Archive for the ‘Government and Politics’ category

Analysing Benghazi Isn’t Difficult

May 5, 2014

The watch dog group, Judicial Watch, requested documents on October 18, 2012 concerning talking points UN Ambassador Susan Rice used on the September 16, 2012 Sunday shows concerning the Benghazi attacks. Judicial Watch had to file a Freedom of Information Act lawsuit against the Department of State on June 21, 2013 to try to get these documents. They were finally obtained on April 18 2014 (read here). E-mails show that the appearance on the Sunday shows was nothing more than political cover for the administration. They pushed a narrative that placed blame on an internet video and not on the administrations policies.

This should surprise no one. I wrote an article titled, Mises’ “Human Action” Explains Lies About Lybia, on October 25, 2012, that sums up the thinking of politicians. Here are some excerpts from the article that are even more true today than when I wrote them.

EXCERPTS FROM THE ARTICLE THEN

“Here is how “Human Action” by Ludwig von Mises helps us analyze the Libyan situation. Human action is purposeful behavior. Action is not simply a verbal preference, it is the individual choosing and acting to reach a particular end. Action is a tangible thing and cannot be confused with wishes, hopes, or after the fact quarterbacking. Men act to substitute what they think will be a more satisfactory state of affairs for a less satisfactory state. We wouldn’t want to change our existing state of affairs if we didn’t think the result would be better. Our action reveals the correctness of our thinking. When a baseball manager makes a decision during a game he does it because he thinks it will help his team win the game. After the fact we can judge if his decision was correct or incorrect in attaining his goal, but that doesn’t mean we would have made a different or better decision than he did, because we cannot recreate that point in history exactly as it was. The science of human action is called praxeology it studies the action itself. Psychology studies the internal events that result in action. It studies the forces pushing a man toward a particular action. Psychology is where Monday morning quarterbacking takes place. Praxeology is where we can analyze success and failure. Lets look at Libya through these lenses.”

“Every Administration has the right to make its own policy about how heavy of a security footprint it will have at any one embassy. You can argue about which policy will achieve the particular goal an administration wants to achieve. What that particular goal is may be misunderstood. For some administrations the goal is the safety of the people in the Embassy. For others it is what the people in the particular country will think if too much power is shown. There are obviously many degrees of security between completely locking down an embassy with every asset you can bring to bear, and simply allowing the people at the embassy to carry a concealed sidearm. There are many foreign policy goals each administration is trying to attain, and security for their people may be sacrificed for these goals.  The choice the administration makes is up for discussion and debate before anything happens. After the decision proves to be incorrect we can say it didn’t work to achieve the end sought,  assuming we knew the true goal of the administration. The end sought may not have been the security of the people. We can say the Obama Administration’s decision in Benghazi didn’t work from a security standpoint, just as we can say the Reagan Administration’s decision in Beirut didn’t work from a security standpoint. But we don’t really know if security was the primary goal in either situation.”

“What we know is that all politicians are self-interested individuals, and remaining in power is their main goal. This is the over-riding goal of every decision they make. They hire advisers to specifically look at everything they do and determine how it will affect them politically. If it is not the over-riding factor in decision-making, it certainly has a major influence in all decisions. This is my problem with the deaths in Libya. From the standpoint of security it was a failure, fine admit it and adjust. When you know what was going on within an hour of the start of the attack, and you put forth a story that’s untrue, and stick with it for weeks even as the truth starts to leak out, it tells me you have no other interests above yourself. You denigrate the lives of the fallen, you insult our intelligence, and you erode whatever trust remains, which is probably a good thing for liberty.”

“Every action that has been taken since the attacks began, is purposeful action toward the attainment of a more satisfactory state of affairs. Every lie told and photo-op taken was an attempt to reach a particular end, this is the science of human action. Since the situation was and is constantly changing, each day’s purposeful actions seemingly contradict the previous day’s purposeful actions. This contradiction only makes sense if we know the true ends sought. The end sought is to hold on to power through any means necessary. The administration believes their purposeful actions will result in them holding on to their power. We will find out in two weeks if their purposeful actions are correct or incorrect. They also act because they think the end sought, reelection, will be a more satisfactory state of affairs than the alternative. We won’t know if they are correct or incorrect about this until a couple of years down the road. Lets hope we find out in two weeks that they were incorrect about the first point so we don’t have to find out about the correctness of the second point.”

