Charles Koch wants to eliminate minimum wage [Archive] - HungAngels

paulclifford

07-12-2013, 06:16 AM

>>>What part of "more pay means more purchases which means more money for the company to pay more so that their employees will buy more so that the company makes more money yada yada yada" don't these fools understand?

"more pay means more purchases"

More purchases *for the particular employee RECEIVING that additional pay* and fewer purchases *for the consumer ultimately PAYING for the employee's higher wage." The consumer will have less money because mandated higher wages must ultimately be paid for by higher prices passed along to him. The higher prices the consumer will pay for his purchases to the "X" company will result in his making fewer purchases to the "Y" company and the "Z" company.

So the *total* number of purchases in the economy remain the same; but the mix, or composition, of the purchases will have shifted from one kind of item to another, or from one company to some other company. That might be politically expedient — to help one group of people at the expense of another group of people — but it's completely false to claim that it helps the economy overall.

Several years ago, when same-sex marriage was first being debated in the news, The New York Times ran an article about lesbian couples in Massachusetts claiming that recognizing same-sex marriage would be "good for the economy" because lesbian couples wanting to marry would "buy 2 wedding gowns, as opposed to one in the case of a hetero couple." In that writer's opinion, buying 2 wedding gowns apparently helps the economy. It didn't occur to the writer that the purchase of the 2nd wedding gown occurs at the expense of the purchase of some other item (fewer purchases of home computers, for example). Lesbian couples don't increase their purchasing power just because they're allowed to marry; they *redirect* their purchases toward items they would not have otherwise bought. That doesn't hurt the economy, of course, but it doesn't improve it either; it merely sends a signal to companies: "make more wedding gowns and fewer home computers."

"which means more money for the company"

Which company? An employee's wage is a company's COST, just as equipment is a cost, rent is a cost, interest payments on borrowed money are a cost, etc. Would you mind explaining how a company makes more money if one or more of its costs go up?

More to the point: if a mandated hike to $9.00/hour is beneficial to the employee, his employer, other companies and their employees, etc., in spreading "waves of prosperity", then why stop at only $9.00/hour? You want instant prosperity? Mandate that companies pay no less than $900.00/hour to all employees! That'll improve the economy! Just imagine the amount of spending a dish washer at a diner could do if his employer were forced to pay him no less than $900.00 for an hour of his labor!

No serious economist (I'm one) doubts for a second the basics he learned in his training: Mandating that the price of "Y" must go never fall below "$" will always cause a glut of "Y" ("glut" means "lots of 'Y' that no one wants to buy at that price"). The price of labor is called a "wage" — it's an unfortunate term, but it's the one we're stuck with for historical reasons. And we have a very special name for the glut of labor — the labor that no one wants to buy — that always follows a mandated increase in its price: it's called "unemployment."

For more on minimum wage, and basic economics in general, see the works of one of the great TS economists, Deirdre McCloskey (formerly, Donald McCloskey). Her website is here:

http://www.deirdremccloskey.com

trish

07-12-2013, 05:59 PM

An employee is an asset to her employer, providing the labor required to reduce the company's product. Her wage is merely the cost of maintenance of that asset. Skimp on the maintenance and the product suffers, and thereby eventually the company's reputation, sells and profits.

Prospero

07-12-2013, 06:11 PM

The rich are better than you. They got rich by being better. They're life's winners. You're the loser. They've earned the right to rub it in.

I love it Trish.

But I groan inwardly that this thread is an open invitation to the zealot who posted endless screeds here a few months ago in praise of the theories of Ayn Rand.

The Kochs have worked some fine magic in America these past few years. Their pernicious impact is still being seen in the deadlock in Washington.

trish

07-12-2013, 06:51 PM

Edit ->
An employee is an asset to her employer, providing the labor required to produce the company's product. Her wage is merely the cost of maintenance of that asset. Skimp on the maintenance and the product suffers, and thereby eventually the company's reputation, sells and profits.
The edited portion is italicized. (Damn I wish there wasn't a ten minute limit on editing one's posts).

paulclifford

07-13-2013, 12:39 AM

>>>An employee is an asset to her employer,

Very true. So why would anyone intentionally vote for a law that punished an employer for maintaining her important asset?

Does legal punishment (or the threat of legal punishment) inspire an employer to maintain more important assets? Or fewer?

Most importantly:

Since everyone is unique, why can't each individual employer and each individual employee decide between themselves voluntarily what "maintenance" consists of? Why "one size fits all?" Why must a third party (Uncle Sam) be brought in to make that decision for them?

No one here wants a third party brought in to decide what "marriage" is, or what "a sexual relationship" is; they want unfettered freedom there. But in the economic sphere, they want that third party to tell them and everyone else what "health insurance" is, and what a "wage" is.

Why not unfettered freedom in both economic relations *and* sexual relations?

paulclifford

07-13-2013, 12:44 AM

>>>I groan inwardly that this thread is an open invitation to the zealot who posted endless screeds here a few months ago in praise of the theories of Ayn Rand.

It wasn't I who did that. But my question is: why do you object to having your ideas challenged?

A groan is not an argument.

>>The Kochs have worked some fine magic in America these past few years. Their pernicious impact is still being seen in the deadlock in Washington.

For example?

trish

07-13-2013, 01:16 AM

Very true. So why would anyone intentionally vote for a law that punished an employer for maintaining her important asset? There can be lots of reasons. At one time in the U.S. some of those assets were slaves. Even after slavery ended many workers were effectively entralled to their employers, laboring eighteen hours days six days a week, paid in tokens that could only be exchanged for necessities and goods at the company store. At one time those assess were very young children! Federal laws were required to thwart these immoral extravagancies of unfettered capitalism. Conservatives since Reagan have been working with corporate interests to dismantle unions returning us ultimately to the days of the robber barons.

paulclifford

07-13-2013, 01:24 AM

http://www.dailyjobcuts.com

A "fun" site to check once or twice a week.

Over time, you'll see the effect minimum wages and Obamacare (to name but two destructive laws) have on workers.

You can also expect the following:

As minimum wage is increased (which it eventually will, since it's always politically popular), most chain stores that normally employ people at checkout counters — supermarkets, DuaneReade and CVS drug stores, etc. — will convert completely to automated checkout machines, employing only a person or two to keep an eye on things.

I don't think the people who were previously employed in these places — or those who will now remain unemployed because their assets to an employer are not worth $9 or $10 or $11 an hour — are going to be thankful for the minimum wage. The reason they won't be thankful is that even with a minimum wage of, let's say, $11.00/hour, it's obvious that $11.00/hour x 0 hours = $0.00.

Minimum wage zealots always forget that they can't force employers to hire people.

The main purpose of minimum wage laws cannot be to help the poor and the unskilled. The main purpose is to help those who propose it and vote for it — invariably middle-class and wealthy — feel good about themselves.

trish

07-13-2013, 02:21 AM

So anyone holding an opposing position is a zealot?! Now we know where your coming from. People on minimum wage typically hold two or three minimum wage jobs without benefits and their children are raising themselves. If an employer doesn't pay a living wage, he is not likely to get quality labor for his dollar. It will eventually effect the quality of his product and his profits. If a significant portion of the labor force is not paid a living wage it negatively effects the economy and the quality of life for everyone in the nation.

paulclifford

07-13-2013, 03:52 AM

>There can be lots of reasons.

Lots of reasons to punish employers for trying to maintain their assets? If you really liked workers, it would make more sense to ask "What can we do to make it *easier* for employers to hire more people?" rather than "How can we punish employers and make it for painful for them to hire more people?"

>At one time in the U.S. some of those assets were slaves.

But these "assets" were not *employees*, and the people maintaining them were not *employers*.

A "master" is not an "employer" and a "slave" is not an "employee."

>Even after slavery ended many workers were effectively entralled to their employers, laboring eighteen hours days six days a week,

Before slavery ended in the south, there were no employers and there were no employees. There were "masters" and "slaves." The master/slave arrangement is not a variation of the employer/employee arrangement; it's a completely different thing altogether: the first is based on coercion, and the second is based on contract.

>laboring eighteen hours days six days a week,

You hinted that they were already laboring eighteen hours a day, six days week previously as slaves (and under threat of physical abuse, too). After emancipation, they were still laboring eighteen hours a day, six days week, but now they were getting paid for it, there was no longer the threat of physical abuse, and — most important of all — they could leave at any time and seek work elsewhere (including in the northern industrialized states).

Blacks certainly saw it as a major improvement in their lives compared to what they had previously.

>paid in tokens that could only be exchanged for necessities and goods at the company store.

Many people, black and white, were paid in tokens or company scrip because the original currency of the Confederacy — the "greenback" — was worthless after the war. Blacks who moved north were paid in US dollars like everyone else.

>Federal laws were required to thwart these immoral extravagancies of unfettered capitalism.

Slavery itself was a product of legislation, not unfettered capitalism, and it was continually upheld by the Supreme Court. After the Civil War, additional legislation was passed — again undercutting unfettered capitalism — mandating into existence the racist "Jim Crow" laws. In a famous case decided by the Supreme Court ("Plessy vs. Feguson") the racist "Separate but Equal" laws (which upheld school segregation from the Jim Crow laws) were upheld by federal law.

Railroad owners in the south, for example, had no problem with black riders and white riders sitting in the same rail car together. It had nothing to do with their personal feelings toward blacks; they may or may not have been personally racist. They favored letting blacks and whites sit together in the same rail car for a very good reason: it was ***cheaper*** to place one rail car on the tracks than it was to put two rail cars (one for black passengers, one for whites). Yet the law required them to do the latter.

School segregation was completely the result of Jim Crow laws (not unfettered capitalism) and upheld in the "Separate But Equal" rulings by the Supreme Court in "Plessy." Even if someone had wanted to open a school for both white and black students, she would legally be prevented from doing so. This is not an example of "racist unfettered capitalism." These are cases of racism institutionalized by the State, and actually interfering with the voluntary arrangements that people would have made had there been "unfettered capitalism."

"Plessy" by the way was upheld by a predominantly Democratic Supreme Court. When it was finally overturned many years later (by a predominantly Republican Supreme Court) it was a rare case of government undoing something evil and stupid that it had done earlier.

Almost all blacks knew this, of course, which is why until the mid 1960s, most blacks voted Republican. All blacks knew it was the Democratic Party that had supported the master/slave system in the south; all blacks knew it was the Democratic Party that instituted and supported the racist "Jim Crow" laws; all blacks knew the insurgent group calling itself the "Ku Klux Klan" had been started by Democrats*; all blacks knew it was the Democratic Party that supported "Separate But Equal" in the Plessy case; all blacks were aware it was the Democratic Party which supported school segregation; all blacks knew that the white guys blocking the entranceways to white schools so that black children could not enter when school integration began — those white guys were Democrats and all blacks knew it!

And that's also why Martin Luther King, Jr. voted Republican his entire life.

Black contempt for the Democratic Party didn't end until Lyndon Johnson became president and implemented a series of social programs called "the Great Society" . . . most of which failed in their stated goal of improving the lives of blacks, but which played an impressive role in helping to break up black families by offering economic rewards for married couples NOT to stay together.

>Conservatives since Reagan have been working with corporate interests to dismantle unions returning us ultimately to the days of the robber barons.

Most of this is pop-leftist-mythology that evaporates quickly on doing a little historical research.

But let's cut to the chase: you don't like "corporate interests" or "robber barons"? Barack Obama is in complete thralldom to corporate interests and robber barons and always has been. Wall Street was the biggest contributor to his 2008 campaign, followed by unions and lawyers. Obamacare, in fact, is best viewed as a big taxpayer-subsidized payoff to the various interests that got him into power: Big Pharma, Big Health Insurance, Big Law, and Big Labor. High quality medical outcomes at low cost for YOU and other individuals have nothing to do with the program. That's just the sales pitch.

