Jobarama: Obama's "Investment"
With all of the talk of how charismatic Barack Obama is, or of his oratory ability--and especially given his recent presidential victory--it is time to engage in a deeper economic critique of Obama's actual policies, writes Chris Brown. Once we see the true effects of his policies and the incentives they create, we will see that his leadership skills and abilities make him more of a threat to freedom than if he were less articulate. FULL ARTICLE
Comments (51)
Arend
1 billion dollars!? Wow, when reflecting on the Dutch Case ( http://uk.babelfish.yahoo.com/translate_url?doit=done&tt=url&intl=1&fr=bf-home&trurl=http%3A%2F%2Fwww.elsevier.nl%2Fweb%2F10212642%2FNieuws%2FNederland%2FEn-werkloze-aan-baan-helpen-kost-half-miljoen-euro.htm&lp=nl_en&btnTrUrl=Translate - hope the links works, otherwise put this link in bablefish, source is Dutch: http://www.elsevier.nl/web/10212642/Nieuws/Nederland/En-werkloze-aan-baan-helpen-kost-half-miljoen-euro.htm), 1 billion dollars would provide soms 1600 persons a job. That's government efficiency!
Published: November 20, 2008 8:37 AM
CAMORRISTA
CHRIS BROWN YOUR FULL OF HORSE FEATHERS.
YOU LIKE TO HEAR YOURSELF TALK OR IN PRINT.
Published: November 20, 2008 9:24 AM
redshirt
Not defending here... just not following the argument...
Are we claiming that people are coerced into providing tax money to assist marginalized individuals? I think one needs to be careful in this analysis. There are yet marginal populations that have no shot at Liberty in a free market. I think most people see tax money for job creation as useful as it potentially creates a better life for the individuals in question and perhaps has positive feedback to the rest if society (less crime, more viable employees, etc).
Your argument that a small population of marginal workers getting government work assistance will somehow spread into a burden on the market seems a distortion.
I think it is difficult to argue a priori against job programs. If a job program restores individuals to the free market job market, the process would strengthen the free market. To argue against this, it would have to be demonstrated that the free market, which doesn't want the marginal workers it seems, would otherwise benefit by pocketing that $1 bil.
Isn't productivity the key to the market running well? If these people aren't otherwise available to work is there not a loss of productivity?
There seems to be times when there just aren't enough people available which would mean lost opportunity for a business.
-r
Published: November 20, 2008 9:25 AM
s. ridgway
Who wants a job? That's work! One wants gainful and useful production of value and if one gets money for such that's great. Moving rocks from one pile to another and back that's punishment.
Published: November 20, 2008 9:31 AM
StatusQuoJoe
I have to agree generally with the author in this article but I would disagree on one seemingly small point in that these jobs will not be created by taxes, since government budget obligations are mostly spoken for at this moment. These jobs will be created by inflation not direct taxes, i.e. an increase by fiat. Print that money baby! How long will this deception rage behind the awareness of the American public, how long will we be robbed of our present and future net worth?
Government getting bigger bad. Government getting smaller good.
Maybe Americans can understand smaller sentences.
Published: November 20, 2008 10:02 AM
Joe Stoutenburg
redshirt:
Why do jobs programs have to be tax funded? If someone is interested in helping the people who have lack marketable job skills, instead of lobbying for government "investment", why not seek for real investment?
Surely, if an entrepreneur is able to help this underserved sector to become productive, his customers would be able to reward him out of their new production. Profit and loss works.
Published: November 20, 2008 10:12 AM
Larry N. Martin
Cammorista, you obviously don't care for Chris Brown, but maybe you could comment on the points the article raised? You know, make an "intelligent and civil comment", like it suggests.
Published: November 20, 2008 10:45 AM
Nick
Redshirt -
Are we claiming that people are coerced into providing tax money to assist marginalized individuals?
Yes - That's what happens when government (coercion...you know...like at the point of a gun...) takes money from one person who earned it and gives it to another who didn't. Whether or not the person getting it is "marginalized" is beside the point.
There are yet marginal populations that have no shot at Liberty in a free market.
You make an assertion, but offer no evidence. How is liberty denied to anyone in a truly free market?
I think most people see tax money for job creation as useful as it potentially creates a better life for the individuals in question and perhaps has positive feedback to the rest if society (less crime, more viable employees, etc).
So doing something criminal - stealing - reduces crime? It doesn't reduce anything, it expands the victim base. Rather than mug five people a day, the thief can now mug thousands and never leave the couch in front of the teevee. Not only that, he can do it without guilt because the same society that condemed him for his individual crimes condones the same actions when performed by the mob. You can't improve society by performing immoral acts.
Your argument that a small population of marginal workers getting government work assistance will somehow spread into a burden on the market seems a distortion.
If I have ten dollars, but I know that I have to give you three of them, then I really only have seven to spend for myself right? So rather than buy ten dollars worth of goods or services, now I can only buy seven so some merchant out there is going to be three dollars poorer because of it. That means he has three dollars less to spend... and so on, and so on...
I think it is difficult to argue a priori against job programs.
It isn't.
If a job program restores individuals to the free market job market, the process would strengthen the free market.
"Restoring" assumes they were denied access to this "free market job market" and you're further assuming that restoring them to that "free market job market" would indeed strengthen it. If they left on their own or were kicked to the curb because they're lazy and worthless, then their return would do the opposite of strengthing the market unless you could somehow make them *not* lazy and worthless.
