Simplistic Economics on the Minimum Wage

President Obama has called for an increase in the Minimum Wage,making the claim that it would be good for business because those receiving the higher wage would have more to spend. Higher demand would lead to increased consumption. That boon is easy to see, but serious policy makers must also consider the less visible consequences.

Where does the money for the raise come from?

No business has a money tree from which to pluck dollars, the raise must be accounted for either by reducing the wages of other employees or the number of employees, reducing their consumption, or raising the prices of the company’s products or services, leaving the customers with less to spend somewhere else, or from the business owner(s) pockets, reducing their consumption, or investment in their own business, or those of others through stock purchases, reducing the consumption of those businesses or their employees.

In every case, the increased consumption by minimum wage earners comes at the expense of reduced consumption by someone else. There is no net benefit to the economy.

Increased wages can bring true increases in consumption and economic growth only if they are the result of increased wealth creation by the employee.

Either the President is being guided by extremely simplistic economic theory or he is simply pandering and hoping no one will notice the fallacy. Neither option is encouraging.

The President’s advisers should point out to him that ‘pulling oneself up by his bootstraps’ is only a figure of speech.

The Warren Buffet Lie

From the President down to the water cooler, we hear that Warren Buffet pays a lower tax rate than his secretary. That is simply untrue.

The fallacious statement is based on the assumption that his secretary pays about 25% of her income in FICA and income taxes while Buffet pays a 15% rate on capital gains and qualified dividends. It sounds terribly unfair, but it ignores the double taxation of investment income.

The Virginia Constitution Forbids Charity By Force

I know this notion ruffles the feathers of our state senators for Fairfax, but the rules are very clear. Ken Cuccinelli’s “opinion” was not earth-shattering or “irrelevant.” He simply quoted Article II section 16 of our Constitution. The General Assembly obeyed this section all the way up until 2006 (debunking our wonderful state senators’ claim that we have always done this) which prompted delegates to ask the Attorney General for a ruling on the matter. He sided with the Virginia Constitution and there are good reasons for him doing so.

In 2008, former national LP chairman Bill Redpath and Virginian came to speak to the Tidewater Libertarian Party. He was running for US Senate at the time and he said something that really stuck with me:

“We won’t begin to address the fundamental problem of government overspending until the American People position government as an agent for justice, not an agent for good, as there is an infinite amount of good to be done in this world”

Guest Editorial on Eminent Domain Abuse

The Virginian Pilot ran my most recent guest editorial today on Eminent Domain Abuse.

The case referred to in the article, the ODU University Village land grab comes to court in January.

Links to 0ther Pilot Guest Editorials by Don Tabor

Told you so

Well, I did, the day after the 2008 election, in a post titled Well, There You Go Again, I warned that the Democrats would mistake voter anger at Bush for a mandate to rush toward socialism and the voters would recoil. And they did.

I did not foresee the rise of the Tea Party movement and the swiftness of the Democrats fall, but nobody’s perfect.

Now we will see if the Republicans will make the same mistake and believe the voters anger at the excesses of the Democrats will be mistaken for a mandate to advance their social issues agendas. It is not, this is a rebellion of the voters against the excesses of government, not a choice for different excesses.

Juggling in an Elevator

Once it has finished its initial acceleration, and has reached its steady speed of about 30ft/sec, you can juggle in a descending  elevator just like you would standing on the floor waiting for the elevator. Seen from outside, your upward toss of maybe 15ft/sec would be revealed as not an upward toss, but a reduction in how fast the ball is descending, but from inside the elevator, it still looks like an upward toss. Looking at inflation only from the perspective of consumer prices can lead us to a similar deception.

ABC , Yeah, you know me!

This video was brought to my attention by one of the many Libertarian Party emails I and many Libertarians get from Wes Benedict, Executive Director of the Libertarian National Commitee.

Thought you might like to see how screwed up Virginia’s liquor laws are. I LOVE the reference to some of our Founding Fathers!!!!!!

- Britt Howard

Fishing in the Federal Pond

If I were to suggest we meet at City Hall, and for every Twenty dollar bill you take from your wallet and burn, you can also burn one of mine, you would think me an idiot for making the offer and yourself a bigger idiot if you accepted. Yet we do this every day in pursuit of Federal funds. It’s really not so different from fishing.

Illegal Immigration Affecting Health Care

Libertarian Issues in the Republican (2nd VA) Primary

The Tidewater Libertarian Party has not made an endorsement in the 2nd District Republican Primary, but we have an interest in the outcome. To that end, we sent a questionnaire to all of the candidates seeking their positions on issues important to us. We did not sent the generic, softball questions typical of media, which allow a candidate to posture and conceal their positions on matters of principle. Answering our questions knowing their answers would be made public required some degree of courage on the part of the candidates, and those who answered deserve credit for doing so. Those who declined should be asked why they are not willing to give clear answers to hard questions .

The questions and the answers we received are present below, in the order in which we received them: