Friday, October 17, 2014
Delusional Statist Thinking: Nothing More than Babies Crying
The delusions that people are under that make our society less-free and government-dependent range from smoking laws to food stamps. Read the opinion of Lawrence W. Reed, president of the Foundation for Economic Education: http://fee.org/the_freeman/detail/27-government-must-have-the-power-to-make-people-take-better-care-of-themselves
Tuesday, September 16, 2014
Why Should We Not Want Welfare?
Most people would probably ask what is wrong with welfare. We've had it a long time ever since the 30's. Why not? It helps people.
Actually, in the long run, if you look closer, welfare does not help people. It actually hurts them.
First, welfare is an incentive not to work. This incentive increases every time the government increases the recipients' checks. This is just common sense: like if your grandmother gave you $5,000 this month and then increased the check to you next month to $5,500, you probably wouldn't want to work very much, and eventually not at all if the increases kept coming. The point is, the incentive to work fluctuates negatively as welfare increases. The incentives just keep piling up not to work as is evident by the truth that what many middle-class people earn today is less than what some people who have welfare receive. The result is that work is discouraged and relying on others is encouraged.
Since work is discouraged, productivity also falls. This argument is made clear by Richard Fulmer in his article in The Freeman: "As benefits and benefit recipients multiply, and as the number of taxpayers declines, the latter will be less and less able to bear the ever-growing burden. Many of the most productive and adaptable will move to countries that allow them to keep more of their earnings ... While productivity increases can help offset falling production due to a declining workforce, any such increase requires either capital investments or innovative process improvements. As previously explained, however, welfare states discourage capital formation by discouraging savings. Innovation is similarly discouraged by taxes that reduce or eliminate any profits that such innovation might generate."
It is ironic that in a country such as the United States, that we should continue to support the idea of welfare when unemployment is such a hot topic and is at the top of the list of objectives to control by the government, as well as the constant cry of inequality among classes.
Not only does welfare hurt people, but it doesn't help the economy either. In his article "Paying the Unemployed Does Not Stimulate the Economy," in The Freeman, James C. W. Ahiakpor makes a valid argument: "Many in Congress as well as the President and some of his economic advisers have argued that extending the period for paying the unemployed will stimulate the U.S. economy out of its sluggish performance. Would any of them consider as valid an argument that giving money out of their own pockets to an unemployed member of their household would promote the financial prosperity of that household? Would they not correctly see such financial contribution as merely a transfer within the household? Would they also not be eager to nudge the unemployed to get up quickly and find a job? ... So why don’t they apply the same logic to the economy as a whole? The only tenable answer is that they are under the spell of the economic miseducation inflicted on the minds of economists and many among the general population by John Maynard Keynes. They believe that consumer spending drives the economy, without having stopped to consider from where consumers get the means to spend."
Welfare itself stems from a good intention, but it does not bring good outcomes in the end. Welfare means dependence, falling productivity, and as Bono of U2 aptly stated, "a Band-aid. Free enterprise is the cure." In other words, free enterprise brings more opportunity and a higher standard of living than any government can promise or give.
 |
| Flickr image by Internet Archive Book Images. |
Since work is discouraged, productivity also falls. This argument is made clear by Richard Fulmer in his article in The Freeman: "As benefits and benefit recipients multiply, and as the number of taxpayers declines, the latter will be less and less able to bear the ever-growing burden. Many of the most productive and adaptable will move to countries that allow them to keep more of their earnings ... While productivity increases can help offset falling production due to a declining workforce, any such increase requires either capital investments or innovative process improvements. As previously explained, however, welfare states discourage capital formation by discouraging savings. Innovation is similarly discouraged by taxes that reduce or eliminate any profits that such innovation might generate."
It is ironic that in a country such as the United States, that we should continue to support the idea of welfare when unemployment is such a hot topic and is at the top of the list of objectives to control by the government, as well as the constant cry of inequality among classes.