To argue against this, it would have to be demonstrated that the free market, which doesn't want the marginal workers it seems, would otherwise benefit by pocketing that $1 bil.
If the "marginal workers" can't or won't do the work to the satisfaction of the free market, then indeed the members of the market would be better off spending that money elsewhere. They could widen their job search for more qualified candidates. They could use it to find more productive ways to get their product or service to market with fewer employees. Or they could use it to pack up their business and move where the workers are more willing.
Isn't productivity the key to the market running well? If these people aren't otherwise available to work is there not a loss of productivity?
Productivity is key. However, all people are not qualified to be productive in all jobs. It's the responsibility of the market - not government - to determine who goes where and when. A business that does well with this and chooses wisely succeeds. The one that does poorly fails. That's the market.
Stealing money from people is never the answer regardless of the question.
Published: November 20, 2008 11:11 AM
Willabus
Nick -
I was going to respond to redshirt but after your post I no longer feel the need to.
Well done.
Published: November 20, 2008 11:18 AM
peter helbich
this is vienna austria. where it all began.
mozart, menger, mises, hayek etc
send this theorem to all your friends and let it loos in the internet.
it proofs mathematically the austrian school of economics
regards peter helbich
Published: November 20, 2008 11:24 AM
prettyskin
Poor Obama, that is he is still dreaming about a comforting life for everyone. Politicians will not lay off of the people and stop selling redundant, failed initiatives.
"Career pathway programs" are disparate colleges and their likes (community colleges) trying to vamp up their enrollments with a high price. Sure, show me the way but a little short of the skills needed for most of these programs (technology, engineering, applied sciences, etc.). Once these programs are completed who needs the graduates short skills? The skills taught are accelerated and insufficient for worthy employment. Last I checked accelerated programs are not for marginals. A 1 billion dollar spending tragedy to be played out.
The voters keep electing children from dysfunctional families(Clinton & Obama) and a drunker (G.W.Bush). Now we have, most likely, another eight years of no end to madness. Too bad there was not an option on the ballot for "Neither".
Published: November 20, 2008 11:57 AM
William Rader
prettyskin:
Change on the presidential-vice presidential level will most likely not be initiated through the ballot (unless, by some miraculous turn of events, the views of a third-party candidate like Ron Paul were suddenly to make their way into the collective consciousness). It is only through a revolution in thought that any true change in the national psyche will take place. Unfortunately--and I hope many people on this site will at least agree with me in part --the conditions in this country, both economically and socially, will have to significantly worsen for the citizenry to welcome a large revision in thinking.
P.S.: I'm not sure that labeling the Clintons as dysfunctional and President Bush as a drunkard adds anything to the discussion. Such labels fall outside the realm of economics.
Published: November 20, 2008 12:33 PM
William Rader
Sorry, all. Change the first sentence in my previous post to read: Change on the presidential-vice presidential level will most likely not be initiated through the ballot in the short term.
Published: November 20, 2008 12:58 PM
Gil Catt
William, I think we are at the initial stages of this "revolution in thought" of which you speak. It is creeping into the psyche of many Americans through the many blogs that are printed through the internet. Myself, I have never heard of the Von Mises site until 4 months ago, and now have voted for someone other than a Repub or Dem for the first time. I have to believe there are more like me, and hopefull it snowballs. First post so go easy on me.
Published: November 20, 2008 1:39 PM
Ejerod
I find your articles interesting indeed and more interesting to me is this argument that all economists and politicians love to have about "free market economies" vs. socialism ( or more accurately 'democratic socialism'). The truth of the matter is that the US hasn't had truly free markets since the earliest part of the 20th century. The definition of free markets would be more closely related to the doctrine of "lassez fairre" But of course no modern society can function properly by simply allowing the free markets to reign. To do so is to invite total chaos.
Case and point. When free markets did reign in the west we had children as young as 6 years old working in factories that were often unsafe and unsanitary. There were no child labor laws until there was an outcry by the parents of those children and others who saw how the children were being exploited. Enter the government to pass legislation to protect children. This government intervention increased costs in every sector where children once worked. No adult was going to work for pennies an hour even if there were no union to represent him so manufacturing and other areas of the economy had to adjust to paying higher wages i.e. increased costs of production!
Of course my argument and the example used is an oversimplification of things but my point is more than valid. The point being that wihout government intervention there is abuse and chaos in society. How many people died from contaminated foods prior to the government stepping in and creating an FDA? What were the human costs to society from food being shipped without any oversight, no quality and safety inspectors? What were the costs to healthcare as more and more of the populations got sick from unsanitary conditions? This added costs and regulations to industries but the benefit of those costs far outweigh the costs themselves.
Even with our government organizations we still have children dying from toxic toys from China and our pets dying from poisonous pet foods from the same country. China is more an example of a "free market society" that most western nations today. China is also an example of why most industrialized countries have decided that "smart" government is a good thing.
The recent worldwide meltdown of the financial and real estate markets is proof that unbridled capitalism does not work. Although in theory pure capitalism should reward the hard working and clever, and punish the lazy and inefficient, more often than not it creates societies of "haves" versus "have nots." Again this is a wonderful idea in text books but in civil societies this creates political instability. It is only a matter of time before the "have nots" will rise up against the "have" in some sort of military coup. When a society has political instability there is nothing but chaos.
The problem I have always had with economic theories is this. More often than not they do not deal with the more base nature of humanity. Greed!!! Again we can look to our current financial crisis. While there is ample blame to go around about if we had too little regulation and oversight, the reality is the problem was greed. Greed from the laborer who only made 30k anually but still decided to buy a 500k home at 1% interest so he could sell in two years and make a quick profit, to the greed of the realtor who showed the buyer the most expnsive home they could afford so that the realtor could make a larger commission, to the greed of the mortgage broker who put together the mortgage for that laborer, to the greed of Wall Street bankers who cut the mortgage up into hundreds of pieces and repackaged it as a CDO.
Modern and classical economics never really deal with real world models or real people and this explains why "no one saw this coming!!!" Even Alan Greenspan who was praised during the 90's for his vision and policy admitted that "he was wrong and all his training did not prepare him for what happened." Case and point. We all know what the CPI is. Why is it that we measure inflation by this index when we all know that the index does not include food prices and energy costs? Two primary costs that affect absolutely everything in human society? Its almost as if the "fathers of economics" wanted to play some cruel joke on all future genereations. It is absolute lunacy that masquarades as academia!!!!! It is like the story of the Emporers New Clothes. Even children can understand that we are butt naked but pretending that we are royally dressed!!!
The true genius of America has been this. Its ability to change when the nation senses that something is terribly wrong. In America the real reason we can change course economically speaking is this. A poor person can aspire to be middle class. The middle class can aspire to be rich. The rich can aspire to be wealthy. The wealthy can aspire to change the world!! ( Wealth isn't only measured in dollars, it is also measured in ingenuity and creativity.)
Obama recognizes this. The other thing I would like to point out is this. I'm amazed at how focused the argument is on Obama "investing" 1 billion dollars for jobs. For the sake of arguement lets say that you are right and it is a futile waste of money. Our national debt is currently 11.3 trillion dollars. We are currently sending well over 600 billion annually to OPEC nations. Our defense budget is over 500 billion annually. We are spending 12 billion a month in Iraq and we continued spending it even after we found out we attacked the wrong enemy. So in the grand scheme of things a billion dollars is literally a drop in the bucket. So to focus on something such as this is more than trivial, its plain stupid.
The entire world economy is built on trust and yes "hope." The world markets are acting irrationally because of fear and a loss of "optimism." People are afraid. Any gesture to show that a government is working to restore calm and hope to the marketplace is a good thing. If that is the case, then 1 billion dollars to make people come out of their caves and start interacting economically speaking is not just an investment. Its a bargain.
Published: November 20, 2008 1:54 PM
Dr Duncan Druhl
It is merely a matter of definition that government has been seeking to 'spin' for decades. In order to make an investment, one must have some valuable commodity earned as a result of an exchange of services or goods. I'm waiting for someone to provide a list of the goods produced for sale by government, other than chaos, that is.
Published: November 20, 2008 2:06 PM
Natalie
Ejerod, I suggest you repost your message in the forums to get more responses.
Published: November 20, 2008 2:37 PM
Goldwater
Ejerod, you made my day. You actually said China was a "free market society". I would tell you to go educate yourself with this wonderful site we have here but comments like this just make me laugh. But them scare the heck out of me that people can be that ignorant.
Published: November 20, 2008 3:02 PM
redshirt
Nick,
You argued none of my points. You simply asserted otherwise.
Marginalized workers are marginalized workers. They are not working because they don't fit into the free market enterprise by definition. They either need simple work or retraining.
You seem to finally come around to the point here...
"Productivity is key. However, all people are not qualified to be productive in all jobs."
We are talking about the people who are already "failed" out of the market. Are they to mill around until a good business sees fit to reconsider them? So they are not working; who is feeding them? Should the government feed them and wait around for some really good charitable business to pop up and train them?
Please review and respond.
Ejerod,
I think a lot folks here are generally anti-government without fully looking at how governments arise naturally. Yeah, 1 bill is a drop in the bucket and I agree arguments over that for jobs are misguided. That said, most anything the government does, a free market does better and that is the point made here most often. The economic problems we are seeing are almost universally accepted to be exacerbated by socialistic government intervention in interest rates (smaller market corrections would have already occurred in a free market system). The coming likely depression will be due to fiat currency collapse (too much currency, not enough productivity).
I tend to argue against free market everything since such a theory seems to dismiss the notion that government arises from free market forces to begin with; it seems counter-intuitive to argue against government. Bad gov, yes; Constitutional gov no.
-r
Published: November 20, 2008 3:04 PM
William Rader
Following up on what Ejerod said about China being a free-market economy. These are just a few of the ways in which the Chinese government DIRECTLY INTERVENED in steelmaking to make the Chinese steel industry the largest in the world: cash grants, land grants, debt forgiveness, preferential loans, debt-load reduction, tax incentives, targeted infrastructure development, manipulation of raw materials prices, and manipulation of the Chinese RMB (Yuan). Far from a free market.
Published: November 20, 2008 3:42 PM
StatusQuoJoe
Wait was this an article in opposition to "Lazy Fare" economics?
Published: November 20, 2008 3:56 PM
IMHO
Regarding government funded training programs
Back in the late 70's, I had the misfortune of accepting a teaching position in a private business school only to find out that just one of the 25 students in the school were private pay. The rest were there as the result of a government funded program. Tuition was $3,000/yr.
