Confused Socialist Accidentally Makes Case For Lower Taxes

You gotta hand it to Bernie Sanders – despite using the same old economic fallacies that progressives have been spouting since the 19th century, his campaign is resonating with people – as evidenced by the fact that around half my family has “liked” his Facebook page and continues to share posts where he seems to make a legitimate point, but in the end, is completely and totally wrong.  Below is one such example.


This graph is an image that he shared, along with the following caption:

“There is something profoundly wrong when we have a proliferation of millionaires and billionaires at the same time as we have the highest childhood poverty rate of any developed country on earth. This campaign is sending a message to the billionaire class: “you can’t have it all.” You can’t get huge tax breaks while children in this country go hungry.”

Now, he doesn’t say it directly, but the obvious logic he is invoking here is that tax breaks for “millionaires and billionaires” are contributing to child poverty.  Even if we assume the child poverty numbers are accurate (which I suspect is, itself, a dangerous assumption), there’s an obvious problem here though isn’t there?  The graph only provides half the data.  He’s making an allegation of a causal relationship between taxation of “the rich” and child poverty, but the data on taxation is mysteriously absent.

I’ve followed politics long enough to know what that means…  If the data helped support his point, he’d have provided it.  The reason he doesn’t is because it does not support his point whatsoever.  See the graph below, which I made myself using my amazing MBA skills in about 20 minutes.


This is a scatter plot of the child poverty rate on the horizontal axis (provided by Bernie) and the combined taxation rate of “the rich” in the countries that Bernie’s image references on the vertical axis.  The U.S. is that one all the way out there on the right.  The red line is an excel-generated trendline representing the correlation between poverty and taxation.

I obtained the “combined tax rate” by combining the three forms of taxation must likely to impact the rich (and most often cited as the ones that need to be raised according to socialists like Bernie), the corporate tax rate, the top marginal income tax rate, and the top marginal capital gains tax rate.  My source for the corporate and income tax rate was Wikipedia, my source for the capital gains tax rate was the tax foundation.


Here’s a table of the data.  As you can see, the U.S. has the third highest combined tax rate of the 16 countries that Bernie provided as points of reference.  If you observe the graph and the trendline, it would seem that there is absolutely zero correlation between high tax rates on “the rich” and child poverty.  If you look reeeeeally closely, the trend line is actually slightly upward sloping, suggesting that higher tax rates lead to more child poverty, not less.

If the point of Bernie’s Facebook post was to suggest that we can improve the lives of children by adopting the taxation policies of other developed nations – then I fully agree.  Massive tax cuts on the top marginal rates would do wonders to get us more “in line” with the rest of the developed world.  Perhaps we could look to emulate Switzerland, for example, whose child poverty rate is 14.7, less than half that of the U.S.  They also happen to have the lowest combined tax rate of all the countries listed.  Their combined tax rate of 0.31 is less than one third of the U.S. rate of 1.08.

Qualification:  Obviously my method of calculating the figure I am referring to as “combined tax rate” is somewhat arbitrary and crude.  Obviously there are other forms of taxation besides the three I selected that are used in varying degrees and methods around the world.  I would defend my selection by pointing out that the three forms I selected are also far and away the most likely forms of taxation to be “progressive” in the sense that the rich are taxed at higher rates than the poor.  While it’s true that Europe, for example, often has high sales or VAT taxes, please keep in mind that the notion of substituting a progressive income tax for a flat-rate national sales tax has, to this point in America, been exclusively the domain of the farthest right portions of the Republican party.  I cannot imagine Bernie Sanders advocating such a position.  As I said above, these three forms of taxation are the exact forms of taxation that left-wing politicians in America regularly advocate need to be raised.  Note that in his Facebook post, Bernie is complaining about taxes for “millionaires and billionaires” exclusively, and not about the total tax burden on the average citizen.


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Zimbabwe’s Greatest Villain

Meet Walter Palmer.  He is a dentist who (allegedly) illegally shot a lion in Zimbabwe.

Now meet Robert Mugabe.  He is a power-mad dictator who for the better part of four decades has used terror and intimidation to maintain his stranglehold on power in Zimbabwe.  He uses rape and murder to subdue his political enemies.  Virtually everyone around the world agrees that he has ordered multiple acts of genocide and ethnic cleansing.  In one campaign alone he is credited with being responsible for over 20,000 (human) deaths.  There is essentially zero political freedom, freedom of speech, or freedom of the press in his country.  Speaking out against him will likely get you and your family tortured and killed by his secret police.  And here’s what he has done with the economy…

Paul Krugman fails to see the problem here

Remind me again which of these is the bad guy?  Which is the one that Piers Morgan is calling for the execution of?  Which is the one that all of your friends (well, all of mine at least) are vilifying on facebook day after day after day?

Do people really, legitimately, believe that poaching should be a capital offense?  Just for lions, or for all animals?  Just for rich, white, Americans?  Or for native Zimbabweans as well (although under Mugabe, it wouldn’t surprise me if this was already the case)?  My intent here isn’t to do a post on animal rights or anything like that – but rather to think about what happened here for a second and what poaching really is.

