Thursday, June 26, 2014

Moms Getting Paid Less than Dads

When I was exploring the web, I had come across a very interesting article about women being paid less due to their “ability to work”. I found this extremely intriguing mostly because I have never thought about women being discriminated against by the wage they are receiving verses men. There had been research conducted stating that for every dollar that fathers are being paid mothers only make 69 cents. This seems almost unlawful.  Hazlitt and Block both explored unfair pay, discrimination, and minimum wage but they never touched point on mother to father.
                In this generation is it most common for both the mother and father to work in order to fully support your family, although it is becoming harder and harder for mothers to find jobs. Now in situations where you have a single mother, how is this individual supposed to raise a family on one salary. They simply cannot, this requires them to work several jobs at once. 

                We have always seen discrimination in women verses men, but not as commonly mothers verses fathers. This is an epidemic that needs to be stopped, we have worked so hard to achieve means end and avoid the majority of discrimination, why would we go back to those times, fair wage is necessary for all individuals of all lifestyles. 

Wednesday, June 25, 2014

Child Labor Helps Many

Child Labor Helps Many
     While reading chapter 32 of Walter Blocks novel Defeating the undefeatable it had discussed child labor. There are many child labor laws in place in order to keep children safe from extensive and harmful treatment from employer. Block made the point that children are working for what seems like an extremely small wage. Sweatshops are generally located in very poor communities in order to maximize profit for the employer by paying less to their worker. They are able to do this because they minimum wage in these areas are much lower than those in more prosperous countries. Block makes it clear that in these countries this small wage is grand and cherished.
            With some research I had come across a very interesting article about child labor. It discussed how a couple was on vacation in Thailand and had met a young lady the age of 15. They had begun chatting and they had discovered that she was working in a sweatshop for only $2 dollars a day. Although, this may have shocked the couple, they added that it work was dangerous. They became very worried and wanted to help the girl. Although what they did not realize at the time, but learned as they became better acquaintances that this job may have saved her life. The young girl claims that if she was not employed she would probably being living on the street, addicted to drugs, and involved in prostitution. She is very grateful for the opportunity that was given to her and even said the money was generous. She has dreams now and is able to support not only herself but her family as well.

This unseen idea is very intriguing. The outside world would view sweatshops and child labor as a repulsive and unorthodox facility. These people do not recognize the opportunities that these sweatshops are giving many individuals. Although the article I found agrees somewhat with what Block had discussed in his novel, it made the point to acknowledge that the working industry in these poor countries are almost inexistent and without these factories, these country could very well be worst off. 

Disbanding Troops

                Every now and then, we hear about wars in some overseas far away country we don’t even know how to find it on the map. Well, our boys went there and in big numbers. Few years later, the biggest concern will be whether we can find jobs for them or not. But most normal people, including myself, don’t really think in the economic consequences that come with those soldiers.  Things like taxes, soldiers spending and savings, and even other war related effects like society excepting women labor during the World War II. It could be a positive thing that soldiers can spend more money in which they might help to an economic growth, says the Keynesian economists. Or, it could be a new challenge to the entire country when they demand government support rather than becoming self-supported civilians (like the rest of us). We should also consider that taxpayers, soldiers or civilians, could have what is called the “purchasing power” which gives them the ability to be their own boss in their privet business. However, that is not the case for vast majority of soldiers. When the war is over, soldiers are no longer supported by the civilians throw taxes. We will witness s great change in rolls, instead of watching the nation spending money on soldiers we will see civilians exchange their taxes with goods and services which will increase the total production and help the economy to recover. 

Is child labor always a bad thing?

It is official: child labor is a good thing. That was the catchy headlines for an article at the telegraph website by David Harrison which I find quite exciting. Child labor always was associated with the images of child employer abusing children and forcing them to work jobs such as mining, deep-sea fishing, and even prostitution and drug-trafficking considering that more than 250 million children aged five to 14 are at work worldwide. But is that the only and the most accurate way to observe child labor? The telegraph article talked about the other side of the story where it is possible that any actions to ban child labor could cause more harm than good, and it could damage the only substantial source of income to many families.
Child labor considered to me one of the most hot and controversial issues in today’s world due to nature of it. The complexity of finding a standard definition makes it difficult to normal people, and even to academic professors, to study and find a moderate solution to it without causing any harm to anyone. However, According to Rothbard “a child becomes an adult not when he reaches some arbitrary age limit, but rather when he does something to establish his ownership and control over his own person.” This definition might be very suitable for rich countries where children could have options. In some countries, there might be some conditions where an average person is making what is considered to be the minimum substantial living to a human being and literally live for the day. Therefore, banning child labor might result in harmful results to those whom living below the official poverty line. The article was describing the study made by two leading professors of economics in which they mentioned that “a worldwide ban, championed by the International Labor Organization and supported by 151 countries, could deprive families of money that might otherwise be used to pay for children's food and education.”
In conclusion, choosing only the worse examples of child labor is a way a campaigner use to attract public attention and promote their causes. There might be other reasons why child labor is allegedly wrong. However, I quote from the previously mentioned study “where there is a choice, the worst forms of child labor will usually be chosen because they pay better than other forms, considered 'non-harmful”. In order to solve our social and political problems, we should all look at issues in a very fair and critical way where all the sides of the stories are presented and illustrated equally.


