President is Pushing Another Failed Policy

February 28, 2014

A couple of weeks ago, I received an email update from President Obama which discussed his signing of the Executive Order raising the minimum wage to $10.10 an hour for federal contract workers.  Within his remarks the President stated his belief that, “It’s the right thing to do”, raising the minimum wage for federal contract workers.

Naturally the President used the news of the Executive Order as a segue to lobby Congress to raise the federal minimum wage from $7.25 to $10.10 an hour for all American workers.  He claims raising the minimum wage “would move millions of Americans out of poverty”.  In fact, Obama indicated that, “Raising the minimum wage would grow the economy for everyone”.  The latter remark is based on his undying Keynesian dogma that more spending is the key to growing the economy.

There’s only one big problem with the President’s position on raising the minimum wage.  It’s called the Law of Demand.  According to this law of economics, with all other factors being equal, when the price of a good or service increases, demand for that good or service decreases and vice versa.

In the case of minimum wage laws, the service in question is the labor offered by workers.  Since minimum wage laws make the price of labor artificially higher the demand for labor decreases per the law of demand.  Consequently, some workers will receive pink slips and others will not be hired.  Higher unemployment will result.

In fact, a Congressional Budget Office report last week confirmed just that.  It indicated that Obama’s proposal to raise the minimum wage from $7.25/hour to $10.25/hour would result in the loss of possibly 1 million jobs.

And there are other reports issued by economists who know the laws of their science, which have found that minimum wage measures cause higher unemployment.  It’s also important to understand that that higher unemployment will result in greater income inequality between rich and poor.

At the end of the day, the President’s belief that raising the minimum wage will grow the economy is ridiculous.  In the first place, the law of demand tells us that less people will be working.  In the second place, the president is assuming that the money businesses earn which does not go to higher wages for their employees, somehow gets sucked down a black hole.  Does he not understand that that money could be channeled into productive enterprises like plant expansions, training for employees, and research and development?  All are enterprises which ultimately lead to job creation and higher pay for workers.  Even my 8th grade economics students understand this.  They also understanding that raising the minimum wage is not the right thing to do.

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It’s Time to Try Something New for a Change

January 16, 2014

Last week, on the 50th anniversary of Lyndon Johnson’s so-called War on Poverty, President Barack Obama unveiled his latest initiative to combat economic deprivation in America.  The President’s latest scheme involves public and private funding to create jobs, enhance public safety, improve schools, and provide better housing in 20 communities across the country.  You know, it is the same old story.  If only the federal government would spend enough money we could eradicate poverty in our lifetime.  Unfortunately, for Obama, his latest initiative to fight poverty will have the same end result as LBJ’s War on Poverty – utter failure.

You see, in the 50 years since LBJ signed into law the most sweeping social welfare programs in the history of the U.S., Uncle Sam has spent about $16 trillion on public assistance schemes.  Yet, Americans living in poverty has only gone from 19 percent of the population in 1964 to about 15 percent today.  Put another way, it cost our economy $4 trillion for every percentage point decrease in the rate of poverty.  Given our already enormous national debt and the future calamity it will bring, isn’t there a more cost effective way to help the poor escape poverty?  We cannot afford to spend more money and that is clearly not the answer anyway.

At the end of the day, the best way to fight poverty is with a job.  Thus, to help the poor all minimum wage laws should be repealed immediately.  The late, great, Murray Rothbard had it right when he labeled minimum wage laws “compulsory unemployment”.  Whenever government fixes prices either shortages or surpluses result.  Fixing wage rates above the market rate will only lessen demand for workers’ labor.  Thus, a surplus of workers’ labor (unemployment) will result.  This is Economics 101.

Low wages may not provide a decent standard of living, but for the 49 percent of African-American youth who are currently unemployed, the jobs they would have by virtue of repealing minimum wage laws would give them the opportunity to work hard, get work place experience, and build a resume.  All three could lead to higher paying jobs in the future.

But repeal of minimum wage laws alone isn’t enough.  Uncle Sam needs to repeal costly regulations on business which prevents the creation of new jobs.  In 2013, the federal government adopted $112 billion worth of new regulatory costs on job producers.  This amounted to 80,224 pages being added to the Federal Register.  Since Barack Obama became president in 2009 close to $500 billion in new regulations have been imposed.  And then there is the job killing scheme known as Obamacare.  At a time when the labor force participation rate is at the lowest level since 1978, should the federal government really be concerned about expensive energy efficiency standards for microwave ovens?

To be sure, more could be done to alleviate the scourge of poverty.  A gold backed dollar like existed in the late 1800s and which kept price inflation flat for more than 60 years should be reintroduced in America.  Abolition of the Federal Reserve System which is primarily responsible for the continuous boom and bust cycle in our economy and the destruction of the middle class should be enacted.