SOME THOUGHTS 18 MONTHS LATER

Nothing has changed. The administration remained in power. Their purposeful behavior worked to attain this end. They are going to continue to hold on to the lie no matter how much evidence proves they are lying. They have a midterm election coming up in November. But more importantly they have a narrative about their administrative legacy that needs to be kept intact or finesse.

This is why I hate politics. The incentive of gaining power or remaining in power overrides everything from a political perspective. Politics interferes with everything, and I mean everything, concerning our daily lives. We are being spun, or lied to, everyday. We can be inoculated from the spin, or lies, if we understand the concept of Human Action, and see all things through its lens.

 

Tax Form 1040 From 1913: Look How Far We’ve Come

April 16, 2014

Yesterday was April 15 the tax filing deadline. I bet you were in a great mood. So to cheer you up I thought you would like to know what the original 1040 tax form looked like. The 1913 form 1040, complete with instructions can be seen here.

Here are the original tax rates and income brackets.

1% of income over $20,000 but not exceeding $50,000

2% . . . . . . . . . . . . .  $50,000 . . . . . . . . . . . . . . . . .$75,000

3% . . . . . . . . . . . . . $75,000 . . . . . . . . . . . . . . . . . $100,000

4% . . . . . . . . . . . . . $100,000 . . . . . . . . . . . . . . . . $250,000

5% . . . . . . . . . . . . .$250,000 . . . . . . . . . . . . . . . . .$500,000

6% . . . . . . . . . . . . .$500,000 . . . . . . . . . . . . . . . .

I bet you wish these were the rates today, and the form was this simple to fill out.

The people who passed the 16 amendment were either duped or stupid. In their wildest dreams they could have never imagine it would lead to the almost incomprehensible 73,954 page tax code that we have today.

This graph is from Wolters Kluwer CCH, is shows the growth in the tax code since its inception in 1913.

CCH Standard Federal Tax Reporter Tax Law Pile Up 2013

Here are the tax rates and income brackets today. We should be proud of how far we have evolved, or devolved, in the last 100 years.

2013 Tax Brackets (for taxes due April 15, 2014)

Tax rate Single filers Married filing jointly or qualifying widow/widower Married filing separately Head of household
10% Up to $8,925 Up to $17,850 Up to $8,925 Up to $12,750
15% $8,926 to $36,250 $17,851 to $72,500 $8,926 to $36,250 $12,751 to $48,600
25% $36,251 to $87,850 $72,501 to $146,400 $36,251 to $73,200 $48,601 to $125,450
28% $87,851 to $183,250 $146,401 to $223,050 $73,201 to $111,525 $125,451 to $203,150
33% $183,251 to $398,350 $223,051 to $398,350 $111,526 to $199,175 $203,151 to $398,350
35% $398,351 to $400,000 $398,351 to $450,000 $199,176 to $225,000 $398,351 to $425,000
39.6% $400,001 or more $450,001 or more $225,001 or more $425,001 or more
Read more: http://www.bankrate.com/finance/taxes/tax-brackets.aspx#ixzz2z1OPahhk
This is yet another example of why we should never believe politicians and bureaucrats when they tell us that giving them more power will benefit us. What kind of monstrosity do you think the 2500 page Affordable Care Act will grow into? How stupid will future generations think we were for passing it into law?

Walter E. Williams Explains The Long, Tragic, Ugly Story Of Government,

April 15, 2014

In a recent article by Walter Williams titled, How To Assist Evil, he makes the point that since the beginning of the 20th century,  170 million people have been killed by their own government, where as only 60 million were killed in wars. When it comes to killing your own citizens we always think of the Holocaust in Nazi Germany. Unfortunately it was just one of the many examples of Government atrocities against their citizens.

Here are some excerpts from the article.

THE HOLOCAUST

“Though the Holocaust ranks high among the great human tragedies, most people never consider the most important question: How did Adolf Hitler gain the power that they needed to commit such horror?