Tuesday, June 24, 2014

"Living Wage"

Living Wage

Over the last year or so there has been much conversation on the subject of a "living wage". A very large protest for this new minimum wage is taking place in the fast food industry. In the immediate, it seems like a good idea. It would provide everyone with an income that allows them to live above the poverty line no matter what industry they are a part of. When looking closer it can be seen that by providing a higher minimum wage, no changes will actually take place in the long run. By raising the minimum wage, jobs that had a higher wage will have to raise their wages as well in order to keep their employees from leaving. If wages all across the board raise then the cost of living will also go up. (This change in cost of living is a result of the fact that cost of labor is one of the costs of production, and if costs of production go up the selling price will go up as well.) If cost of living and wages go up at the same time, then no real changes will be seen in the financial ability to live. In this article it talks about different politicians who are making efforts to increase the minimum to get it to the point of this so called "living wage". It is interesting to see how much focus is put into this, when no matter what they do to the dollar amount a forced wage will not have much or any affect. It appears that regardless of the truth about minimum wages, politicians will always be pursuing this topic in some way because it has a strong influence on the masses and influencing the masses is how elections are won.


Rage Against the Machine

We are living in a world where machines are becoming so advanced that they make us look stupid and sometimes these machines can outwork us, providing more efficient results. I work as a cashier at The Home Depot and in recent years a “self check-out” service has been made available to customers, and when I say “made available” I mean “has been forced upon them”. A common complaint among customers is that these machines are taking someone’s job away. However, little do they know, cashiering is a job in which little skill is required to succeed at it and virtually anyone can do it. Yes, this means even customers can do it. The customers complaining about these self check-out machines have neglected the thought that if they did their own cashiering there would be more opportunities for associates to provide customer service throughout the store, ensure items are stocked and inventory is ordered, and deter theft. It may seem that the consumer does not significantly benefit from cashiers being used in other parts of the store, but let me introduce you “shrink”. “Shrink” is a common word used in the retail world that basically means a store has more or less of an item than is showed in the inventory. “Shrink” normally can be caused by inaccuracy in inventory counts, theft, damages, and markdowns. With more employees working towards no or very low shrink numbers, the consumer will in turn see lower prices on their favorite items. Now if only customers would stop swearing at the machines then maybe this goal would be attainable.

$15/hour? Aint nobody got skills for that!

The recent increase of the minimum wage in Seattle to $15 has been a topic that has garnered celebration from workers in the city and jealousy from workers elsewhere in the United States. With the rise in minimum wage comes a rise in the price of living and this concept is clearly displayed by the ranging costs of living between states within the nation. For example, as a minimum wage worker in California I earned $8.00/hour and paid much more for gas and housing than I did while living in Missouri where my wages were $3.67 as a minimum wage tipped employee. By no means were both of these “living wages” as I had assistance to offset the costs from my family and would not have been able to afford a comfortable lifestyle otherwise. With the minimum wage rising to $15/hour in Seattle, this will obviously create a price increase in other goods and services sold within the city such as gas, food, housing, etc. This will not eliminate the gap between the rich and poor as Seattle Councilor Tom Rasmussen has stated, it will only further the cycle of poverty.

In addition to raising prices of living, the tremendous rise in minimum wage in Seattle will cause employers to be more selective with whom they choose to hire. As a member of the work force for five years, I have had my fair share of minimum wage jobs. All of the goods or services I have produced for my employers and consumers in these jobs are not even close to being worthy of $15/hour. I cannot help but think about what would occur if this $15 /hour minimum was pushed on The Home Depot, my current employer. In order to make this wage worthy of the goods and services they are gaining from their employees, The Home Depot would look for better qualified salespeople (rather than a college student desperate for a job), an employee able to Home Depot Credit Cards on customers (which I do not for many reasons), and an employee who is looking to invest a significant amount of time with the company (which I am not). Basically, if this new minimum wage as applied to Colorado Employers I would be out of a job. In all honesty, the work I do is definitely not worth $15.