Not once did a government official sit in on one of my classes or ask to see my students' work.
A very large percentage of my students were functionally illiterate, so I unable to teach them. I explained to the school administrator that almost all would have to fail their first semester--that they were nowhere near the minimum requirements.
The administrator told me to pass all of them, no matter what, because the government would pull the students out of the program, and he needed the money to pay the bills.
I submitted my resignation.
You might be tempted to say that it was just an isolated incident; but 22 years later I received a call from a training facility (whose url ends with .gov) that was being funded with government money, and they asked me if I could help out one night a week.
Curiosity got the best of me. It was the same dog and pony show. They were getting ready for the start of the next semester. Someone went through the prior semester's grade books and discovered that the majority of the students hadn't completed half their work from the previous semester, yet those students were going to be permitted to continue with the program.
Deva vu all over again.
The next morning I called the administrator of that program and quit.
So, contrary to what some of the people who are posting here might think, these training programs are a waste of taxpayer dollars.
Published: November 20, 2008 4:05 PM
Chris
StatusQuoJoe,
Regarding jobs being created by (money) inflation and not directly by taxes, you're right, it could come from other sources. In a previous draft I had something similar to, "This money can come from one of three sources. . . . Assuming it comes from taxation . . . " I meant to make that point.
Thanks!
Chris
Published: November 20, 2008 4:08 PM
joebhed
central government planner here
Not on behalf of Obama, of course, as I did not even vote for him.
It is well to join the situation of our present world economy to the discussions of monetary policy, economic freedom and especially the role of government.
Thanks for drawing this connection to the economic policies of a certain party, who happens to be the president-elect of the United States of America, as opposed to some empty definition of the government via the pronouncements of its general failures.
The irony if not the humor of invoking the “savings” necessary to make any new investment is that it essentially denies the reality that all money that is created in this country, the USA, is created as debt.
So, Obama is just calling the new debt that must be created as an investment in the future of America.
There is no other way to make an investment in anything new without creating more debt.
That’s how the money system works.
All of the new money that is being created is being created as a debt repayable with interest.
Since Obama is going to be president of the USA, and given that Obama is not going to do anything of importance with the monetary system in general, whatever action is taken is going to have to create new debt to the taxpaying people of this country.
So that’s like $1 Billion, was it?
It’s the TRILLIONS that we need to worry about.
Also being created out of new debt, repayable, with considerable interest by the taxpayers of America, only its TRILLIONS of new debt.
So I’m not too worried about that one BILLION.
Given that the government has the power to create its own money, it all seems such a shame to the American taxpayers.
Published: November 20, 2008 4:10 PM
Brent Railey
Great Article!
I've been speculating on this idea for a while, and this article has pretty much sold me on it:
Whether through taxation or inflation, every "public sector" job is a vahicle of wealth redistribution--even if the employee is a hard worker, like many teachers.
Published: November 20, 2008 4:48 PM
Brent Railey
redshirt
The "marginal populations" are the ones who cannot obtain jobs because their level of production is not worth the price set by minimum wage controls. If it were a truly free market, with employers having the ability to set wages for what they are worth, these "marginalized populations" would be able to find jobs. It is government enforced wage controls that created this so-called population--not the free market.
In fact, wage controls are the barrier between those who have jobs and those on public welfare--between those who provide for themselves and those who are provided for at the expense of others.
Published: November 20, 2008 5:01 PM
Francisco Torres
Redshirt,
Are we claiming that people are coerced into providing tax money to assist marginalized individuals?
People are being coerced into providing tax money. Period. Intentions are irrelevant. Your question is loaded, by the way.
I think one needs to be careful in this analysis. There are yet marginal populations that have no shot at Liberty in a free market.
Why would they not have a shot at Liberty in a free market? It is a strange thing to argue, considering people are born as free individuals.
I think most people see tax money for job creation as useful as it potentially creates a better life for the individuals in question and perhaps has positive feedback to the rest if society (less crime, more viable employees, etc).
Taking money from one set of individuals by coercive measures and give it to others just so these feel better is not going to give a positive feedback for the rest of society. If all, it actually creates a culture of entitlement that can make crime and sloth even worse.
Marginalized workers are marginalized workers. They are not working because they don't fit into the free market enterprise by definition. They either need simple work or retraining.
For instance? Most "marginalized" workers are either not allowed to work by law ("child" labor laws that punish able bodied individuals that are simply not yet 18 years old) or cannot compete because of minimum wage laws. It is mostly government intervention that creates these "marginalized" workers and not the free market.
From an ethical standpoint, there is no justification for taking people's money just so others can enjoy a "job". That is not different from stealing money directly.
We are talking about the people who are already "failed" out of the market. Are they to mill around until a good business sees fit to reconsider them?
If markets were free, I could be that good business. I could make a good profit by hiring "marginalized" workers, enjoying the cheaper labor. And what's logical for me should be logical for other business people. Since this is not currently happening, then the explanation is that something is hampering this process, i.e. we do not really have a free market.
So they are not working; who is feeding them? Should the government feed them and wait around for some really good charitable business to pop up and train them?
Why "should" the government do anything? Why would the "marginalized" need training for? The question is loaded.
Published: November 20, 2008 5:38 PM
Brent R
At that point in time, we were in the midst of the industrial revolution and the emergence of new and immature industries. Unsafe and harsh working conditions were commonplace, as they were in industries outside of factories. Children were not the only ones working in harsh conditions, and the employers were not forcing them to work—their parents were. Also, at that point in time, pennies actually bought something and contributed to purchasing power.
Where did the money for these higher wages come from?
Few questions for you: Would people continue to do business with companies and practices that harm them? In the examples cited above, have we not had significant food contamination scares here in the US just recently? Are not the hospitals with the most unsanitary conditions most often government run? Shouldn’t SOX have prevented the abuse by these financial institutions? Are not governments prone to bring about abuse and chaos? (Iraq war, anyone?) My point is that governments cannot prevent abuse by enacting laws. Laws should only define abuse—and clearly do so—and enact consequences for such abuse. In fact, fuzzy preventative laws can make abuse easier by opening up the opportunity for moral hazard.
Is this a mandate for more government? Didn’t we have mad-cow disease recently? Wasn’t the tomato scare from domestic agriculture (which is heavily subsidized, by the way)? Also, the socialist can’t have it both ways with China, they can’t praise it for its progressive policies and then criticize its “free” markets.
The meltdowns of the financial and real estate markets were not the result of free market, but rather came about through the government mandated moral hazards of high inflation through fractional reserve banking and fixed interest rates. What creates the “haves” and “have nots” is government welfare and minimum wage—and it is this socialist ideal that creates the political instability, my friend.
However, the socialist utopia assumes that people are interested to serve the state at the expense of self, which you just demonstrated will not happen. Austrian economics expressed in the free market is the ONLY system that will work with human self-bias, this greed you speak of. In a truly free market, people must produce in order to gain. It takes that greed and drive it to produce a good or service that is desired by the market. People can cheat the system, but the markets are much swifter to correct cheaters than governments, and government interference tends to produce conditions in which cheating is rewarded—the moral hazard in which one can gain at the expense of the other without consequence.
The Austrian economists did see it coming, and they have been sounding alarms for years about this crisis. In fact, the Austrians do not explain inflation as “price increases.” They explain it as the expansion of the supply money, which results in price increases. They measure inflation by counting the dollars in circulation. You need to read this blog more often, and you might come to see that what we say you might just come to agree with.
Published: November 20, 2008 5:45 PM
William Rader
"The recent worldwide meltdown of the financial and real estate markets is proof that unbridled capitalism does not work."
I would encourage anyone who holds this view to read Michaeal Rozeff's essay "Moral Hazard and Blunders" at http://www.lewrockwell.com/rozeff/rozeff240.html.
Published: November 20, 2008 6:09 PM
joebhed
cgph
"You need to read this blog more often, and you might come to see that what we say you might just come to agree with."
Not pointed at me, I know, but I do agree that there are aspects of things that we might unknowingly agree with.
And then there are things that we know we don't agree with.
And then there are the unknown unknowns, remaining to be scribed.
Which is why I try to focus on the knowns and the agreeds.
Most posters agree that the mechanism by which that "inflation" is created is in the increase in the quantity or supply of federal reserve dollars, regardless of who it is that creates those dollars.
And there is agreement on the need to abolish the fractional reserve banking system and replace with bankers lending real money rather than creating money. I think there is agreement on that.
However, there is little discussion and little agreement about the significance of the fact that all of that new federal reserve dollar money that is created, again by whomever, is created as a debt repayable with interest to the bank that created it out of nothing.
And, in the case of the Federal Reserve Banks, creates that federal reserve dollar money out of nothing and lends it "payable with interest" to the Federal government, who sign on behalf of the taxpayer to repay that newly created money and interest due.
For what?
Every bag of groceries is bought with an IOU note that must be paid back two or three times to the banks for the privilege of using their money system.
Mises identifies this misapplication of any sane monetary theory as a government flaw.
Whereas, I agree with McFadden:
"Every effort has been made by the Federal Reserve Board (FED) to conceal its powers, but the truth is - the FED has usurped the Government. It controls everything here (in Congress) and it controls all our foreign relations. It makes and breaks governments at will."
The government ain't the problem here.
Published: November 20, 2008 6:24 PM
Inquisitor
Ejerod, why do you resort to repeating platitudes? We're not unaware of them and we're not convinced by them, so try make your points relevant to Austrian economists, who have heard (and refuted) many points you've made. Familiarizing yourself with the Austrian school would be a good first step.
Published: November 20, 2008 6:57 PM
Inquisitor
"This added costs and regulations to industries but the benefit of those costs far outweigh the costs themselves. "
Unproven subjective value judgement. On the Industrial Revolution, read Hayek. On China, witness its firms engaging in a drive to boost their quality standards, and witness firms recalling their products from the market when scares emerged. Out of a love for their fellow man? No, out of a realization that killing off their consumers is not generally the best way to make a profit. Regulations only fossilize these realizations ex post facto. To that extent they are pointless and rigid. As for the FDA and other shams like it, look up sources on that wonderful institution on here. It is a fraud.
Published: November 20, 2008 7:04 PM
Inquisitor
"The government ain't the problem here."
So a legally granted monopoly is not the problem? If so, pray tell, what is it exactly that the Fed enjoys, if not that? So how does it differ from either being the government or being its major beneficiary? No, the government is most CERTAINLY the problem here.
