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Originally Posted by u-Bob
by Rod Rojas:
I have to say that I share most ? if not all ? the goals of the honest Left, which would be embodied in a constantly rising standard of living for the lowest economic classes. I often find myself watching Democracy Now for its antiwar, free-speech, and anti-death-penalty stances. But the big problem with the honest Left is their absolute and obstinate refusal to learn the most basic economic principles. The "Occupy Wall Street" movement is no different, and it is a real pity that all this energy and frustration can't be put to use toward achieving their goal.
Many demands are being made, but sadly, if these were ever implemented, they would make problems worse by lowering the standard of living for all ? especially for the poor! I will proceed to address some of the demands in plain English, hoping to reach out to them. |
Just a couple of thoughts on some of these points.
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Raise the Minimum Wage to $20
If this were a solution, why not raise the legal minimum to $50 an hour, or maybe to $1,000 an hour? If this were a real solution, why not go to a poor country and legislate a minimum wage of $1,000 an hour and let the wealth flow!
Hong Kong, which enjoys one of the highest standards of living with almost no unemployment, didn't have a minimum-wage law until 2010, and it was passed because of pressure from the Communist government in Beijing. Switzerland has a very similar story of creating amazing wealth with low unemployment for its population without a minimum wage until very recently.
With the minimum wage you are creating an obstacle for hiring people if their labor doesn't produce more than the minimum wage. For example, if a teenager without experience produces only $5 an hour, the employer will not hire him at $20 per hour, because it would represent a loss of $15 per hour. The employer will instead not hire at all, hire a more experienced and productive person, or purchase a labor-saving machine.
Every single time a minimum-wage law is passed, or the minimum-wage rate is raised, unemployment figures rise, and they rise mostly among the most vulnerable in society.
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This isn't always true. There are times in our history when the minimum wage has gone up and unemployment went down like in 1990's or even in the 40's when it was started.
While it may have something to do with the overall bigger picture I think it is just a piece of the puzzle. You can look at times when the economy is doing well and minimum wage isn't even in the conversation for many people because the jobs being created are competitive wage jobs so they pay more than minimum and companies compete for those employees.
There are a lot of places like Switzerland and Hong Kong who have done well without a minimum wage. But there are a lot of third world shithole countries out there without them where people live in abject poverty. Not having a minimum wage would require A. a corporate community that was responsible and treated workers with respect and B.some kind of oversight to make sure there didn't become such a separation of wealth that most jobs became lower wage jobs and those wages were nearly impossible to live on.
It is a big issue.
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Free College Education
What do you mean by "free"? Are the costs going to magically go away?
Perhaps what they mean is that they want somebody else to pay for their education. They protest against the plundering on the part of bankers, which is a correct stance, but instead of advocating for honesty across the board, they just want to plunder themselves.
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I look the model that Qatar is using. They are a rich middle eastern country that has the largest deposit of natural gas in the world. Yet their leadership knows that one day it may run out. He has taken it upon himself to stress education to the people of his country. College is free. Men and women are encouraged to go and K-12th grade is required. They have liberal laws when compared to other middle eastern countries. He realizes that an educated population is a valuable one.
We look at it differently. The leaders of this country must feel that a valuable, good worker, is someone that needs that job badly. The best way to do that is shackle them with massive debt before they even get the job.
If we as a country are going to compete in the future we need to fix our educational system. Free college might not be realistic for us, but $100K for a bachelors degree can't be sustained.
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Ending "free trade" and opening immigration
Do you not see the contradiction in these two demands?
If you want a high standard of living, you need free trade. Import restrictions may seem like common sense, but all they do is create economic distress. This is why economic sanctions are put in place against enemy regimes: these sanctions are meant to hurt them, not benefit them. Why would you want to impose economic sanctions upon yourselves?
Immigration is always positive because it increases the division of labor, which makes society more productive; but it doesn't work if you offer immigrants "free" services, because then people do not come with a job in mind but rather with the promise of free goodies. This type of policy always creates racial tension between the immigrants and the population at large.
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Free trade is a must, but it wouldn't kill us to be a little tougher on those we trade with or on our own companies like Apple who could bring all of their manufacturing jobs home to the US and still make a 100% profit on their items, but they choose to have them made in China for more profit.
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Immediate across-the-board debt forgiveness for all; Outlaw all credit-reporting agencies
These two demands, if passed into law, would be rewarding debtors and punishing savers, rewarding risk takers at the expense of prudent people. Need I say more?
Of course, the corrupted system by which the banks create credit out of thin air, creating bubbles in the economy, has to end.
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We can't just forgive debt. I think working with home owners who are upside down on their mortgages isn't a terrible thing. Also, like you said, we need to put an end to how banks seem to make money out of thin air.
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One trillion dollars in infrastructure spending
If this were the solution, why not do 2 trillion? Why not 100 trillion? Why don't poor countries just spend more?
Economics is pretty much like most other sciences: 2+2=4 here in North America, just as 2+2=4 in Siberia or Argentina. This means that if you compare your own household's economic workings with the national economy you can make very accurate assertions and learn many things. Keeping this in mind, when you and your family are broke, do you spend more? Does spending create more wealth for you as an individual? The answer to those questions is of course a resounding no.
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This could put people to work for the short term while the economy rights itself and it is something that needs to be done. My friend has a daughter in grade school. It is the same grade school he and I went to in the early 80's. Nothing has been upgraded. Hell, most of the place hasn't even been painted and the building is just falling apart. Spending an unlimited amount on these kinds of things is foolish. But putting some people to work doing jobs that need to be done is not a terrible idea.
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Then, ask yourself this: What makes me better off? What measures bring my economic house in order? When you have the answer to those questions, not only will you ? hopefully ? understand that the government cannot possibly help; you will also know what you need to do.
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If we are being honest, most people do exactly what the government does. If suddenly they are taking in less money they make up the difference with credit and just hold on hoping to get a better job or a raise or whatever to help make up the slack. Only when that credit runs out and it is clear there are no other options do most people downsize and change their lives.