There's an old joke about a retailer: margins thin already but trying to attract customers, the retailer decided to have a big sale. After looking at the proposed discounts, an assistant questioned the strategy, noting that they would lose money on each transaction.

The retailer said, "That's okay -- we'll make it up on volume!"

Another little story: I am working on a quilt. I'm pretty good at math. It's easy for me to design quilts, calculate the yardage needed, figure how many pieces to cut. For the current project I calculated the length of strips needed for borders. I cut the fabric carefully, sewed strips together, cut long pieced strips to correct border lengths. And yet I didn't have enough. I calculated again. Hmm... there should be enough there. So I checked, laying the strip against the finished quilt center, and sure enough, it was still too short. My eyes were not deceiving me.

How could that happen? After calculating the third time and coming up with the same solution, I finally realized the calculation was correct, but the inputs were wrong.

A classic example of garbage in, garbage out.

One more story: a year or so ago, a large number of my Finance students thoroughly miscalculated an exam problem. It was a calculation they should have learned in their survey class, not difficult if they understood what they were trying to achieve.

When I handed exams back, several tried to argue that they had done it right. I explained where their mistake was. Then, shockingly, someone asked me why they had to do it my way, when that wasn't how they'd learned it.

I told them, "You have to do it MY way because that is the RIGHT way!! It's a simple thing: money coming in has a DIFFERENT sign than money going out."

They had learned process without understanding.

As President Clinton said, "It's arithmetic."

The retailer who loses money in the long run goes out of business. The quilter who consistently makes math errors resorts to quilting by recipe, shifts to art quilting, or switches to another hobby. Students who learn without understanding will not hold jobs for long, and if they do, heaven help their clients.

It's arithmetic. Subtracting more does not increase the result. Inputting the wrong numbers leads to the wrong answer. Misunderstanding the problem means you can't develop a good solution.

The Republican's tax-cut policy makes all of these mistakes.

Republicans care a lot about money. They claim to be capitalists, in favor of investment. They claim their tax-cut policies will encourage investment and expand the economy, even in the face of evidence to the contrary.

Bill Clinton nailed the problem in his speech Thursday night. Their brand of capitalism leads to losses, not gains. Via Transcript Editors:

If they stay with a 5 trillion dollar tax cut in a debt reduction plan – the – arithmetic tells us that one of three things will happen:

1) they'll have to eliminate so many deductions like the ones for home mortgages and charitable giving that middle class families will see their tax bill go up two thousand dollars a year while people making over 3 million dollars a year get will still get a 250,000 dollar tax cut; or

2) they'll have to cut so much spending that they'll obliterate the budget for our national parks, for ensuring clean air, clean water, safe food, safe air travel; or they'll cut way back on Pell Grants, college loans, early childhood education and other programs that help middle class families and poor children, not to mention cutting investments in roads, bridges, science, technology and medical research; or

3) they'll do what they've been doing for thirty plus years now – cut taxes more than they cut spending, explode the debt, and weaken the economy. Remember, Republican economic policies quadrupled the debt before I took office and doubled it after I left.  We simply can't afford to double-down on trickle-down.

`spacing added by diarist to make it easier to read`

(Also see jamess' diary from Sunday, Their Math Just Doesn't Add Up for more examples of their math incapacity.)

Republicans misidentify the problem, and they try to solve it with the wrong processes, which they learned without understanding. They think they can make it up in volume. All in all, "garbage in, garbage out" is a good description of their processing.

I am a capitalist. With almost 30 years of education and experience in finance, including three degrees and a major professional designation, I believe in investment. That investment must include public goods as well as private goods. That investment must engender public returns on capital as well as private returns. Ignoring public health and safety, ignoring education and training, ignoring infrastructure, is doing the same thing as the retailer trying to make it up on volume.

