8/20/2010
By Charles Payne, CEO and Principal Analyst

Poland and Atlanta are 4,991 miles apart, but in many ways recent news from both shows a kindred bond.  This week, citizens in Poland were up in arms after it was reported the government would cut its allowance for funerals to $1,300 from $2,100.  I was taken aback because I didn't realize the government in Poland paid for funerals.  Then, there was the amount, a lot of money when you consider per capita purchasing power is around $17,000 a year.  But, here's the rub, people were outraged with one woman who was quoted as saying "births and deaths should be celebrated." 

In an article in the FT, a maker of inexpensive coffins celebrated the news because he currently sells most of his 11,000 in annual production to neighboring Germany, where funerals are less conspicuous.  His plain, old coffins just weren't opulent enough for Poles.  I guess if someone else is paying for it then go full bore.  That comes with the territory of entitlements.  The recipient doesn't think, or care, where the money comes from but makes sure the check is there on time. The more of this kind of stuff that's given away by the government the less people will strive to get it on their own.

It gets back to the notion of mediocrity ruling.  It gets back to the idea we should applaud mediocrity while voicing disdain for success.  Qualifications for the former are being alive, while the latter is driven through hard work and sacrifice.  The thing is you can't get the former without the latter. Poland is facing many issues that mirror the United States, including the battle over the cross in front of the presidential palace, and the rise of secularism accompanied by apathy among that nation's youth.  Across the Atlantic, the offering of government assistance in housing created a mob scene.

The city of East Point, Georgia is a neighbor of Atlanta in Fulton County.  Last week, the county offered applications for Section 8 housing assistance.  In the U.S. Housing Code, and part of the Housing and Community Development Act of 1974, Section 8 is a housing allowance where the government assists tenants in paying their rent. Tenants pay up to 30% of the rent, and the taxpayers put up the rest of the dough.  Hey, it's a heck of a deal if you can get it, but it's not a fair deal. Recently, there have been reports from across the country of people on Section 8 living in McMansions. 

It's one of those things where you ask where the line is drawn, essentially who gets it and who doesn't.  We're talking about an $18.0 billion program.  As for those actually getting Section 8, it's unlikely they are going to be motivated to ever improve their standing in life so they are victims in the sense they will never taste the thrill of achievement beyond a minimum level.  Last week in East Point, 30,000 people showed up for applications, and yet there are less than 40,000 people in the town. 

The place became a mob scene, with people fleeing with children in tow.  Once the dust settled, and everyone left, reports says the place was sprawling with empty water bottles, crushed soda cans, and cigarette butts and packs.  When the government is paying for your funeral you don't think about who really pays, and when you are seeking government to pay most of your rent you don't consider who might have to clean up your mess, either.  I'm sure many people feel like Section 8 is the reward for their vote in November 2008.

The tradeoffs are shackled dreams, ambitions, and pride. 

Americans love helping Americans, and things like welfare and food stamps were set up to aide in times of need, but not to become permanent entitlements.  Yet, not only are we being told they should come with citizenship, so, too housing, healthcare, and maybe at some point funerals.  I agree with the Polish woman that birth and death should be celebrated.  In America, we celebrate the fact that God allows us to begin life in the greatest nation in the world, and hopefully by the time we pass, we can say we had a chance to take advantage of that great gift.

Charles Payne
Wall Street Strategies