In the final analysis, for 50 years, Washington has thrown good money at the so-called War on Poverty.  The result has been failure to achieve the objective.  And this is why it’s time to try something new for a change.


Young Voters Betrayed by Obama Policies

December 21, 2013

Barack Obama, in large part, owes his presidency to young voters.  In two presidential elections he has garnered 66 percent and 67 percent of their vote respectively.  Many of those votes proved pivotal for him in winning key states like Florida, Virginia, Pennsylvania, and Ohio.  And yet the President apparently feels no loyalty toward this group of voters that has given him so much.  In fact, it has become second nature for him to run roughshod over their interests.

To begin with, the economy Obama has produced for young people in close to five years of his leadership is horrendous.  His policies of regulate and spend have not permitted the economy to recover from the Great Recession that began in 2008.  Unemployment for 15 to 24 year olds is more than double the national average.  Many college graduates, unable to find a job, have returned to their parents’ nests to wait for better days and brighter employment prospects.  African-American teenagers face a jobless rate of more than 40 percent!

And while the President was attempting to “stimulate” the economy back to good health with profligate spending, what he did instead was run up a tab that young folks will have to pay back for many years into the future.  What’s more, when interest rates rise to their historic average and interest payments on the national debt more than double, paying back that debt will have to include much higher taxes or enormous cuts in government services.

Lastly, there is Obamacare.  The President is relying on young folks to make his health care scheme work.  He is counting on millions of them to purchase high cost plans to offset costs for the sick and elderly.  Of course, many will not accommodate the President’s wishes, thereby causing health care premiums to skyrocket for all consumers.  By the time the current crop of 18-30 year olds is interested in purchasing health care coverage the costs will be astronomical.  Thus he has put them in an unenviable position.  They are damned if they do, damned if they don’t.

Young people made a serious mistake giving Barack Obama their overwhelming support in the last two presidential elections.  But, what choice did they have?  John McCain and Mitt Romney weren’t much better alternatives.  What young people need are free market policies – sound money, a balanced federal budget, and deregulation.  It doesn’t appear this is going to happen anytime soon.


Obama is Disingenuous about the Economy as Well

November 21, 2013

Lies, damn lies, and statistics.  The current administration has become adept at using all three to mislead the American people.  There is the current kerfuffle over the President’s lie that Americans could keep their health care plans and doctors under Obamacare if they liked them.  Of course, that was a damn lie, especially if you have lost your plan and are now looking at much higher premiums.  And then there are smaller mistruths, perhaps not as egregious, when it comes to describing the current state of the economy.

For instance, I got an email from the White House last week with the headline:  “Here’s What Economic Growth Looks Like, in 3 Charts”.  Included in the message was a chart showing private sector job growth over the last 44 months.  7.8 million private sector jobs have been produced in that time period.  At first glance, this number is amazing.  But, it is only a statistic.  And statistics can be deceiving if you only take them at face value.

Although, nearly 8 million jobs produced in the last 44 months is quite an accomplishment, the figure becomes a lot less remarkable when it is viewed alongside other related statistics.  Those 7.8 million jobs in the last 44 months calculates to an average of about 177,000 per month.  Unfortunately, over the same time period the working age population has grown by an average of 213,000 workers per month.  Thus, private sector job growth is not keeping up with the number of new workers entering the job market.  7.8 million new jobs is simply nowhere near the number of jobs that are needed.

Further, the statistic put out there by the Obama Administration does not indicate what kind of private sector jobs are being produced.  According to the Household Survey of the Bureau of Labor Statistics, from February to August of this year, 963,000 more people reported they were employed, and 936,000 of them reported they were in part-time positions.  Additionally, Labor Department statistics show that people employed in part-time positions are growing four and a half times faster than those employed in full time positions.  So, while claiming 7.8 million jobs is “What Economic Growth Looks Like”, the Administration is being less than honest given that most of the jobs are low-paying, light hour positions.

To put things in the proper perspective, in 2009, 133.5 million Americans were employed.  32 million Americans were on food stamps.  Today, 143.5 million Americans are employed, while 47 million are on food stamps.  Thus, while 10 million more Americans are working today, 15 million more are on food stamps.  This is not indicative of economic growth.  It is characteristic of a collapsing economy.

But, the point is that the President needs to come clean with regards to the condition of the economy.  He is a smart guy.  He has access to the same statistics referenced in this article.  The charade that the economy is growing and has been in recovery since 2009 must end.  Lastly, there needs to be an acknowledgement from Obama that spending trillions of dollars and pumping trillions more into the economy through Federal Reserve monetary schemes has been an abysmal failure in reviving our collapsing economy.  Let’s end the lies, damn lies, and dishonest statistics so we can have an adult conversation about a new direction for America.