Poaching is the illegal killing of an animal – presumably when the person who kills an animal is not entitled to do so.  This implies that property rights in said animal exist.  The animal was owned by someone other than the person who killed it.  Sometimes, the animal may be the private property of an individual (a cow owned by a rancher), or, in the cases of endangered species or animals who reside on land where “hunting is illegal,” the animal would properly be considered to be owned by the state.  After all, if you pay a butcher to come slaughter your cows, he is not poaching – because you had property rights in the cows and authorized him to do so.  Similarly, I don’t know that I’ve ever heard of a government agent being arrested for “poaching” while engaged in the killing of an animal within the scope of his job duties (which happens, even for endangered species, if the animal is considered dangerous, unable to survive on its own, or for the purposes of thinning out the herd).  This is because the state claims property rights in the animal, and has authorized its agents to kill it, for whatever reason.

Therefore, to the extent that Palmer is guilty of poaching, it is because he, without permission, killed an animal owned by the state of Zimbabwe.  Well guess what… in Zimbabwe, Robert Mugabe is the state.  For all practical purposes, Palmer is guilty of the crime of vandalizing Mugabe’s personal property.  This is not dissimilar to accounts of Robin Hood being prosecuted by the local authorities for daring to kill “the king’s deer.”

In many cases, someone who vandalized the personal property of a genocidal dictator would be lauded as a hero, but Dr. Palmer has received no such recognition.  Nor have the tens of thousands of Robert Mugabe’s human victims, as well as the entire nation who continues to suffer daily under his tyrannical rule.  But for those who (for whatever bizarre reasons) value the lives of lions above the lives of actual people – it should be pointed out that the best way to protect lions would be to assign property rights in them to private individuals, who would thus be incentivized to properly protect them from poaching.  Assigning them collectively to the state puts their entire disposition in the hands of the state.  Maybe that seems like a good idea if you live in America and believe in the “we are the government” nonsense.  But it probably isn’t such a great idea if you live in Zimbabwe and “the law” is “whatever the crazy genocidal dictator decides it is.”

Look, I get that we’re all busy people and there’s a limit on the amount of outrage we can feel for the tyrannical monsters of the world at any given moment.  My point is not to say that because Mugabe is bad that means Palmer is okay, nor is it to diminish the notion of animal rights in a general sense.  I just think this issue would strongly benefit from some perspective of the relative harm done by certain individuals – as well as an economic understanding of the property rights that help determine what is, and what is not, a crime.

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Arming recruiters and reserve centers is almost as stupid as disarming them

Should military recruiting centers be armed? –

Full Disclosure:  I have a dog in this fight.  I worked at a reserve center that was essentially a public building with almost zero security for about four years.  To a certain extent, I was actually in charge of our “security.”  Because we were such a small command, this was a “collateral duty” meaning it was an extra thing I had to do in addition to my regular job, meaning it was paid very little attention – it was considered a minor annoyance that distracted me from what I was really there for.  My suspicion is that for the overwhelming majority of recruiting stations and reserve centers, security is managed as a collateral duty in this respect.

In the aftermath of the shootings in Chattanooga, we’re seeing increased calls for the “arming” of recruiting stations and reserve centers.  As usual, this is presented in the standard American “right versus left” debate format.  Conservatives think military personnel at these locations should be “armed,” liberals, presumably, don’t.  But, yet again, there’s a superior third option – that is going completely and totally ignored.

The appropriate response to a heavy-handed, one-size-fits-all regulation (such as, “no weapons allowed in federal buildings”) is not another heavy-handed, one-size-fits-all regulation (such as, “everyone in military stations must carry weapons.”)  Speaking as someone who used to work at such a place, I wouldn’t want to be issued and have to carry a gun all the time for my routine desk job.  It would really just be one extra hassle I’d have to go through.  One more piece of training and qualification I’d have to get on a yearly basis.  One more thing to remember to bring with me every morning.  It would be a distraction and an annoyance and wouldn’t really help me do my job at all.

Now at this point, you may be thinking, “Hey, who cares if you’re a huge sissy who doesn’t want to carry a gun?  Suck it up, buttercup!  You’re in the military!  You signed up for this!  Following dumb orders and carrying guns is part of your job!”  That’s all technically true, except for one small caveat…

As I mentioned above, this is being framed as an all or nothing sort of binary proposition.  Either recruiters are armed, or they’re not.  But there’s absolutely no reason why that must be the case.  There’s a perfectly viable (in fact, probably superior) alternative – the option that never occurs to anyone who operates under a statist mindset – the libertarian and voluntarist option:  carry a gun if you want, or don’t carry one if you don’t want to.

The proper response to this scenario is not to pass some new additional law or responsibility or requirement – it is simply to eliminate the last one that was passed forbidding military personnel from carrying weapons in these places.  Simply discard that, and place military personnel at these sites under the same laws and regulations that civilians in public places have to abide by.  Those who want to obtain a concealed carry permit and carry a weapon can do so, and those who don’t want to, can choose not to.  There is literally no flaw to this plan – other than that it diminishes government control and micromanagement over the military.

