Ramblings of a Getz

What is required to form an “informed opinion” on an issue? I don’t mean  the type of opinion we form all the time when we hear some tidbit of information and instantly categorize it. I mean a truly informed and educated decision, where you have achieved some certain level of familiarity with the sides of an issue and then render judgment based on that information. Where do you get your information from? Where do you place yourself on the skeptic-supporter spectrum while you are processing the information? Where is the line drawn between being a skeptic and being a supporter?  Basically, how do you pick sides in an issue?

So in my readings, I came across a section of text in Sowell’s Basic Economics regarding minimum wage and discrimination, basically stating that minimum wage laws enable discrimination by reducing the number of jobs available while increasing the number of people searching for those jobs, particularly among young workers, i.e. teenagers. Please read it and reply with thoughts. Sorry, I know its kinda lengthy.

Minimum wage laws make it illegal to pay less than the government-specified price for labor. By the simplest and most basic economics, a price artificially raised tends to cause more to be supplied and less to be demanded than when prices are left to be determined by supply and demand in a free market. The result is a surplus, whether the price that is set artificially high is that of farm produce or labor. Minimum wage laws are almost always discussed politically in terms of the benefits they confer on workers receiving those wages. Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they lose their jobs or fail to find jobs when they enter the labor force.

…

Although most modern industrial societies have minimum wage laws, not all do. Switzerland and Hong Kong have been among the exceptions—and both have had very low unemployment rates. In 2003, The Economist magazine reported: “Switzerland’s unemployment neared a five-year high of 3.9% in February.” Back in 1991, when Hong Kong was still a British colony, its unemployment rate was below two percent. Although Hong Kong still did not have a minimum wage law at the end of the twentieth century in 1997 new amendments to its labor law under China’s rule mandated many new benefits for workers, to be paid for by their employers. This imposed increase in labor costs was followed, predictably, by a higher unemployment rate that reached 7.3 percent in 2002—not high by European standards but a multiple of what it had been for years. In 2003, Hong Kong’s unemployment rate hit a new high—8.3 percent.

…

Indeed, minimum wage laws were once advocated explicitly because of the likelihood that such laws would reduce or eliminate the competition of particular minorities, whether they were Japanese in Canada during the 1920s or blacks in the United States and South Africa during the same era. Such expressions of overt racial discrimination were both legal and socially accepted in all three countries at this time.

Again, it is necessary to not how price is a factor even in racial discrimination. That is, surplus labor resulting from minimum wage laws makes it cheaper to discriminate against minority workers than it would be in a free market, where there is no chronic excess supply of labor. Passing up qualified minority workers in a free market means having to hire more other workers to take the jobs they were denied, and that in turn usually means either having to raise the pay to attract the additional workers or lowering the job qualifications at the existing pay level—both of which amount to the same thing economically, higher labor costs for getting a given amount of work done.

The history of black workers in the United States illustrates the point. As already noted, from the late nineteenth-century on through the middle of the twentieth century, the labor force participation rate of American blacks was slightly higher than that of American whites. In other words, blacks were just as employable at the wages they received as whites were at their very different wages. The minimum wage law changed that. Before federal minimum wage laws were instituted, in the 1930s, the black unemployment rate was slightly lower than the white unemployment rate in 1930, but then followed the Davis-Bacon act of 1931, the National Industrial Recovery Act of 1933 and the Fair Labor Standards Act of 1938—all of which imposed government-mandated minimum wages. The National Labor Relations Act of 1935, which promoted unionization, also tended to price black workers out of jobs by barring them from union membership.  The National Industrial Recovery Ac raised wage rates in the Southern textile industry by 70 percent in just five months and its impact nationwide was estimated to have cost blacks half a million jobs. While this Act was later declared unconstitutional by the Supreme Court, the Fair Labor Standards Act of 1938 was upheld and became the major force establishing a national minimum wage.  As already noted, the inflation of the 1940s largely nullified the minimum wage law until it was amended in 1950. By 1954, black unemployment rates were double those of whites and have continued to be at that level or higher. Those particularly hit hard by the resulting unemployment have been black teenage males.

