Minimum wage: Taxation by Misrepresentation (American Thinker)

 

By Steve Baker

I know this is hard for our low-information citizens to understand -- so I'm going to keep this as simple as possible.
Your well-intentioned feelings about the minimum wage do not trump facts about the minimum wage!
Increasing the minimum wage does not benefit the very people it is intended to help. In fact, it is a basic economic truth that minimum wage increases reduce the number of jobs available to college-age workers; drastically reduces the number of positions available to high school-age entry-level employees; and, devastates the number of jobs available in minority communities.
Ironically, our first black President now proposes to force businesses to raise the minimum wage to $9 per hour -- which is a direct assault on black teen employment. Hovering around 40%, black teen unemployment is not only a staggering economic problem, it is also directly proportional to the high crime rates in those communities.
Black economists, Dr. Thomas Sowell and Dr. Walter Williams, have been sounding this alarm for decades. Does black 'leadership' or anyone else in the left wing of American politics heed the irrefutable data and tragic historical trends presented by these imminent economic professors? Of course not. And, especially not President Obama, who, in his State of the Union address characterized his proposal thusly:
"Tonight, let's declare that in the wealthiest nation on earth no one who works full time should have to live in poverty, and raise the minimum wage to $9 an hour."
Sounds good. Feels good, too. Right?
H. L. Mencken said, "There is always an easy solution to every human problem-neat, plausible, and wrong."
Mencken hit the President right between the eyes on this one. Increasing the minimum wage to $9 per hour not only does nothing to reduce poverty, it does in fact exacerbate the very condition it so deceptively avows to fix. Of course, since the left believes force is the solution to every problem, then why not pass a law making it a criminal offense for business to fire anyone over a mandatory wage increase?
(I'll give you a minute to think that one through.)
Done?
OK. If you believe forcing business to increase wages is a good idea, and you also think regulating or preventing layoffs is a viable solution, then why not pass another law requiring all businesses to increase their number of employees by a certain percentage? Unemployment, today, (if you believe the government's own numbers), is at roughly 8%. Why not require all businesses to increase their labor force by whatever percentage is necessary to eliminate unemployment, altogether?
Seriously! If mandatory wage increases are the right thing to do, and feels oh so good, can you imagine how good we'll all feel if government forces business owners to also increase their employee rolls?
(I'll give you another minute to ponder that one.)
Done?
Good. Now, as many have pointed out, why are we stopping at $9 per hour. Consider exactly what the president said Tuesday night:
". . . no one who works full time should have to live in poverty"
Solution?
". . . raise the minimum wage to $9 an hour."
Even the most ignorant among us knows that a fulltime minimum wage earner is not lifted out of poverty at $9 per hour. So, why not $10 per hour? $20? $100? Better yet -- in the spirit of "fair share" -- let's pass another law leveling the playing field for everyone -- so that all Americans earn the same wage, regardless of the industry-sector -- or the worker's education, experience, and work ethic? Isn't that exactly the good the mandatory minimum wage provides for society, taken to its ultimate end?
Well, even the most liberal CongressPerson knows that a minimum wage increase to $50 per hour will not eliminate poverty; will lead to higher unemployment; and will produce runaway inflation -- such that the cost of even a Big Mac will jump to at least $40 per sandwich.
Why do they know this? Because they know the market will quickly adjust to the new, artificially-imposed realities, just as it will shift and adjust in the same manner as the more moderate, feel-good increase to only $9. Why then is any increase so important to them, when they have at their fingertips the data that proves such an artificial market adjustment is actually detrimental to the economy and will result in the exact opposite of their stated goals?
Because...it benefits the politician.
The minimum wage laws have always been, and will always be a voting-buying scheme, tailored for and directed at the uneducated, logic-deprived, math-challenged, Ooo-that-feels-good voter. Further, because more layoffs are inevitable when the mandatory minimum wage is raised, it forces an even larger percentage of the population onto food stamps and other welfare programs -- creating the snowball effect of putting more people in the "dependency voter" class.
Consequently, which party do you think that strategy benefits most on election day? The Democrats, most certainly. But, it also leaves the GOP chasing their tails with the failed notion of "compassionate conservatism" and other such clap-trap -- and Republicans therefore inevitably respond, even if grudgingly, by supporting some sort of compromise increase. Net result? The progressives' strategy of incrementalism wins -- again. We lose more freedom, and we advance ever more closely to pure socialism.
Another irony of the minimum wage is that even though liberals are demonstrably on record as despising big business and those evil big corporations, it is the largest of these corporations that can best absorb these mandated increases and increased regulations. Guess who it hurts the most; who has the most difficulty complying; who has the most difficulty keeping their entry-level laborers when faced with federal intrusion into the free market? That's right: Your favorite neighborhood Mom & Pop shop. Your corner grocer. Your locally-owned farm. Your neighborhood bar. That row of family-owned shops in minority communities. They are the first forced into unwanted layoffs and price increases -- making it ever-more difficult to compete with Wal-Mart and other national chain stores.
How hard is it, for even the most undereducated voter to understand, that if the government forces business to pay 10-20% higher wages -- and then those businesses are forced to raise their prices for goods and services by 10-20% to cover their increased cost of doing business -- that NO ONE benefits from an increase in the minimum wage?
It's no secret that any forced wage increase is also a backdoor tax increase on the employer. The amount of the increase is actually 10-to-30% higher for the employer, who has to pay higher social security, unemployment and other taxes. Their only logical response? Layoffs and price increases.
This video offers a very simple example of what minimum wage increases really means to the worker. So simple, even a liberal can . . . well . . . maybe not. But, here it is:
http://youtu.be/7DS0XXFdyfI
In the mid-90's, when the unemployment rate, here in Raleigh, North Carolina, was just 1.5%, I recall seeing signs on Burger Kings and McDonald's drive thru windows advertising job availabilities for $10 per hour. A 2011 USA Today story reported that the McDonalds in Williston, North Dakota has to pay $15 per hour to attract entry-level workers. Why? Because the oil fields are paying $25-50 for low-skilled laborers, attracting the available labor pool away from traditional minimum wage jobs. Result? McDonalds is forced by the free market to adjust the wage, as necessary and dictated by the laws of supply and demand.
This past weekend I spent about 15 hours behind the steering wheel of my car. I listened to talk radio with hosts and guests offering perspectives from both the liberal and conservative camps on the minimum wage. I even heard a liberal economist openly admitting that the minimum wage was a backdoor, feel-good "redistribution" mechanism -- acknowledging that despite requisite layoffs; price increases; the fact that it hurts small businesses; increases teen unemployment; and also resulted in other "unintended consequences" -- the forced "redistribution" of wealth and profit was worth it as a "benefit to society as a whole."
In other words, it is a form of taxation by misrepresentation. It automatically results in price increases for goods and services, on everyone -- including the poor and middle class. And, it puts more people on the welfare rolls.
Well-intentioned feelings about the minimum wage do not trump the facts. Even the liberal economist I heard admitted the deleterious side-effects of each an increase. At the very least, minimum wage increases ultimately have zero net effect on poverty or real earnings, as the market always adjusts its cost structure to accommodate the artificially-imposed increases. Sure, the minimum wage earner is making more, but in a matter of days, weeks or months, everything the minimum wage earner is buying is more expensive. The true net effect? Ignorant people feel good, and politicians buy a few more votes.
Ultimately, the minimum wage is only a benefit to the agenda and ends of those who are progressively manipulating us toward socialism, and to those who use the tax code, entitlements and labor laws as a vote-buying scheme.

Page Printed from: http://www.americanthinker.com/articles/../2013/02/minimum_wage_taxation_by_misrepresentation.html at February 28, 2013 - 08:31:07 AM CST

What is Happening to Canada?

 

As the saying goes  “February 27, 2013 is a day that will live in infamy”.  The Supreme Court of Canada (all lawyers) handed the legal profession its greatest gift ever.  Since lawsuits require legal professionals on both sides, anything that requires a complex drawn out process transfers wealth from all Canadians to them.  Even if someone from the ‘RIGHT’ files suit there will be money for all.  Of course, in the end anyone demanding court action in favor of conservative, Christian, or Jewish will lose.

Today the most clearly hateful words are ‘RACIST’ and ‘HOMOPHOBE’.  This decision was about the second of these.  On this basis, if you are called either of these two you should have a prima facie case for a tribunal suit.  Your attacker should be able to prove that in fact you are what you’ve been called.  Actually that is not true based on this decision.  You only need to feel threatened.

Would anyone care to speculate on the victims’ chances of a win in any canadian court or tribunal??

We, the people MUST insist that our legislators (representatives of the people) invoke the notwithstanding clause in this case.  There has never been a better opportunity to demonstrate the supremacy of the Constitution.  If they won’t do this, then we must amend the Constitution by the prescribed process.

