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Tuesday, January 28, 2014

Fix or Farce: Obama Imposed Federal Employee Minimum Wage Increases Will Wage War on Citizens Working in the Free Market


There are rumors Pres. Obama plans to increase Federal employee minimum wage via executive order.  One could argue whether Obama actually has the authority to do such a thing.  Additionally, Congress, if it had the will, could legislate federal pay according to the market so it does not come into conflict with it. That aside, since doing something about it would require men (and women) of resounding character, let us get to the issue of minimum wage and how it effects the economy.

Raising the Federal employee minimum wage will cause:

MORE Federal debt to pay the wages;

A reason to justify Federal spending;

A reason to increase the debt ceiling;

A reason to increase taxes;

A sense of entitlement from employees (whose wages already average higher than the free market for the same work.) who have not earned a raise:  This is counter intuitive to motivation based upon excellence.  Conversely, left to its own devices, the Free Market System actually grows income better and based upon value of productivity which in turn spurs economic growth naturally. The graph below shows historical numbers in times of growth calculated without minimum wage interference and those with interference by government. Notice, particularly, the steady incline with greater momentum when productivity (Free Market) governs minimum wage levels versus mandated minimum wages. Also notice the erratic spikes and adjustments caused by government intervention in the federally mandated minimum wage. Thirdly, notice the counter productive drop in real wages, meaning that over time the costs of living outpace the wages in the government mandated minimum wage history.

Proponents of raising the minimum wage believe raising the Federal employee minimums will signal states to follow suit.
 
In reality: The Federal government (which is not actually part of the Free Market System) will become an even greater competitor against the Free Market. That means you and I and everyone else you know working for anyone other than the government will struggle as businesses struggle with unfair and illegitimate competition.


{Cr for caption: Rgcombs]
History shows a number of  negative market conditions prevailing every time minimum wage is increased: 1.) Either companies must cut expenses somehow; or they must raise the costs of goods and services to cover the costs of doing business. This ultimately hurts those at the bottom most.
Defenders of minimum wage will argue that  actual low income (real income) doesn't really soar with minimum wage increases so the effects are negligible. I cant argue this point: In fact, I agree: Minimum wage increases do not solve low income problems. They maintain them.

This is because minimum wage also increases inflation throughout all other wages. All incomes will will  rise to distinguish value between skilled and unskilled labor. Proponents of minimum wage increases claim that very few people in the US actually earn minimum wage.  They fail to acknowledge the effect on higher wages when the minimum wage is forced to increase. Put again, forced minimums only increase the entire spectrum of wages, leading to nothing more than inflation and causing frustration among the poorest sector of wage earners. Were this not so, low or unskilled job wages would have already caught up to the wages of higher skilled jobs.

History also shows a pattern of slump in the economy whenever the wages are mandated to increase. Defenders of minimum wage claim because increases are small, the effects are negligible. They do not account for the effect on businesses that survive on low pay and unskilled workers. These businesses also have a rapid turnover and higher training expenses because their workers are unskilled (retail businesses for example). Their argument is completely moot with the current intention to raise minimum wage at least $3 in one hike.

Moreover, history shows employment growth slows with mandatory wage increases.  Businesses recoil. Growth and hiring slow or stop as they adjust to the forced added expense. (Notice the spikes, then sudden drops, in the graph with every forced wage increase.)

Ultimately, the only one that benefits from minimum wage increases is the Federal government via income taxes. This effect is not lasting as politicians do not slow spending.

This is not a fix, it's a farce. Numbers don't lie: People lie about numbers. It pays, literally, to note the difference.




Monday, January 6, 2014

American Political Perspectives under Scrutiny: Are You Sure You Want Term Limits?

Every few years there is a resurgence of interest in a Constitutional Convention with an array of amendment proposals.  A favorite is the idea of term limits for Congress.  The argument is drawn out of the frustration by Americans dissatisfied with the lack of responsiveness by their representatives; and perceived poor performance of the bicameral legislature.