Henry Hazlitt's The Lesson Blog 2

     Henry Hazlitt has many beliefs as to why the economy does what it does and fluctuates from time to time. We explored one of his opinions in our previous blog about looking at the big picture and not just cutouts in time. Well this next topic could not seem more true to that statement than it already does. Hazlitt believes that not only does technology help our economy grow it provides more jobs than it destroys. This is a very controversial topic that has been debated for generations and one person who would argue this statement is Erik Brynjolfsson. Erik is an MIT professor at the Sloan School of Management. He not only believes that technology is hurting our economy but that it is destroying jobs faster than it can replace. These are two differing opinions and we will go in to depth about what each man's thoughts are.
     Hazlitt's main argument is that technology is helping us grow as an economy and brings more jobs as a result than it destroys. This may very well be the case but he also states that people who argue these views such as the "technophobes" do not understand how labor works. Every where you work people are always trying to be more efficient and productive in less time, the same that a machine does when put to use. He argues that if we want to blame technology for the economy downfall then why are we as a civilization always looking for the shortcut or the faster way to complete a task if it will only lead to our economies downfall. Brynjolfsson's counter argument to this is the chart that shows productivity compared to labor. Throughout World War Two the two lines remained consistent and almost connected but once 2000 hit with the technology boom the two lines started to diverge. Now the gap is bigger than every and Brynjolfsson believes that technology is to blame.
     There are many different points of view to these arguments and everyone is entitled to their opinion. After all no one knows the true code to economics as it is an ever changing landscape. One thing that can be certain is both of these men provide a good argument but Hazlitt's argument has more rationale behind it. Now that I have explained two points of view feel free to make your own decision or maybe come up with your own argument.

Toll Operators

Toll Booth Operators

In the last couple of days I was driving to Denver International Airport to pick up some family. To avoid traffic backup I decided to take the E-470. When one of my passengers saw that there are no longer toll operators they made the comment that it was a shame that so many jobs are no longer being provided. Luckily I was able to explain to them that they were only understanding the seen consequences of the jobs being lost.
Without going doing extensive research some of the seen possible unseen new jobs are the increased staff at the mail room for sending out tolls to the toll road users. Along wight the possibility that tolls may go down, or the fact that not having to pay up front will increase the number of people who will choose to use the roads. With this increase in traffic more businesses would be willing to invest along to road. New gas stations, Wal-Marts, fast food restaurants are built and providing many new jobs that require similar skill sets to the "lost" toll booth operator jobs.
Going a little further, with the increase use of the toll road and the increased number of businesses that are accessible via the toll road, the tolls should eventually be removed. This government would now be able to justify using a tax to pay for road maintenance. With the toll ultimately removed, causing an even greater amount of traffic. And just like before, with more traffic more businesses are willing to invest.
The One lesson teaches us that we cannot assume that what we see is the end of the conversation. Just because toll booths no longer require operators, does not mean that nothing else will happen as a result. Hazlitt talks about the criticism that machinery gets in Chapter 7 "The Curse of Machinery"

Monday, June 23, 2014

Understanding the Incentives that Underly and Perpetuate the Drug War

    When it comes to the issue of government attempts to prohibit non-violent criminal behavior, it's all about the incentives.  Individuals act in response to the perceived opportunities to profit from doing so, therefore regardless of the government's stated intentions for pursuing a particular policy of prohibition: drug smuggling, gambling, prostitution, or whatever; in the process of their attempts to do so they inevitably trigger a set of market singles that inspire the very sort of entrepreneurial activities they are aiming to end.  In layman's terms they only make problems worse.  For the purpose of this brief analysis I'll confine my account to the issue of drug prohibition, however I am confident that the same principles apply to other products and services, although the particulars may vary due for a variety of reasons.  Nonetheless, it's all about the incentives, even for politicians.  Thus, when politicians detect an opportunity to profit in terms of public opinion by attacking the “scourge of drugs”, they are acting in a way consistent with the idea of rational self-interest.  The public hears many speeches full of frightening rhetoric about the threat to public health posed by the newest wave of illegal drugs, and also about the illicit profits made from their sale and the nefarious purposes to which they often flow, even to terrorism!  But, thanks to the vigilance and goodwill of our tireless government  they soon see news reports of massive arrests, people, guns, and drugs seized, and they here how now their children won't face the risk of those dealers targeting them.  Finally, they see the prison population: proof that the bad ones are being caught.  “See?”  says the government, “The system works.”  This is what is seen and heard.
    Of course this is an overly simplistic account, but then, so too is the government's. Although politicians rationally pursue a policy for the sake of maximizing their own ends, what is lost is the fact that everyone else does, too. In the wake of government intervention into the drug market there arise massive opportunities to supply sought after yet illicit sets of products at great personal risk, thereby justifying the accompanying promise of lucrative profits.  Prohibitions increase the prices of the goods prohibited because they reduce the supply more sharply than the relative demand.  While the government and public may lament the violence that often occurs amongst those who seek to dominate these underground markets, nonetheless they must be understood to in fact be a direct result of the prohibition of those products.  This too, has a rational basis, for when a legitimate company has a contractual dispute with another party they can call upon government courts to enforce their rightful demands to just remedy.  In the case of a black market, however, no such option is available, and absent a third party opinion which will then be respected and enforced, physical violence is an unfortunate but unsurprising result.  Likewise with the issue of dangerous and tainted drugs in the market, absent the ability for an industry to regulate itself in the open view of the public, the opportunity for unscrupulous or otherwise unqualified individuals to maliciously or negligently supply their customers with dangerous or simply substandard products is greatly increased.  The most direct example would be the issue of toxic moonshine during the prohibition of alcohol and its disappearance after its end, along with the violence that supported the bootlegger's illicit trade.  We don't hear about Coors and Budweiser employees gunning each other down these days, do we? 