Tell the lawyers to get stuffed

The awakening of a self defined liberal (Freerepublic.com)

 

Posted on Wednesday, February 27, 2013 4:36:01 PM by Render

…..and I awakened to an upside down world which I could not recognize as anything similar to what I had previously known.

I was once an energetic, carefree, optimistic individual who believed in the greater good. I felt I knew much of what was happening around me and also believed that my eyes were wide awake and I was aware of the major events taking place in my nation. The world was much smaller then.

I brought home a decent living, my bills were always paid, and there was cash on hand for the small enjoyments of life that create long lasting memories and enjoyment. I really believed the nation was headed in the right direction.

I believed in many causes and also put much trust into the good intentions of our leaders and the various legislations they pushed upon us. They were after all, for the greater good and we were a country of free people.

I wondered why we couldn’t just let anyone into our country that wanted to be here to pursue a better life.

I wondered why anyone would need a high powered rifle with a large capacity “clip” for hunting.

I believed promoting a higher level of self esteem into our children at whatever cost would be worth it.

I believed all people, given the opportunity to succeed, would contribute to the overall good of our society.

I believed that we should embrace more energy efficient policies to save the environment no matter the resources needed.

The list goes on and on and on….

In 2008 I voted for Barrack Obama………..

I expected greater accountability of the government. I expected transparency.

I expected greater economical growth.

I expected we would all be better off than we were in 2007…..

In 2011, I woke up to what was really happening to all of us.

I have less money.

I barely pay my bills.

I couldn’t afford to go school clothes shopping for my children so I sold some items that were very dear to me.

I watch as those that make significantly less money or don’t work at all, eat well, dress trendy, drive nice cars, and live in nice houses.

I haven’t bough clothing for myself or my wife in years. Instead we sew what tears to conserve money.

I’ve seen the children of this country become victimized and used to further the destruction of our freedoms.

I watch as our political leaders blatantly lie to us and look down upon us as if we are there to serve them.

I’ve seen our free press and our reporters cater to those who wish to dictate over us.

I’ve seen foundations of our country slandered, abused, banned, and referred to as out of date or irrelevant while enemies of this nation are shown preferential treatment, gifted more money then I will ever see in my lifetime, and had their beliefs force fed down our throats under the guise of diversity and tolerance.

Sometimes I think to myself, “Wow! Times have sure changed!”

Then I realize that times haven’t necessarily changed, but rather things have become more obvious and I have actually opened my eyes to the happenings around me. For once I am really aware….

…..and I awakened to an upside down world which I could not recognize as anything similar to what I had previously known.

We are all being treated as sheep by the wolves and they are doing their best to lead us to our slaughter….

I am not a sheep though… I am a wolf. I am a hunter. I am a defender.

What are you?

There is a cause.. It is not republican nor is it democrat. It is not liberal nor is it conservative. It is American. Preserving America is the cause. We must rescue our nation from the lies, the greed, and the unforgivable acts of our political leaders.

That is the cause. Will you help?

Brave New World (Victor Davis Hanson–PJ Media)

 

February 19th, 2013 - 12:09 am

The Revolutions We Missed

Sometimes societies just plod along, oblivious that the world is being reinvented right under their noses. In 2000, one never saw pedestrians bumping into themselves as they glued their noses to iPhones. Thirteen years later, it is almost rare to see anyone on the street who is not stumbling about, networking or texting. Yet most of us are scarcely aware of the collective effect of that odd habit repeating itself millions of times over each day, of millions of books not read, of “hellos” not offered, of brains wired to screens rather than the physical world about them. When cars once drifted into your lane, you assumed a DUI; now their drivers are most likely texting.

Cars, of course, look about the same as they did thirty years ago. But we just assume now that they almost never break down. Up until 1980 I used to see them with hoods up by the side of the road almost every five miles or so. Today, entire notions such as points, plugs, tune-ups, and carburetors have simply quietly passed away for most motorists. The old jalopy with 100,000 miles on it was junk; the new Accord with 150,000 miles has another easy 250,000 to go. The world changes while we snore.

Lazy Money

No wonder, then, most of us are still not quite aware of how vastly different the world of 2013 is from even 2008. Take interest: not long ago most Americans assumed that when they retired, their 5-7% interest rate on passbook savings would provide some sort of income. Not now. There is scarcely a 1% return. In fact, most accounts lose money. The interest is not even matching the rate of inflation. Will we soon be charged by the banks for “protecting” our deposits?

At some unspoken moment, we shrugged and silently accepted Ben Bernanke’s world, along with the thousands of ways that his Federal Reserve Board has radically changed our lives. Those at retirement age are not stepping down, not when they have a bad/worse choice of receiving no interest income or putting their life savings in the stock or bond market. Our fathers may have retired at 58; we will be lucky to quit at 70. Is there even such a thing as retirement anymore?

No wonder that unemployed young people are endlessly circling the airport with nowhere to land, given all of us old planes perpetually taxing around on the crowded runways below. To understand the effect of no, or very low, interest, think of the billions of dollars in cash that are silently transferred from those who have saved to those who have no cash. The former receive little or no interest from the banks. The latter take out mortgages or car loans at historically low interest rates.

Did the president ever mention this revolution, among his boilerplate of “millionaires and billionaires,” “pay your fair share,” and “fat cats”?

Does it really make all that much difference whether you are a doctor at 70 who religiously put away $1,000 a month for thirty years, compounded at the old interest, and planned to retire on the interest income, or a cashless state employee with a defined benefit pension plan? The one might have over $1 million in his savings account, but the other a bigger and less risky monthly payout. Suddenly the old adult advice to our children — “Save and put your money in the bank to receive interest” — is what? “Spend it now or borrow as much as you can at cheap interest”?

Them and Us

I think it was around 2009 when an entire new vocabulary entered the American popular lexicon. Where did the 1% versus the 99% come from? From where did the new financial Mason-Dixon line arise — good below $250,000 in annual family income, very bad above it? When did the 47% — or is it the 50%? — pay no federal income taxes?

At some magical point, the rich became not the successful, the skilled, the well-inherited, the lucky, or the hardworking, but “them”: the suspect, the damned even, even as the lifestyles of the rich and famous became ever more sought after.

There are not just the rich and poor any more, but now the “good rich” (e.g., athletes, rappers, Hollywood stars, Silicon Valley grandees, Democratic senators, liberal philanthropists, etc.) and the “bad rich” (e.g., oil companies, CEOs, doctors, the Koch brothers, etc.). The correct-thinking nomenklatura and the dutiful apparat versus the kulaks and enemies of the people.

The president in his State of the Union damns the “billionaires with high-powered accountants,” as a friendly Facebook pays no state or federal taxes, as a George Soros walks away with $1.2 in speculation profits (in three months, no less!) by betting against the Japanese yen, and as a Jesse Jackson, Jr. gets caught stealing from a campaign fund to buy a $43,000 Rolex (was not a $1,000 one enough?). I thought Soros at his age knew when he had made enough money?

We shrug at all this. A president who thunders to the nation that we must be on guard against the “well-off and well-connected” heads south to Palm Beach to meet his $1,000-an-hour golf pro, while Michelle and the family go west to hit the slopes at “downright mean” Aspen, where no one accepts that they’ve reached a point where they’ve made enough money, or that there was any time when it was not good to profit.

Massachusetts' murder rate has risen much faster than that of its neighbors or the US rate since the 1998 firearms licensing bill (John Lott)

John Lott's Website

From the Boston Globe:

Massachusetts has a national reputation as a bastion of gun control, but crimes and injuries related to firearms have risen — sometimes dramatically — since the state passed a comprehensive package of gun laws in 1998.

Murders committed with firearms have increased significantly, aggravated assaults and robberies involving guns have risen, and gunshot injuries are up, according to FBI and state data.

To gun-rights groups like the National Rifle Association, these statistics are evidence that gun control does not work. But to gun-control advocates, the numbers show that no state — no matter how tough the laws — is protected from firearms violence when guns are brought in from other states.

“The quality of your gun-licensing laws is only as good as those surrounding you,” said James Alan Fox, a Northeastern University criminologist. . . .

In 2011, Massachusetts recorded 122 murders committed with firearms, a striking increase from the 65 in 1998, said Fox, the Northeastern professor. Nationwide, such murders increased only 3 percent from 1999 to 2010, the CDC says.

There were increases in other crimes involving guns in Massachusetts, too. From 1998 to 2011, aggravated assaults with guns rose 26.7 percent. Robberies with firearms increased 20.7 percent during that period, according to an FBI analysis conducted for the Globe. . . . .

The number of registered guns in Massachusetts dropped by 86% -- from 1,541,201 prior to the 1998 law to just over 215,000.
It is hard to see how to see how the presence of these other states could cause Massachusetts' murder rate to rise. Those states were there before the 1998 law and criminals could obtain their guns before the law. It is easy to see how the spillover might keep the crime rates from falling, but if the law helped at all, Massachusetts' murder rate should have fallen relative to the rate in the rest of the US as well as the states that are Massachusetts' neighbors.

