In a rare show of rashness Obama said that “the Cambridge police acted stupidly in arresting somebody when there was already proof that they were in their own home.” He even admitted not knowing the facts of the case but decided that calling an entity and in fact an officer stupid would be the proper course of action.
As of today the Federal minimum wage has increased from $6.55 to $7.25 an hour, some praised the move, yet other like myself realize this will only hurt the economy. Our economy made it’s leaps and bounds when it was largely free. A free market economy is self-reinforcing as those who hire offering lower salaries will raise their salaries when no one who is qualified for the job is willing to work for the employer-set salary. Quite conversely, if a certain job is flooded with eligible workers who will work for a given salary, employers may decrease the salary to save costs.
A higher minimum wage means more of two things: Unemployment and hiring of illegal immigrants. I am not aiming to attack immigrants who come here to work, simply stating the obvious. In fact, local cheap labor is what can cut down our dependance on imports of manufactured or labor intensive goods, and increase GDP by providing more jobs and a base local economy to support the higher-tiered industries that rely on them. Without cheap labor the United States would become more like Japan, where food accounts for much of the annual income and prices are quite frankly through-the-roof.
Countries like China enjoy a constant influx of labor from the countryside, labor that has not yet been fully utilized. This is why they can dominate production of virtually all manufactured low to medium tier products globally. This is also the reason why Walmart has ascended to Empiredom, through its ingenious logistics, sturdy supply-chain, and product tracking it is positioned well above other retailers to sell Chinese imported products.
An increase in the minimum wage also means inflation, not only because traditionally lower priced American made or handled goods require more labor expenses, but more people have money to spend. However, I am not discounting the fact that if the economy is bad enough, everyone will be laid off and prices will once again drop and deflation is still a possibility. I am also aware that increases in labor costs sometimes spur new inventions in automation that can increase the productivity and/or efficiency per worker.
In essense, government intervention in the operation of businesses nationwide is a bad thing, as the USSR taught us centralized planning hurts the economy so will we learn the damages of an increases minimum wage.
What has happened this past month will change history, for the worse. The United States, founded on the ideals of freedom, liberty, and representation before taxation, has fallen prey to a socialist system of protecting certain industries (banking, for example) from going under and replacing them with Government rule. What has transpired in this month is no doubt a shifting of power, and the price tag is being paid by you.
The United States Government has bought out certain financial institutions and officially federalized them. For others, they have injected capital. Currently the national debt stands at 9.5 trillion, and much of the federal budget is allocated to paying off interest to this gigantic debt. Instead of focusing on the real issues at hand, such as our energy crisis and the final frontier (space), we are going to have to pay bankers for getting us into trouble.
This new approach to economics is sure to slow down our economy, and is predicted by some to shave off 1% or more of our economic growth for the next five years. Thank you treasury, federal reserve, and President Bush for the worst financial losses since 9/11.
In light of the recent mortgage crisis, government has once again crossed the boundary from what it should do and what it can’t do.
After 9/11, we were given the “Patriot Act”. After this mortgage crisis, irresponsible financial folk were pulled out of their debacle at taxpayer expense, with 700 billion dollars being given to Henry Paulson (the architect of the bailout plan which Pres. Bush so strongly supports), the US government is going on a buying spree with our tax dollars to claim more power over the free market.
Sen. John McCain expresses concern on this matter, as do I. “Never before in the history of our nation has so much power and money been concentrated in the hands of one person. This arrangement makes me deeply uncomfortable,” Mr McCain said. Morgan Stanley and Goldman Sachs have requested to change their status to Fed regulated. Like I said before, goodbye capitalism and democracy, here comes socialism.