You believed all that "Hope & Change" rhetoric? That was simply a slogan — a mantra, in fact — to get people jumping up and down with excitement; because the more jumping one does, the less critical thinking one is likely to do.

*(The KKK's membership and leadership are still mainly Democratic. The late Robert Byrd, Democratic senator from West Virginia, had been a long-time member of the KKK, and, in fact, held high office in the group: his title was "Grand Kleagle," a kind of senior recruiting officer to bring in new members.)

trish

07-13-2013, 05:06 AM

But these "assets" were not *employees*, and the people maintaining them were not *employers*. Slaves were employed the way a miner employs a pick to break rock. But the choice of word is a mere matter of semantics. Slaves were assets whose acquisition involved some overhead but very little ongoing cost once acquired. They are the limiting case of what happens as wages go to zero relative to the cost of living.

So when did this become a discussion of Obama. Stay on target Luke Skywalker.

trish

07-13-2013, 06:05 AM

BTW
http://www.politifact.com/tennessee/statements/2012/jan/23/charlotte-bergmann/another-republican-claims-martin-luther-king-jr-wa/

paulclifford

07-13-2013, 06:10 AM

>So anyone holding an opposing position is a zealot?!

Since when is holding uncritical support of minimum wage an "opposing" position? It's the mainstream party-line.

>People on minimum wage typically hold two or three minimum wage jobs without benefits

And by forcing employers to pay 9, 10, 11, 12 dollars/hour, these people will lose one or more of their jobs, or they won't won't get hired at all. Minimum wage laws cannot force anyone to hire anyone else. As the minimum wage increases, those with few skill and little experience remain unemployed.

In any case, according to the Bureau of Labor Statistics, the majority of minimum-wage job holders are teenagers who still live at home.

Their jobs are low-skill, low-productivity, low-experience, *entry-level* jobs whose purpose is to gain experience. The function of these jobs — mopping floors, cleaning dishes, slinging hash, etc. — will never be to provide someone with a "living wage" (whatever that is) because those jobs don't produce enough value to the employer to justify her paying someone that high a wage. The purpose of these kinds of jobs is for the employee to gain experience and then move on and move up to a better job. That's "economic reality" and that's the way it has always been. The idea that one can legislate reality away is fantasy. You might as well try to legislate away the law of gravity.

> If an employer doesn't pay a living wage, he is not likely to get quality labor for his dollar.

Better:

If an employer doesn't *offer* a living wage to *potential employees* — i.e., candidates who haven't been hired yet but are being interviewed for the job — the employer isn't likely to find high quality labor assets waiting in her office to be interviewed. Why would high quality labor assets waste their time sitting in an office waiting to be interviewed for a job that pays crap, right?

The crux is this: does an employer need "high quality" labor for every job duty that needs to be done in her business? Does she need someone with a Ph.D. in finance, or someone with a degree in marketing, or someone with entrepreneurial experience, just to perform a low-skill, low-productivity job like mopping floors?

The employer doesn't think so. She simply needs anyone who can handle a mop without poking a customer in the eye. She needs a "low quality" asset who is simply competent and reliable. That's it.

And if the law forces her to regard a low-quality asset *as if* it were actually a high-quality one, she'll fire the low-quality one, or won't hire him to begin with. That low-quality asset will then be unemployed.

How does any of that help the economy?

You're assuming that if she already has hired a low-quality asset to mop floors at, e.g., $5.00/hour, the low-quality asset automatically turns into a high-quality asset when legislation makes the employer pay him $9.00/hour. Not so. The mopper is no doubt *happier* that he's receiving a higher wage, but that doesn't turn him into a high-quality asset from the employer's point of view.

trish

07-13-2013, 06:44 AM

What makes your support of not raising the minimum wage "critical" and those in opposition of your view "uncritical"?

The purpose of flipping hamburgers is to grill them evenly on both sides, it's not to gain experience at flipping hamburgers. By flipping those burgers the employee provides the product that the waiter shills to the customers. The workers produce the product and collect the revenue from which the employer makes his living and collects his profit. If an employer needs to hire people that earn for him a living income, then they too should earn a living wage. A waiter who is not holding down two other jobs and raising two kids on the side, is going to present a friendlier face to the customers and a chef who is not also holding down two other jobs might not spit in your salad.

paulclifford

07-13-2013, 07:28 AM

>Slaves were employed the way a miner employs a pick to break rock. But the choice of word is a mere matter of semantics.

We shouldn't strive for some precision in language?

>Slaves were assets whose acquisition involved some overhead but very little ongoing cost once acquired.

Well, yes . . . that's what defined them as "slaves"! I mean, the reason there was "very little ongoing cost" once they were purchased was that *they weren't paid a wage*. That's the definition of a "slave".

And — to return to semantics — to "employ a slave" is not the same as to "employ a cashier", because the first usage implies ownership and use of a non-human tool — the way you "employ a pick to break rock."

You're not acknowledging the profound *moral* difference between voluntary actions and coercive ones. Volunteering for the armed forces is voluntary; being drafted under penalty of a prison sentence is coercive. Choosing to live with a romantic/sex partner is voluntary; arranged marriages under penalty of having one's ears or nose cut off are coercive. Contributing to charity is voluntary; paying income tax under penalty of wage garnishment and penalties is coercive. Buying marijuana from a dealer on the street corner is voluntary; being mugged by a heroin addict for your wallet is coercive.

None of this says anything about "happiness". The guy who volunteers for the service might end up hating it, while the guy who had been drafted might have found it a great coming-of-age experience. I'm merely saying that the essence of the moral issue involves whether the exchange came about from the free will of the parties involved, or whether one of the wills — or the will of a third party — used force, or threatened force, to complete the transaction.

So that means the old-left slogan of "wage-slave" is an absurdity. If you're getting a wage, you're not a slave.

> They are the limiting case of what happens as wages go to zero relative to the cost of living.

Except that under conditions of unfettered capitalism and individual freedom, wages never approach zero; they go in the other direction. For over a thousand years of feudalism in Europe, the highest GDP that an individual ever earned was less than $3.00/day. Then in the 18th century, with the tearing down of privilege and the spread of property rights, free trade, enforcement of contracts in law courts, recognition of intellectual property (e.g., technical inventions) and the rise of the Factory System — when labor was free to move around and accept any wage that factory owners bid for it — and when capital was free to move around freely, too (e.g., moving from places of high taxes to low taxes; moving from places of bad farming weather to good farming weather, etc.) — when all these things started happening simultaneously, wages began to rise. Today, the average wage in the west, stated in terms of GDP per person, is over $100/day.

The capitalist west did not go from a $3/day per person economy to a $100/day per person economy because of legislation. You cannot legislate wealth into existence.

Under British governance until 1997, Hong Kong had no labor legislation at all; none. No minimum wage laws, no laws requiring anyone to join a union or hire union workers. Guess how much unemployment they had? Zero. None. Additionally, wages were not "subsistence", because the way free markets form, there were always slightly more jobs available than there were potential employees to fill them, so employers — if they wanted "quality labor" — had to bid talented people away from competitors. And since there were no prescribed minimums, those who were not "quality labor" from the employers point of view — the least skilled — could still find employment because no laws prevented them from accepting a low, entry-level wage.

Today, under Chinese rule, though Hong Kong is still robust, a lot of new labor laws have been implemented since 1997. Result? Unemployment of the least skilled workers, between 4% and 7%.

It's not coincidence, global warming, or George Bush's fault. It's strictly labor policy.

>So when did this become a discussion of Obama.

For that matter, when did it become a discussion of slavery? I mentioned BHO because you previously criticized "corporate interests" and "robber barons" while lauding minimum wage — unaware of the fact that one of the most vocal supporters of the minimum wage, BHO, is a lackey of the first and a patron of the second.

Prospero

07-13-2013, 07:34 AM

a groan is indeed not an argument Mr Clifford - it was a gut response to the poison of Rand's ideas and the notion of unregulated freedom for big business. Capitalism needs constraints. Business needs rules and regulations. Government plays this role.

Regarding the Koch Brothers their role in helping fund and create the so-called grassroots Tea Party is evidence enough of their pernicious influence on US politics and thus by extension global politics.

robertlouis

07-13-2013, 08:42 AM

As I recall this thread was started to question Koch's motivation for seeking the abolition of the minimum wage. It's now gone off on an extended tangent about the limits and scope of unfettered capitalism.

Fine. But to return to the original post, if anyone thinks that the Koch brothers are pursuing the aim of abolishing the minimum wage out of any altruistic philosophical principles, they are simply fucking crazy.

I don't think that's our new man Mr Clifford's intention either, but maybe if we could get back to the point, please?

In terms of the Kochs' intentions, and this is merely yet another manifestation, all they want to do is destroy workers rights and get as close to slavery as the laws will allow.

OK everyone?

Sheesh!

Prospero

07-13-2013, 08:55 AM

:iagree::iagree::iagree:
As I recall this thread was started to question Koch's motivation for seeking the abolition of the minimum wage. It's now gone off on an extended tangent about the limits and scope of unfettered capitalism.

Fine. But to return to the original post, if anyone thinks that the Koch brothers are pursuing the aim of abolishing the minimum wage out of any altruistic philosophical principles, they are simply fucking crazy.

I don't think that's our new man Mr Clifford's intention either, but maybe if we could get back to the point, please?

In terms of the Kochs' intentions, and this is merely yet another manifestation, all they want to do is destroy workers rights and get as close to slavery as the laws will allow.

OK everyone?

Sheesh!

Prospero

07-13-2013, 08:56 AM

But the argument about unfettered capitalism is a recurring one here RL... given the huge swathe of support for "government of our backs" among otherwise intelligent people

paulclifford

07-13-2013, 10:47 AM

>What makes your support of not raising the minimum wage "critical" and those in opposition of your view "uncritical"?

Years of studying the subject and debating it, as opposed to repeating what pop media journalists (and even a few, odd, pop Nobel Laureate economists like Paul Krugman) might opine about the matter. (You don't do that, but most supporters of the policy I've met do.)

By the way, I don't "support not raising the minimum wage." I support freedom of contract for the wage receiver and freedom of contract for the wage payer. I don't accept that one group has special rights that the other group doesn't have. We all have the same rights. I support *abolishing* minimum wages altogether as a violation of that basic moral principle, as well as for the usual economic reasons: it creates a glut of unskilled labor (mainly young, and often minority) who cannot find employment at that wage. Their unemployment then becomes chronic. Youth unemployment in the US is now over 16%, yet the recession supposedly ended a few years ago. I haven't the slightest doubt most of that 16% is caused by minimum wage laws.*

You won't be happy to learn that the original purpose of minimum wages in the US was to help labor unions — which were uniformly white and male at the time — stop blacks and women from offering their labor at competitive rates. The unions feared competition from these two new groups of unskilled labor entering the work force and found a way they could get congress to help price the newcomers out of the market: forbid them from accepting a low wage when it was offered. Though it was couched in "progressive" slogans of the day ("helping the poor live a dignified life", "preventing exploitation of the worker by the employer", etc.) the real aim of the minimum wage legislation was to make the more experienced and more expensive union man look more competitive by comparison. Think of it this way:

The minimum wage does the same to cheap unskilled labor as an import tariff does to cheap imported goods. It artificially raises the price others have to pay for it, in the hopes that people will buy the higher-priced domestic good (or the higher-priced, "higher quality" labor).

So if you want to think about minimum wage in an economically realistic way, without starry-eyed romanticism, think of it as a tariff imposed on cheap, unskilled labor.

>The purpose of flipping hamburgers is to grill them evenly on both sides,

From the consumer's point of view, because that's what he's paying for. From the viewpoint of the flipper with even the smallest amount of ambition who wants someday NOT to be a flipper, he needs to learn some things about arising at 7:00 a.m., donning a uniform, showing up on time, and saying "Yes Sir, Madam Boss Woman! What needs to be done today?" As well as, perhaps, learning some things about supervising a kitchen and, maybe eventually, running a restaurant. Those are all things one can learn as a burger flipper if one wants to, especially if one has even an ounce of ambition — as, I believe, most young people who hold minimum wage jobs do have.

