why this ideology is dangerous (to say the least).

The underlying reasoning is helping those that need help and I think the majority of Americans embrace that idea. The problem is in the “method” of redistribution. Our government would have us believe that THEY can spend OUR money more wisely that WE, the people, can. If you aren’t laughing then the odds are that you’re a politician! If there was ever an oxymoron it’s “Wise Government” …

Look at the current status of our government. They spend ONE TRILLION more dollars than they bring in every year. Do you know how much ONE TRILLION dollars is? Start counting right now. It will take you 536 years to count to one trillion! Well, if you don’t stop for a breath anyway.

If the goal is to help people escape poverty then giving money earned by hardworking citizens to those who have done nothing to earn that money will not teach the lessons that need to be learned in this nation. Milton Friedman said “The great achievements of civilization have not come from government bureaus. Einstein didn’t construct his theory under order from a bureaucrat. Henry Ford didn’t revolutionize the automobile industry that way. In the only cases in which the masses have escaped from the kind of grinding poverty you’re talking about, the only cases in recorded history, are where they have had capitalism and largely free trade”.

It’s about self reliance, hard work, ingenuity, honesty, integrity, and perseverance. We must stop using the tactics currently employed by our leaders. Envy, hate, and resentment hurt our society and the ultimate result of the “redistribution of wealth” achieved by those means is best described by Winston Churchill as “the equal sharing of misery”. Margaret Thatcher summed it up precisely: “Socialism is a great until you run out of other people’s money”. Now that I’m clear in my abhorrence of the redistribution of wealth, let me explain the “tweaks” to the ideology that would make it more palatable.

It all boils down to WHO we extract the money from to accomplish this grand scheme. My first criteria would be to garnish the wages of those that add no redeeming value to our society. Has anyone been watching American Idol this season? If so, I think we can agree that Nikki Minaj should start off the list of people that add nothing to our society. Well, nothing positive. She does add arrogance, rudeness, conceit, and self aggrandizement to our society. I never thought Idol would find someone more full of themselves than Simon Cowell but I guess if you dig far enough down in the barrel you can find about anything. Another addition to the list is Kim Kardashian. Do I really need to explain that one?

In the next category I think we need to add actors and actresses that access their uninformed, unintelligent minds to bless us with their liberal wisdom (another oxymoron). Does anyone really care what Matt Damon, Ashley Judd, or Sean Penn think? They are most certainly in favor of redistributing wealth (mostly other people’s wealth) so why don’t they put their money where their mouth is and pony up about 95310302f their wealth to the government so they can pass it out to those people they claim they so desperately want to help? Or do they think they can spend the money more wisely on their own?

Lastly, I would like to propose that the career politicians that so excitedly support the redistribution of wealth are added to the list along with an assurance to the American people that the legislation they write will not exempt them from their own legislation as most of their legislation typically does. In addition, those that have made a killing on Wall Street via their use of insider information should be required to be wealth redistributed FIRST. If Nancy Pelosi loves redistribution and she’s made millions due to her political ties and her access to information most traders would kill for, then let’s raid her bank account first. I’m sure she’d willingly provide access to her ill-gotten gains because she’s a real patriot, right?

Stop laughing and wipe the tears from your eyes so you can see the remainder of my list of other politicians and celebrities that should surrender their money so they look less like the hypocrites we, and they, know they are: Warren Buffett, Harry Reid, Barack Obama, Valerie Jarrett, George Soros, Bill and Hillary Clinton, Chris Rock, Alec Baldwin, Al Gore, Michael Moore, Ariana Huffington, Oprah, Mark Cuban, Jay-Z, Bill Maher, Michael Bloomberg, Chris Mathews, Rachel Maddow, George Clooney, Paul Krugman, Andy Stern, and Al Franken. For good measure lets go ahead and throw in all of the news media that tout the evils of capitalism; ABC, NBC, CBS, and PBS.

IF those people on the list would practice what they preach they could probably eliminate the debt, eliminate the deficit, provide free health care for those that genuinely NEED it, feed every hungry mouth in the USA, and even give us all a free Netflix membership. But don’t hold your breath. They’d rather sit up on their high horse and pretend they care about others than to actually do something about the issues that plague our country.

