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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.

Originally posted to Melanie in IA on Tue Sep 11, 2012 at 06:35 AM PDT.

Also republished by J Town.

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