Filed under: Politics | Tags: American Income Mobility, Dishonest Language, Redistribution of Income
We lose track of reality by misuse of words, deliberate efforts to change the meaning of words, ignoring common sense, and simply not stopping to think things through.
Poverty is much in the news. But do we ever stop to think that as long as we define the poor as the bottom twenty percent of the national income, there will always be the poor.
There is no material poverty in the United States. 80 percent of poor households have air conditioning; three-quarters have a car or truck, 31 percent have two or more. Two-thirds have cable or satellite TV. Half have one or more computers. Forty-two percent own their homes. Poor Americans have more living space than the typical non-poor person in Sweden, France or the U.K.
The Treasury Department divides the American people up into quintiles — the poor, the lower middle, the middle, the upper middle, and the rich. They are not the same people over time, and income mobility is the norm. 80 percent of people born in households below the poverty line escape poverty when they grow up, some become rich.
Economics Professor Walter E. Williams writes:
The Census Bureau pegs the poverty rate among blacks at 35 percent and among whites at 13 percent. The illegitimacy rate among blacks is 72 percent, and among whites it’s 30 percent. A statistic that one doesn’t hear much about is that the poverty rate among black married families has been in the single digits for more than two decades, currently at 8 percent. For married white families, it’s 5 percent. Now the politically incorrect questions: Whose fault is it to have children without the benefit of marriage and risk a life of dependency? Do people have free will, or are they governed by instincts?
The black illegitimacy rate was only 14 percent in 1940. A slightly higher percentage of black adults were married than white adults according to census data going back to one generation out of slavery, a fact in every census from 1890 to 1940. Avoiding long term poverty is not complicated: 1. graduate from high school. 2. get married before you have children and stay married. 3. work at any kind of job, even one that starts at the minimum wage. A married couple, each earning the minimum wage would earn an annual combined income of $30,000. The poverty line for a family of two is $15,500, and for a family of four, it’s $23,000.
Since LBJ’s War on Poverty the nation has spent about $18 trillion at the federal state and local levels of government on programs justified by the “need” to deal with some aspect of poverty. Poverty is a political game. Promising to help the poor is a good thing. Making the poor dependent on government is not. A poor person who is offered a job at the minimum wage that promises a brighter future, would lose money by going off welfare. But you don’t climb the economic ladder on government handouts. The government is not dependable. Once welfare is granted the amounts may be cut at any time depending on budgeting. There is little political interest in addressing the basic causes of poverty. Which is why the failure to talk about it honestly is so unfortunate.
So you have increasing the minimum wage. Government will make the poor less poor by ordering their employer to pay them more. A full time minimum wage worker at $7.25 is earning more than the poverty line. The minimum wage here is $9.25, and goes mostly to teenagers whose family incomes are around $50,000. You will notice that the politician who is proposing to raise the minimum wage has no skin in the game. He just gets to preen and get votes from people who think he’s doing something nice.
Filed under: Capitalism, Domestic Policy, Economy, Freedom, Politics, Taxes | Tags: Redistribution of Income, Tax the Rich, The Laffer Curve
There’s a lot about economics that is counterintuitive, and for the most part, liberals just don’t understand that. More than that, they deliberately reject the idea when it is explained. Perhaps it’s just not in their DNA.
For example: the minimum wage, which is meant to be the bottom limit for beginning workers, and is meant to protect innocents from exploitation. For liberals, it’s not enough pay for a poor person and his family. But the minimum wage is not directed to a worker and his family. By the time someone has a family to support, they can be assumed to have worked.
True beginners aren’t worth very much. They don’t know how to sweep the floor, how to answer the telephone, how to speak to customers, and how to follow the rules of the business. The manager is going to have to teach them all these things before they can be turned loose to do them properly on their own. All workers are a cost to business, but at a certain level of productivity, their work pays for their cost and makes money for the employer. Most minimum wage employees get a raise within the first six months. When they become useful, their reward grows. When government raises the minimum wage, it increasingly eliminates job openings for beginners, depending on how high the minimum wage becomes. There is a reason why there are ATM machines, and more and more stores have self-checkout machines.