So if the liberal progressive legislators want conservatives on board for redistribution of wealth … there’s the plan. By the way, one final word from Thomas Jefferson …

“The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.”

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Business

US Housing Sales Boom Will Last Until 2021

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Redfin CEO Glenn Kelman told CNBC on Thursday that he sees the US housing sales boom will last until 2021. Total US Home sales increased 9.4% in September, surpassing estimates. Meanwhile, median prices went up 15% year over year. This is according to data provided by the National Association of Realtors.

RELATED: Biden Is Latest Dem to Support Ridiculous Free Housing Proposal

Shares of Redfin, a real estate brokerage firm, were higher by 1% Thursday to $45.60. The stock more than doubled during this year. It now has a market cap of $4.5 billion. 

Why do people buy houses during a recession? 

During this time when the economy is reeling and jobs are tight, people buy homes. Why? There are a couple of reasons.

The bigger acceptance for remote work freed many people from living in the city. The opportunity to leave cramped apartments and expensive city living. The pandemic gave enough reason for workers to pack up and head for greener pastures. Next, interest rates are going down hard. From 3.7%, 30-year mortgage rates are now 2.9%, the lowest rates ever. Despite higher prices, people know this is the best time to buy on the cheap. 

The intent is there. The pandemic allowed you to work anywhere. And interest rates allow you to pay the lowest interest rates. People are taking the plunge and buying. So what’s the problem? We’re running out of houses to buy. 

Demand coming from the rich 

Rich professionals who can work from home are the reason for the uptick in housing demand. Kelman said that many remote workers moved from major cities to distant suburbs. Kelman said these workers began “taking a permanent vacation where they’re working from those homes.”

People are taking advantage of low-interest rates to snap up homes. Kelman noted that “part of what is fueling this boom is that the economy has just split into two and rich people are able to access capital almost for free.” The opportunity to buy homes for cheap may be too much to resist. “Of course, they’re going to use that money to buy homes,” he added.  

Meanwhile, there’s another group of people who would like to buy but can’t. Kleman said:  “There’s just another group of Americans who are still struggling, who can’t access the credit because we’ve raised credit standards, and you have high unemployment. I just think those two trends, at some point, have to collide.” 

Kelman foresees demand to continue until 2021 at least. Many undecided buyers will buckle down next year and take the plunge. He said: “There’s no way it can last forever. This level of demand is absolutely insane. I would expect it to last into 2021, at least.” Why 2021? “There are so many people now who have decided they’re not going to be able to buy a home by year-end,” he said. Kelman expects them to buy next year, “as their kids shift school districts. I do think we’re going to see this for some time.”

Shrinking inventory of houses for sale

With homes fast disappearing from the market, higher purchase prices are coming back. Based on data from the National Association of Realtors data, only 2.7 months’ supply of houses is available last month. This represents the lowest level since 1982 when the NAR began tracking data. 

Kleman expects supply to increase after the elections. Uncertainty will decrease after voters elect a new president. Listing and selling a home can take months to process. That’s why sellers have a lower risk tolerance than buyers. “Buyers, when they see a house they love, they pounce,” he said. “I think the sellers are just looking long term in the economy and still feeling some anxiety. Many of them are going to put their homes on the market in January and February.”

Demand won’t last forever  

The Wall Street Journal’s Justin Lahart thinks not everybody can live outside the big cities. A remote job in a vacation spot may pose difficulties for some. Winter conditions may also make some remote workers rethink their strategy. He also believes that the housing boom now made people buy houses sooner than later. He thinks many of the workers who moved to the suburbs would’ve done so in a few years. When the pandemic subsides, a smaller group might follow the exodus out of big cities. 

The number of people who can afford houses will shrink as well. Many workers’ careers derailed during the year. Many millennials got burned during the financial crisis in the early 2000s. Now, a new career-threatening crisis is in full swing. The post-coronavirus landscape may depend on how well the economy rebounds. We’ll have next year to find out.