Not only does welfare hurt people, but it doesn't help the economy either. In his article "Paying the Unemployed Does Not Stimulate the Economy," in The Freeman, James C. W. Ahiakpor makes a valid argument: "Many in Congress as well as the President and some of his economic advisers have argued that extending the period for paying the unemployed will stimulate the U.S. economy out of its sluggish performance. Would any of them consider as valid an argument that giving money out of their own pockets to an unemployed member of their household would promote the financial prosperity of that household? Would they not correctly see such financial contribution as merely a transfer within the household? Would they also not be eager to nudge the unemployed to get up quickly and find a job? ... So why don’t they apply the same logic to the economy as a whole? The only tenable answer is that they are under the spell of the economic miseducation inflicted on the minds of economists and many among the general population by John Maynard Keynes. They believe that consumer spending drives the economy, without having stopped to consider from where consumers get the means to spend."
Welfare itself stems from a good intention, but it does not bring good outcomes in the end. Welfare means dependence, falling productivity, and as Bono of U2 aptly stated, "a Band-aid. Free enterprise is the cure." In other words, free enterprise brings more opportunity and a higher standard of living than any government can promise or give.
Thursday, September 4, 2014
More Privatization by Schools Leads to Huge Savings
By using private firms to provide non-educational services, millions of dollars could be saved, according to the study just released by Troy University's Johnson Center for Political Economy. Link to story: http://www.al.com/news/index.ssf/2014/09/millions_for_the_classroom_tro.html
Sunday, July 27, 2014
The Welfare Cliff
Of course people should be concerned about the world's poverty-stricken people. It is a worthwhile cause to fight for: reduce the poverty in our world, fight hunger, see that everyone has clean water, etc. Being concerned about the "welfare" of others is only natural however selfish we are.
But to say such a thing as that, is to say that it is my responsibility, my family's responsibility, and everyone else paying taxes in the United States to give to the less fortunate or the poverty-stricken. Responsibility.
Some people today seem to think that the world's poverty should be dealt with by the government because it is their responsibility.
 |
| Flickr image by Ben Phelps-Rohrs |
But to say such a thing as that, is to say that it is my responsibility, my family's responsibility, and everyone else paying taxes in the United States to give to the less fortunate or the poverty-stricken. Responsibility.
It is my belief that, being a Christian, I should help others.
It is not the help itself that I have a problem with. It is where the help is coming from.
My opinion is that of the French economist Fredric Bastiat, whom I will quote from his fantastic book The Law.
"You say: 'There are persons who have no money,' and you turn to the law. But the law is not a breast that fills itself with milk. Nor are the lacteal veins of the law supplied with milk from a source outside the society. Nothing can enter the public treasury for the benefit of one citizen or one class unless other citizens and other classes have been forced to send it in. If every person draws from the treasury the amount that he has put in it, it is true that the law plunders nobody. But this procedure does nothing for the persons who have no money. It does not promote equality of income. The law can be an instrument of equalization only if it takes from some persons and gives to other persons. When the law does this, it is an instrument of plunder.
With this in mind, examine the protective tariffs, subsidies, guaranteed profits, guaranteed jobs, relief and welfare schemes, public education, progressive taxation, free credit, and public works. You will find that they are always based on legal plunder, organized injustice."
The Welfare State in one way or another, through taxes or borrowing, is paid for by the public. So when people think that they are getting something from the government for nothing, think again. Think about all those people, including those who receive welfare benefits (who pay for certain taxed products), who are plundered by each other. Independent (welfare-free) citizens who are paying heavy taxes to provide for the welfare of others when they could be giving so much more to society through their productiveness. At the same time, welfare recipients are being plundered by independent citizens because these poverty-stricken people could be so much better off. So it's plundering of plunderers.
I will in my next post give my opinion on how to help the poverty-stricken, and to forewarn: it does not involve government assistance that is supposedly "owed" to its citizens.
Saturday, July 19, 2014
Just Plain Stupid
An increase in the minimum wage is a topic I am really passionate about because I am not for it -- it is appallingly shallow-minded. I believe I will just come right out and say the word that I really am thinking of: just plain stupid.
Go ahead politicians, raise the minimum wage. Distribute the wealth. Inequality is so not fair. The middle class is disappearing and we need to fix this massive problem by adding more government programs. Those are common phrases about a topic that is constantly appearing in headlines everywhere and a topic that many people are concerned about.
