Jan

31

Posted by : Brian | On : January 31, 2014

“One of the great mistakes is to judge policies by their intentions rather than their results.” -Milton Friedman

Obama’s proposal of raising the federal minimum wage to $10.10 seems like an idea that everyone can get behind. Everyone except those rich, white, capitalists, that is. Poor people should be paid more, and these employers are exploiting the low-skilled workers, right?

The exploitation argument has a few false assumptions. The biggest assumption is that the worker can only work for that particular employer. If I am making $7.25/hr and another employer is willing to pay me $8.00/hr, the rational decision for me to make would be to take the other job. In the real world, however, will I actually take the other job? Probably not. Here’s why. If the first employer finds out that another employer is willing to take me away from him, he will have to make the decision if I’m worth that $8.00 to him. If I am worth that, he may offer me the $8.00/hr – maybe more.

I am now in a really great position. I have worked at minimum wage for awhile and built up skills so that I am worth more. Now different employers are competing over me. I can now barter for higher wages, better benefits, better working conditions, etc… At some point in the bartering process, one of the employers will give up and the other employer has “won” my labor. I now make $8.50/hr. This is my maximum production value (what an employer is willing to compensate me for my labor) Awesome.

This is how pay raises work in the free market.

Now let’s look at how it works in a government-controlled market.

I am a worker making $7.25/hr. Another employer offers to pay me $8.00/hr. I begin the competing process and just as in the last scenario, the employers “bid” to hire me for what I’m worth – and just as in the last scenario – the cut off is at $8.50. I am happy that I get paid $8.50 and hour.

But wait… compassionate people don’t think that is enough. They think I should get paid more. These caring and compassionate people have the best intentions, so they celebrate getting a law passed that makes the minimum wage $10.10 (the current proposed federal minimum wage). Hooray! Poor people will make more money now!

Unfortunately, no. We already covered that my current production value is $8.50/hr. That is the MAXIMUM that an employer will hire me. If they are forced to pay me $10.10 in order to hire me, they simply won’t hire me. No sane employer will employ somebody in order to lose money. That is a quick way to go out of business.

Now, instead of making $8.50 and remaining employed to further my skill-building and experience level, eventually receiving even another pay raise, I am out of a job. My number-eating alligator education taught me that $8.50 > $0.00.

Who Does It Help?

The minimum wage law has some positives. It helps 2 groups of people. The first group is a minority group of workers. These employees are the ones that legitimately were not being paid what they are worth. The employee that is paid $8.50/hr and is worth $10.50/hr now gets paid $10.10. Yay! These are the few people that the government will parade around during political speeches.

The second group that the minimum wage law helps is big business. “What?” you ask? “But big businesses are the ones exploiting these workers by paying them a low wage. The raising of the minimum wage will force them to pay their workers a fair wage.

Yeah, you would think. Why exactly is WalMart and Costco advocating and lobbying for a higher minimum wage? If they thought it would be better to pay higher wages, they would. I don’t believe there’s a law saying they can’t pay them more. Big businesses can afford to pay their workers more, but small businesses can’t. The minimum wage law effectively shuts down their small, mom-and-pop type competitors. This is another example of crony capitalism.

The Law of Demand

The simplest way for me to understand and explain the negative effects of the minimum wage is to repeat the elementary economic principle of the law of demand. This law says that as a price of a product increases, consumers will buy less of it. Conversely, as a price of a product decreases, consumers will buy more of it.

In order to make money, you must barter for something you have. If you have no product to trade, then you must use your labor. Labor has become your product. You trade your labor. Going back to the law of demand: if the price of labor is raised artificially, consumers (employers in this case) will buy less labor.

Don’t believe the unemployment statistics

The unemployment rate is not the 6.7% that they claim. These are adjusted numbers to influence the public into having a false faith in the economy. In 1994, the Bureau of Labor and Statistics (BLS) created a new category for certain unemployed people. This category was “discouraged worker.” According to their unemployment statistics, this category doesn’t get counted. This is a simple way for them to fudge the numbers and create artificially low percentages. If the BLS wants to drop the unemployment rate, they can simply add more unemployed into the “discouraged worker” category.

Simple math to help explain and drive this point further: If there were 100 people in the world and 10 of them were unemployed, we would say there’s a 10% unemployment rate.

