Are Americans Dangerously Uneducated?

It isn’t a stretch to claim that Americans are less informed when it comes to politics than at any time in our nation’s history. A hundred years ago citizens debated politics in constitutional terms. Today few, if any, Americans know that there are 7 articles and 27 amendments in our constitution. We would be hard-pressed to find anyone who knows America isn’t a democracy and, furthermore, why that should make us shout for joy. Most Americans have no idea why our constitutional republic is so crucial to our freedoms and don’t even seem to notice that we are effectively operating as a democracy. This should terrify every freedom-loving citizen in this great country.
Again, probably less than 5% of the citizens of this country know the three branches of government, the two entities of the legislative branch, the number of senators and representatives that make up the congress as a whole, the difference between the judicial and executive branches, etc… It stands to reason that our rights and our freedoms are in danger if we have no idea what sustains them.
Obama’s election was a chilling example of our nation’s political ignorance. The vast majority of Obama supporters, I hope, have no idea that he was mentored by Saul Alinsky, a self-described opponent of Capitalism. Again, most had no idea that Obama is, or at lease was, a member in good standing of the New Party, a communist front group. Did anyone know that the Communist Party of America, cpusa.org, supported Obama for president? Are any of Obama’s supporters aware that he recently referred to capitalism as “social darwinism”? Do any of his supporters understand the very serious threat that Obama represents to 2nd amendment directly, and, indirectly, our 4th amendment?
Americans heard two things: “change” and “free stuff from the government”. No one knows what “change” means, but everyone understands “free stuff”. To suggest that people are more informed and involved means that they might know the names of the president and vice president. Our personal freedom is in greater peril than at any time in the history of this country. We have almost no will to defend it militarily and no desire to understand what constitutional mechanisms are in place to sustain it politically.
First, I strongly encourage everyone to simply google “government structure”. Second, get a copy of the constitution. Read it. Heritage.org will give anyone a free copy. Third, find a copy of the Communist Manifesto. Read it. Forget “right or left”. Forget “Republican or Democrat”. Understand what ideologies built this great nation and gave us our freedom. Be careful to spot what ideologies seek to take our freedoms and crumble the foundations of this country. Fourth, read Federalist Paper number 10 to get a great understanding of the importance of a republic to protect our freedoms. Call yourself a liberal or conservative. Fine. But know where your freedoms come from, what protects them, and what represents a threat to them.

A Liberal’s Confusion

I think liberals would understand capitalism easier if money wasn’t part of the discussion. I don’t think most of them will stop doggedly pursuing Marxism, but they will have a firmer grasp of my nutty affection for freedom to say the least. Before I begin, let me boil down capitalism for the beginner: You keep what you work for. Period. That is eerily similar to being free. Marxism, on the other hand, is the abolition of private property.
That should be the end of the conversation, but liberals love challenging my fourth-amendment rights. Weird huh? Wealth, in whatever form, causes liberals to foam at the mouth. They always prefer an equal distribution of poverty to an unequal distribution of wealth. I’m always unclear whether liberals would prefer that the state prohibit the wealthy from working hard or simply prevent them from getting compensated for it.
In a capitalist economy you simply need to get your product or service into as many hands as possible in exchange for money. Look! You’re rich! Without money as a placeholder of sorts people would simply trade their products.
Whoever produces the most product has the most wealth to barter with. Would someone with a massive quantity of products that he produced himself infuriate liberals to point of legislative action? Goodbye fourth amendment.
Does a massive amount of products in the hands of a person hurt those who have less? Liberals always howl about something called “income disparity”. A capitalist might call it an “effort disparity” or “production disparity”, but, regardless, is it harmful to a society when a citizen produces a lot more than another?
If someone has way more stuff than you then you can rest assured that there will be someone who has enough excess to trade with you on a regular basis. Here in America, the greatest nation the world has ever known, this concept means someone is wealthy enough to cut you paycheck every week. In contrast, no poor guy has ever signed the front of my paycheck, at least not for long.
Liberals seem to pine for the day when government taxes all businesses into submission. That’s great until many of the products these wealthy folks produce end up in the hands of the government much to the satisfaction of liberals. With fewer products in their possession these rich guys are forced to trade with fewer people on a regular basis. You could say it this way: employees have to compete with the government for their employer’s money.
Me? I like rich guys. I wouldn’t mind keeping a lot of them around. There is a good chance that at least one of them would trade with me on a regular basis or perhaps give me a job. In fact maybe more than one of them would be clamoring for my products. In this environment you might call me the “comfortable middle class” with a lot of job options available. It could also be said that everyone benefits in a business-friendly economy.
You can increase production though increased trade with others. When the government steals what you produce and hands it to another your production suffers. You have less to trade with, and it doesn’t matter anyway. People can get your stuff without giving you stuff. This relationship doesn’t last long. The rich guy just stops producing excess that is destined for government seizure.
Steal a man’s capital and you steal his incentive. It’s kind of mysterious how a decrease in incentive immediately results in a decrease in production. Conversely, offer rewards for not producing and the dependant class grows without any motivation to ever produce. This hurts everybody except the liberals who offered a handout in exchange for a vote. This behavior is what you might see in a democracy, unlike America, which is a republic.
Starvation, it turns out, is a great motivator to produce. It gets me out of bed before six every day. The threat of starvation exists for everyone. The goal is to create as big a wealth barrier as possible between your family and starvation. Mother government can offer you no protection from starvation without moving someone else closer to starvation.
To claim that theft won’t cause as much damage to someone with more stuff to steal is no justification to steal, nor is it justification to allow government to have authority over anyone’s private capital. If our society has given government the authority to steal what we earn with the idea that the state knows better how to spend our money than us then how long will it take them to steal the things that we buy with the money that we earn? How long will it take them to abolish our fourth amendment?
To directly attack the fourth amendment the state must eliminate our second amendment first. In context of amendments one, three, and four it would appear our second amendment exists as protection from an out-of-control government. Hello anti-gun, anti-second amendment Eric Holder, our newly-nominated Attorney General. The predictability of liberals is frightening.

