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I wrote this days ago and I didn't post it. It is the last response to Loren's post 435182 which therefore has the url -
https://talkfreethought.org/showthr...mum-wage-to-15&p=435182&viewfull=1#post435182
(The basic problem is that you are trying to ignore supply and demand.) The market is very resilient against anything but very heavy-handed intervention in this regard--
I am not ignoring supply and demand. I just said that the interaction of the two doesn't set the price. And that demand is not infinite, that in order to have economic demand it is not sufficient for there to be a supply and the desire to own a product or to consume a service, there has to be money to realize the desire. And that the economy is demand lead and that it is no longer constrained by the supply.
I don't believe that the economy is "very resilient against anything but very heavy-handed intervention" in any regard. If this was true, the government interventions would have a minimal effect on the economy. But we know that this is not true and the vast majority of your fellow free market enthusiasts would agree.
It is worth noting at this point again that the government defines the roles and the structure of the players in the economy such as corporations and the professionals that are allowed to do critical jobs. That, as in the broader society, in the market it is the government that defines and enforces what behavior is acceptable. That it is the government that defines and enforces property rights. And important for our discussion it is the government that determines the income distribution to the participants.
In 1980 supply side economists were certain that the market was not resistant to government intervention and that it was government intervention that had pushed up wages and suppressed profits. They were correct.
And what they proposed to do was that the government should intervene to reverse this and to suppress wages and increase profits to increase the the incomes of the already wealthy. And the government did do this. They passed tax cuts, they stopped raising the minimum wage, they stopped supporting the unions, started increasing the government's support of the corporations, started allowing the concentration more corporate control over the economy by larger and fewer corporations, started rolling back the burdening of exchanges with externalities such as having to clean up their own pollution or the burden of having to sell only safe products manufactured in safe factories paying decent wages.
... and I don't want to give the government the sort of control on our economy that would be necessary to force what you want.
What makes you so fearful of the government? I would think that you would be happy with the government that we have now. It is solidly in the control of the party of neoliberalism and anything the wealthy and the corporations want, they get. Exactly the principles that you support, here in this blog.
They have promised to do the things that you want to do, relieve the free market of government oversight, especially the financial sector, banks, because they have learned to regulate themselves and to play nice, not like they did before 2008. To reduce taxation on the rich and to shift it to the non-rich, because the wealthy don't need the government, why should they pay for it? To re-establish the joys working for a living rather than living off of government largess, people like me, disabled and all of those children who chose the wrong parents. To turn government services into private, for profit corporations like was done in Russia. You want the US to be like Russia don't you?
Loren Pechtel said:
You, Reagan, and Milton Friedman are making the same mistake that Marx made. You are proposing an economic system based on conjecture, on an unproven fantasy that is unsupported by history or even theory. Like Marx you are proposing to replace a large part of the regulation of society that government currently does with the regulation by the economic system, to subject large segments of society to the questionable "discipline" of competitive markets, including education, the national defense, health care and jurisprudence.
Whereas you are proposing a system that has been shown not to work.
See, this where your memorized, randomly placed talking points fail you, not to mention your failure to read and/or to understand my posts.
I am proposing to keep the economy that we have right now, the mixed market, government and private enterprise working together, capitalistic economy that you see working quite well everyday. The economy that has provided for you and yours everyday that you and yours are here. The most successful economy that the world has ever seen. The economy that defeated both fascism and communism within fifty years.
Why do you think that it is a failed system?
Your fantasy is that the adaptations that capitalism made were a mistake and that the 99% can be changed to accept your vision of an optimized capitalism. That markets can self-regulate and control much of what government does now. That rather than we using capitalism to improve our lives it would be better to let capitalism change us to improve capitalism. And like Marx, you are wrong.
I realize the markets aren't good at self-regulating.
Jeez, Loren, I wish that you had told me that about 3,000 of my words ago, and long before I made a complete fool of myself.
Oh, well, it isn't the first time and I expect it won't be the last. I have to stop assuming that I can keep it straight who has said what here. I apologize.
I have to regroup.
=============== Okay, I am back again ===============
That doesn't mean that going head-to-head with the market is a good thing--the results are almost always bad.
I am sure that this argument, that we have to put up with bad outcomes because it is the nature of the beast, has been used to justify not doing anything about monopolies, speculation, slavery, child labor and wife beating, among many others.
Curiously this didn't seem to be a big problem in 1980 when we were told that we should change our policies to suppress the growth of real wages to increase profits to give the rich more money to invest so that everyone would have a good job and more money.
We did change our policies and we did suppress the growth of real wages and we did give more money to the rich but they didn't invest in job producing investments and we didn't all get good jobs and and only the rich got more money. And now we ask what went wrong and can't we change our policies to back to grow real wages by suppressing profits and here we are today with you telling us that we can't go head to head against the market, the bad outcome that will result is just the nature of the beast.
Mitch McConnell told one of his town hall meetings filled with irate constituents that one of the reasons that ObamaCare is a failure is because there are still people in the country without health care insurance.
See if you can spot a flaw in his argument.
Maybe this will help. I heard this argument before when we were told that the war on poverty was a failure because it had only cut the rate of poverty in half.
As much as possible the government should aim for the minimum intervention that accomplishes what's needed.
I agree completely with you. Although I am pretty sure that you won't agree with the next statement.
If anything, the government is always behind the curve writing new regulations and passing new laws for the new innovations that crooks and crooked businesses (since corporations are people now too!) are constantly coming up with. The government therefore has an insufficient number of regulations and laws compared to what is needed at any point in time. However, looking at the entire economy this is a small problem, the vast majority of the economy is regulated well enough and the main problem is enforcement of the existing laws and regulations.
This is due to the government being controlled at the present time by people who have an irrational aversion to regulating businesses, while maintaining an irrational interest in regulating what people do in their private lives. It is an odd and hypothetical mixture of what is important to society. Businesses are deposed or forced by competition from businesses deposed to take advantage of every opportunity to make a profit.
The test of this is if removing more regulations causes more problems than it helps. It's clear that we are close now. Take as example, the inability of anyone here to name a single job killing regulation after what must be going on to three years now. Compare that with the massive amount of damage cause to the world when Alan Greenspan and the other George W. Bush administration appointees decided that the banks and the financial sector had learned to self-regulate and that the Fed and the SEC and the other regulators didn't need to reign them in
It will never be perfect of course, the government is always behind the curve because it can only be reactive. It can't foresee the almost infinite ways that crooks will try to cheat the system, each other and consumers. It has to wait until a problem develops to see if the existing laws are sufficient or if there is the need for new ones. And new regulations create incentives to try to find ways around them.
And the economy is always getting more complex, requiring new laws to handle new developments. Things like the stem cell frauds, the possibility of custom babies by manipulating DNA and self-driving cars.
But the biggest problem that we have is with all of innovation in the financial sector, all of the new heavily leveraged derivatives, some so complex that even the people who developed them don't understand them, because they incorporate other people's derivatives that their creators don't fully understand.
In today's economy, because we have such large corporations, they have the edge by a long margin negotiating wages with employees. They don't have to pay someone what he is worth or even a percentage of the value that the employee adds to the company.
We could reduce the many regulations that we have governing corporations and reduce the advantage that corporations have negotiating wages by breaking up them up into many smaller ones, making it more deficit for companies to control the the wages they pay or the prices they receive for their products and services. This would move the economy closer to the perfect competition model required to self-regulate. It would put the management of businesses closer to the employees, give the employees greater leverage negotiating wages because there would be many more companies doing the same work.
But this is not a reasonable solution. We have gained much from the economic model of large corporations regulated by the government. Large corporations are more efficient because of the economies of scale. The burden of the costs of management and planning are spread over more units of product sold. Large corporations have the money to develop new products and to refine their existing products that smaller companies lack.
They don't have to work hard enough for their profits. They have things too easy now. They don't even know what to do with all of the money that they are earning in profits. They pay higher dividends, the rich stockholders get even ricer but they are running out of places to put the money, the stock market is horribly over valued, many times over, by the P/E ratio standards of just a few years.
Corporations stuff money into offshore banks to avoid paying taxes on it, they hate to pay taxes. The uber-wealthy do the same. The estimates of the amount of these taxes sitting in tax haven banks from the US are in the range of ten to twenty trillion dollars. two companies, Apple and Google combined are estimated to have four trillion dollars off shore.
Also, I am categorically opposed to off-the-books accounting. Minimum wage is a form of off-the-books accounting. Look at the costs fairly, don't push them off into a corner where you can pretend they don't exist. (Thus I favor abolishing the minimum wage but expanding the EITC.)
I don't fully understand what you mean by off the books accounting. It seems to me that if you account for something it is not off the books, if you mean by that it is somehow hidden. But I know that you are categorically opposed to the minimum wage. Although you don't seem to have a full grasp of why, just a collection of talking points that you don't seem to fully understand and can't defend without magic.
You believe that we should drive wages down until they are as low as in any country on earth. You don't seem to feel as if the very lowest paid workers, who often work many jobs, do anything of importance. That they are lowly paid because the markets don't value the work that they do and we readily see this because the markets don't pay them very much. And then a paragraph later you tell us that they should have to compete with the low labor rates overseas. Then someone else tells them if they can't pay for health care, that they don't deserve it. Then you tell them that an education is the way out of poverty but they have to pay for that and if they can't afford it they don't deserve it.
I oppose the EITC, it is better if people have to work for the money needed to live and the EITC is nothing more than a subsidy for low wage jobs and the employers.
The minimum wage is nothing more than one of the many standards that we impose on businesses for the businesses to be in business. We tell them that they have to clean up their own pollution, to pay taxes for the roads that they use and for the schools that taught their workers and that teach their future workers, we tell them that they can't use child labor, how many hours a week their workers can work, and the conditions that they have maintain for the workers, we tell them that they must sell safe products produced in facilities that are safe for their workers, and on and on. And yet you balk at telling businesses what the minimum wage should be because it is off the book accounting because it pushes labor costs off into a corner where we can pretend the costs don't exist.
The last post for this response