“Through the Enabling Act (1933), whose formal name was “A Law to Remedy the Distress of People and Reich,” Hitler gained the power to enact laws with neither the involvement nor the approval of the Reichstag, Germany’s parliament……It was decent Germans who made Hitler’s terror possible – Germans who would have never supported his territorial designs and atrocities.”

OTHER ATROCITIES IN THE 20th CENTURY

“….since the beginning of the 20th century, governments have killed 170 million of their own citizens. top killers were the Soviet Union, which, between 1917 and 1987, killed 62 million of its own citizens, and the People’s Republic of China, which, between 1949 and 1987, was responsible for the deaths of 35 to 40 million of its citizens. In a distant third place were the Nazis, who murdered about 16 million Jews, Slavs, Serbs, Czechs, Poles, Ukrainians and others deemed misfits, such as homosexuals and the mentally ill.”

“We might ask why the 20th century was so barbaric. Surely, there were barbarians during earlier ages. Part of the answer is that during earlier times, there wasn’t the kind of concentration of power that emerged during the 20th century.”

IT CAN’T HAPPEN HERE

“….The more power a government has, the more it can act arbitrarily according to the whims and desires of the elite, and the more it will make war on others and murder its foreign and domestic subjects…..the elite’s use government to dupe and forcibly impose its will on the masses. The Masses are always duped by well-intentioned phrases….what German could have been against “A Law to Remedy the Distress of People and Reich”?….and who could be against the “Patient Protection and Affordable Care Act”?” 

“We Americans ought to keep the fact in mind that Hitler, Stalin and Mao would have had more success in their reign of terror if they had the kind of control and information about their citizens that agencies such as the NSA, the IRS and the ATF have about us…”

The Road To Serfdom, by F.A. Hayek was written in 1944. It is a book that answers the question Dr. Williams asks in his article. Hayek lived in Germany during the time before Hitler came into power. He explains how the concentration of power just doesn’t lead to serfdom, it is the road to serfdom.

Related Article, Terminus On The Road To Serfdom, by D.W. MacKenzie, at mises.org.

Here is The Road To Serfdom, at mises.org.

Here is The Illustrated Road To Serfdom , at mises.org.

 

 

 

 

 

 

 

 

 

 

The Russian and Ukrainian Situation; Lets Take A Look

March 5, 2014

What can the U.S. and the President do, if anything, about the situation in the Ukraine? I view this situation through the lens of two things Thomas Sowell has said, 1) “Results observed at a given point in time may be a part of a process that stretches far back in time.”, and 2) “You can only choose from alternatives actually available.”

DECISIONS PRODUCE EXPANDING OR DIMINISHING ALTERNATIVES

Where the Ukrainian situation sits today is the result of decisions, by millions of people, that stretch far back in time. The President inherited the situation that existed the day of his inauguration, but he is responsible for the decisions he has made since then. His decisions were made from alternatives that were actually available at the particular time of each decision. Every decision that is made today influences future decisions in many ways. A decision made today can expand or diminish future decisions that are available. If you choose to travel from L.A. to N.Y. by car you have many options along the way that a person who decided to take a plane doesn’t. One preson is limited to what he can choose to do while on the plane like read, sleep, etc, while the person who drove can choose when to stop, what and where to eat, and even to change his mind and go somewhere else instead of N.Y.

Decisions aren’t made in a vacuum, or as I like to say, other people get to vote on how they will react to your decision. You don’t get to determine what other people decide to do after you make a decision, unless you use force to restrain their response.

INTERVENTIONIST OR NON INTERVENTIONIST UTOPIAS

Whether you are on the interventionist or non interventionist end of the spectrum, before you make up your mind about the Ukrainian situation, read these articles because the situation is more complex, from many angles, than it might seem. One thing is for sure, the U.S. can’t reset the clock and start over. The U.S. has to make a decision based on the reality that exists today, it can’t make a decision based on a utopian reality which exists on each end of the interventionist and non interventionist world views.

The truth is, the U.S., is stuck with bad or worse choices that politicians and bureaucrats from both ends of the spectrum have led us to.

