Friday, July 31, 2009

Why Minimum Wage Means Maximum Slavery

Whiskey & Gunpowder

Gary’s Note:  In the very near future the government will be assigning us our jobs our housing and our wages. If you’re lucky, you’ll get to work in a factory instead of a farm. It's already starting -- the commissars-to-be in D.C. recently raised the minimum wage, but they won’t stop there. Below Tex Norton explains why the recent increase in minimum wage will have disastrous repercussions for you and your way of life…

Whiskey & Gunpowder
by Tex Norton

July 31, 2009
The Republic of Texas, U.S.

Why Minimum Wage Means Maximum Slavery

While we were in Vancouver last week, the dipsticks in Washington, District of Criminals did it again. They increased the Minimum Wage from $6.55 to $7.25 per hour.

I don’t mean to preach to the choir, but there goes the remnant of what might otherwise have been the start of a jobs recovery.

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Wage and Price Controls don’t work. You and I can see it in everyday real life. Richard Nixon tried it and failed. The Pols that run the country can’t seem to see beyond the end of their noses. Actually, they know exactly what will happen but they’re so hell-bent to reward unions, they don’t care.

Why unions? Simple. If the minimum wage is increased, naturally the union wage must also be increased. Increasing the union wage rate keeps the membership in line and fattens the pockets of the union officials. In turn, it helps get the Pols re-elected. Talk about being hypocritical. The very Pols that caused the dollar to lose purchasing power due to government deficit spending now pretend to be so munificent as to help the poor earn a “living wage.”

This is no different than rent controls or price controls. Anytime artificial numbers are substituted for what an otherwise free market would be willing to pay, somebody gets hurt. In the case of minimum wages, it’s the very low-level worker that gets hurt. If the objective is to provide employment for entry level workers, minimum wage isn’t the answer.

Would you like a job paying $6.55 per hour or would you prefer no-job paying $7.25 per hour?

It really is that simple. If you’re a marginal worker, you’re expendable. The business for which you work can perhaps justify paying you $6.55 per hour to sweep or wash dishes. When then forced to pay $7.25 per hour for the same services, the business just decides they can no longer afford to hire the sweeper or dishwasher. They make other arrangements to get the jobs done. Meanwhile, the former dishwasher is now out of a job thanks to the Federal Government raising the minimum wage.

During WWII, we had all sorts of wage, rent and price controls. Perhaps because we were involved in a major war, folks simply made-do without and devoted their efforts to helping the United States win the war. Once the war was over, most of the wage and price controls were removed. The economy then took-off like a scalded dog.

There were a few pockets of resistance however. One was Santa Monica, CA. They decided rent controls were necessary because “greedy” landlords were taking advantage of the “poor” tenants. Ditto NYC, by the way. The result was fewer units available because the very folks that risk their own money and expended their own energies to provide living accommodations weren’t willing to do so for a less-than-profitable return. Existing units were not well maintained because the owner was seldom allowed to increase rents to cover expenses. New units were exempt. Those new units were rentable at whatever the market would pay. As a result, all varieties of high-priced new units came on the market while the more-affordable units vanished. Once again, the very folks who were supposed to be helped by rent controls now found thems elves with no choices, thanks to government interference.

As mentioned above, during WWII, we had price controls on almost everything. We also had coupon books that limited the quantity of almost every good we could purchase. My mom traded coupons with other moms so everyone had a chance to get what they really needed. Shortages, however, were the norm. It made almost no difference whether you had an “A,” “B,” or “C” gasoline sticker for your car because you couldn’t buy tires. When prices and/or quantities are artificially limited, scarcity is the result.

Have you heard the opposition to Obama’s National Health Care complain about rationing? This is exactly the “why” of that complaint. Some bureaucrat will decide who gets what medical treatment. The excuse is that medical costs are too high. It’s another form of wage and price controls. In this case, the result will be otherwise-avoidable deaths simply due to the rationing of medical services. And as you’ve read many times, if you think health care is expensive now, wait until you see what it costs when it’s free.

So what’s the solution? What about “all those poor people?” What’s a heartless capitalist to do?

Recall Mama Obama ranting during the campaign that “some folks are going to have to give-up some of their pie so that others can have some?” Neither she nor the multitudes like her understand the basics of Economics 101. Our economy is not a zero-sum game.

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For most of my life, I raced cars and one of my favorite races was the 2000 mile La Carrera Panamericana from Guatemala to the USA through central Mexico. Let’s admit that Mexico is a poor country. That is, many of the folks are considered to be poor. Yet as I traveled throughout Mexico, I saw color TVs in cardboard shacks. I must have been really “poor” when I was a kid because we didn’t even have a black and white TV. No one did. We were one of the first families in the neighborhood to get a TV and that wasn’t until 1948. Today, even a poor Mexican can have a color TV. Why? Because contrary to Mama Obama, the world’s pie continues getting bigger. That means even the poorest among us can enjoy a living standard that wasn’t even available when I was young.

