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I have yet to see Michelle Bachmann give a straight answer to any question about the things she has said in the past. Apparently, she is afraid that if she reveals her plans and motives she cannot get votes. Sarah Palin lite.
Realistically there should be no minimum wage. The market will ultimately set the price. Even if we did eliminate the minimum wage this very moment it would make a marginal difference for most people.
For most, they would still be employed at their same wage but for the unemployable (ie. drug addicts, criminals, disabled) it could be the difference between working and just sitting on welfare all day. Even if that job only pays 5$/hour it could be the stepping stone to better paying work.
Plus it would encourage more hiring in the usa. I for one, might consider actually employing Americans instead of only hiring foreigners. For most businesses its all about the money so if we can hire people in other countries for less then thats where we will go. Minimum wage is kind of obsolete these days considering we live in a global economy. Its not very difficult to open up shop in foreign countries. In fact, many countries give incentives to do so (ie. free-trade zones). Why do you think everyone has rushed off to china so quickly? China gives incentives to business to do business there.
Also here is the economic proof on why we shouldn't have a minimum wage: it causes unemployment (ie. the grey box).
Drug addicts and criminals will work for less than minimum wage? And you are going to employ them?
Quote:
Originally Posted by killer2021
I for one, might consider actually employing Americans instead of only hiring foreigners. For most businesses its all about the money so if we can hire people in other countries for less then thats where we will go.
This country needs more true patriots, like yourself!
"might consider" Yes, yes, the passionate cry of true patriots everywhere!
So let see if I have this correct -- we cut out the minimum wage and cut the throats and bottom out from everyone at or near the bottom and actually think the system would keep standing.
This pyramid is going to have a NASTY fall.
Need to sell these folks a bottomless boat. Happy sailing.
Killer, it is posts like yours that totally reinforce the need for tariffs and requirements for balanced trade.
It's a moot point. Even the current minimum wage laws barely provide for a sustainable living. The only reason that they're as low as they are is because of government subsidies via child tax credit, food stamps, medicare, etc. Those are all subsidies that allow the minimum wage to be as low as it is.
Western and Central European minimum wages are astronomically high when compared to the US.
Market equilibrium pricing is not a 'textbook only' phenomenon....
That's why so many economists are great businessmen?
The vast majority of textbook economics is gibberish. This is coming from someone who has a degree in it and it was apparent to me during the first few courses that I took. Most economists aren't worth the paper that their degrees are printed on.
Economists Are Trained to Ignore the Real World (http://www.washingtonsblog.com/2009/12/economists-are-trained-to-ignore-real.html - broken link)
As I have repeatedly noted, mainstream economists and financial advisors have been using faulty and unrealistic models for years. See this (http://www.washingtonsblog.com/2009/03/economics-profession-bears-some.html - broken link), this, this (http://www.washingtonsblog.com/2009/07/bis-slammed-federal-reserve-and-other.html - broken link), this (http://www.washingtonsblog.com/2009/07/economists-have-acted-like-team-docors.html - broken link), this and this.
And I have pointed out numerous times that economists and advisors have a financial incentive to use faulty models. For example, I pointed out last month:
The decision to use faulty models was an economic and political choice, because it benefited the economists and those who hired them.
For example, the elites get wealthy during booms and they get wealthy during busts. Therefore, the boom-and-bust cycle benefits them enormously, as they can trade both ways.
Specifically, as Simon Johnson, William K. Black and others point out, the big boys make bucketloads of money during the booms using fraudulent schemes and knowing that many borrowers will default. Then, during the bust, they know the government will bail them out, and they will be able to buy up competitors for cheap and consolidate power. They may also bet against the same products they are selling during the boom (more here), knowing that they'll make a killing when it busts.
But economists have pretended (http://www.washingtonsblog.com/2009/10/shiller-look-up-bubble-in-economic.html - broken link) there is no such thing as a bubble. Indeed, BIS slammed (http://www.washingtonsblog.com/2009/07/bis-slammed-federal-reserve-and-other.html - broken link) the Fed and other central banks for blowing bubbles and then using "gimmicks and palliatives" afterwards.
It is not like economists weren't warning about booms and busts. Nobel prize winner Hayek and others were, but were ignored because it was "inconvenient" to discuss this "impolite" issue.
Likewise, the entire Federal Reserve model is faulty (http://www.washingtonsblog.com/2009/10/should-we-give-fed-more-power-or-less.html - broken link), benefiting the banks themselves but not the public.
The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found.
This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists. In the Fed's thrall, the economists missed it, too.
"The Fed has a lock on the economics world," says Joshua Rosner, a Wall Street analyst who correctly called the meltdown. "There is no room for other views, which I guess is why economists got it so wrong."
The problems of a massive debt overhang were also thoroughly documented by Minsky, but mainstream economists pretended that debt doesn't matter.
And - even now - mainstream economists are STILL willfully ignoring things like massive leverage (http://www.washingtonsblog.com/2009/07/economists-have-acted-like-team-docors.html - broken link), hoping that the economy can be pumped back up to super-leveraged house-of-cards levels.
