Jay's Tuesday Free Enterprise Quote - 1 May 2012

By
Home Inspector with Jay Markanich Real Estate Inspections, LLC

"Democratic government has this fundamental problem:  In broad terms, 20 percent of the people do most of the productive work and create most of the nation's wealth, but the other 80 percent command a heavy majority of votes."

Thomas G. Donlan

Well, this is certainly another view of the 1%!

It is also another take on the old "Pareto Principle," that everyone learns about in Econ 101 - the old 80/20 rule. 

This doctrine stems from the 1906 statement of an Italian economist named Vilfredo Pareto.  He observed that 80% of the land in Italy was owned by 20% of the people.  He was also a gardener, noticing that 80% of the peas in his garden came from 20% of the pods.

Considering this a natural occurrence, in both ways, he came up with his 80/20 economic principle.  Looking around at business activity, society incomes, a company's sales, and so forth, it is pretty much true all across the board! 

Generally speaking, in business, 80% of the profits come from 20% of the products; 80% of the sales are produced by 20% of the sales people; 80% of the profits come from 20% of the customers.  This goes on.  In this country the top 20% of income earners pay just over 80% of the taxes.  Again, this goes on.

This 80% of Mr. Donlan's less productive people has pretty much held true if you average out the last many presidential elections.  Just in the last three the winner in 2008 won 27%, in 2004 won 83% and in 2002 won 85% of the 3113 counties in the country.  Not naming names, but looking at an election map breakdown by county, does that not appear to hold true for the most productive counties in each election versus the least productive?  WHAT A CONTROVERSY THAT INTRODUCES!

For some time now, I have said that in this country the debate is no longer between left and right, or conservative and liberal (a misnomer).  It seems to me that the real debate is between the producers and non-producers, achievers and non-achievers, and those who give and those who feel entitled to be given to.  Note which group gets pandered to the most!  Note which group makes the most noise!  Note which group creates the most election controversies!

Thomas Donlan is the editorial page editor of Barron's, The Dow Jones Business and Financial Weekly, and is based in Washington DC.



 

Posted by

Jay Markanich Real Estate Inspections, LLC  

Based in Bristow, serving all of Northern Virginia.

Office (703) 330-6388   Cell (703) 585-7560

www.jaymarinspect.com


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Rainmaker
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Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Thanks James.  I have always found the Pareto Principle to be a valid one, and with this Donlan twist it is even more fun!

That's it in a nutshell Clint.  Think "buying votes..."

May 01, 2012 04:17 AM #5
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Harry F. D'Elia
Precision Real Estate Inc. - Phoenix, AZ
Investor , Mentor, CSSN, Radio Coach, REOs, ABR

Entitlement is a scary word when it comes to government because it is hard to take away

May 01, 2012 04:31 AM #6
Rainmaker
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Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

And this is certainly the debate Harry.  And notice how demanding those "receivers" are when even a small dent is suggested in their "receipts!"  Remember how the Wisconsin gubment workers reacted when it was suggested that they pay even a small percentage of their OWN retirement plans!!?

May 01, 2012 04:34 AM #7
Rainmaker
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Lisa Von Domek
Lisa Von Domek & Associates LLC, Real Estate Broker/Associate with Real Living Real Estate Group www.LisaVon.com - Dallas, TX
....Experience Isn't Expensive.... It's Priceless!

Jay,

So sad, so true....

May 01, 2012 04:49 AM #8
Rainmaker
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Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

One of the most significant lessons from the book 1984, Lisa, is that the best way to get something that is abhorrent more acceptable in society, one only needs to change the word used to describe it.  Hence we have words like gay, choice, right to die, and progressive.  I could go on.

May 01, 2012 04:52 AM #9
Rainmaker
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Mike Cooper
Winchester Real Estate Sales, Cornerstone Business Group Inc - Winchester, VA
Your Winchester, VA Real Estate Pro

Well said, Jay. It's interesting to me.  Having worked in a former Soviet country, I don't think the average American realizes what he is lusting after.  He may have free health-care, a job and a vacation every year, but he wouldn't want any of the three if they were solely provided by a big government.  What the entitlement society doesn't seem to realize is that money is finite and the human appetite for free stuff is unlimited.  Sooner or later it will run out.  Hence, Greece, Spain, England, France, etc.  

May 01, 2012 05:12 AM #10
Rainmaker
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Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

The key word is "free," Mike.  There is no free lunch.  And when 80% receive from 20%, how long is that going to last?  The book Atlas Shrugged comes to mind.

Any time the word "free" is used, we know what is being proposed is a lie.

May 01, 2012 05:50 AM #11
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Mike Frazier
Carousel Realty of Dyer County - Dyersburg, TN
Dyersburg Tn Real Estate

I keep wondering how low our economy has to go before people wake up!

May 01, 2012 07:44 AM #12
Rainmaker
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Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

We may already be at the point of no return.  Notice nobody is saying or doing anything about debt ALREADY accumulated Mike!

May 01, 2012 08:34 AM #13
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Steve Hoffacker
Hoffacker Associates LLC - West Palm Beach, FL
New Home Sales Trainer/Coach, Sales Books Author

Jay,

Quite right. The non-producers occupy the seats of bureaucracy (paid for by the producers), and the non-producers demand all of the government giveaway programs (paid for by guess who?). :)

Steve

May 01, 2012 10:28 PM #14
Rainmaker
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Tom Arstingstall, General Contractor, Dry Rot, Water Damage Sacramento, El Dorado County - (916) 765-5366
Dry Rot and Water Damage www.tromlerconstruction.com Mobile - 916-765-5366 - Placerville, CA
General Contractor, Dry Rot and Water Damage

I enjoyed the post Jay, it made me think. I hope to be a producer for quite a while.

May 02, 2012 12:52 AM #15
Rainmaker
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Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Um, let me think Steve.  The twenty percent?

I hope so too Tom!  Especially when you wear that cool suit.  That suit is nothing GQ would want on their cover, but it is cool nonetheless.

May 02, 2012 01:58 AM #16
Rainmaker
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Tom Bailey
Crystal Coast Realty & Home Services, LLC - Atlantic Beach, NC

Jay, as always a great post from you. One of the great problems with our system is that the non-producers can vote themselves the producers money. 

May 02, 2012 03:18 AM #17
Rainer
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Steven Cook
No Longer Processing Mortgages. - Tacoma, WA
- Pierce, King, Kitsap, Thurston, Mason Counties

Jay -- interesting post from yesterday - especially in light of the mayhem created in Seattle yesterday by the "non-producers" during marches by others.

May 02, 2012 09:44 AM #18
Rainmaker
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Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Tom - I had a blog on that very topic!   http://jaysfreeenterpriseblog.blogspot.com/2011/08/lesson-from-congressman-davy-crockett.html

Steven - they will march for their right to produce nothing and get paid for it!  I heard a couple of interviews without hearing a coherent thought.

May 02, 2012 09:59 AM #19
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Steve Hoffacker
Hoffacker Associates LLC - West Palm Beach, FL
New Home Sales Trainer/Coach, Sales Books Author

Jay,

Congratulations. This post is now featured in "Celebrating Free Enterprise." :)

Steve

May 03, 2012 11:05 AM #20
Rainmaker
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Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Thanks Steve.  I thought this one would be controversial, but I guess not!

May 03, 2012 12:14 PM #21
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Steve Hoffacker
Hoffacker Associates LLC - West Palm Beach, FL
New Home Sales Trainer/Coach, Sales Books Author

Jay,

I think people know this to be true - if not even more than the 80%. The shame is that they're OK with it. :)

Steve

May 06, 2012 02:09 PM #22
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Steve Hoffacker
Hoffacker Associates LLC - West Palm Beach, FL
New Home Sales Trainer/Coach, Sales Books Author

Jay,

Congratulations. This post is now featured in "The Law Of The Land." :)

Steve

May 06, 2012 02:09 PM #23
Rainmaker
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Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Thanks Steve!  I wonder often about that 80%, in many contexts.

May 06, 2012 05:43 PM #24
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Rainmaker
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Jay Markanich

Home Inspector - servicing all Northern Virginia
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