>By flipping those burgers the employee provides the product that the waiter shills to the customers.

No he doesn't. The product the waiter brings to a customer is called "a cooked burger"; the flipper only provides the "cooked" part to the final product. He doesn't provide the beef; he doesn't provide the grill; he doesn't provide the utensils; he doesn't bring the food to the table (the service ingredient); he didn't build or rent the space in which the restaurant is located (the mood or ambience ingredient); he doesn't provide the lighting or the A/C; etc. He provides one element in the final product.

And in the opinion of the consumer of that final product — the gal eating the burger — she might not agree with Washington, DC that the value of "cooked" is worth the additional $x.xx the law will make her pay in order to support the higher wage. She might go elsewhere. She might do her own cooking. She might order the burger and pay the higher price, but order no fries, or no Coke, or no dessert, etc. The extra spending power the flipper might enjoy clearly has to equal the lowered spending power the customer will suffer. Add the two together and they equal: no net increase in spending in the economy.

Lastly, if the consumer is unwilling to pay the higher price to make the higher wage sustainable, the employer — who is ultimately relying on the consumer for this support — will soon find that for each additional cooked burger she sells to each additional new customer, she is actually losing, or "leaking" a little bit of money to the minimum wage flipper, that she has to pay for personally, rather than out of gross revenues. Will this knowledge make an employer more likely to keep this worker (as well as eager to hire more)? Less likely? Or will she say, "Meh. So I'm losing a little bit of my own money to the flipper with each burger a customer buys. Not to worry. I'LL MAKE IT UP ON VOLUME!"?

*(youth unemployment in Greece, with much higher minimum wages laws and much more intrusion into workplace arrangements between employer, employees, and customers is over 62%. In Spain, it's over 56%. Yet what do you think the left in those countries want to do about it? You guessed it: "We need to raise the minimum wage more! Greek and Spanish youth must be able to earn a living wage!" They never learn.)

paulclifford

07-13-2013, 12:38 PM

>groan is indeed not an argument Mr Clifford - it was a gut response to the poison of Rand's ideas and the notion of unregulated freedom for big business.

I know all about gut responses; I've had many myself.

First of all, I never mentioned Rand, nor is it fair to lump all ideas regarding individual freedom with her particular ideas on the matter. We could all play the guilt by association game, right? For example, if you support minimum wage, I could point out that Benito Mussolini did, too, and that special rights for workers, special obligations for employers, and a special panel of "Wise Ones" — chosen by Mussolini (who, of course, was the "Wisest One of All") would decide and arbitrate all matters between them regarding wages, prices, benefits, retirement, so that everything was "fair" and nothing left to the capriciousness and anarchy of the market. Now, would it be fair if I said, "Groan! You're an Italian Fascist Corporatist!"

>Capitalism needs constraints.

Any social system needs constraints, but the point made by free market people like me is that there are different kinds of constraints and different sources for them, not just coercive constraints from government. Free markets already have a very powerful "self-emergent" property that functions as a constraint without necessarily meaning to, but which does so anyway: competition. Competition — even the possibility or threat of competition — is a very powerful constraining force on a firm's behavior, especially its behavior regarding innovation, quality controls, pricing of products, and yes, wage rates and hiring practices. What ultimately keeps Apple honest is the existence of Microsoft; what keeps Microsoft honest is the existence of Hewlett Packard; and what keeps them all sweating bricks is the fear — felt in the back of the neck most strongly by Bill Gates and Steve Jobs — that somewhere out there among 315 million Americans, is another young Bill Gates and Steve Jobs, who have dropped out of college, said "fuck off!" to authority (including, established Big Businesses), and are busy inventing the next technological and social revolution in their garages; because those are the kinds of people who incite these kinds of upheavals.

>Business needs rules and regulations. Government plays this role.

Granted. But government needs rules and regulations, too. Who plays that role? The reason I'm for small, minimally-intrusive government, is that every time government becomes Big and Intrusive, it's always commandeered by Big Business (and other organized special interests, like Big Labor) for its own purposes. So government is not impartially establishing rules for everyone as you might think; it's implementing rules in a partisan way that benefits some groups (usually the lobbies) at the expense of everyone else.

Big Business, for example, usually lobbies government FOR many kinds of regulation in its own industries! Not against it! Though business will issue press releases and Public Service Announcements bragging of how public-spirited it is, that's just the sales pitch. From an economics perspective, the reason Big Business supports regulation in its own industries is obvious: most small startups trying to compete in that industry cannot afford to comply with the new set of regulations: it requires hiring compliance officers, doing additional paperwork, filing fees, etc. But a big established business has no problem absorbing these costs. Thus, Big Business uses lobbying in favor of regulating itself as an anti-competitive measure; basically, as a socially approved way of lousing up potential competition.

So, though you're sincere in your belief that government plays the role of "neutral rule-giver and regulator" in economic matters, I think it's naive. Government is a kind of sharp tool: it's necessary, it performs an important function, but it's dangerous, especially when it falls into one set of hands to serve one set of interests. Since there's no way to stop that from happening in a democracy — especially in one whose constitution permits lobbying ("the people shall have the right to PETITION congress . . .") I see the only effective method as severely limiting the size, scope, and influence of that sharp tool in all sphere's of the individual's life: economic and social.

>Regarding the Koch Brothers their role in helping fund and create the so-called grassroots Tea Party is evidence enough of their pernicious influence on US politics and thus by extension global politics.

But this is precisely what I mean! In fact, who cares if he funded the Tea Party or didn't fund it? The only power the Tea Party could have over you would be the power it wielded from *government*. Shrink government, and the influence of the Tea Party shrinks, too!

In the 1950s, a free market economist once wrote, "I used to have nightmares over the fear that there might be communists in the Department of Agriculture!!! Then I realized, hey, wait! Just abolish the damn Department of Agriculture! Do we need it? No. Does it actually grow more food for more people? No. Does it add valuable things to the economy and to people's lives? No. In fact, it hinders the growing of more food for more people! So if you abolish the whole thing, you get rid of a useless bureaucracy AND you neutralize any supposed power some communists might be able to wield over you by means if it!"

I agree with him. And you should consider his words in relation to any concerns you might have regarding the nefarious Tea Party and its potential power over individual decision making. There's nothing you can do to stop people from voluntarily associating with one another and calling themselves "Tea Party Patriots"; and there's nothing you can do to stop a private individual like Koch, or anyone else, from saying, "Here's some money! Now go demonstrate and march up to Capitol Hill and make your cause known!" But you can make the Sharp Tool of government small enough and blunt enough that it can't do you or your interests any harm. If a special interest you dislike gains controls of a big sharp tool like a machete, beware; but if you do away with the machete and replace it with a nail-clipper, who cares if this or that special interest temporarily gains access to it?

You're afraid of nail-clippers?

paulclifford

07-13-2013, 02:05 PM

>As I recall this thread was started to question Koch's motivation for seeking the abolition of the minimum wage. It's now gone off on an extended tangent about the limits and scope of unfettered capitalism.

Apologies. My own fault. This reply will be my final post on the matter!

>if anyone thinks that the Koch brothers are pursuing the aim of abolishing the minimum wage out of any altruistic philosophical principles, they are simply fucking crazy.

I don't understand what possible difference it makes what anyone's intentions are. Economics is a science. And while it doesn't have the same precision as the exact sciences like physics and chemistry, it's still a science, and you can still, broadly, make confident predictions regarding outcomes of policies. Whether anyone is well-intentioned or ill-intentioned, it doesn't change the fact that raising wages above what the employer and the employee would have privately agreed to between themselves WILL cause other potential employees NOT to be hired. Those "could-have-been-hired-at-a-lower-wage-but-now-cannot" potential employees most likely will be 1) young, and 2) black. Many supporters of the minimum wage didn't take them into account because they are a tacit, unseen effect of minimum wage policies — a bit like radioactive "fallout": you see the rain, but you don't see the radiation. You see the lucky employee who gets a 23% increase from 7.25/hr to $9.00/hr, but you don't see the unlucky, less skilled, less experienced kid who *could* have been hired at the original $7.25/hr rate, or perhaps *might* have been hired at $8.00/hr, but now sits home unemployed because no one thinks his particular skills and experience are worth that 23% increase to $9.00/hr.

It's a real effect touching real people, but it generally stays *unseen*, which is why it generally remains *unconsidered* by many when they think about the minimum wage issue.

Whether Alan Krueger (Chairman of the President's Council of Economic Advisors) has wonderfully Christian, big-hearted altruistic intentions in supporting the minimum wage or not, it doesn't change the facts about the fallout of higher and higher minimum wages. And whether the Brothers Koch have mean, narrow, callous, and self-interested intentions in not supporting minimum wage increases, it also doesn't change any facts about the fallout of higher and higher minimum wages. In other words — as in any science — the effect is independent of the intentions of the cause.

Are you really telling us that an injurious policy becomes a beneficial policy as long as it is implemented with good intentions? Don't you remember that line about "the road to hell"?

>all they want to do is destroy workers rights and get as close to slavery as the laws will allow

Do workers have "special rights" that others don't have? I thought there were only universal rights we each have as *individuals*, not special rights we get if we're a worker, and which we lose if we change from being a worker to being an employer. You mean each special interest group has its own special rights?

Regarding slavery:

Slavery in the US (and in all other countries at all other times, I believe) was not a product of the market. It was a *legally sanctioned* institution, sustained by a network of laws, conceived, passed, implemented, and enforced, by government. The smaller and less intrusive government is, the less it can implement and sustain slavery.

trish

07-13-2013, 06:17 PM

Slavery in the US (and in all other countries at all other times, I believe) was not a product of the market.In the past slaves were utilized by both governments and private businesses (to build pyramids, hoist sails and pick cotton). In the Southern states of the U.S. the slave market flourished in part because it was unfettered by government strictures. Southern growers lobbied Washington to keep slavery legal and bring more slave states into the union. I say, "in part" because the other important factor was the market for cotton. If a significant number of plantations cut their costs by the employment of slave labor, then to survive financially the other plantations must too. It's the same argument being used today to pay workers less than the worth of their labor.

buttslinger

07-13-2013, 06:43 PM

Koch and his Buddies know the Bush Party that lasted eight years is O-ver,
and they know Obama and Hillary need them, it's just a question of how much. There is a legitimate question of who steers the ship, Team Koch or Team Obama. The American Dream is a dream with TEETH, and the Koch Bros are living that dream. That's the way it works. You can't ask the Kochs to give up their Championship belt, you've got to take it from them. That's how you spread the money around.

The American dream is sketchy on if you can step on the hands of the people below you on the ladder. I think the real action will happen when Hillary steps in, she's got like a 20 year head start on these guys with their smirking lawyers. Obama will be remembered for Obamacare, he's the Black Jesus. Hillary's going to have an operation to attach Elephant Balls to her Vagina. Obama has to be a Saint because he's black. Clinton is going to have to be a Prize-Fighter because she's a woman. It really takes eight years to figure out what's going on, and Hilary Clinton has been prepping for President since '92.

hippifried

07-14-2013, 06:05 AM

Every time the subject of raising the minimum wage comes up, we get bombarded with the same old doom & gloom scenarios about how people will be put out of work, or that businesses will fold, or that prices will skyrocket, etc... The debunked Austrian School gets dusted off, amid the hand wringing & whining, & everybody gets buried in long winded diatribes & lists of bullshit talking points.