Obamacare is Mostly a Wealth Redistribution Program

November 1, 2013

President Obama has long held the view that wealth redistribution is good for America.  His most famous proclamation of that position came during the 2008 presidential race when in Ohio he told “Joe the Plumber”, “When you spread the wealth around, it’s good for everybody,” But, perhaps the best indicator of how he would govern as president came in a 1998 speech he gave to students at Loyola University.   Then, Illinois state Senator Obama said, “The trick is figuring out how do we structure government systems that pool resources and hence facilitate some [wealth] redistribution — because I actually believe in redistribution, at least at a certain level to make sure that everybody’s got a shot.”

The President’s signature legislative accomplishment as chief executive, the Patient Protection and Affordable Care Act, more widely known as Obamacare, is one of those government systems he spoke about whose purpose is to redistribute wealth to help everybody.

All along, it’s been clear that Obamacare’s goal was to provide health care coverage to the millions of Americans who could not afford their own coverage.  Its purpose was never to lower health care costs in general.  In order to accomplish the goal, Obamacare must take from some (the young, healthy, and responsible) and give to others (the not so young, unhealthy, or irresponsible).  At the end of the day, this amounts to nothing more than a program to redistribute wealth on a vast scale.  And that is exactly what is happening under the law so far.

CBS News has reported that more than two million Americans have recently been notified that their current health care policies do not meet the higher minimum standards mandated by Obamacare.  Therefore, they will lose their coverage on January 1, 2014.  It’s been estimated that about half of those who have lost coverage will pay more while the other half will pay less.  But, Obamacare is not based on actuarial science like other insurance schemes.  Those paying higher premiums in the future aren’t going to be paying more because they smoke or guzzle booze or participate in risky sexual practices.  They will pay more to subsidize those who pay less or nothing at all.  This defies the very essence of insurance – shared risk.  What incentive do the poor have to live a healthier lifestyle if those with more resources will always pick up their bill?

And watching Secretary Sebelius testify before the House Energy and Commerce Committee, I learned that single men, who have never given birth, are required under Obamacare to have maternity coverage!  Really?  Is this fair or is this a means to transfer wealth from men to women by using the income of the former to reduce the costs of the latter?  After all, the Administration believes women only earn about 70 cents of every dollar that men make.  Perhaps, the Administration is trying to achieve through Obamacare what it can’t through legislative action?

No matter the case, Obamacare is doomed to failure.  Yes, more Americans will be covered but the costs will overwhelm the system and those that are footing the bill.  As more and more high risk applicants sign up for health coverage through the exchanges, the premiums of those paying the bill will continue to rise.  The incentive for these folks will be to find a way to have Uncle Sam subsidize at least a portion of their coverage.  More Americans will become impoverished.  That is always the result of wealth redistribution policies.  The president is a learned man.  He should know this.


Is the Chemical Attack in Syria a False Flag Perpetrated by Washington?

August 30, 2013

Next year will mark the 50th anniversary of the Gulf of Tonkin Incident.  It was that false flag event that persuaded Congress to give President Johnson a blank check to retaliate against the supposedly unprovoked attack by North Vietnam on an American warship patrolling international waters off the coast of Indochina.  The fraudulent claim by Johnson resulted in the Vietnam War fiasco which claimed the lives of over 50,000 young Americans and produced millions of Vietnamese casualties.

Now Barack Obama is potentially up to his own false flag event in Syria.  In an effort to justify U.S. military intervention in the Syrian conflict, the Obama Administration has accused Syrian dictator Bashar al-Assad of perpetrating the chemical weapons attack in a rebel-held suburb of Damascus last week.  Speaking forcefully, earlier this week, Secretary of State John Kerry stated, “The indiscriminate slaughter of civilians, the killing of women and children and innocent bystanders by chemical weapons is a moral obscenity.”  The Secretary chose his words carefully in an effort to rally a war-weary U.S. citizenry for another military adventure on the other side of the world.

Was al-Assad responsible for the attack?  The Administration has tried and convicted him before a team of U.N. inspectors has had a chance to finish its investigation.  It claims he alone possesses the means to carry out such an atrocity in Syria.  At least 4 U.S. warships are sitting off the coast of Syria waiting for Obama to give the order to attack Syrian military and government targets.  It seems likely that a U.S. attack on al-Assad forces is imminent.

But there are at least two other possibilities of who may be responsible for the chemical attack last week.  In May, members of the Al-Nusra front, an Al-Qaeda affiliated group which many analysts believe to be “the most aggressive and successful arm” of the Syrian resistance, were apprehended by Turkish security forces in Turkey while in possession of 2 kilograms of sarin gas.  Thus al-Assad does not have a monopoly on chemical agents in Syria as the U.S. asserts and it is possible that Al-Nusra perpetrated the chemical attack last week to provoke the U.S. into striking the Syrian regime in an effort to help its own cause.