Supply, Damand, and their effects on prices

Chapter 15, How the Price System Works, begins by explaining the importance of looking to the long run consequences and results in opposition to simply seeing what is a primary or secondary consequence, but a third one in which effects all member of society, not just one individual. The fallacy of isolation exists as problematic when individuals look at personal short term outcomes as opposed to the effect on all other parties involved. When thinking about production we know that innovation comes from engineers and scientists amongst many other fields of specialization. Although these fields create production, it has to be at a profit for the business an to fiance and approve projects or product productions. The business is said i the book as being important as they give orders to the others on what to produce and at which quantities. opportunity costs are noted in the chapter as "One occupation can expand only at the expense of all other occupations." Demand for products is created by consumers and although some believe it is based on the cost of production this is not true. Supply and demand meet in equilibrium due to market forces and will rise or decline with a return to equilibrium in the long run. Below is a simple graph of supply and demand and how the price level is determined at the equilibrium point.

At the point in which the supply and demand curves intersect is the price and quantity of the product being examined and it's production level. 
Because labor is scarce, it is important to allocate it towards the mot urgent of needs first. It is encouraged by the author to look at the whole forrest as opposed to just the tree. This means to us that we must consider the effects of every decision not only on our selves, but many others in he economy effect as well. The article concludes that is is "essential for the health of a dynamic economy that dying industries should be allowed to die as that growing industries should be allowed to grow"(108).

One Lesson Blog Post 1

     The book "One Lesson" by Henry Hazlitt, offers some great insight into the world of economics that I agree with! One of these topics that struck me as spot on is government spending. President after President have said increasing government spending will revive our economy and boost us to the top and time after time it fails. Hazlitt offers great insight as to why that is happening. I will also give input from another article written by Casey B. Mulligan an economics professor at the University of Chicago. He argues that government spending does increase the economy short and long term. In this blog I will refute that claim and use Hazlitt's "One Lesson" to do so.
     Mulligan's examples he uses are government spending for the military and government spending to build new roads.  He states in his article that "Perhaps road building and scientific research would even expand the economy in the long term as they made labor and capital more productive." A clear statement that violates Hazlitt's theory. Hazlitt believes government spending should only occur if the necessity is their to build. Building for new jobs and boosting the economy is not what Hazlitt sees as helpful. Hazlitt states "I am here concerned with public works considered as a means of "providing employment" or of adding wealth to the community that it would not otherwise have had." I have the same view as Hazlitt has where I believe that this is not the solution to the economic woes. Taking tax money and spending it on unnecessary things such as military overgrowth or new roads just to increase jobs is wrong. You are taking away from the tax money that people would have spent on needs for themselves instead of building a new road that will provide 500 jobs for one year.
     I feel as though this is a big problem in politics today, governments are set on spending their way out of the debt no matter what the means are. This view by Hazlitt is just one of many that teach you to look beyond the immediate satisfaction and see the trickle down effect at its worst. It is hard to look past this new road or this new shiny bridge and the people working on it to see the underlying problem. That the money used for the project was tax dollars that could have been used on needed things. Our government and society have a long way to go to discover this true meaning but hopefully for everyone's heartache it is sooner than later. In my next blog post I will discuss another one of Hazlitt's topics that many people either disagree or agree with.

Sunday, June 22, 2014

The Curse of Machinery

Henry Hazlit: Economics in one lesson

When reading Economics in one lesson by Henry Hazlit i found the chapter labeled as "The Curse of Machinery" to be particularly thought provoking comprising of multiple different arguments as to if machines are creating a problematic rise in un employment, or are they beneficial for the economy overall and it's employment levels. The belief that machines are on net balance with un employment is used in thesis by Hazlit as the author believes that the benefit from machines offsets the small amount of un employment they create. Although it is not argued that machines cause a loss in jobs, it is noted with logic that they also create jobs such as the employment of the creators of the machines. If the owner of a company lays off workers to impose more machinery, he may be able to reach a higher level of efficiency leading him to spend money, furthering the economy overall in 3 ways: One by expanding operations and buying more machinery to increase output, secondly, he may invest his extra profits in other industries creating more jobs, and lastly, he will simply consume more thus leading to a necessity in service and consumption industries.

Those who seek to keep new machinery low and older less efficient jobs in practice are noted by the author as Technocrats. Technocrats ran to unions in order to save their jobs such as making un necessary workers put in hours of nothing productive just to remain on payroll. Technocrats argue for the use of labor-saving machines and their idea was shot down by a Nobel Prize economist who wrote a book stating "oppose the introduction of labor-saving machines in the underdeveloped countries on the ground that they decrease demand for labor! This powerful quote accompanied with lessons from our history over time as examples work to show that although some jobs are lost by new machinery, many more are created. Without innovation and creation of new machinery our economy will not be able to flourish as quickly and productively. The use of labor unions to create un necessary jobs is toxic to the economy overall and many credible view points over time have shown that the jobs lost by new machinery cause an increase the overall GDP and the labor force in the long run through maximized productivity and innovative approaches to a better tomorrrow.

