Saturday, April 16, 2005

Redux: Economics, The Two Dogs Way

While my posts on a weekend seem to be for the most part unread, I still like to do it. I guess that I can just hash out some of my opinions without debate with anyone other than myself, so here I go....

It seems that there are still some people that think that a minimum wage is a good idea, and no matter what you tell them, they continue to hold this concept dear to their heart. While I don't think that these people are evil as a rule, I do believe that they are so completely misinformed as to lean toward becoming evil. Ah Hell, they're evil.

I cited this particular case as a basis for my argument (and yes it's me): A seventeen year old male enters the workforce upon high school graduation. Not knowing exactly what this male wants to do for the rest of his life, he decides to get a job in construction because of an interest in building. Watching things go together (the ol' in-out, in-out) has always been interesting to our hero so he applies for a job as a laborer for Gianormous Construction Company Inc. Let's call him 'Adonis' for ease of story-telling.

Anyhoo, Adonis starts his meteoric rise to the pinnacle of the business world raking in a whopping five dollars per hour. That was a weekly net pay of $181.50. (For those economically challeged people, there are taxes that are taken from your check that make the "net pay" less than if it was straight math of hours times rate) Minimum wage at this particular point in time hovered right around $3.35/hour (which would have been $134.00 in just staight compensation). Adonis spent the majority of his day pushing a broom around a construction site and quickly became bored with his tasks. He approached Mr. Big-time Construction Dude and asked for more compelling tasks that were better suited for his talents. He moved up to a post of carrying around heavy things for a welder. Mr. Welder-Man quickly realized that Adonis had good skills and a desire to work hard.

Needless to say, Adonis was again charged with harder tasks and was "awarded" greater compensation. Within two years, Adonis was making $11.00/hour. Wow! That is over two times the beginning wage!

Now for the fun stuff. In the same time frame, minimum wage stayed about the same, so therefore Adonis' salary was worth the rate he was paid, $11.00/hour. If in fact the minimum wage had been increased from 3.35/hour to say 10.00/hour in the same time frame, Adonis salary had in fact been decreasing in regards to the minimum wage which actually dictates to price of everything from a Big-Mac to dental dams. (I bring up dental dams because our hero was ADONIS and had no shortage of fawning women and he never failed to please. Hey, look up at me!)

Every single thinking person can understand this concept, but it seems that there are close to 49% of Americans that do not think, so I will explain this s-l-o-w-l-y. It is very easy to understand that if an employer is FORCED to pay basically unskilled workers a certain amount of money per hour, he must adjust his end cost to cover that wage. If he does not, he will go out of business. You see, business is not a zero sum game, Mr. Business Owner has to reach a place in earnings where he receives what is known as "PROFIT". Granted, 49% of Americans think that profit is evil, but they fail to understand that is why a business is there. Oh, it would be GREAT if it was just to serve the community, but face it, Gomer, there is NO OTHER REASON THAN TO MAKE A PROFIT. He has to do this in order to afford to send his wealthy little girl, Buffy, to Vassar and to move up in the wine and cheese circles, because his wife, Trixi, has to have a better dress than that trollop, Betty Sue Ann, down the street.

Now the ugly stuff: If Mr. Business Owner fails to achieve this plateau of nirvana known as "SUCCESS", he will not have the damn jobs to award to the minimum wage guy in the first place.

The Two Dogs conclusions: Profit=Good. Minimum wage=stupid, bad, evil lunacy.

Oh, and for Tom and Travis, I know this is an overly simplistic view of things, so don't just make me look too bad. But, y'all probably don't know how to talk to children anyway. Trust me this had to be done.

UPDATE: What happened to Adonis, you ask? He moved up in the construction field until he got to a point that either he had to start his own construction company or either go back to college to receive a degree in architecture. Did Adonis finish his degree? Yep, he received his BA in 2002 (twenty years after high school graduation) and is now employed with Major Architecture Firm Incorporated. At some point in the very near future, he will approach the salary that he was making at Gianormous Construction Company Inc. and far exceed that in subsequent years. While he enjoys being paid ridiculous sums of money modeling for "Sexiest Man Alive Magazine", it is still just a hobby. Oh and he runs a "humor" blog on the side and patiently awaits his death by wild boar.