My plan – to put the military under the same rules as everyone else – comes with several key benefits.  Here are just a few:

  1. It would achieve the desired objective of increasing the security of these installations. As John Lott discusses in his book, “More Guns, Less Crime” concealed carry creates a deterrence effect.  Criminals (even violent and suicidal mass shooters) are less likely to target those who they believe may be armed.  It would seem to me that the military is probably over-representative of people who would choose to carry a concealed weapon, if given the opportunity.  It seems statistically likely that each command would have a few people who would choose to do so, and as Lott discusses in his book, the deterrence effect doesn’t just work for those who choose to carry – it works for everyone around them as well.
  2. Concealed carry can potentially be a better deterrent than armed guards. Posting an armed guard at the entrance of a facility where everyone else inside is disarmed is basically like having a guy standing around wearing a large sign that says “Shoot me first!”  They become sitting ducks, easy targets, and provide a false sense of security to everyone else.  The benefit of concealed carry is that you never know who it is that might fight back against you.  This element of surprise can become a major tactical advantage.
  3. This would create no additional burden on any military personnel. The option to concealed carry would be completely voluntary, and would be selected by people who would choose to go through the necessary training and purchasing of weapons on their own anyway.  It would not distract anyone from their primary duties or impose any additional training or administrative burden of any kind.
  4. You would not have to re-write or modify existing laws, rules of engagement, etc. This currently seems to be one of the primary objections to “arming” these locations.  The top military generals insist that because these sites are located in civilian areas, laws and rules of engagement would have to be re-written.  The article from CNN I link to above even has wonderful lines such as “the law does not permit the military to shoot civilians in the United States.”  But under my plan, none of this would be necessary.  Rules of engagement would not apply, because a potential active shooter scenario would not be considered a military engagement.  The military members who may choose to respond to such a scenario would be acting with the same rights and responsibilities to protect themselves and others as any ordinary civilian with a concealed weapon would.
  5. This would not put the public in any additional danger. Concealed carry holders, as a group, are some of the most law abiding members of society.  They are also typically gun enthusiasts who are very proficient in the operation of the weapon of their choice.  In basic training for the Navy, do you know how many times I fired a live weapon?  Once.  Your average civilian concealed carry holder is exceptionally more qualified to handle a weapon than I was.
  6. It would enhance community relations. The sight of armed soldiers walking around shopping malls (where many recruitment centers are located) is not a particularly pleasant one to imagine.  Armed guards standing outside the door could potentially deter many from walking in and engaging with the staff.  The vast majority of these sites are located in towns with virtually no military presence aside from these places, and community outreach is a big deal.  Under my plan, the local military recruiter would look just like everyone else at the mall, but would still be able to protect himself if necessary.
  7. It would improve the attitudes of military personnel. I’ve written before about how military culture can foster a sense of entitlement – as those in the military are indoctrinated into believing that they are somehow superior in every way to the common plebeians they protect.  Giving them special rules and exemptions from local law would only reinforce this belief.  It would provide an extra incentive for someone who just wants to carry a gun around to join the military – which are the exact sort of people who shouldn’t be joining the military in the first place.  In every possible situation we should look to try and place the military under the exact same rules and restrictions as the civilian population they supposedly protect.  This will promote increased understanding and empathy across two very different and disparate groups.
  8. It would encourage military personnel to advocate for more liberal gun laws. By requiring them to abide by the same rules as everyone else, military personnel wanting to defend themselves would be encouraged to join the advocacy for greater liberalization of concealed carry in their particular state.  Gun-grabbing state and local governments would face increased public scrutiny, as they would be seen not just as disarming the general public, but disarming the military as well.  Giving the military special exemptions would eliminate any incentive they might have to care about these issues, as an “I got mine, who cares about the public?” attitude would sink in.

But despite all of these advantages, I hear nobody advocating this laissez-faire approach.  We’re so programmed to automatically assume a top-down government enforcement method of one party or the other is the only acceptable solution to any possible problem.  And once again, this is completely and totally wrong.  The solution here is not to “arm” the troops, nor is it to “disarm” them.  It’s to simply treat them the same way that everyone else is treated – which will naturally lead to a situation where some of them are armed and some of them aren’t, according to their own voluntary preferences.

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You Pay Taxes, So That Means You Agree

Gunman tried to justify market raid to hostages, recording apparently shows –

In the aftermath of the Charlie Hebdo shootings, it seemed that the typical battle-lines were being drawn.  Neocons were calling for increased surveillance and foreign meddling.  Self-righteous “moderates” were proclaiming their support for free speech (while simultaneously supporting laws that dramatically restrict it).  The left’s fellow travelers were insisting the real danger was not terrorism, but Islamophobia.  And Ron Paul pointed out that, like every other terror attack, this could largely be attributed to “blowback.”  Naturally, the neocons, the moderates, and the left could all get together to do what they all do best – loudly denounce Ron Paul and the principles of non-interventionism.

As a brief recap – the principle of the “blowback” theory is quite simple.  The simplest explanation is probably the best one.  We can listen to what terrorists say, and when they say, “We’re attacking you because you keep meddling in the affairs of our countries,” they’re probably telling the truth about that.  It is in direct conflict with the “they hate us for our freedom!” line that is parroted about by mainstream politicians (even in places like France, where the concept of “freedom” is laughable).  While it’s true that journalists who criticized Islam were targeted, the question remains:  Would terrorist cells be active in France in the first place if the west wasn’t out there engaging in military interventionism in Islamic countries?

Before you answer that – let’s look to one more example.  Charlie Hebdo wasn’t the only terrorist attack in France.  Two days after the Charlie Hebdo attack, a gunman took hostages in a kosher market, ultimately killing four.  It’s easy to see the word “kosher” above and immediately assume this is simply an act of anti-Semitism.  Obviously this guy was just looking to kill Jews, and his attack has nothing to do with blowback or interventionism, right?  Wrong.

As CNN reports in the link above, the gunman made it quite clear that his primary objection is that the French military is harassing Muslim countries, and restricting the rights of Muslims domestically.  A phone was left off the hook, and captured audio of portions of his discussion with his hostages.  Of particular interest to this blog is the key line – “You pay taxes, so that means you agree.”  In that very instant, what seemed like a crazy terrorist slaughtering Jews because he’s racist suddenly took on the appearance of a common political debate that libertarians and statists have been having for decades.