Published: November 20, 2008 7:07 PM
Inquisitor
"I tend to argue against free market everything since such a theory seems to dismiss the notion that government arises from free market forces to begin with; it seems counter-intuitive to argue against government. Bad gov, yes; Constitutional gov no."
Who cares what it arises from? If it violates voluntary transactions, it is to be suppressed. Your Orwellian nonsense will not be allowed to pass as truth here, commie-wannabe.
Published: November 20, 2008 7:10 PM
joebhed
A legally granted monopoly IS the problem in that it is a monopoly granted in the name of the people, without their consent, and from the people to the private banking cartel known as the FED.
I don't understand the confusion about that part.
And I don't know that it was legal, I just know it was done.
And I know that McFadden charged the FED and Treasury with treason.
Said he:
""What is needed here is a return to the Constitution of the United States. We need to have a complete divorce of Bank and State. The old struggle that was fought out here in Jackson's day must be fought over again... The Federal Reserve Act should be repealed and the Federal Reserve Banks, having violated their charters, should be liquidated immediately. Faithless Government officers who have violated their oaths of office should be impeached and brought to trial. Unless this is done by us, I predict that the American people, outraged, robbed, pillaged, insulted, and betrayed as they are in their own land, will rise in their wrath and send a President here who will sweep the money changers out of the temple.""
I'm with him.
It is not the government that is creating the debt, it is the private bankers of the federal reserve system.
When you go in for a car loan, it is not YOU that creates the debt, it is the private banker who creates that debt out of thin air.
This is not a conspiracy OF the government.
It is a conspiracy AGAINST the government, and against we, the people.
Published: November 20, 2008 7:29 PM
Inquisitor
Yeah, using the coercive apparatus of the government, kind of making them and it one and the same? So...
Published: November 20, 2008 8:43 PM
redshirt
Some interesting points there by Francisco and Brent, but you are admitting my correct assessment. Now rather than discussing if a job plan is fruitful you are arguing minimum wage regulations and entitlement cultures; I think some positive good comes from a government job plan.
It would seem that for those who want to work, a transitional job plan would bounce them into employment quickly; it could be very efficient.
A "free market" is not a panacea. It will not solve all things the right way every time. There will always be ups and downs and winners and losers. During the time someone is between jobs, unless they have been quite successful, they will need assistance.
As for loaded questions, yes you bet they are loaded. That is exactly the point... a test of morality. The article and counterpoints are all morality based and loaded morality arguments-- the endless arguments about coercion. (You're born someplace, you deal with what you got-- that's reality.) To take the stand that one should not allow for programs that help others, allowing for a statistical subset that take advantage of it, is an exceptional stance in my mind. Do you really think you should not care? Let's exclude the possibility of helping anyone because some will take advantage...meanwhile you know they'll do the same in the free market business world.
How it specifically is carried out, that is where to be tough... not a priori up front, exclude all possibilities, it won't work.
I think it serves no good to argue about the little things... we have to work on the truly big things... sound money, constitutional government, reduced spending (big ticket items). End the fed. These are things people can agree on. I want more of those articles! I think people are coming to this site for the big ticket info!
-r
PS: How could it be possibly anything other than slavery to offer someone sub-minimal wage just because they don't have competencies? Presumably a minimum wage establishes the minimum acceptable social standard of living. Anything less would be too little to be useful.
Published: November 20, 2008 9:38 PM
Brent Railey
redshirt, I appreciate the kinds words and candid interest in a fruitful discussion. I will try to address directly your questions as to government job programs...
You mentioned a marginalized segment of society that seems to be unemployable in the current state of the market. You seem to think that a job program will be the best way to prepare them for productive position in the free market. Minimum wage is relevant to this discussion because it is the threshold at which people become unemployable. When a person cannot produce goods or services worth the minimum wage, he or she ends up in this marginalized group of yours. Hence, there would be no marginalized segment if there were no wage controls.
What am I not saying is that no one benefits by government programs, but every genuine rehabilitation comes at the coerced expense of the rest, and a free ticket is always abused.
Price fixing a good or a service only does one of two things: If priced too high, it leaves the good sitting on the shelf or the service being unutilized. If priced too low, it deplinishes the supply by a run on the product. Hence, the price fixing "floor" of minumum wage leaves those not worth it sitting on the shelf, marginalized by this "free" market. If there were no minimum wage, then they would be employable.
Name one efficient government program. The ideal is to be praised, but government cannot be efficient in producing this end.
I disagree. You are right, there will always be winners and losers, and market conditions constantly change, and it is not a perfect system...but it is the best system. Government intervention always has "unintended" consequences. Moreover, without the high tax burden, it would be easier for people to put away savings in case a job loss happened. Here is another example of an unintended consequence--inflation penalizes savings, so people don't save.
Putting away an emergency fund is a matter of discipline, not a matter if success.
You can't call compassion that which is actually coercion. It's not that we should not care, it's that we should not be forced to care. Charitable organizations have their place in free markets, as do private unemployment insurance programs.
I've worked for charitable organizations, and I can tell you that most [certainly not all] people are trying to find a free ride.
People do fall on hard times outside of their control, and there are mechanisms in a free market that people could voluntarily associate with to protect themselves.
Why not make the minimum social standard of living $100,000 a year? Slavery is coerced work for no pay. Low-wages are not slavery, it is voluntary work for low pay.
In actuality, minimum wage is feel-good legislations that politiciana use to look benevolent. However, without the inflationary policies, even small wages would be useful.
