Living wage part IV monetary reform- part 1

A lot of people who support raising the minimum wage will sight inflation as a reason to do so. When I see this come up I always ask- what is the reason for the inflation and suggest that we would be better off with out inflation and bring up the reason for inflation.
Inflation is a monetary phenomena caused by an expansion of the money supply from a mixture of fractional reserve banking, government over spending and money printing.
First fractional reserve banking- the way our banks operate is the following. 100 people deposit $1000 in the bank-on the 15th then they turn around and lend $50,000 on the 16th. They still tell the first group of people they all of $1000 available to them but they have only $50,000 in the bank. So the money supply has grown and as it does prices start to rise.
Rising prices tell companies to produce more while consumers buy less which results in this inflationary trend reversing until people feel things are cheap enough they want to buy and companies cut back on production.
When prices are increasing across the board due to monetary inflation- it is hard to tell where consumer demand lies. So if it were completely up to the banks they would start raising interest rates which sends the signal to people who have debt to pay it down and for those who don't to save their money.  Eventually the money supply will shrink and prices will start to drop.
Fractional reserve banking is still dangerous as a bank that makes the wrong call they won't be able to cover their depositor's money.
There have been two extreme ways to deal with the risks of fractional reserve banking-the newest is a central bank and the older has been to ban fractional reserve banking.
The argument for a central bank is that you need a lender of last resort backed up with tax dollars the problem with this answer is that it basically ends up centralizing interest rates. Now if the central bank has interest rates set to low and refuses to increase the rate- now the market gets confused. The low interest rates send the signal to borrow money but because the average person has little to no money in the bank they are not in a position to buy big ticket items or to fund the long term investments and thanks to the inflation it becomes hard to tell what prices are increasing because of consumer demand.
The reason that a lot of people like Ben Bernanke   object to the idea of falling prices is on the notion that they will inevitably ruin the ecconomy- as people will stop buying things and stop paying on their debts and will start hoarding money and some will bring try to sell the fact it lower real wages.
The alternative view simply calls stuffing your cash is a mason jar a form of savings- and expect to see the consumer base for a particular product to expand as prices fall.
In the next part I will talk more about where fear of falling prices will lead some people.

living wage part III regulations

A lot of times the opponents of regulatory reform appear to hold the view that the regulatory process involves climbing the top of Mount Rushmore where they fast and pray until Teddy Roosevelt, Woodrow Wilson, and FDR write the new code on a stone tablet that is delivered by a bald eagle and can never be altered lest the nation faces plagues and famines of epic proportions and we should never question them.

While this is a bit of a joke the fact remains that the opponents of regulatory reform- argue there is no problem with how regulations are written, claim line of the code will pass a cost risk analysis and seem to believe business might lose money if they hurt their customers.

First the regulatory agencies that enforce the regulations and benefit from a larger code are the same people writing the code. The basic process goes as following they propose a regulation, have a hearing where different people comment- some times people with in the industry the regulation will affect will come out in favor as they believe it will eliminate competitors then finally the agency implement the regulation. The fact this happens was shown quite clearly when Mitt Romany said we need regulations to prevent people from opening banks in their garage.

As regulations are the law of the land this violates the constitution which requires that congress make the laws and for the president to sign or veto them and creates a conflict of interest as the more an agency regulates the easier it will be for them to request more money from congress. Right now the first step to fixing this problem is the REINS act which would require congress to vote on a regulation if it is expected to cost more than $100 million.

http://www.forbes.com/sites/realspin/2015/01/12/the-reins-act-increasing-the-accountability-of-our-elected-officials/

There might be good arguments for some regulations- but just because those exist does not mean every regulation falls into those categories so we need to remove some regulations.

so we have the cost of existing regulation- and the ways they hurt the average consumer.

The first way is by making it harder to enter a field- this could be done by limiting licenses, fees, or by limiting how a company could distribute their product.

A few examples of the last are the fact there are laws in some states that prevent car companies from owning their own dealership, next we have regulations that prevent a new cable company from opening up in your town.

There are also some regulations in 36 states called Certificate of needs laws which basically state that in order to open a new clinic or hospital you would need to get the permission of existing health care facilities. The argument given for the CON laws is that limiting the supply of health care options will some how decrease prices by eliminating duplication. While economics 101 states that restricting supply of anything leads to higher prices.