We should love “income disparity”

Is a significant income disparity of any consequence? Other than stirring up envy among the “have-nots” does it affect anyone? Does the total of one man’s bank account have any impact on someone else’s lifestyle? Why can’t Americans point to a disparity in incomes and say “that is proof that success is achievable in America”? Maybe the most important question is whether or not the government needs to even out inequalities by pulling money from one man’s pocket and slipping it into the wallet of another.

       Most of the “class-envy” crowd, of which Karl Marx was chief, looks at the wrong aspect of various income levels. It is crucial that we look at the ability to create wealth and the actions taken to achieve it instead of the end result, a fat pile of cash. I think everyone knows how to stay poor so let’s turn our attention to those who got rich.

    If we provide whatever product or service that we have to offer to anyone we can reach with our own efforts we will earn a living. If we create a vehicle (a business) that allows us to deliver it to the masses we will get rich, like liberals-will-despise-us kind of rich. That is the idea anyway. I can’t imagine a more appropriate incentive to justify the tremendous risk, investment, sacrifice and intense hard work required to build a business. The function of a business is to multiply your efforts and allow you to get your product or service into the hands of more interested Americans than you would have otherwise been able to reach. Again, a massive return on our investment is the goal and the only logical reason to expend the effort and expose ourselves to such risks.

       Know that a business which is generating mountains of cash for the owner has a variety of operational needs that can only be met by purchasing services from others. A business represents a continuous need for the services of others and the ability to pay for them. We could interpret it another way: A business represents a low-risk venue where anyone can provide a skill or service and receive a modest return.

        Here is a prime example of income disparity and no victims to be found.  It is also a recipe for success. The employer is in the tricky position of trying to balance a payroll that entices quality people to remain on staff and continue to be profitable in a free market. Once the balance is achieved products are sold, customers are satisfied, profits roll in, the payroll grows. The stage is set for workers to receive payment for their skills and the employer starts lining his pockets. That is an extremely difficult and challenging position to arrive at, but appropriately profitable as well.

     In this scenario we will find a healthy, happy middle class. They have a reasonable selection of prosperous, unfettered, growing businesses to offer their services to with very little risk in a growing free market that is expanding. Knowing that quality, long-term employees provide the most return on investment, wealthy capitalists will extend greater monetary incentives to keep them from reaching for another employer’s greener pastures. This is an environment where workers succeed and businesses thrive. Income disparities abound and no one cares. In a free market, opportunity always accompanies income disparity.

         Where is the problem? Why are so many people touting socialism as a cure for the “problem of income disparity”? According to history, the free market, Capitalism, has a strangely successful track record of providing prosperity for anyone who is willing to grab it.

       Most Americans who have encountered the middle-class crunch can not place blame on the free market, but, rather, a departure from the free market. If it is possible for a person to convince enough of the populace that “unfairness” exists, as evidenced by the income gap, and those who aren’t wealthy are actually victims of the those who are wealthy, it is almost a natural progression that the voters will happily provide this person with the power to seize assets from the wealthiest. In this instance people are first convinced that government dependence is their only hope and, secondly, they exchange the freedom of all Americans to own the fruits of their labor for this dependence on government. The government would then logically have the power to appropriate more and more wealth as long as they could keep finding new groups of victims to garner votes from. This class envy business almost seems like it might pay off big for the politicians who agressively promote it.

         Therein lies the departure from the free market. Remember the fine balance between payroll, profit, and price? Consider the ramifications of government “fairness” being thrown into the mix. When money is pulled from a business with no product or service offered to replace it one of those three will suffer. Again, the successful business owner put in the effort of building a business for the sole purpose of creating semi loads of cash. The logical consequence of this outside force on the market then is increasing prices (inflation), lowering wages, or cutting staff. Cutting profit is the intelligent last resort. 

       What is actually taking place here? Is there actually wealth being redistributed? The government adopts a method that is only slightly more discreet than seizing money and cutting checks. Instead the largest portion of the tax burden is shifted up to those who benefit the economy the greatest. Don’t misunderstand, there are certainly government checks being mailed out to people who didn’t earn them, but that is another topic.  

         This artificial market pressure on wealthy Americans puts the greatest squeeze on the middle class (again, through inflation and lower wages and unemployment). In other words this pressure rolls downhill as businesses attempt to remain profitable in spite of government-imposed “fairness”. Of course those who offer the most benefit to the average Joe end up looking like the bad guy. And once profits fall below the interest rate it only makes sense to fire the staff, sell the business and just invest the money.

         As government extracts the largest percentage of cash from the rich a new income disparity appears without the familiar opportunity that usually comes with it. It is the transfer of wealth from the free market to government coffers. There is no opportunity for a middle class American to earn this money from his employer by exchanging a product or service for it so their income potential decreases. It’s almost like this once accessible money has been effectively taken out of play. There is, however, now a chance to declare yourself a government-dependent victim of unfairness and vote for a larger governing body that offers greater control over the earnings of the free market in hopes of receiving a handout.

          If wealthy individuals were allowed to keep their earnings, opportunities for new jobs and income increases would abound and prices wouldn’t be pressured upward (inflation) in an attempt to make up for the increased tax burden. With that we’ve discovered the solution to the middle class crunch: less government. Of course people would be forced to rediscover self reliance, but there would be plenty additional opportunity to take advantage of to offset this new responsibility. Less of the free market’s capital would be tied up uselessly in the government’s control and the cost of producing wealth would decrease for ALL Americans. 

Debating the liberal view of economics…

Theleftanchor.com posted an article Denouncing McCain’s economic plan (http://www.theleftanchor.com/2008/08/mccain-bad-for.html). I am certainly no McCain apologist, but I defend conservatism whenever I get a chance.

I opened the conversation with this post:

I always tense up when Americans begrudge prosperity. When I hear phrases like “income gap” and “unfair” and people suggesting that government should even out the inequalities I begin to wonder if I should bury my money in the backyard. During periods of economic increase wealthy Americans proper the most. Great! Conversely, when GDP flattens or even declines the wealthy stand to lose the most and the gap narrows. According to the IRS (http://www.irs.gov/taxstats/indtaxstats/article/0,,id=129270,00.html) under Bush’s reign of terror the top one percent of Americans accounted for 21.2% of adjusted gross income and 39.4% of federal tax revenue. You describe this as “greedily enjoy the benefits of a Bush presidency”. Its almost like they paid their “fair share” and part of yours and mine too. For you to side with Karl Marx and suggest the government graduate the tax scale even more aggressively sounds “unfair” and maybe even unamerican. What is the logical conclusion of Obama’s economic plan? Tip the tax scales so much that no body is allowed to be wealthy by order of the government? Extracting even more tax dollars from those who employs the most, consume(spend) the most, invest the most, and generate the most would put a blight on the economy and cap on GDP growth like you can’t imagine. No poor guy has ever signed the front of my paycheck and I sure don’t want a dime from the government. So maybe take it easy on those Americans who embraced the very heart and soul of free enterprise and just be satisfied with the extent to which they are being punished for their success. The more successful, wealthy, rich, etc… an American becomes the vulnerable his earnings are to seizure by the goverment. When enough anger and envy is stirred among the populace people begin to cheer on the goverment in appropriating wealth from the richest. Is there a more terrifying scenario for Americans who putting in the efforts to achieve great success in the USA?

