VIDEO: The Power of Branding

The video below provides a fascinating explanation of how the tech-savvy Obama administration is light years ahead of their opponents at the art of branding.

Jim Cardoza: More Mandated Unemployment

Last month, in a move that sparked little outrage, the federal government hiked minimum wage to $7.25 an hour. Just as the jobless rate prepares to pierce double digits, our government’s response is to mandate more unemployment.

Many Americans fail to understand the dynamics of minimum wage, seeing it as a protection for low-skilled workers, rather than identifying it as a protection from low-skilled workers. This is a misconception of the type described by Henry Hazlitt in Economics in One Lesson. It is one that results from focusing only on a policy’s direct effect on a specific group, without considering its indirect effects on all groups.

It is easy to understand how an increase to $7.25 an hour benefits current minimum wage workers who provided a production value greater than that amount. But, few consider how that same action drives those with a production value below $7.25 an hour out of the job market altogether.

In a free market, the price of every commodity is determined by factors such as scarcity and demand. Scarce commodities in high demand, such as diamonds, command higher prices than abundant commodities in low demand, like sand. Wages are no different. Skills that require a high level of expertise, such as those of a brain surgeon, are naturally valued more highly than those needed to wash dishes.

Once wages are recognized to be just another price set by the market--that of labor--minimum wage can be properly understood. It is an arbitrary price control which, like all others, serves to restrict consumer choices and grant favor to one group of citizens at the expense of another.

To illustrate the point, pretend a minimum price of wine was enacted, requiring all wine to sell for at least $10 a bottle. Just like minimum wage does not effect what the Yankees pay their third baseman, a minimum wine price would not effect the price of Dom Perignon champagne. The price minimum would only have impact on the lowest grade wines.

Consider the effect of the $10 wine minimum on what is currently a cheap $2 wine, like Thunderbird. Forced to compete with fine corked wines from Napa Valley, Thunderbird would find few takers. The real world effect of such a law would not be to bolster Thunderbird's profits, but rather to mandate Thunderbird’s demise. Minimum wage works exactly the same way.

I was confronted by this dynamic during my career in social work. For a time, I served as job counselor for General Relief (GR), a local government program that provided a last-ditch means of support to those who lacked assets, income or eligibility to state and federal welfare. In order to access GR, able-bodied applicants had to agree to work off their grants at the rate of minimum wage. Failure to do so resulted in a sanction for the upcoming month.

Despite their lack of a disability, most of these GR workers were regarded as unemployable. Those who were not irresponsible, unreliable or addicted, generally lacked the necessary skill and/or education to compete with students and others seeking the same entry level jobs.

Each month, I would discuss the work performance of my client’s with their job site supervisors. What became apparent was that nearly all of these workers demonstrated some level of production value. That is, each of them was able to produce work that would be of some value to some employer.

The problem for GR workers, and others of low skill or poor work history, is the inability to display a recognized value of at least $7.25 an hour to potential employees. In effect, minimum wage mandates their unemployment, since hiring them at fair market value has become a criminal activity.

Quite likely, in a free labor market, small business would be willing to hire the unskilled at a lower wage, as apprentices, then provide the necessary training to increase their production value. However, no matter how much it is in the individual’s benefit to accept such an arraignment, government forbids it. Is not the marketing of one’s own skill a self-ownership right?

For the bottom rung of American workers, minimum wage laws impede the pursuit of happiness by diminishing their prospects for upward mobility. Moreover, imposing price controls on labor damages society at large, by discouraging production and fostering dependence on the public purse.

Minimum wage laws were not spurred to enactment by a coalition of young adults and unskilled labor--those widely believed to be its primary beneficiaries, but who are actually its primary victims. Rather, it was the brainchild of organized labor. Even though few union employees make anywhere near minimum wage, organized labor had its own reasons for being sponsors of it. Fully understanding the dynamics involved, they have used minimum wage for decades as a mechanism to protect their members from the competition of unskilled labor.

Big Labor likes to apply spray deodorant to their motives, arguing that minimum wage is a necessary tool of social justice and that Americans must be paid a “living wage,” despite what they produce.

But what they are really doing is far less noble. In essence, organized labor is using its massive political power to strip self-ownership rights from those struggling most to survive tough economic times, simply to further their own selfish interests.

The very politicians who wallow in Big Labor money are the quickest to blame the rich for the plight of the poor. Yet, it is not the rich who are mandating joblessness for the most vulnerable among us.