Published: November 20, 2008 10:53 PM
StatusQuoJoe
@Chris, hey no problem I thought it was a well thought out article, as I said I just had one comment.
As to those who hold subjective ideals above objective ideals I ask you to look yourself in the mirror tonight before you go to bed and honestly evaluate how every single subjective decision you made today benefited yourself or others. Its a slippery slope elevating subjective reasoning above objective reasoning. Our forefathers knew this and penned a very good document describing objective ideals that every man and woman shared, i.e. freedoms.
Published: November 20, 2008 11:07 PM
Nick
Redshirt,
I had this long drawn-out point-by-point reply to you written up while I was at work. When I got home, I polished it and made it whole...then I logged on and read your last entry here and deleted the whole damn thing.
There are two types of people when it comes to free-market econ.
First, there are those that approach with an open mind, willing to listen and learn. They're hungry for knowledge and eagerly consume all the writings of the fathers of the Austrian school and others for comparison.
Secondly, there are those whose mind is closed and/or clouded with preconceived notions they can't or won't dismiss. They have no concept of logic and all their arguments flow in a circle around what they've rationalized into a truth. They will frequently come to sites like this one, for no other reason that to disagree. They take satisfaction in running folks around trees with inane arguments of the "doesn't have corners" variety.
You obviously belong to the latter bunch and any more time on you would be wasted. It wouldn't even be worth it for the lurkers to see it.
FWIW, every point you've attempted to make has repeatedly been refuted - not only by myself and other posters on this site, but by people far more learned than us - People like Rothbard and Mises. The answers to all your questions and misgivings are already out there if you'd just go look for them and deal with them with an open mind.
You, and others like you, seem to view government as some sort of insurance program. Unfortunately, it's not a VOLUNTARY insurance program, it's COERCED using violence and threats. Like the mafia only legal.
Stealing is evil. It doesn't matter if it's done by a million people instead of one and it doesn't matter if you vote on it. It doesn't matter how much you think someone else "needs" the money. Theft is theft and it's evil - PERIOD. You can't be a "little bit evil" any more than you can be a "little bit pregnant".
You cannot argue with that - No matter what, it always comes back to that one truth. You can rationalize it any way you like. You can hide it from the light, you can toss it under the bed, you can drag it down to the river and throw it in - but it will always beat you back to the house where you will find it eating your chips, drinking your beer, and sitting on your couch watching Mork and Mindy re-runs on channel 57.
Sorry, that's just the way it is.
Nick
Published: November 20, 2008 11:14 PM
Inquisitor
"PS: How could it be possibly anything other than slavery to offer someone sub-minimal wage just because they don't have competencies? Presumably a minimum wage establishes the minimum acceptable social standard of living. Anything less would be too little to be useful."
How is it anything other than slavery to force someone to offer a wage they do not believe their employee merits? It is easy for government to concoct fictions such as a "minimally acceptable social standard of living" (acceptable to whom? you? "society"?) but in reality this is just the imposition of preferences, and will not alter economic reality. Slavery it is not.
Published: November 20, 2008 11:31 PM
William Rader
"PS: How could it be possibly anything other than slavery to offer someone sub-minimal wage just because they don't have competencies? Presumably a minimum wage establishes the minimum acceptable social standard of living. Anything less would be too little to be useful."
See Hazlitt, Economics in One Lesson, 3rd Ed., 1979, p.139.
Published: November 20, 2008 11:37 PM
William Rader
"Real wages come out of production, not out of government decrees." -- Henry Hazlitt
Published: November 20, 2008 11:48 PM
Gil
"Like the mafia only legal."
With some 200 nation-states how are government not free-market entities? A territorial monopoly backed up by the use of force also adequately describes a private property owner. Why, if land was taken from governments and hand over to existing landholders/homeowners, would such landownership stay small? Just as mom-and-dad stores can't generally compete with large-scale retailers because large-scale retailers can better address customer needs than why shouldn't landownership slowly coalesce into fewer hands making most people landtenants and the few landowners the equivalent of government? For some reason a lot of people here seem to have the attitude of 'when guvmint does it, it's wrong' but don't care if the same prohibitions and laws exist in the private sphere.
Published: November 21, 2008 5:10 AM
Nick
Gil,
Not exactly sure of your point, but...
Government as an insurance company is exactly like the mafia - You pay them for protection not from some imagined boogeyman - but from their own operatives. Walks like a duck...quacks like a duck...
Government, if it is to exist at all, should have but one mandate: Protect the rights of everyone inside its borders. Government is not, and should not ever, be a business providing services like healthcare or job training and it certainly doesn't need to be in the business of stealing money from one person to give it to someone else.
And yes - When government does anything other than protect rights, it's wrong.
Nick
Published: November 21, 2008 7:01 AM
Inquisitor
I am so sick of this nonsense that is repeated with no end in sight.
"With some 200 nation-states how are government not free-market entities?"
Free market = property acquired via homesteading, exchanged on the free market. Please show me a government that has done this.
"A territorial monopoly backed up by the use of force also adequately describes a private property owner."
No, it doesn't. You're playing with words here. The definition of a state is a territorial monopolist over the provision of law and order, which is its own judge and the final court of appeal in all cases between itself and its subjects, WHETHER OR NOT it has any right over their property. When a property owner starts asserting over other property owners the unique right to adjudicate disputes between them or between them and himself, THEN your word game might actually work. Otherwise it is just lying.
