End, Don't Raise, Minimum Wage Laws

Earlier this year, the NJ Legislature took up a bill to raise the state's minimum wage laws. Urging Governor Christie to support the bill, the NJ Star-Ledger wrote:

The Assembly last week voted to boost the state’s minimum wage from the federal floor of $7.25 an hour to $8.50, and to link future increases to the rate of inflation. If the state Senate follows suit and votes along party lines, as the Assembly did, the bill will move to Gov. Chris Christie’s desk.

As of mid September, the bill was stalled. I left the following comments:

It is simply immoral to force any person to pay another person more than he judges their services to be worth. The employer who created the job has a fundamental right to think and act on their own rational judgment, and no one has any moral right to institute laws that interfere in that judgment. If a businessman has no right to determine what to pay his employees, then what right does anyone else have to impose their judgment as to what should be paid?

 
 

Likewise, job seekers have a fundamental right to take a job on mutually agreed-upon compensation terms. By what right do government officials, whose solemn duty is to protect our rights equally and at all times, interfere in voluntary employment agreements?

 
 

Of course, the immoral is also the impractical. It simply defies logic, economic theory, and history to presume that minimum wage laws do not destroy jobs and—more importantly--prevent new jobs from coming into existence. Profitable business enterprises generate jobs, and no business can be profitable by paying more than its employees contribute to the enterprise. Minimum wage laws, to the extent that some workers actually “benefit” from them, are nothing more than a forced redistribution of wealth. This means that the extra money in the worker’s pocket does not represent value—i.e., wealth—created, but a forced handout from the employer. It represents not new production and thus new demand, but merely a transfer of demand from the person who produced it to the person who didn’t. To claim that minimum wage laws foster economic growth is to fall into the same fallacious trap that drives government “stimulus” policies; the Keynesian fallacy that “demand” or consumption, rather than savings and production, drives the economy. Of course, Keynesianism is merely a cover for statism, not rational economic theory.

 
 

Minimum wage laws are morally and economically destructive, and should be repealed.

Another correspondent took issue:

fedupinnj100

"It is simply immoral to force any person to pay another person more than he judges their services to be worth. The employer who created the job has a fundamental right to think and act on their own rational judgment, and no one has any moral right to institute laws that interfere in that judgment. If a businessman has no right to determine what to pay his employees, then what right does anyone else have to impose their judgment as to what should be paid?"

Fine-to use your logic, I find it equally, if not more so, morally objectionalbe that tax dollars are handed out to corporations for the supposed reason of keeping jobs here. Like the 5 mile Prudential move. or Xanadu-seen lots of those jobs lately?

I find it amazing that so many of you think that $7.25 an hour is just fine. Try it for a while and let me know how it's working for you. And please tell me one company that hasn't raised prices for its goods and services for the same years that $7.25 has been the minimum wage. Maybe the oil conpanies or the food industry?

My response:

Fedupinnj100: I notice you didn’t refute anything I said in the quote you cited. You simply sidestepped it. 
 
For the record, I second Mtown_Quaker’s position. I oppose all subsidies, loan guarantees, grants, and other forms of corporate welfare to private business. Yes, it is most certainly immoral to use tax money in such fashion.
 
As to your final point, low wage jobs are not “just fine” for most people, which is why most people acquire skills that raises the economic value of their labor. The fact that some people don’t is no justification for violating the rights of others. As to rising prices of goods and services—which include wages and salaries across the income scale--that is a consequence of inflation, a deliberate government created phenomenon.
 
Those who truly want to improve opportunities for the young and/or the poor should recognize that killing off the sub-minimum wage job market freezes many people out of the economy. Minimum wage laws along with other government intrusions like occupational licensure laws kick out the lower rungs of the economic ladder, making upward mobility harder or impossible. Politicians create such laws because they seek the votes of the select people who benefit from such market intrusions and to hell with the people who stay unemployed due to the jobs not created and don’t know they are being screwed.

Romney's Edge; Some Genuine Respect for Business and the Individual

As expected, in the first debate Mitt Romney demonstrated that there is fundamentally little difference between himself and Obama.

Clearly, Romney's biggest Achilles Heal is healthcare. As Obama hammered home, ObamaCare is modeled after RomneyCare in Massachusetts. Romney simply had no way to wiggle around the issue, and his promise to repeal and replace ObamaCare had no credibility. The one highlight was his sharp focus on the (IPAB) board that has the power to dictate healthcare decisions of doctors and patients. But given his strong statist inclinations toward healthcare, it's hard to imagine anything he would put in its place that would not ultimately lead to some form of rationing.

On education, Romney endorsed a large federal role for education. His idea to have government grade the schools so parents could tell the good ones from the bad smacks of central planning.