Even through 1949—the year before a series of minimum wage escalations began—was a recession year, black male teenage unemployment that year was lower than it was to be at any time during the later boom years of the 1960s. The usual explanations of high unemployment among black tenneagers—inexperience, lack of skills, racism—cannot explain their rising unemployment, since all these things were worse during the earlier period when black unemployment was much lower. Taking the more normal year of 1948 as a basis for comparison, black male teenage unemployment was less than half of what it would be at any time during the decade of the 1960s and less than one-third of what it would be in the 1970s. Moreover, unemployment among 16 and 17-year-old black males was no higher than among white males of the same age in 1948. It was only after a series on minimum wage escalations began that black male teenage unemployment not only skyrocketed itself but became more than double the unemployment rates among white male teenagers. In the early twenty-first century, the unemployment rate for black teenagers exceeded 30 percent.

Just got moved up a few places on my reading list.

http://www.pjtv.com/video/Klavan_on_culture/_Why_Are_Conservatives_So_Mean%3F/1949/;jsessionid=abcybdvbQ23-ofhyJ_Ggs

Obama Wants to Control the Banks, WSJ: http://online.wsj.com/article/SB123879833094588163.html

Government tells banks to take TARP money. Government sets new fuel economy standards. Government fires CEO of private company. Government has bill to regulate salary/pay/compensation of employees of private (non-gov) companies.
 
A definition of fascism (paraphased from wikipedia): A system where the means of production are privately held but controlled by government.

The question that flummoxed the great orator, Guardian: http://www.guardian.co.uk/world/2009/apr/03/g20-barack-obama-nick-robinson-question

Where's that teleprompter when you need it? Oh wait, writing its own blog (http://baracksteleprompter.blogspot.com/)

W.H. team discloses TARP firm ties, Politico: http://www.politico.com/news/stories/0409/20889.html

Transparency is such a pesky thing.

Millions for Axelrod in sale of firm, Politico: http://www.politico.com/news/stories/0409/20885.html

What would the reaction have been if he was aide for Bush?

Barack Obama fails to win NATO troops: http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6032342.ece

Just FYI: NATO is in charge in Afghanistan, not the US. The US just does all the work.

Obama's $163,000 Tax Bomb, WSJ: http://online.wsj.com/article/SB123871911466984927.html

So much for that 95% promise.

http://boortz.com/nealz_nuze/2009/03/the-house-gets-its-bonus-tax-u.html

Yesterday's vote in the House was completely expected. Overwhelmingly, your representatives in Washington voted huge taxes on bonuses for AIG employees. Nancy Pelosi said, "We want our money back and we want our money back now for the taxpayers." Funny .. after recently passing a bill with more than 8,000 earmarks worth over $400 billion, the hollow-eyed hippy from Haight-Ashbury and her flying monkeys are suddenly worried about the taxpayers.

First point. It is not "their" money. The money, whether you like it or not, belongs to the people to whom they were paid. Those bonuses were paid pursuant to a valid contract and are now the rightful and legal property of the payees. Let's us also remember that the amount paid in those bonuses was less than one-tenth of one percent of the bailout money received by AIG. Remember, though ... politicians believe that ever penny you earn actually belongs to the government. In the official language of Washington any money from your paycheck that these political hacks allow you to keep is a "tax expenditure." You earned it ... but if you're allowed to keep it they treat it as a government expenditure. To the Democrat mind, and in the mind of all too many Republicans, all wealth is owned by government. Produced by the people, but owned by government.

Second point. This is absolutely unconstitutional. Con su permisio I'll explain.

So the House succeeded in passing a 90% tax on bonuses given to employees of AIG and any company receiving at least $5 billion in bailout money. But only with those evil rich employees whose family income is above $250,000 a year will have to pay this 90% tax.

You just cannot like what you're seeing here. These politicians are targeting specific individuals out there who have received some money that the politicians, for political purposes, just do not want them to have. So they pass a law allowing the government to seize that money. Can you imagine where this goes from here? How about Ann Coulter? She delights in writing books that just irritate the ever-luvin' puddin' out of Democrats and liberals. Let's say that one of Nancy Pelosi's flying monkeys reports to the Princess that Coulter made $1.5 million from her last book. This money was legally paid to Coulter pursuant to a contract. Sound familiar? But Pelosi feels that Coulter has made this money by promoting divisiveness in the population, so she decides that punishment is in order. She then has her minions pass a bill establishing a 90% tax on the royalties from all books and writings that promote political dissention and defame public servants in the Congress of the United States. Come on now, you tell me the big huge difference between a confiscatory tax on legally earned bonuses and one on legally received book royalties.