ARTICLES

A 35-Step Guide To Understanding Why Russia Decided To Follow The Olympics With A War, by Miriam Berger and Julia Pugachevsky, at buzzfeed.com. This is an article that takes you through the time line of this conflict.

The Stepping Stone To The Ukraine Situation, by Victor Davis Hanson, at victorhanson.com. This article talks about how the Presidents actions since he was inaugurated have been seen as weakness by Leaders like Putin. Didn’t President Kennedy say, “We dare not tempt them with weakness”.

The Back Story To The Russia – Ukraine Confrontation, by George Washington, at economicpolicyjournal.com. There is a lot of information and opinion to digest in this article. Did the U.S. push Russia

Lugar and Obama Urge Destruction Of Conventional Weapon Stockpiles, at fas.org. In 2005 President Obama and Senator Lugar visited the Ukraine to push for the destruction of stockpiles of military supplies. Here is a quote from Obama, “Vast stocks of conventional munitions and military supplies have accumulated in Ukraine…….” Obama said. “We need to eliminate these stockpiles for the safety of the Ukrainian people and people around world, by keeping them out of conflicts around the world.” Is he saying in order to keep Ukraine out of conflicts they need to destroy their weapons? This sounds like the gun control debate, disarm yourself so you don’t provoke the bad guys.

Russia’s 25,000-Troop Allowance and Other Facts You May Not Know About Crimea, at rt.com. Russia Today talks about the Partition Treaty signed by Russia and Ukraine in 1999 to determine military bases and the Black Sea Fleet in the Crimea. Read about Black Sea Fleet here, at fas.org.

An American Special Ops Veteran On The Ground In Ukraine Speaks Out, at sofrep.com. Great background of life in the Ukraine from the perspective of a Spec Ops guy on the ground.

Rand Paul and Mike Lee Respond To The State Of The Union Address

January 30, 2014

Senators Rand Paul and Mike Lee gave responses to the President’s state of the union address. These two are speaking a completely different language than the President is speaking. They are speaking the language of individual liberty, and the President is speaking the language of collective central planning. Unfortunately tens of millions of people in this country don’t understand the language of individual liberty, because they were taught the language of collective central planning. It is our job to educate them that liberty is superior to central planning. I think the tide is turning because these two responses would never have been given just a few years ago.

These responses show the fundamental differences between liberty and central planning that is summed up so well in my favorite quote by F. A. Hayek, “The coordination of men’s activities through central planning or through voluntary cooperation are roads going in very different directions. The first to serfdom and poverty the second to freedom and plenty.”

We have been slowly going down the road to serfdom for too long, it is time to change direction.

Here is Senator Rand Paul’s response.

Here is Senator Mike Lee’s response.

Related ArticleLet The Counterfeiting Continue! The Fed Is Stuck In Their Feedback Loop, by austrianaddict.com.

Related ArticleTom Woods Explains The Austrian Business Cycle, by austtianaddict.com.

Walker’s State Of The State Address vs. Obama’s State Of The Union Address

January 29, 2014

These two videos show the difference between a Governor who trusts the wisdom of individuals, and a President who trusts the special wisdom of Government bureaucrats.

In Governor Walker’s state of the state address, he is able to talk about the actual results of policies that have rolled back Government intervention in the free market, although not as much of a rollback for my taste. In the President’s state of the union address, he is painting a vision about a fantasy world that can be created by expanding the decision-making of Government, while shrinking market based decisions by individuals.

Walker’s policies have brought $900 million more in tax receipts than the state spends. Obama’s exponential expansion of Bushes policies, read here,  has increased the Federal debt by $7 trillion.

Walker is going to refund the tax surplus to the individuals who produced it, allowing them to use the dollars as they see fit. Obama is talking about expanding government even farther than he already has, which means taking more from producers. The Federal Government can’t spend anything that it first doesn’t confiscate from you, therefore, all Government spending is simply the substitution of politician’s decisions on how to spend the money taken in taxes, for your decision on how you would have used those confiscated dollars.