(10/100 = 10%)

But I’m up for reelection soon and 10% doesn’t look very good, I need to drop that number, so I’m going to say that 3 of them have been out of work for too long and they are now “discouraged,” so we’ll take them out of the equation altogether. We now have only 7 people on unemployment out of 97.

(7/97 = 7.2%)

Wow! I’m such a great politician. Under my leadership, I have dropped the unemployment rate from 2.8%. Vote for me again, and I promise I will mess with the numbers again to make myself look even better.

What’s really happening is that unemployment keeps getting worse and worse, with so few jobs available (partly thanks to the minimum wage laws) that more people are being labeled as a “discouraged worker.” The BLS has another statistic called the “U-6” which in short is all unemployed, underemployed, and discouraged workers combined. This unemployment number ranged between 13-16% last year. Economist John Williams of Shadow Government Statistics claims that the real unemployment rate is right around 22%.

Here’s a graph that shows all 3:

Unemployment

All that to say, don’t believe anything about stats that are given about unemployment rates.

Minimum Wage Myth #1 – It helps the poor.

I’ve already tried to argue against this, but I needed to put this as #1 because it is such a prevalent argument. I am 100% on board for helping the poor, but unfortunately the most needy are the ones most hurt by minimum wage laws.

Minimum Wage Myth #2 – Workers deserve a fair wage.

This isn’t a myth, really. Workers deserve a fair wage. In a free market economy, they will get a fair wage. Of course you have to define what fair means. Minimum wage supports use the word “fair” to mean “as much as everyone else.” Free market supporters use the word “fair” to mean “equal to the value you produce.” This is different for everybody. A fry cook at McDonald’s doesn’t deserve $15/hr because that is not fair. It does not equal the value he is producing for McDonald’s.

Minimum Wage Myth #3 – It helps boost the economy.

Anything can be done legislatively if you tag several choices of words at the end of a bill. Two of the biggest culprits are probably “for the children” and “to boost the economy.” The claim here is that if employers pay their employees more, then they will have more money to spend in the economy. First, this overlooks the fact that employers will be forced to compensate the extra cost of labor. They have a few options to choose from:

1. Hire less people

This goes back to the law of demand. If they have to pay more for labor, they will be forced to buy less labor. Now you’ve removed someone from earning any money at all. How does that help boost the economy?

2. Increase prices of goods

If employers are forced to pay more money for labor, they will be forced to earn more money by charging more. Of course taking supply and demand into the equation, the possibility of increasing prices may just drive a small business into the ground.

3. Outsource

If an employer needs cheap labor and can’t get it where he’s at, he’ll find a place to get it. Someone will underbid the minimum wage worker. Unfortunately, it’s against the law for an American to compete for that job (if we’re strictly speaking about the federal minimum wage).

4. Invest in technology

No one will argue against technological advancements, but they do often take away low-skilled jobs. Have you been in a Jack-in-the-Box lately? Many of them have computer screens rather than employees taking your order. Employers don’t have to pay a machine an hourly rate, so once it is cheaper to automate a job through technology, jobs are lost.

Evidence

I’m going to steal this straight from a Thomas Sowell article, “Minimum Wage Madness” because it’s too good not to copy.

“Most nations today have minimum wage laws, but they have not always had them. Unemployment rates have been very much lower in places and times when there were no minimum wage laws.

Switzerland is one of the few modern nations without a minimum wage law. In 2003, “The Economist” magazine reported: “Switzerland’s unemployment neared a five-year high of 3.9 percent in February.” In February of this year, Switzerland’s unemployment rate was 3.1 percent. A recent issue of “The Economist” showed Switzerland’s unemployment rate as 2.1 percent.

Most Americans today have never seen unemployment rates that low. However, there was a time when there was no federal minimum wage law in the United States. The last time was during the Coolidge administration, when the annual unemployment rate got as low as 1.8 percent. When Hong Kong was a British colony, it had no minimum wage law. In 1991 its unemployment rate was under 2 percent.”

Conclusion

The minimum wage sounds good on the surface, but it’s true effects on unemployment and a rotten economy are seen easily today. More steps must be done to have a free market than simply removing minimum wage laws, but it is a good first step. Let’s end the ban on working.

