Imagine screwing up on the job so much that you get the money and no longer have to work

Former Senator from Nebraska finished his first of four years as president of University of Florida and decided to call it quits under the fig leaf to take care of his family, but continue with his million dollar a year compensation as President emeritus. This week it came out that he spent $1.3 million in catering in that truncated university presidency that is 3 times what the previous president spent on average for the 8 years prior to the pandemic. Failing up is once again not for the everyman, just the few people who are the ones that are intrinsically worthy because they are members of the elite. Why are they worthy to be members of the elite, they are the ones who given the station in life where failing up is tolerated, of course. This circular logic is the underpinning of the satirical term meritocracy when coined by Michael Young's The Rise of the Meritocracy, but that term has lost lost all of its intended meaning and now is the sincere definition of deserving of one's position because of effort. 

Seattle Raise Minimum Wage to $15; Plutocrats Pull Their Hair Out That Consumers Will Have More Purchasing Power In Northwest Washington State

Seattle becomes the nation's leader in minimum wage Monday when they set the minimum wage to $15 (incrementally increased over next three years) nearly doubling the the Federal minimum wage and increasing the state minimum of $9.36, which is a 60% increase for the lowest paid workers. Small business employers such as Subway franchisee David Jones complain that he would have increase prices of his sandwiches by a dollar, nearly a 20% price increase; the implication being that his workers getting a 60% increase will require him to raise prices 20% to maintain his profit margin. Seattle's Clarion hotel claims that this will ensure rates will increase 10% to avoid large number of layoffs but instead only minor layoffs will occur; the implication being that they would have immediately hire far more than they actually need if they could pay the employees wages below what could sustain a subsistence living standard. The criticism of pushing local minimum wage has largely been based upon harming employment levels, but that ignores all economic analysis since Card & Kruger that in 1992 overturned the conventional wisdom that mandatory increase in labor costs would have a negative effect and shed jobs due to the increase of costs. Why that conventional wisdom seems intuitive, but does not bare itself out in reality, is that it assumes the perspective of the employer as the central decision maker in a local economy when in reality the aggregate of the consumers/employees has a larger effect on demand than the parochial concerns of the overly vaunted entrepreneur.

Even the uber-individualists of Reason.com, fail to include the employee's individual choice to demand higher wages as a liberty that should be respected. Only those that have already shown themselves to be the select elected, as in the theological Calvinist use of the term, can have their liberty defended by the libertarians while those not elected by not being graced by the invisible hand of the market should suffer with their station in life without complaint nor question. The employer can't bear to see a top marginal tax rate anywhere near the Laffer Curve, but the lowly minimum wage worker should not demand his/her fair cut for being industrious through his/her labor? That paradox that those who already have money beyond what they could reasonably spend in a lifetime would somehow have no further incentive if they were to minimize even an iota of luxurious living, but those that are barely getting by can have no financial cushion or they would no longer be incentivized to work (ignoring the incentive of continuation of said employment slightly above a subsistence wage).

Here is a hypothetical to exemplify this economic argument: if we were to have three individuals with different incomes a hedge fund manager with income of $100 million per annum, a insurance claims adjuster earning $50,000 per annum and a fast food worker getting paid $20,000 per annum (assuming Washington state minimum wage of $9.36/hour 40 hours a week, 52 weeks allowing for $600 worth of overtime pay). If we then were to increase the income of all our hypothetical earners by 60% of their income, would their economic activity differ and would that economic activity be beneficial to the rest of the economy? The minimum wage worker going from $20,000 to $32,000 can now put away savings for the inevitable rainy day AND viably climb into the middle-class becoming a more active consumer purchasing more products and services including local businesses such as restaurants. The insurance claims adjuster going from $50,000 to $80,000 can now purchase a newer car from the local dealer more often, go on family vacation (though economic benefits are transferred to wherever they travel, it would be reciprocal were the increase be nationally implemented rather than locally), and the additional funds would also allow the employee to be a little more risk-tolerant and possibly begin to invest along with a slight increase to his/her savings for retirement. Then we have the hedge fund manager earning a $100 million a year, having nearly unlimited purchasing power so increasing income would have no noticeable effect on personal consumer choices, leaving the only effect to what investment the multi-millionaire makes. If the hedge fund manager decided to start a labor intensive enterprise that required (at least down the road after it grew) a large number of employees that would beneficial to the greater part of the economy, but the return-on-investments (ROI) on such ventures are notoriously low which is why the financial industry has been growing as regulations and taxes on investments have evaporated over the last 30 years ensuring the high ROI with the least depency on labor. With the hypothetical income increases for anyone that are already keenly aware of their own economic limitations, any increase will almost entirely go to more consumption creating a demand in the consumer market while having a multiplier effect across the masses whose financial status has improved; conversely those that have nearly limitless purchasing power will not change their economic activity in any way that will increase demand in the economy and very likely would not increase employment in any way.

To argue that if the employer was free to hire the lowest possible wages while also free to set the highest possible prices to attain the most profit is not to the betterment of even those employers in the long term, as the employees getting squeezed on both ends will be resentful of those financially comfortable while they struggle. The counter argument would be that the masses of consumers given a greater purchasing power will cause more money chasing the same amount of product and service, though inflationary, benefits all working members of the economy and encourages consumption while rewarding income from work over passive income from investments which in the near term is the optimum scenario for our economy.

Those that despise the minimum wage has little to do benefitting the many, rather it has to do with that it doesn't exclusively benefit the few preordained economic victors. This can be seen in the plutocratic perspective that cheer for the immediate benefits of tax cuts for the wealthy, and their finger wagging towards immediately benefitting the lowest paid employees. Representative democracy exerting the will of the vast majority, those that are (or have in the recent past) getting paid at or near the minimum wage are seen as far too selfish which is the exclusive domain of those that have become accustomed to economic and political domination that claim their own selfish is a virtue and a vice for everyone else. Thanks alot Dagny Taggert!


http://www.spokesman.com/stories/2014/jun/03/seattle-council-approves-15-minimum-wage/

http://reason.com/blog/2014/06/03/seattle-prepares-for-robot-revolution-by

BitCoin: Mercantilism's Rebirth For The 21st Century

Free market economy depends on re-investing profit and dividends back into capital costs of new or continuing enterprises, and with the departure of mercantilism and gold, silver or other mineral backed currency. Mercantilism was the norm of the dominant economies of Western Europe from 1500's till the around the First World War which is the beginning of use of fiat currency that allows nation-states to print paper currency and set the value or manipulate the value of currency  while managing inflation through monetary policy independent of the value of rare metals that was central to national economies prior. Why mention these archaic economic terms in relation to 5 year old cryptocurrency, BitCoin? Because BitCoin proselytizers often cite the alternative currency as benefitting the economy by assuring the that no nation or corporation or regulatory body could increase the money supply because it relies on peer-to-peer network and is limited by math of cryptography, so BitCoin currency is incapable of inflation inducing monetary or any monetary policy since it is regulated by the algorithm in an open source network that can be audited, checked, and double-checked by those that are coders; the end results is that removing inflation (at least monetary policy created via inflation) from our economy incentivizes accumulation of currency and removes the disincentive of being inflation-ed-out of wealth and encouraging that wealth back into the market to chase the greatest return on investment. BitCoin, like the absolutist monarchs at the height of mercantilism, seeking out the greatest accumulation of currency rather than the best and most efficient use of limited resources. I will acknowledge that our current monetary system is overly reliant on state involvement and subject to corruption, as well as intrinsically tied to infinite growth within a world with limited resources-- so it is obvious that there needs to be reforms, it is just that BitCoin isn't anything new or something that humanity has not already tried.

So last week's announcement by Circle to offer BitCoin exchange and banking services sans fees for withdrawing or depositing BitCoins as every other BitCoin exchange does as a means to turn a profit should not be considered as anything other than warmed over the common practice of the 18th century of mints of the European monarchs that provided the service of coinage free of charge to ensure that the gold and silver would be minted and accumulated within their borders. Though the concept of competition between the BitCoin exchanges mirror the competition between the egos of the monarchs is an inelegant analogy, they both share a truth that the economic purpose of these currencies are devoid of benefitting the real economy. Mercantilism encouraged an excessive amount of resources to be deployed to conquer and maintain global colonies without providing direct benefit to the mother country other than bragging rights; BitCoin is able to remove state-induced inflation but does not improve purchasing power of the individuals whom use the currency but actually could cause a downward pressure on the income of labor and stagnate the economy as it benefits savings far greater than our current economic paradigm. The motivating factor to promoting this new mercantilism is that if you have inherited wealth and little income from wages from a job, then there is all the incentive in the world for you to return to mercantilism and stop the slow slide of inflation that may force the wealthy to be entrepreneurial like their ancestors or (G-d forbid it) seek out employment like the vast majority of the economy.

Trading gold bullion, a favorite hobby of those believing doomsday is coming and those that identify themselves as "real 'Mericans", assume that since gold is tradable and currently has high value compared to inflationary fiat currencies then when 's##t hits the fan' they will be all ready to barter and continue participating in the economy as a post-apocalyptical consumers; what they fail to realize is that if 's##t hits the fan' day ever comes then only resources that are essential to life will have any value and gold and doubly so crypto currencies will be valueless. These doomsday preppers and survivalists make up the vocal minority of those calling to get rid of fiat currency, but their voices are amplified by those with accumulated fortunes who seek to retain those fortunes for their progeny without lifting a finger-- in essence a return to Gilded Age where labor was cheap and the uber-wealthy were like living gods. Powerful and wealthy individuals express these latent desires by hiring a small conclave of private investigators to tail Eliot Spitzer because Spitzer rattled Wall Street's cage as Ken Langone did, or compare the trials and tribulations of the most comfortable and wealthiest in world history to that of the Jews in Nazi Germany as Tom Perkins did, or prophesied that gold would reach $5,000 an ounce (when it actually took a drubbing to below $1,000) and that their are some people that deserve to be paid $2 hour such as those with mental disabilities as expressed by Peter Schiff, or to mint his own silver coinage with his face on them like David Koch did in his failed campaign for Vice President on the Libertarian ticket. The fact that the survivalists have bought into the malarkey that the uber-wealthy have sold them as viable economic and public policy demonstrates exactly how duplicitous the new mercantilists are. If the argument is being made that due to rampant government spending that devalues the American dollar will lead to a collapse, but that can be avoided if we end deficit spending and stop taxing the uber wealthy while only tax wages from employment (thereby taxing only the income the uber-wealthy avoid), while the same argument states even if they are unsuccessful the gold coins being sold to them by hucksters like Glenn Beck and Alex Jones will still hold their value even after the collapse is detached from reality and wholly wrongheaded. But this shell game does have the benefit that having a critical mass of duped voters that can show up to rallies demanding to give tax breaks to those that couldn't use it except to become morbidly wealthy, cut government services that are essential to themselves ("Get rid of social security-- because private charity will take care of me when I'm old!"), and stop regulators from enforcing environmental and financial laws because they like reading by the light of the burning cuyahoga river and swindled out of their homes by auto-penned eviction notices. A crowd of old white people is 'great optics' for the elected officials that have already been bought and paid for by those that want to see greater economic disparity even if that is delivered in means made verboten by both Ayn Rand Objectivists and Austrian School of Economics.

We could have an income ceiling that would still exorbitantly high allowing a very luxurious living, but not so high that any individual could jerry rig the economy and the government in their favor, it would essential to include all types of income for all legal individuals to be treated the same (until the Supreme Court changes their opinion would be inclusive to corporations and other fictitious legal entities)-- say $30 million a year. Those that currently earn more than that a year wouldn't be de-incentivized as they would basically be 'Brewster Millions' every year, and whatever opportunities they gave up beyond that income cap would certainly be picked up by someone that hadn't made hit the income ceiling yet spreading the wealth while retaining some aspect of economic meritocracy.

But this is of course a non-starter, for the individuals that currently earn a billion dollars a year or more make up the 700 individuals that hit contribution limits in the 2012 Federal elections, which have been removed with the SCOTUS McCutcheon decision and that along with the disembowelling of the McCain-Feingold legislation allowed dark money into our elections have certainly transformed our democratic implements in November into vestigial afterthoughts of the auctions that occurred long before the ballots for the primaries were even printed.



So lets all get ready to make the heady decision, shall we be crucified by gold or BitCoin?

Steamroller Spitzer: Had To Go; "My Way or No Way" Cuomo: Can Stay Forever

So it was often referred to in 2008 and throughout Eliot Spitzer's governship that he 'did not play well with others' which was part of the rationale to why he couldn't weather out the storm of his perchance to use high end prostitutes like current Senator David Vitter did when he was outed as a family values politician that flouted his family obligations. Assemblyman Keith Wright in an attempt to collect endorsements from Democratic clubs around the city came across the problem that the Governor is not too popular among the most active Democratic activists, as seen in the below quote from Capital New York article:

Later, (satirist and protest candidate for governor Randy) Credico asked (former Assemblyman Peter) Grannis, “How is the comptroller’s relationship with Andrew Cuomo? Seriously.” After a few moments of silence from Grannis, who had a knowing smile on his face, Credico added, “Be honest.”

“I know the answer to the question," Grannis replied. "It’s a strained relationship and that’s unfortunate because we … could be a much more aggressive and productive partner with the governor.” He added, “the governor has this approach: my way or no way.”

AND

“Expectations have been high for this governor because of what he did with the Marriage Equality Act,” Wright told the crowd. “Why can’t he do that everywhere? I mean, that’s the question. This governor is in firm support of the Dream Act. I’m going to tell you quite frankly, the New York State Senate doesn’t like it. They hate it. And the Dream Act really doesn’t poll that well. So, you have senators that just won’t do it, just won’t do it. You’re giving tuition, financial aid to children of undocumented immigrants. Every place is not Greenwich Village."

So the styles of the Governors could be considered similar, if there was even a small smell of scandal would Cuomo be forced to resign as Spitzer did due to lack of support? Or would Cuomo weather the storm due to the support that his grating leadership style has lost him are the grassroots and not the big money contributors. In the documentary "Client 9", Ken Langone (billionaire founder of Home Depot) was shown in his own words to have inside information about investigating Eliot Spitzer prior to any knowledge of Spitzer's involvement with prostitutes, and demonstrated that his personality had nothing to do with his resignation but that his grating and obnoxious was merely directed towards the wrong segment of society, the organized money. Andrew Cuomo's obnoxious behavior is set against the least among us and those in the middle class, so he is secure in getting an insurmountable level of support and resources from those that are morbidly wealthy. Only those that have near infinite resources cannot be offended by elected officials that dare to seek out to carry out the will of the people and enforce the law indifferent to size of his/her bank account. When organized money screams for the heads of elected officials, get behind those candidates for office; when organized money get behind elected officials they find agreeable, scream for their heads and oppose them in every possible democratic institution.

But maybe the current New York State governor with future presidential ambitions should look to a previous holder of that office for some advice:

"We had to struggle with the old enemies of peace-business and financial monopoly, speculation, reckless banking, class antagonism, sectionism, war profiteering. They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know that Government by organized money is just as dangerous as Government by organized mob. Never before in history have these forces been so united against one candidate as they stand today. They are unanimous in their hatred for me - and I welcome their hatred. I should like to have it said of my first administration that in it the forces of selfishness and of lust for power met their match. I should like to have it said of my second administration that in it these forces met their master.- President Franklin Delano Roosevelt, Speech at Madison Square Garden"