Time for a reality check:
Despite all the pseudo-theoretical economic caste theology, a raise in the minimum wage has never had any effect whatsoever on the rates of unemployment or inflation. Regardless how well put together the argument seems, I can't think of a single reason to seriously pay attention to prognostications that never pan out.

paulclifford

07-14-2013, 10:10 AM

>Every time the subject of raising the minimum wage comes up, we get bombarded with the same old doom & gloom scenarios about how people will be put out of work, or that businesses will fold, or that prices will skyrocket, etc... The debunked Austrian School gets dusted off, amid the hand wringing & whining, & everybody gets buried in long winded diatribes & lists of bullshit talking points.

No one mentioned anything about the "debunked" Austrian School.

>Despite all the pseudo-theoretical economic caste theology, a raise in the minimum wage has never had any effect whatsoever on the rates of unemployment. Time for a reality check:

Yep. Here goes.

See:

http://epionline.org/downloads/KruegerStudy.pdf

And see:

http://www.economics.uci.edu/files/economics/docs/workingpapers/2006-07/Neumark-08.pdf

"In the end, our view is that the weight of the empirical evidence is generally consistent with the view of traditional economists that the low-wage labor market can be reasonably approximated by the neoclassical competitive model."

[Note that the authors say nothing about Austrian economics; they mention "traditional economists" and the very mainstream "neoclassical" ways of looking at economic data. And what is the "neoclassical competitive model" held by traditional economists? It's the commonsense one that anyone who has ever run a lemonade stand understands: if the cost of one of your ingredients goes up in price, and if you cannot successfully pass along that cost increase to the customer, you'll use less of that ingredient. As far as lemonade goes, that includes water, lemons, sugar, and labor. Substitute any other business for "lemonade stand" and you've got the idea.]

"As a result, we also believe that raising the minimum wage leads to economic distortions and often has unintended adverse consequences for the employment opportunities of low-skilled workers. Of course, as we have argued elsewhere, the effects of the minimum wage on employment represents only one piece of the analysis necessary to assess whether minimum wages are a useful policy tool for improving the economic position of those at the bottom of the income distribution— which we believe is the ultimate goal of minimum wage policy. In particular, a more comprehensive review that includes the implications of the minimum wage for the levels and distributions of wages, employment, incomes, and human capital accumulation, as well as consideration of alternative policies, is ultimately needed to assess whether raising the minimum wage is good economic policy."

"Of course, if minimum wages do not generate disemployment effects among low-skilled workers, it is far more likely that they have beneficial effects at the bottom of the income distribution. But given that the weight of the evidence points to disemployment effects, the wisdom of pursuing higher minimum wages hinges in potentially complex ways on the tradeoffs between the effects of minimum wages on different workers and other economic agents, and whether other policies present more favorable tradeoffs."

And see:

http://online.wsj.com/article/SB10001424052970203440104574402820278669840.html

October 2009

"Earlier this year, economist David Neumark of the University of California, Irvine, wrote on these pages that the 70-cent-an-hour increase in the minimum wage would cost some 300,000 jobs. Sure enough, the mandated increase to $7.25 took effect in July, and right on cue the August and September jobless numbers confirm the rapid disappearance of jobs for teenagers."

"The September teen unemployment rate hit 25.9%, the highest rate since World War II and up from 23.8% in July. Some 330,000 teen jobs have vanished in two months. Hardest hit of all: black male teens, whose unemployment rate shot up to a catastrophic 50.4%. It was merely a terrible 39.2% in July.

The biggest explanation is of course the bad economy. But it's precisely when the economy is down and businesses are slashing costs that raising the minimum wage is so destructive to job creation. Congress began raising the minimum wage from $5.15 an hour in July 2007, and there are now 691,000 fewer teens working.

As the minimum wage has risen, the gap between the overall unemployment rate and the teen rate has widened, as it did again last month. (See nearby chart.) The current Congress has spent billions of dollars—including $1.5 billion in the stimulus bill—on summer youth employment programs and job training. Yet the jobless numbers suggest that the minimum wage destroyed far more jobs than the government programs helped to create."

[Remember: the main thing about advocating minimum wage is to feel good about it because it supposedly indicates good intentions. One can always ignore any attempt to closely analyze the effects it might have on groups [I]other than the lucky ones who get the wage increase and manage to keep their jobs by invoking some "magic talisman" names that drive away all skepticism: "Rand!" "Koch!" "Austrian School!"]

Ben

07-17-2013, 04:59 AM

Bernie Sanders Goes off on Charles Koch - YouTube (http://www.youtube.com/watch?v=arsbO7ay0I0)

hippifried

07-17-2013, 09:14 PM

No one mentioned anything about the "debunked" Austrian School.
I did. Nobody else was sourcing the basis of this bogus economic theology.

As for the links:
First one's an Op-Ed. Who cares?
Second is too, but tries to be precise. There's these pesky phrases that keep popping up in the quoted reports to screw with the preconceived conclusions. Things like "imprecise data", or "negligible employment effect", or even "positive employment...", & the models pose their own set of problems. Modeling precise economic segments requires a stable overall economic model to measure against. Doesn't exist. Pinpointing a specific cause for fluctuating numbers in a fluctuating economy is a fool's errand.

trish

07-17-2013, 10:50 PM

Healthcare understood as medical insurance is often independent of healthcare understood as the science and scientific practice of medicine. The best country in the world for healthcare of the latter kind can be the worst country in the world for the former. You got cancer and you have a decent middle range income, you might want to go to Mayo Clinic; no matter where you’re from. It’s not at all surprising patients come to the U.S. for healthcare of the latter kind. They certainly aren’t coming to the U.S. for healthcare of the former kind.

An insurance program pools the money collected by its clients. When a client gets sick, he is given a check for part of his medical expenses drawn from the pool. If every client got sick (or just a number beyond a certain threshold), the company would go belly up, because medical costs are way greater than the amount any client can even afford to put into the pool. So too few clients, the probability that more than the threshold number of clients get sick moves toward certainty.
That is one reason why having hundreds of thousands of small insurers just doesn’t work. A viable insurance company has to have a large number of clients paying into the common pool. Even large companies do their best to skimp on the payoffs and maximize profits. They find ways to drop clients with chronic illnesses, who are aging etc. They refuse to accept clients with previous conditions. Some have tricked clients with long term conditions to drop their insurance and then refuse to renew because of their “previous” condition. Insurance agencies decide which procedures recommended by your doctor will be covered. If you can get by with a less costly more risky procedure, they may not approve the safer, more reliable procedure. These schemes and dozens of others are why medical insurance companies are regulated. The smaller the pool available to a company the greater the pressure to cut expenditures; i.e. the greater the need to short-shrift the client. Selling insurance across State borders is not a way to increase competition; it’s a procedure for getting out from under one particular State’s regulatory regime.

The desire, on the part of insurance companies to make a profit, is one driver to price of medical insurance. Another is the cost of pharmaceuticals and medical procedures. Pricing lists at private hospitals (there weren’t any privates to speak of four decades ago) are essentially constructed willy-nilly, charging ten dollars for a cotton ball one week and a dime the next. Each insurance company insists on its own forms to be filled out by the doctor. Large staffs of people are hired by doctors and hospitals just to fill-out, send-in and file insurance forms. There obviously needs to be more enforced uniformity and more regulation, not less.

National healthcare is for people who can’t afford healthcare. There are lot’s of people in this Nation who put off trips to doctor because the cost of a trip to a general practitioner would wipe out their budget for the month. It can be uniform. It can be simple. It can have the leverage to negotiate with pharmaceutical companies. It can regulate pricing in hospitals. It can have a large pool that everyone pays into. It will answer to the people, not an isolated set of shareholders who were never elected to determine which of your medical procedures will be approved.

paulclifford

07-19-2013, 07:40 PM

>>>Healthcare understood as medical insurance is often independent of healthcare understood as the science and scientific practice of medicine.

Not "often independent", but always independent. Health insurance and health care are two different things. For empirical proof, just ask the poor slobs waiting and waiting and waiting in lines in Canada and the UK. They have lots of insurance (translated as, "the right to get in line and wait") and not enough health care (translated as "treatment for their conditions").

>>>The best country in the world for healthcare of the latter kind can be the worst country in the world for the former. You got cancer and you have a decent middle range income, you might want to go to Mayo Clinic; no matter where you’re from. It’s not at all surprising patients come to the U.S. for healthcare of the latter kind. They certainly aren’t coming to the U.S. for healthcare of the former kind.

Except that the former kind is utterly useless in itself: all the best, cheapest, most generous insurance policies in the world won't cure you of your diseases. Only the latter kind of medical care can do that. The purpose of the former is to be able to get the latter. So which is more important: access to a piece of paper called a "policy" with lots of small print on it that says you are "guaranteed" all kinds of wonderful benefits at public expense for every imaginable condition; or the actual care that will treat you, or cure you, of one or more of those conditions?

Most people would say they prefer the latter, especially if they understood that there is no necessary connection between "easy access to pieces of paper called policies" and "easy access to high quality medical care that could actually treat them."

Hint: Britons don't get it. Their thinking goes like this: "Nanny government promises me free care. All I know is that if I get a heart attack, I'm guaranteed — at some point — to be taken to a free hospital and hooked up to all kinds of tubes." That's all they know. That's all they want to know. If you told them, "But the care you'll get sucks, as proven by your crappy survival rates after a heart attack — survival rates that are much higher in the US, despite having no such 'guarantees'". They'll shrug. The shrug really means, "I don't care about survival rates. I care about the fact that the ambulance ride, the hospital stay, and the tubes are free!"

There's obviously no arguing with that.

trish

07-19-2013, 07:58 PM

So which is more important: access to a piece of paper called a "policy" with lots of small print on it that says you are "guaranteed" all kinds of wonderful benefits at public expense for every imaginable condition; or the actual care that will treat you, or cure you, of one or more of those conditions?Of course if you can't afford to pay for a doctor's care, then it doesn't matter how distinguished and knowledgeable he is. Affordable care is what one chiefly needs.

broncofan

07-19-2013, 08:11 PM

People come to the Mayo Clinic because they can afford care that most people cannot. This is not evidence that our healthcare system provides better care on average to the average person.

Insurance has always been regulated. As a system it is almost unworkable if there are no regulations. Before PPACA it was regulated by each state with its own set of laws effecting the risk pooling arrangement. There were laws regulating what providers could participate, surcharges against certain patients to be used to subsidize others, and mandates for community rather than experience rating for certain types of insurance.

Without such regulations the system will tend to fall apart. Although adverse selection is generally a problem with community ratings, where the better than average risks will opt out of the system leaving only the sickest, experience rating is also problematic. Someone who has recently been sick will not be able to afford a premium individually tailored to their risk.

The quality of healthcare depends on issues of access. You don't have a good system of healthcare if most people can't afford necessary procedures or are made bankrupt by illness. I don't care how many wealthy people flock to our best institutions.

paulclifford

07-19-2013, 09:23 PM

>>>Of course if you can't afford to pay for a doctor's care, then it doesn't matter how distinguished and knowledgeable he is. Affordable care is what one chiefly needs.

Quite so. That's why 1/3rd of all poor people eligible for Medicaid turn it down. They know — and studies prove — that they will have better medical care if they have NO insurance at all, and simply present themselves to a doctor as a charity case. The doctors know this, too, because Medicaid restricts their ability to practice medicine in whatever ways they might deem best for the patient's health.

Another example:

Do you own a car? If so, you have car insurance. When you engage in regular care and maintenance for your car — filling up with petrol, oil change, spark plug replacements, tune-ups, new tires, tire rotations, etc. — do you pull out your auto insurance card and hand it to the mechanic with the idea that your insurance provider will pay for it? No. Of course not. YOU pay for these things out-of-pocket. The insurance becomes relevant when, God forbid, you're in an accident.