UPDATE 2: I am throwing my support behind the dark horse candidate, Travis Benning, for any damn thing he decides is worth his talents. Carrying the one...patience, just a little patience....Benning for President/2020!

UPDATE C: Welcome all of you from the Carnival of the Capitalists!

UPDATE 7: Welcome all from the Best of Me Symphony. Look around a bit, if you don't mind. Front page HERE.



.

41 comments:

Hillary said...

this is somewhat unrelated, but I heard once a REPUBLICAN - in trying to deal with a way to increase a minimum wage earners real income without making everything rise in price was to simply do away with income tax on minimum wage. if you were recieving minimum wage, you didn't pay income tax. this would allow for the minimum wage person to get a "raise" WITHOUT costing the employer any more, so he doesn't have to raise prices, therefore putting the minimum wage worker back down to where he was before. i think it is pure genius and utter proof that republicans don't hate poor folks at all, but guess what. the democrats shut it down.....

Paul Mitchell said...

For some unknown reason, I always had you pegged for an extreme lefty. I guess that old book-by-its-cover cliche might be true.

Now I know that you really read my blog. Thanks, Laura, and good luck in grad school.

Tom said...

I carry around three books wherever I go:

1. Henry Hazlitt's "Economics in One Lesson," which explains the negative effects of government interference in very simple terms. Alas, it is too thin to be a good weapon.

2. The Federalist Papers. It is hefty enough to be a good weapon.

3. This is usually either Mises' Human Action (definitely able to deal a good ass-whipping either figuratively or literally, as it's quite hefty), Bastiat's The Law, or Ayn Rand's Atlas Shrugged.

Tom said...

Of course I did! I even scared people in a speech-writing class once by giving a half hour long (speeches were to be 5 minutes at most) excerpt from it.

Travis at least has milk-chugging competitions. I have not even the bastion of vomit-related normalcy to fall back on.

Oh- I used your quote as a testimonial on my site. Heh.

Tom said...

Pam, read the analysis of the possibility of the Fwench voting no on the EU "constitution" at Ne Pasaran

Wayne World said...

Hell, let's do away with minimum wage and pay people $1.22 an hour. That way the Mexicans won't see the point in risking their lives to make that whopping extra cash. Hell, let's just do away with wages and go right back to slavery. That way, the economy can really pick up because business won't have to deal with stupid salaries, and won't have to lose any profit. Hey , it worked before. I say we do it again, just until we get out of this deficit.What do you leading economists have to say about that?

Tom said...

Soundboyz

If that was sarcasm, I commend you for your talent. If that wasn't sarcasm, then please tell us when you plan to move to North Korea or Turkmenistan.

Paul Mitchell said...

Dammit, I had to go to a wedding for an afternoon and we rename Fwance and have a dissertation of European economics. That'll teach me to walk away from the blog for six minutes.

You young punks are screwing it for everybody. Pam, I hope you are over six years old, cause them damn college students from the buckle on the bible belt are just driving me nuts with their damn wisdom.

soundboyz, don't screw around with these dudes, they are for real. Damn punk ass college students. By the way, I'm voting for that damn Tom guy, too. If it's a Tom and Travis ticket, I'll vote more than once. They have a chance to be 75% as smart as I am.

Tom said...

I will work for no government currently existing. So long as the government spends one dollar on something other than life, liberty, and property, I have no right to accept that tax dollar.

Wayne World said...

> I'll vote more than once.

Sounds about right!

Tom , I think you're smart enough to decipher what that was , or maybe i'm giving you too much credit.


>soundboyz, don't screw around with these dudes, they are for real.

Two Dogs, I'm a big boy , I can take care of myself.I know a couple of big words also!!Try "niggernomics".

So, to wrap this up , Republicans are for big business because they throw massive amounts of lobbying dollars their way i.e. DeLay and the crew. Therefore Republicans are to do everything to benefit big business i.e. tax codes , enviornmental, employees rights, deregulation,tort reform, safety regulations etc. so big business can operate at MAXIMUM profit , so Trixie can afford her 6,745 pair of shoes a la A. Marcos.

Wayne World said...

>I will work for no government currently existing. So long as the government spends one dollar on something other than life, liberty, and property,


Hey, guess who's not going into politics......

Tom said...

Soundboyz has either an excellent sense of sarcasm, or a prefrontal lobotomy.

Wayne World said...

> Soundboyz has either an excellent sense of sarcasm, or a prefrontal lobotomy.

Real funny Tom...See, I knew you weren't as smart as Two Dogs thought.For your information , my doctor called it a "prefrontal leukotomy". So , you're wrong again!!

Anonymous said...

soundboyz,

"Republicans are to do everything to benefit big business"

Now, I'm pretty sure your taste in music is quite different from mine (a brief look at either of our sites would show that) but that makes no difference. Isn't the music industry, and especially the industry that produces your apparent favorite, 'big business?'
Would you not then be stating that you are a Republican by your very support of such music? Or do you just download your tunes?

Just a question. If I'm wrong, my apologies, but kindly state the correction in a clear and rational way.

Two Dogs,

Yes, I have read John's speech and have some of it memorized. Also of note is Rearden's in the court room. That one, along with Roark's, are among my favorite parts of any book I've ever read.

Wayne World said...

Hi Travis,
I understand the point that you are trying to make. However, it is inaccurate because I don't support those major record companies. As a matter of fact, I blame them for the exploitation of the music and the deterioration in it's content quality.You might think that people like that crap that's coming out of these companies, but the truth is that they don't . I think this crap is being pushed unto the children , who happen to be the ones buying most of it. I personally find the contents embarrassing and lewd!!

Look Travis, I know that Republicans aren't the only one's to blame for the way things are , but after seeing them in action for some time now, I know that they are for big business, at the expense of the workers. They are for the rich, at the expense of the middle class. They are for the special interests groups , at the expense of American citizen's safety and rights. But, hey I'm sure you're a lot smarter than me, and know why things only seem that way.

Anonymous said...

soundboyz,

"I understand that people from the south, for the most part, inherently cannot rap. However Mike Jones brand of sucking for some reason irritates me more than normal (NH)." - from your latest post.

Ok, that's funny. I do see where you rip on the manufactured music, and I support that. I agree with you about the industries pumping this stuff out.

However, in a market system it is not the industry's job to pick what's best for the people, so long as the people buy it, they will make it. Now, if their sales dropped because people were fed up with that trite stuff, then they would obviously have a vested interest in changing their practices. It is up to the people to make informed and rational decisions on what they spend their money on.

Until then, the best one can do is lobby grassroots support and boycott said product(s).

"You might think that people like that crap that's coming out of these companies, but the truth is that they don't." - If they did not, then they would not buy it.

In response to "I know that Republicans aren't the only one's to blame for the way things are"...
Well, that's a start. I think the main culprit in this mess is a lack of self responsibility. The Democrats thrive on blame, "It's not my fault, THEY did it." etc. etc.

Unfortunately, the Republicans seem to think they need to out Democrat the Democrats to hold onto their positions. That infuriates me and makes me want to start my own party and split the Republican party. However, that is a separate issue.

"I know that they are for big business, at the expense of the workers" - So what was their attack on Microsoft for? The only Big Business the Democrats like is the business of government handouts. Leave the market alone unless you want another ‘Great Depression.’

"They are for the rich, at the expense of the middle class." - No, if they were then they would end the 'Progressive' tax code that taxes the rich more than anyone else. Why? 'Because they can afford it.' Unjust that is. The top 10% pay 96.2% of all taxes.
Insert-pipe-smoke-that.