Watch this as CNBC reports on the US housing sales boom. Redfin CEO Says “people are buying vacation homes, then taking a permanent vacation:

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Automobiles

Tesla Keeps Streak Intact, Posts Profitable 3rd Quarter

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The winning streak continues Tesla posts a profitable 3rd quarter, it’s fifth consecutive. The EV company posted a net profit of $331 million for the three-month period ended Sept. 30. Tesla also confirmed its goal of delivering 500,000 vehicles within the year. CEO Elon Musk calls the latest quarter as Tesla’s “best quarter in history.” The company posted a record of $8.77 billion in revenue against estimates of $8.28 billion. This is an increase of 39% from a year ago. Analysts surveyed by FactSet expected sales of $8.28 billion. Shares went up over 3% at about $438 in after-hours trading. Since January, Tesla shares have grown 500%.

RELATED: Tesla To Sell New Stock To Raise $5 Billion Capital

500,000 Deliveries on Target

Despite the pandemic, the company will proceed with its original goal of 500,000 cars in 2020. In a statement, Tesla affirmed its goal. “While achieving this goal has become more difficult, delivering half a million vehicles in 2020 remains our target,” it said. This entails building more cars at its Shanghai factory, and improvements in logistics and delivery.

Earlier in October, Tesla reported 139,593 vehicle deliveries in the quarter. This places the 500,000 targets is within reach. Model 3 and Model Y took up the bulk of deliveries and growth during the period. The more expensive Models S and X dropped by 12% compared to 2019. As such, Tesla started slashing prices for its higher-end models to increase demand. The Model S reduced its prices twice to $69,420.

China Remains the Crucial Market

China remains the key market for Tesla’s profitable 3rd quarter. Tesla’s auto sales in China climbed nearly 13% in September, their sixth straight monthly gain. The company’s Shanghai Gigafactory raised production due to demand. Demand for the Model 3, especially in China, led to a retooling. From 150,000 units per year, it now handles 250,000.

China’s “Golden September, Silver October” is the country’s high point in car purchases. Sales reached 2.57 million vehicles last month. The China Association of Automobile Manufacturers (CAAM) said that sales were still down.  For 2020, 17.12 million vehicles got sold, which is 6.9% below last year. 

Electric vehicles enjoyed brisk sales during the period. Sales increased by 67.7% to 138,000, which is the third straight month of gain. Tesla reduced its Model 3 prices by 8%, down to 249,900 yuan ($36,805).

Based on September sales, the momentum looks to carry over to October. Haitong International analyst Shi Ji expects even better numbers this month. He said: “Based on our dealer channel checks, the growth in momentum extended into the October Golden Week, as retail sales exceeded dealers’ expectations”

A Decrease in Credit Sales

While revenue rose, regulatory credits fell down from $428 million to $397 million. Ben Kallo of RW Baird observed that “Regulatory credits are a big part of the EPS beat. But that’s part of the game: Tesla’s competitors are paying them, and Tesla is reinvesting that into their factories in Berlin and Texas.”

Tesla generates extra income by selling credits. Manufacturers buy these credits to comply with carbon-emissions standards. They come from all over California, Europe, and other areas. Investors prefer seeing profits from the core business of selling cars. A Bloomberg analyst thinks that the S&P snub might be due to credit sales. Analyst Michael Dean noted “question marks about the sustainability of regulatory emission-credit sales, which are currently underpinning earnings.”

For 2021, Tesla aimed for even more increases in production. This includes its all-electric semitrailer truck and its pickup truck. The company hopes to get more cars out of its China factory. It also expects its newest plants in Berlin and Texas to start churning cars. Musk estimates the 2021 production could reach 840,000 to 1 million vehicles.

The company also laid out plans during its recent “Battery Day” event. Musk announced that the company will start making its own “tabless” batteries. These batteries improve the cars’ range and power. The improvements will help bring down the cost to produce a car. Soon, Tesla hopes to launch a vehicle priced under $25,000.