Before anyone makes the claim that I am oblivious, unconcerned, and uncaring because the poverty in our world today needs to be addressed... let me clarify why I believe that the increase in the minimum wage is a stupid idea.
When you force employers to pay employees more when they can't afford it, do you think they will hire more or fewer people? Do you think that they can afford to charge low prices? Do you think that they will increase the quality of their products? Do you think that employers will hire low-skilled workers like young people fresh out of high school who need the job experience and the money, ahead of older and more experienced college grads or seasoned highly skilled employees? What are the answers to these questions?
There will be more unemployment, especially among low-skilled (probably low-income) people, there will be higher prices on the majority of goods and services, and the quality of certain products and services will go down. The employers will cut back because they want to still make a profit to keep the business afloat. Min wage is already making living harder for everyone, what do you think an increase will do?
The lower-income people will be hurt worse than everyone else, ironically –those are the very people that the minimum wage was designed to help. With the decrease in the possibility of getting a job when you really need it, an increase in prices, fewer choices of products and decreases in quality– poverty will increase.
What needs to happen to decrease poverty and increase the standard of living for all Americans, is the demise of the minimum wage itself. Employers then can decide when they want to pay their employees more, and for what reasons.
When an employer is doing extremely well due to the high demand for their product(s)/service(s), and the work environment is great due to good employees, then that employer will more than likely be able to afford to pay their employees more, possibly hire more workers, and increase the quality of their products, but at the same time always look for news ways of technology to incorporate into the business – lowering costs. The freedom of the employer will increase the standard of living for not just the people working for the company, but for everyone due to the increased quality of products and moderate to low costs. Of course, what I mean by low costs is the lowest cost possible, considering ever-rising inflation (which acts as a tax on all goods and services.)
However, when an employer is forced to pay their employees more, when those employees may or may not have been worth the raise (what I mean is not ultimately the worth of the employees themselves, but rather the relationship between their work and how much profit the company is making). If an employer cannot afford to pay more for their employees, then not only is the company worse off, but so are consumers. Higher costs of products all across the board mean that low-income people will not be able to afford certain products they once were able to afford, in addition to the cut-backs on quality that will make them worse off than before the wage hike.
Like many instances, government meddling decreases the standard of living for us all, but particularly the poor in this case. Let employers decide what they want to pay their employees. Competition in the free market for employees will increase the wage by itself, without a minimum price for employees.
Sunday, July 6, 2014
A Thank You
Today I was thinking about what happened a few days ago while I was at work. Really affected me, and had to share my thoughts.
As I ask myself this, I guess it comes down to your own pride and what others think of you when you say something random and simple like that.
An elderly woman was behind this young military man in my checkout lane at the Piggly Wiggly. I was checking out the soldier when the elderly woman turned and spoke to the solider.
She said "Thank you for your service young man."
The look on this young man's face was one I will never forget.. his whole face lighted up with sincere gratitude and humbleness.
I smiled. This was a great moment of a person expressing gratitude for someone else's sacrifice and dedication.
What really stood out to me, about this event, was the ability of the elderly woman to tell this young soldier thank you.
So many times, I have wanted to say thank you to someone, in everyday situations or to military men and women especially, but did not have the guts to do it. Why?
 |
| Thank you Servicemen. (Flickr image by USAG- Humphreys) |
But to think deeper, to say thank you to people when you really feel gratitude is what you should do if you are thinking of your pride. Because the simple things that we say to each other, like thank you or I love you are the things in life that matter the most. Along with apology.
To express your value and love to others adds to your character, and says to the world, "I know who I am, and I am proud to be able to say things that come from my heart."
Human beings are imperfect though, and continue to say things and do things that we know are not right, or not true. But we can strive to do the right thing, and pray to God that we can do it when the right moments come that will never come again.
Wednesday, July 2, 2014
Why It's Important for My Generation to Understand the Financial Crisis
Since reading John A. Allison's incredible perspective of the Financial Crisis, I have learned just how important it is for not just me to know the causes, but for my whole generation.