The hostage responds as you would expect the average person to respond – by claiming that they pay their taxes for the roads and the schools, not for bombing children in Yemen.  But the gunman is having none of it.  He understands that all tax dollars go towards financing all government operations.  We don’t get to earmark our taxes to only go towards happy things everyone likes.  When you buy a membership to big government – you get the schools and the fiery death robots.  It’s a package deal with no a la carte pricing option.  The gunman’s position is quite clear on this – and it’s hard to argue that he’s wrong.  Paying taxes and supporting a government that engages in violence does make you somewhat responsible for that violence.

This isn’t to say that the gunman’s actions are morally justified.  I don’t support the use of force against individuals who simply finance violence and other bad behavior (as evidenced by the great “should it be legal to hire a hitman” debates of 2011).  But this particular attack should be far more terrifying to the average neocon, moderate, or liberal, than the Charlie Hebdo attack was.  As much as the media wants to emphasize that Islamic terrorists are “attacking free speech,” it’s pretty easy to avoid publicly mocking Muhammad (putting aside for the moment the issue of whether or not you should have to avoid it).  But if radical terrorists start targeting any and all taxpaying citizens for their complicit part in military aggression overseas, we’re looking at an entirely different ballgame.  The warnings of Ron Paul will be harder and harder to ignore.  And perhaps this will be a necessary condition for meaningful change.  Perhaps knowing that you could be held individually responsible for the actions of your country’s military will inspire people to more loudly and forcefully oppose military interventionism.  Normally, the aftermath of terrorist attacks consists of loud calls for us to surrender more and more freedom to the state.  Hopefully, the aftermath of this particular attack might be for us to consider the vile acts that government commits in our name and with our permission, and whether or not that’s something we ought to be supporting…

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Are Obligations to the Government Infinite?

taxesGather round, boys and girls, it’s analogy time!

Scenario A:  You walk into an unfamiliar bar in a bad part of town.  You sit down at the bar, and the bartender approaches you and says, “Hey buddy, you look really thirsty,” and slides you a cold beer.  You drink the beer, chit-chat with the other patrons for a bit, decide this particular bar isn’t really the right place for you, and announce that you’re leaving.  The bartender glares at you and barks out “Hey!  You owe me twenty bucks for that beer!”  You think this is absurd!  First of all, you never asked for the beer, he just gave it to you.  Secondly, there was no agreement ahead of time about the price of the beer, there are no prices posted in the bar, and $20 seems incredibly excessive.  You try to haggle with the bartender, but he becomes more aggressive:  “What?  You think you can just come in to my bar and drink my beer and not pay for it?  Are you some kind of thief?”  The bartender is a very large man with a neck tattoo.  He seems to be reaching behind the bar for something.  Over in the corner, a bunch of big, gruff-looking guys who seem to be regular stand up and start approaching the bar.  Although you still think that this transaction is unfair and you don’t really agree with or consent to paying $20 for a beer you never asked for, you begrudgingly take our your wallet, slap a 20 on the bar, and quickly get out of dodge in order to avoid having your skull caved in.

Scenario B:  You’re moving across town.  You call up a friend and ask him to help you with your move.  He happily agrees.  The move takes up most of the day and includes a lot of heavy lifting.  It’s not a pleasant task, but your friend helps out cheerfully with whatever you ask him to help with.  You don’t offer him any payment for his services, it’s just a friend helping a friend, and at the end of the day, you say to him, “Thanks buddy, I really owe you one!”  Two months later, the friend asks you for help building a fence on his property.  You had a rough week at work and were really looking forward to just relaxing on the weekend, but you recall how he helped you previously.  You feel indebted to him for this, even though you never explicitly agreed that you would help build a fence in exchange for his helping you move.  There is no real contract here, he can’t legally require you to help him out, but you feel a moral obligation to “return the favor,” so you assent, and help build the fence.

Let’s call Scenario A the “payment for services” model and Scenario B the “moral obligation” model.  In both scenarios, you receive some type of good or service with no specific method or amount of compensation being agreed to beforehand.  But in Scenario A, it is made clear that you are paying a certain amount for a certain service, whether you agree with that amount or not.  Once you pay, the transaction is complete.  In Scenario B, no one ever explicitly states that any one thing is being exchanged for any other thing.  There is no real contract involved here.  Everything is left fairly vague.  But you are expected to comply nonetheless due to moral or ethical reasons.  You received a favor, and therefore you should return the favor.

Now for the million dollar question:  Which of these scenarios does taxation fall under?

If you ask someone on the left:  both!  Now they won’t typically admit that at any given moment, but as you get in arguments with these people, both of these scenarios will be used as justifications for taxation, depending on the specific issue being debated.

Object to taxation in general?  The argument will usually go something like:  “Well, you drive on public roads, don’t you?  You were educated in a public school, weren’t you?  What gives you the right to refuse to pay for these things!”  This sounds an awful lot like the bartender in Scenario A, doesn’t it?  Never mind the fact that you never asked for these things, that the price was never explained to you, or that the price seems exorbitant, unfair, and completely disconnected from economic realities.  You had a benefit, so now you must pay, and the other party gets sole discretion in deciding what the amount is.  Of course, the government is worse than the bartender, who bills you a specific amount and then lets you leave.

