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Thursday, September 29, 2011

an INCREDIBLY important read.

It is important that we understand some of the basic motivations that the consumer faces when acting in the market place, and how current economic practices violate the rules governing those motivations to the detriment of everyone concerned, except for big business and the military industrial complex. 

Ludwig Von Mises wrote his treatise on Human Action, which brings to light some of this information, as well as provides a good basic understanding of economic practices, both good and bad.

I recommend it strongly, it is available to read for free at the above link

Thanks for staying informed!

The Monopolization of the Economy

So, I was talking to someone today about the role that Government plays in the marketplace, and made the assertion that labor phenomena like forced union membership, minimum wage laws, and other 'pro-worker' legislation actually ends up hurting the employees and consumers in the overall market, rather than curbing the illegitimate or immoral behaviors of employers.  There are several good arguments that support this assertion, I think, but a couple points come to mind immediately.

'Big Labor':  The idea behind labor unions is an incredibly important one.  I fully support any group of individuals who want to get together and advocate for better pay, safer work environment, and good benefits from their employers.  We need to understand a couple of important concepts though, to realize that requiring union membership by law to work a given job is counter-productive, and ends up preventing these goals from being realized in the labor market as a whole.

First of all, employers and businesses almost ALWAYS pass on the costs associated with regulation to the customer via increased prices (we have seen this more and more recently, as prices continue to rise across the board). This means that when the government forces businesses to hire from union labor pools, at a wage that is fixed by that union (and thus protected by law), that business has to recoup those losses.  They will do this in several different ways.  

The first way is to lay off workers.  Unfortunately this doesn't defray the costs all that much because of the requirements for laying off union workers, such as having to pay unemployment at a wage much higher than they would pay a minimum wage worker to work.  A perfect example of this is the grocer's union in some areas.  Those who work in groceries and stock shelves can make up to 14 dollars an hour.  Unemployment pays a significant portion of their wage, up to 70% in some cases.  70% of 14 dollars is over 8.55 an hour (which is the minimum wage in my state).  Therefore, instead of the company being able to pay someone minimum wage to stock shelves(which is certainly a low skill job), that person places a burden on society of over minimum wage. 

Remember, we can't just look at the individual grocer and employee involved, we have to consider the labor market as a whole, across industries, and the grocery market as a whole, including things like the food manufacturing industry which is so closely tied to it.  As a result of these increased costs, both in keeping an overpaid workforce, and in laying off excess workforce, the prices of the goods and services that the business provides will necessarily increase.

 In the face of increasing prices or failing, obviously a business will try to increase prices first.  This has a cascading effect on the rest of society.  As prices increase, both on the prices the grocers have to pay and the prices the consumer has to pay, more workers have to be laid off, and prices continue to rise.  It's a never ending circle.  We are experiencing this phenomenon as I write this, in every arena from the cost of tickets to sporting events to the cost of airline tickets to the cost of something so basic as milk and eggs. 

This is an example of how forced union membership hurts businesses, who are required to only hire persons from unions at the union mandated wage, rather than hire from the entire labor pool for significantly below the mandated wage.

Obviously the relationship between legislative protection of unions and a decrease in price stability along with an increase in joblessness is not the only relationship we need to consider when examining how government regulation in the labor market cause the very problems the legislation allegedly tries to prevent. 

In the next installment we will examine how minimum wage laws destroy jobs and small businesses, and favor big business (especially those businesses with close ties to the government).


Monday, September 26, 2011

New York City PD can shoot down planes, but should they?

The Christian Science Monitor published this story today in response to comments by NYPD police commissioner regarding the Police Department's capabilities with regards to anti-terrorism.  IT seems that the  NYPD can shoot down airliners in the event of a hostile takeover that puts them at risk, and the question raised is should the Police, Mayor, or Governor alone have the authority to make that decision?