Saturday, June 21, 2014

The Truth About Minimum Wage

When I see my friends on Facebook celebrating the rise of the minimum wage in Seattle, I have to cover my eyes and sigh to myself.  I love my friends, but I wish they realized that this isn’t really something to celebrate.  The rise in minimum wage can lead to more harm than good.  Reports from Fox News already shows that there are many business that recognize the danger.  This is a good sign, as it shows that many business owners may already have comprehended the meaning of the one lesson of economics.
            The City Council of Seattle only see that if the minimum wage is increased, then workers will make and receive more money.  While they may be receiving an actual higher amount of money, the value of that money will not increase, because the cost of living in Seattle will increase.  Remember that pizza you ordered from Pizza Hut last week?  Instead of paying $16, it now costs you $40, for that same one pizza.  The article posted by Fox News even goes on to say that “customers will be able to easily go outside the city for better pricing”.
            What the City Council also doesn’t consider is that the increase of minimum wage will actually decrease the level of employment, as businesses will no longer be able to afford to pay their workers.  Fox News quoted David Goldstein, who runs his own blog, saying, “If some jobs are lost, but we lift tens of thousands of low-wage workers out of poverty, that’s a net plus in the long run.”  Sorry to say, David, but there will actually be more people in poverty due to the minimum wage increase because, as stated before, the cost of living will increase, and more people will lose their jobs, with most of them being unable to find a new job as employers do not want to pay a $15 minimum wage.

            It’s very obvious that there are many people out in the world who do not understand the one lesson of economics.  What’s more depressing is that these people are running our cities our country.  Why are these people making decisions that we obviously know are wrong on every level?  The City Council wishes to help the people of Seattle, but are doing it in the worst way possible, as those people will just be hurt more.  More cities will vote for a minimum wage increase, such as San Francisco in November.  Hopefully the people there will be able to recognize the horrible consequences in Seattle and use that to influence their vote.

Friday, June 20, 2014

The Economic Impact of Arts and Culture

                When I first started reading an article talking about the economic impact of arts and culture, I was surprised by how much the author viewed economics as taught by the one lesson – looking at the longer effects of any act or policy, and also tracing the consequences for all groups, not just one.  The article had me nodding my head in agreement, but by the end, I shouldn't have been surprised that the author went back to thinking of only one group.
            In the beginning, author Andy Vick made sure to point out that “a vibrant creative community can be a catalyst for economic vitality, a draw for tourism, and a meaningful way to increase quality of life for area residents.”  Thank goodness he said area residents, for an increase of tourism in one part of the country must mean that there are decreases around the rest of the country.  There are a limited number of people who can travel, and if they travel one place, they cannot visit another at the same time.  The increase quality of life for the area residents may mean a decrease in the quality of life for other residents elsewhere.
            Vick made sure to state that there are challenges within the community that will have “long-term implications for the future success of our entire economy”, and any sustainable solution will “likely have a number of different and complementary approaches”.  This sounds like a man who knows the one lesson.  But, as I said above, the one lesson seemed to vanish by the end of the article.  Vick states that we should increase our local investment in the arts. Sorry, Vick, but where would that money be coming from?  If we increase investment in the arts, we would have to decrease investment in another area.

            There are both good and bad results if people invested more into the arts.  Good results would be that more jobs could be created in regards to creating more buildings/using underutilized properties for new enterprises, and there could be an increase of tourism within the city, bringing more money to local restaurants and hotels.  Bad consequences could include that there is a decrease in investment within other areas, which could very well harm the economy and residents Vick wishes to help, and the jobs created from the investments would mean that there are less people working in the other areas, or there could be a lack of productivity.  Good and bad results can only be seen by someone who has been exposed and understands the one lesson of economics.

Texas VA run like a ‘Crime Syndicate’ claims Whistleblower

In the recent times, scandals have become the order of the day. In Texas, the Veterans Affairs (VA) hospital had institutionalized the issue of manipulating the hospitals waiting lists for many years. According to, immense complaints were received and the VA inspector general launched an immediate investigation (Durden). Despite thorough investigations, no person was put behind bars for such malpractices. Within the public domain, it is true that something was wrong and required immediate action from the government. However, the hospital went ahead to receive an award and showing how the discord among the top leadership can mess good policies on the ground.
            In the above case, public policy seems to be violated by the same leaders who are supposed to formulate and ensure that they are implemented for the benefit of the public. Hazlitt posits that bad economists are good at manipulating the public, which is the case in the VA hospital scandal (6). However, to address this issue there is the need for the good economists to come out and prove the bad economists instead of complaining about the existence of such economists. Through public engagement, good economists will carry the day in showing the public the effects of bad policies and thus help them realize the importance of having policies that are long term in nature.