This is going nowhere folks. It will never make it through the Senate. If the members of the House had any appreciation at all for the Constitution it wouldn't have gone this far. And why, pray tell, would that be? That would be because of one pesky little clause found in our (once) supreme law of the land.

Article 1, Section 9, Clause 5 - United States Constitution

"No bill of Attainder or ex post facto law shall be passed."

Do you know what that means? The key is the word "attainder." Let's go to Websters: It's a 15th century word meaning "extinction of the civil rights and capacities of a person upon sentence of death or outlawry usually after a conviction of treason." A definition, this one from the Catholic Encyclopedia, describes "bill of attainder" thusly: "A bill of attainder may be defined to be an Act of Parliament for putting a man to death or for otherwise punishing him without trial in the usual form. Thus by a legislative act a man is put in the same position as if he had been convicted after a regular trial."

Well, in this case the Congress isn't trying to put anyone to death ... they're just trying to steal some money. They are trying to deprive some individuals of property that is rightfully and lawfully theirs without accusing them of a crime and without the benefit of any trial ... except, that is, for this trial that has been taking place in the media for the last week. Well, there's that pesky little Constitution again. A man cannot be deprived of life, liberty or property without due process, and in our country due process means a trial before a jury of one's peers. Barney Frank et al are trying to take these people's money through legislative action without a trial. I would truly hope there isn't a federal judge in this country that wouldn't smack this idiocy down at the earliest opportunity.

This isn't about whether or not those people deserved those bonuses. Perhaps not. But the bonuses were paid pursuant to a legally enforceable contract. The property is theirs. Now we have politicians who are trying to take it away just because they're unhappy and embarrassed because they didn't take care of this little problem before the bailout money was paid.

On to the Senate. Let's hope someone over there has read the Constitution.

Lots of them for you today cause its been a while.

http://www.washingtontimes.com/news/2009/mar/15/maxing-out-a-crisis-card/
Obama campaign speech based of actions taken since inaugurated.

http://www.mcclatchydc.com/miscellaneous/embargo/story/63954.html

http://www.breitbart.com/article.php?id=D96TBEN00
How far are we from giving non-US citizens captured on battlefields on the other side of the world the same Constitutional rights and protections that we give the soldiers, sailors, marines, and airmen whom they seek to destroy?

http://www.breitbart.com/print.php?id=D96UJ2M00&show_article=1&catnum=3
Wait a sec, didn’t McCain get hell over a very similar statement a while back? Now Obama’s aides are saying it after the stock market has dropped ~20% since election day? WTF? Apparently the economy is both strong and weak, depending on which day it is.

http://www.latimes.com/news/nationworld/nation/la-na-specter15-2009mar15,0,1294787.story?track=rss
FYI: One provision of this bill is unilateral arbitration of contracts if both sides can not agree, a third party (government) comes in and mandates the contract that both sides have to obey. Another FYI: Facisim – a system where the means of production are privately owned but run by government. That’s what this bill is.

http://www.nydailynews.com/opinions/2009/03/15/2009-03-15_more_than_a_bad_day_worries_grow_that_ba.html?page=0
No really? I had no idea….

http://townhall.com/columnists/DickMorrisandEileenMcGann/2009/03/14/does_obama_know_what_he_is_doing
Ok...delete that sarcasm.

http://www.edmontonjournal.com/news/Global+warming+longer+happening/1391903/story.html Behold the power of selective use of statistics.

http://news.bbc.co.uk/2/hi/americas/7944564.stm
What’s scarier is that we are on our way towards this.

http://www.breitbart.com/article.php?id=CNG.60c16244ea000ff85d74f58d7f9d2744.5b1&show_article=1&catnum=0
Apparently you can have moral debts. News to me.

http://www.cnsnews.com/public/content/article.aspx?RsrcID=45015
Its about freakin time.

http://online.wsj.com/article/SB123698976776126461.html?mod=rss_opinion_main
Incredibly good. Incredibly scary. Incredible prophetic. Buy a copy and read it. Now.