Walker understands that real jobs are created by individuals making decisions in the market. Obama thinks jobs are created from top down decrees by Government bureaucrats and politicians.

In this video Walker seems to understand the importance of producers. He understands that you get less economic activity if you burden producers with taxes and regulation.

Contrast what Walker said with what the President says in the video below, if you can get through it. The Presidents speech is more of a theatrical production with soaring rhetoric, appealing to your emotions instead of your brain.

The fact that the Peoples Republic of Wisconsin can change course and slowly start heading in the direction of individual liberty gives me hope for the country as a whole. We may be at a point in history where liberty is on the rise and the state is on the decline. It may not seem that way if you look at the present political situation, but just remember it is dark in the middle of a tunnel. I think more individuals are changing their thinking about the role and scope of Government in their lives. Politics will follow this sea change, it won’t lead it. In Rand Paul’s response to the state of the union show, he talked about how Federal Reserve policies caused our economic problem in the first place. This is an example of the sea change, because the Federal Reserve would never have been talked about, let alone been accused of causing the problem, just five years ago.

Related ArticleWalter E. Williams: “Are We Moving Toward More Personal Liberty, Or More Government Control Over Our Lives”, by austrianaddict.com.

Thomas Sowell Sums Up “Fact Free Liberals” In Part IV

January 28, 2014

Thomas Sowell

Thomas Sowell’s first sentence of this article, One of the things that attracted me to the political left, as a young man, was a belief that leftists were for “the people.”, reminds me of the time I was a senior in high school and we were given a form to take home and fill out in order to register to vote. One of the questions was, “what party are you going to register under, Democrat or Republican”? I asked my mom, “what party are we”, she said, “we’re Democrats”, I asked , “Why”, she said, “because they’re for the working people”, so I marked Democrat and handed it in the next day. I learned quickly that my mom’s view of the Democrat party was wrong, and I learned much later, after reading Sowell and Hayek in the early 90”’s, that my view of the Republican party was wrong. Since the incentive of a politician is to grow Government, which in turn grows their power, there are big Government politicians in both parties. In the words of F. A. Hayek, “….The battle for freedom must be won over and over again, the socialists of all parties must be persuaded of defeated if they and we are to remain free men.”

Here are some excerpts from the article, Fact-Free Liberals: Part IV read here.

“…Fortunately, I was also very interested in the history of ideas — and years of research in that field repeatedly brought out the inescapable fact that many leading thinkers on the left had only contempt for “the people.”

“That has been true from the 18th century to the present moment. Even more surprising, I discovered over the years that leading thinkers on the opposite side of the ideological spectrum had more respect for ordinary people than people on the left who spoke in their name.”

“Another disturbing pattern turned up that is also with us to the present moment. From the 18th century to today, many leading thinkers on the left have regarded those who disagree with them as being not merely factually wrong but morally repugnant. And again, this pattern is far less often found among those on the opposite side of the ideological spectrum.”

“The vision of the left is not just a vision of the world. For many, it is also a vision of themselves — a very flattering vision of people trying to save the planet, rescue the exploited, create “social justice” and otherwise be on the side of the angels. This is an exalting vision that few are ready to give up, or to risk on a roll of the dice, which is what submitting it to the test of factual evidence amounts to. Maybe that is why there are so many fact-free arguments on the left, whether on gun control, minimum wages, or innumerable other issues — and why they react so viscerally to those who challenge their vision.”

In a previous post, Thomas Sowell Discusses “Fact Free Liberals”, Dr. Sowell explains issues like minimum wages, gun control and many others.

If you want to understand the vision of the left, I suggest reading The Vision Of The Anointed, and A Conflict Of Visions, by Thomas Sowell. In these books he explains, in his words, “…the underlying assumptions behind the very different ideoligical visions of the world being contested in modern times.”

These two books started me on a mind expanding voyage allowing me to see places I never realized existed.

Thomas Sowell Discusses “Fact Free Liberals”

January 23, 2014

Thomas Sowell

I love when Thomas Sowell writes articles taking the educated elite to the cleaners by challenging  the facts they cite to prove their reality. The first article is titled, Fact-Free Liberals, read here. Here are some excerpts from the article.

