I teach eighth-graders about Karl Marx's "take from each according to their means and give to each according to their needs."
The teacher takes away 20 points on a test from those who got 95 and gives those points to those who had 55. Therefore everybody now has 75. OK class, will the 55 students study for the next test? No! Why bother studying (working) if it will be given to you. And what will the 95 students do? The same thing. Why bother working (studying) when it will be taken away. What will happen to the class average (the standard of living) on future tests? The average will go down. Eighth-graders understand this. **** As I look at the stocks on my screen that did well today and compare them to those that did poorly, I see George's story being played out in spades. Those with the highest ROE's, profit margins, growth rates etc seemed to be giving their success to those who have done the poorest. Is it really a coincidence that this happened on the same day of the government's largest bailout ever, or am I just loony and seeing things?