            With an educated public, it is easier for the good economists to convince the public on the advantages of creating long-term policies that considers their concerns. However, for purposes of addressing the VA hospital scandal, there is the need for an immediate policy to be set with the view to looking at all the messes done by the top management and formulating a long-term policy based on the report of an independent commission findings on the issues facing the hospital. It is crucial to note that, bad policies exist because of public ignorance as well as the selfishness of the leaders to accumulate power and wealth. The public has the power influence the decisions made by public institutions especially over malpractices committed by any senior of junior officers. 

What if the Fed Did Less?

           There has been an increased concern as to why the public is in the doldrums outside of the course of the stock market. According to, every time the government is quick to say that, it will do more to improve the livelihood of the citizens but less is actually done (Durden). According to the lessons from Hazlitt, there is the need to focus on the future instead of wasting the whole energy on the issues of today alone (5). The leaders should focus on policies that are long terms and those that will enhance the livelihood of the citizens.
            While it is crucial to note that, it is not always true that some policies should focus on the future as some policies are designed to cater for the immediate concerns befalling a country owing to an immediate action against the economy. Policies formulated to cater for a specific concern may not necessary focus on the future because it is designed to find a sustainable solution to an immediate concern that if not attended to will create a concern for the economy.

In as much as Hazlitt believes that the public hears bad economists, there is the need to note that they are respected because they try to reason with the public in finding immediate solutions to the issues befalling the society? Good economists tend to distance themselves from the public and thus creating a gap that may be difficult to fill in. It is for this reason that the public officers may lie about a given policy because these good economists fail in trying to breach the information gap existing in the public domain. It must be noted that the public believes in statements that reflect a trace of any truth and for this reason, such policies will reflect defeat the policies that focuses on the future. Policies that address current situations seems to reflect the present and thus enlisting the trust of the public unlike future oriented policies that at times may lack the rationalization as the future remains to be speculative given the dynamism of the market. 

Thursday, June 19, 2014

The 99% Movement

The 99 Percent Movement

We all think about how the economy is in a spiral in the wrong direction. There are many people who look at the 99% is the support of the 1%,this has been an issue for awhile. People have stepped forward in taking a stand against the 1% owning at least 40 percent of the nations wealth; surely people will soon gather together and revolt. People are against the idea of the 1 percent who owns so much yet pays back so little; there are people in different states taking a stand. People have been told there is no alternative to the economic system and they begin to think there is something very wrong with this picture...
     Of course we all want a well being for all and not riches for only a select few- so what are we to do? Many people have become activists and they were then taken upon economists who teach them the way of the economy to give it a little more fight. People are fighting for those in poverty and who are struck with the useless system that seems to only help out a certain few. Then we look at how the war is funded but then look at our hospitals that are falling apart, our school systems declining, and many other important figures that don't seem to stand a chance. There are people who lose their jobs over time and while having the job that they had they were taxed but now what of it. There are many different flaws in this and there are people who are fighting to have everything equal. 

We need to take a good look at the big picture. There are people who make maybe 200 million who pay less than 20 percent of their taxes. They do pay a portion but this is basically seen as the "eye of the beholder" whether its fair or not. It is mostly seen that the rich do receive special treatment and there are many people who are ready to revolt on the subject. When there is special treatment this does take a toll on the education system funding, defense, social programs, etc. It's almost like in Hazlitt's where the producers and the consumers want to see what's "fair" in prices when buying an item. People want to see that the rich pay more in taxes, they do not want to be the support when it comes to being taxed and they have a low paying job. Everyone wants everything to be fair, but that is not always the case. There has been times when things have been tough price fixing was involved so that people could afford the item. Then there is the problem with supply and demand so then the item goes up to where no one wants to buy it anymore except those who can afford it. There are many sides to the 99% but the most commonly thing we hear is "We are the 99%" 

Ronald McDonald's War Against Wages

Is Burger Flipping really worth THAT?

Everyone basically at one point in their life started out at minimum wage at a job somewhere. Speaking from experience, I was making anywhere between 6 something and 7 something my years at Sky Sox only having my wage change due to laws being passed in Colorado raising the minimum wage for workers. It was easy for me to fight and continue to ask for the wage to increase because I was part of that population making the minimum even though year after year I continued to exceed what someone with minimum skills had for working ability. It felt as though that because of the minimum wage, my company may have felt that they did not have to pay me more since low pay was regulated by government. One major issue going on in today;s society that has become more and more public is the minimum wage fight against McDonalds. A group has been fighting to the the rate up to $15 an hour. The problem is they do not necessarily see the implications of what this sort of hike in pay would bring.
Hazlitt argues that you cannot distribute more wealth than that is created. The problem more recently is that the sales of Mcdonalds have been slowly decreasing. Increasing customer disapproval and an ever-changing menu has had a negative effect on sales over the past year. The group fighting for a higher minimum wage doesn't take into count the diminishing returns from the company. With a higher wage, you would expect the company to higher fewer workers in order to be able to afford them. Another point Hazlitt makes is that it is unnecessary for people to expect higher wages when for their specific market they make above what the average is. It is not reasonable for workers to expect 15 dollars an hour flipping burgers when other people make less doing more specialized things. Companies are not out to hurt their employees lives, but they are not expected to provide such a high wage for a small job so that they can make a normal living like those that have specific careers. It is agreed globally that the United States has quite a low minimum wage compared to the world which has led to President Obama fighting for 10 dollars an hour, it is not reasonable to have it raised to 15 dollars an hour at this point.