Posted by: Michael Paul | August 09, 2008 at 10:41 AM

Hey Michael, you make an interesting argument but one that conservatives/republicans usually make when liberals like myself talk about a more evenly distributed income system. Your first response is usually that the wealthy already pay more and that any sort of tax is going to stifle success, I am currently away from my home state in Europe and let me tell you, the higher tax rates do nothing to stifle the success of people in the U.K and Ireland (Living in Ireland at the moment).

The second response is always to associate a more even tax system with Karl Marx, absolute capitalism is wrong as is the same with absolute socialism. The mix is where a country truly blossoms. The logical conclusion of the Obama tax plan is to give the middle class a bigger tax break while forcing to the top 1% aka Bill Gates, Buffet etc.. to pay on average $738,000 more. Do you think that is going to force Bill Gates to resign his citizenship and flee to Guatemala where the tax rate is lower? I don’t think so.

Posted by: Crian | August 09, 2008 at 12:02 PM

Michael,

First of all, nothing in Crian’s post suggests that people shouldn’t be allowed to be wealthy. Further, the wealthiest Americans now pay less of a percentage of their income in taxes than they ever have, and the — yes, get ready for it — the income disparity between the rich and the poor is as high as its been since Hoover.

The government has a vested interest in ensuring as large and healthy a middle class as possible, and that idea doesn’t come from Karl Marx, it comes from Aristotle. Having a middle class that is just scraping by puts the economy at enormous risk. We need a middle class that can afford to buy all the things this economy is creating. No matter how wealthy the top one percent is, they will never be able to do that, because there are simply not enough of them, and they are far more likely to invest than to consume. Nothing wrong with investments, but if people aren’t building new houses, buying cars, etc., then investment won’t do much to spur growth. It’s why I’ve never understood tax cuts that are massively slanted to the wealthiest Americans. It’s also why those tax cuts almost always fail to work.

Also, you act as if the richest Americans are entitled to everything they earn. As if the roads, water systems, electrical grid, banking systems, international monetary systems just magically created themselves. We make the wealthy pay more, because they’ve benefited more. Not to mention that when we cut taxes on income or capital gains, that money has to be gotten from somewhere — usually in the form of higher cigarette taxes, or sales tax, or another one of the massively regressive taxes the government chooses to levy. This only squeezes the middle and lower classes even more, meaning they can buy even less, meaning the economy will worsen.

Posted by: Big Blue | August 09, 2008 at 12:49 PM

We need to be very careful not adopt a distorted view of the government, at least as the founders intended it. Threats, internal and external, were the general scope of the government. Attempting create fairness or equality was never the intention of our limited government. The government has no interest in the success of any class of people. Again, government exsists to maintain the rule of law for the people. People or classes don’t exsist for the goverment to invest in. The concept of two distinct economic classes to justify government intervention to any degree was the foundation of Marxism and, of his ten steps to move to a capitalist society into communism, “A heavy progresive or graduated income tax” was number two on the list. That is direct quote from Marx himself. In response to Big Blue, I actually act as if they are entitled to keep the same PERCENTAGE of what they earn that we do. Clearly they will contribute far more dollars that the average Joe. Big Blue, you are correct, nothing in Crian’s post suggested people shouldn’t be wealthy, but carrying the idea to it’s logical conclusion unfortunately points to something close to that. Gang, let’s be careful to not miss the general idea that some in America believe the government has license to appropriate wealth in name of charity or equality or fairness and spread it to people who have offered no product or service in return. Money is meanlingless paper, worthless I-owe-yous, that represents actual goods and services. There are no limits in America to you or me producing goods and services for other people if we want their money. That is capitalism. When our country was founded it was PURE capitalism. There was no government redistribution and America became, as a result, the most successful experiment in freedom and free enterprise, ever. Let’s be careful how much control we allot the goverment.

Posted by: Michael Paul | August 09, 2008 at 01:31 PM

Michael are you then saying that the economies of Europe with their graduated income tax scale are heading towards communism? I hardly think that is possible. The Government was originally created as you state Michael but to continue to operate in such a way ignores the current facts of our times. The role of Government needs to mold to fit the current society. I know this depends on whether you interpret the Constitution as a “living” document or the “original intent” of the founders. Let’s discard that for the moment?

Tell me Michael, how are we as a free society supposed to prevent the growing income disparity, increasing poor etc….? The status quo is not going to help that so unless the Republicans have a plan, it is time to change the way America works to actually help people.

I truly believe that America will not fall apart if it drifts from pure Capitalism. It will actually be better for it.