“Someone summarized Barack Obama in three words — “educated,” “smart” and “ignorant.” Unfortunately, those same three words would describe all too many of the people who come out of our most prestigious colleges and universities today.”

“……The net results are bright people, with impressive degrees, who have been told for years how brilliant they are, but who are often ignorant of facts that might cause them to question what they have been indoctrinated with in schools and colleges.”

“All too often when liberals cite statistics, they forget the statisticians’ warning that correlation is not causation.”

“But who reads history these days? Moreover, those parts of history that would undermine the vision of the left — which prevails in our education system from elementary school to postgraduate study — are not likely to get much attention.”

After wetting your appetite by tackling issues like women getting paid three-quarters of what men make, income mobility, black applicants for mortgage loans being turned down at twice the rate of white applicants, and other issues , he challenges more Progressive sacred cows in his next article titled, “Fact Free Liberals: Part II”, read here. Here are some excerpts from this article.

“Words seem to carry far more weight than facts among liberal….”

“When words trump facts, you can believe anything. And the liberal groupthink taught in our schools and colleges is the path of least resistance.”

He analyzes rent control laws, and minimum wage laws in this article, and then takes on “the war on poverty, sex education, and the murder rate in this article titled, “Fact-Free Liberals: Part III”, read here. Here are some excerpts from the article.

“The actual signing of the “war on poverty” legislation took place in August 1964, so the 50th anniversary is some months away. But there have already been statements in the media and in politics proclaiming that this vast and costly array of anti-poverty programs “worked”.”

Of course everything “works” by sufficiently low standards, and everything “fails” by sufficiently high standards. The real question is: What did the “war on poverty” set out to do — and how well did it do it, if at all?

“Without some idea of what a person or a program is trying to do, there is no way to know whether what actually happened represented a success or a failure. When the hard facts show that a policy has failed, nothing is easier for its defenders than to make up a new set of criteria, by which it can be said to have succeeded.”

“While the fact-free liberals celebrate the “war on poverty” and other bright ideas of the 1960s, we are trying to cope with yet another “reform” that has made matters worse, ObamaCare.”

Reading Thomas Sowells books is like receiving a vaccine, inoculating you from the lies of politicians, journalists, and the educational establishment, who are unapologetic about pushing their ideology through propaganda.

Other Thomas Sowell Posts You Might Like.

Thomas Sowell’s Vision of the Anointed, at austrianaddict.com. Short video.

Thomas Sowell Used To Be A Marxist? at austrianaddict.com. Short video.

Thomas Sowells Take On The Federal Reserve, at austrianaddict.com. Short video.

Thomas Sowell- “Economic Problems Don’t Have Political Solutions”, at austrianaddict.com. video.

Income Inequality Part II: Increase The Minimum Wage

January 15, 2014

Economic theory suggests an excessive minimum ...

The two recent, but not new, political solutions for income inequality (aka income redistribution), are extending unemployment benefits, and raising the minimum wage. In this post we will look at the consequences of the political solution, “raising the minimum wage”, but first lets start with an understanding of the nature of exchanges.

TYPES OF EXCHANGES

The free market is nothing more than individuals making voluntary exchanges. What is produced and consumed in the free market is the result of these individual decisions. All actions by individuals are exchanges, whether it’s an isolated exchange or an exchange involving other people.

An example of an isolated exchange would be you deciding to run on your treadmill. You are exchanging the time on the treadmill for other activities that could have been done with that time and at that time. This exchange reveals your value preference no matter what you might have said about that preference before your choice. Value is revealed in action and not one second before the action takes place.

Examples of exchanges between individuals, or interpersonal exchanges, would be you exchanging your labor for money, you exchanging that money for a treadmill, a steak dinner, a ticket to a baseball game, or having your roof repaired. These voluntary interpersonal exchanges increase the value for both parties involved, or they wouldn’t have taken place. Put another way, each person values what they are receiving in the exchange more than what they are giving up.