Tuesday, June 17, 2014

Rising Gas Prices Influences

The Economic Benefit of Rising Gas Prices

We take a look at how gas prices rise over time.We all shudder at the fact that we may hit $4 shortly. Commuters are having problems with paying for the gas so they try to find alternatives to shopping, finding sources of substances(Meaning food), and etc. There are more people who are shopping online for furniture, clothes, and other things that they could get in a store but choose to not waste gas to get to the store to purchase the item, then drive home. People have found different ways to save money and still do the things that they enjoy.The article makes a statement the only people who benefit from the gas prices raising is the person who owns the oil or a person who owns stock in the oil. 

   There are some flaws in this article because yes because of the rise of the gas prices, online shopping and other sources have prospered. Then there is the fact that more people who will be working at home if given a choice. Then the oil industry will be hurting and there will not be enough income, as hard as that may seem. Then when given the chance and they become more popular- prices may raise on the internet. Also the delivery cost could rise; this will be good for UPS or any other delivery service. Gas prices have always been an issue on our society, people become upset when they see the gas price raise each day. There are so many different industry's that are affected by the rise of gas prices. 
     We then look at the fact at who it influences. The consumers are screwed. They need gas to get to work to make the money that will then be put back in the car to get them to that job to make that money. There are more people who are buying bikes or running shoes so they can go to work comfortably along with at a cheaper rate.  Knowing our economy and the people who live in this Country, the answer is plain and simple, we love our cars too much. I am guilty- I'm lazy and it gets me where I need to go, it's just an extra cost. This article is pretty two sided in the good and bad.

Wednesday, June 11, 2014

City for Champions: Colorado Springs

Being from Colorado Springs my entire life, I wanted to find something that was close to home to focus on when dealing with issues in today's society. This city has always been a breeding ground for stubborn people it seems; I say that in somewhat of a good way. It takes something big in order for the citizens of Colorado Springs to approve measures or give the "ok" for big time infrastructure changes. If you're from the Springs, you know how many Republicans are here compared to how many Democrats there are in places like Denver and Pueblo. Political differences like this greatly effect changes in our society. One of the major goals of the city lately is to create this tourist destination known as the "City of Champions". In this proposal, they would create an Olympic museum downtown, a new sports and event center, a new Air Force Academy visitors center, a sports and medicine performance center integrated with the University of Colorado at Colorado Springs, and a few improvements to parking garages and bridges downtown near the America the Beautiful Park. 
Knowing this city and the people who live here, this proposal has been quite controversial. Back before I was born, it was a massive deal in this city to create the airport out east. Looking at the City of Champions project, it would cost around the ballpark of 250 million dollars. They expect things like the Regional Tourism Act and donations from private donors to help pay for some of the cost along with issuing bonds and increased sales tax. Considering the Springs is fairly conservative, any mention of taxes frightens people and creates anger among the masses. After reading the One Lesson by Hazlitt, I try to look at this issue differently. The immediate reaction people have is "I don't want to pay more taxes." The problem though is that people here expect things to get better magically. If we want better roads or anything improved it takes money that must be collected from taxes. When the founds are finally reached, people will still complain and want laws and taxes changed. Using the example of the broken window in Hazlitt's book, we see the use of money changing because of a certain action. Money that is supposed to go to one thing is instead sent to another location. The citizens here do not look at taxes or other things in this sort of light. All they see is maybe a few more cents gone and that makes them grumpy. That money that is collected to create things like the City of Champions has greater impacts then they could ever imagine. The new jobs that would be created spur growth in the city. The increase in tourism would lead to a stronger economy which would lead to improvements in smaller things like roads and maybe even donations from the new business that were created due to the increase in tourism. All of these things could be effected positively if the city comes together and looks at the big picture. 
I use the broken window example from Hazlett's One Lesson because it stood out to me. I hadn't looked at the big picture when it came to what happens economically in society from the action of using money on something else compared to what you initially wanted to use it on. Hazlett also focuses somewhat on the "need" for things in order to create job growth or economic growth. Money that is used to create things that people want compared to what they need may be inefficiently used.  I think when talking about the City of Champions this is the main focus of what the citizens of Colorado Springs focus on; want versus need. All in all, Colorado Springs will always be an issue driven city that looks to find a common interest whether it makes economic sense or not. 