Posted by: Crian | August 10, 2008 at 12:27 PM

I gotta agree with Crian. Talking about the purpose of government as it existed 230 years ago is pretty disingenuous. The purpose of government has evolved during that time.

And again, the government does have a very compelling interest in maintaining a strong middle class. It creates a stable economy and a stable government, and frankly, redistributing wealth from the very wealthiest to the working class has proven to be a very effective method of creating both a robust economy and a healthy middle class.

I have also made the point on this blog time and again that I do not now, nor will I ever be swayed by slippery slope arguments. That if we have a progressive income tax we’re destined to fall to communism is just plain silly.

Also, ever since we’ve had income taxes, they have been progressive. And the wealthiest Americans used to have to pay far more percentage-wise than they do now. Exactly what is their complaint. They benefit more from what little economic growth we’ve had over the last eight years, while paying less than they ever have in taxes. Meanwhile working class Americans are barely scraping by due to sky rocketing gas costs, health costs, and college tuition, meaning they have less to spend, which is bad for the economy.

I have absolutely no objection to a graduated income tax that increases as income rises. And I would feel the exact same way if I were a millionaire.

Posted by: Big Blue | August 10, 2008 at 12:44 PM

The phrase “income disparity” seems to suggest our economy is a zero-sum game or that there is a finite quantity of money/wealth. If that were the case then wealth accumulation would be nothing more than a contest of speed. The victor grabs to largest sum of the whole and it is crumbs and begging for the rest. The income disparity represents nothing more than a number for others to point at and gnash their teeth. In reality, there are NO LIMITS to the amount of products or services that Americans can produce. Money is a mere representation of those goods and services. To imply that the steps and efforts that America’s wealthiest have exorcised will work for them alone is absolute denial! If I want to get my hands on a share of another’s bank account I only need to provide a product or service in exchange. It is stunning to watch someone size up America’s economic situation and proclaim a portion of Americans have reached a point where self-reliance should be exchanged for government dependence. The transfer of meaningless pieces of paper, or i-owe-yous, to benefit anyone with no product or service to back it up is a CATALYST for inflation. The middle class derives far more suffering from that alone than any ultra-rich man’s bank account total. I can assure you if social programs were exchanged for private sector jobs and something of actual value was exchanged for cash there would be no middle-class crunch. As far as the slippery slope argument, take it up with Karl Marx. He had a goal and a ten step plan to achieve it. When self-reliant citizens can, with clarity, see those steps being implemented, and when a large contingent of the left openly defends Marxism (revleft.com among others) I do tend to get a bit nervous.

Posted by: Michael Paul | August 10, 2008 at 10:21 PM

As far as Europe’s future is concerned, who knows? With a declining population (http://en.wikipedia.org/wiki/World_population, http://www.iiasa.ac.at/Research/LUC/ChinaFood/data/pop/pop_6.htm), a death-bed demography (http://www.iiasa.ac.at/Research/ERD/DB/data/hum/dem/dem_2.htm), lavish social programs, and not nearly enough replacement laborers (http://www.medicalnewstoday.com/articles/51329.php, http://www.rand.org/pubs/research_briefs/RB9126/index1.html)to support those dependent on the government, their economy won’t exist long enough to find out.

Posted by: Michael Paul | August 10, 2008 at 10:24 PM

MP,

You’ve left the reservation. No one in this post has advocated Marxism. I advocate a strong, healthy middle class existing within a predominantly capitalist economy, but the need for a middle class was laid forth by Aristotle, not Marx.

And now you’re equating recognizing an objective income disparity — which has nothing to do with believing wealth is finite, but rather suggests that there is a “disparity” (the condition of being unequal) between the wealthiest and the middle class that is far in excess of what is economically sustainable — with mercantilism, which actually is the economic belief that there is a finite amount of wealth in the world (and which went out of fashion a couple of centuries ago).

This is a straw man. You take an argument, call it something that it’s not, and it makes it very easy for you to argue against the idea that no one has proposed. I don’t propose that the government should control all aspects of the economy, or that all property should be owned in common. I merely propose a tax plan designed to put more money in the hands of working Americans. It’s not just about what America can produce, it’s about what America can consume. And when what little economic growth there is goes almost entirely to the wealthiest one percent, that’s bad for everyone.