VIDEO: America, the Republic

An important video explaining why we Americans must maintain our republic and not let ourselves devolve into democracy or oligarchy.

A Profound Paragraph

A profound paragraph that sums up socialism nicely:

"You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is the beginning of the end of any nation. You cannot multiply wealth by dividing it."

Adrian Rogers, 1931-2005

VISIT LIBERTYPEN

VIDEO: Coming to America - Socialism

A cautionary tale about the promise of socialism, with commentaries by Ayn Rand, Arthur Laffer, Ron Paul, Stuart Varney and others. Unless we resist or revolt, this is where we are headed.

Government Almighty

Today’s Americans readily accept the federal government’s unlimited authority. We choose our politicians, not to protect our liberties, but to provide for our needs and insulate us from bad judgments. In fact, we just can’t seem to get enough government. A little socialized medicine, anyone?

Curiously, our founders feared big government. Perhaps, they were just not as enlightened as we modern Americans. Or, could it be that they knew something that we haven’t yet learned?

For most of us, our earliest perceptions of government began to form in school, prior to the time our critical thinking skills had engaged. We learned about democracy. America, the people, was equated with America, the government. Beliefs about the source of America’s greatness---whether a creation of government or the product of free individuals---began being molded.

We received our first dose of simplistic history at this time. For example, we all learned that Lincoln freed the slaves, but few were taught about Lincoln imprisoning 13,000 Americans, without trials, for simply criticizing his heavy-handed policies. The triumphs of government were emphasized, while encroachments on individual liberty were minimized.

Upon initiation of the Department of Education, in 1980, control of the public school system began shifting from community control to federal control. As the judgments of parents were replaced by the dictates of bureaucrats, opportunities for unbridled indoctrination expanded.

New focus was placed on issues of “social responsibility,” like conservation and global warming, where the government could be cast as the shining knight, standing between the well being of the good children and the evil, polluting, corporate greed mongers seeking to suffocate them.

Rather than revering economic liberty along side of political liberty, children were led to see private industry as predators, who in the absence of a watchdog government, sought to force folks to work for slave wages and flood the market with dangerous products.

If children understood their heritage of liberty and the wisdom behind our Constitution, they would also know that corporations cannot take their liberty, only government can. But, such knowledge is increasingly rare.

Last year, the Intercollegiate Studies Institute quizzed a sampling of Americans regarding their knowledge of our founding principles. Less than half could name the three branches of government, and only 27% knew that the Bill of Rights prohibits establishment of a state religion. How can this be?

Our Bill of Rights takes no more than five minutes to read and is the legal protection to our basic liberties. Yet, despite twelve years of schooling, its contents remain a mystery for many. This illustrates just how large the disconnect between our federal government and the Constitution’s principles has become.

As adults, we see evidence of government’s massive power everywhere. We learn about payroll taxes and find out there are tax implications to almost every significant decision we make. We discover that government regulates everything from our light bulbs and toilet mechanisms to what doctors can prescribe and how much money we must receive before being allowed to work.

We notice government's ability to take the rightful property of one citizen and simply give it to another citizen. And, when that is not enough, we observe politicians simply creating money from thin air, backed by nothing.

Such an almighty federal presence was the worst nightmare of our Constitution’s framers. Having just freed themselves from big government tyrants, they sought to curb the natural inclinations of government to gain maximum power and control, then exercise it to the extent of their capabilities.

The Revolutionary War had been about winning liberty. Now, it was up to the Framers to protect that liberty. Thomas Jefferson, advocating adoption of the Bill of Rights, argued this could only occur if government was bound by “the chains of the Constitution.”

For much of our history, the Framers’ plan worked as designed. In fact, just ninety years ago, both politicians and citizens continued to acknowledge the strict limitations on government authority. They recognized that, without a Constitutional amendment, the federal government lacked the authority to even ban alcohol.

Now, turn the page to 2009. Does anyone think today's Congress would bother with a Constitutional amendment to ban a vilified substance? In fact, can you think of any instance in which Congress would feel the need for a Constitutional amendment in order to expand their authority for any reason at all? If your answer is no, you have just defined unlimited power.

Currently, we are on course to leave future generations an America in which their liberties are few and their economic burdens are great. While this is increasingly a likelihood, it is not a carved-in-granite inevitability.

The Constitutional principles of limited federal authority were adopted by the people and ratified by the states. They are the law of the land; the fundamental agreement between the American people and their government. Servants plotting to become masters can ignore our rightful heritage, but they cannot invalidate it without our permission. Let's stop giving it to them.

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