The View from Abroad

Economic Illiterates Pounce on Wal-Mart Again

The Wal-Mart haters are at it again.  The token lefty at Forbes.com, Rick Ungar, has a piece on that site accusing the nation’s largest private employer of amassing huge profits at the expense of American taxpayers.  Citing a report issued by the Wisconsin Medicaid program, Ungar claims that for every 300 employee Wal-Mart Supercenter store in Wisconsin alone the company’s “sub-poverty” level wages costs American taxpayers about $904,000 per year.  The total is the result of government subsidized health care and housing, and food stamp payments needed to keep families afloat financially.

It’s the same tired old story with a new twist – not only does Wal-Mart harm its workers, but it is a financial burden to taxpayers as well.  What’s even more alarming is that California and other states are considering fining employers like Wal-Mart up to $6000 for every employee of theirs that ends up on state subsidized health care plans.

In the first place and at the foundation of the issue is the fact that no one is forced to work for Wal-Mart and accept the company’s so-called “sub-poverty” wage.  The last time I checked the 13^th Amendment to the Constitution banned slavery and involuntary servitude.  If workers don’t like the wages they receive or can’t make ends meet working at Wal-Mart, they can look for work with another employer.

But many do not and thus we have the crux of the problem.  Retail jobs require few if any advanced skills and they certainly do not require a college degree.  Thus, they don’t pay very well.  Traditionally, they have been ideal starting positions for young folks to give them work experience and gas money.  I remember applying for my first job with a family pharmacy when I was 16.  The toughest question I encountered during the interview was, what is the final price of an $.89 box of cough drops if the sale price for the day is 10 percent off?  And today, retail clerks have it even easier as all they have to do is pass the item over a scanner to get the final price.  The bottom line is that retail positions are not made for folks who are supporting families or have adult commitments.  Customarily, folks with these responsibilities have turned to manufacturing and professional jobs.

However, the great irony is that the myriad federal and state regulations which were meant to benefit workers have actually hurt them more by chasing jobs overseas to lower cost venues.  Since 1979, when manufacturing jobs in America peaked at 19.5 million, we have lost close to half of them to overseas competition.  Currently, about 11.5 million Americans work in manufacturing jobs which is the lowest amount since 1941. Now, with far fewer manufacturing jobs for workers to turn to, the same folks who gave us this condition are demanding that retailers raise their wages so workers can meet their financial responsibilities.  But, it doesn’t work that way.  In our economic system, Wal-Mart pays wages based on what the market will bear.  Instituting a higher minimum wage or mandating that retail companies provide health care coverage for their employees will cause more unemployment and hurt the very people those directives were meant to help.  We are already seeing Wal-Mart and other companies gearing up for Obamacare by cutting employee hours to circumvent the law.

In the final analysis, hasn’t government intervention in our economy done enough harm already?  Besides obliterating our industrial base through enormously costly regulations, the Federal Reserve has destroyed the purchasing power of the dollar by monetizing huge sums of federal debt and expanding the money supply ad infinitum .  The very commodities that the working class spends so much of their disposable income on – health care, housing, and food are the very things that have increased in price the most.  More federal and state mandates will only make the matter worse.  We need a return to free markets and sound money.  Folks literate in economic theory understand this.

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

The View from Abroad

Teacher was Right to Warn Students About Drug Survey

Back in 1999 when my wife and I taught at a public high school in North Carolina, she came across an opportunity to put into action material she had just taught.  Fresh from teaching a unit on the Bill of Rights, as she wondered through the administrative office area of our school one day, she noticed a meeting between the vice-principal, the school’s resource police officer, and one of her students.  Without hesitation, she took full advantage of what teachers refer to as a teachable moment by ducking her head into the office and reminding her student that he had a constitutional right to remain silent under the 5^th Amendment.  For her efforts, my wife received a sneer from the police officer and nothing more was made of the matter.

Let’s fast forward to 2013 and the tale of another public school teacher taking advantage of the same exact teachable moment.  A short while after teaching a unit on the Bill of Rights, John Dryden, a social studies teacher at Batavia High School in Illinois, picked up a stack of surveys from the school office for his students to complete.  Noticing that his students’ names were on the surveys and the surveys had questions asking about drug and alcohol usage, he reminded his students that they had the right to not incriminate themselves guaranteed by the 5^th Amendment.

For his admonition, Dryden was docked a day’s pay, charged with “unprofessional conduct”, and had a letter of remedy outlining probationary actions he must complete placed in his file.