Posted by: Big Blue | August 11, 2008 at 02:04 AM

Hey MP, BB has said what I wanted to say in a more concise manner so I won’t repeat what he said. On the subject of Europe, what has been the overall change in GDP in countries like France, Germany etc… with their social programs. Strong positive growth has occurred and will continue to occur in these challenging global times. For example where I currently live for the moment: “The latest economic analysis from PricewaterhouseCoopers estimates that the Irish economy is headed for a sharp slowdown in 2008 and has little scope for any significant recovery in 2009. Growth in Ireland is expected to slip to 2% in 2008 and remain fairly subdued in 2009, as the economy suffers from subdued domestic and foreign demand during both years.”

The EU and its member countries have done something right with a fair tax system not to mention healthcare, its about time America catches on to this trend.

Posted by: Crian | August 11, 2008 at 11:05 AM

To come to the conclusion that wealth is not finite is an exciting first step. However, we may need to follow that line of reasoning just a bit further, at least to help with my point. You are right: The phrase “income disparity” does not suggest that wealth is in limited supply. For you to suggest that income disparity is a real problem that needs to addressed, however, does suggest that wealth is finite. Calling a significant difference in income levels a real concern implies one of three things. Either the majority of wealth has been gobbled up by the most aggressive and there is nothing left over for the rest of us poor saps (finite wealth) or wealth is limitless, but the middle class have nothing of value to offer in exchange for wealth and, without relying on the government, will never get a share of the loot. The third possible implication arising from someone making an issue out of income disparity is that they simply prefer the government be that ultimate authority concerning accumulation of capital. There appears to be agreement in saying that wealth is not finite, and I don’t believe your preference is that government be the final arbiter of wealth. As for the ability of middle class to be self-reliant, to provide marketable skills and products to the free market and receive compensation, we certainly can do it ourselves without the crutch of government. If I happen upon some rich guy sitting on a mountain of cash we have a match made in Heaven. This wealthy chap has the power to consume and I have the ability to produce. The government need not apply. I pose that if the government extracted its tentacles from the free market, as opposed to artificially tipping the scales towards the underdog, incomes would climb across the board.

On a different note, let me remove a little confusion. An aggressively graduated income tax is not Marxism. Because you subscribe to that idea does not make you a Marxist. A heavy progressive tax was simply one tool out of ten that Marx suggested we utilize to achieve communism where capitalism once was. I can only assume that your reasons for employing that tool are much more benign.

Posted by: Michael Paul | August 11, 2008 at 04:51 PM

I think what I’ll do is address the thrust of this argument in a future post. This conversation has somewhat outgrown a comments thread, so just look for a post maybe sometime in the next week, and we can take this up again then. To get into all the details of what we’re talking about here deserves more than the somewhat limited back-and-forth comments allow. This is rich subject matter, and I might like to take 1,500 words to address it (which would still be a limited discussion to be sure, but is probably the best you can do in a blog format).

To be continued,
BB

Posted by: Big Blue | August 11, 2008 at 06:31 PM

Is there a need for the minimum wage?

Should the minimum wage in this country be increased to keep up with inflation or is $5.15 per hour adequate compensation from entry-level employees? Are those in opposition to a minimum wage increase cold and uncaring? Is it really the boost to a minimum wage earner’s economic situation that they expect?

            Perhaps a better alternative to this minimum wage increase is a minimum wage elimination. Businesses struggle to find profit between reasonable, marketable price points and the overhead required to stay in business. A large part of this overhead is wages paid to employees.  

            If an employee is paid $5 an hour for a position that produces $9 an hour for the business then he is profitable and worth his pay.  The remaining profit keeps the lights on, the doors open, and the shelves stocked with product. If Uncle Sam decides to tip the scales in favor of the employee to gain favor with his constituents then “big bad business” feels the squeeze.

            There! We’ve effectively “stuck it to the man”. Now, to remain in business, the employer, like many other employers in their shoes, needs to raise prices or reduce overhead. Either way, the bottom-wrung employees get the short end of the stick.

            By raising minimum wage the dollar bill is devalued. Let’s say a minimum wage employee earns enough weekly income to purchase a gallon of milk, a loaf of bread, and a carton of eggs. Our heart goes out to him and others like him so we force employers to increase his wages. For maybe two weeks this employee can add two boxes of popsicles to his weekly order. Very soon, however, the cost of all his groceries increases so the businesses selling them can remain in the black after paying out more money to their employees who still perform their same job. This same employee with his new found, government-mandated pay raise can still only afford a gallon of milk, a loaf of bread, and a carton of eggs.

            Unfortunately, the employees above him on the pay scale, those who aren’t affected by the increase in minimum wages, are facing the very same devaluation of their dollar bill as well. The intended recipient of the increase still hasn’t benefited, and those who weren’t in the scope of the legislation are adversely affected. There is no clear winner in this scenario.