If some weird government program were implemented that required auto insurance to cover buying gas, oil changes, tire rotation, tune-ups, etc., do you believe the prices of these things done by an ordinary mechanic would increase, decrease, or stay the same?

paulclifford

07-19-2013, 09:29 PM

>>>There are lot’s of people in this Nation who put off trips to doctor because the cost of a trip to a general practitioner would wipe out their budget for the month.

I doubt that. One reason medical care is expensive in this country is that many people who ought to put off trips to the doctor because it's unnecessary, do not do so. The additional demand "pull" on the supply of medical care — made possible by bureaucratically regulated insurance policies that mandate coverage for just about everything at taxpayer expense — has the perverse effect of raising prices.

Example:

If government decided that all poor people should have the same access to filet mignon as the wealthy, it might implement a program with a taxpayer-subsidized coupon, which a poor person could exchange for filet mignon at a supermarket or butcher's for the additional cost (a "co-pay") of, e.g., $1.00. If filet mignon is $12.00/pound on average, a qualified poor person would get his voucher from a government agency and hand it, plus one dollar of his own, to the butcher, and get a pound of meat. The voucher would therefore be worth $11.00.

Obviously, this has nothing to do with the rich. They still consume as much filet mignon as before, with no problem paying $12.00/pound for it.

But now look at things from the butcher's point of view. He doesn't care who pays, or where the money comes from. All he knows is that before the government program, only the rich were buying filet mignon from him (let's say, 50 customers a week); but after the program is implemented, he sells filet mignon to 150 people: 50 rich people and 100 poor people with vouchers. That's fine for him! But the question is this: what happens to the price of filet mignon when so many more people have access to it? Does it go up? Down? or remain the same?

Obviously, with 3-times the number of people buying filet mignon as before the program, the price of filet mignon goes up! And it makes no difference if the government starts a propaganda campaign about the "greed of the butchers!" The price of filet mignon will rise as it responds to increased demand. Period!

How high will it go? Hard to say exactly. But it will probably go up to the point where it can "level off" of the demand, relative to its supply, so that it will go back to only having 50 customers again! So let's say it rises to $23/pound. The wealthy can still buy all they want; but the poor only have a voucher worth $11.00, so their "co-pay" will be $12.00/pound . . . which is exactly what they had to pay BEFORE the big-hearted, well-intentioned government-run program to give the poor greater access to filet-mignon! Did the program work? No. Perhaps briefly, in the short-run, when it first started. But the long-run effect is zero! Additionally, there's now a big bureaucracy, with big bureaucrats, that have to be supported in the "US Department of Filet Mignon for the Poor" in Washington, DC.

Now, substitute "health insurance" or "medical care" for "filet mignon" and you'll see why government handouts to the poor don't have the effect of the ones intended by their supporters. By inducing people — even poor people — to use more medical services via health insurance policies, polices AND medical care goes UP in price, responding to the artificially increased demand.

And if you think that government might deal with those nasty, greedy butchers by simply mandating to them that they NOT raise their prices — even in the face of 3x the demand for the product — one of two things will occur: they butchers will sell out quickly and those showing up a day or two later with their vouchers and a dollar will find that there's nothing left (this is called a "shortage"); or, the butchers might intentionally remove their filet mignon from the shelves and store it in deep freezers, hoping the stupid price-controls will be abolished after the next election. If it's not abolished, you know what they'll do? They will sell it on a black market for the actual market price of filet-mignon, or they will take it home to their families and consume it themselves. Either way: it won't be on the shelves for the poor people with their government coupons and their dollar bills.

Again, substitute medical care for filet mignon and you'll see the effect of government/bureaucratic management as opposed to profit/loss management. In programs that put price controls on medical care or health insurance, there are always shortages of both.

And finally: government might respond to the threat of a shortage by not only mandating a set price for filet-mignon, but mandating to customers how much they can purchase: e.g., only one pound per customer every alternate Monday and Friday if your Social Security number begins with an odd number, or every alternative Tuesday and Saturday if it begins with an even one.

This is called "rationing."

It's completely whimsical and arbitrary, of course, but people will feel "assured" and "relieved" that their government "cares for them" by "protecting them from those greed, graspy butchers."

Replace "filet mignon" with "health insurance" or "medical care" and you've got the idea. I don't see how the inevitable rationing of medical care ultimately provides greater access to medical care for the poor. It's a bit like telling a poor person, "You only have to pay $1.00 + a voucher to a butcher to get filet mignon; unfortunately for you, none is left. But before the program, there was lots of filet mignon available and you had to pay $12/lb. for it! Surely you're much better off now!"

Additionally, much of the increase in medical care costs is a direct result of bureaucratic regulation that requires constant 1) compliance and filing costs on the part of doctors, clinics, hospitals, and other providers; and 2) implementation-policing costs on the part of the bureaucrats who pull fat salaries, pension, and benefits.

I hope you understand that as regulation increases in the holy name of "uniformity", the size of the bureaucracies (and the number of bureaucrats) standing between the otherwise direct economic line of "patient-doctor" grows, often exponentially; and that, furthermore, most of the costs of such centrally-directed systems have to do with the political/bureaucratic side of things. In all nationalized healthcare systems in the world, most of the money from tax revenues gets consumed by the managing bureaucracy . . . the lion's share does NOT go to the patient or the medical care provider.

None of this helps the poor, who are just as interested as anyone in the middle class as getting a cure for their ailments, and not just a piece of paper that says "You have the right to get in line and wait."

>>>It can be uniform. It can be simple.

Simplicity is never a result of government regulation or hampering of voluntary trade in the market, and never has been (and never will be), precisely because nothing the government does is motivated by the need to earn more than their costs. That's precisely why government programs are always so wasteful of natural resources and human labor: precisely because it need not earn a profit, government has no way of assessing whether the economic value of the things it uses (call it the "inputs") is of lower value than the things it provides to the public (call it the "outputs"). Obviously, if an economic input is of lower value than the economic output, then the program is economically successful: it's providing something of higher value to people that they wouldn't be able to get on their own had they simply gone directly to those inputs. Conversely, if the output is of lower value to people than the inputs, the program is wasting resources; it's not directing those inputs to their highest-valued uses to consumers . . . "highest valued" means "most important from the consumers' own point of view," not a nanny-bureaucrat telling them what's most important for them.

There's no way for a government, "non-market" institution to solve this fundamental problem.

There's nothing wrong the simplicity as a value, but I'm no admirer of uniformity. What the poor need more than anything else — just like anyone else — are CURES for their ailments; and CURES are the result of INNOVATION, not uniformity.

You don't want a healthcare system run like the armed services, where everything is uniform: dress codes, speech patterns, basic training, pay grades, triplicate forms, etc.

You want a healthcare MARKET modeled along the same lines as the vibrant consumer electronics market: constant innovation, intense competition, lots of price wars.

The poor have all the access that everyone else to iPods, iPads, iPhones, notebooks, desktops, smartphones, BlackBerries, etc.

I want the poor to have the same kind of choices and access to medical care as they do to consumer electronics. The way to accomplish this is by structuring the market for healthcare along the same lines as the market for consumer electronics and computer technologies: NO ARTIFICIAL BARRIERS TO ENTRY.

For some reason, you want to structure the market for healthcare along the same lines as the "market" for postal delivery by the US Postal Service, driver licenses as provided by the Department of Motor Vehicles, and the US Army.

Somehow, regimentation in the name of "simplicity" and "uniformity" is supposed to result in lots of choices — choice in both quality and price — for the poor. But it actually has the opposite effect, as well as stifling the life-blood of medical care which is innovation.

paulclifford

07-19-2013, 09:35 PM

Re: Simplicity and uniformity:

http://oversight.house.gov/wp-content/uploads/2013/07/Duncan-TIGTA-Statement-PPACA-Data-Hub-7-17.pdf

Download the above-linked PDF.

Scroll to Appendix I on pages 9-11. Study the diagrams and ask yourself if the schematic of the Affordable Care Act serves your values of "simplicity" and "uniformity."

trish

07-19-2013, 09:39 PM

Regular care and maintenance of one's car is preventative medicine. But if I lose a windshield because it caught a stone on the highway and cracked, my insurance covers it. People who can't afford cars don't buy car insurance because they don't have a car to insure. People with bodies don't have the cost saving strategy available to them. If you're making $12000 a year and your teenage daughter is in pain because she broke a tooth on a fast food burger, the dentist's bill will break you.

broncofan

07-19-2013, 10:23 PM

>>>

I doubt that. One reason medical care is expensive in this country is that many people who ought to put off trips to the doctor because it's unnecessary, do not do so. The additional demand "pull" on the supply of medical care — made possible by bureaucratically regulated insurance policies that mandate coverage for just about everything at taxpayer expense — has the perverse effect of raising prices.
.
What you're talking about is moral hazard, that people who are insured overuse those services for which they're insured. Those with car insurance might drive more recklessly, and those with health insurance might overuse medical care. However, there is a screening function performed by both doctors and insurance companies.

I have no idea why anyone should put off an appointment to go to the doctor. Someone in their 50's with chest pain should assume it's heartburn and not something worse? Someone with a torn ligament should assume that it's a minor strain? This is callous nonsense.

Do me a favor. Next time you think you need to see a doctor, ask yourself whether you would like to put it off.

I also love what you did with the demand function for healthcare. You are correct that if poor people are not served by doctors and not insured by their employers, and cannot afford healthcare, the price of healthcare in this country might be cheaper. Afterall, less demand for services does mean a lower equilibrium price. Some of us don't actually think that those in the lower income strata should be denied healthcare to lower the average cost of healthcare, or that access to healthcare should be limited to an elite segment of society. What you're describing works with filet mignon but is unacceptable to people of conscience when discussing cancer treatment or cardiograms.

Once you have one distortion in the market, and you have a number of built-in distortions in the market for both healthcare and health insurance, the de-regulation argument falls apart. Even the patent system is a distortion, given that it gives an innovator a monopoly for a length of time, allowing him to collect surplus profits for his innovation. I'm not saying there isn't a reasonable trade-off involved, but this argument about price wars and intense competition is something you simply don't see in a field characterized by strict licensure of providers, patents on drugs and technology, and insurance which almost by definition can't be left unregulated. When you leave insurance un-regulated, insurance companies end up forfeiting their obligations. Why? Because they have an incentive to invest premiums and not hold sufficient reserves. You just don't get anything like intense competition in either the delivery of healthcare services or the insurance markets.

broncofan

07-19-2013, 10:26 PM

Is medical school an artificial barrier to entry? I can't open up a medical practice because I haven't gone to medical school. Do you know what this does to the supply function for medical services? With a lower supply of healthcare providers, the price of healthcare is now much greater than it would be if every third person were a doctor.

Ben in LA

07-19-2013, 10:31 PM

Just ask yourselves this question: are YOU willing to work for less that $7.25 an hour...no matter the job? I'm pretty sure that with no restrictions on minimum wage, there'll be no restrictions on what fields can implement that.

Can you imagine a policemen or EMT making that?

paulclifford

07-21-2013, 03:43 PM

>People come to the Mayo Clinic because they can afford care that most people cannot.

I never mentioned the Mayo Clinic, but in any case, you're repeating leftist-pop-mythology.

The Mayo Clinic has a high reputation for providing charity medical care for those unable to pay. It does this by using differential pricing: wealthy patients pay much more than middle-class patients; middle-class patients pay more than the poor. Thus, the Mayo Clinic uses payments from the wealthy to subsidize charity care for the poor. Most importantly, the OUTCOMES of the poor are better than they are at "free" clinics in the UK, Canada, and other countries that have socialized healthcare.

Additionally, since the clinic has long practiced "integrative care" — i.e., all specialists, all diagnostic facilities, all appointment-setting, etc., are integrated into one unit, under one "tent" — care in general can be provided at lower cost and in a timelier manner than at many other clinics or hospitals, even in the US. Recent studies, for example, even show that Medicare spent about 50% less-per-patient at the Mayo Clinic than at other places. So the Medicare Unit at the Mayo Clinic is easier on taxpayers than other hospitals and clinics.