 

 

Jan

27

Posted by : Brian | On : January 27, 2014

In my recent post “Are you pro-life? Are you sure?”, I wrote all about how we need to celebrate life. In fact, in the summarizing paragraph I wrote:

“Be pro-life. Be for life. Celebrate life. ALL LIFE.”

So now I’m doing a different post and titling it “Celebrating Death.” Interesting…

At the beginning of the year, my grandfather passed away at the age of 79. He was in very poor health and for the last five or six years, every Christmas season was “probably our last Christmas with Grandpa.” Turns out that it became true for Christmas 2013. At our annual family Christmas gathering, my grandparents were unable to make it because of his health, so we went to visit them at their home after the party. It was clear that Grandpa was not doing well and my first comment to Keri when we got the car was “He needs to go.”

10 days later, he did just that. In peace. Surrounded by his family.

The next two weeks consisted of preparing for the funeral and reminiscing about Grandpa’s life – much of which I knew nothing about. I got to go through old pictures with my mom and grandma and listen to stories about him as a child, as a worker, as a husband, and as a father. The stories were not told with frowns and tears, but with smiles and laughter.

O death, where is thy sting? O grave, where is thy victory? – 1 Corinthians 15:55

To Death: Seriously, though. Answer the question. What power can you possibly possess over Christians? We have hope in this life as well as hope in eternal life. A physical death can only end one life to bring us into eternal life.

To the reader: I have to admit, the title of this post is false. It was a ploy to get you to click on it. Sorry. We do not celebrate death. We celebrate life. We celebrate life on earth, and we celebrate life after death.

And that’s exactly what we did at Grandpa’s graveside service as well as his funeral. We rejoiced in his life here on earth and the memories that we all had with him. More importantly, we celebrated and continue to celebrate his eternal life spent in the presence of God.

Love you Papa. See you soon.

Jan

27

Posted by : Brian | On : January 27, 2014

TheCaseForGold

In my ongoing pursuit of reading more, I finished another book. I actually finished this one a few weeks ago, but I am just now getting to posting about it.

If you’re looking for an exciting, keep-you-on-the-edge-of-your-seat type book – this is not it. Only so much excitement can come from looking at the world’s history of monetary policy. That’s what 3/4 of this book is – a history book. The Case for Gold is actually a reprint of a report given by the U.S. Gold Commission in 1982 (a commission that Ron Paul started).

If thinking about reading a U.S. Gold Commission report from 30 years ago doesn’t fire up your adrenaline synapses, then I don’t know what will.

I have no idea if “adrenaline synapses” are a real thing. I made it up.

Being new to the world of monetary systems and real vs. fiat money, I’ll admit that this book was above my head, but that’s not always a bad thing. As I learn more elementary facts about money systems, economics, and the gold standard, I will have a framework for where each of those things fit it.

The last quarter of this book is the part that I enjoyed most, and if you do end up reading this book, don’t put it down until you get to this part. This last section turns away from the historical aspect and gets into the “how”s and “why”s of getting back onto the gold standard. This covers a more basic explanation of the gold standard and the methods that can be taken in order to return to a system that protects consumer value rather than runaway inflation.

They say you don’t really know something until you’re able to teach it. Well, I still can’t teach you, so I guess that’s means I have some more learning to do.

You can purchase The Case For Gold here, or you can borrow my copy.

Jan

24

Posted by : Brian | On : January 24, 2014

This is a parody, right?

RIGHT?

Oh, it’s not. Of course it’s not.

The things that constitute “news” these days is staggering to me.

Jan

24

Posted by : Brian | On : January 24, 2014

Awhile back I posted about attending a gun control information forum (debate) between 4 of the political student organizations on campus. In that post, I summed up what I believed the 4 positions would say specifically about the 2nd amendment:

College Republicans: The 2nd amendment was designed so that citizens could protect themselves from bad guys.

Socialist Alternative: THE 2ND AMENDMENT WAS DESIGNED FOR THE WHITE MAN TO OPPRESS THE SLAVES AND IT SHOULD BE ABOLISHED! CAPITALISM IS BAD!!

Young Democrats at UW: The 2nd amendment was designed so that Americans could keep single shot, muzzle-loading muskets locked in a safe with a trigger lock. There’s no real purpose behind it.

Young Americans for Liberty: The 2nd amendment was designed so that citizens could fight off a tyrannical government.

As I’m sure you can imagine, I agree with the Young Americans for Liberty on this one. The gun control debate far too often surrounds itself with statistics about how many people are shot every year due to gun violence or how many people defend their homes with a firearm. That is all well and good and it is a very important discussion to have, but to argue that the 2nd amendment’s purpose is to protect yourself from home intruders or from the mugger down the back alley is simply false.

When you watch the Piers Morgan’s, the Chris Matthews’, the Rachel Maddows’, and (unfortunately) the Jon Stewart’s of the media, it’s absurd that civilians would ever use arms against a government. In fact, several of these liberal commentators have made jokes about it being a social fantasy of right wing extremists to start a revolution through the use of arms. Remember, the government IS the people (or so they say).

The use of arms against government tyranny is not some abstract fantastical-hypothetical paranoia-ful situation that really isn’t something we need to worry about. I can think of 2 clear cut cases in American history where it has been used for that very purpose. (Hint: One started the country and one is the title of the post)

The first one you hopefully know something about. The American Revolutionary War was people using arms against government tyranny. In a sense, this was a civil war. The “Americans” were at war with their own government. But this is not the point of this post.

This next example is.

Very few people know about the Battle of Athens in 1946. It happened in McMinn County, Tennessee (Were you thinking Greece?). Over the past few elections (beginning in 1936), McMinn County had been investigated for fraud and political corruption in the county elections. A man by the name of Paul Cantrell was the Democratic candidate for sheriff and was elected in 1936, 1938, and 1940 elections. In the next two elections (1942 and 1944), he was elected to the state senate while his former deputy, Pat Mansfield, was elected to sheriff.

Then comes 1946.

Oh wait, wait, wait…we forgot about 1945. What happened then? WWII ended and a bunch of soldiers came home from war. There were about 3,000 that returned to McMinn County. That’s important

Ok. NOW comes 1946.

In the 1946 elections, Paul Cantrell was running for sheriff again and Pat Mansfield was now running for state senate – they were determined to win. Unfortunately for them, some of these soldiers returning from the war decided to run against them on the platform of fraud-fee elections and the end of political corruption. At a rally, one of the GI speakers is quoted as saying:

“The principles that we fought for in this past war do not exist in McMinn County. We fought for democracy because we believe in democracy but not the form we live under in this county.

August 1, 1946 – election day. While the polls were open, about 200 armed deputies turned out to patrol the precincts. This was odd as the usual number was approximately 15. Deputies decided to close the polls early and confiscated the ballot boxes and “count” them at the local jail. Of course, the citizens (veterans, mainly) knew that it would not be an open count and the possibility of the outcome being rigged was extremely likely.

This is tyranny.

The citizens took up their arms and marched to the jail. After being refused the ballot boxes, gunfire was exchanged between the citizens and the 55 deputies that were guarding the jail. Those inside the jail remained in the jail while waiting for backup from the National Guard. Before the National Guard arrived, however, the veterans blew the jail door with dynamite. At that time, the deputies were forced to surrender. The ballot boxes were returned and after having the votes counted, the 5 veterans that had run for office had been elected. Paul Cantrell and Pat Mansfield were unable to fraud their way back into their positions.

The 1992 movie “An American Story” depicts this battle, although minor details are off (as with any true story made into a movie). Here’s the 10 minute scene:

THIS is what the 2nd amendment is about – not about stopping a bad guy from taking your wallet.

Of course that’s important, too.

Jan

18

Posted by : Brian | On : January 18, 2014

It’s official. I’m an outcast.

Today I found out that I have essentially been banished from my own battalion. I am not to be in the building and no one is to have contact with me. I have been “cast-out,” if you will.

Long friendships have been forced to end immediately so that I do not have a negative influence on them. “Negative” here is best described as my own personal convictions that I explicitly told the leadership were my own personal convictions and I had no intention of influencing others to do the same. Apparently this is a bad thing.

It saddens me that it has come to this, but it is more clear to me than ever that following internal beliefs creates foes – and that’s not easy.

I wish more people would become outcasts, not so they can sit in a corner and wallow in self-pity about how nobody likes them, no..

I wish more people would become outcasts so that they can have more meaning in their lives.

I wish more people would become outcasts so they could understand what is important in life.