If you raise taxes, you get more revenue, right? Liberals hate the Laffer Curve because it directly attacks a cherished belief. Raising taxes has always been their solution to their constant need for more revenue to support Big Government. If they were to give up on the idea that they cannot constantly raise taxes, they would have to give up on the idea that they can constantly increase the size of government. They would become Republicans.
From June 2009 to September 2012, America gained some 2.59 million jobs. That weak recovery was what Obama bragged about. But nearly all of the job creation occurred in right-to work states, states in which no industry can force a worker to join a union in order to work. There are 22 right-to-work states, and those states were responsible for 72% of all net household job growth. But don’t unions get better pay for their workers? Many workers don’t believe that it matters.
Peter Ferrara wrote in Forbes on Friday that:
If those who make the sacrifice to save and take the risk of investing find that the government is only going to seize their savings and investment when they are successful, they will soon sharply reduce their savings and investment, at least here in America. That will only hurt the middle class and the poor the most, as they lose the jobs and rising wages and incomes essential to their own personal prosperity.
But that is all only going to get much worse in Obama’s second term, as his policies produce renewed recession, double digit unemployment, collapsing real wages and incomes, and new poverty records.
In a market economy, consumer demand can never be inadequate for the economy to grow and prosper. If demand is not sufficient to clear the market for any good or service, the price of the good or service will fall until demand equals supply.
Filed under: Education, Freedom, Humor | Tags: Affirmative action, Freedom of Speech, Redistribution of Income
The intellectual climate of the nation today came from the public schools, where almost every one of us was schooled in the work of the mind. We are a people who imagine that we are weighing important issues when we exchange generalizations and well-known opinions. We decide how to vote or what to buy according to whim or fancied self-interest, either of which is easily engendered in us by the manipulation of language, which we have neither the will nor the ability to analyze. We believe that we can reach conclusions without having the faintest idea of the difference between inferences and statements of fact, often without any suspicion that there are such things and that they are different. We are easily persuaded and repersuaded by what seems authoritative, without any notion of those attributes and abilities that characterize authority. We do not notice elementary fallacies in logic, it doesn’t even occur to us to look for them: few of us are even aware that such things exist. We make no regular distinction between those kinds of things that can be known and objectively verified and those that can only be believed or not. Nor are we likely to examine, when we believe or not, the induced predispositions that may make us do the one or the other. We are easy prey.
Richard Mitchell: The Graves of Academe
Also, affirmative action had a disastrous effect. We created two universities during affirmative action. We had a super-elite university of people who were admitted on the most competitive criteria in the history of the university, but then we had this other university of people who could not have been admitted on those criteria, and who had to have special courses and special departments set up for them.
Now affirmative action meant two completely different things. When it first started out the definition was that we were going to take affirmative actions to see that people who would never have tried to get into the university before would be encouraged and trained so that they could get admission. I was all for that —that we were going to get people into the competition. What happened though, and this was the catastrophic effect, is that race and ethnicity became criteria, not for encouraging people to enter the competition, but for judging the competition.
John R. Searle, Professor of Philosophy, Berkeley
We are telling students what to think, not teaching them how to think. Without teaching them how to draw meaning, significance and wisdom from those facts, we are teaching mindlessness. Teaching kids how to think means teaching them how to weigh and consider ideas, see implications, follow an argument to a logical conclusion, integrate knowledge, and apply creative and critical thinking to solve problems and make decisions.
Vincent Ryan Ruggerio: Warning: Nonsense is Destroying America
Filed under: Capitalism, Economy, Politics, Taxes | Tags: big government, Higher Taxes For the Rich, Redistribution of Income
We don’t really have to cut spending, they say. Just raise taxes on the rich and on those obscenely rich corporations. Bill Whittle takes the theory on, with the help of IowaHawk. Here’s the way the world really works.