Watch this as Yahoo! Finance reports on Tesla earnings: Tesla posts a profitable 3rd quarter, it’s fifth consecutive and EPS estimates:

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Business

DOJ Files Antitrust Suit Against Google

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Yesterday, the US Department of Justice (DOJ) filed an antitrust suit against Google. The Justice Department alleged that Google maintained a monopoly on internet searches. Its dominance allowed it to cut off rivals from critical distribution channels.

RELATED: Legislative Changes on Tech Companies

Eleven Republican state attorneys general joined the lawsuit as plaintiffs. These are Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina, and Texas.

DOJ Cites Sherman Act of 1890

Under the Sherman Act, DOJ lawyers alleged that Google illegally maintained monopolies. This covered markets for “general search services, search advertising, and general search text advertising.” US Deputy Attorney General Jeffrey Rosen led the filing of charges. He said that “Google is the gateway to the internet and a search advertising behemoth. It maintained its monopoly power through exclusionary practices that are harmful to competition.”

The lawsuit comes after a House Judiciary report that says some tech act as monopolies. Apart from Google, Amazon, Apple, and Facebook also got mentioned. The report recommended Congress to update antitrust laws. These changes can help with breaking up businesses.

Within a month, the Justice Department issued a lawsuit against Google. It is a result of a 16-month investigation into company business practices. Google got involved in a 2013 antitrust suit but did not get charged.

Monopoly Power In Online Search

Google allegedly tied up distribution channels for online search and related markets. The suit said Google “foreclosed competition for internet search” through exclusionary agreements. This prevented rivals from achieving the scale to fight Google’s dominance. The DOJ said Google holds 88% of the U.S. search market and 94% of mobile searches. Google allegedly harmed consumers by providing lower quality search and reducing choices.

The DOJ also claimed Google owns more than 70% of the search ads market. It said that the company’s monopoly power lets them charge more. While they charged more, Google provided lower-quality services in the absence of competition.

Exclusionary contracts

Google used exclusionary tactics with distributors of its Android mobile OS. As such, Google also suppressed innovation in the search market. Google allegedly requires phone manufacturers who use Android to agree to certain limits. Android-powered devices that aren’t compliant with Google standards face selling restrictions. The company then provides the same manufacturers access to its “vital proprietary apps.” They do so in exchange for agreeing to carry other Google apps. Under the agreement, the devices should prevent users from deleting certain Google apps.

Apart from exclusivity, Google’s revenue-sharing model for distributors helped expand its dominance. A senior executive described the model as bittersweet.  He said it was“a bitter pill for carriers, and a generous revenue share is a sugar that makes it go down smoother.”

Apple’s partnership

Google’s partnership with Apple is the centerpiece of the DOJ’s allegations. Google allegedly misused its power in an anticompetitive manner. At stake is a major revenue stream for both tech giants.

It’s no secret that Google relies on search traffic from Apple’s iPhones. The search engine is the default service on Apple’s Safari phone browser. This means that consumers get Google search results—and related advertising – automatically. The agency claimed Google “locked up” distribution by entering exclusionary agreements with Apple.

Google responds to the suit

Google Chief Legal Officer Kent Walker responded immediately to the suit via a blog post. He laid out the company’s rebuttal to the DOJ’s claims.

He wrote: “Today’s lawsuit by the Department of Justice is deeply flawed. People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives. This lawsuit would do nothing to help consumers. On the contrary, it would artificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use.”

Walker refuted claims that Google’s arrangement with Apple is exclusive. Rivals also pay to appear in Apple’s Safari. He said Apple chose Google search because they found it as “the best.” He linked a 2018 article where Apple CEO Tim Cook complimented the search engine.

Missed the Main Point

Walker also said that the suit missed the “bigger point.” He argued that consumers choose to use Google’s services because they want to. In case they didn’t, switching default search engines is an easy task to do. Walker pointed to specialized search engines like Expedia, OpenTable, and even Twitter. These companies help people seek specialized information and are available. While Google pays for digital shelf space competitors “are readily available too.” As for agreements, he said that Google’s contracts are industry standard. They offer nothing unusual. 

Watch this as FoxNews reports that the US Department of Justice has filed an antitrust lawsuit against search engine giant Google: 

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