(http://www.ncsl.org/research/health/con-certificate-of-need-state-laws.aspx,

http://www.forbes.com/sites/katherinerestrepo/2014/10/29/certificate-of-need-bureaucrats-blocking-your-health-care-options/)

No matter what level of government has imposed these regulations- you need to ask what is the real problem if someone tried to run a particular industry from their house? If they risk blowing up the neighborhood there might be some logic be hind that. If the business is just loud and bothers the neighbors that is fine- but if your argument for a regulation banning someone from selling home made cookies is the possibilities of food poisoning- that is a little harder to accept because in improperly sanitized industrial kitchen will result in you being as sick as an improperly cleaned home kitchen.

Bernie Madoff ran his scam from a push office

http://www.huffingtonpost.com/2009/07/10/bernard-madoff-s-office-f_n_229278.html

and there are people running small banks and savings and loans in Europe from offices that barely above their garage.

like his documentary the bank of Dave show or RT report show. https://www.youtube.com/watch?v=0fIGZOe-Oa0

https://www.youtube.com/watch?v=Gyy6q9vrKpU

Next there are regulations which limit growth- the regulations with small business exemptions will often fall into this category. People argue the exemptions need to exist because specific regulation is expensive and only a company with 50 employees would have the money to afford it. This creates the situation where a company with 49 employees will not hire employ number 50- unless they know they can cover the cost which the big business in a field won’t have to worry about small fast growing innovative companies from challenging them. So if you honestly think a regulation is to expensive for a small company- then you need to explain why it isn't to expensive for the consumers and if you honestly think a company that grosses $1 billion dollars should not do some thing then why is it fine for 1000 companies that gross $1 million to do the same thing?

Then there are regulations designed to counter the negative effects of older regulations which we see with net neutrality- supporters point to the regional cable monopolies to say we need it instead of going after the regulations which created the monopolies in the first place.

The benefits of deregulation might even show up on one of the favorite memes in support of raising the minimum wage- the one that claims Australia has a minimum wage of $14 US and the unemployment rate is about the same as ours.

In the 1980’s and 1990’s the Australians and New Zealanders did tax and regulatory reform-and the country did not fall apart so bad that Mad Max is a documentary and they aren't dropping dead left and right due to air and water pollution down under.

The goal of regulatory reform should be sliming the code down so the rules are the same for every company in a field and to eliminate the parts of the code where the costs out weigh the benefits.

So if $14 in Australia bought roughly what it does in the US and the unemployment rate uses the same calculation methods that the US does- then you should consider that this is because the tax and regulatory reform freed up enough cash to enable companies to pay $14- and as I stated before if you can make a profit starting people at $15 and charging today’s prices then the same process could bring down prices and given the choice I would rather see prices drop and wages stay the same over seeing wages increase and prices staying the same as the first will help savings go farther.

Sadly there a lot of politicians and economists who would rather have the higher wages which leads to the next topic monetary reforms.  

Living wage part II-Tax reforms and subsidies

I am discussing these two in the same entry as a lot of subsidies come in the form of tax credits. First let’s talk about tax reform by starting with the poster boys Warren Buffet and Mitt Romney.

A lot of people will claim tax reform will only benefit the rich- however Warren Buffet claims he pays a lower tax rate than his secretary

The tax issue is one of the reasons I can’t stand Warren Buffett- he goes on TV screaming his taxes are to low and asking for the “Buffett Rule” while in private he seems to believe the real Buffet rule- is “if you are Warren buffet you don’t pay taxes http://nypost.com/2011/08/29/warren-buffett-hypocrite/.”

I digress- the two of them both have such low tax rates because they are able to structure their business in such a way to avoid as taxes as best as they can. I don’t blame someone for wanting to do that so my biggest issue with Mitt was the fact when he had a chance to address the issue- he avoided details and seemed to quite ignorant on the subject.

He was proposing to reduce loopholes and and deductions and lowering the right. When Obama claimed that this had never been done before- Mitt could have- stated that both JFK and Ronald Reagan did that.

I consider this to be the bare minimum that needs to be done with tax reform ideally we should go farther- and adopt something a long the lines of a flat tax or sales tax.

Examining the pros and cons of those tax proposals is beyond the scope of this post- as this is about why it needs to be done.

The first issue when discussing tax return is simplicity- I don’t care if some one like Warren Buffet or Mitt Romany- only pay 10% in taxes but I do care how they get that rate and this is the first failing of our current tax system. The amount of loopholes, credits and deductions- the argument for the lot is to shape behavior and some are designed to favor certain industries- which is the case with the green energy and renewable fuel mandates.

Subsidies no matter what their form is- are designed to give a boost to economic activities that would otherwise be unprofitable or less profitable.

Let's take the green energy mandates- the stated goal is to make America carbon neutral by encouraging bio-fuel, wind and solar power with subsidies.