Term limits may force legislators back into the private sector to earn a real living. But they will also guarantee revolving representatives. The understanding of which should be reviewed for its consequences before promoting the measure.

Are Term Limits All They are Quacked Up to Be?

For an example of how nefarious term limits are we need not look any further than our current Administration.  The term “lame duck” is often associated with an incumbent president in the second—and final—term, where the president is at odds with the legislature or has no motivation to work with it. Thus, he is ineffective and unaccountable to anyone. Without accountability there is no motive to do either what is morally right; or, what the constituents who vote expect. It is the sole reason President Obama can and has successfully circumvented the constitution by rerouting legislation via Executive Orders, etc. Those without any moral compass have license when they know their term will end. The incumbent on his last term is more than a lame duck.  He can be a constitutional menace—an engineer who has no need to stop politicizing the public against their will, knowing he will be free from the freight train by the time it rams into a brick wall.  Superficially, term limits appear to reduce the apparent misgivings of long term incumbents. But what is not observed is that in limiting terms, we actually limit our voice. As for reducing collusion, corruption and so forth:  Term limits do not stop an outgoing elected official from orchestrating the perpetuation of his agenda with the next candidate.

Speeding Up the Political Revolving Door

The problem just mentioned is a greater unseen menace than the original problem that leads many to believe term limits will resolve irrational legislation (such as “Obamacare”) and lack of constitutional representation. The unseen—and dangerous—appeal of term limits is that it gives license to individual Americans to operate on auto-pilot.  An incumbent is automatically thrown out after a set number of years. Political alliances that are now formed in the open will be formed behind the scenes by a systematic and automatic succession of politicians groomed and ready to replace the outgoing incumbent.  This may seem efficient, but efficiency was exactly what the Framers were trying to avoid when they designed a constitution with more than 30 checks and balances incorporated within its body.  It is not incumbency that is nefarious. It is the machine that can (but does not necessarily drive it. 

While we may pay particular attention to the single politician-or a single party, we forget that this politician (and/or party) was promoted by someone—and many “someones”. Term limits render the public impotent to stop the machinery running behind the scenes.  Rather, they promote a stronger system that reduces the unique power of our republic that is by and for the people. When one candidate is elected, a body will immediately organize for a successor to maintain the body’s power.  This goes far beyond the current overgrown power of party politics, but balloons collusion by many factions vying for power through government by validating the system. If Americans are disillusioned by party politics and collusion now, wait until we have term limits.   All the problems disdained by the public now will become an automatic revolving door under term limits as the element of surprise is gone.  Term limits provides regularity, not honesty and representation. Free from term limits, the people decide how long an incumbent remains, not a system, and particularly, not this system. Irregularity of incumbency—vis a vis: unpredictability in elections—actually thwarts the automatic calculation and systematic orchestration of groups seeking power rather than service to the Constitution they swear to uphold.

Who’s Steering The Ship?

Term limits puts voting on auto-pilot, hardly what the American public needs given their growing laziness.  Ours is a republic specifically designed to be run by the people, who appoint representatives that identify their unique and specific concerns from state to state and district to district, respectively. Our involvement is what makes us free. But as far back as this Republic began there were concerns about how effective this form of government would be. Among others, Benjamin Franklin worried that the American constituency would not be up to the task, instead resolving to political laziness and indifference in civic affairs.  Therefore, anything that can exacerbate this malaise, such as putting us on auto-pilot, must be avoided like the plague it drives.  Secondly, we must end pointing fingers of blame.

One point of blame is laid on heavily financed elected officials signaling collusion and corruption—because they listen to deep pocket campaign contributors. That may be superficially relevant.  But elected officials are not elected by deep pockets contributors:  They are elected by their constituency.  Without the substantial voice of their constituency many elected officials vote based upon contributions who do voice their opinions.  This is not the fault of the elected official or deep pocket supporters. The absent constituent must put their finger down: This is his fault.  Elected officials who are being told what to do by constituency will not routinely vote contrary to their dictates, knowing if voters put them in office they can just as easily take them out.  Elected officials vote according to the wallet when the constituency is conspicuously absent from duty. With no other voices to guide them, they have nothing to fear, knowing also that most will be absent in the voting booth also. When the people speak their minds and are actively engaged in the American process corruption is prevented. Unless of course, the constituency is corrupt.