"They are for the special interests groups, at the expense of American citizen's safety and rights." - That is precisely why Al Gore orchestrated the largest sale of our domestic oil reserves to special interests in California. That is why PBS can continue to blare their slanted views on the taxpayer's dime in favor of the Democrats. That's why out of all the illegal aliens that entered the US under Clinton's watch, Elian was the only one they didn't like. Republicans take their share I’m sure, but it’s no worse than the Democrats.

"But, hey I'm sure you're a lot smarter than me, and know why things only seem that way." - I'm dual majoring in Political Science and MIS (Management Information Systems). Not necessarily, but maybe I can offer a different perspective to help you understand the way I and many in the world see things.

Regardless of who started what, the end result is that our system now is offering too many teats for our lazy or brain dead populous to suckle on. How long until we go dry?

I know this went from Music to government practices and party actions, but I think you can make the connections.

Paul Mitchell said...

Travis,
To put perspective on Roark's plight, I went back to college at the age of 33. I actually had a professor ask me if I WAS Roark. That professor, after 22 years in a teaching postion, offered his resignation, which was promptly accepted, after teaching me for one semester. Am I Roark? Not at all. Am I a man? You damn skippy.

Wayne World said...

Travis ,

I must say that you have spelled out your argument rather clearly.I can respect a person that takes the time to express his views and points in a clear and concise manner. I only hope that I can learn from your demonstration in civility.

However, if you had taken the time to check, you would have noticed that I didn't write that post. I haven't been a contributer to that blog for some time now.I was just a guest contributer for a while , but I am not a member anymore.

But, I get the point that you made about big business not being able to function without the support of the people. I had made the point to you in my previous comment , that the big lables(sticking to your analogy)target children. They spend a large portion of their expenses on marketing and promotion so that they "convince" young people that their product is great. This tactic is used by many companies like the record industry and the tobacco industry,with great success. I understand your point about not supporting this stuff, but when they spend millions to promote their product to brainwash young people, it's an uphill battle.

Your example of Microsoft as being a big business that was attacked was disingenuous . Microsoft was under attack because of anti-trust laws and regulations. I would like to think that far more companies should be held accountable for unfair business practices.

As far as the tax code is concerned, I think it's fair that those who make more , pay more. If this was only the case, maybe the deficit would not be as great, except that there are various loopholes afforded to big business so they end up paying a small fraction of the taxes they are supposed to pay.Insert that into your pipe and smoke!!

Travis , you are correct in saying that both parties are guilty of pandering to special interest. To split hairs about who is worse than the other is pointless. Although, I am ashamed of the way Delay and co. swindled millions out of the Indian casinos. It wasn't just how much they got away with , but the dishonesty and the way that they double crossed those people.This should even cause Two Dogs 25% Indian blood to boil.

Just one note about Dems being the party of welfare.I think that's spin used by the other side to rally white America into thinking that Dems give free money away to minorities. Under Clinton, the economy was booming, I don't care when it really started or why, I just know that under Clinton the economy was doing great, not adjust the numbers and report the data in a different way great.People want to work.
Travis, like I stated previous, you strike me as a highly intelligent individual. But, as is my experience with your types, they seldom see the forest for the trees. It's one thing to know data and info to support your views, but to be ignorant, or play ignorant of other points of view, makes all your reasoning seem flawed and invalid .

P.S. PBS is in the business of stating the facts. If they don't coincide with your views,this does NOT mean that the info is wrong , or spin. You do know there is a possibility, albeit minute, that you might be wrong about something at sometime about some topic. I know, that's impossible, but impossibilities are facts yet realized.~Soundboyz 2005.

Paul Mitchell said...

Yea, soundboyz, I'm pissed about the whitey ripping off the redman. But it is Bill Richardson and the folks in Interior that actually took my folks for the millions that you are talking about. Clinton and his cabinet ripped my people a new one. Also, when he presided over the largest bust of the stock market ever, that became the point when I had had enough. Yea, in 1997.