People tend to cringe at this notion of local control of something so... scary.  However, it seems like the citizens of New York pay taxes to be protected by their police department.  If the resources exist for the NYPD to take care of these types of situation on their own, why call in the federal government at all?  This is a great example of the ability for local governments to care for themselves without the intervention of the federal government.  Why as citizens from California to pay for the protection of citizens in New York through federal funding, if citizens in New York can take care of themselves? 

In my effort to encourage decentralization of power, and return decision making abilities of all types to the individual, it seems like New York should have the authority to make decisions regarding their own safety, even if that decision rules out federal intervention, regardless of whether that decision is economic, social, or military.


Monday, September 12, 2011

The Modern Day Gladiators

Sports is an interesting phenomenon in this country.  The ties between sports and patriotism should be evident, and sports as a propaganda tool is extremely useful.  That being said, GO SEAHAWKS. 

This year is going to be tough on the Hawks, though, they have a particularly difficult schedule, especially considering the decision to bring on T-Jack as the starting QB.  It's too bad, I think, that we aren't seeing Whitehurst up there at least sharing the role, given his performance in the playoffs last year.  Regardless, I doubt we will be seeing much playoff action except for of course our division.  The division is still weak of course, and no one really respects the rams or the niners as a contender league wide, but given T-Jack's lack of familiarty with the Seahawks offense, it will probably still be a close run to the NFC West.

One can still be disgusted with American Politics and love sports.


Monday Monday

It's monday for the rest of the world, Friday for me. 
Work is bad on monday.  For some reason no one wants to gamble. 
The nice part is monday night football though, we have a bigscreen in the break room, and T.V.s all over the casino.

I was watching Cspan2 last night at work and saw something on by this investigative journalist regarding a book she wrote, Top Secret America: The Rise of the New American Security State, on the Afterwords program.

She was talking to the former undersecretary of defense about the necessity for protecting the process of exposing classified information, as the government couldn't necessarily be trusted.  He kept arguing against her, despite huge evidence to support her claims.

anyway, I'd advise taking a look at her book, at the link above, It seems like something good to know about, especially the role of the intelligence community in our every day lives, as well as the control they exert over political and police practices around the world.

Also, to get a little insight into some basic economic ideas, it's important to look at Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics, a really great introduction into sound money policy and some reasons to argue against over regulation of the economy in terms of wealth and prosperity production for the poor. 

At some point I'll start to talk about the problems that we can all agree on, whether we identify more with socialist ideas or capitalist ideas, and why what we have seen recently fits neither of those viewpoints.

I had to take my girlfriend to the hospital today for what we thought was a separated rib.  In reality it was inflamation of the outside of her lung wall rubbing against the inside of her body wall.  There's a medical term for it, but I've forgotten it now.

While we were there my tax dollars paid to airlift (for the second time this week) an alcoholic smoker who had had a stroke...  he was 75 and had been an alcoholic for a long time.  We could smell alcohol from the other side of the curtain. 

Yet alcohol is legal, despite the burden upon taxpayers and society and families, and other substances, far less damaging from a numbers standpoint are not.


Happy Monday,

Sunday, September 11, 2011

Remembering September 11th

Two towers fell, full of people, killing over 3000 civilians, police, and firefighters in the great American city of New York, changing forever one of the most distinct skylines in the world, and the lives of millions of people around the world. 

What lessons should we take away? 

It seems we might say that the original causes of this tragedy might, on the surface, be as simple as the hatred of wealth and success.  The hatred of freedom and the pursuit of happiness by those outside our borders.  This belief is naive at best, and the height of arrogance and ignorance at worst.    We have to remember what happened before 9/11/2011.  We have to remember our role in the world as a whole before we draw conclusions.  It is important to examine all of the historical facts, and the entire causal history of those two hijacked planes. 

Osama bin-Laden, credited with leading Al-Qaeda, responsible for the attacks on our country on that day was not acting with his own money.  Where did he get the resources?  One explanation was that he got part of his resources from a tyrannical regime in Iraq.  This explanation led us to war, and the deaths of thousands of American soldiers, and hundreds of thousands of Iraqi soldiers and civilians.  We know now, much after the fact, that there were no verifiable ties between the Iraq government under Saddam and Al-Qaeda.  There were also no weapons of mass destruction to be found inside those borders. 