I wish more people would become outcasts so they can understand the fulfillment of standing up for what you believe.

I wish more people would become outcasts so they could influence others to be outcasts

 

Then who knows… maybe, just maybe, all us outcasts could band together and change the world.

Jan

10

Posted by : Brian | On : January 10, 2014

Disclaimer: This is NOT a New Year’s Resolution. I started January 4th. So there…

I’ve always had a problem with getting in the habit of exercising regularly, because I am lazy…and apathetic (see what I did there?).

I enjoy working out. I especially enjoy right AFTER the workout. It helps me sleep better, makes me want to eat better, and gives me more energy throughout the day. It seems like it would be easy for me to slap my running shoes on and get to the gym or go for a run, right?

Nope.

I’ve started P90X on multiple occasions. I get through about two or three weeks and then I realize I just can’t keep up with the rigorous schedule that is required. If only I could finish, I could have the body of Tony Horton.

With that said, here’s my latest and greatest workout program. Be prepared. It’s rigorous. It’s painful. It’s complicated.

1. Put running shoes on (as Claire would say, “yunnin” shoes)

2. Go outside

Those are literally the only two goals that I have in order to consider my workout a success. That’s it. See, I’ve found that one thing I hate more than beginning a workout (remember, I enjoy it once I start) is doing something for no reason. If I complete only these two goals, the idea of working out is much easier. My thought process usually goes something like this:

Sitting on the couch: “I should put my shoes on now…ugh..”

Get off the couch: “GRAAAAHHHHH!!!!”

Go to closet and grab shoes: “I guess I’m really doing this…”

Sit on couch to put shoes on: “Wow, this couch is comfortable, I guess I could just sit here and…NO!”

Walk outside: Oh, look… a pull up bar.

30-45 minutes later: I’m tired. Good workout.

I haven’t gone a day yet where I haven’t actually worked out just by putting shoes on and going outside. There may come a day where it is late and I really want to lounge around. I may just walk outside, turn around, take my shoes off, and sit on the couch. But it will be a success, and in my mind, that will drive me to complete my goals again the next day, which will probably end up with another workout.

Two goals: put shoes on, go outside.

This is my strategy because I know myself and how apathetic and lazy I am concerning exercising. If I can’t put shoes on and walk outside, then there’s something much deeper that is wrong with me. This also works for me because I know that I’m good once I get going. This will not work for those that would simply walk outside and turn around everyday.

As someone on the internet said: “The hardest lift of all is lifting your butt off the couch.”

Jan

05

Posted by : Brian | On : January 5, 2014

I claim to be a libertarian.

I claim to support a laissez-fair, free market economic system, free from government control and regulation.

I claim that that government intervention makes things worse, not better.

But last November, I made the mistake of throwing all that out the window. You see, a controversial initiative was on the ballot in Washington State. I-522, the mandatory labeling of genetically modified foods (GMOs) was the talk of the town. Even in the libertarian circle, debates arose about whether we should vote yes or no. I understood the reason for both choices, but I was still a “YesOn522” advocate. It was the only thing I voted “yes” on.

I regret it.

I can claim free market economics all I want, but when it came to a vote, I voted against the free market. [After all, government should be included in nothing – except for what I believe, said every voter ever.] I voted FOR government intervention (gives me the creeps just typing that).

I am heartily against GMOs and especially the crony capitalism that is so heavily associated with them. Companies like Monsanto and Dupont (leading manufacturers of genetically modified crops) are evil and they have governments, local, state, and federal backing them up in their evilness. But why would I think that the same government would fix it?

Stupid me.

The free market will take care of it, right? That was easier said than done for me, hence the “yes” vote. However, yesterday’s news put it all in perspective. Capitalism wins again. General Mills announced that they would begin making Cheerios without genetically modified ingredients. Is this because they believe that GMOs are bad? Nah..probably not. They’re making them because there is a large enough number of consumers that want it.

I believe this to be only the start. Many people do not know or really understand what GMOs are. As they look down the cereal aisle, they will notice a label (one that is voluntarily put on by General Mills, not by government regulation) that says that Cheerios is not made with genetically modified ingredients. Most will probably look into it and begin to demand that other cereals, as well as other foods, be made without GMOs.

Way to go consumers, keep up the good work. Force producers to give you what you want by how you spend your dollars, not by how you vote.