Object to transfer payments, welfare programs, and foreign aid?  Then Scenario B is invoked:  “You received help from the government at some point in your life; therefore you have a moral obligation to return the favor to the less fortunate.”  But wait a second; didn’t you already pay for the services you received?  Isn’t that what Scenario A was all about?  After you pay for something, your “moral obligation” ends.  Similarly, you don’t incur the “moral obligation” in the first place unless you received something without paying for it.

But you did pay for it.  That’s what your taxes are supposedly for, right?  We are now caught up in the circular reasoning.  Taxes are equivalent to a bill that you pay for services you received, but you also have a moral obligation to keep paying new bills because you received the services.  This makes no sense.  Once you pay the bartender for the beer, he cannot call you up two weeks later and demand you come in and wash dishes for eight hours because hey, remember when he gave you that beer?

Which begs the question, at what point do our obligations to the government end?  Is there ever an end, or are they infinite?  If they are infinite, are we not slaves?  If your friend helps you move, do you have a moral obligation to help him with each and every favor he might ever ask of you for the rest of your life?  Or is there a certain point where you’re finally even?  If you build his fence, paint his house, bail him out of jail, and save him from drowning, is it not possible that after all of those things, he might even owe you a favor?

These are the questions the left cannot answer.  Rather, they focus on one scenario or the other, hoping you will be blind to the fact that they are demanding both scenarios at once.  They demand you pay what you “owe,” but even when you do, they hold it over your head for the rest of your life, demanding more and more whenever the need arises (and don’t worry, they’re inventing new needs all the time).

This is especially instructive when you consider new government programs that are added every day.  While it might not seem unreasonable to say something like, “You benefitted from public schools as a child, therefore you are morally obligated to pay for current children to attend public schools as well,” this reasoning falls short when it comes to, say, government-provided cell-phones for low-income families.  Because my family was low-income, and yet, the government never provided us with a cell phone (probably because the free market hadn’t invented them yet).  So how can I have a moral obligation to provide something that I myself was never provided?  How can I be required to pay for services that I never received?  If my friend didn’t help me move, where does he get off asking me to build his fence?

The difference between these two scenarios may seem very subtle and unimportant, but I encourage you to really think about this.  The demands of leftists are quite extreme.  Not only must you pay for government-provided services, but the fact that you used those services also causes you to incur a lifelong obligation to pay whatever the government demands for those services in the future, as well as any other new services they happen to invent afterwards.

Sorry, but it just doesn’t work that way.  If you want to justify taxation as payment for services used, then the obligation ends with the payment.  Furthermore, you cannot be morally obligated to pay for things you never received.  If you want to stick with the “moral obligation” reasoning, then that requires you to admit that what you pay is entirely arbitrary, that you will incur this obligation for life, and that it has nothing to do with whether you used the service or not.  Stating this outright is scary, because it sounds like slavery (because it is).

Watch for this inconsistency whenever you’re debating the merits of taxation with a leftist.  Don’t let them get away with it.  Demand they pick one justification or the other, and force them into attempting to defend an indefensible position.

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The Minimum Wage and Indifference

Seattle-Wallpaper-seattle-2232631-1024-768We Can Predict The Effects Of Seattle’s $15 An Hour Minimum Wage.

In light of Seattle’s recent decision to raise its minimum wage to $15 an hour, numerous free-market writers have done an excellent job detailing the long list of economic arguments against the notion that minimum wage laws benefit the poor.  I assume most readers are well-versed in the basics, so I won’t be reviewing the general arguments against raising the minimum wage.  Rather, I want to address one specific issue that is occasionally brought up in these discussions – the notion of indifference.

Writing for Forbes, Tim Worstall addresses the issue of indifference while commenting on hotel employees in SeaTac (where the minimum wage is already $15 an hour).  He tells us of two employees he spoke to who were dissatisfied with the wage increase, because it was accompanied by a decrease in non-monetary benefits.  Employees saw their wages go up, while perks such as free food, free parking, and paid holidays were eliminated.  Worstall explains:

“Employers look at the total cost of employing people. They’re indifferent (that is, they just don’t mind) whether that’s made up of wages only, or wages and benefits, or what the precise mix between the two is…” 

While his analysis of employers being indifferent is correct, he does not address the issue from the perspective of the employee.  He highlights employees who are upset at how the minimum wage increase motivated employers to reduce non-monetary compensation in exchange for higher monetary compensation.  But these employees may be missing the bigger picture.  The average person would be expected to have a preference for increased wages in lieu of non-monetary benefits.

Money is fungible – meaning it can be used to satisfy a very wide variety of potential desires.  Most of us would much rather have $50 in cash than a $50 gift card for a local boutique – after all, what if the boutique doesn’t have anything we’re interested in buying?  But if forced to choose between a $50 gift card and a pair of pants (valued at $50), we’d take the gift card.  What if the pants don’t fit, or we don’t like the style?  If monetary values are equal, we naturally prefer to receive compensation in the form of money, rather than highly specific items such as free parking, the total benefit of which will vary radically from person to person.

Economic historians often outline the progression of economies starting with a barter system and developing into a monetary economy where goods and services are exchanged not for other goods and services directly, but for money.  When you sell your labor for money, you can use that money to purchase anything you desire – including parking, lunch, or other benefits your employer might have provided to you as compensation.  Or you can choose to not have these things at all.  If you walk to work, you wouldn’t place a high value on free parking.  The abolition of parking in exchange for higher wages would be a pure gain.  Rather than a dreaded scenario worthy of scorn, this is a development to be celebrated.  Employees are receiving much more flexibility regarding how their compensation can be used to benefit their own lives.