Where, then, did these resources come from? 

Back during the cold war, Al-Qaeda received capital and training from, guess who, the United States Government, and were instrumental in driving the Soviet Communists out of Afghanistan.  They received weapons training, insurrection training, and most of the training they implement today in their camps was brought to them by our own government. 

We can say that, simply, it was a small group of individuals that caused the destruction of the Twin Towers.  We would be wrong.  Sometimes the hardest thing to do is accept personal responsibility for horrible occurrences.  This is one time when we have to look inside our borders, and hold those accountable for the role they played.  To do otherwise is a disservice to the families of those who have died in the wake of 9/11, both domestic and foreign.  It is a disservice to those who are now starving and jobless because of the economic effects of the war, as well as the direct effects of war.

What do we do to prevent this from ever happening again?  Is perpetual war against 'Terror' really the answer to our problems?  It seems that war is terrorism, in many ways.  The invasion of foreign territories, the removal of families from their homes, the destruction of personal and public property, any of these things, were it my own home country, would cause me to fight back, why would we think that fighting terror will discourage terrorism rather than promote it? 

God forbid we engage in sound diplomacy, non-interventionism, and sound economic policies at home.  If we did that, our imperialist efforts would fail overseas.  Our wages at home would rise, joblessness would decrease, and overall violence around the world would drop immensely.  War doesn't stop terror, it causes terror.  Once, all we had to worry about were fanatics who had a grudge, either religiously or economically, against our country.  Now we have to worry about sons and husbands who have watched their families ruined picking up arms and fighting back. 
Despite promises to the contrary, military intervention overseas continues to be the norm, and not just in Iraq and Afghanistan. 
Unless the attitude ends, 9/11 will not be the last tragedy that we observe that occurs because of the American Imperialist ideals. 
Until we learn humility, and let others make decisions for themselves, both internationally and domestically, we will continue to suffer.

Judge not lest ye be Judged and found wanting.

I find us wanting. 

That said, my heartfelt condolences to the families that have suffered as a result of 9/11/2011.  Both on the day of, and in the years after.  They in no way deserved their fate, and were casualties in a perpetual war that was never fought in their best interest in the first place.  I can't imagine what it would be like to lose a brother or a father in such an event, but neither can I imagine what it would be like to lose a mother or a sister to an American missile or .223 round.  Neither tragedy is greater than the other, and any life is sacred.  War is horrendous, and helps none except the evil. 

In sadness,


Saturday, September 10, 2011

How to think about unemployment.

We often hear news about shifts in the unemployment rate.  What exactly does the unemployment rate measure?  Here is one pretty good summary:

The overall picture here is that not everyone who is jobless is counted in the unemployment rate.  For isntance, if you're not looking for work, haven't declared as unemployed, or have run out of benefits, you're not counted in the figures. 

So when we are told by the same Website that unemployment is at 9.1% as of the sept 6th article, we need a bit more information.  Real joblessness, when taking into consideration all of the individuals that are not measured by unemployment statistics published by the federal government, the estimates are anywhere between 16-22% of the population.  That's 1/5th of every working age individual that is currently without a job. 

So if only half or so of the people without jobs are receiving income from unemployment benefits, at best, what happens to the rest of the unemployed? 