Romney enthusiastically endorsed government regulation of business, with only the tepid "I can do it better and more efficiently" establishment Republican/conservative line. He lost the chance to place the blame for the Great Recession squarely where the mountain of facts tell us it belongs--on government regulation and interference into the markets (although he correctly attacked our "too-big-to-fail" bank policies). Obama was thus able to perpetuate the lie that lack of regulation and tax cuts caused the whole debacle, giving credence to his call for ever-more regulation.

On taxes and spending, Romney made pretty clear he wouldn't raise taxes. But I think he squandered a chance to use the tax issue to put force a bold tax reform plan like a flat tax, and he took pains to avoid any real commitment to reducing taxes in any meaningful way. On spending, his assertion that we could grow our way out of the deficits is unconvincing to say the least, considering the size, scope, and runaway nature of government entitlement programs. He simply does not have the heart to say what needs to be done with spending.

On Lehrer's question about the proper role of government, Romney fell flat, saying his interpretation of the "pursuit of happiness" principle is an endorsement of welfare statism. Not surprisingly, Romney believes that the welfare state is compatible with freedom: "But we also believe in maintaining for individuals the right to pursue their dreams and not to have the government substitute itself for the rights of free individuals." The contradiction is obvious. 

On the positive side, he convincingly demonstrated his commitment to maintaining  a strong military. Romney was better on energy. While giving the obligatory nod to "alternative energy," he went to bat for fossil fuels, especially the Obama-battered coal industry and the Keystone pipeline. I liked that he called the President on the surge in domestic natural gas and oil production--which Obama took credit for--by noting that the surge was in spite of, not because of, Obama's policies. I also like his introduction of the term "trickle-down government," a nice retort to Obama's insulting smear of free markets as "top down" or "trickle down" economics.

Policy specifics aside, though, the big message that came across in this debate is that Romney clearly has some genuine respect for business and the individual--a respect that may help pull him in the right direction on policy. Despite insultingly phony lip-service to free enterprise and freedom, Obama clearly has nothing but contempt for the individual's liberty and dignity, as epitomized in his frequent references to freer healthcare markets as "being at the mercy of private insurance companies." Disappointingly, Romney failed to capitalize on this Democrat talking point. He should have hit that one out of the ballpark. While he did note that, in the private market, you are free to switch insurers any time you're not satisfied with the one you have, he failed to hammer home that being at the mercy of government is the real threat to the individual.

Still, for liberty lovers, Romney showed that he is the clear choice in this election. Though there is little hope of a Romney presidency reversing the long-term statist trend, and despite the ever-present danger that any economic calamity that may happen under his watch will be another excuse to blame "free market policies," the need for a respite from Obama's policies takes priority. The dangers inherent in electing a statist republican is outweighed by the danger posed by a second Obama Administration.

The Evil Genius of the Welfare State

At least for now, the Romney campaign appears to be sinking. While it's impossible to prove, I feel very strongly that the turning point was Romney's 47% statement, and the fallout from that continues. The NJ Star-Ledger's October 1st editorial is entitled What Moochers? Government Programs Help Nearly All Americans. Here are some excerpts:

Nearly all Americans have received a direct form of government benefits at some point in their lives, according to a national survey by Cornell University — whether rich or poor, Democrat or Republican.

After pointing out the Romneys' legal exploitation of some tax write-off, the editors say:

   As many as 96 percent of Americans have relied on the federal government to assist them, it found, and most of the remaining 4 percent are simply too young to be eligible for these policies.
   We’re not talking about government spending that benefits everyone, such as national defense or the interstate highway system. This only includes direct benefits, everything from Social Security or unemployment insurance to home mortgage-interest deductions — which are just as much government help as food stamps, home heating aid or college grants.

The editors conclude, "So when Romney wrote off 47 percent of the country, he got his numbers wrong. And he overlooked one pretty jazzy, Olympic-quality dressage horse, too," this last referring to the aforementioned tax write-off.

I left the following comments:

First, let's get past this editorial's dishonest obfuscatory terminology. Those government "benefits" or "help" or "assistance"--whatever you want to call it--are no such thing. All of these programs are based on brute force, politely disguised as "legislation" or the "democratic process." They are funded by money taken by force of taxation from private citizens who earned it, and paid out in one form or another to other citizens. The government's role in this process is that of nothing more than a money laundering operation--an operation so huge that it makes the biggest organized crime syndicates look like mere pickpocket rings.

Romney's idiotic (and untrue) 47% statement aside, the fact remains that there are those who receive more from the government money launderers than they pay in taxes. And there are many suckers who pay more in taxes than they "get back" in government checks. That nearly every American will receive some form of government handout only disguises the fact that the welfare state is a huge immoral transfer of wealth from those who earned it to those who didn't.