We have a bunch of politicians who continuously deficit-spend thus reducing the purchasing power of the dollar. Then they graciously increase the mandatory minimum wage in order to off-set the loss of purchasing power they, themselves, created. Do you suppose there is a moral hazard hiding somewhere in this fraud?

Tex Norton

Parting Shot...

Today you do the heavy lifting, Shooters. Here are just a few of the letters I received about yesterday’s Whiskey

Today you said:
I’m all for murderers and rapists being removed from society permanently…but an awful lot of people are guests of the states because of insanely immoral prohibition laws. Yes, I speak of drug offenses.

And plenty of the murderers in prison are such because they are the de facto warriors and enforcers in a black market economy created by prohibition.

End prohibition and an awful lot of prison space becomes redundant.

I concur with this exactly. Too bad we don’t we don’t hear more about this. Keep up the irreverence!

Consider the irreverence kept up!

Bravo!!! I completely agree with you!

Drug prohibition has been one of the greatest tactical errors and manifest failures of the powers that be.

It has handed a very lucrative and powerful market and placed in the hands of the organized crime, making them very wealthy, powerful, and un-stoppable.

The only way we can defeat the drug traffickers is to take away their product:  Legalize it! Regulate it! Tax it!

The War on Drugs has been a failure.  The victims are our families and our tax dollars spent on housing masses of people in prison and the funding this ineffectual war.

I hate drugs, want to have nothing to do with them.  But I am a pragmatist and the War on Drugs is a wasteful joke. 

It's time to declare victory and make the stuff as legal as whiskey and put the cartels out of business!

Danke. Beware when you hear anyone say “there oughta be a law.” Just because you don’t approve of a behavior doesn’t mean there ought to be legislation against it.

When the citizenry really gets fed up the easiest thing to do is build a big concrete wall around Washington, call it a jail, and start over.  And definitely do away with prohibition - what a stupid concept.  Let people do what they want as long as they are harming no one but themselves (or aiding themselves).  This police state has to stop, and the politicians don't get it at all.  Besides the billions of dollars wasted on enforcing drug laws, and the billions missed in taxing substances, you have billions spent on keeping so-called criminals incarcerated.  Don't they have calculators?  I know they can't add up things in their heads, but calculators have been around for years.  I know some of them don't get computers yet, but calculators?  Add up the costs, dear government, this drug war thing is throwing money out the window.

Waitaminut…government throwing money out the window whilst simultaneously meddling with individual behavior it has no natural right to control? Doesn’t seem possible.

Hooray, someone else with common sense. Case in point, a local man was sentenced to 42 years in prison for having 1 marijuana smoke in his possession. He did have a number of convictions for the same thing, but no convictions for any other type of crime. The judge handing out such a sentence is up for reelection soon. Some common sense must return to our laws on soft drug usage and possession in small quantities. We have prisons full of people who cost the entire country indirectly through lost productivity as well as the direct cost of housing them.

Thanks, but it shouldn’t matter how “hard” or “soft” the drug usage is. We don’t arrest people based on how hard they hit the bottle. Why should it be different for any other drug?

The violence issue often comes up, but plenty of people smoke crack and manage not to assault and rob others.

And if there were no government-spawned black market, the cost of crack and drugs like it would come down so far that those who currently rob strangers or sell them sexual favors for rock or smack most likely wouldn’t have to. The habit would become as cheap as compulsive gum-chewing. Hard drug-users could kill themselves in peace without the government incentives to mug or whore.

RE: drugs: I wish I could howl, but I am moving toward the same position. If people want to screw up their lives, let them buy drugs from a drug store, let Midwest farmers grow pot and poppies, and tax it like any other sinful substance.

BUT: You can not do that if health care is considered a right rather than a privilege in this society. If it is a right, then hospitals and ER docs are required to work without compensation. Right now, if a hospital bills Medicare / Medicaid, they must treat anyone who shows up at the ER, whether they'll get paid or not.  Isn't that slavery? Do you have any position on slavery?

So before you take drugs off the streets and legitimize an outlet for them, a repeal of the slavery - I mean, compassion laws is necessary. If people show up to an ER, they should have to show ability to pay, or they don't get care. Harsh? I suppose, but I bet it would be a nice incentive to buy health insurance.

And you certainly cannot legalize drugs and have Obamacare. Government run health care will not work. Government already heavily controls our health care system, which IMHO is exactly why costs are out of control. Any time you subsidize something with government thievery, the costs will go up. 

No alcohol, please, I'm from Utah, but I will squeeze off a round or two in a show of solidarity.

Oy. You really, really don’t want me to get started on government healthcare, Good Shooter…but it’s too late.

This whole government healthcare racket itself smacks of slavery: foisting care upon people then telling them what they can and can’t do since any harm that comes to their bodies would be a burden on the national system.

I’d like to opt out of the collective, thank you very much. Let me abuse myself as I wish and pay for care as I see fit.

I await the indignant responses from the nannies and meddlers who insist on taking care of me and on telling me what’s on their approved list of what goes on with my person.

This ought to be good.

Gary Gibson
Managing Editor,
Whiskey & Gunpowder

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