Obama's Action on Higher Education Debt: Throwing Gas on the Fire

Recently President Obama passed an executive order aimed at aiding some of the millions of Americans struggling under the burden of student loan debt.  Ultimately, however, the actions taken by the President fail to address what is ultimately the primary problem with this issue, and, in fact, only make the issue worse.  As the President and so many in the media see the issue, the problem is that there are too many graduates unable to pay off their student loans due to a lack of jobs during this period of economic recovery.  The solution, from this view, is to offer relief in the form of reduced interest rates, reductions in the size of accepted payments, and administrative oversight efforts by the Department of Education to encourage loan servicing companies to endeavour to work with loan-holders in default.  This view, unfortunately, suffers from the crippling malady of only focusing on the immediately seen results of recent events while missing entirely the fact that the unseen causes of those events are of the same variety of the sort that the President has proposed, thereby ensuring the perpetuation of the problem, rather than the solution.

The problem is not, as the President has suggested, the fact that so many now suffer under student loan debt, but rather the fact that economic incentives are such that students feel compelled to accept such loans in the first place.  Ultimately, the problem stems back to the sky-high costs of higher education, but where from can we derive the reason for that price?  From the exact set of federally-guaranteed loan programs designed to "increase access" to higher education.  In the face of such guaranteed revenue, what incentives have colleges to lower prices?  With the assurance of future loan-rate reductions, what incentives have borrowers to spend years working to save up the funds to pay for their education outright?  All the while, the initial problem of access to higher education due to the cost of attending continues to worsen.  As well as any issue, that of higher education should hold clear lessons on the consequences of government attempts to intervene in the market. 

Wednesday, June 04, 2014

Unemployment in America

Jobs have become difficult to come by in the past years. Many people are losing jobs, there are people who are unable to find a job, and as for someone like me putting in applications I hear things such as: " You need experience to be employed at this job" or " 5 years experience needed." Honestly how can you gain this experience when you cannot get into the job in the first place! That is one thing that infuriates me in the job market these days. There are middle aged people who were let go from their previous jobs because of a price cut so now they will work anything to make ends meet. It's a cruel world and it is very harsh to say the least but there is some who are trying to mend the wound.


Employers Add 192,000 Jobs in March, Unemployment Rate Unchanged

Job growth slightly lower than hoped for as winter finally subsides.

There are new jobs that were created to help those in need of an occupation. Thus new jobs are made for nurses, loggers and miners, part-time retail, etc. There was a hope that this will help decrease the amount of the unemployment but there was little to no change. Yes it did give some people jobs but some were part time or they were only seasonal. There are companies out there that are trying to help create more spots to bring in more employees but with the economy going the route that it is, there is no telling what could happen to the unemployment rate. As for criticism on this article Henry Hazlitt talks about people looking to the future and missing the unseen. I think years back people thought they were safe at the job they were at and didn't make plans for the future. As a result we have problems such as this where people are struggling to find jobs and companies are trying to make more room for people to work. 
              There is the thought also that Hazlitt brought up was that people would be unemployed because they are primitive to "The Curse of Machinery". Unemployment was brought on because it could be that machines do take part and then there are budget cuts, the company cannot afford to pay for the services of the person. Some compare now to the Great Depression in 1932. This article claims that they want to "fix" the rate of unemployment and so they hire new people but what if they cannot afford the new people they bring in? Hazlitt explains labor-saving devices that help companies save their money, and maybe letting 5 out of 10 people go is the way to do it. If these people don't work, how will they be able to be taxed? This is a new problem that occurs in a web of problems the US faces with unemployment. This is why new job opportunities are created. This article leads into other articles such as home owners, growth in the economy today slowing, etc. This article is troubling because it claims it gives that many people jobs, but then there isn't a change in the unemployment rate. There are some people who are picky about the job they want to preform, this is something that economists like to point out. Hazlitt brings another point up that finds flaws in this article: The consumer makes or breaks a deal with the company. If there are people making coats for 30 an hour and they sell the coats for 50, but if there isn't anyone to buy the coat that will make no difference in the production and the employment of the person. In other words, if there is no one to buy the product made then how will the employee get paid. The major flaw in this article is there are jobs made for people but that may not affect the amount of consumers that are coming in, so what good is to hire someone and give them a job when there is no income coming in? 
       On a final note,  this has been a problem for the economy for awhile and this will continue to be a problem until there is a major break through somewhere. Hazlitt does make a statement on Pg. 41 that machinery could make more jobs for people, the production, the guy who fixes the machine when it goes down, the woman who feeds the guy on his lunch break, a web of different possibilities of jobs that can come forth. There hasn't been a big chain like that to give thousands of people their jobs back or the one's that they could perform; sooner or later there will be something that sparks and brings out those jobs and this article claimed that there was an effort in doing so, it just wasn't successful. Unemployment is a problem and hopefully soon it is a problem we can fix.