Oh, I'm sending you a photo of the chick that I am running away with for the weekend, let me know if Beyonce has one damn thing on her. Trust me, I may never come back to civilization.

Wayne World said...

Two Dogs, we must be talking about two different rippings!!! What I was referencing was this http://www.houseofscandal.org/


I will check out the pic and let you know what the real deal is. She better not be from another one of your "dating" sites.Be careful when dealing with the badunkadunk!!!

Paul Mitchell said...

This is the one that I went to the gay bar to see do her thing. We had dinner tonight and it's ON!!!!!

Wayne World said...

> This is the one that I went to the gay bar to see do her thing. We had dinner tonight and it's ON!!!!!

WTF? Did you say Gay bar?........Uhmmmm

Did you check his.....I mean her Adam's apple? You are missing the "no homo" on that comment. Is everything alright with you?

Paul Mitchell said...

I had a post a few weeks back about going to see her at a gay bar do her thing. Devastating beautiful, I tell ya. Oh, she isn't really Beyonce, but you really can't tell the difference. As a matter of fact, the waiter at the restaurant called her Beyonce tonight. Damn, she's cute.

Here: http://liberalsmash.blogspot.com/2005/02/typical-friday-night-for-meanies.html

Paul Mitchell said...

Patches, to answer your first question, "What happens to Adonis, that as in real life, he’s not given a raise but is made to do more work for less money?" Then we have not the situation that he is a good worker, but rather that he is not worth what he is being paid. Competition does away with your scenario. If Adonis is a good worker, then he simply goes to work for another company for the same amount.

As for your comment that Americans companies trying to operate with fewer workers, let's assume that you are correct and attack this. American workers are the most productive in the world. And the most expensive. Yes, it has to do with minimum wage, labor unions, and declining educational standards. You see, we don't have a right to work, per se, but Americans have become lazy and whine and cry about how abused they are. Hey, you want me to get your purse outta the truck?

And as far as minimum wage "propping up" starting wages, I believe that I have sufficiently attacked the premise that minimum wage does anything other than make your salary worth less. Minimum wage makes everything more expensive, what part about that statement is so hard for some folks to understand? I'm not sure, but I will bet you when you start your own business, it comes to you pretty damn quick.

Paul Mitchell said...

So you are agreeing with me that if there was no minimum wage, instantaneously this cashier is living high on the hog. The minimum wage is the damn problem in this scenario. You raise minimum wage and this person starves. Pretty simple, I think.

And another thing is that before tax income is $1083.33, per month. They DO NOT pay any taxes. Still another thing is that this person is not the rule, but the extreme exception. A government cannot pass legislation aimed at putting my money in this person's pocket. That has to be my choice.

Imara, I understand that your heart goes out to this woman and her kids. Mine does as well, but in the same vein, where she paid absolutely no money at all to protect this country, I shelled out close to 50k, in taxes alone.

Wayne World said...

BREAKING NEWS!!!!!!! THERE IS A SECOND UPDATE AT "WHERE TWO OR MORE......"

WE NOW RETURN YOU BACK TO OUR REGULARLY SCHEDULED PROGRAM!!!!!

You tell him Imara!!! They NEVER once stop to think that 56.7 BILLOIN is more than enough for profit. NO, any and all other cost of doing business HAS to be passed on to the CONSUMERS and WORKERS!!!!!Greedy BASTARDS!!!!

Paul Mitchell said...

Oh, and Walmart posted an after dividend profit of 7 billion for last year.

Wayne World said...

> Oh, and Walmart posted an after dividend profit of 7 billion for last year.

Holy Shit!!!!! Imagine how much loot the primary shareholders walk away with!!!!7 billion, we're talking Coorperate welfare here!!!

Paul Mitchell said...

