immigration- the real issue we need more jobs and better real pay globally.

Our current immigration system is a mess- as we have an unofficial open border , the politicians are discussing giving amnesty to people here illegally then to make the political matters worse we have the 14th amendment giving birth right citizenship.
As a nation we need to ask what is wrong with having  an honest policy and either enforcing the laws as written or adopting an official open border policy?
The main arguments against adopting an open border policy are the following.
1.) the notion that modern immigrants don't try to adopt to the US culture. Most of the immigrants family's I have met at least the kids speak English and they try to keep the heritage of the old country as well as claim that of the US.
2.) The fear immigration will overwhelm welfare roles- this was one of the reasons that New Zealand has such  strict immigration polices -they don't let anyone in except the rich. The issue here is however is the government welfare system and not immigration.  If a program either private or public is successful it will be a hand up. One of the reasons I prefer private charities over government welfare programs is the simple fact I can go to places like Charity watch  and give my money to what ever program I believe is the most effective at helping people.
3.) depressed wages- When ever you have to many people and not enough jobs you can expect depressed wages the best way to improve the situation would be more jobs. The only way that will happen is to have more business opening up and possibly growing- this is why in my posts on the minimum wage I talk about the importance of regulatory, tax, regulatory tort and monetary reform.
There are regulations that make it hard to start a new business like a city that only has a limited number of taxi licences and others that make it expensive to hire the 50th employee both sets of regulations form a tag team against the poor after all some rich person might be interested in taking some large gamble that will shake up some given industry but feel unable to do so.
Going from country to country should simply be called moving and all the economic objections people might give should be countered with proposals to end those objections with more liberty.

basic principles

I'm stepping back to cover some basic principles that guide my thoughts on politics and society.

1. TANSTAAFL- There ain't no such thing as a free lunch. This phrase gets tossed about a bit and it relates to the fact everything in life does have some opportunity costs even things that don't cost you money. For example if I am sitting on the couch watching classic "Doctor Who" while chatting with Truthseaker on Yahoo IM- there are tons of other things I could be doing at that point in time but I am not on the simple grounds I would prefer to watch classic "Doctor Who" and chat with Truthseaker. 

2. Voluntary exchange is always better than force- this is one of the many problems with government mandates. If Marry hires Bill and Ted to paint her house for example- you might not like the details of the contract- for example they might agree to do the job for less money than you or a different paint- but you don't right do dictate pay rates- you would have room to complain if they were using a toxic paint that would harm  you and your property. 

3.) Murphy never sleeps- Murphy's law is what  ever can go wrong will go wrong when Murphy is on the job. This is one of the classic problem with all political promises. Every time a politician proposes a new law, program or what not they will always paint a rose picture where the proposal pays for itself and  life is some how better. So you need to think about what they expect things to work and as many ways that things can go wrong- and alternatives to accomplish the goal.

4.) Be contestant but feel free to change your mind as you get new information. This might sound contradictory but it is not. The constancy is about ideology, morality and logic not your opinion on individual positions. As one quote from a  British politician accused of flip-flopping goes "When my information changes my opinion changes- do you do the same sir." 

Oklahoma Surgical center- why aren't they the typical clinic ?

Healthcare is an important issue for us- as you as you will know from reading other posts my friend and blogging partner Truth Seeker- was born with 4 forms of Congenital heart defects so the importance of affordable healthcare is not lost on us.  On the build up to Obamacare- the supporters were quite fond of stating how much faster medical expenses have grown compared the the ecconomy as a whole- I believe some figures were saying as much as 10 times as much as the general rate of inflation.
This is an issue that must be fixed in order to determine how to do that we must ask  the simple question how did we get in this mess?
The first clue might be found with the Oklahoma surgical center  this is a clinic that offers up front pricing and claims that other clinics charge several times more than they do- on their webpage they like to point to operations where their total cost was less than the co-pay at other clinics.
Their founder  claims in his blog that they are the exception instead of the rule because the current US healthcare system is a  scam filled mess that that hurt consumers.
The first being the Certificate of  Needs laws which- used to exist at the federal level but now exist at the state level in all but 14 states- which are built around the notion that limiting the number of clinics providing a service would some how limit the prices. Their supporters would claim that this is because the medical industry for some reason is different than the rest of the ecconomy and is exempt from basic laws of economics .
Then we have programs like Medicaid Disproportionate Share Hospital (DSH) Payments which was set up to reimburse healthcare providers that were losing money treating uninsured and patients. The problem according to Dr. Keith Smith- in his videos title the $100 aspirin is that the program has institutionalized abuse as hospital might jack up a bill by by 100000% as they know people would not be able to pay- then claim a loss and collect 5% of the bill which would be 500% more than they should have charged in the first place. The problem is not solved by more insurance due to claims repricing programs where an insurance company will get a bill negotiate it down then charge a claims repricing fee based on the percent they claim to have saved the policy holder.  These videos paint an image where hospitals are not struggling due to giving away free care but rolling around in cash because they gouge the public with the DSH program and will fight any plan to either end or reform the program in a cost saving manner tooth an nail.
Any healthcare reform needs to favor a free market approach if you were to reform the DSH program- the easiest part of any reform might be putting a limit on what you will pay for some medicine- for example you can buy a bottle of aspirin 500 tablets for $3.60 at Walmart there is no reason for a hospital to believe they can get buy with charging $5 for a single pill. The harder part would be to determine a DSH reform where you have hospitals competing and driving down prices to a market clearing level which is exactly what I would expect to happen if the program was ended.
While there are some people who are battling horrible conditions and should get help for the medical battles and I will do what I can for them- but these people should be the exception and not the rule- and the Oklahoma surgical clinic does provide some clues on how to improve the medical system.