What a difference 14 years can make?

The above illustrates just how perverted the public school system in America has become.  Whether you are a teacher or a student, if you deviate from the Establishment order, you will pay a heavy price.  This includes arresting 12 year olds for doodling on desks and suspending 7 year olds for biting PopTarts into the shape of a gun.

In handing down the punishment on Dryden, the school board president Cathy Dremel indicated that he “mischaracterized” the intentions of school administrators with regards to the survey.  According to Dremel, the intention was not to invade the privacy of students but to focus attention on specific student needs.

Unfortunately, that focus was on actions (drug and alcohol usage) that are illegal and whether school officials and resource police officers like to admit it or not, they are a part of the government apparatus charged with making sure the law is adhered to in the public schools.  Thus, there is no guarantee that a student answering in the affirmative to illegal drug usage would not be charged with a crime.

Now, it could be argued that school officials at Batavia High School would have no way to address student needs without the cooperation of teachers and students on the survey.  Many kids could be lost to drug addiction or worst.

But, the current circumstances not the Bill of Rights impede a school’s ability to do that. If school officials want to truly help students with these types of problems they should push for ending the War on Drugs.  Then we can treat drug abuse not as a criminal matter but like the medical issue that it is.  Then, students could answer questions frankly and potentially receive the help they need.
At the end of the day, all Americans enjoy the right to not incriminate themselves guaranteed by the 5th Amendment.  Public school officials should not be allowed to ignore this right or punish those who teach it.

The View from Abroad

Benghazi Investigation Entirely Misses the Big Picture

By now, unless you have been living under a rock you are aware of the scandals plaguing the Obama Administration – the Justice Department illegally acquiring the phone records of the Associated Press, the Internal Revenue Service illegally targeting the President’s opponents for tighter scrutiny, and Benghazi.  Now, in all fairness to Obama, to date, no improprieties have been proven in any of the above cases.  But, while the scandals involving AP phone records and IRS treatment of the President’s opponents should be investigated, the Benghazi investigation entirely misses the big picture on that issue.

With regards to Benghazi, currently congressional Republicans are focusing their investigation on whether the Obama Administration botched security at our consulate in that city thereby causing the assassination of Ambassador Christopher Stevens and 3 other Americans and whether it lied about it in an effort to cover it up.

I say, who cares?  The bigger issue and one that no one seems to be asking is, should we have been meddling in the internal affairs of Libya in the first place?

When Obama sidestepped Congress and unilaterally chose to intervene in the Libyan Civil War, the mission was supposed to be a United Nations sanctioned “no-fly zone” over Libya so Gadhafi could not use his air force to slaughter Libyans on the ground.  However, in very short order, the mission morphed into an all-out air invasion complete with coordinated strategy between NATO forces and anti-Gadhafi fighters and bombings of Gadhafi’s fighters on the ground.  The point man chosen by Obama to serve as a conduit between anti-Gadhafi fighters and the U.S. military was Ambassador Stevens.

What was lacking is the same thing that has failed to happen with all U.S. military engagements since World War II.  Congress did not debate whether American military forces should be employed and it did not vote on whether to grant a declaration of war.  Why is this important?  Because the Founders of the United States knew that the decision making power to send Americans into harm’s way and the consequences of that action for the country was too important to give solely to one person – the president.

Libya was not a national security issue for the United States.  We were allegedly there on a humanitarian mission to help Libyans.  The question is, is that a justified use of our military?  Should its role be to police the world?  Congressional debate could have addressed these questions, prevented our intervention in Libya, and possibly changed U.S. foreign policy in the future for the better.

Additionally, our intervention in Libya has made that country “a center of jihadist terror”.  Consequently, weapons, terrorism, and chaos are emanating from there to the rest of North Africa and the Sahel regions.  Gadhafi may have been a bad guy to his people, but our intervention in his country is having adverse effects on all the people of the region.  With 535 members in Congress, someone would have questioned, during debate in that body, what would happen as a consequence of our intervention?  Perhaps the consideration of that inquiry would have prevented our ill-fated intervention and Ambassador Stevens would still be alive today.

In the final analysis, what needs to be investigated is whether we should have been in Libya in the first place?  This investigation then should lead to a reconsideration of our current foreign policy.  Given that our current foreign policy has our military forces engaged in at least 74 other conflicts around the globe this seems more important than finding out whether the Obama Administration botched security at our consulate in Benghazi causing the death of an American ambassador and 3 other Americans and whether it lied about the matter in an effort to cover it up.  It’s time Congress looks at the big picture.