But then, that's the evil genius of welfare statism: Piece by legislative piece, like termites eating away at a structure, the statists have managed to trap everyone into a position that makes it nearly impossible for anyone to avoid that government check. Then, use that trap to discredit any opposition to welfare statism. But the editors clever attempt to exploit the trap for political purposes only serves to highlight our corrupt tax code and the extent to which the welfare state has intruded on our lives, and the desperate need to begin phasing out both. 

Is it hypocritical to collect on a program whose "benefit" promises were paid for with your own tax money? "Yes" is the answer implied in this editorial. A resounding no is the correct, and moral, answer. I addressed this issue in a previous post on Social Security. The arguments extend to virtually all government programs.

Related Reading:

The Social Security Injustice

Social Security and the "Hypocrisy" Charge

For Obama Opponents, Not Much to Hope For in Tonight's Debate

My hope meter jumped a couple of notches when Romney picked Paul Ryan as his running mate. Then came his fold on ObamaCare and his 47% comment. This is the tip of the iceberg. As columnist Paul Mulshine points out:

   I can’t see a dime’s worth of difference between these two. Romney somehow convinced Republicans that he represents a real change from Obama. But back when he ran Massachusetts, Romney’s policies were virtually identical to Obama’s on just about every issue of importance, from health care reform to the cap-and-trade approach to reducing carbon dioxide emissions.
   Look no farther for the reason he’s behind in the polls. There’s an old saying to the effect that the best lie detector is a television camera. And every time Romney gets up in front of one, it is obvious to anyone paying attention that virtually everything he says is a refutation of something he said in the not-too-distant past.  Obama doesn't have that problem. When he endorses all those liberal positions that Romney used to support, he’s telling the truth. He really believes this stuff.

I basically agree with Mulshine here, although I'm not sure how many Republicans Romney actually convinced "he represents a real change from Obama"--i.e., is a proponent of individualism and free markets. It was obvious to me he never was. But that's me, and I'm not a Republican.

The problem is not bad ideology. It is much worse than that. As Mulshine observes, "Romney...has no deeply held beliefs." Romney's inept campaign is the consequence, and it is hard to see how Romney can do much to tip the scales in his favor in these debates. Despite some of his shallow rhetoric, he is basically Obama Lite, just like W. Bush. Why elect another Obama Lite, when you can have the real thing?

As Mulshine notes, quoting George F. Will, "If the Republican Party cannot win in this environment, it has to get out of politics and find another business." Or, I would suggest, radically restructure its message.

As for my wife and I, we won't be watching tonight's debate. We'll tape it, in case we care to watch it later. Tonight, we'll be focused on something more substantive. We'll be watching the New York Yankees attempt to clinch the American League East crown.

GO YANKEES!!

Related Reading:

Romney vs. Romney on Coercive wealth Redistribution

Is Romney Really on the Political Right?

Romney Addresses Entitlement Mentality, Misses Fundamental by Ari Armstrong

Craig Biddle on the Philosophic Foundations of Freedom

The title of Craig Biddle's excellent talk, The Trinity of Liberty: Individualism, Individual Rights, and Independent Thinking, is a relatively short talk about what freedom's advocates must incorporate into their activism in order to gain the moral upper hand in the battle for free markets--and ultimately succeed.

Memo to Ed Bobinski: The Politicization of Food Starts with Government Programs

This letter by Ed Bobinski appeared recently in the NJ Star-Ledger:

   Joy Pullman of the Heartland Institution published a letter in The Star-Ledger deploring our state’s decision to feed poor children ("Government isn’t a charity," Sept. 12).
   Food should never be used as a political weapon. Poor, unfed children come from poor, unfed homes. Most parents are good, decent, moral folks who have come upon hard times.            Some parents are uncaring, drug-addicted felons. Some are ignorant about child-rearing. Sometimes there are no parents. But children are children, and hunger is hunger.
   The Heartland Institute is a multimillion-dollar nonprofit research institution. I’m sure its employees are well cared for financially. And what do these folks do with their living? At least one preaches against the downtrodden. What a way to build a country, a society, a civilization.
   Heartland, stay out of New Jersey. We take pride in caring for our citizens.

I left the following comments:

The minute the government undertook to feed one person at the expense of the seizure of another person's money by force, food became a political weapon. Therefor, it is Bobinson--who supports this practice--rather than Pullman who is using food as a political weapon.

I do not take issue with Bobinson's concerns here. They are his concerns, and he is free to act upon them, with his own time and money, as he sees fit. I take issue with his immoral methods. Anyone who undertakes to practice charity with other people's tax money forfeits any right to claim concern for others as a motive, and I utterly reject Bobinson's claim to the moral high road. All individuals, not just Ed Bobinson, have a right to decide when, who, and in what manner to extend a helping hand to others.