Guest Post: Gun Rights - Are There Any Peaceful Solutions Left?

 

Submitted by Brandon Smith from Alt-MarketGun Rights: Are There Any Peaceful Solutions Left?

Throughout history, citizen disarmament generally leads to one of two inevitable outcomes: Government tyranny and genocide, or, revolution and civil war. Anti-gun statists would, of course, argue that countries like the UK and Australia have not suffered such a result. My response would be – just give them time. You may believe that gun control efforts are part and parcel of a totalitarian agenda (as they usually are), or, you may believe that gun registration and confiscation are a natural extension of the government’s concern for our “safety and well-being”. Either way, the temptation of power that comes after a populace is made defenseless is almost always too great for any political entity to dismiss. One way or another, for one reason or another, they WILL take advantage of the fact that the people have no leverage to determine their own cultural future beyond a twisted system of law and governance which is, in the end, easily corrupted.

The unawake and the unaware among us will also argue that revolution or extreme dissent against the establishment is not practical or necessary, because the government “is made of regular people like us, who can be elected or removed at any time”.

This is the way a Republic is supposed to function, yes. However, the system we have today has strayed far from the methods of a Free Republic and towards the machinations of a single party system. Our government does NOT represent the common American anymore. It has become a centralized and Sovietized monstrosity. A seething hydra with two poisonous heads; one Democrat in name, one Republican in name. Both heads feed the same bottomless stomach; the predatory and cannibalistic pit of socialized oligarchy.

On the Republican side, we are offered Neo-Con sharks like George W. Bush, John McCain, and Mitt Romney, who argue for “conservative” policies such as limited government interference and reduced spending, all while introducing legislation which does the exact opposite. The recent passage of the “Safe Act” in New York with extensive Republican support proves that Republicans cannot be counted on to defend true conservative values.

The Democrats get candidates like John Kerry, Hillary Clinton, and Barack Obama, who claim to be anti-war and against government abuse of civil liberties, and yet, these same “progressive and compassionate” politicians now froth at the mouth like rabid dogs sinking their teeth into the flesh of the citizenry, expanding on every tyrannical initiative the Republicans began, and are bombing more civilian targets in more foreign countries than anyone with a conscience should be able to bear.

I’ve said it before and I’ll say it again; the government is not our buddy. It is not our ally or friend. It is not a “part of us”. It is now a separate and dangerous entity. A parasite feeding off the masses. It has become a clear threat to the freedoms of average Americans. It is time for the public to grow up, snap out of its childish delusions, and accept that there is no solace or justice to be found anymore in Washington D.C.

Once we understand this fact, a question then arises – What do we do about it? If we cannot redress our grievances through the election process because both parties favor the same authoritarian direction, and if our street protests are utterly ignored by the mainstream media and the establishment, and if civil suits do nothing but drag on for years with little to no benefit, then what is left for us? Is the way of the gun the only answer left for the American people at this crossroads?

I cannot deny that we are very close to such a conclusion. Anyone who does deny it is living in a candy coated fantasy land. However, there are still certain options that have not been exhausted, and we should utilize them if for no other reason than to maintain the moral high ground while the power elite continue to expose their own despotic innards.

State And County Nullification

The assertion of local authority in opposition to federal tyranny is already being applied across the country. Multiple states, counties, and municipalities are issuing declarations of defiance and passing legislation which nullifies any future federal incursions against 2nd Amendment protections. For instance, the Gilberton Borough Council in PA in conjunction with Police Chief Mark Kessler has recently adopted a resolution defending all 2nd Amendment rights within their municipal borders up to and including the denial of operations by federal officers:

http://oathkeepers.org/oath/2013/02/03/first-molon-labe-town-in-america/

Approximately 283 county Sheriffs and multiple police officers have taken a hard stand, stating that they will either not aid federal enforcement officials with gun control related activities, or, that they will not allow such activities within their county, period:

http://cspoa.org/sheriffs-gun-rights/

This trend of dissent amongst law enforcement officials debunks the nihilistic view promoted by disinformation agents that “no one in law enforcement will have the guts to stand up to the government no matter how sour it turns”. It has also shaken the Obama Administration enough that the White House is struggling to counter it by wining and dining police unions and sheriffs departments in order to form their own “coalition of the willing”. Obama seems to believe that holding press conferences using children or police as background props will somehow earn him political capital in the battle for gun rights, but I have my doubts:

http://news.yahoo.com/obama-asks-police-help-pass-183056466.html

http://www.sltrib.com/sltrib/politics/55716645-90/com-congress-doing-enforcement.html.csp

Multiple states have legislation on the table to nullify as well, and it would seem that the violent push by the establishment to extinguish the 2nd Amendment has actually sharply rekindled the public’s interest in States Rights and the 10th Amendment.

This does not mean, though, that we should rely on nullification alone. While the gun grabbers are stumbling into severe resistance at the national level, some representatives are attempting to supplant gun rights at the state level, including New York, California, Washington State, and Missouri. The goal here is obvious; counter states rights arguments by using anti-gun legislators to impose federal controls through the back door of state legislation.

They will claim that if we support states rights, then we have to abide by the decisions of regions like New York when they ban and confiscate firearms. It’s sad how gun grabbers lose track of reality. Neither federal authority, nor state authority, supplants the legal barriers of the Constitution itself, meaning, no federal or local authority has the right or power to remove our freedom of speech, our freedom of assembly, our freedom of privacy, OR our freedom to own firearms (including firearms of military utility). The Constitution and the Bill of Rights supersede all other legal and political entities (including treaties, as ruled by the Supreme Court). At least, that’s what the Founding Fathers intended when they established this nation. The point is, a state is well within its rights to defy the Federal Government if it is enacting unconstitutional abuses, and the people are well within their rights to defy a state when it does the same.

Economic Nullification

There is actually a fantastic economic opportunity to be had by states and counties that nullify gun control legislation. Many gun manufacturers and retail businesses are facing financial oblivion if the establishment has its way, and moving operations outside the U.S. is not necessarily practical for most of them (gun manufacturing is one of the last business models we still do better than the rest of the world). Municipalities could offer safe haven to these businesses, allowing them to continue producing firearms and high capacity magazines, fulfill expanding public demand, and create a surging cash flow into their area while at the same time giving the federal government the finger.

This strategy does not come without dangers, though. Many states and counties are addicted to federal funding, and some would go bankrupt without it. The obvious first response by the feds to protesting local governments will be to cut off the river of cash and starve them into subservience.

This brand of internal financial warfare can be countered by local governments by nullifying a few other unconstitutional regulations, including those issued by the EPA and the BLM. States and counties could easily disable federal land development restrictions and begin using resource development as a means to generate supplemental income. North Dakota is essentially doing this right now in the Bakken Oil Fields, becoming one of the few states in America that is actually creating legitimate high paying jobs (instead of part time wage slave jobs), and growing more prosperous every year.

This tactic is not limited to state governments either. Counties also have the ability, with the right officials involved, to regain control of their economic destinies anytime they want. All it takes is the courage to rock the establishment boat.

Refuse All Registration Schemes

National firearms registration and gun databases are almost always followed by full gun confiscation. The process is usually done in a standardized manner: First demand extensive registration and cataloging of gun owners. Second, ban more effective styles of weaponry, including semi-automatics and high capacity rifles (Let the sport hunters keep their bolt actions for a time, and lure them onto your side with the promise that they will get to keep their .270 or their 30-06). Then take all semi-auto handguns. Then, ban high powered magnum style bolt actions by labeling them “sniper rifles”. Then demand that the gun owners that still remain allow official “inspections” of their home by law enforcement to ensure that they are “storing their weapons properly”. Then, force them to move those weapons to a designated “warehouse or range”, locked away for any use other than recreational shooting. Then, when the public is thoroughly disconnected from their original right to bear arms, take everything that’s left.

Keep in mind that the federal government and certain state governments are acting as if they would like to skip ALL of the preliminary steps and go straight to full confiscation. I am not discounting that possibility. But, they may feign certain concessions in the near term in order to get the one thing they really want – full registration.

Registration must be the line in the sand for every single gun owner in this country, whether they own several semi-automatics, or one pump action shotgun. Once you give in to being registered, fingerprinted, photographed, and tracked wherever you decide to live like a convicted sexual predator, you have shown that you have no will or spirit. You have shown that you will submit to anything.

After a full registration has been enacted, every gun (and maybe every bullet) will be tracked. If confiscation is utilized, they know exactly what you have and what you should not have, and exactly where you are. Criminals will still acquire weapons illegally, as they always have. The only people who will suffer are law abiding citizens. It’s a recipe for dictatorship and nothing more.