"Why, if land was taken from governments and hand over to existing landholders/homeowners, would such landownership stay small? Just as mom-and-dad stores can't generally compete with large-scale retailers because large-scale retailers can better address customer needs than why shouldn't landownership slowly coalesce into fewer hands making most people landtenants and the few landowners the equivalent of government?"
Deterministic nonsense. See Roderick Long and Kevin Carson's works for strong doubt of this thesis. Big business receives ample privilege in the current system. it is by no means necessarily the best at what it does. Moreover, unless these landowners actually assert power over land they have not homesteaded, they are not territorial monopolists over the provision of law and order and the final court of appeal in all cases between them and third parties. Wish away reality all you like.
"For some reason a lot of people here seem to have the attitude of 'when guvmint does it, it's wrong' but don't care if the same prohibitions and laws exist in the private sphere."
For some reason, some people here actually care whether the government has actually done anything to assert a right over other people's holdings. Silly us.
Published: November 21, 2008 11:05 AM
Inquisitor
small correction: exchanged freely*, not on the free market. Don't want it to be self-referencing!
Published: November 21, 2008 11:08 AM
redshirt
Nick,
I am sure you are a good guy... so don't take this wrong.
More assertions and "right back at ya"? The two type of people argument is stunningly weak. It really should be beneath you, but you went there. It's as lame as it gets.
You are simply turning around and defining things to be "evil" the way you choose to define it. That is wildly arbitrary. One can make any argument they want that way.
Of course theft isn't always evil. That is a staggeringly wrong statement. I hope recognize that. The notion of evil is completely subjective. What you have actually done here is just proved my argument. That coercion arguments boil down to points that are simple moral assertions and not something to do with free markets, etc.
That is why any article that wanders into the "oh it's coercion" realm is just missing the point. The point is that economic outcomes are likely to be better (GIVEN TIME) when tried and tested in a free market rather than guessed at by a government. (feedback like a big computer solving a problem)
But such notions do not stop government from taking a free market approach to programs. Start an idea, let a competitive process get underway, then cut it lose to the market to make it better. It also doesn't rule out programs that work to assist the free market by dealing with things like people out of work.
-r
Published: November 21, 2008 7:06 PM
redshirt
Inquis...
I want you to think a bit more about the minimum wage. A lot arguments against it go like... well, if the person isn't worth it why should I pay it?
Well ok, let's take a job that pays $15 / hr and say min wage is $8 / hr. Suppose I could split that job in two (two simpler tasks), but I don't because it would cost me $16 / hr to do so. The only thing stopping me is the minimum wage limit, not the merit of the worker.
A possible unintended consequence of eliminating minimum wages is the division of somewhat complex tasks into simpler ones that take more minimally trained, marginally paid, individuals to do. More jobs, less overall wages, higher profit for the employer at the expense of employees.
One can imagine how this could gut the workplace of intermediate jobs, churning out ultra low paying jobs and pushing down lower middle class people into the poverty level.
The minimum wage is a governor on this process.
-r
Published: November 21, 2008 7:19 PM
redshirt
Brent,
Awesome reply.
OK, I can see the forces at work in your explanations.... see my reply to Inquisitor RE min wages. You can see there I disagree with your assessment. I think a healthy free market would, given time resolve most cases of abuse as there would be enough job opportunity. Nevertheless, you would invite that abuse without the minimum wage; and TIME is a big issue when dealing with such abuse.
And other comments... I think they are well thought out, but still come down to picking coercion as your prime moral stand versus some other moral stand. Poverty and hunger are big evils to a lot of people and those people would prefer it be attacked directly, even it means coercion of others. Their moral stand then is that these things trump other moral stands. It's hard to argue morality.
Unlike what others seem to ASSUME about how I am thinking, I appreciate you working at it!
Someone said commie want-a-be... I think they missed the parts where I mention sound money (no central bank-- Marxist) and constitutional government :) Maybe that was elsewhere.
-r
PS: redshirt as in star trek by the way.
Published: November 21, 2008 7:53 PM
Gil
Nick your reply is hollow - "Guvmint is, wrong, period. Ta da!" A big question becomes when does a organisation qualifies to be a 'government'. Some seem to imply that it refers to whenever someone 'initiates force and fraud'.
Inquisitor, I don't get what you mean. To be a landowner should mean being a sovereign owner hence be the one to say what goes on his or her land. You seem to have a problem seeing guvmint as an institution that tells sovereign individuals what to do - I prefer that analogy to be more towards the U.N. trying to override nation-states. Then there's the question of what if private landowners choose to accept external authority such as Catholic landowners choosing to abide by rulings from the Vatican.
On the other hand, the notion of landownership staying small is a tad irrelevent. Does it matter how much land a tyrant claims ownership over? How many not many dictatorships and tyrannies actually amounted to small nations and populations, especially when you think of the term 'city-state'?
If you want to play further wordgames some Libertarians like use word like 'governance rather than government'. Why always presume laws, rules and punishments come from an external gang of thugs who swagger down a village of individual and declare themselves 'the rulers'? I believe Homeownershps' Associations and Gated Communities show how an governmental scenario can emerge privately rather than through conquest. Or, in other words, my view of government vs. citizens equals landowners vs. landtenant in the private market.
Published: November 21, 2008 8:57 PM