This is not to say that an increase in the minimum wage is a great thing – it is still an unnecessary government intervention into the economy that creates a whole host of problems for low-skilled workers.  There might also be very legitimate reasons why employees may have preferred the previous state of affairs (perks and a low wage) to the current one (high wage, no perks).  Perhaps the employer was able to negotiate a group rate for parking that individual employees would not be able to obtain for themselves.  Or perhaps the employees were accustomed to eating large amounts of free food that was highly marked up, so the benefit they received was higher than the pre-markup cost of the food to the employer.

Optimally, the government would not be involved in any of these decisions, and employers and employees would be free to negotiate whatever terms of employment they deemed appropriate.  This might include a high wage with no benefits, or a low wage with many benefits.  Each individual will seek an arrangement that best suits their needs and desires.  Employers may be indifferent towards differing forms of compensation, but individuals are not.  While monetary compensation is preferred if all things are equal, in real life, this is rarely the case.  Understanding this distinction is critical to comprehending a large portion of debate surrounding minimum wage policies.

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Article Roundup – 6/6/14

zodWinter Olympics Sports Socialism Goes Out of Fashion in the Free World – Hit & Run :

Following the giant embarrassment in Sochi, they’re having a tough time convincing cities to spend tens of millions of dollars to host the Winter Olympics.  After decades of failure, the people (not the bureaucrats) are starting to wise-up, and recognize that this whole thing is a giant waste of money.  After all, even Putin couldn’t make it work!


How Valuable Is a Federal Grant? :: The Mises Economics Blog: The Circle Bastiat.

A short post from the LVMI blog that I think is hilarious.  Apparently some federal grants come with so many regulations, requirements, and strings attached that some groups are now refusing to take them.  The Feds “free money” literally has a negative value.  Another thing that conservatives and libertarians figured out a long time ago and that the mainstream is finally catching up to.


Statism: Doing Most of an Invader’s Work for Him – Robert Murphy :

Bob Murphy invokes Superman in order to explain another often overlooked downfall of governments.  They make it easier for hostile regimes to “take over.”  If there was no government, there wouldn’t be anything to “take over.”  No central authority would be empowered to “surrender” to an invading force on behalf of hundreds of millions of people.  The invaders would have to subjugate each individual, a virtually impossible task.


Occidental Expels Student for Rape Under Standard So Low That the Accuser Could Have Been Found Guilty, Too – Hit & Run :

Apparently “rape culture” means that you can now be expelled for sex so obviously consensual that the police didn’t even bother to press charges.  But no need to worry about things like “evidence” and “proof.”  The school decided he was guilty because he “fit the profile” of a rapist.  What’s the profile of a rapist?  Well obviously it includes things like coming from a good family, getting good grades, and being on a sports team.

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Screw The Rules – I’m A Marine!

coriolanus_03Roseburg principal responds to questions about Marine uniform |  KVAL CBS 13.

Stories like this annoy the hell out of me.  This type of thing happens every few years, where someone with a military affiliation (the article doesn’t mention whether this person is active, reserve, or separated) makes a big stink, demanding special and preferential treatment because of the fact that they’re connected to the military.  They generate public outrage at school officials, who are accused of being stupid and unpatriotic because they dare to insist that the rules exist for a reason and should apply to everyone equally.  They whine and complain and shame and bully until they get their way, demanding to be treated as an individual rather than as part of a group.

Is this the image that Marines really want to cultivate with the general public?  That the rules don’t apply to them?  That the public should bow down and worship the very ground they walk on?  Doesn’t this directly contrast the image of recruits getting off a bus and arriving in basic training, where they will all receive identical clothes and haircuts?  Where they will be stripped of all but their last name and social security number, and explicitly treated as expendable cogs in a vast and uncaring machine?  Isn’t it surprising that people who receive that sort of training would then go on to demand that a school waive a rule that has been standing for over 20 years in order to accommodate their singular desire?

I don’t think it’s surprising at all.  I think the secret to understanding this issue is to understand that the military produces a culture of entitlement.  This might sound shocking or controversial, but it is also true.  Our culture as a whole reinforces this theme.  From the first time you see a recruiting commercial as a child, we are taught that people in the military are heroes, whose occupation alone gives them greater value than mere civilians.  They don’t work, they “serve.”  They are the best, the brightest, the bravest, and all that crap.  This sort of propaganda isn’t just a tool to increase enlistments, it also seeps in to the mindset of active duty personnel.  You learn to ask for a discount everywhere you go (and businesses who don’t engage in price discrimination based on military status are often ridiculed for the crime of treating everyone the same).  You learn to expect preferential hiring status because of your “leadership experience.”  You learn that you are entitled to “special” protections that others are not.  Within your unit, you may be content with being a mere cog in a machine for the “greater good,” but as soon as you step foot off the base, you are taught to expect reverence from the common plebes.  (In fairness, I’ll note that this isn’t exactly a new phenomenon…)

This post might not make me very popular with my former friends and co-workers, but the point needs to be made.  This kind of outrageously selfish behavior on the part of veterans has to be stopped.  It makes us all look like spoiled, selfish, children who demand that the entire world stop and cow-tow to our own desires.  The school has a rule.  The rule is long-standing.  If you want to march in the ceremony, you wear a gown.  Period.  If you don’t like it, don’t march in the ceremony.  There is nothing controversial here.  There is only a fully grown adult acting like a child and attempting to use popular support for the military as a weapon against school officials in order to demand special treatment.