Not sure why anyone would complain about this. Obviously, what we need, therefore, are MORE Mayo Clinic-type organizations (i.e., private, voluntary, integrative, and run by the doctors themselves).

See:
http://takingnote.tcf.org/2008/10/what-makes-the.html
"What Makes the Mayo Clinic Different?"

> This is not evidence that our healthcare system provides better care on average to the average person.

My evidence was empirical/statistical, not anecdotal. If you remove suicides and high-speed automobile deaths (i.e., accidents in which the driver dies immediately upon crashing), the U.S. has the longest life-spans for its citizens; it has the highest survival rate of cancers and heart disease; it has the highest patient satisfaction with special surgeries like back surgery, hip-replacements, knee-replacements, heart-valve and bypass surgeries, etc. It also has the highest rates of colonoscopies and mammographies in the world — two reasons that Americans spend a higher percentage of their incomes on healthcare than citizens of other countries. It has the most access to new drugs, new medical devices, and new kinds of therapies (stem-cell, nano-technologies, prostheses, etc.). It has the lowest infant mortality. It's not just at the Mayo Clinic. It's a general characteristic of US healthcare. It can certainly be improvised, but not by following the European model of having the government pay for more things. When government pays for things, prices always go up and quality always goes down. Government can "mask" the price increases because it can always cover losses between the cost of something and its selling price with tax revenue. That doesn't change the fact that the REAL costs of something have risen.

>>>Insurance has always been regulated.

And marriage has "always" been one man and one woman. So? That's not an argument. We could also say, "There has always been slavery. Why abolish an institution that has existed for thousands of years?" So what if it has always existed?

Additionally, regulation of insurance only began in the 20th century — correlating strongly with things going awry for patients' easy access to high quality medical care.

>>>As a system it is almost unworkable if there are no regulations.

Says who? Might as well assert the same thing about the dairy industry or the consumer electronics industry or the bicycle industry or the shoe industry. It's all self-interested nonsense. The only two groups of people who believe such a thing are members of the insurance industry themselves (who benefit from regulation because it protects them from competition) and politicians (who also benefit from regulation because it allows them to buy votes). Consumers of medical care (patients) don't benefit, and neither do providers of medical care (doctors and nurses).

See:
http://www.cato.org/sites/cato.org/files/serials/files/cato-handbook-policymakers/2009/9/hb111-15.pdf

You'll find most of the arguments for freedom of choice in healthcare in the above-linked PDF from the Cato Institute, a thinktank that analyzes policy from a free-market perspective.

>>>You don't have a good system of healthcare if most people can't afford necessary procedures or are made bankrupt by illness.

You also don't have a good system of healthcare if most people spend most of their time waiting to get an appointment, are then given a 5-minute examination, and then have to wait months for their "free" necessary procedure. You don't have a good system of healthcare if most people cannot get the latest, most effective drugs, devices, and treatments because some "cost-efficiency" panel says, "It's too expensive. Our job is to keep the cost of medical care down, and we're doing that by DENYING you the latest, expensive treatment. Don't like it? Go to some other country and seek treatment there." Which is pretty much arrangement in the UK and Canada, to name but two single-payer systems that supposedly cater to the poor.

>>>I don't care how many wealthy people flock to our best institutions.

You also don't care how many poor people die waiting in lines in other countries' socialized institutions, or who die for lack of access to the latest drugs, devices, and treatments, or who die waiting months — sometimes years — for simple procedures like a hernia operation. You only seem to care about the rhetoric — the sales pitch — by the politicians who run these programs, that the system is "for the benefit of the poor", even though it guarantees the poor only two things: long waiting times and crappy care.

Are you really going to say, "But at least they get FREE crappy care!"?

paulclifford

07-21-2013, 04:05 PM

>>>Is medical school an artificial barrier to entry?

No. But using government to close many medical schools throughout the US for the purpose of intentionally graduating fewer doctors — in order to keep the supply of doctors low and, thus, their rates and incomes high — IS an artificial barrier to entry. Doctors did precisely that through their lobby, the AMA, and something called "the Flexner Report", back in the 1920s or 1930s.

Additionally, state licensing of only "approved" doctors, with "approved" training, at "approved" medical schools, are all examples of artificial barriers to entry imposed by government and its special-interest lobby: the AMA.

State licensing of physicians with only a narrow, specific kind of training (which would NOT include age-old techniques such as homeopathy, naturopathy, etc.) was sold to the public with the rhetoric that it would "protect people from quackery". It has no such effect, and no studies have ever been done that show such regulation has such an effect. Ordinary laws against fraud and misrepresentation — which have long been in place in all states — can protect the public against that. The AMA/Flexner regulations on state licensure do nothing but artificially make the supply of physicians scarce in relation to the great demand for their skills. Obviously, this drives up their rates, and thus their incomes.

Prior to the AMA and the Flexner Report, most Americans preferred to see non-invasive homeopaths or naturopaths for their chronic conditions. Allopathic medicine allied itself with the chemical industries and the pharmaceutical industries with the discovery of anesthesia and asepsis, indispensable for surgeries. To force Americans away from their traditional therapies of choices, the AMA, the Flexner Report, and, of course, government, closed many medical schools, and instituted the state-licensing regulations.

Government licensure requirements also have the perverse effect of keeping older, less sophisticated doctors in practice, who should have perhaps retired long ago. Instead of keeping up with the breathless pace of medical advancements — including lots of new knowledge regarding "complementary" medical practices incorporating food supplements, vitamins, minerals, herbs, exercise, etc. — it tends to keep doctors in practice who know nothing about any of these, because "they have their licenses" and are thus "legit" practitioners of medicine, even if their knowledge and their treatments are 40 years out of date. Under a truly free market-driven system, the "branding" of such out-of-touch physicians would decline, as would their rates and practices.

paulclifford

07-21-2013, 04:51 PM

>>>Just ask yourselves this question: are YOU willing to work for less that $7.25 an hour...no matter the job? I'm pretty sure that with no restrictions on minimum wage, there'll be no restrictions on what fields can implement that.

>>>Can you imagine a policemen or EMT making that?

Can you imagine a policemen or EMT making that?

No. Which is why in a free market — with employers bidding against one another competitively for the skills and experiences of potential employees — wages RISE, not fall.

You have a basic misunderstanding of how prices and wages are set on a free market. They are not "set" or determined by only one side of the economic transaction (the seller of a good, or the employer of labor). Prices and wages are always co-determined by both buyers and sellers, and both employers and employees . . . assuming, of course, the existence of competition.

Regarding minimum wage, here's another hypothetical that might make you think about it differently:

Suppose you're earning a $50,000/year salary. Your skill-set and your experience-level are worth $50,000/year both to you and to your employer. Then (God forbid!), you lose your job because of some sudden economic downturn. You are now unemployed, but you immediately start looking for another job: contacting friends, connections, head-hunting firms, etc.

Then the government enters the scene with the following regulation:

Although it's very happy to see you be proactive in your search for employment, it mandates that you can only accept new employment IF it offers a salary that is 23% higher than your previous salary of $50,000; i.e., you can only accept a new job on condition that the minimum salary offered to you is $61,500/year.

Even if you were to agree to an offer of $50,000/year or less, you would legally not be permitted to accept it. You can legally accept only an offer of $61,500/year or higher.

Question:

Would such a regulation — implemented for your benefit, don't forget — increase your chances of finding new employment? Or would it decrease them? Or would it not affect your chances of finding new employment at all?

trish

07-21-2013, 07:24 PM

You have a basic misunderstanding of how prices and wages are set on a free market. They are not "set" or determined by only one side of the economic transaction (the seller of a good, or the employer of labor). Prices and wages are always co-determined by both buyers and sellers, and both employers and employees . . . assuming, of course, the existence of competition.Ever hear of a buyer's market? Since the Great Bush Recession, here's been an over supply of labor. So how does the market respond? By lowering wages, contrary to something someone said recently.what was it...oh yes...
...in a free market... wages RISE, not fall.In an unregulated market there is nothing to prevent a full time job from paying less than a living wage. At least in the U.S. we are beginning to recover. It would have been a stronger recovery had we had a more serious stimulus program. Europe's austerity strategy is failing miserably.

paulclifford

07-21-2013, 08:03 PM

>>>So how does the market respond? By lowering wages, contrary to something someone said recently.what was it...oh yes...

But we don't have a free market, at least not in the entry-level labor market. We have minimum wage laws that make the market the opposite of free, remember?

We also have an unfree market in many skilled labor markets which demand that employers only hire union labor. Unemployment is highest in those states — all of them "blue" Democratic controlled — that have union-hire laws, and which do not have "right-to-work" laws.

It's an old story, all well understood in Econ-101 classes and textbooks.

As for everyone else:

When the left cries that "wages have not kept pace with productivity", they speak only of the nominal wage — the number printed on the paycheck — and not all those benefits workers get today: paid vacation (technically part of one's wage); paid sick-leave (technically part of one's wage); paid personal days (technically part of one's wage); paid health insurance (a benefit, not a "right", and technically part of one's wage); additional benefits like reductions in health club memberships (technically part of one's wage); etc.

Add all of these up, and it represents a big increase in wages.

Additionally — and more to the point — the way capitalism works to raise wages for everyone is not, necessarily, by guaranteeing them a larger "nominal" wage (that is, a larger number printed on their paychecks so that they have more money); but, rather, by lowering prices of everyday goods and services, so that the purchasing power of the paycheck increases: lower prices for food, clothing, transportation, communication, etc. This is true even today in spite of government-caused inflation and erosion of the dollar's purchasing power. Measured in terms of the number of hours one must labor in order to buy a mid-priced item such as a phone, a television, a washing machine, a new suit, a winter coat, a pound of beef, etc., prices have actually radically declined: in other words, most workers today spend a much smaller percentage of their incomes on these items than workers in the 1970s because they only have to labor for a few minutes to earn the requisite amount of money to make these purchases; whereas 30+ years ago, they had to labor several hours or several days to earn enough money for these kinds of purchases. Additionally, the quality of today's products is far, far higher than what was available back then. Televisions are better, coffee-brewers are better, and some things — like a MacBook Pro, for example — cannot even really be compared to an IBM electric typewriter, since the former does things that were simply impossible for the latter.

So I dismiss the claim that "wages have declined". They most certainly have not.

Where purchasing power really has declined is in precisely those areas that have the most government meddling: the housing market, public education, school loans for private higher education, insurance, and health care. This is obviously not a coincidence.

paulclifford

07-21-2013, 08:26 PM

>>>In an unregulated market there is nothing to prevent a full time job from paying less than a living wage.

Sure there is. Competition. It never fails, and it never has failed. Until 1997, Hong Kong had no minimum wage laws. It had zero unemployment, and everyone who produced a living-wage worth of value earned a living wage or above.

Minimum wage supporters have a fantasy about the so-called "living wage." They think that someone who works as a dish washer in a fast-food restaurant "ought" to earn enough doing low-value work to be able to rent a nice apartment, get married, support a wife, have kids, send them to a nice private school, take 1 or 2 nice relaxing vacations a year, get his teeth capped, buy a car, and retire comfortably. Sorry, but in order to have all those nice things, you have to be in a job where you're producing the equivalent value of those things. From a dish washer's point of view, the purpose of a low-paying job is to get enough experience to become a manager of a fast-food restaurant, and then, perhaps, a franchise owner. The purpose, from his point of view, is simply to gain enough experience to use as a stepping-stone to something better: something that produces higher value, and which therefore is higher paid. That's simply economic reality.

Additionally, as I've already pointed out several times, the great majority of minimum wage earners are teenagers who still live at home with their parents. We don't have to worry about paying them a "living wage" because they are not worried about it either.