I plead with you to take the time to find out exactly what happened, by doing some research on the Internet (other than Wikipedia) and/or reading at least a part of John Allison, President and CEO of the Cato Institute, and retired Chairman and CEO of BB&T's excellent book The Financial Crisis and the Free Market Cure. You will not only discover what happened and why, but discover a whole new outlook on the problems of our world today, and discover the possible solutions that is ultimately: less government and more freedom. If Americans can understand that, then we have hope to not make these mistakes that caused the Financial Crisis in the future.
To me, this is the most powerful part of the book, and when I say powerful, I mean that it struck me as the root of many of the problems that exist today in the world. The following is an excerpt from the chapter entitled "The Deepest Cause is Philosophical."
"The deepest cause of the Financial Crisis is not economic policy. The fundamental cause is philosophical. The financial crisis is a result of the philosophical ideas that have been taught in the liberal arts departments of the most prestigious universities in America for more than 50 years.
The fundamental cause of the financial crisis is a combination of altruism and pragmatism. Altruism does not mean kindness toward others; it literally means 'other-ism.' Altruism is defined as selflessness, that is, believing that everyone else is more important than you are. The good of the individual is irrelevant. It is only the good of 'others' that matters, and this is interpreted by liberals as being the good of 'society.' This assumes that society is a living entity and that the effect on actual individuals does not matter. In reality, however, there are only individuals. There is no entity as society.
The 'common good' (or the 'public interest') is an indefinable concept. There is no such thing as the public. The public is only a number of individual people. When the common good of a society is regarded as something apart from and superior to the individual good of its members, the good of some people takes precedence over the good of other people, with those others consigned to the status of sacrificed animals.
Altruism should not be confused with benevolence. Altruism means that other people (society or the tribe) are more important than you are. Altruism is an unquestioning duty to others. It is not about being nice to people. It is self-sacrifice.
A classic economic error made by liberals is to assume that good intentions produce good outcomes. Economic theory unquestionably demonstrates that so-called good intentions often produce very bad outcomes. This is the 'law of unintended consequences' that is so relevant to policy makers and others who not only fail to achieve their aims, but also cause results that are directly opposed to their aims – as when central banks and regulators seek to ensure 'safe and sound' banking, but instead make banks and the system more dangerous and precarious. However, if you are an altruist, moral good is defined by your intentions to help others, not by the actual outcome. In fact, altruism often serves as an excuse for bad behavior (and bad intentions)."
To summarize, Allison goes on to make the point that by being an altruist, you could make the claim that everyone has the right to health care, a home, etc. etc... all free. And because of those "rights" then you then must also have the "right" to steal a house away from someone just because everyone should have a house, even though that person may have worked very hard for it. This logic is opposite to what the Founding Fathers believed, that we have a right to what we work for, not for something someone else worked for.
Altruism suggests that we should all try our hardest to make sure everyone is equal – if you're productive you need to give away your wealth even to those who are nonproductive. Allison sums it ups further "In fact, it implies that no one has a right to her own life. Everyone is everyone else's property. This is a rejection of the concepts of rights."
Business people cannot be altruistic if they want to maintain successful businesses. But what if business people instead were pragmatists? Pragmatists argue that nothing is for sure. You must always act for short-term, never consider the long-term consequences. Some business people of today were/are altruists, or pragmatists, and because of their erroneous philosophies, contributed to the fall of their companies and the decline of our economy.
"The combination of altruism and pragmatism leads to the 'free lunch' mentality... that leads to a lack of personal responsibility, which is ultimately the death of democracies."
I plead with you to take the time to find out exactly what happened, by doing some research on the Internet (other than Wikipedia) and/or reading at least a part of John Allison, President and CEO of the Cato Institute, and retired Chairman and CEO of BB&T's excellent book The Financial Crisis and the Free Market Cure. You will not only discover what happened and why, but discover a whole new outlook on the problems of our world today, and discover the possible solutions that is ultimately: less government and more freedom. If Americans can understand that, then we have hope to not make these mistakes that caused the Financial Crisis in the future.
To me, this is the most powerful part of the book, and when I say powerful, I mean that it struck me as the root of many of the problems that exist today in the world. The following is an excerpt from the chapter entitled "The Deepest Cause is Philosophical."