http://www.breitbart.com/article.php?id=D96V8OM00&show_article=1
Speaking of Atlas Shrugged: “President Barack Obama declared Monday that insurance giant American International Group is in financial straits because of "recklessness and greed" and said he intends to stop it from paying out millions in executive bonuses.” Stupid greedy people. They should just give up and spread their wealth to those who need it. After all, isn’t that the socially conscious thing to do? Besides, profit seeking is an inherently evil thing to do. Besides I want my fair share.

http://www.nydailynews.com/ny_local/2009/03/15/2009-03-15_borough_presidents_spend_our_tax_bucks_b.html
Community leaders at work.

http://www.spiegel.de/international/zeitgeist/0,1518,612684,00.html
I don’t know what to say.

http://www.cbsnews.com/stories/2009/03/16/business/main4868077.shtml
So when will the government refund my money it spent on these bailouts?

First, let me say that owing a home is not a right. Period.

Second, check this out: http://sweetness-light.com/archive/acorn-people-have-a-right-to-housing

Third, let me say again that owing a home is not a right. I don't want to have my money taken to pay other people's bills on things they can't afford. If you have fallen behind on your mortgage, bummer. You should have planned better. You have no one to blame but your self. Stop trying to blame others for you failures.

After all, you are in the situation you are in because of the sum of all the decisions you have made up to this point.

Excerpt from Henry Haziltt's Economics in One Lesson (http://jim.com/econ/chap04p1.html)

There is no more persistent and influential faith in the world today than the faith in government spending. Everywhere government spending is presented as a panacea for all our economic ills. Is private industry partially stagnant? We can fix it all by government spending. Is there unemployment? That is obviously due to “insufficient private purchasing power.” The remedy is just as obvious. All that is necessary is for the government to spend enough to make up the “deficiency”.

An enormous literature is based on this fallacy, and, as so often happens with doctrines of this sort, it has become part of an intricate network of fallacies that mutually support each other. We cannot explore that whole network at this point; we shall return to other branches of it later. But we can examine here the mother fallacy that has given birth to this progeny, the main stem of the network.

Everything we get, outside of the free gifts of nature, must in some way be paid for. The world is full of so-called economists who in turn are full of schemes for getting something for nothing. They tell us that the government can spend and spend without taxing at all; that is can continue to pile up debt without ever paying it off because “we owe it to ourselves.” We shall return to such extraordinary doctrines at a later point. Here I am afraid that we shall have to be dogmatic, and point out that such pleasant dreams in the past have always been shattered by national insolvency or a runaway inflation. Here we shall have to say simply that all government expenditures must eventually be paid out of the proceeds of taxation; that inflation itself is merely a form, and a particularly vicious form, of taxation.

Having put aside for later consideration the network of fallacies which rest on chronic government borrowing and inflation, we shall take it for granted throughout the present chapter that either immediately or ultimately every dollar of government spending must be raised through a dollar of taxation. Once we look at the matter in this way, the supposed miracles of government spending will appear in another light.

A certain amount of public spending is necessary to perform essential government functions. A certain amount of public works — of streets and roads and bridges and tunnels, of armories and navy yards, of buildings to house legislatures, police and fire departments—is necessary to supply essential public services. With such public works, necessary for their own sake, and defended on that ground alone, I am not here concerned. I am here concerned with public works considered as a means of “providing employment” or of adding wealth to the community that it would not otherwise have had.

A bridge is built. Ifit is built to meet an insistent public demand, if it solves a traffic problem or a transportation problem otherwise insoluble, if, in short, it is even more necessary to the taxpayers collectively than the things for which they would have individually spent their money had it had not been taxed away from them, there can be no objection. But a bridge built primarily “to provide employment” is a different kind of bridge. When providing employment becomes the end, need becomes a subordinate consideration. “Projects” have to be invented. Instead of thinking only of where bridges must be built the government spenders begin to ask themselves where bridges can be built. Can they think of plausible reasons why an additional bridge should connect Easton and Weston? It soon becomes absolutely essential. Those who doubt the necessity are dismissed as obstructionists and reactionaries.

Two arguments are put forward for the bridge, one of which is mainly heard before it is built, the other of which is mainly heard after it has been completed. The first argument is that it will provide employment. It will provide, say, 500 jobs for a year. The implication is that these are jobs that would not otherwise have come into existence.