Bobinson speaks as if he has the lives and wealth of all "New Jerseyans" at his disposal. He doesn't. He has no right to claim to speak for anyone but himself. There is no "We." Just as it is wrong for him to rob his neighbor at gunpoint, so it is just as wrong to hide that theft under cover of tax law. Any "society" that exempts politicians from the moral law forbidding theft is not a "civilization," but a tribal mob ruled by thugs.

Yes, "children are children, and hunger is hunger." But that is not the moral issue. The only issue involved here is whether or not each individual has the equal right to act upon his own moral judgement without coercive interference from others, including others in their capacity as government officials. The right to disagree is the essence of a moral country, society, or civilization. Government should be out the charity business.

My advice to Ed Bobinski is: Put your own guns away, before you complain about others' use of political weaponry.

Why the GOP Must Stand Firm on "Tax Cuts for the Rich"

There is much more at stake in the coming political battle over extending the Bush tax cuts than a mere few percentage points of someone's tax bracket. The Left knows that whatever additional revenues flow to the government from a raise in the top tax bracket from 35% to the pre-Bush 39.6% level will be minuscule compared to the deficit. They don't care, because they're looking to fry a much bigger fish.

To understand what is at stake, we must look at the numbers. The Democrats' assault on "the rich" has taken the form of singling out the "top 1%." That is their symbol and rallying cry.

Remember that the percentage of something is relative to the hard numbers. In relation to any fixed number, the total quantity always equals 100%. If you have 100 marbles of varying sizes in a jar, the total equals 100%. If you take the largest one and shave it down so it is no longer the largest, you still have 100%; except that now the next largest one, which then becomes the largest, is not quite as large as the previous largest marble. You now have a smaller "top 1%." Continue with this process, and eventually all of the marbles are cut down to the size of the smallest--i.e., no more top, middle, or bottom 1%.

The same is true with regard to taxpayers in an industrial economy.

If every dollar of the "rich" that falls into the category of the highest 1% of income were redistributed away, reducing the taxpayers "take-home" pay below that magic threshold--effectively discouraging anyone from earning money above a certain level--the total number of taxpayers will still equal 100%. But now the next highest level of income--what was the previous 99th percentile--becomes the new “top 1%.” If their "surplus" wealth is confiscated, then the next level of income becomes the “top 1%,” and so on.

But the Left doesn't want to take it all, just a "fair share," you say? Think again. There was a time when the highest rate in America was 91%. Then came the Kennedy/Reagan tax cuts, which brought the top rate down to 28%. The rates have bounced around since then, settling at the current top rate of 35%. But make no mistake, the Left has been itching to reverse the Kennedy/Reagan tax regime, and their 1% strategy is their means. If the premise that the top 1% should be singled out for special, higher taxation is accepted, the Left will always have someone to go after. Just as the process by which we reached today's massive welfare state was a long-term, incremental process, so it will be with regard to the tax issue. As long as there is any income “disparity” whatsoever, there will be a “top 1%” to exploit--and it will be.

The logical endgame of Obama’s anti-1% crusade is a society of universal economic, rather than legal, equality; that is to say, of universal poverty--a jar full of small marbles. Then, a new top 1% will have arisen; a top 1% comprised of rulers over a command economy. This is why the Left is so feverish about the relatively inconsequential 4.6% rise in the top rate that excluding "the rich" from extension of the Bush tax cuts would engender. The Left's “top 1%" strategy fits neatly into its collectivist worldview. It is an egalitarian assault on virtually any productive person with an income above bare poverty levels. Obama’s vision is not new. It has a name. It is nothing less than a “soft” brand of Marxian communism.

How, then, will the Republicans respond? There is only one way to stop this game: Attack the principle behind it--which, really, goes to the heart of the fundamental battle between individualism and collectivism. If the Republicans cave in on taxing the rich, they will have handed the Left a "gift that will keep on giving." Once the principle that the highest earners can be singled out for discriminatory taxation, what's to stop the Left from going back to the 1% well time and time again?

There are many policy areas in which the GOP can and must halt its retreat, and draw a firm philosophical "line in the sand." It must use this battle to take a firm stand for real tax fairness--extend the tax cuts for everyone, or no one, the polls be damned. The long-term philosophical stakes are high in the coming tax battle. That is a good place to draw that line.

Related Reading:

My Challenge to the GOP: a Philosophical Contract With America

In the Spirit of Compromise, How About a Flat Tax?

Global Wealth "Redistribution" for Global Poverty: The Egalitarian Ideal, by Ari Armstrong