A person's choice to buy any of these products should be based completely on their advantages and disadvantages compared to the alternative and not a government subsidy or tax credit. Some time the reason their supporters give in congress is terrifying for example this lobbyist stating one of the goals of the ethonal mandate is to increase the price of corn- then he tries to argue it does not effect people because it was feed corn and not sweet corn.

https://www.youtube.com/watch?v=zyNRl-YzX4Q

If the price of corn were to drop- then perhaps you might be able to cut the budget for food stamps- by making it so fewer people will qualify. I could hear some people screaming this might harm the US farm industry- but if the bottom falls out of the corn market- perhaps farmers will change crops

or may be some one will find away to make corn based bio-fuel profitable. I don't know what is possible- but I do know when the economics side is market driven- people will save money some how.

This might be cheap food, cheap fuel or ideally both.

The next area to simplify the tax system is removing the progressivity. The main arguments for a progressive tax system are the ideas- that the rich benefit proportionality more from the government than other people and the idea the government should be redistributing income with out thinking that policies like a fiat currency and low interest rates are leading to inequality, or asking the question do people drop in and out of income brackets or the negative effects of catering to envy- like reduced investment, reduced savings, both of which can lead to reduced employment or the possibility that increased taxes might just lead to increased prices.

The charts that show a growing income inequality tend to claim that this trend has existed since the 1970’s- they will normally blame taxes and come out to support a tax system that did not exist back then- perhaps there are other issues could be causing the situation as I fail to see how this complex tax code helps the poor or how taxing someone else more would help me either as I expect them to pass the cost of their higher tax rates to everyone else

a living wage - introduction

While I am opposed to a $15 minimum wage- I would love to see everyone get a living wage.

I would agree 100% with the notion that every full time employee should be able to make enough money to rent or buy a house buy enough food to feed themselves and take care of a dependent.

However- raising the minimum wage will not allow this and the only way to make this dream a reality is for people to have higher real wages which mean low unemployment and lower prices.

The notion that raising the minimum wage will result in a higher standard of living across the board is simply magical thinking.

First- in order for a higher minimum wage to mean anything for the bottom rung prices would have to remain the same or at least increase less than the minimum wage increase.

So when these posts pop up I start talking about regulations, taxes subsidies , tort and monetary reforms which the people supporting a higher minimum wage will automatically dismiss under the claim that would only help the rich then state that executives at McD’s make $8 million a year.

The supporters of a higher minimum wage seem to believe that if you simply raise the minimum wage- the executives will simply cut their own pay and it would be enough to cover the increase with out raising prices or cutting jobs which leads me to conclude that they believe that the bulk of a burger’s price is the CEO’s pay instead of the executives pay being a small cut of the burger’s price and selling millions of burgers.

If they made their money from mark up- then it would be reasonable to believe that they could make money if they cut their prices. If they made their money in volume – there would be little room to alter pay or other costs upward. As lower prices tend to attract more customers- a company that offers lower prices might be more profitable than one with higher prices. We must also remember that industries with high profit margins- no matter what the cost of entry is will attract new competitors who will bring down prices.

Another fact to remember as well- is that when the cost of running a business goes up- companies will find ways to cut costs, raise prices or go out of business- all of which harm the poor the most.

So any answer that increases the cost of business must be rejected- and we must look for other answers.

If the fast food giants are big because they keep their prices low- decreasing the cost of business will lead to lower prices. I will go though my next few entries addressing each point starting with subsidies and taxes, then monetary reform and finally tort and regulatory reform.

I am looking at these things- as all I would expect to happen with a minimum wage increase- is for people to loose their jobs and prices to increase unless something offsets the higher wages. So let’s look things that could lower the cost of business- there is a chance that it might not increase the buying power of $7.25- however if that does not happen the trade offs could be more raises, more well paying jobs and lower unemployment making it easier for people to climb the economic ladder- which is the common goal.  

Who should be on the $20 dollar bill?

http://www.womenon20s.org/candidates
There is a move to put a woman on the $20- Over all I don't have any objections as long as it is the right woman. My top two candiates are Harriet Tubman and Sojourner Truth.
Both Women were instrumental in  starting the underground railroad-  which helped a lot of people escape slavery and it was the nation's first civil rights battle.

Saint Patrick - a voice for liberty

As a paleo-conservative/libertarian and Christian who supports the free market and believes the non aggression principle ( all people should be free to make the choices they believe will benefit them with out threat of violence, coercion or fraud.) and Luke 6:3

Do to others as you would have them do to you.

are both the best summery of all moral code was greatly moved when I saw on a couple of websites that Saint patrick was a very vocal opponent of slavery.