            The other unexpected consequence to bottom wage earners is unemployment. When their wages exceed their worth they become an expense to a business. The logical conclusion in their case is unemployment. A business will not continue to employ a person who isn’t producing more income for the company than they are being paid. In the free-enterprise system, wages increase when worth increases. To increase a person’s worth they gain skill and/or experience.

            Understand that when businesses succeed people that work for those businesses succeed. If a business operates with large, “unfair” margins, the employees benefit with often higher salaries, increased job security, and occasionally regular bonuses. Put the squeeze on those big, bad, greedy businesses by increasing their overhead through taxation or forced wage increases and it is the worker that loses. He or she will lose as the employee of the business by being fired or forced to work harder to compensate for the pay raise. The bottom-wrung worker also loses as a consumer now facing accelerated inflation.

            The minimum wage is not intended to provide a house in out in the country and two cars. In fact, the minimum wage shouldn’t be relied on for an apartment and a bus ticket. Think of it as a probationary wage paid to workers who haven’t proven themselves in the work place. Those who are worth more will get paid more. Those who are worth more, but don’t get paid more find other employment or start a business. The employer who isn’t willing to give adequate compensation for higher-skilled employees ends up the loser when quality help seeks employment with, perhaps, his competitor. Most businesses offer starting wages above minimum wage at this point anyway. Ultimately a booming economy will eliminate the need for minimum wage.

            Workers who are overpaid are workers who aren’t in demand by anyone. They are nearly unemployable thanks to the increased minimum wage. They can’t accept a more reasonable pay rate if they wanted to. Increasing their worth to an employer is now no longer an option, but a requirement to get a job.

            If the minimum wage were abolished, inflation would be a non-issue for the near and maybe distant future. Entry level workers will enjoy a stronger dollar and readily available work. If an employer expects to keep them on staff they will be forced to offer acceptable incentive. Should the employee feel taken advantage of by being underpaid they will search for better wages with a different employer.

            If a worker wants to command a higher pay rate they will simply increase their skills and experience, and, thereby, increase their worth to an employer. In America we have the ability to create our own way and achieve any level we desire. We can not accomplish this by relying on the government to force employers to pay us more than we are worth. We accomplish this by making ourselves worth more than we are paid. Then, and only then, are we in a position to expect higher pay.

            We, as consumers and workers, need to cast our votes in favor of free enterprise. It works EVERYWHERE it is tried. Our votes should reflect our desire that government remain neutral in our free enterprise economy. Our economy relies on businesses. They are the engine behind our economic success. When government hinders business from the bottom in the form of forced pay scales or from the top in form of taxation our economy suffers.

Liberalism vs Capitalism

Capitalism has kind of gotten a bad rap, and here in America of all places. Never mind that our unprecedented economic growth can only be attributed to capitalism, the free market, the curiously successful idea that a man should be allowed to keep the fruits of his labor rather than handing ALL or even some of it over to the government. When stated in this manner, most people might say something like “duh, I want to keep what I earn”. The challenge, or the area of concern for me, is the part where people also want a portion of what other people earn. Most people will, if asked, vehemently deny this. However, take a second to phrase it another way: Should the government provide you with needed products or services that you are unable to afford or should the government provide economic relief when you come upon hard times? Most citizens nod fervently, unfortunately. That mindset, in effect, says that the wages of others should be seized by the government to meet any monetary shortfalls another person may encounter. I think we can all agree that the government can not give one dollar to an American who hasn’t earned it without first taking it from an American who has. Thinking along that line of reasoning, who among us is forced to give up his capital? In simple terms, anyone who isn’t dependent on the government already is a source of revenue for government charity. That answer is fairly accurate and a bit misleading only in that the deck is stacked. When the government happens upon a citizen who’s in a bad way it looks to the rich man for the largest portion of economic assistance. That seems “fair”, right? He who has the most gives up the most, right? We need to be careful not to miss the grave implication of that mindset: The more prosperous an American becomes the more vulnerable his earnings are to seizure by the government in the name of charity. This can be interpreted another way: under-achieving is encouraged over hard work.

There are other equally troubling aspects of that policy. Politicians do an exceptional job of stirring up envy and anger towards the “evil, villainous rich man”. You’ll find precious few objections to government appropriation of wealth from people who are consistently, reliably demonized particularly when those appropriations are said to benefit the majority. A political environment that discourages success is bad place to find yourself in.