Are there involuntary interpersonal exchanges, or exchanges an individual wouldn’t choose unless he was forced or defrauded? Yes: examples of these involuntary interpersonal exchanges would be a robber taking your wallet at gun point or under the threat of physical harm, a slave owner taking the labor of the slave under the threat of violence, or a counterfeiter stealing what you’ve produced in a fraudulent exchange of something for nothing. So, in review there are two types of exchanges, isolated and interpersonal, and there are two types of interpersonal exchanges, voluntary and involuntary. Now lets look at raising the minimum wage and extending unemployment benefits through this lens.

THE REALITY ABOUT LABOR AND WAGES

When Government officials make a law raising the minimum wage, it voids the wage contract voluntarily agreed on by the employer and the employee. Each person in this exchange decided that the terms of employment were beneficial, or their wouldn’t have been an exchange of the labor for money. The Government is a third-party to the exchange between the employer and the employee. It forces an agreement on both parties that one, or both, would have never decided to make under a voluntary situation. It forces an involuntary exchange to be made.When Government officials mandate a higher wage, the employee would obviously like this exchange of his labor for more money, but the employer wouldn’t voluntarily make this exchange. What if Government officials mandated all wages be lowered? The employers would like these new terms, but the employees wouldn’t voluntarily make this exchange. Labor is ruled by the same economic laws as every other good or service supplied in the market, in spite of the Marxist brainwashing about the specialness of labor, that has taken place over the last seventy plus years.

We know from the law of supply and demand that more is demanded at a lower price than a higher price, and more is supplied at a higher price than a lower price. We have this concept of supply and demand bass ackwards when it comes to labor because we think the supplier is the employer and the demander is the employee. In reality the demander of labor is the employer and the supplier of labor is the employee. The employee is demanding money, not a job, and the employer is supplying money, not a job. When a wage is high, workers will supply more labor at this higher price than they would supply if the wage is lower. When the wage is high the employer will demand less labor than he would demand if the wage was lower. This applies to labor in general, but labor is more complex than this.

Labor is not homogeneous it is specific. Labor can be broken down into specific general categories like construction, healthcare, food services etc; and each general category can be broken down into specific jobs with specific skills like welder, plumber, doctor, nurse, cook, server etc. Each specific skills value is determined by the demand for that skill, balanced by the supply of that skill. If there is a high demand for a skill that’s rare, the price for that skill will be high. If there is a low demand for a common skill the wage will be low. The combinations of how much demand there is for a skill, and how rare or common it is, determines how much money that skill can demand, and how much money the employer will supply.

The demand for NFL quarterbacks is limited to the number of teams in the NFL, 32, and there is no real demand for this skill outside of the NFL. There are roughly 64 quarterbacks in the NFL, counting starters and backups, and these 64 are demanded differently. The demand for the skill level of  Tom Brady or Payton Manning is greater than the demand for the skill level of Ryan Mallet or Josh Johnson, and this difference in skill level determines how much money each can demand.

Millions of people have the ability to dig with a shovel, making it a common skill, and if you add to it the fact that we use machines to dig, we get a situation where there is a large supply of potential labor for the low demand job of digging with a shovel. The result is a low wage for that particular skill. The varying  combinations of the supply for specific labor, and the demand for that specific labor is why wages differ. If you factor in the reality that these combinations are constantly changing, because technology and innovation are constantly changing the supply and demand for labor, you have a situation where no one politician or bureaucrat, or group of politicians or bureaucrats, could possibly have enough knowledge to arbitrarily set wages. Although they certainly have enough arrogance and ignorance to try.

GOVERNMENT MANDATES VS. INDIVIDUAL CHOICES

There is one factor these moral crusaders fail to think about when they make these third-party mandates. Individuals may not comply. In an involuntary interpersonal exchange, like robbery at gun point or forced slave labor, the person being robbed or enslaved can simply not comply and accept being beaten or killed, or he may fight back if he thinks he has a chance of prevailing over his aggressors. In the case of the minimum wage being artificially raised above what labor produces, the employer has options besides complying with the law. The employer can 1)use capital in place of labor,  2) get rid of, or not hire low skilled labor and spread the work among his higher skilled employees, or 3) a combination of the two.