Unemployment vs. Private Savings

So some people make the argument that people wouldn't save if it weren't for unemployment insurance.  While this may be true, it is sort of irrelevant for the reasons discussed below.  Further problems with unemployment insurance become apparent when we look at the difference between money in the marketplace and money in the unemployment fund.  Money in savings or investment portfolios has the opportunity to earn interest.  The reason it earns interest is that banks use the money in those funds to trade, effectively borrowing money from their customers to make what are hopefully profitable investments.  So they pay their customers interest on the money they are borrowing.  Theoretically one can live off the interest of a large enough bank account.  Consider next unemployment.  A worker at a bank loses their job, then starts collecting unemployment.  The unemployment they collect comes out of a fund theyve been paying into for however long they've been working.  During that time that money was not earning interest or being actively used in the market place.  In fact, that money COSTS money to keep track of.  Some of these costs include the statements that we receive once in a while letting us know how much we've accumulated, alot of those costs include paying people to watch over that money.  So instead of participating in the market place where it can grow wealth, it gets taken out of the market place, where it costs additional money to maintain.  Then, once the individual goes to take that money out, even MORE money is taken from their company to match some of those unemployment dollars.  So not only is the initial income taken out of the market at an overall loss to the marketplace (because the money spent maintaining it is being used for a loss-bearing service) but the money when 'paid back' to the individual takes even MORE money out of the marketplace as the company has to pay that unemployment, causing more job loss, because the company has to pay money to an individual that is not laboring for them.    So unemployment, even if only the original money the individual has put into it is paid out, along with the obligation of the company, is a huge negative against the marketplace as a whole.  Those dollars would have either been saved in a private interest-earning fund by the individual, in which case the banks would have traded the income around, or the money would be spent by the individual in the marketplace, driving down the cost of goods and increasing the rate of pay as companies earn more money. 

from work

Unemployment is good....

So I talked to this individual last night while I was waiting for a ride home from work (my girlfriend and I share an old beater), and we got to talking about unemployment.  Apparently it was this individual's view that unemployment insurance was good for the economy because when people didn't have jobs they still had money to spend on goods, which helped the companies and thereby stimulated the economy even when people were losing work. 

It is disheartening to see such evident misunderstanding of basic economic principles. 
Here is why this reasoning is faulty, at best.

First of all, people have to pay into unemployment when they do have jobs.  Part of the individuals argument was that people wouldn't save if we didn't force them to by law.  Whether or not that's true, let's grant it for the sake of the argument.  If people wouldn't save for the times when they don't have jobs, then it stands to reason that they would be spending that money in the economy.  Instead of the money they would be paying into unemployment, there would be money they were injecting back into the economy.  In addition, companies wouldn't have to pay out unemployment benefits either, meaning they could invest more in their corporation initially, or raise wages, or do any other number of useful things with that money.  So not only would the money from unemployment, if people wouldn't save on their own, be used BEFORE there was an economic crisis, the companies (whichever ones they are) would have more capital to work with BEFORE the economic crisis as well.  So, there would be twofold protection against joblessness, it would be cheaper to employ people, driving down the cost of goods, and people would have more money to spend initially, further stimulating the economy and preventing hardship in the frist place.

Prevention of problems is almost always better than elimination of symptoms. 

More to come on unemployment...

Friday, September 9, 2011

Back to the grind

Back to wage slavery.  Well, not slavery, that's probably a bit insulting to those individuals who are actually in that position, but something similar.  Anyway, I got a job as a casino dealer, which is a great job, as the wage work goes, and something I've done before.  20 minute breaks every fourty minutes, and I get paid to gamble (though not with my own money, and as the house).  The bad part though, as ever, is taxes.  Out of an 1100 dollar paycheck, I see about 900.   *stabs eyes*   I could really use that 200 dollars.  I found out we spent something like 20 billion dollars on air conditioning in Iraq for soldiers this last year.  I don't disagree with keeping them cool, I just disagree with them being there...  I'm thinking we could do a little bit of repair to our own internal issues with that 20 billion dollars from air conditioning alone, not to mention all the other direct and indirect costs of keeping people overseas.  I also saw brief outtakes from the september 7th GOP debate, in which Ron Paul thoroughly rocked the house, despite the attempted sabatoge by those who questioned him and his opponents.  It's exciting to see his popularity rise.  I'm at work now, on one of my frequent breaks.  I've learned to deal roulette this week, which just adds another feather to my cap, sortof.  Now if i can just get proficient at craps I might be able to stop living paycheck to (barely) paycheck sometime in the next 20 years (assuming there are such things as paychecks in 20 years).  

Relevant links: 



Some few of the things I find interesting: