Sunday, March 30, 2014

THE PIONEER VS. THE WELFARE STATE: Essays on Liberty in Peril by GEN LAGRECA


Available at Amazon.com (http://amzn.to/O7WIbR) in Kindle format. 99¢.


A New Declaration of Independence
This is a wonderful book. It evoked despair when the author described the conditions of our welfare state. At the same time, and especially as the result of the next-to-last essay “Why I Love America,” it evoked great admiration for our Constitution and Bill of Rights, and resulted in my having hope for the America I also love. Hopefully, the author’s projected “New Declaration of Independence” will someday become a reality. This book should be required reading in all the high schools and colleges of this country.

EDITH PACKER


Strangling the Pioneering Spirit

The essays in this book are gems of excellent, powerful writing in a great cause. Again and again, when the book describes the original, pioneering spirit of America, it brings the reader to a mountaintop of admiration for freedom, for the unimpeded action freedom makes possible, and for the genius of our Founding Fathers in establishing a country dedicated to freedom. And again and again, when it describes the very different spirit that prevails today—the spirit of the welfare state—it plunges the reader into the depths of despair. Here, the reader is made to confront such things as the entitlement mentality run amok and the results of the 700,000 pages of stifling arbitrary rules and regulations that have been promulgated and accumulated in The Federal Register since 1936.


One cannot read this book without a sense of tragic loss over what has gone so terribly wrong in our country. The author concludes with a call for a “NEW Declaration of Independence.” One can only hope that someday it will happen. But for now and the foreseeable future, it would have the greatest difficulty in finding signers, let alone a sufficient number of soldiers willing to fight for a renewal of the ideals on which our country was founded. But enough people reading this book would certainly help to improve the odds.


GEORGE REISMAN


Wednesday, March 19, 2014

Second Comment on the Big Bang Theory Appering in the New York Times Online

The “Big Bang” theory and its associated estimate of the age of the universe are not empirical facts of any kind but strictly inferences from propositions that are themselves questionable. Namely, an estimate of the size of the universe and the claim that the universe is expanding and is so at some definite rate. Given a definite size and rate of expansion of the universe, it follows mathematically that at some point, allegedly 13.8 billion years ago, the universe was disappearingly small.

The analogy of a financial “Big Bang” may be useful. Thus, for example, a hypothetical present-day fortune of a trillion dollars might be traced back to the “Big Bang” of the investment of a single penny 339 years ago that has earned a 10 percent compound rate of interest ever since. For 0.01*1.1^339 equals a little more than a trillion dollars. The fortune could be declared to be 339 years old.
In fact, of course, no one has an actual fortune of a trillion dollars, and a uniform rate of compound interest or any rate of interest has never been earned on the same fortune probably even for as long as a single century. So the mathematics does not tell us anything about actual reality here.
So it is with the Big Bang theory. It is an exercise in mathematics. But more than that, it claims the equivalent of $1 trillion being physically stuffed into the space of a single penny. No. It claims the whole physical universe being stuffed into the space of single penny.
 
This comment appears in TheTimes at


 

Reisman's New York Times Comment on the "Big Bang" Theory

The other day I posted a series of tweets on the "Big Bang" Theory. They were inspired as a response to a New York Times article on the subject by Dennis Overbye, titled "Space Ripples Reveal Big Bang’s Smoking Gun."
Today, I consolidated the tweets and posted them on the Times' website as a reader's comment. My statement follows and the hyperlink to it appears at the end.
The universe is the totality of all of existence.
If the universe is expanding, into what is it expanding? Mustn’t that into which it is expanding exist and thus be part of the universe?
If the universe is the totality of all of existence, how can there be anything beyond the universe?
As the totality of all of existence, the concept of boundaries cannot apply to the universe.
As the totality of all of existence, nothing could have existed before the universe except non-existence, which cannot exist.
The concepts before and after cannot apply to the universe without implying the contradiction of the existence of non-existence.
The universe did not have a beginning. Nor will it have an end.
Not having had a beginning, the universe did not originate in a “Big Bang” or any other event.


http://nyti.ms/1mhKpIS. Click “All” if necessary.



Wednesday, March 05, 2014

Letter to Secretary of Labor Perez Against Raising the Minimum Wage


Secretary Tom Perez
Department of Labor

Dear Secretary Perez:
Raising the minimum wage is a formula for causing unemployment among the least-skilled members of society. The higher wages are, the higher costs of production are. The higher costs of production are, the higher prices are. The higher prices are, the smaller are the quantities of goods and services demanded and thus the number of workers employed in producing them. These are all propositions of elementary economics that you and the President should well know.

It is true that the wages of the workers who keep their jobs will be higher. They will enjoy the benefit of a government-created monopoly that excludes from the market the competition of those unemployed workers who are willing and able to work for less than what the monopolists receive.
The payment of the monopolists’ higher wages will come at the expense of reduced expenditures for labor and capital goods elsewhere in the economic system, which must result in more unemployment.

Those who are unemployed elsewhere and who are relatively more skilled will displace workers of lesser skill, with the ultimate result of still more unemployment among the least skilled members of society.
The unemployment directly and indirectly caused by raising the minimum wage will require additional government welfare spending and thus higher taxes and/or greater budget deficits to finance it.

Your and the President’s policy is fundamentally anti-labor and anti-poor people. While it enriches those poor people who are given the status of government-protected monopolists, it impoverishes the rest of the economic system to a greater degree. It does this through the combination both of taking away an amount of wealth equal to the monopolists’ gains and of causing overall production to be less by an amount corresponding to the additional unemployment it creates. The rise in prices and taxes that results from raising the minimum wage both diminishes the gains of the monopolists and serves to create new and additional poor people, while worsening the poverty of those who become unemployed.
Furthermore, the higher the minimum wage is raised, the worse are the effects on poor people. This is because, on the one hand, the resulting overall unemployment is greater, while, on the other hand, the protection a lower wage provides against competition from higher-paid workers is more and more eroded. At today’s minimum wage of $7.25 per hour, workers earning that wage are secure against the competition of workers able to earn $8, $9, or $10 per hour. If the minimum wage is increased, as you and the President wish, to $10.10 per hour, and the jobs that presently pay $7.25 had to pay $10.10, then workers who previously would not have considered those jobs because of their ability to earn $8, $9, or $10 per hour will now consider them; many of them will have to consider them, because they will be unemployed. The effect is to expose the workers whose skills do not exceed a level corresponding to $7.25 per hour to the competition of better educated, more-skilled workers presently able to earn wage rates ranging from just above $7.25 to just below $10.10 per hour. The further effect could be that there will simply no longer be room in the economic system for the employment of minimally educated, low-skilled people.

Of course, the minimum-wage has been increased repeatedly over the years since it was first introduced, and there has continued to be at least some significant room for the employment of such workers. What has made this possible is the long periods in which the minimum wage was not increased. Continuous inflation of the money supply and the rise in the volume of spending and thus in wage rates and prices throughout the economic system progressively reduce the extent to which the minimum wage exceeds the wage that would prevail in its absence. The minimum wages of the 1930s and 1940s—25¢ an hour and 75¢ an hour—long ago became nullities. To reduce and ultimately eliminate the harm done by today’s minimum wage, it needs to be left unchanged.
The standard of living is not raised by arbitrary laws and decrees imposing higher wage rates, but by the rise in the productivity of labor, which increases the supply of goods relative to the supply of labor and thus reduces prices relative to wage rates, and thereby allows prices to rise by less than wages when the quantity of money and volume of spending in the economic system increase.

If raising the standard of living of the average worker is your and the President’s goal, you should abandon your efforts to raise the minimum wage. Instead, you should strive to eliminate all government policies that restrain the rise in the productivity of labor and thus in the buying power of wages.
If your goal is to raise the wages specifically of the lowest-paid workers, you should strive to eliminate everything that limits employment in the better-paid occupations, most notably the forcible imposition of union pay scales, which operate as minimum wages for skilled and semi-skilled workers. In causing unemployment higher up the economic ladder, union scales serve to artificially increase the number of workers who must compete lower down on the economic ladder, including at the very bottom, where wages are lowest. To the extent that occupations higher up could absorb more labor, competitive pressure at the bottom would be reduced and wages there could rise as a result.

Abolishing or at least greatly liberalizing licensing legislation would work in the same way. To the extent that larger numbers of low-skilled workers could work in such lines as driving cabs, giving haircuts, or selling hot dogs from push carts, the effect would also be a reduction in competitive pressure at the bottom of the economic ladder and thus higher wages there.
The principle here is that we need to look to greater economic freedom, not greater government intervention, as the path to economic improvement for everyone, especially the poor.

Sincerely yours,
George Reisman, Ph.D.
The Capitalist Economist
Pepperdine University Professor Emeritus of Economics
On Twitter @GGReisman