I am a capitalist. Despite my little story above about miscalculating my quilt border, I am pretty good at math. The Romney-Ryan budget does not add up. It does not invest in the long-run health of our economy. Instead it strips the resources and profits for a small number of people and sends the rest to fend for ourselves.

I am a capitalist. And that's why I vote for Democrats.

Tags

EMAIL TO A FRIEND X
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
 Unpublish Diary (The diary will be removed from the site and returned to your drafts for further editing.) Delete Diary (The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

• I am a social democrat kinda Democrat(8+ / 0-)

of the sort that kinds of holds my nose at capitalism because as much as it stinks, it's "what we got" and highly regulated capitalism combined with a real honest to goodness social safety net is a decent societal goal.

Even so, Ryan doesn't add up. You don't have to be a capitalist to do math. ;)

I know what Mitt Romney is hiding: Mitt Romney. equalitymaine.org

• Capitalism(11+ / 0-)

in MY view is using capital to create. Capital may be physical resources, human capital (labor), and/or financial capital. Almost always, all 3 are required in some measure. The goal of capitalism is to make MORE benefit than cost.

Regulation is essential, not secondary, because there must be constraints in place on how the elements are used, and there must be measures for "cost" in terms of pollution and other costs that aren't easily measured in units of currency. If you can't measure it, how can you know if you had a positive return on investment?

Unregulated financial markets are the ones where a very small number of people "win" and everyone else loses. And on the whole there is no net gain. It is not successful capitalism.

Social capitalism recognizes that social investment in education, health, green space, clean air, streets.. are all part of the same process. On the whole, there should be more good than cost. It is just more difficult to measure in dollars.

[ Parent ]

• Why is all of this(8+ / 0-)

so hard for Republicans to understand?

Excellent diary, Melanie

Occupy is the symptom. Fundamental reform is the cure.

[ Parent ]

• Thanks, Tim.(7+ / 0-)

Why so hard to understand? Because over time the party of policy has been corrupted. Now it is full of people who don't believe in science or math, facts in general. Capitalism requires facts in order to make good decisions. In the meantime, the Democratic party has gotten smarter, not dumber. Oh yes, we still have trouble with marketing, but we are a lot better at facts and respect for science and numbers. We are better educated, make more money, and are more compassionate. Who wouldn't want to be like us?

[ Parent ]

• Science is the key(2+ / 0-)
Recommended by:
Melanie in IA, belinda ridgewood

That is, science in the broad sense including social sciences, economics, history, and applied sciences. Science is based on data -- real world evidence. Math is an important tool, but without a connection to facts and data, it cannot give reliable answers. Your quilt story is a great example.

My local paper ran long stories on Steve King and Christie Vilsack.  As a youngster, King spent a lot of time playing chess. He was a math major before he dropped out of college. He prides himself  on making decisions based on logic rather that emotion. What he consistently misses is the need to apply logic and math to facts and data. For example, King is a global warming denier and he denies modern economic theory.

Logic or math based on false data leads to false conclusions.

• Because of the root of all evil - GREED.(1+ / 0-)
Recommended by:
Melanie in IA

"I believe more women should carry guns. I believe armed women will make the world a better place. Women need to come to think of themselves not as victims but as dangerous." Anna Pigeon

[ Parent ]

• VERY clear explanation, Melanie(7+ / 0-)

I'm intellectually challenged when it comes to economics (I'm not sure it isn't just willful, but there you have it) so the fact I found this crystal-clear is testimony to how well you presented it.

-7.75, -8.10; All it takes is security in your own civil rights to make you complacent, and we are all Wisconsin.

• It just baffles me. Growing up in the sixties on(4+ / 0-)

the east coast, the capitalism I was exposed to by my father was businesses that served a real good, that prospered with employees who were trained and reasonably rewarded. It focussed on the idea that legitimate profits came from doing something worth doing and doing it well.

This current crop of Republicans - well, they're Martians or something.

Is it true? Is it kind? Is it necessary? . . . and respect the dignity of every human being.