Gun Barter Networks

The retail firearms and ammo markets are Sahara dry right now, and will probably remain that way in the foreseeable future. Anything that is available for purchase is usually twice the price it was last year. Extremely high demand is removing retail from the picture before any legislation is even passed. Enter barter…

Cash will remain a bargaining tool for as long as the dollar remains the world reserve currency and holds at least some semblance of value (this will end sooner than most people think). That said, as gun items become scarce, the allure of cash may be supplanted. The signs of this are already evident.

Gun owners are now looking more to trade firearms and accessories for OTHER firearms and accessories, because they know that once they sell an item, they may never see it again, and the usefulness of cash is fleeting. Gun Barter is not only a way for firearms enthusiasts to get what they need, it is also a way for them to move around any future gun sale restrictions that may arise. Private gun sales are legal in some states, but do not count on this to last. Barter leaves no paper trail, and thus, no traceable evidence of transaction. For those who fear this idea as “legally questionable”, all I can do is remind them that an unconstitutional law is no law at all. If it does not adhere to the guidelines of our founding principles, our founding documents, and our natural rights, then it is just a bunch of meaningless words on a meaningless piece of paper signed by a meaningless political puppet.

3D Printing And Home Manufacturing

3D Printing is now available to the public and for those with the money, I recommend they invest quickly. Unless the establishment wants to make the possession of these printers illegal, as well as shut down the internet, there will be no way to stop data streamers from supplying the software needed to make molds for every conceivable gun part, including high capacity mags. This technology has been effectively promoted by the Wiki Weapons Project:

http://defensedistributed.com/

According to current ATF law, the home manufacture of gun parts is not technically illegal, as long as they are not being produced for sale. But in a state or county where federal gun laws have been nullified, what the ATF says is irrelevant.

Home manufacturing of gun parts and ammo would be a highly lucrative business in such safe haven areas. And, the ability to build one’s own self defense platform is a vital skill in a sparse market environment. The ultimate freedom is being able to supply your own needs without having to ask for materials or permission from others. It should be the goal of every pro-gun activist to reach this independence.

Force The Establishment To Show Its True Colors

While some in the general public may be incensed by the trampling of our freedoms by government, many (including myself) would view direct action and aimless French Revolution-style violence as distasteful and disastrous. The moral high ground is all that any dissenting movement has. It will be hard enough to keep this ground with the constant demonization of liberty minded people that is being espoused by propaganda peddlers like the SPLC and numerous media outlets. We do not need to help them do their jobs.

Now, to be clear, I have NO illusions that the above strategies will defuse a confrontation between those who value freedom, and those who desire power. The hope is that enough people within our population will refuse to comply, and that this will make any future despotism impossible to construct. However, it is far more likely that these acts of defiance will elicit a brutal response from the government. And in a way, that is exactly what we want…

The Founding Fathers went through steps very similar to those I listed above and more to counter the tightening grip of the British Empire during the first American Revolution. The idea is simple:

Peacefully deny the corrupt system’s authority over your life by supplying your own needs and your own security, rather than lashing out blindly. Force them to show their true colors. Expose their dishonor and maliciousness. Make them come after you like the predators they are, and then, once they can no longer play the role of the “defending hero” in the eyes of the public, use your right to self defense to send them a message they won’t forget.

Skeptics will claim that physical defense is useless against a technologically advanced enemy. They will claim that we need a "majority" we do not have in order to prevail. These are usually people who have never fought for anything in their lives. They do not understand that the “odds” are unimportant. They mean nothing. No revolution for good ever begins with "majority support". Each is fought by a minority of strong willed and aware individuals. When all other methods of protest have been dismantled, the system leaves us with only two options: stand and fight, or kneel and beg for mercy. All you need to know is what YOU would do when faced with that choice.

There is no other culture on earth that has the capacity, like Americans currently do, to defeat centralists, defend individual liberty, and end the pursuit of total global power in this lifetime. We are the first and last line. If freedom is undone here, it is undone everywhere for generations to come. This is our responsibility. This is our providence. There can be no complacency. There can be no compromise. There can be no fear. It ends on this ground. One way, or another…

Milton Friedman On The Unholy Coalitions Of The Minimum Wage

 

Submitted by Tyler Durden on 02/16/2013 14:15 -0500

• Milton Friedman
• Unemployment

This week we were told that, by the magic of a non-deficit-increasing wave of our President's hand, the minimum wage should be increased to $9 (a 24% rise from the current $7.25 federal minimum wage) and anchored to inflation going forward. The rabbit-holes of whether this is a good or bad thing run deep and in very different directions. However, in three short minutes, Milton Friedman provides some critically clarifying truthiness on the unholy coalitions between 'do-gooders', 'special interests', 'trade unions', and the vicious circle that this non-market-based decision will create. "Do-Gooders believe passing a law saying nobody shall get less than [a minimum wage] is helping poor people (who need the money). You're doing nothing of the kind. What you're doing is to ensure that people whose skills do not justify that wage will be unemployed." It is no accident that youth unemployment is almost double the overall unemployment rate. We never learn... and as Friedman concludes, "it is the exact people who the do-gooders are trying to help that are hurt the most - the poorest!"

Obama's Minimum Wage Increase Fallacy

 

By Warren Beatty

In Tuesday night's (February 12, 2013) State of the Union show, er, speech, Dear Leader Barack Hussein Obama said:

We know our economy is stronger when we reward an honest day's work with honest wages. But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we've put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That's wrong. That's why, since the last time this Congress raised the minimum wage, nineteen states have chosen to bump theirs even higher.

Tonight, let's declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. This single step would raise the incomes of millions of working families.

Obama called for raising the minimum wage to $9.00 per hour, and to index the minimum wage to inflation. Sounds great! In ObamaWorld, in a static economy where the economy will not react to a minimum wage increase, what Obama proposes would be fine. Unfortunately (or fortunately, depending on your perspective), we don't live in a static economy; rather, we live in a dynamic economy that will react to a minimum wage increase. So, with that bit of economic reality that seems to be lost on Obama's economic advisers (perhaps it's not lost -- it's the only they can sell their ideas to low-information voters), let's examine what will occur if the minimum wage is increased:

• Jobs will be lost. 10.6 percent minimum wage increase in 2009 resulted in the loss of 600,000 teen jobs in six months, even with a 4 percent economic expansion. A 10 percent minimum wage increase resulted in a 4.6 percent to 9.0 percent drop in teen employment in small businesses, and a 4.8 percent to 8.8 percent drop in hours worked by teens in the retail sector. The same study showed an increase in unemployment of 2.7 percent to 4.3 percent, and 5 percent for low-skilled employees most affected by minimum wage increases. So, the job-destroying effects of a minimum wage increase falls particularly hard on low-skilled workers. Why focus upon teen employment? Because teens comprise the bulk of minimum wage earners. And most minimum wage earner do not work full-time.

• The economy will suffer (even more, if it can). This video (at the 1:15 through 1:31 point) says that increasing the minimum wage will slow the economy because manufacturers have less to reinvest. There is a condition where raising the minimum wage -- a monopsonistic situation -- (1:41 point) can benefit the economy. But monopsonism refers to the situation in which there is only one buyer, hardly the case in the U.S. labor market (although the federal government is trying to achieve that situation). So we are left with a minimum wage increase harming the economy.

It's rather ironic that Obama chose to cite poverty of a full-time worker. That is because only about 38 percent of those earning minimum wage work full-time. That percentage was true in 2005. Can anyone cite a source that suggests a substantial percentage change since then? So, using 2005 percentages, 53 percent of those earning [minimum wage] or less per hour are between the ages of 16 and 24. Those earning the minimum wage, ages 16 to 24 years, had an average family income of over $64,200 (2005 dollars), while those over 24 had an average family income of over $33,600. Further proof that a minimum wage increase will not help the group Obama cites. Also, consider that even in 2005 dollars, average family income of minimum wage earners far exceeds the amount Obama cites, $14,500.

And, as William Dunkelberg says, "About 60 percent of the officially poor don't work, so the only thing raising the minimum wage does for them is to make it harder for them to get a job if they ever decide they want one." Dunkelberg continues, "It is estimated that less than 15 percent of the total increase in wages resulting from an increase in the minimum will go to people below the poverty line and less than a third of those receiving the minimum wage are families below the poverty line." "Don't work" means that they don't work full-time. Did Obama somehow miss this little fact?

Of those making minimum wage, 16.9 percent of those aged 16 to 24 lived at or below the poverty threshold, while 22.8 percent that were 25 or older lived in similar circumstances. Of those making minimum wage, 64.7 percent of those aged 16 to 24 had a household income above 200 percent of the poverty threshold, while 44.8 percent that were 25 or older lived in similar circumstances. These percentages are particularly damning to Obama.

Further, again using 2005 percentages, the largest percentage of minimum wage earners have "less than a high school" education. This fact is not some deep, dark secret. The last time I checked, public schooling included high school. And public schooling did/does not directly cost (except for "cool" clothes) those being educated. Dropping out of school is a conscious choice. Yet we consumers are expected to pay higher prices to support what is a bad decision. Some economists suggest that increasing the minimum wages may actually encourage some students to drop out of high school. About half of the 3.8 million workers who make at or below the minimum wage are under 25, according to the Bureau of Labor Statistics (see table 1).

But wait, you say. Those "evil" business owners should raise wages but not prices. They have, after all, large quantities of money stashed away. This is just the "other side" of the same coin. Business owners are somehow expected to support a bad decision. Besides, how do you think those "evil" business owners got all that money? Have you ever heard of education? There are very few business owners with the last name "Kennedy."

As University of California economics professor David Neumark says, "There is no research supporting the claim that minimum wages reduce the proportion of families living in poverty."

And, as Paul Kersey of the Heritage Foundation wrote in 2004:

Well, I have good news and bad news for you. The bad news is that increasing the minimum wage will do little to improve conditions for the working poor. This is because relatively few of the recipients of such an increase are living in poverty. The good news is that the working poor do not necessarily need government help. Research shows that the 'dead-end job' is largely a myth.

This is not to say that the working poor do not have a hard road ahead of them, but for those who persevere it is a road that leads out of poverty. We should not block off that path by making low-wage jobs more scarce, which is a likely result of an increase in the minimum wage.

As Rea S. Hederman, Jr. and James Sherk wrote in 2006:

Many support raising the minimum wage because they want to help low-income Americans get ahead. But while some minimum wage-earners do live below the Poverty line, these workers are far from representative. Only one in five minimum wage-earners lives in a family that earns less than the Poverty line. Three-fifths work part-time, and a majority are under 25 years old. Minimum wage-earners' average family income is almost $50,000 per year [2005 dollars]. ... It is not surprising, then, that studies show that higher minimum wages do not reduce Poverty rates.

Minimum wage workers under 25 are typically not their family's sole breadwinner. Rather, they live in middle-class households that do not rely on their earnings. For the most part, they have not finished their schooling and are working part-time jobs. These workers represent the largest group that would directly benefit from a higher minimum wage.

As David Neumark said in 2009:

Minimum wages, like most public policies, confront us with trade-offs. An employed, low-skilled worker who keeps his job earns a slightly higher wage. But a worker who loses his job, or a labor-market entrant or unemployed worker who cannot find a new job, pays a much higher cost. Given present economic conditions, the imperative should be to create and enhance job opportunities.

If "a family with two kids that earns the minimum wage" does receive a minimum wage raise to $9.00 per hour, the family will still live below the poverty line. Assuming the minimum wage earner works 52 weeks per year (no vacation), 40 hours per week (becoming quite rare due to ObamaCare), he/she will earn $18,720 per year (do the math). Yet, Health and Human Services says that a family of four is below its 2012 poverty threshold of $23,050. To rise above that threshold, a minimum wage of $11.10 would be required. So, why did Obama not call for the minimum wage to be raised to that amount? But why stop at $11.10 per hour? While we're at it, let's raise the minimum wage to $22.20 per hour so poverty is eradicated. I'm suuuuuuuuuuuuuure prices won't rise as a result.

Are you reading (and understanding) this, all you Obama supporters? Or have y'all been taught how to suspend economic reality? Please, unlike Obama, be specific as y'all try to refute empirical evidence. Don't just provide some "feelgood" rhetoric.

Bottom line: increasing the minimum wage kills jobs, hurts the economy, and doesn't lift people out of poverty. There is only one way out of poverty: get educated and work!

But that's just my opinion.

Dr. Beatty earned a Ph.D. in quantitative management and statistics from Florida State University. He was a (very conservative) professor of quantitative management specializing in using statistics to assist/support decision-making. He has been a consultant to many small businesses and is now retired. Dr. Beatty is a veteran who served in the U.S. Army for 22 years. He blogs at rwno.limewebs.com.

Raise the Minimum Wage and Get Minimum Jobs

Fiscal Times ^ | 02/15/2013 | Ed Morrissey

Posted on Friday, February 15, 2013 11:16:42 AM by SeekAndFind

Like those of all modern presidents, Barack Obama’s State of the Union speech was filled with agenda-list items, long-held hobby-horse issues of his party, and inflated claims of the success of his own policies. Most of the content could have been lifted from campaign speeches in 2012, probably 2008, and arguably every Democratic campaign for the last 40 years. Kirsten Powers, the liberal analyst on Fox News, wrote in a column for USA Today that the speech made it seem that “President Obama's chief speechwriter has been replaced by a cliché-generator circa 1960.”

Among the blizzard of clichés was a surprising throwback to 2007. President Obama focused on middle-class economic issues, which came as no surprise after having taken criticism over his inaugural speech, which hardly mentioned jobs and the economy at all. The White House didn’t make that mistake on Tuesday evening, with 32 mentions of “jobs” peppered throughout the address, and a pledge to focus on economic growth and job creation. However, included with that commitment to focus on job expansion came a new proposal to raise the federal minimum wage from its current $7.25 per hour to $9 per hour.

“We know our economy’s stronger when we reward an honest day’s work with honest wages,” Obama told the joint session of Congress. “But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong.” The President worked in a shot at wealthy CEOs at the same time: “In fact, working folks shouldn’t have to wait year after year for the minimum wage to go up, while CEO pay has never been higher.”

This plays into Obama’s theme of “fairness,” a strategy that ended up being successful in his campaign against the wealthy Mitt Romney. It plays on very sympathetic messages; most Americans will wonder how anyone can live on their own on $14,500 a year. Voters want an economic system that generates a fair, living wage for a fair day’s work. But the framing of this issue by Obama in the State of the Union speech provides a misleading context, and masks the failure of this policy in the past to produce the desired outcome.

Let’s start with the worker end of the equation. It’s true that minimum-wage earners don’t get a lot of money, but these are usually entry-level positions and starting wages. Workers don’t “wait year after year” for wage increases, unless they aren’t progressing from entry-level status or are changing from job to job at that level. Employers don’t wait for the government to raise the minimum wage to give existing employees a raise, mainly because the accrued experience makes the employees more valuable on the job market.

And that’s the big problem with these proposals. They don’t make people more valuable on the job market, especially those with no experience or proven skills. Minimum wage hikes make it more difficult for them to find jobs, especially in the short run. The raise proposed by Obama would increase just the straight wage cost for a business by 24 percent in its entry-level positions (and probably in other positions near that level), which businesses would have to absorb in one of two ways. Either they raise prices without providing consumers with a commensurate increase in product or service value, or they have to reduce staff to cover the increase. The former is inflationary and harms their competitive edge, while the latter gives businesses less flexibility to take risks, especially on new hires. Forced to pay a higher cost for employees, businesses will stick with experience rather than look to younger workers entering the workforce.

Consider what happened when Congress last passed a minimum-wage increase in 2007. At that time, overall unemployment was 4.7 percent and the job market favored workers. Among those between 16 and 19 years of age, the jobless rate was 15.3 percent, on the lower end of the range seen during the previous four years, the highest rate of which had been 19.0 percent in June 2003 during the previous recession.

By July 2008, overall unemployment had jumped to 5.8 percent due to the then-moderate recession that had begun in December 2007, but youth unemployment rocketed upward by more than five full points to 20.7 percent. As the wage floor stepped upward to its present level by July 2009, the youth unemployment rate rose to 24.3 percent. And while the overall unemployment rate has declined from 9.5 percent at that time to 7.9 percent now (albeit with a plummeting workforce masking the true nature of chronic unemployment), youth unemployment remains at nearly the same level as in July 2009, at 23.4 percent. Why has this been the case? When forced to pay more for labor, businesses will insist on getting more value for their money – experience and proven skills, even in entry-level positions. Younger workers never get a good chance to earn their stripes. That has long-term implications for their ability to earn in the future, as well as the social costs of high unemployment and restlessness of youth.

Worse yet, it’s the small business owners who get squeezed the most by this economic vise. The wealthy CEOs to whom Obama refers run companies large enough to dissipate the increased costs of minimum-wage hikes by balancing out cost reductions through economies of scale that aren’t available to mom-and-pop businesses. That puts smaller businesses at a competitive disadvantage that benefits the very CEOs that Obama scolded in his address.

Furthermore, that corrosiveness was amply demonstrated in a still-relatively healthy job market in 2007-8. With millions more unemployed, the jobs market is even more heavily tilted in favor of the employer, which will make that situation all the more dire for younger, less experienced workers – for whom the minimum wage is intended. That’s why John Boehner called this proposal dead on arrival.

“I’ve been dealing with the minimum wage issue for the last 28 years that I’ve been in elected office,” Boehner said. “And when you raise the price of employment, guess what happens? You get less of it. At a time when the American people are still asking the question, ‘Where are the jobs?’ why would we want to make it harder for small employers to hire people?”

We all want to see Americans prosper, and for people to earn wages that allow them and their families to live in dignity. Arbitrary hikes in the minimum wage don’t provide that, however, and even Obama’s target of $9 would produce an annual wage below the current federal poverty line ($18,720 vs $22,000). So what does succeed? As a former hiring manager, I can tell you what works. I spent 15 years hiring people into entry-level office positions for call centers, positions that usually paid above the minimum wage but reliant on it as a compensation basis. When the economy was slack and investors discouraged, I would have a flood of applicants for every open position, including on one occasion an unemployed man with a doctoral degree, and an unemployed college professor on another.

There was no competitive pressure to raise the entry-level wage, and my employees didn’t get wanderlust at the wage they were being paid. Most importantly, I never had to take a flier on an inexperienced but impressive applicant, thanks to the volume of more experienced candidates who were practically bursting through the door.

However, when investors put money in the economy and job creation flourished, we suddenly had to compete – and not just for new employees. As employees on staff gained experience, they would leave for greener pastures unless we raised the pay for everyone. During the Bush recovery, our company had to repeatedly revisit compensation to stem the outflow and get applicants to commit to joining our firm. That competition, in a well-performing and properly regulated economy, made the minimum wage an afterthought and lifted the living standards of everyone in the job market.

If we want to aim at that outcome as our goal, then we cannot punish the workers who want to enter the market and the business owners who would otherwise hire them by pricing new workers out of the equation. We need to focus on fixing the conditions under which businesses and investors operate in order to create the kind of expansion that spreads prosperity, rather than create arbitrary new costs that smother it.

Guest Post: The Deflationary Spiral Bogey

 

Submitted by Tyler Durden on 02/14/2013 22:36 -0500

Authored by Robert Blumen of the Ludwig von Mises Institute,

What is deflation? According to dictionary.com, it is “a fall in the general price level or a contraction of credit and available money.”

Falling prices. That sounds good, especially if you have set some cash set aside and are thinking about a major purchase.

But as some additional research with Google would seem to demonstrate, that would be a naïve and simple-minded conclusion. According to received wisdom, deflation is a serious economic disease. As the St. Louis Fed would have us believe,

While the idea of lower prices may sound attractive, deflation is a real concern for several reasons. Deflation discourages spending and investment because consumers, expecting prices to fall further, delay purchases, preferring instead to save and wait for even lower prices. Decreased spending, in turn, lowers company sales and profits, which eventually increases unemployment.

The problem with deflation, then, is that it feeds on itself, destroying the economy along the way. It is the macro equivalent of a roach motel: perilously easy to enter but impossible to leave. The problem, you see, is that deflation reduces consumption, which reduces production, eventually shutting down all economic activity.

Wikipedia explains it this way:

Because the price of goods is falling, consumers have an incentive to delay purchases and consumption until prices fall further, which in turn reduces overall economic activity. Since this idles the productive capacity, investment also falls, leading to further reductions in aggregate demand. This is the deflationary spiral.

Deflation is far worse than its counterpart, inflation, because the Fed can fight inflation by raising interest rates. Deflation is nearly impossible to stop once it has started because interest rates can only be cut to zero, no lower. For this reason, "The Ben Bernank" believes that monetary policy should be biased toward preventing deflation more than preventing inflation.

Economist Mark Thornton cites the prominent New York Times blogger Paul Krugman who compares deflation to a black hole, a type of astrophysical object whose gravitational field is so strong that no matter or energy that comes near it can escape. Krugman writes,

... the economy crosses the black hole’s event horizon: the point of no return, beyond which deflation feeds on itself. Prices fall in the face of excess capacity; businesses and individuals become reluctant to borrow, because falling prices raise the real burden of repayment; with spending sluggish, the economy becomes increasingly depressed, and prices fall all the faster.

In case you’re not already scared straight, the deflationary doomsday has already happened in America when (according to the New York Times) it caused the Great Depression.

Japan, according to Bloomberg “has been battling deflation for more than a decade, with the average annual 0.3 percent decline in prices since 2000 damaging economic growth.” The New York Times reports that Japan’s new prime minister Abe “has galvanized markets by encouraging bold monetary measures to beat deflation.”

I hope that everyone is clear on this.

Now that you understand the basics, I have some questions for the people who came up with this stuff.

Why do falling prices make people expect falling prices?

The observation that prices are falling, means that in the recent past, prices have fallen.

One person noticing that the price of a good, that appears somewhere on their value scale has fallen for some time, might interpret that information and conclude that in the future, the price of that good will be lower. But a second individual might see the same thing and expect the price to level off and stay where it is, and a third might interpret falling prices as an indicator that in the future prices will be higher.

Why should a price having fallen indicate that it will continue to fall? That is only one of three possible future trends. Why should past trends continue indefinitely?

Why will the public mainly choose the first of these three outlooks, more than the other two?

According to economist Jeffrey Herbener, the assumption that falling prices create expectations of more of the same is a feature of certain popular macroeconomic theories in which price expectations are modeled as part of the theory. In his testimony to Congress, Herbener observes that “the downward spiral of prices is merely the logical implication of assumptions about expectations within formal economic models. If you assume that the agents operating in an economic model suffer from expectations that are self-reinforcing, then the model will produce a downward spiral.”

Are expectations self-reinforcing? It would make just as much sense to say that expectations are self-reversing—after people have seen prices go down for a while, they will expect prices to go up.

Are these formal models a good description of human action? Contrary to what these models say, there is no fixed response to an event. In my own experience, I can think of many times I, or someone that I know, jumped on a low price because we did not expect the opportunity to last.

But what about wages?

The postponement theory depends on the assumption that a fall in prices will benefit buyers who wait. This is true if we are talking about people who have lots of cash and can sit on it indefinitely. But most of us have ongoing monthly expenses and we depend on our wages to replenish our cash reserves. Our purchasing power, at the time when we want to make a delayed purchase, comes from our cash savings and our wages. A fall in wages, if substantial, would wipe out any gains in purchasing power realized from lower prices.

If consumers do not buy today because they expect lower prices tomorrow, then what are their expectations about their wages? Do they anticipate that their wages will be the same, higher, or lower? If lower, then by how much? As much as prices have fallen?

If consumers forecast lower prices and stable wages, then why are consumer prices included in the models, but wages are not? Does deflation only affect consumer goods prices, leaving all other prices untouched?

According to the deflationary death spiral theory, decisions not to buy drag the economy into a death spiral. Does anyone expect that could happen without affecting wages?

And what about asset prices?

In addition to cash savings and wages, individuals decide how much to spend and save taking into account the amount that they have already saved. Someone who is trying to save to meet their family’s future needs will feel less comfortable about spending.

Most people hold some of their savings in cash. That portion of their savings increases in purchasing power when prices fall. But people also save by purchasing financial assets, such as stocks and bonds, or real assets such as property, and rental housing. All of these assets have a price, which could rise or fall. Depending on the mix of cash and other assets that an individual holds, a fall in asset prices could wipe out any gains in purchasing power from the cash portion of their savings.

Do people take value of their past savings into account when deciding whether to buy or wait? Or do people form expectations about consumer prices only and ignore what might happen to their savings in a deflation?

If falling consumer prices generate expectations of more of the same, what impact do falling prices have on expectations about asset prices? Do buyers who delay purchases expect the prices of their saved assets to be lower as well? If not, then do they expect that consumer prices will be lower and asset prices will be higher?

If deflation causes the economy to disintegrate, will asset prices be spared?

Is it only buying behavior that is affected?

The deflation death star begins to destroy the earth when buying is postponed.

But is it only buying that is affected by expectations about the future? If buying is affected but not selling, then why not?

If consumers expect lower prices of most things, including things that they already own, it is equally logical that they would sell their possessions and their assets in order to buy them back later at a lower price. Selling your home and renting a similar one would be the place to start. Selling your car and leasing would be the next step. Finally, selling your assets for cash would be equally profitable. Expectations of lower prices should lead to a spiral of selling, driving prices down even faster, leading to more deflationary expectations and more selling until everyone has no possessions and no assets other than cash.

If this happened, then who would buy?

Do prices ever get low enough?

If buyers expect lower prices, then how much lower? Any number in particular? If a buyer expects a specific lower price, and the price reaches that level, will he buy? Or does he always expect prices to go even lower than they are today, no matter how far they have fallen already?

If expectations of lower prices turn out to be correct, and prices drop to even lower levels, then is there any point where a minority of contrarian buyers defect from the consensus and begin to see a bottom, or even an uptrend? Or do these expectations go on forever adapting to lower prices causing prices to drop indefinitely?