"The deepest cause of the Financial Crisis is not economic policy. The fundamental cause is philosophical. The financial crisis is a result of the philosophical ideas that have been taught in the liberal arts departments of the most prestigious universities in America for more than 50 years.
The fundamental cause of the financial crisis is a combination of altruism and pragmatism. Altruism does not mean kindness toward others; it literally means 'other-ism.' Altruism is defined as selflessness, that is, believing that everyone else is more important than you are. The good of the individual is irrelevant. It is only the good of 'others' that matters, and this is interpreted by liberals as being the good of 'society.' This assumes that society is a living entity and that the effect on actual individuals does not matter. In reality, however, there are only individuals. There is no entity as society.
The 'common good' (or the 'public interest') is an indefinable concept. There is no such thing as the public. The public is only a number of individual people. When the common good of a society is regarded as something apart from and superior to the individual good of its members, the good of some people takes precedence over the good of other people, with those others consigned to the status of sacrificed animals.
Altruism should not be confused with benevolence. Altruism means that other people (society or the tribe) are more important than you are. Altruism is an unquestioning duty to others. It is not about being nice to people. It is self-sacrifice.
A classic economic error made by liberals is to assume that good intentions produce good outcomes. Economic theory unquestionably demonstrates that so-called good intentions often produce very bad outcomes. This is the 'law of unintended consequences' that is so relevant to policy makers and others who not only fail to achieve their aims, but also cause results that are directly opposed to their aims – as when central banks and regulators seek to ensure 'safe and sound' banking, but instead make banks and the system more dangerous and precarious. However, if you are an altruist, moral good is defined by your intentions to help others, not by the actual outcome. In fact, altruism often serves as an excuse for bad behavior (and bad intentions)."
To summarize, Allison goes on to make the point that by being an altruist, you could make the claim that everyone has the right to health care, a home, etc. etc... all free. And because of those "rights" then you then must also have the "right" to steal a house away from someone just because everyone should have a house, even though that person may have worked very hard for it. This logic is opposite to what the Founding Fathers believed, that we have a right to what we work for, not for something someone else worked for.
Altruism suggests that we should all try our hardest to make sure everyone is equal – if you're productive you need to give away your wealth even to those who are nonproductive. Allison sums it ups further "In fact, it implies that no one has a right to her own life. Everyone is everyone else's property. This is a rejection of the concepts of rights."
Business people cannot be altruistic if they want to maintain successful businesses. But what if business people instead were pragmatists? Pragmatists argue that nothing is for sure. You must always act for short-term, never consider the long-term consequences. Some business people of today were/are altruists, or pragmatists, and because of their erroneous philosophies, contributed to the fall of their companies and the decline of our economy.
"The combination of altruism and pragmatism leads to the 'free lunch' mentality... that leads to a lack of personal responsibility, which is ultimately the death of democracies."
Sunday, June 22, 2014
Understanding Economics
Essential to Understanding Economics
And also an argument in favor of price fixing, that the government should price-fix to keep the cost of living from rising is unfounded. Hazlitt explains that: "there is no point in assuming a price control that would fix prices exactly where a free market would place them in any case. That would be the same as having no price controls at all. We must assume that the purchasing power in the hands of the public is greater than the supply of goods available, and that prices are being held down by the government below the levels to which a free market would put them."
Hazlitt's Economics in One Lesson is a book that clarified economics for me, a person already acquainted with fundamental laws and insights. For someone not acquainted with Econ, this book is easily understandable and provides the foundation for thinking on the truth of what Hazlitt says to which is the essence of Economics: for someone to look "not merely at the immediate but at the longer effects of any act or policy; it consists in tracing that policy not merely for one but for all groups."
Before I discuss why I love this book, I should clarify what Econ really is. Contrary to what some believe, Economics is not merely a science of dealing with money, but rather according to the What Is Economics website, "Economics is the study of the production and consumption of goods and the transfer of wealth to produce and obtain those goods. Economics explains how people interact within markets to get what they want or accomplish certain goals. Since economics is a driving force of human interaction, studying it often reveals why people and governments behave in particular ways."