They are taking like eight cents per share. And after a little cursory search, the average pay at Wal-Mart is a little over 10.00/hour.

Wayne World said...

> They are taking like eight cents per share

Is this the public holdings or the ownership holdings?

Wayne World said...

>C'mon Two Dogs, isn't there some compassion in that little heart of yours?

Nope!!!!

Paul Mitchell said...

Imara, I'm guessing that the profit made by a compnay for the most part goes back into expanding that company's reach and size. I'm not sure, but I'm guessing that they can't just leave $7b in the bank for a company picnic.

And as far as compassion is concerned, while I care deeply for the plight of the poor, I'm POSITIVE that raising the minimum wage will do exactly what it has done every time and that is increase the size of the unemployed roles. This is exactly my point. Hey it SEEMS like it's a good idea, but it is not.

This is what I continually preach, the poor have not been forced to be poor by the rich. The Wal-mart employee has not been forced to work at Wal-Mart. Just because a situation FEELS right on the surface, resilts are what you want when you develop ideas. You want to diminish the size of the poor population?

Get rid of the minimum wage laws!

Wayne World said...

>The funny thing here is that most of these CEOs claim to be "Christian"... I thought one of the first "laws" of Christianity was that those that are blessed with more should look out for those with the least...

Oh , they're Christian alright!!!

Paul Mitchell said...

Imara, the profit that companies make is at the expense of no one. Companies set their prices and if people pay those prices, the company makes profit. Wal-Mart did not jump up in the Expedition and roll through the 'hood taking making from the poor little ladies.

KCFleming said...

two dogs,

Nice post, and it shook the usual economic illiterates on the left from the bushes.

In 2003, WalMart employed 1.4 million people. Their 2004 after dividend profit was 7 billion. Divided equally among employees gives you $5000 each, or $96 dollars per week, or $2.40 per hour. Not chump change. Why not just give everyone a raise?

If WalMart does not reinvest this money into the company (building maintenance and repair, buying new equpment, employee training, healthcare costs, pension funding, debt management, fighting lawsuits from socialists, and having sufficent free cash to manage growth) it will go out of business.

Further, WalMart is packed with shoppers BECAUSE THEIR STUFF IS CHEAP. Raise wages, and the prices rise. This makes shoppers, many of whom are in fact lower income, priced out of simple luxuries and basic commodities.

Paul Mitchell said...

Thanks for the thoughtful comments, pogo.

KCFleming said...

two dogs

Do you ever get the feeling that the socialists or anti-capitalists, by continuing to deplore the most successful method known to man to reduce poverty, have a basic dislike for other humans?

What is the word for "compassionate" behavior that actually causes harm?

Paul Mitchell said...

pogo, that topic is most definitely a full post. I honestly think that Leftists think that their policies will work. I am not sure if they have a dislike of humans or history, but I am positive that everyone of them has memory loss. It seems that they will try the very same things year after years.

I think that Howard Dean is a good example. They wanted him for President for a month and he flipped out, then they didn't want him. Now he is DNC Chair and acting like a moron. And they are surprised?

And the word is "torture".

Two Dogs said...

pogo, that topic is most definitely a full post. I honestly think that Leftists think that their policies will work. I am not sure if they have a dislike of humans or history, but I am positive that everyone of them has memory loss. It seems that they will try the very same things year after years.

I think that Howard Dean is a good example. They wanted him for President for a month and he flipped out, then they didn't want him. Now he is DNC Chair and acting like a moron. And they are surprised?

And the word is "torture".

Pogo said...

two dogs

Do you ever get the feeling that the socialists or anti-capitalists, by continuing to deplore the most successful method known to man to reduce poverty, have a basic dislike for other humans?

What is the word for "compassionate" behavior that actually causes harm?

Two Dogs said...

Imara, the profit that companies make is at the expense of no one. Companies set their prices and if people pay those prices, the company makes profit. Wal-Mart did not jump up in the Expedition and roll through the 'hood taking making from the poor little ladies.