The point of delaying a purchase is so that you can make the purchase in the future and have some additional cash left over to make another purchase or to save. What is the point of delaying a purchase that you never make?

We have all had the experience of buying a new computer, or some other device, the day before the next version was released and it costs less and does more. If you knew would you have waited? Maybe, but maybe not. If you need a computer for work, then you will buy it sooner rather than later.

Many people delayed their purchase of the iPhone 4 in order to buy the iPhone 5, then when available they bought the iPhone 5. My iPhone4 was worn out by that time and I needed a new phone.

What about the Law of Demand?

According to the law of demand, a greater quantity of a good is demanded at a lower price than at a higher price. If that were true, then people would buy more, rather than postponing purchases.

What happens to the law of demand in a deflation? It turns out that the law of demand has a loophole: it requires that all other things remain equal. In a deflation death spiral, all things are not equal. Consumer preferences change in response to prices. Stationary supply and demand curves do not exist in such a world. For prices to fall and yet still fail to induce buyers to buy, the quantity demanded must always fall by more than enough to compensate for the lower asking price. The demand curve is always shifting downward faster than the price falls, to prevent an equilibrium price from ever forming. Economist W. H. Hutt calls this “an infinitely elastic demand for money.”

Does this describe the world that we live in, or any world that we could imagine? Do people really react in such a mechanical way to price changes? How do we explain, for example, shoppers competing to buy at low prices?

Why do sellers not lower prices?

Why is it only buyers whose expectations of lower prices are based on falling prices? Are the expectations of sellers included in the model?

If not, is that because the models assume that sellers do not have expectations? Or do the expectations of sellers not match the expectations of buyers?

If sellers have the expectations of lower prices, why do they not lower their prices immediately in order to sell inventory ahead of their competitors?

According to the deflation spiral theory, expectations frustrate market clearing. Yet, as Rothbard argues, speculation about future prices helps prices to converge to market clearing values. If buyers and sellers both expect future prices to be lower, why do market prices not converge upon this new, lower level immediately?

If customers are postponing purchases expecting lower prices in the future, but sellers do not cooperate, then inventories will accumulate. If this began to happen, then why would sellers not lower their prices immediately in order to clear out inventories?

All of us are both buyers and sellers, of different things at different times. To say that only the expectations of buyers are affected by falling prices, is to say that the same person, early in the day, has expectations about his own future purchases, but later the same day, does not have expectations about his own current and future sales. Does the model assume that we have all been lobotomized so the two sides of our brain do not communicate with each other?

Do producers have any control over their costs?

Previously, I asked if sellers could anticipate lower prices as well as buyers. If the producers anticipated lower prices, why did they go ahead and produce the item, or order raw materials with such high costs that they could not make a profit?

If a single business firm is experiencing fewer sales, they may not be able to reduce their costs because a single firm is close to being a price taker in the markets for labor and capital. There are usually alternative uses for their factors that value them more highly, at or close to current prices. But if prices, and sales are falling everywhere, or if everyone expects this to be the case, then why will suppliers not lower their prices if they expect their costs to be lower?

What are people doing with the money that they did not spend?

Suppose that people postpone spending. What do they do with the money they did not spend? Are they increasing their cash holdings? Or are they spending on investment goods? Saving and investing is a form of spending, only the expenditure is for capital goods rather than consumer goods. In this case, there would be no general decline in total spending or employment. Workers would have to change jobs from working in the consumption industry, to working in the capital goods industry, as Hayek explains in his essay "The Paradox of Savings" but production would continue.

How lower prices are necessary to induce people to postpone purchases?

There is a return on the purchase of a consumption good that results in the services provided by the good. This must be balanced against the return on the cash by holding until prices are lower. As noted by the Center for Economic Policy Research (CEPR), a small price change is not much of a motivation to wait, if you need a new product:

[postponement of purchases] would be true for rapid rates of deflation, but Japan's deflation has almost always been less than 1.0 percent a year. In 2011 its inflation rate was -0.2 percent. This means that if someone was considering buying a $20,000 car, they could save $40 by waiting a year. It is unlikely that this rate of deflation affected the timing of many purchases to any significant extent.

Why do quantities adjust but not costs?

If there is a generalized increase in money demand, then prices need to adjust downward. Why is it that all the quantity of goods bought and the quantity of labor employed can adjust, but prices cannot?

According to The Asia Times, when deflation strikes, factories lay workers off in order to cut costs. Why cannot producers lower their bid prices to their labor force and their suppliers in order to preserve production? If they could lower their costs, then they could produce profitably at a lower price level.

The general price level does not matter to business firms, so long as their costs are below their sale prices. Why does a deflationary meltdown assume that business can not operate profitably at any nominal price level? Why can business not lower costs?

Is this really what caused the Great Depression?

What about the credit bubble of the 1920s?

What about bank failures? The great contraction of the money supply?

The Smoot-Hawley tarrif?

What about regime uncertainty?

How about new deal wage and price policies that prevented prices from falling, which would have allowed employment to recover?

Conclusion

The deflation death spiral is a theoretical description of a situation but it does not describe the reality of human action, for any number of reasons:

1. There is in reality always a diversity of expectations among the public. While some people will expect prices to continue in the same direction, others will form the opposite view. Everyone’s expectations will change not only in response to changes in the data, but taking into account their entire life experience, their own ideas, and their situation.

2. Expectations are not entirely driven by prices. A broad range of things influences our expectations about price.

3. Lower prices are not always sufficient motivation to delay purchases because everyone prefers to have what they want now, rather than later.

4. Expectations of buyers tend to be met by sellers, if not at first, then fairly soon. In some cases, buyers can hold onto their cash for a bit longer, but most businesses have no choice but to sell their inventories at what the buyer will pay. In other cases, buyers may not be able to delay purchases, or may not wish to, and will pay what they must in order to buy.

5. Everyone—buyers and sellers (and every one of us acts in both of these roles at different times)—has expectations not only about consumer prices, but about wages, employment prospects, even asset prices, the economy in general, the progress of our own life, and the future of our family. A coherent plan of saving and spending takes all of these things into account.

6. Expectations can be met. Buyers have a buying price. Even if not known in advance, they know it when they see it posted. Even if they do not know what they plan to buy in the future, a bargain price will be met by buyers.

7. People only need so much cash. Beyond that, they start to look around for either consumption goods, or investments.

The truth on background checks (New York Post)

 

• By JOHN LOTT
• Last Updated: 11:27 PM, February 13, 2013
• Posted: 11:05 PM, February 13, 2013

Gun control “deserves a vote,” President Obama said time and again in his State of the Union speech on Tuesday. Sadly, the measure Congress is most likely to pass — beefed-up background checks — may cause more harm than good.

First, checks obviously won’t do anything about gun crime in cities like Chicago or New York, which revolves almost exclusively around illegal guns.

But they also wouldn’t stop the mass killings Obama mentioned. The Newtown, Conn., shooter stole his mother’s guns, while the Tucson, Ariz., and other killers didn’t have records that a check would’ve spotted.

You can see the fundamental unseriousness of this proposal just by looking at the numbers cited by its advocates, such as New York’s own Sen. Chuck Schumer.

Schumer tells us that “48 percent of gun sales are made without a background check” and that background checks have “blocked 1.7 million prohibited individuals from buying a gun.” Both stats are just false.

On sales without a check, even the 40 percent figure that President Obama and others use is off. It’s obtained by rounding up of a 36 percent statistic that comes from the only study on this issue.

And that (small) study covered a 1991-94 period, most of which came before the Brady Act took effect on Feb. 28 1994, and for the first time required that all federally-licensed dealers perform checks.

There’s more: The researchers gave this number for all transactions, including family inheritances and gifts, not just “sales.” Count only guns that were bought, traded, borrowed, rented, issued as a job requirement or won through raffles, and 85 percent went through federally licensed gun dealers; just 15 percent would’ve been transferred without a background check.

(By the way, that survey also found that all gun-show sales went through federally licensed dealers. If Schumer et al. really trust the study, they should stop raging about the “gun show loophole.”)

Bottom line: It’s hard to believe that the percentage of sales without background checks is above single digits today.

On to Schumer’s second falsehood — the claim that checks have stopped 1.7 million prohibited sales. In fact, these were only “initial denials,” not people prevented from buying guns.

The Bureau of Alcohol, Tobacco, Firearms and Explosives dropped over 94 percent of those “initial denials” after preliminary reviews. Further review cleared at least a fifth of the other 6 percent.

Truth is, these government databases are rife with flaws. Remember the five times that the late Sen. Ted Kennedy missed flights because his name was on the anti-terror “no fly” list? By Sen. Schumer’s method of counting, that means the “no fly” list stopped five flights by terrorists.

The flaws in the background-check system carry another price: They cause dangerous delays for people who suddenly, legitimately need a gun for self-defense, such as a woman being stalked by an ex.