Ideas that are Especially Important
Particular issues and ideas that are Hazlitt discusses in his book that are basic ideas and insights into a true free society and government are the ideas of the folly of spread-the-work schemes, the truth that taxes discourage production, the damage of government price-fixing, the long-run effects of minimum wage laws, and the function of profits.
Discussing Government Price-Fixing
Hazlitt opened my eyes as to the dangers of price-fixing. According to the author, "The first thing to be noticed about this argument is that if it is valid the policy adopted is inconsistent and timorous. For if purchasing power rather than need determines the distribution of beef at a market price of $2.25 cents a pound, it would also determine it, though perhaps to a slightly smaller degree, at, say, a legal price "ceiling" price of $1.50 cents a pound. The purchasing-power-rather-than-need argument, in fact, holds as long as we charge anything for beef whatever. It would cease to apply only if beef were given away."
And also an argument in favor of price fixing, that the government should price-fix to keep the cost of living from rising is unfounded. Hazlitt explains that: "there is no point in assuming a price control that would fix prices exactly where a free market would place them in any case. That would be the same as having no price controls at all. We must assume that the purchasing power in the hands of the public is greater than the supply of goods available, and that prices are being held down by the government below the levels to which a free market would put them."
The problems that arise from government price fixing are shortages of the goods under the price laws. The price-fixing laws are self-defeating because these goods are the same goods that government wants to make plenty available to the public. Also, Hazlitt further explains that "they limit the wages and the profits of those who make these commodities, without also limiting the wages and profits of those who make luxuries or semi-luxuries, they discourage the production of the price-controlled necessities while they relatively stimulate the production of less essential goods."
Arguments and ideas such as this one that Hazlitt makes in his book Economics in One Lesson stands for the principles of a free market that makes this book eye-opening to individuals who seek the truth about why people should prefer liberty over government meddling.
Tuesday, June 10, 2014
Friday, June 6, 2014
Thursday, June 5, 2014
Look out Troy University!!!!
I was ecstatic Tuesday morning as I made my way into Mrs. Lynn Hughes' office.
When I left her office, I was incredibly happy. I am now an Econ major!!!!
Dr. Daniel Smith of the Johnson Center for Political Economy is my academic advisor. I am currently writing an opinion editorial with him and could not be more excited about this opportunity to write with him!
Economics is such a worthwhile degree and one that I am very sure will be a lasting passion of mine.
I thank God for leading me down this path and firmly believe that this has happened because it is where I belong. I will continue to pray that He opens more opportunities for me in this field if it is meant to be.
Wednesday, May 28, 2014
Monday, May 26, 2014
Thursday, May 22, 2014
Sunday, May 18, 2014
Wednesday, May 14, 2014
Income Equality is not Feasible
A common cause fought for in today's world is equality. Politicians everyday seem to take a stand for the poor of America, and commonly state that the middle class has declined in our country.
But is this really true that the middle class has declined, and that income inequality should be a real issue that we must amend?
What has really happened is that more Americans are making more money and so there has been in increase in the number of Americans in the top income percentiles. The income for everyone else, also has seen increases as well with time.
And according to the Census Bureau, in 2012, the percentage of households with no earners ranges from 61% in the lowest fifth income quintile to 3% in the highest fifth income quintile. This means that the number of people in households directly affects the amount of income earned. Also, in this same study, it has been proven that the marital status, age, work status, and education impacts the amount of income people earn. Some of the main causes for inequality of income in America have to do with not staying in school, not getting married, families not staying together, and work status.
Also, inequality, under a free market, is only natural. People have the freedom to choose where they want to work and what opportunities they would like to take advantage of.
There is no way possible that our federal government could survive by giving everyone the same income. If you just look around you today, at the US economy in action, you can tell that people are being more careful with their money than they were before the recession. This is due to the increased taxes, and inflation, along with other factors of the recession.
The downfall of Social Security, in addition, will be because too many people in the coming years will be older Americans looking for pension. But the system cannot afford it. With the rise of the older population, this also means fewer of the younger population, who is the working population that pays for the social security payments made today to retirees. For these reasons and others, distributing the wealth can only cause the downfall of our economy.
Subscribe to:
Posts (Atom)