Living wage conclusions

Tax, Tort, Regulatory and monetary reform as long with ending subsidies needs to be brought up whenever the minimum wage is discussed especially when someone make the claim that it in fact was relatively higher.
When someone makes the claim it was someplace between 30% and 300% higher in 1968- it is vital to ask the simple question why the did the real value drop with out a decrease in unemployment?
I have seen many people state the reason was greed- the problem is this would be like the FAA blaming a plane crash on gravity- which was constant through the entire flight.
Colonel Sanders, Ray Kroc, Dave Thomas and every other business man will naturally look at how to maximize their profits - that is simply the nature of business, so I try to look at what has changed since the late 1960's or if they bring up Australia- what is different between both nations.
Your standard of living is not based on how much money you have in your pocket- rather it is completely based on what you can buy with that money and that in turn is based on society's productivity levels and competition.
A good example of this is to simply think about the quality of life has changed over the course of the past few centuries.
Next it is important to remember there is no such thing as a free lunch - in life there are always trade offs and  Failure to understand this fact is magical thinking which is doomed to fail.
This is the reason that I ask everyone who wants to see a $15 minimum wage  especially if they site the the US in the past or Australia- why are prices so high in the modern US?
I don't expect CEO's to cut their own pay but instead- reduce hours for those people the increase would effect, decrease quality and increase prices so the value of $1 would drop so that the quality of life you could afford on $15 would be a lot closer to what you can currently afford on $8 today.
I don't pretend that there might not be any negative side effects for ending subsidies and conducting the forms.  I just claim they will affect fewer people and be over quicker.
I am not saying we should toss every regulation out- I am though saying we should look at costs and benefits because Australia might just be proof that it will result in drastic price cuts with reasonable environmental and safety standards.

Living wage part V- monetary reform part II

I mentioned shortly about people screaming for inflation becuse it lowerd real wages. A good example of that can be seen in this article by Kevin Drum of Mother Jones Magazine titled Why High Inflation is Good in a Recession.
The basic claim is that in a recession the biggest obstacle to recovery is the phenomena is sticky wages which is caused by employers who for some reason are not wanting to cut wages.
His entire plan to unstick wages- is to go print out a bunch of money to devalue wages as employers are refusing to do it.
My understanding of economics states that no matter how bad the ecconomy is- that the only reason that an employer would be reluctant to cut your pay is because there is still demand for the goods and services that the company is providing. Now Kevin Drum is arguing for a higher minimum wage.
If Kevin Drum or anyone else advocating inflation to solve the "problem of sticky wages" honestly believes the biggest problem facing the ecconomy is that wages are not adjusting then they should advocate repealing the minimum wage and if he has honest concerns about the standard of living for the poor then he should have advocated letting deflation run it's course.
The primary argument that people will bring up against repealing the minimum wage is the fear it doing so will hurt the poor by lowering real wages across the board. However if someone were to turn around and sight sticky wages as an argument for inflation which is common among Keynesian economists then they can not use this argument as they are expecting that inflation will decrease real wages across the board.
If there was no minimum wage- companies will try to cut pay the concept of sticky wages states that they will be reluctant to cut a good employees wages especially if they are making money. There is a chance that wages might fall with out prices falling- and there are two reasons that this might happen. The first is the ecconomy quickly starts to recover and people prefer to pay a few bucks over standing in line so companies hire more people for example starting pay might fall from $9 to $6 so a company might hire 3 people instead of two so it is now easier to get a job and at some point prices will settle with close to 0% unemployment.
On the other hand if you simply allow inflation to run it's course a Keynesian would argue that the higher real wages would lead to more unemployment as employers are reluctant to hire new people and would automate and off shore jobs that consumers would prefer to have done by a person in the US.
The problem with this argument is that they will make the claim that increasing the minimum wage will lead to higher real wages because employers for some miraculous don't automate or move jobs off shore or raise their prices to accommodate the higher costs.
Letting deflation happen may result in jobs getting moved off shore and automated but as prices are going down consumers will have more purchasing power which means they might have the money to hire people to do other jobs and you might have some jobs come open as people decide to retire.
In either of the two situations the way to reduce the possible bad side effects would be if it was easier to start and grow a business which takes us back to tax tort and regulatory reform. People who object to the idea of having a minimum wage- will inevitably support tax, tort, regulatory and monetary reform and ending subsidies as they expect it to reduce the cost of running a business which in turn will mean higher real wages due to a mixture of lower prices and unemployment depending on consumer preferences.
My next post will be the last on the subject

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.