But there may be an even scarier possibility of who was responsible for the chemical attack last week on the outskirts of Damascus – the Obama Administration.  Emails from the British-based contractor Britam Defence released in January by a Malaysian hacker showed a plan “approved by Washington” that would fund Syrian rebels to carry out chemical attacks in Syria which the U.S. could use as a pretense for military action against al-Assad.

Is it hard to believe that an American administration could be guilty of such an atrocity?  Not really if one looks at history objectively.  American history is littered with examples of our government producing coups, assassinations, lies about weapons of mass destruction, and other events that simply didn’t happen in order to accomplish its goals.

Let’s not forget that the current administration’s Bureau of Alcohol, Tobacco, and Firearms facilitated the sale of approximately 1400 illegal weapons to Mexican drug cartels in Operation Fast and Furious.  Ultimately the program resulted in the death of a U.S. border agent, Brian Terry, and no doubt scores of others caught up in Mexico’s failed war on drugs.

It is possible that Washington could stoop to any depth to carry out its aims.  Americans who believe that only other country’s governments are capable of heinous acts are simply naïve.

Of course, it is possible that Bashar al-Assad used chemical weapons against his people.  But, knowing that it would provoke U.S. military intervention in Syria, it just doesn’t make any sense for him to do it.  On the other hand, just like in 1964 when President Johnson was getting intense pressure from the military-industrial complex to escalate the war in Vietnam, Obama is receiving the same kind of pressure with regards to Syria today.  Unfortunately, like Johnson, he doesn’t seem to have the courage to resist it either.


Benghazi Investigation Entirely Misses the Big Picture

May 24, 2013

By now, unless you have been living under a rock you are aware of the scandals plaguing the Obama Administration – the Justice Department illegally acquiring the phone records of the Associated Press, the Internal Revenue Service illegally targeting the President’s opponents for tighter scrutiny, and Benghazi.  Now, in all fairness to Obama, to date, no improprieties have been proven in any of the above cases.  But, while the scandals involving AP phone records and IRS treatment of the President’s opponents should be investigated, the Benghazi investigation entirely misses the big picture on that issue.

With regards to Benghazi, currently congressional Republicans are focusing their investigation on whether the Obama Administration botched security at our consulate in that city thereby causing the assassination of Ambassador Christopher Stevens and 3 other Americans and whether it lied about it in an effort to cover it up.

I say, who cares?  The bigger issue and one that no one seems to be asking is, should we have been meddling in the internal affairs of Libya in the first place?

When Obama sidestepped Congress and unilaterally chose to intervene in the Libyan Civil War, the mission was supposed to be a United Nations sanctioned “no-fly zone” over Libya so Gadhafi could not use his air force to slaughter Libyans on the ground.  However, in very short order, the mission morphed into an all-out air invasion complete with coordinated strategy between NATO forces and anti-Gadhafi fighters and bombings of Gadhafi’s fighters on the ground.  The point man chosen by Obama to serve as a conduit between anti-Gadhafi fighters and the U.S. military was Ambassador Stevens.

What was lacking is the same thing that has failed to happen with all U.S. military engagements since World War II.  Congress did not debate whether American military forces should be employed and it did not vote on whether to grant a declaration of war.  Why is this important?  Because the Founders of the United States knew that the decision making power to send Americans into harm’s way and the consequences of that action for the country was too important to give solely to one person – the president.

Libya was not a national security issue for the United States.  We were allegedly there on a humanitarian mission to help Libyans.  The question is, is that a justified use of our military?  Should its role be to police the world?  Congressional debate could have addressed these questions, prevented our intervention in Libya, and possibly changed U.S. foreign policy in the future for the better.

Additionally, our intervention in Libya has made that country “a center of jihadist terror”.  Consequently, weapons, terrorism, and chaos are emanating from there to the rest of North Africa and the Sahel regions.  Gadhafi may have been a bad guy to his people, but our intervention in his country is having adverse effects on all the people of the region.  With 535 members in Congress, someone would have questioned, during debate in that body, what would happen as a consequence of our intervention?  Perhaps the consideration of that inquiry would have prevented our ill-fated intervention and Ambassador Stevens would still be alive today.

In the final analysis, what needs to be investigated is whether we should have been in Libya in the first place?  This investigation then should lead to a reconsideration of our current foreign policy.  Given that our current foreign policy has our military forces engaged in at least 74 other conflicts around the globe this seems more important than finding out whether the Obama Administration botched security at our consulate in Benghazi causing the death of an American ambassador and 3 other Americans and whether it lied about the matter in an effort to cover it up.  It’s time Congress looks at the big picture.