(http://www.americancatholic.org/Messenger/Mar1997/feature1.asp#F3 ,http://faithworks.crs.org/our-hero-st-patrick-of-ireland/ )



I know his history and how he was kidnaped and sold as a slave in ireland then escaped and returned as a priest. I am not surprised he would be an enemy of slavery. However reading it just made me feel blessed about him choosing to by my patron and reminded me why the theology of the icon and my belief in individual liberty walk hand and hand.

All arguments for liberty are based on the simple idea- being an individual human means we must be treated with some degree of dignity. The bible states we are created in the image and likeness of God.

Saint patrick knew and understood this- I'm not going to speculate what he would say about the world today only- that belief in the dignity of the individual is a corner stone of liberty.

Congenital Heart Defects (Why I care, and why YOU should)

If I’m posting this on time, then today should be February 6^th 2015. Tomorrow starts Congenital Heart Defect Awareness Week.

Faces of CHD:
from left to right, Bo, 1996-Still Alive,
Matthew, 1996-2003 (May his memory be Eternal),
Chelsea 1994-Still Alive

The definition of a Congenital heart defect is a structural problem with the heart or main arteries that develops before birth. Here’s the sad thing. Every year in the United States, 1 out of every 112 live births, or roughly 40,000 babies, are born with at least one heart defect. 1 in 5 of those 40,000 will require corrective surgery in their first year in order to save their lives.

CHDs and birth defects in general tend to come in clusters, so a child born with a heart defect, may have more than one, and/or also have other muscle problems, problems with the function of other organs, immune system problems, and the possibilities are actually endless.

There are 40 different known kinds of heart defects, ranging from those that don’t interfere with the function of the heart and amount to little more than an internal birthmark, all the way to those that require full heart transplants in order for the patient to have any chance of surviving to adulthood.

The scary thing about CHD is that it is more common and more fatal than all forms of pediatric cancer combined, and yet research into the causes, detection, and treatments of CHD as a whole, is disturbingly underrepresented in terms of government research funding.

What is sad, is that when we as people pay attention, we have proven we CAN save these children’s lives. In 1994 it was expected that 50% of CHD babies born that year would die before he or she reached their eighteenth birthday. In 2014 that rate had fallen to 35%, the reason? There are a few.

1.      Better and Earlier treatment. Thanks to advances in medicine that make life saving surgeries safe and possible earlier in life, and drugs and machinery such as the Berlin Heart, that help keep children healthier otherwise and alleviate the strain of everyday life on their hearts, therefore helping prevent further damage to the heart while they are waiting for surgery, fewer children are dying and/or suffering long-term damage before they can receive the treatment they need.

2.      Better detection: The fact is, that unless the required treatment IS a full heart transplant, lack of treatment options isn’t usually to blame for most CHD related deaths these days. More often than not, it is because the CHD isn’t detected and treated in time. There are a few ways of detecting CHDs, including prenatal ultrasound, neonatal ultrasound, detection of a heart murmur, labored breathing, cyanosis (lack of Oxygen which is apparent in a blue/grayish tint to skin around the mouth and fingernails), or the use of a pulseoximity meter. Pulsox is more accurate, cheaper, less time consuming and less invasive than almost any other method at our current disposal for detecting CHDs in babies that appear healthy. For this reason, most states now have it on their list of neonatal medical tests that are mandated by law. Of the 8 states that currently don’t, (Washington, Idaho, Montana, Wyoming, Colorado, Kansas, Hawaii, and Mississippi) Mississippi has introduced legislation which if passed would require pulseox as a newborn screening, Hawaii has a similar bill already in the works, and in the remaining six that have yet to make laws requiring it, Wyoming and Kansas are currently considering it, and a majority of hospitals in all 6 states are using pulseox as a normal part of their own protocol.

Here’s a map detailing current Pulsoximeter legislations:

http://cchdscreeningmap.org/

Still the sad fact remains that of the 40,000 CHD babies born last year, 14,000 of them STILL will not live to see the big 18, and in the year 2015, that’s appalling. 

            If you would like to help, there are several ways to do it.

You could donate to the organizations where most of the funding for research is coming from.

http://www.marchofdimes.org/

http://www.heart.org/HEARTORG/

Here is a link that will help you learn more about pusloximeter screening and allow you to sign a petition to enact legislation in your state if it does not currently have one:

http://www.chfed.org.uk/campaigns/chf-pulse-oximetry-campaign/

Or, starting tomorrow, wear red, support the cause!