Donald Trump says that low wage workers are making too much money. He would like to do away with the minimum wage and reduce worker's salaries to the same level as those in China and other Asian countries where most of our consumer goods manufacturing is currently being done.
What do you think of that proposal?
Short answer is … he is wrong in our highly manipulated, regulated and distorted economy. He is right if you actually allowed free trade to set prices.
ReplyDeleteIn the US between the overbearing corruption of unions (Particularly public sector) and the huge distortions created by government from the top of the economy to the bottom, product prices in the US and the costs to produce them are high in relation to other countries… Efficiency is the only thing that makes us competitive and the Japanese learned from our efficiency and the Chinese ought or stole our efficient technology.
Housing is so manipulated by the government that they inflate prices and when the market tries to correct the imbalance, they force prices to stay high, protecting asset holders and holding ownership costs and rental cost high.
We have a fed that deliberately inflates prices, then taxpayers have to pay millions to support COLA rises in Social Security to pay for the ever increasing cost of products. We have mountains of unnecessary regulations and licensing costs that make us uncompetitive and drive up the cost of living with almost everything.
As I have said in the past, I am a proponent of open borders… but I am a free market , libertarian kind of open border person. If people can bring their skills to the US for cheaper, it is no different than going to Wal-Mart for a cheap Chinese product. Will some people lose out as we unprotect our artificial market?.... yes. Will people have to reorient their idea of what a good paycheck looks like… yes. At the same time anyone from the US should be able to travel freely to any other world market to compete. Talented US entrepreneurs could transform communities around the globe if they could move as freely as illegal’s can to the US.
We are caught between two worlds and divided between to beliefs about government… one of free market competition and one of protectionism. The interesting thing is, some of the groups who advocated for the multitudes to come to the US without restraint are the same people who push for minimum wage laws… the same people who push for protectionist policies are the same people who had the US government employ economic hit men on behalf of US business.
As far as government goes… some think government is fundamental to external security and law and order. Others think that the governments…. City, county, state and federal, are the ONLY incorporated businesses, pulling everyone else’s strings to create the greatest return for the state….
Historically, I believe revolutions occur when people feel like they have nothing left to lose. Economics text books endlessly trumpet the benefits of free markets and even I agree with many of them. I don't favor an economy dictated by central government edict as we have two stunning examples of failure. We have the failure of helping the little people in communism, and we have the failure of benefitting only the rich via the federal reserve in this country. In both cases, we have created a small group of very comfortable who live in sharp contrast to the little people who do all the work.
ReplyDeleteI get your point TS. I got it when I read Ayn Rand. I got it when I read Friedman. I also got it when I read Adam Smith. What I don't believe most the free market types, except for Smith perhaps, seem to get is success frequently breeds corruption and the desire to make markets less than competitive. Whether the consolidation of power benefits the state (communism) or the wealthy (pseudo capitalism), the end result is kind of the same in my eyes. If you have nothing to gain by working, if you have no feeling that you genuinely participate in the economy you support everyday, you become dis-incentivized to keep it going. You can school me all day with free market thought, but you will never address this dilemma.
What you don’t get Mike because you just can’t believe in self governance and you have never really experienced a free market is that it takes guns to consolidate power. Either you are the government taking from people with the power of the state or you are a mafia type group taking from the people with the government too afraid enforce the law or you are private business garnering favor with the government that creates/enforces laws for favor. All three occur to some degree in the US; the second only because of how much the private business knows about deals cut in the third and the first only because of a blind public handing government control of their lives. Well… I say that about the second but I do have to wonder just how much the central banking system isn’t akin to the mafia….
DeleteLook, the government creating conflict of interest and collusion laws is perfectly fine. I don’t know that I even found fault with investment banks being separated from consumer banking… it is another form of co-mingling that isn’t allowed anywhere else, so why banks. They are blanket laws that affect every business going… as equal justice laws should do. I don’t think that you do believe in those free market things you read because you have told me too many times in too many ways how you want a fair economy and find that it is only government that can deliver that. When you start looking at tax revenue as THE reason for enterprise so as to support the glorious state, then you corrupt the system of free enterprise.
The dilemma that you have is that you can’t believe that the market of billions of transactions a day and society being able to pick and choose as they see fit will correct most all monopoly that exists. I know you can’t see it, but if you think corruption exists in the hearts of CEO’s who actually worked to build a business how much corruption must there be in the hearts of elected government who know that they have no real talent to create anything… except favor?
The dilemma is in believing that people can, if given the chance… and the responsibility to sort out life on their own. You know, a sin that my grandfather always preached to me is the evil of loans.. now, thanks to our government/banking structure we are headed for permanent negative rates designed to destroy the last vestiges of cash and savings… When you are born you are implanted with a chip… the chip is you and you are the chip… sounds glorious doesn’t it?
P.S. - I'm not trying to convince anyone of anything really... I'm just spouting my opinion... I assume you are doing the same( If your trying to garner votes for the Democratic party on this forum your conversion rate, even if everyone switched, would be slim.. given one can't even vote). If I read something that makes sense... I absorb it. So far since the market watch days I have had to rethink some of my foreign policy beliefs and am still pondering a discussion with King over Article V of the constitution... I refuse to be a flipflop but given meaningful info I can change my mind.
"The dilemma that you have is that you can’t believe that the market of billions of transactions a day and society being able to pick and choose as they see fit will correct most all monopoly that exist"
DeleteYou are correct, I don't believe it. I believe that when people shop, they are shopping to satisfy a need as cheaply as possible. Many complain about the shitty wages that a place like Walmart pays, and some, like my conservative Mom and Liberal sister bitch about how badly Walmart treats women. Yet, they continue to shop there because it is easy and because it is cheap. Both are very outspoken in their views, and principled in their way, yet continue to support an institution that apparently stands in opposition to their views and further causes a detriment, in their opinion, to society at large. This example can be extended to most every industry.
Something you will never let go of is a need to wed everything I say to a perceived desire to have the government control everything and create a utopia. Nothing is further from the truth. I'm simply pointing out what I have seen happen time and again. People will choose what is cheap and easy without giving a damn to what consequence may happen down the road. I'm not saying they should be blocked from making that choice, per se. What I am saying is that I refuse to buy the dogma that if there are no rules, we can all just do what we want, reject what we don't like, and society will thrive.
What I do believe is that if we had no rules, we would have many not so bright people victimized and preyed on by the cunning. Some who believe they are smart probably have a belief that this is too fucking bad and all who enter the market place should be informed consumers and if they get ripped off, that is their problem. In this respect, you are correct, I believe that dishonest sellers in the marketplace should be punished and they should be prevented by law from making dishonest claims. In a true free market, there would be no such rules. What about people who would practice medicine with not training? Veterinarian care with no training? yeah, deep down, I believe people should be prevented from being allowed to sell bullshit and also be disallowed from buying things that will harm society. Why don't we let high school children sell themselves for sex when they want to buy some mindless electronic gadget? We don't because we want to protect them. And in spite of that, many children do exactly that anyway by hooking up with internet perverts. Does the constitution stipulate that grown men shouldn't bang teenage girls? I'm sure Jefferson had some REAL enlightened thinking about that.
I don't think the government should tell anyone what to think, or what to buy. But in the interest of avoiding exploitation, which I believe is in everyone's interest, I do believe in putting limits on excess. Again, the point I will keep going back to perpetually TS is that human beings are just not that rational. The government cannot fix that, but it can put limits on the worst of the predictable excess that irrationality breeds. Or they could just sit back and do nothing while everyone fends for themselves and let the world replicate the hunger games.