Beyond the crashes in the computers doing the checks, 7 percent of checks aren’t finished within two hours, with most these delays taking three days or longer.

Delays are undoubtedly just an inconvenience for most people buying guns.But for a few, it makes a huge difference in being able to defend themselves against assailants. Indeed, my own research suggests these delays might actually contribute to a slight net increase in violent crime, particularly rapes.

Expanded background checks might well be reasonable, but only if the current system is fixed.But our politicians are more interested in symbolic action — being seen to “do something” — than in actually saving lives.

John Lott is a former chief economist at the United States Sentencing Commission; his new book, “At the Brink,” is due out next week.

Our murder rates are screaming the truth but the Democrat controlled media is smothering it

 

By Coach Collins, on February 13th, 2013

By Derrick Hollenbeck, staff writer

When Jamie Fox gleefully spoke about getting to “kill all the White people” in his latest film, it was ignored by the Leftist media the way parents ignore the babble of an angry three year old. To Liberals, Blacks are tall children incapable of committing any wrongful act because their great, great grandparents were slaves.

This paternalistic attitude may have been necessary and defendable for actual slaves set free after the Civil War, but by the dawn of the 20^th century the grandchildren of Black slaves were moving into the middle class in some parts of the country. Woodrow Wilson and W.E.B. Dubois changed that with lies and deceit and put Blacks back on their knees where they have been at the mercy of Democrats ever since.

With the election of Barack Obama the relationship Blacks have toward Whites is changing again. The increase of Black on White crime that is not being talked about by the White Democrat controlled media is causing major problems. Whites are running away from America’s big cities and they are imploding – look at Detroit.

These cities are becoming hollow shells that are uninhabitable because Blacks are killing Whites in “retribution” for the miserable existence they endure living in cities controlled by Democrats.

The FBI’s, National Crime Victimization Survey, and The Department of Justice’s Uniform Crime Reports, have released data that shows a rising criminal hostility toward Whites among Blacks.

The data is clear. Those who would ignore them or argue they are irrelevant must assume the burden of proof.

Blacks kill at a rate seven times higher than other races do. They are three times more apt to employ a hand gun; twice as likely to use a knife in the commission of a crime.

For every Black killed by a White, there are 39 Whites killed by a Black. Robberies are virtually all committed by Blacks as the ratio of Black robbers to White robbers is 136 to one.

In 2010 the ratio of Blacks killing Whites was over 2 to 1. While this is bad enough, when relative population size is factored in, the rate is stunning.

Blacks are approximately 12.6% and Whites make up 72.4% of our population. There are just .174 Blacks for each White. This means Blacks exceed their statistically expected murder rate by 388%.

Democrat John Conyers of Detroit has renewed the demand for reparations for years of slavery. These demands serve only to deflect the justifiable anger Blacks feel toward their modern day slave masters in the Democrat Party and redirects it toward Whites in general whom the Democrats have written off as a voting constituency.

As a society we can either face this problem or keep burying innocent people. We know what the Democrats want to do, but sadly it seems that the Republicans are following them.

Sarah Palin exposes the fraud of Obama’s SOTU Address

February 13th, 2013 in

This is really great analysis

by Sarah Palin

If you missed President Obama’s State of the Union address last night, you didn’t miss much – especially if you watched any of his past four State of the Union addresses.

We heard the same recycled rhetoric, and we heard his Orwellian declaration that the cornucopia of new federal programs he proposed, as well as his intention to eradicate world poverty, wouldn’t “increase our deficit by a single dime.”

Of course, he glossed over the inconvenient facts. He boasted about job creation, but didn’t mention that real unemployment is higher today than when he took office. He touted all those still undiscovered “clean energy” jobs without mentioning the tens of thousands of real jobs the Keystone Pipeline will create if he would simply allow it to be built. He sang of new energy development, but didn’t mention that new offshore leases for oil and natural gas drilling have declined a decimating 61% under his administration.

He talked about “helping” to build “a thriving middle class,” but didn’t address how the middle class is actually faring under his economic stewardship. This is important – his deception must be addressed: under his leadership, middle class families have seen the average price per gallon of gas increase 96%, the average cost of family health care premiums rise 24%, the annual cost per household from federal regulations rise to over $15,000, and real median household income decline $4,520. If this is what happens when he “helps” the middle class, then please, Mr. President, we implore you to stop “helping” us.

He talked about a “balanced approach to deficit reduction” without mentioning that $5.9 trillion has already been added to the debt since he took office. We’re $16.5 trillion in debt and he keeps digging the hole deeper! He didn’t mention his record trillion dollar deficits or the fact that his last proposed budget would add $9.2 trillion to the debt through 2022. His Democrat-controlled Senate hasn’t passed a budget in four years. That’s obviously not “responsible” or “balanced.” He said, “We can’t cut our way to prosperity.” Well, we definitely can’t get there by borrowing and spending money we don’t have on his “investments” that don’t work. If indiscriminately borrowing and spending money led to prosperity, then bankruptcy would be a sign of economic strength. But it isn’t.

A State of the Union address should give us a true picture of the direction in which we are headed. But we didn’t get the truth last night. And it WAS Orwellian.

What is the true state of our union? Though this may sound harsh, I’ll speak the truth here. We are a country going bankrupt to fund a bloated, distant, and often corrupt federal government led by venal politicians more concerned with paying off their campaign cronies and consolidating their own power than in preserving the constitutional republic that so many have fought and died for (including our brave men and women in uniform who were barely mentioned last night).

We are a country with an economy being stifled under the weight of a bankrupt and voracious federal machine demanding more taxes and burdensome regulations. Job creators are the ones stuck with the bill when Obama calls for “new revenue.” Their businesses bear the brunt of the nearly 87 million paperwork hours imposed by federal regulations in 2012 – annually costing them $1.75 trillion. And I haven’t even mentioned Obamacare yet, which looms like the dark cloud it is over our private sector. Is it any wonder why our economy is stagnant or why job growth is so anemic? President Obama’s “solution” to these problems is to make the federal government more intrusive, bankrupt, and controlling.

If we continue down the path Barack Obama has us on, the long-term forecast of the state of our union is not a pretty picture. Yet he merrily rolls along it, deceiving too many Americans into thinking that these are intelligent, economic, and ethical proposals.

Our President wasn’t candid with Americans about our forecast, but, interestingly, in a Q&A session last week, Paul Krugman, one of President Obama’s economic cheerleaders at the New York Times, was remarkably candid about where we’re headed.

When asked about our federal debt, he admitted that “eventually we do have a problem” especially because “the population is getting older” and “health care costs are rising.” So, what does he see as the solution to pay for all this? He admits that your taxes will rise. And worse:

“Surely in the end it will require some middle class taxes as well. We won’t be able to pay for the kind of government the society will want without some increase in taxes, not a huge one, but some increase in taxes on the middle class, maybe a value added tax. And we’re also going to have to make decisions about health care – not pay for health care that has no demonstrated medical benefits. So, the snarky version I use, which I shouldn’t even say because it gets me in trouble, is death panels and sales taxes is how we do this.” (But wait, I thought there’d be no such thing as “death panels,” liberal liars?)

Mr. Krugman tried to portray this brave new world in the gentlest possible light, but it’s going to take quite a lot of “sales taxes” to meet the payments on the ever-increasing multi-trillion dollar debt we’re burying our kids and grandkids under. And with health care costs rising under Obamacare, obviously a lot of care will be rationed and even flat out denied by panels of faceless bureaucrats making life and death decisions for you and your loved ones. This is the long-term forecast for the state of America under Obama’s failed policies: middle class taxes and death panels.

Does that sound good to you? It doesn’t to me. So, we better get motivated to do something about it. We’d better get out of our post-election funk and wake up to the radicals’ reality being created as America gets “fundamentally transformed.”

Here’s the good news: President Obama is in many ways a lame duck president. None of his ridiculous ideas will come to pass via the legislative process. Of course, he may try to force them down America’s throat by imposing them through other means. But they can be undone if the right people are in position to undo them. He is very bold right now – some would say cocky – because of his November win, but there is another election around the corner, and we can check his boldness at the ballot box by electing constitutional conservatives. We must continue to affirm the fact that growing our bankrupt federal government is NOT the solution. Most of what the federal government does could be handled better on the individual, local, and state levels.

Our country didn’t weather a Revolution, two World Wars, a Civil War, a Great Depression, and countless other political and economic storms, just to be sunk by the dangerous policies of this current administration. We’re stronger than this. As President Reagan said, “I do not believe in a fate that will fall on us no matter what we do. I do believe in a fate that will fall on us if we do nothing.”

So, do something. 2014 is just around the corner. Get motivated! Get organized. America, don’t retreat. In the words of yet another White House program, “Let’s move.”

- Sarah Palin