The ones we do have to worry about are the extremely low-skilled, inexperienced workers who would like to work at $1, $2, or $3 per hour, but who cannot find work at $9.00 an hour. They were priced out of the labor market. It's not the fault of employers that they are unemployed. It's the fault of minimum wage laws.

I notice, however, that the most vocal supporters of the minimum wage — all of whom are upper-middle class and wealthy, including, of course, most politicians — believe that unpaid internships — where the worker is paid NOTHING — are just great. This, despite the fact that the unpaid intern is obviously not getting a "living wage".

So paying someone nothing is apparently OK with minimum wage advocates, as long as that someone is labeled an "intern" and not an "employee", and as long that someone admits that he's really just there to learn a skill and gain experience. Yet paying that same someone $2.00/hour while labeling him an "employee" is suddenly defined as exploitation and morally wrong.

Got news for you. It's pure hypocrisy. If it's OK to pay someone zero in order for them to learn skills and get experience, it's also OK to pay them more than zero — e.g., $2.00 hour — for the same things. If the former is not exploitation, then neither is the latter

paulclifford

07-21-2013, 08:28 PM

A documentary originally broadcast on PBS in 1982. It's hosted by economist Walter Williams

"Good Intentions"
Walter E. Williams, economist
PBS (1982)

Good Intentions 1of3 Introduction and Public Schools with Walter Williams - YouTube (http://www.youtube.com/watch?v=P1r-r6iLBEI&list=PL7D326F68D152205B)
Part I

Good Intentions 2of3 Minimum Wage, Licensing, and Labor Laws with Walter Williams - YouTube (http://www.youtube.com/watch?v=7DS0XXFdyfI&list=PL7D326F68D152205B)
Part 2

Good Intentions 3of3 The Welfare System and Conclusions with Walter Williams - YouTube (http://www.youtube.com/watch?v=eqMuLNWL_Qo&list=PL7D326F68D152205B)
Part 3

hippifried

07-21-2013, 11:27 PM

The ones we do have to worry about are the extremely low-skilled, inexperienced workers who would like to work at $1, $2, or $3 per hour, but who cannot find work at $9.00 an hour. They were priced out of the labor market. It's not the fault of employers that they are unemployed. It's the fault of minimum wage laws.

No problem there. We have regulations that keep y'all from filling your sweat shops with 5 & 6 year olds.

trish

07-22-2013, 01:25 AM

Really? Inexperienced workers willing to work for a dollar an hour?! If they worked eighteen hours a day, seven days a week they'd earn $6570.00 a year! Subtract the rent or the mortgage and you're very lucky to have $3000 left for groceries. That $8.22 a day to feed your family. Of course I didn't subtract the utilities, but you can live without water, heat and electricity...they're just amenities only the successful deserve. Yeah, you're right! Competition is Kick Ass. Hope no one gets sick.

Ben in LA

07-22-2013, 10:21 AM

Greed makes people do strange things.

paulclifford

07-24-2013, 08:41 AM

>>>Really? Inexperienced workers willing to work for a dollar an hour?

Yep. Absolutely.

Because if an inexperienced worker is willing to work for nothing (in an "unpaid internship"), then he's also willing to do the same kind of work for some amount above nothing.

paulclifford

07-24-2013, 08:43 AM

>>>Greed makes people do strange things.

So does envy.

hippifried

07-25-2013, 10:33 AM

Greed's just an aspect of envy.

broncofan

07-25-2013, 11:36 PM

>>>Greed makes people do strange things.

So does envy.
I think what you're aiming for is a system where you can maintain your advantage in wealth and at the same time keep the masses at bay. If you overreach, for instance, by recommending a wage so inhumane that people can scarcely survive on it, you may find that the teeming underclasses don't really want to be part of this system and that their disobedience need not be civil.

In our case, we have a system where you can become insanely wealthy. In fact, you can aggregate enough wealth that neither you nor your great grandchildren will ever have to work again. This is one of the benefits of a system that rewards entrepreneurial ingenuity, and allows people to reap benefits for intellectual contributions far beyond what they contribute in terms of labor.

Your comparison of a one dollar per hour wage to internships is nearly offensive. The fair labor standards act has standards that prevents internships from being unduly exploitative, and even if these standards are not always enforced stringently, the purpose of an internship is that the employer provides it primarily for the benefit of the intern. Internships are not supposed to keep mature workers in a chronic state of underemployment or poverty nor do they generally provide employers with much of a work product. There is a big difference between interning at a financial services firm over the summer while attending school and working full time in a factory to barely earn enough to subsist.

Your vision of America is not a very charitable one. I hope you don't think I come from a place of envy, but moral disapproval.

Edit: Regulatory guidance from Department of Labor on unpaid internships
http://www.dol.gov/whd/regs/compliance/whdfs71.htm

paulclifford

07-28-2013, 08:00 AM

>>>If you overreach, for instance, by recommending a wage so inhumane that people can scarcely survive on it, you may find that the teeming underclasses don't really want to be part of this system and that their disobedience need not be civil.

"Pay me $50/hour for washing dishes or I'll bash your brains in"? Sounds to me as if you're the one with the very uncharitable view of America. "Support me . . . or else!"

>>>In our case, we have a system where you can become insanely wealthy. In fact, you can aggregate enough wealth that neither you nor your great grandchildren will ever have to work again. This is one of the benefits of a system that rewards entrepreneurial ingenuity, and allows people to reap benefits for intellectual contributions far beyond what they contribute in terms of labor.

Most of what you said was true and correct up to the last part of the last sentence. Labor qua labor contributes very little to any sort of productive activity without "brain power" behind it. Conversely, brain power greatly enhances the value of labor. That's why someone in a non-capitalist country can labor for hours and hours, scratching the soil, pushing it into the shape of an elongated cube, firing it in a hand-built oven, and 12 hours later, creating a beautiful hand-crafted product called "1 brick"; while someone in a western capitalist economy can push a button, and 1,000 perfectly formed identical bricks come streaming out on a conveyer belt in some production line, and all of this can be done in one hour.

Who expended more labor: the guy scratching the soil who produced 1 brick in 12 hours, or the guy who pushed a button and produced 1,000 bricks in one hour? Obviously, the first guy expended more actual labor. His wage, however, will be much lower than the second guy's wage, because despite all that labor he's expending, he only produced 1 brick in 12 hours. The 2nd guy — who expends a lot less labor — can produce 12,000 bricks in the same amount of time. It wasn't labor that made the 2nd guy so much more productive. It was other people's brain power invested in his labor. Another word for "brain power invested in pure labor" is: capital.

Because the 2nd guy can produce more than the 1st guy in the same amount of time, the 2nd guy's wages will be a lot higher.

>>>Your comparison of a one dollar per hour wage to internships is nearly offensive. The fair labor standards act has standards that prevents internships from being unduly exploitative,

"Unduly" exploitative? You mean, it's OK by you and the Department of Labor to be "duly" exploitative (in the opinion of some bureaucrat)?

In other words, in your view, if a person accepts a job in the summer for a wage of $0.00/hour, then she's only being "duly exploited", and that's OK by you and the DoL, because we have a pretty name for such an employment relation: we call it an "internship" instead of a "job". But if the same person were to accept the same job from the same employer in the summer for $1.00/hour, then she's being "unduly exploited" by her employer, and it's not OK by you and the DoL, because the jump from $0.00/hour to $1.00/hour semantically changed what was previously an "internship" into some other DoL category called a "job".

In your opinion, she may not legally accept any offer below $9.00/hour if her relation to her employer is semantically called a "job".

In other words, in your view, she can legally accept $0.00/hour and call it an "internship"; or she can accept $9.00/hour (or more), and call it a "job" — even if it's exactly the same work, same employer, same expectations, same hours, etc. But she is legally forbidden from accepting an offer to perform exactly the same work for any amount between $0.01 and $8.99.

Bizarre. Only the mind of a bureaucrat from a government bureaucracy like the Department of Labor could twist itself into a pretzel and come up with an argument like that.

Anyway, as I've pointed out before, the majority of those working in minimum wage jobs are teens still living at home with mom and dad, or still being supported by mom and dad. In fact, the majority of minimum wage job holders are white teenagers who come from families with median incomes of over $50,000.

The narrative about the "great masses of destitute, working, blue-collar, poor folk", each with a "Tiny Tim Cratchit" on crutches at home, is a myth.

The fact is this:

Most of those "great masses of destitute, blue-collar, poor folks, with Tiny Tim Cratchit on crutches" are simply unemployed. Period. Their problem is not "low wages"; their problem is "no wages", as in "no jobs." And simply increasing the hourly wage of white teenagers living in middle-class homes will not get them any.

Your minimum wage laws help the wrong group of people.

trish

07-28-2013, 03:49 PM

Who expended more labor: the guy scratching the soil who produced 1 brick in 12 hours, or the guy who pushed a button and produced 1,000 bricks in one hour? How about the laborers who built the machine that outputs those bricks at a rate of one thousand per hour? How about the laborers who built the factory? The electrician who wired the factory for power and the plumbers who hooked it to the municipal water supply? The laborers who built the damn that powers the factory? Those who drilled for the oil and natural gas that heat the factory? How about the architects and engineers who drafted the blueprints? One can go on. There's a lot more energy being consumed and a lot more labor involved in producing one brick than you might imagine. So which brick, the one made in America, or the one made in a single oven by a single worker, took more effort and energy to produce? And who gets the credit for those bricks? Well in your eyes it's the CEO who told his executive committee on the phone between hole 8 and hole 9 that he wants to build a brick factory outside Phoenix. Capitalism is wonderful, I agree. It has made it possible for humankind to grow its populations and live a high quality life. But powerful tools are dangerous, including capitalism. In your little parable capitalism shifted the ownership of the brick from the craftsmen to the corporation. Indeed it eliminated craftsmen and craftsmanship entirely. Brickyards that were once proudly producing high quality clay products now lie dormant all through the American Midwest. Profits are now collected by the corporation and distributed to the CEOs and stockholders. It's a very nice arrangement for CEOs and stockholders. Not so nice for the thousands of workers it took to actually produce a brick. Yes, if it weren't for minimum wage laws it could be even more wonderful for the CEOs and the stockholders.

BTW the Koch brothers are now making billions of dollars by creating an artificial aluminum scarcity, buying it up and warehousing it. Very productive, don't you think? Isn't capitalism operating with very little restraint wonderful? Wouldn't it be more wonderful if there were no restraints?

If you're holding down two or three crummy jobs and still can make a living wage (have you seen McDonald's insulting budget advice?), that's no better than no wage. It's still not living. One's time might be better put to use raising your kids, selling your own "wares", running drugs, or protesting for a higher minimum wage. Capitalism is a big idea. Big ideas solve big problems. They cause big problems too. That's why it needs to be regulated.

paulclifford

07-29-2013, 03:04 AM

>>>How about the laborers who built the machine that outputs those bricks at a rate of one thousand per hour?

Well how about them. Their labor would be useless unless directed by the engineer who designed the machine and told them what to do. Same for the rest of the examples you cited.

And what if the same laborers expended the same amount of labor-hours, or burned the same number of calories, or whatever unit you want to measure labor in, but misplaced all of the machine parts, using the wrong wiring, the wrong connectors, etc.? They have expended exactly the SAME labor, the SAME hours, the SAME calories, as workers who followed the engineer's plans and blueprints, but the first group of workers produced nothing of value: a useless machine is a pile of junk regardless of how many hours of labor went into producing it.

What makes something valuable is not something inherent in the thing; it's whether or not it satisfies some sort of want or need in the subjective opinion of someone else.

Economic value is subjective, not objective.

>>>If you're holding down two or three crummy jobs and still can make a living wage . . . , that's no better than no wage.

Obviously untrue. If "no wage" were just as good as "a low wage," then no one would accept a job for a "low wage". The reason they do so, is that from their point of view — theirs, not yours — a low wage is preferable to no wage.