Do you trust government to do the right thing?

Reblogged from The Jeffersonian:

Brooks and Shields have an interesting discussion about trust in government on PBS NewsHour tonight. I won't try to summarize it here. It's not long and it holds your attention, so go ahead and listen to it.

Here's the interesting thing: for all their perceptive comments about why our national government has lost people's trust, these two analysts still believe that we would be better off if people trusted government more.

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The View from Abroad

Focus on Minimum Wage is Misplaced

In spite of the abysmal unemployment problem in the United States, President Obama was in Texas last week touting his plan to raise the minimum wage to $9 an hour.  Recently, New York, Chicago, St. Louis, and Detroit have seen fast food workers walk off the job and strike demanding higher wages.  Specifically, in Detroit, the Michigan Workers Organizing Committee, a coalition of labor, religious and community organizers is calling for a national minimum wage of $15 an hour.

The common denominator for everyone who wants to raise the minimum wage is the claim that the current government mandated floor price for hourly workers is too low for them to make a decent living.  Then there are the recipients of low wages, who claim their value, after years of faithful service to an employer, is much higher than the wages they receive.  For them, raising the minimum wage is the only way they can potentially get what should be coming to them – a higher rate of pay.  At the end of the day, proponents of raising the minimum wage assert that it is simply a matter of fairness to give those at the bottom rungs of the socio-economic ladder a little more.

Well, there are a lot of problems with the above reasoning.  In the first place, only two percent of wage earners in America work for minimum wage.  While workers under 25 years of age account for just 20 percent of hourly paid workers, they make up close to 50 percent of those earning the federal minimum wage or less.  In other words, very few workers are affected by the minimum wage and those that are tend to be young, first time wage earners.  You know, the teenager working at McDonald’s after school.  Naturally, older folks with familial responsibilities should find it hard to live making the current minimum wage.  The system is not really set up for them.

Then there is the economic problem caused by the minimum wage, namely unemployment.  Now, I know that there have been studies on both sides of the issue.  But, it is an economic fallacy to believe that the minimum wage does not cause unemployment.  Basic supply and demand tells us that as the price for a good or service increases, demand decreases.  Conversely, as price falls, demand increases.  By its very definition, the minimum wage is a price fix for labor above the market rate.  Thus, as the minimum wage level is greater than the equilibrium wage or wage level where demand equals supply, fewer workers will be demanded and a consequent surplus of workers will result.  Put another way, unemployment caused by the minimum wage is the difference between the amount of workers demanded and the amount supplied at the minimum wage level.  To decrease unemployment (surplus of workers) wages have to drop, just like the price of a good, to reach the clearing equilibrium price.  Naturally, this is impossible under federal and state laws, so unemployment persists until the minimum wage is overtaken by the market wage rate.

Instead of raising the minimum wage to help the working poor make ends meet, the focus should be on the cause of price inflation – the Federal Reserve Bank (the Fed).  Since 1971, when President Nixon ended the convertibility of the dollar to gold that foreign creditors enjoyed, the Fed has monetized over $16 trillion in U.S. government debt and created trillions more dollars out of thin air helping the American banking cartel increase its profits.  The result has been an 82 percent loss in the value of the dollar and consequent general price inflation.  For instance, in 1971, a basket of groceries that cost $30 would cost $173 today.  It’s no wonder minimum wage workers are hard pressed to make ends meet.

In the final analysis, only a return to sound money will ultimately help those currently working for minimum wage.  It wasn’t perfect, but a return to the pre-1971 gold exchange standard would eliminate the need to constantly raise the minimum wage, cure our chronic youth unemployment problem, and be a “matter of fairness” for all wage earners.

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

Syrian Connections

Reblogged from The Jeffersonian:

Alright, folks, since I don't read other people writing on this subject, I have to raise it myself. Does anyone else see a connection between the war in Syria and the war in Iraq? The Iraqi war started ten years ago, and continues now. The Syrian war started two years ago. Do we not want to think about this question, because of our complicity?

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Tea Party Topography

Reblogged from The Jeffersonian:

Revolution on the Ground argues that the states should take the lead in resisting the federal government. Which states are in the best position to do that? Right now, states with Republican governors are well positioned to resist federal overreach, in health care and elsewhere. Of the states with Republican governors, which ones can act most effectively to resist the feds?

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