CONCLUSION

The reality is, when the price of labor is artificially set above the cost of labor, there will be less labor. Raising the minimum wage increases unemployment. Politicians really don’t care about the reality that their minimum wage mandate will hurt the people they say they are trying to help. Politicians are only interested in how morally righteous they look in the fight against income inequality. Low skilled workers are being sacrificed on the altar of politics, because political reality is the only reality that interests politicians.

Related ArticleMinimum Wage Laws Create Unemployment, by austrianaddict.com.

Related  ArticlePolitics And Minimum Wage, by Walter E. Williams, at jewishworldreview.com.

Pimping The Empire – Progressive and Conservative Style. Charles Hugh Smith Explains

January 9, 2014

English: The Liberty Bell in 2008.

OUR CHOICE LIBERTY OR SERFDOM

These two articles, Pimping The Empire – Progressive Style, and Pimping The Empire – Conservative Style, by Charles Hugh Smith, help us understand the real battle in our country is between those of us who believe in individual freedom to pursue our interests in the free market, vs. Progressives and Conservatives who believe in Government planning which circumvents our individual decisions,  either totally (Progressives)  or partially (Conservatives).

I like to read CHS  because he lets you to see events through a different lens which allows you to think more clearly.

Here are some excerpts from the first article, Pimping The Empire – Progressive Style.

“Let’s begin by stipulating that ideology, any ideology, is an intellectual and emotional shortcut that offers believers ready-made explanations, goals, narratives and enemies without any difficult, time-consuming analysis, study or skeptical inquiry. This is the ultimate appeal of ideology:”

The central illusion of Progressives is that an all-powerful central state will not become a self-serving expansive empire, but will be content to wield its vast powers to protect its favored cartels/monopolies and distribute money skimmed from the citizenry to Progressive constituencies such as public unions, healthcare and education.”

“Progressives worship the central state and cede it essentially unlimited powers because they want that state to be powerful enough to impose their agenda on others and reward their constituencies.

You can’t have it both ways, Progressives: if you support a central state with essentially unlimited power to protect and fund your constituent cartels, you end up with self-liquidating cartel-capitalism, a state bent on protecting itself from the uncertainties/risks of democracy and a global Empire that is teleologically driven to expand its reach and power by any and all means available.”

Here are some excerpts from Pimping The Empire – Conservative Style.

“… the Founding Fathers were so intent on limiting the powers of the Central State. They understood …. by its very nature (i.e. as a consequence of its essentially unlimited powers), the central state is genetically programmed to become an authoritarian state devoted to self-preservation and the extension of its reach and power.”

“The state with unlimited powers will be ontologically predisposed to protecting its powers by cloaking all the important inner workings of the state behind a veil of secrecy, and pursuing and punishing any whistleblowers who reveal the corrupt, self-serving workings of the state.”

“The state with unlimited powers will be ontologically predisposed to create and distribute propaganda to mask its self-serving nature and its perpetual agenda of extending its powers, lest some threat arise that limits those powers.”

Conservatives are masters at projecting a preachy devotion to a limited state, democracy, liberty and free enterprise while their support of the Central State undermines every one of these values. Conservatives are like the preacher who issues stern sermons on righteousness every Sunday while skimming big money from pimping sordid, destructive policies Monday through Saturday.”

Conservatives claim to want to limit the Central State, but their slavish support of Medicare, Social Security, the Pentagon, the National Security State, the Federal Reserve (and thus interest on the national debt), farm subsidies to Big Ag, law enforcement and the War on Drugs Gulag means they support virtually 100% of the Central State’s unlimited powers. Their proposed “cuts” are farcically tiny slices designed for propaganda purposes.”

“You cannot have a state with essentially unlimited power and not end up with cartel-capitalism. So-called Conservatives defend their favored cartel-fiefdoms, yet these cartels are busy bankrupting the nation and destroying the very bedrock of the liberties Conservatives claim to hold dear.”

The Progressives on the left and right are the enemies of the individual. Our founders created our constitution to protect the freedom of the individual from the very Government apparatus that the constitution produced. The individual was sovereign and the state was subordinate to the individual. Not many people understand this important point, as our politicians ignore it as they goose step toward ever increasing power.