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Common Core Complaints Co-Opted

I’m starting to miss the good old days, when the only media coverage of “Common Core” consisted of Glenn Beck ranting about how it was a giant conspiracy led by Bill Gates to brainwash your children into buying Microsoft products.  But alas, those days are gone and we aren’t getting them back.  Like many of Beck’s rants, common core hysteria has now gone mainstream, and even leftists are starting to speak out against it.

The traditional media is slowly becoming more and more vocal on this issue, and they’re publishing more and more complaints from teachers and parents about why this system is awful.  Good news right?  Liberals and conservatives working together!  What could go wrong?

The same thing that always goes wrong.  Conservatives are so desperate for the attention and approval of liberals that they’re about to get completely screwed over, as they don’t seem to realize that the left’s objections to common core are completely and totally different from what their objections are.  The Glenn Beck opposition to common core seems to be based on two major factors:  that it essentially creates a mandated “national curriculum” which teachers will be required to use, and that it includes a lot of “data mining” conducted by large corporations.  The issues are teacher independence, and student privacy.

But what are the objections we’re seeing in the mainstream media?  Well, let’s have a look, shall we?  This piece was, at one point, the most popular article on The Washington Post yesterday.  In it, a public school teacher (and local teacher’s union chapter president) complains about how awful common core is.  But what does he oppose about it?  Is it the nationalized education system that would reduce all teachers to mindless robots?  Is it the tracking of children and the potential conflict of interest with private companies?

Nope, it’s not any of those things.  This guy’s major complaint is that the tests are too hard.  It’s the same point that has been made by Louis CK, and a countless number of Facebook memes.  And as of now, it seems to be the only argument against common core that the mainstream media is actually willing to support.  Nearly all of the common core coverage you will get from the New York Times, the Washington Post, or CNN is exactly like this:  “Common core sucks because its test questions are too difficult.”

It would seem that this teacher, and many of the other “mainstream” opponents of common core have no objection with the concept in theory, only the specific implementation of it.  They have no problem with a single curriculum being forced on teachers nationwide.  They have no problem with relying on private companies to track your child throughout their educational career.  They just want easier tests.  After all, difficult tests make students feel bad.  They get sad and frustrated.  It’s bad for their self-esteem!

(Sidebar:  How much do you want to bet the same people whining about these tests being too difficult are the same people who constantly insist that we need to dump more money into the failing public school system because we’re “falling behind” other nations?  Do you think that if a Chinese student came home with a failing grade on a test and told their parents it was “too hard” the parents would react by saying, “This is an outrage!  I’m going to write a letter to the newspaper demanding these tests be changed!  You shouldn’t have to face anything this challenging!”  Or would they say, “Go to your room and study until you figure it out!”  It seems ridiculous that the same people who regularly demand “higher standards” will immediately freak out at the first glimpse of a test that their normally brilliant (according to them) kids struggle with.  For more on “falling behind” and standardized testing, click here.)

So how does this eventually play out?  Allow me to make a prediction.  The collective outrage over “common core” from the left AND right is gaining traction.  The system known as common core is too unpopular, and supporting it will soon become political suicide.  So our great and wise overlords of parties R and D will get together and develop a “common sense, bipartisan solution for reform” that the media will claim “abolishes common core.”  In reality, it will work the way “bipartisan compromise” almost always works in Washington.  The left will get exactly what it wants, and the right will get nothing.  The “common core” name will vanish, and the tests will be made significantly easier in order to placate the school teachers (and their politically influential unions) and the helicopter parents (who have nothing better to do than whine to newspapers all day).

But the nationalized curriculum will remain.  Teacher independence will be very much dead.  RINOs will brag in their campaign commercials about how they “led the effort to abolish common core” and get re-elected based on that technically accurate, but entirely misleading claim.  And most of the public will buy it.  They’ll support the new system with the new name, because they’ll be so excited at having “won” the battle against common core, they won’t bother looking into the details of its replacement.  Anyone who fails to support this “bipartisan compromise” will be branded as a ridiculous extremist standing in the way of fixing our schools (or smeared as being in favor of common core).

I could be wrong here, but I really don’t see this playing out any other way.  The left will get what they really wanted all along (nationalized educational curriculum and detailed tracking mechanisms), the right will be told to shut up because after all, we gave them what they wanted by getting rid of common core!  Incumbents on both sides will be lauded for heroically standing up and fighting for teachers and children to repeal a bad system (without mentioning that it’s being replaced by something that will be the exact same, but with easier tests.)  This is what co-opting looks like, and it’s happening right now, under our eyes, in real-time.

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Donald Sterling Proves Me Right

An artist’s rendering of Donald Sterling

Originally, my plan was to completely ignore the Donald Sterling fiasco.  I considered this to be another non-story, hyped up by a bunch of sports “journalists” envious of their friends who work in “real” news.  To me, “old man continues to hold beliefs that were widespread during his youth” is something of a “dog bites man” story.  It’s not surprising, and it’s not particularly relevant to anything.