A Compass and a Rudder

To prevent a wandering, mindless, and greedy constituency takes propagation of our American tradition. The argument that America is based upon a lack of tradition is a mistake.  George Washington was so concerned about the progeny of American perspective and its ramifications for future elected officials that he believed—and espoused—a national school teaching the principles of the Constitution as imperative to America’s future. This oft-quoted section speaks to his concern:

[T]he assimilation of the principles, opinions, and manners of our country-men by the common education of a portion of our youth from every quarter well deserves attention. The more homogenous our citizens can be made in these particulars the greater will be our prospect of permanent union; and a primary object of such a national institution should be the education of our youth in the science of government. In a republic what species of knowledge can be equally important and what duty more pressing on its legislature than to patronize a plan for communicating it to those who are to be the future guardians of the liberties of the country?[i]

Designed to be our compass and rudder, Washington was encouraging a national school for the cause. He also suggested a national academy for military training and education.[ii]  Arguably, a national school devoted to the teaching of our republic, while not unconstitutional given several clauses that could support it, does not mean it is wise as it holds many troubling problems of its own. The greatest concern, in light of an indifferent public, would be whether such a school could withstand the temptation of corrupted bureaucrats forging an education of their own making. That is, after all, exactly what has happened to public education beginning with John Dewey in the ‘30s and growing exponentially since nationalization in 1965.[iii] On the other hand, there are those with a smidgen of knowledge, who, once gaining it, believe themselves to be experts. They may have a rudder, but have no compass, nor the capacity to know which way to steer.

A nationalized school teaching founding doctrines and our heritage is not the answer.  But it can be argued that states should be teaching those; and mandating them to be promoted for perpetuation of their respective states and the union, as President Washington suggested. A curriculum for every year of education should be standard. Texas has such a requirement. Graduates of public institutions of higher education must fulfill four core courses in Texas and US constitutions. This however, is merely cursory. Yearly teaching of constitutional ideas in conjunction with world history for perspective requires consistent study throughout the education years and beyond.[iv]

This brings us back to the real problem: Poor representation is merely a symptom of political laziness.  The remedy for poor representation is not term limits, but an active and knowledgeable public. In depth knowledge of American constitutional concepts and accurate historical perspectives, derived from thorough individual and institutional study of the founder’s own words and works, is half the remedy. The other half is constantly speaking up, not just in the voting booth, but between elections directly to respective representatives.  Americans should run from the concept of term limits unless they would like to add one more chink in the shackles of political laziness that got us in this predicament in the first place.




[i] Eighth Annual Message of Geo. Washington, Dec. 7, 1796.
[ii] Ibid.
[iii] http://www.scribd.com/doc/49149656/Elementary-and-Secondary-Education-Act-of-1965#sthash.MVANep0d.dpuf. The Elementary and Secondary Act of 1965 copied the nationalization efforts of England and other European countries utilizing a nationalistic approach to education.  While England, in particular had huge success in bringing 80% of their population out of poverty with a nationalized school system in the late 1800’s, it is equally important to note Britain’s public school system originated from a feudal-monarchical which eventually became a representational democracy in the 1960s. Nationalism is often a portal for governmental system transitions.  For them it was a step away from that dual system.  Given we have been a representational democracy since inception, nationalization of public schools was a step backward in 1965 toward a socialistic society.
[iv] Having formally and independently researched primary source documents of Colonial, revolutionary, post-revolutionary and US constitutional history for many years, I can attest that study of the American perspective cannot achieve a measure of proficiency without consistent study as an American lifestyle.