This is what is immediately seen. But if we have trained ourselves to look beyond immediate to secondary consequences, and beyond those who are directly benefited by a government project to others who are indirectly affected, a different picture presents itself. It is true that a particular group of bridgeworkers may receive more employment than otherwise. But the bridge has to be paid for out of taxes. For every dollar that is spent on the bridge a dollar will be taken away from taxpayers. If the bridge costs $10 million the taxpayers will lose $10 million. They will have that much taken away from them which they would otherwise have spent on the things they needed most.

Therefore, for every public job created by the bridge project a private job has been destroyed somewhere else. We can see the men employed on the bridge. We can watch them at work. The employment argument of the government spenders becomes vivid, and probably for most people convincing. But there are other things that we do not see, because, alas, they have never been permitted to come into existence. They are the jobs destroyed by the $10 million taken from the taxpayers. All that has happened, at best, is that there has been a diversion of jobs because of the project. More bridge builders; fewer automobile workers, television technicians, clothing workers, farmers.

But then we come to the second argument. The bridge exists. It is, let us suppose, a beautiful and not an ugly bridge. It has come into being through the magic of government spending. Where would it have been if the obstructionists and the reactionaries had had their way? There would have been no bridge. The country would have been just that much poorer. Here again the government spenders have the better of the argument with all those who cannot see beyond the immediate range of their physical eyes. They can see the bridge. But if they have taught themselves to look for indirect as well as direct consequences they can once more see in the eye of imagination the possibilities that have never been allowed to come into existence. They can see the unbuilt homes, the unmade cars and washing machines, the unmade dresses and coats, perhaps the ungrown and unsold foodstuffs. To see these uncreated things requires a kind of imagination that not many people have. We can think of these nonexistent objects once, perhaps, but we cannot keep them before our minds as we can the bridge that we pass every working day. What has happened is merely that one thing has been created instead of others.

I'm going to give you two ways to read this one. First is the orgininal written by the author. Second is my version, changing only a few words, in brackets. Read, reflect, and respond to both versions.

From Thomas Sowell's book Basic Economics, found on pages 13-14:

Misconceptions of prices are common. Many people see prices as simply obstacles to getting the things they want. Those who would like to live in a beach-front home [or have health care], for example, may abandon such plans when they discover how expensive beach-front property [or health care] is. On the contrary, the inherent reality is that there are not nearly enough beach-front homes [or medical professionals] to go around and prices simply convey that underlying reality. When many people bid for a relatively few homes, those comes become very expensive because of supply and demand. But it is not the prices that cause the scarcity, which would exist under whatever other kind of economic system or social arrangements might be used instead of prices. There would be the same scarcity under feudalism or socialism or in a tribal society.

If the government comes up with a "plan" for "universal access" to beach-front homes [or health care] and put "caps" on the prices that could be charged for such property [or procedures], that would not change the underlying reality of the high ratio of people to beach-front land. With a given population and a given amount of beach-front property [or medical professionals], rationing without prices would have to take place by bureaucratic fiat, political favoritism or random chance--but the rationing would still have to take place. Even if the government were to decree that beach-front homes [or health care] were a "basic right" of all members of society, that would still not change the underlying scarcity in the slightest.

Read. Reflect. Respond.

From Mark Steyn's "It's the Demography, Stupid" (http://tinyurl.com/8mkmr [WSJ]):

There are many trouble spots around the world, but as a general rule, it's easy to make an educated guess at one of the participants: Muslims vs. Jews in "Palestine," Muslims vs. Hindus in Kashmir, Muslims vs. Christians in Africa, Muslims vs. Buddhists in Thailand, Muslims vs. Russians in the Caucasus, Muslims vs. backpacking tourists in Bali. Like the environmentalists, these guys think globally but act locally.

Yet while Islamism is the enemy, it's not what this thing's about. Radical Islam is an opportunistic infection, like AIDS: It's not the HIV that kills you, it's the pneumonia you get when your body's too weak to fight it off. When the jihadists engage with the U.S. military, they lose--as they did in Afghanistan and Iraq. If this were like World War I with those fellows in one trench and us in ours facing them over some boggy piece of terrain, it would be over very quickly. Which the smarter Islamists have figured out. They know they can never win on the battlefield, but they figure there's an excellent chance they can drag things out until Western civilization collapses in on itself and Islam inherits by default.