But as the days wore on and the story refused to die, it started popping up on a lot of the “libertarian” sites I regularly visit.  As it tends to happenwithn these things, each individual author wanted to offer the “libertarian view” on this mess.  There doesn’t seem to be much of a consensus.  Some decry the politically correct thought police for crucifying an old man whose statements weren’t that racist, some defend the NBA’s right to disassociate itself from Sterling and maintain that the non-aggression principle was not violated, therefore nobody has any right to complain.  Meanwhile, the leftist agitators who ginned up this controversy in the first place are happy to sit back and automatically dismiss any criticism of the NBA’s actions with a, “Ha ha you stupid libertarians, this is your free market in action!  Now shut up and like it!”

After reading a lot of back and forth that left me ultimately unsatisfied, I found some pretty great discussion of this issue over at Economic Policy Journal, where Robert Wenzel and various commenters have shed some unique light on the situation and offered a robust debate.  My understanding of Wenzel’s position is that libertarians can be simultaneously outraged and disturbed by the public lynching of an individual for borderline-racist comments made in a private conversation while simultaneously upholding the NAP and refusing to suggest that any actions involved with this issue either are or aren’t “libertarian.”  I agree with Wenzel on this point:  Libertarianism = following the non-aggression principle, but that does not preclude libertarians from suggesting that certain actions, even ones that don’t violate the NAP, are wrong and should be condemned.

While reading one of Wenzel’s posts on this topic, commenter Josiah made a point that really resonated with me.  He says:

“The free market viewpoint is interesting. If Sterling is this outrageous bigot, why does he hire a black coach, why doesn’t he have all white players? Because he wants to win and make money. Free markets lead to cooperation.”

I made a brief reply to this, and the purpose of this post is to further explore this issue in more detail.  I think this really is the heart of the story, and this is the “libertarian” angle to this issue that is largely going ignored.  It’s a great opportunity for libertarians to make a critical point that, for the most part, we seem to be wasting.

Freedom of association is a pretty common topic on this blog (over the long-term, this is my most popular post).  Libertarians regularly make the case that not only are government policies prohibiting discrimination against private parties morally wrong, but that they are completely unnecessary.  Racism would not run rampant on the free market, because racism is bad for business.  Stores who refuse to serve blacks have immediately alienated a large portion of potential customers.  Employers who refuse to hire blacks will find themselves with either less efficient employees, or a more costly labor force.  In either case, these companies should be thoroughly out-competed by their more tolerant competitors, who will do what’s most profitable without letting prejudice stand in the way.  If that was true in the Jim Crow south (remember:  a private company sued to get Jim Crow overturned), then it is far more true in 2014 America.  Putting the question of whether racist actions (not thoughts, this is a key distinction here) are immoral or not, we can safely conclude that they are terrible corporate policy, and will lead to public backlash and likely boycotts, in addition to simply being economically inefficient.

The left usually chimes in here to reject this line of thinking entirely.  They accuse us of being utopians who don’t understand how entrenched racial hatred really is.  They insist that there are plenty of white business owners who are so racist that they wouldn’t mind making a little less profit in order to discriminate against blacks.  That without the government vigorously forcing businesses to integrate, Jim Crow would come roaring back and we’d have “colored only” drinking fountains in a manner of weeks.

How does this relate to Donald Sterling?  Well, Sterling would appear to be living proof that libertarian predictions are correct.  Sterling, who, according to media analysis, is a repugnant and unrepentant racist, is also an employer.  According to my research (which consisted of looking at the Clippers roster on ESPN and examining the photos of the players), their current roster consists of 10 out of 14 non-white players, who collectively made over $71 million this season.  The NBA has no affirmative action policy.  The evil racist Donald Sterling is free to draft and sign players based on his racism.  And yet he does not.  Why?  Two possibilities.  Either he’s not really that much of a racist after all, or, more significantly, he IS at least partially racist, but as a businessman, he’s far more concerned with profitability than with indulging his racism.  He understands that the vast majority of great basketball players are black.  Therefore, he employs them on his team, because he wants his team to be successful.  He may secretly despise every last one of these black players.  It may bother him a great deal that they are on his team.  But he continues to court them nonetheless.  This is the exact scenario the left regularly proclaims would not ever happen.

In addition to the players, Sterling employs Doc Rivers, a black man who is currently the coach of the Clippers.  In contrast to black players, black coaches are hardly a baseline requirement for success in the NBA.  Of the last five NBA championship teams, two were coached by an Asian-American, and three were coached by whites.  While truly great white players are now a rarity, outstanding white coaches are abundant in the NBA, and readily available.  Why didn’t Sterling hire one?  Why did he agree to pay $7 million to Doc Rivers?  It might have something to do with the fact that Rivers himself is the last black coach to have won an NBA championship, with the Boston Celtics in 2008.  Rivers is a good coach.  So Sterling hired him, because that’s what businessmen do.  I haven’t researched it, but I think it’s also probably safe to assume that Sterling employs minorities in his various non-basketball business ventures as well.  We know for certain he employed one as a girlfriend/prostitute/archivist.

Once again, there are only two possible explanations:  Either Sterling isn’t really much of a racist at all, or he is willing to put his racist thoughts aside to engage in non-racist actions because it is profitable to do so.  This is precisely the outcome that libertarians regularly predict would occur in a society where the government respects the freedom of association.  A few small-time businesses might choose to discriminate, but they would never meet with any real success.  Meanwhile, actual racists would, in most cases, choose to hire and serve minorities, because they care more about profit than they do about racism.  Donald Sterling is living proof that “anti-discrimination” laws are a completely unnecessary violation of our natural right to free association, and that the free market has built-in mechanisms to readily combat the evils of racial discrimination.

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