To facilitate this transfer of wealth (at the expense of the free market), the government has set up a variety of social programs. Social programs are very addictive for both the politician and his constituents.  The converse of that is this: social programs also happen to be very damaging to those hard-working, self-reliant Americans.

            The problem is compounded by a population that is more than willing to trade self-reliance for government dependence and politicians who use this money spent on social programs to buy more votes and, ultimately, more control. A population that has turned over its primary needs to the government, or become government-dependent, is a population that has forfeited its right to keep the fruits of its labor and is easily controlled.

            Understand that, originally, the government functioned at the discretion of the people. However, when the government becomes the arbiter of wealth the people function at the discretion of the government and when the majority of the population depends on the government to meet most of its basic needs there is nothing they can do to regain control of, or get freedom from, the government.

            The other consequence arising from government redistribution is the belief that government knows better how to spend our money than we do or is more benevolent and selfless than we would be and is, therefore, justified in taking whatever portion of our income it determines is acceptable. If the government doesn’t subscribe to that logic THEN WHY CAN’T AMERICANS SIMPLY BE ALLOWED TO KEEP THEIR MONEY? The intent of the founders in the way of government was, in simple terms, local and national security. If that accurately highlights extent of the government’s proper reach then why can’t Americans have the OTHER seventy percent of the federal budget back in their pockets?

            I suppose the next logical question is whether or not there is actually a need for government intervention through redistribution of income. Let’s peek through the lens of history. Did American citizens provide for the needy without funneling their money through the government first when this country was founded? Absolutely! If your neighbor had a need nobody waited for a governing body to act as a conduit. The need was simply met through the private sector with no local or federal mandate. Let me also add that there was never such a great need for welfare until after the program was created.

            I want to pose the challenge that the American people can be trusted with their money. And even if we can’t, well…  it’s still our money! If a particular politician needs my money to make promises of more government entitlement programs in order to garner votes then he may need to make a switch in policy platforms.

           Can we all agree that working, saving, and spending are activities that grow the economy? Certainly! That is a formula that we can all rely on. Taxation, for any reason, makes these activities more expensive. When the cost of saving and creating wealth increases people are inclined to do less of these things and the economy slows. That is another reliable formula. Maybe we could say it this way: The government and free market can not flourish simultaneously. That is only partially accurate though. When the taxation is decreased we see an instant surge in economic growth and individual, pre-tax incomes. Revenues going into the government increase as a byproduct of free market success. So long as politicians don’t see that as a green light to expand government the cycle can be allowed to continue.

         Of course how does this capitalistic greed affect the “proletariat”? There is no better, more productive, more beneficial social program in existence today than a private-sector job. It is a means by which Americans can extract money from other Americans while, at the same time, providing a product or service in exchange. A job will, or at least should, provide a better standard of living than a government handout. A flourishing free market will provide far more jobs than the government can provide welfare checks.

         My employer is a sterling example of corporate greed. He wants to grow his business and increase his income. However, he can not line his pockets with more cash without his employees encountering increased income as well. His business can not expand independently of his payroll, at least not sustainably. Consequently, he treats his employees like gold, like they are his most important asset. Smart, prosperous business owners must take this approach to attain consistent, lasting success. That sort of puts a dent in the whole exploitive bourgeois theory and liberalism/Marxism in general.

        Wealthy capitalists also benefit the economy in another way. Besides employing people they also spend their money. Sitting on a mountain of dollars is like sitting on a pile of I-owe-yous. Nobody needs to swipe their money (including the government). Pieces of paper are useless to them or anyone else for the matter. Wealthy Americans will happily exchange that useless paper for a product or service of value to them. That is where you or I come in. We provide whatever good or service we have to offer and the useless I-owe-yous get transferred into my pocket or yours. Now WE are the evil rich man, at least if we provided a particularly valuable or necessary good or service.

       Can everybody be rich? Is there a limitless supply of money? Well there is a nearly unlimited supply of ink and paper and there are definitely no limits placed people offering useful products or services. So, yes, everyone can earn enough income to satisfy and even far exceed their needs.

          No country in the world has proven that more effectively than America. The government has made greater strides in ensuring that success is harder to realize by swiping a bigger portion of every business transaction and every pay check than it has at any other time in our nation’s history. The solution to our financial struggles is not increased taxation and more burdensome government control through regulation. To achieve a good economy and individual prosperity we need to remove the biggest obstacle the free market faces: the government! That isn’t to say the government shouldn’t exist, but, rather, that the government shouldn’t exist as an obstacle to achievement and an avid supporter of slothfulness.