A Lesson in Economics

I’m all for helping people. Especially people who, through no fault of their own, find themselves in unfortunate circumstances.

Like the people who run businesses along the Gulf Coast, who are learning that their customer base is leaving. They’re finding that their ability to earn a living has suddenly disappeared even though they may have been doing all of the right things.

It’s ice cream vendors who don’t have kids to sell to because their parents have opted out of the beach.

Beach rental owners who have vacancies because Biloxi is not the vacation spot that it was last year.

Wedding planners and florists who have no bookings because who wants to risk their wedding is going to happen on a beach that smells like Jiffy Lube on a busy Saturday morning.

Shrimpers who are no longer allowed to fish and sell their catch.

These are all victims of this disaster, as surely as if the oil were gushing into their living rooms. They are unable to pay their mortgage, feed their families and do the other things that we have to do to live. They need all the help they can get, from about any source that offers it.

There’s a group of people, though, who are undeserving of any assistance.

Yeah, I know – it surprised me when I realized that I felt that way, too. I’m usually not a fan of “merit based assistance”, instead figuring out that anyone who needs help ought to get a shot at it.

The exception, though, is those people who worked on a “cash basis”, and didn’t pay their share of taxes on their income.

Maybe this is just a sore spot with me as my extensions expire and I'm having to finally deal with my own tax return from last year, but I don't think so.

These small businessmen and women are now coming forward and saying that they should be compensated by BP or the government for their lost income. Of course, there are no tax returns or other business records out there to substantiate how much they made. We’re just supposed to trust them and believe how much they said they earned in the prior years.

How much they’ve earned breaking the law in several ways, not the least of which is by not reporting their income.

There is a hue and cry across our nation, especially by individuals of a conservative bent, that undocumented individuals from other countries shouldn’t get any of the benefits of living here because presumably they’re a drain on our system, using medical resources, putting their children in our schools and not paying their fair share.

Other than the fact that their skin may be a different color and they may speak a different language, how is that any different than the guy who sells the fish his brother-in-law caught out of the back of his pickup along side the road? He’s not complying with any of the business regulations that legitimate businesses follow, nor is he paying taxes on that cash that’s crossing his palm.

They are the ones who chose not to fight their way through zoning requirements, or comply with OSHA regulations or the fire marshal or the health department.

And yet, just because he (or she) lives near the coast where this disaster is happening, we’re supposed to replace this undocumented, unreported and untaxed income?

Sorry, but I don’t think so.

Those of us who complied with the regulations, sometimes fighting battles over them to make things better for everyone rather than simply ignoring the rules we didn’t like deserve both to go to the front of the line and to be rewarded for playing by the rules.

I’m sorry that these people are having a tough time, but the reality is the individuals in those situations made decisions – sometimes years ago – to avoid their obligation and sponge off the rest of society.

They got their reimbursement in advance over the years when they weren’t paying their fair share of state and federal income taxes or meeting any of the myriad of regulations imposed on several levels that are required for most businesses.

They bet that they wouldn’t get caught and there wouldn’t be any consequences.

When the only regulation of their actions came from the government, that was probably a pretty good bet. It’s when something unexpected – Hurricane Katrina or a big ol’ runaway oil well under the ocean – that their plan fell apart.

The income from illegal activity should not be replaced. Plain and simple.

Let’s take it a step further and look not only at the guys selling fish out of their truck, or mowing yards or otherwise working on a cash basis.

Let’s talk about the Crack Ho’s.

Over the years, I’ve had the opportunity to meet several of these ladies in a purely professional capacity.

My profession, not theirs.

I’ve yet to meet one that took Master Card or filed an income tax return reflecting the fact that they engaged in a number of physical activities in exchange for cash money.

No checks. No debit cards. Greenback cash money only.

I would think that it’s safe to assume that several of these women and men ply their trade along the gulf coast, especially in tourist areas. Supply and demand, you know.

Presumably their income will be off for the next few months / years because tourism will be down and well, the locals just aren’t as likely to pony up the money for that little slice of heaven, or if they do it'll be at a deeply discounted rate.

Should their income be replaced because of this disaster?

And what about the dealers who sell them the crack from which their name comes? It’s a cinch that income is all “off the books” as well. Do they get to claim a loss?

These people are entrepreneurs every bit as much as someone who bets everything on a shrimp boat and their own determination. It may or may not work, and income will go up and down many times based upon things over which they have no control.

The weather. Oil wells. Government ineptitude. Crooked suppliers. Lazy employees. Bad decisions.

It’s all there to work through. The difference is that those dealing in a cash economy have chosen to remove themselves from the burdens of operating a legitimate business within our society.

They should not, just because of this disaster, now be able to make a claim for and be reimbursed for their illegal income. They rolled the dice, took a chance and lost.

Now they need to deal with the consequences.