As the Wall Street Journal article notes:
As they did in the two revolutions in economic thought of the past century, economists are rediscovering relevant work.
It is only "rediscovered" because it was out of favor, and it was only out of favor because it was seen as unnecessarily crimping profits by, for example, arguing for more moderation during boom times.
The powers-that-be do not like economists who say "Boys, if you don't slow down, that bubble is going to get too big and pop right in your face". They don't want to hear that they can't make endless money using crazy levels of leverage and 30-to-1 levels of fractional reserve banking, and credit derivatives. And of course, they don't want to hear that the Federal Reserve is a big part of the problem.
Indeed, the Journal and the economists it quotes seem to be in no hurry whatsoever to change things:
The quest is bringing financial economists -- long viewed by some as a curiosity mostly relevant to Wall Street -- together with macroeconomists. Some believe a viable solution will emerge within a couple of years; others say it could take decades.
Saturday, PhD economist Michael Hudson made the same point:
I think that the question that needs to be asked is how the discipline was untracked and trivialized from its classical flowering? How did it become marginalized and trivialized, taking for granted the social structures and dynamics that should be the substance and focal point of its analysis?...
To answer this question, my book describes the "intellectual engineering" that has turned the economics discipline into a public relations exercise for the rentier classes criticized by the classical economists: landlords, bankers and monopolists. It was largely to counter criticisms of their unearned income and wealth, after all, that the post-classical reaction aimed to limit the conceptual "toolbox" of economists to become so unrealistic, narrow-minded and self-serving to the status quo. It has ended up as an intellectual ploy to distract attention away from the financial and property dynamics that are polarizing our world between debtors and creditors, property owners and renters, while steering politics from democracy to oligarchy...
[As one Nobel prize winning economist stated,] "In pointing out the consequences of a set of abstract assumptions, one need not be committed unduly as to the relation between reality and these assumptions."
This attitude did not deter him from drawing policy conclusions affecting the material world in which real people live. These conclusions are diametrically opposed to the empirically successful protectionism by which Britain, the United States and Germany rose to industrial supremacy.
Typical of this now widespread attitude is the textbook Microeconomics by William Vickery, winner of the 1997 Nobel Economics Prize:
"Economic theory proper, indeed, is nothing more than a system of logical relations between certain sets of assumptions and the conclusions derived from them... The validity of a theory proper does not depend on the correspondence or lack of it between the assumptions of the theory or its conclusions and observations in the real world. A theory as an internally consistent system is valid if the conclusions follow logically from its premises, and the fact that neither the premises nor theconclusions correspond to reality may show that the theory is not very useful, but does not invalidate it. In any pure theory, all propositions are essentially tautological, in the sense that the results are implicit in the assumptions made."
Such disdain for empirical verification is not found in the physical sciences. Its popularity in the social sciences is sponsored by vested interests. There is always self-interest behind methodological madness. That is because success requires heavy subsidies from special interests, who benefit from an erroneous, misleading or deceptive economic logic. Why promote unrealistic abstractions, after all, if not to distract attention from reforms aimed at creating rules that oblige people actually to earn their income rather than simply extracting it from the rest of the economy?
As I have previously written, mainstream economists and financial advisors who promote flawed models are not necessarily bad people:
I am not necessarily saying that mainstream economists were intentionally wrong, or that they lied because it led to promotions or pleased their Wall Street, Fed or academic bosses.
But it is harder to fight the current and swim upstream then to go with the flow, and with so many rewards for doing so, there is a strong unconscious bias towards believing the prevailing myths. Just like regulators who are too close to their wards often come to adopt their views, many economists suffered "intellectual capture" by being too closely allied with Wall Street and the Fed.
As Upton Sinclair said:
It is difficult to get a man to understand something, when his salary depends upon his not understanding it.
That's why so many economists are great businessmen?
The vast majority of textbook economics is gibberish. This is coming from someone who has a degree in it and it was apparent to me during the first few courses that I took. Most economists aren't worth the paper that their degrees are printed on.
This blog haws a great series on it:
So you are seriously claiming that all modern economic theory is incorrect? Where is your nobel prize? Show it to me and I will trust you over what I know from graduate level economic courses I have taken from a school that has produced nobel prize winners in the field.
So you are seriously claiming that all modern economic theory is incorrect? Where is your nobel prize? Show it to me and I will trust you over what I know from graduate level economic courses I have taken from a school that has produced nobel prize winners in the field.
Why are you acting like a Nobel prize means anything? lol About the only Nobel's that holds any weight anymore are in the sciences.
What you learned is junk, for the most part. Especially the heavily laden econometric/ math based economics of recent years.
Why are you acting like a Nobel prize means anything? lol
What you learned is junk, for the most part. Especially the heavily laden econometric/ math based economics of recent years.
Economics is not a science.
1. Economics is a science
2. You completely lost my respect when you claimed Nobel prizes don't mean anything
3. You need to educate yourself a bit more. Mathematics explains the economy better than huffington post blogs.
4. Pick up a calculus textbook, then pick up some economics textbooks, read them and then we can have a real discussion.
Until then, keep convincing yourself that you know better than the top academics around the world because you read a few blogs. unbelievable....
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