Perhaps your efforts would be more productively spent if you demonstrated outside of a local McDonald's to convince the employees to quit their jobs and accept a wage of $0.00/hour instead of a low wage of whatever it is they're making. I'd like to see how many employees throw down their french-fries and follow you.

In any case, it would be an interesting empirical test of your statement.

>>>Koch brothers are now making billions of dollars by creating an artificial aluminum scarcity, buying it up and warehousing it.

I've heard that Goldman Sachs (not the Koch Brothers) is warehousing aluminum, and that some unions are complaining that it makes the price of a can of beer "artificially" high (that's actually a riot! Unionized labor bears more blame than anything else for making their products artificially high, yet here they are blaming the commodities markets).

Sorry, but if something is deemed "artificially too high" by manufactures, they would switch to some other material — e.g., glass or plastic in the case of beer and other beverages. The reason they don't switch at present is that consumers of beer and other beverages are perfectly willing to pay the current price for their beverages in aluminum cans.

This is simply another example of "commodities speculation" and "arbitrage", and is not only perfectly legitimate legally, but it performs a very important function economically: allocating a scarce resource (aluminum) efficiently — meaning, directing it to those producers and, ultimately, consumers, who value the resource the most — over different geographical areas, and over different time periods.

The socialist/Marxian notion that resources are "fixed" and need to be owned by a panel of "resource experts" in the government is a sure way of guaranteeing that there really will be a shortage of that resource; "shortage" meaning: no matter how much a consumer is willing to pay for it, he simply cannot buy it because it's just unavailable.

That was the common, everyday buying experience of consumers in the socialist Soviet Union, the socialist Maoist China, the socialist Communist Cuba, the socialist Marxist North Korea, the national socialist economy of Hitler Germany, etc.

Constant shortages of many goods, and all for the same reason: the resources were socialized, nationalized, and owned by the government.

>>>Very productive, don't you think? Isn't capitalism operating with very little restraint wonderful? Wouldn't it be more wonderful if there were no restraints?

But there are always restraints. The choice is between what kinds of restraints: natural economic restraints (competition), or artificial political ones (regulation). The second usually undercuts the first, and is far less effective at doing what it is intended to do.

trish

07-29-2013, 05:16 AM

Well how about them. Their labor would be useless unless directed by the engineer who designed the machine and told them what to do. Same for the rest of the examples you cited. Actually I included the engineer as one of those examples. So according to you the engineer's work would be useless if not for the engineer! Look do you want the brick or not? If you do somebody will have to make it, 'cause they don't make themselves.

broncofan

07-31-2013, 11:42 AM

The example you gave with the brick workers is probably a better counterexample. A company with a method of producing one thousand bricks per hour may be able to pay a worker more than the company whose workers can only make one. That does not mean they necessarily will. The workers do not receive the profits, but are paid based on the supply and demand of labor.

Therefore, if it is easy to push a button and produce a thousand bricks, then there will be many workers who can do this job and the wage will be low. As a result, the company will make larger profits. We can see that at some level, since workers have a great deal of trouble systematically withholding their labor to drive up wages, that higher wages should be mandated. These workers have a collective action problem and are in a specific position of vulnerability that is not faced by those owning the means of production.

The point I was making is not that workers who use violence are justified in doing so. It is that if you exploit people without limit then you end up with people who will refuse to cooperate. You may protect yourself from them by hiring police officers and security guards at the same dollar an hour wage but they might not be too eager to protect you. Eventually you have shortages in demand because you've starved your own customer base.

As I said, workers tend not to be able to aggregate their interests effectively. So they have very little opportunity to bargain for wages, and employers have great opportunity to play their interests against one another. When you have such abuses, it calls for government regulation through a body of laws that prevents that kind of exploitation. You don't like it but it has won out through the democratic process.

broncofan

07-31-2013, 11:56 AM

Trish brings up an interesting point about the intellectual property that is used to make a thousand bricks. Many companies force their engineers to sign agreements that assign any invention they create to the company. As a result, the company has provided nothing but a breeding ground where smart people with no capital can create things for them but retain no property right in their own creations. This is another example of people who own property having a disproportionate amount of bargaining power. Do you really think that someone who was not facing a relatively higher degree of duress would bargain away the entire product of their own ingenuity?

The company who buys the machine then does not have to share even the smallest proportion of the profits with the employees because these people need money now. So they cannot effectively withhold labor in order to barter for a fair share of the profits that their work enables. That is where the government comes in. They do not mandate equity sharing or anything close to that, but they don't permit you to systematically take advantage of a broad class of people. We should have a system that allows for upward mobility and does not fix people into a state where they are constantly having to choose between starvation and near starvation.

Stavros

07-31-2013, 03:56 PM

Almost all blacks knew this, of course, which is why until the mid 1960s, most blacks voted Republican. All blacks knew it was the Democratic Party that had supported the master/slave system in the south; all blacks knew it was the Democratic Party that instituted and supported the racist "Jim Crow" laws; all blacks knew the insurgent group calling itself the "Ku Klux Klan" had been started by Democrats*; all blacks knew it was the Democratic Party that supported "Separate But Equal" in the Plessy case; all blacks were aware it was the Democratic Party which supported school segregation; all blacks knew that the white guys blocking the entranceways to white schools so that black children could not enter when school integration began — those white guys were Democrats and all blacks knew it!

And that's also why Martin Luther King, Jr. voted Republican his entire life.

Factually incorrect:

As the leader of the SCLC, King maintained a policy of not publicly endorsing a U.S. political party or candidate: "I feel someone must remain in the position of non-alignment, so that he can look objectively at both parties and be the conscience of both—not the servant or master of either." (http://en.wikipedia.org/wiki/Martin_Luther_King,_Jr#cite_note-Oates1993-31)In a 1958 interview, he expressed his view that neither party was perfect, saying, "I don't think the Republican party is a party full of the almighty God nor is the Democratic party. They both have weaknesses ... And I'm not inextricably bound to either party."[/URL]
King critiqued both parties' performance on promoting racial equality:

Actually, the Negro has been betrayed by both the Republican and the Democratic party. The Democrats have betrayed him by capitulating to the whims and caprices of the Southern Dixiecrats. The Republicans have betrayed him by capitulating to the blatant hypocrisy of reactionary right wing northern Republicans. And this coalition of southern Dixiecrats and right wing reactionary northern Republicans defeats every bill and every move towards liberal legislation in the area of civil rights. (http://en.wikipedia.org/wiki/Martin_Luther_King,_Jr#cite_note-King-Carson2000p364-32)
Although King never publicly supported a political party or candidate for president, in a letter to a civil rights supporter in October 1956 he said that he was undecided as to whether he would vote for Adlai Stevensn or Dwight Eisenhower, but that "In the past I always voted the Democratic ticket." In his autobiography, King says that in 1960 he privately voted for Democratic candidate John F. Kennedy: "I felt that Kennedy would make the best president. I never came out with an endorsement. My father did, but I never made one." King adds that he likely would have made an exception to his non-endorsement policy for a second Kennedy term, saying "Had President Kennedy lived, I would probably have endorsed him in 1964."
[url]http://en.wikipedia.org/wiki/Martin_Luther_King,_Jr#Politics (http://en.wikipedia.org/wiki/Martin_Luther_King,_Jr#cite_note-King-Carson1992p384-34)

Stavros

07-31-2013, 04:26 PM

Under British governance until 1997, Hong Kong had no labor legislation at all; none. No minimum wage laws, no laws requiring anyone to join a union or hire union workers. Guess how much unemployment they had? Zero. None. Additionally, wages were not "subsistence", because the way free markets form, there were always slightly more jobs available than there were potential employees to fill them, so employers — if they wanted "quality labor" — had to bid talented people away from competitors. And since there were no prescribed minimums, those who were not "quality labor" from the employers point of view — the least skilled — could still find employment because no laws prevented them from accepting a low, entry-level wage.

Today, under Chinese rule, though Hong Kong is still robust, a lot of new labor laws have been implemented since 1997. Result? Unemployment of the least skilled workers, between 4% and 7%.

Rubbish, as usual from PC.

Labour law in Hong Kong can be dated back to the impact of immigration on a place that was populated by 23,817 people in 1845, growin to 300,000 by 1901, and 878,947 by 1931.

Labour laws were introduced because of the growth in HK of craft guilds which had secret rituals (as did the Guilds in Europe) and the criminal Triad Societies -all were obliged to register under the Triad and Unlawful Societies Ordinance of 1887 until merchant associations were exempted under an update of the Ordinance in 1911.

Following the Versailles Treaty and the May 1919 Movement, the growth of Sun Yat-Sen's Guomingdang Party led to labour unrest culminating in the General Strike-Boycott of 1925 which almost broke Hong Kong's eminence as a trading port of significance for China and the British Empire.
Labour unrest continued after the Japanese Occupation with the Tramway Strike of 1949 which itself followed the 1948 Trades Union and Trades Disputes Ordinance, which restricted the right of Honk Kong residents to form trade unions and banned any affiliation with overseas unions.
After a relatively peaceful decade in the 1950s the 1960s was a decade of unrest, from the Kowloon Riots of 1966 to disturbances related to the Cultural Revolution which in fact reduced labour participation as most HK Chinese were anti-Communist and dropped out of union membership.

Far from lax labour law and private enterprise making HK a paradise of free market economics, it was the British Empire in its governance of Hong Kong which created the public housing sector, which invested in the physical infrastructure of HK, and which financed most of the education which resulted in the spectacular literacy rates which have been an important feature of HK's economic success; rather in the way that literacy rates soared in the USSR as the state financed education; and indeed, improved noticeably in Afghanistan under the guidance of the USSR in the 1980s.

The problems of the HK economy did not follow the withdrawal of the British in 1997 but have been shaped by the demands of capitalism before and since -the Open Door policy promoted by Deng Xiaoping in 1978 led to the relocation of most of the small textile manufacturing companies from HK to Guandong province, indeed, by 1997 80% of the foreign direct investment in Guandong came from Hong Kong capitalists who abandoned their workers for the cheaper labour market in the PRC -hardly surprising that the 1970s was for a time characterised by sit-ins, occupations, strikes and disputes over redundancy payments.

If it is rubbish to argue there were no labour laws in HK before 1997, it is also rubbish to argue there was no unemployment, as if HK was immune from the Oil Price shocks of the 1970s, and the Asian Economic crisis of 1997.

Unemployment in HK has fluctuated over the decades: 5% in 1983 dropping to barely 1% in 1989, rising to 3.9% in 1997, falling to about 2.1% in 1998; rising to 9% in 2004, falling to 3% in 2008 where it appears to have stabilised.

None of this is solely the consequence of HK being a Special Administrative Region of the People's Republic of China; it has a lot to do with HK reinventing itself as a financial and service economy while losing its manufacturing base, yet retaining its entrepot status; while changing modes of labour that have affected all economies -self-employment increasing, seasonal labour, part-time contracts and so on make up the formula.

In Hong Kong, growth, historically is intricately linked to state investment in the physical and social infrastructure, as well as entrepreneurial capitalism; private enterprise would not have housed the population or educated them en masse, but selected a few for 'the privilege'. Just as large segments of the populations of the British Empire between 1880 and 1960 were educated by Christian Missionaries not by private enterprise.

http://eh.net/encyclopedia/article/schenk.hongkong
http://www.tradingeconomics.com/hong-kong/unemployment-rate
http://books.google.co.uk/books?id=O4EcKO2kaK4C&pg=PA296&lpg=PA296&dq=hong+kong+labour+law+history&source=bl&ots=CYYA3ybM6N&sig=Q7u1ODKxcog2ssCvuPl6UTrhsUo&hl=en&sa=X&ei=ZQz5UaX6Je330gWfxIBI&ved=0CG8Q6AEwCA#v=onepage&q=hong%20kong%20labour%20law%20history&f=false