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We argue against income minimums and caps, and for a free and private market.
May 01, 2009
Opposing income minimums and caps.
Vic Biorseth, Friday, May 01, 2009
Income minimums and caps today seem innocuous enough; we’ve had a minimum wage law for years, and the salaries and bonuses of corporate big shots always appear to be way out of line, especially when compared to the income of the average corporate worker. So how can any argument opposed to them be valid, moral and practical?
Well, a free market is either free, or it is not. A free market is a private market; that is, it is not subject to government intervention. Otherwise, if it is a government market, as opposed to a private market, then it is not a free market. It is a government controlled market, to the degree that the government controls any part of it. A free market operates independently of government, as do the people who have the liberty required to participate in it. It is the most important sphere of private human activity that operates outside the reach of government and impervious to government control of it. The only government controls affecting the free market place are those laws and regulations that enforce contract law, limit monopoly and so forth, in order to keep it free.
Just as the natural laws of supply and demand set the price for products and services produced in the free market, the same laws of supply and demand set the income levels of various workers who produce the goods and services for sale in the free market place. I submit that a Lee Iacocca is indeed worth more pay than I was worth as an assembly line worker at the old GM Fleetwood plant on Fort street in Detroit when I got out of the army. Or any other typical hourly worker.
For one thing, there were quite a few more like me than like him available on the job market at that time. Hundreds of thousands more, perhaps even millions.
The notion that pay and bonuses of big shots like Lee Iacocca and perhaps the next lower three to ten tiers of management detract from corporate profits is nothing but a boatload of poo-poo. These people add, enormously, to corporate profits. How many are there out there in the job market that can compare to the likes of Iacocca? How many are there who can turn a corporation around, and change it from a loser to a winner? Damned few, that’s how many, and they don’t come cheap, because there is a strong market for that kind of talent. The private market already knows that; government does not. Government is not smart enough to know that. Corporations compete for that kind of unique talent. People who solve big, major problems, who take on extreme challenges, turn red ink into black ink, and who regularly meet really big payrolls do not come cheap.
Sometimes, like us lower mortals, they screw up or make less than good major decisions. The Edsel model is a good example. But then, more than making up for it, everybody recognizes that the Mustang was a marketing concept that hit the corporate economic ball completely out of the park. How much does that sort of thing bring to a corporation profit, to corporate expansion, to increasing jobs, to growing the economy? It’s almost incalculable.
To think that you can get that same sort of passion, commitment and performance from talented people who spent a major part of their lives immersed in the education and training to get themselves to this point, with some sort of fixed amount of compensation comparable to hourly workers is just ridiculous. People don’t become engineers or MBAs and work their way up for twenty years or more just to make a “comparable wage.” Go to Cuba if you want to do that; America is the place of dreams; the place where you can truly be whatever you want to be and make of yourself whatever you are determined enough to make of yourself.
Our American Marxists who are currently running the House, the Senate, the White House and the SLIMC may be counted upon to regularly demonize executive pay and bonuses in their ongoing effort to increase class envy, and to demonize even wealth itself in the eyes of the overall populace. They are out to kill the free market and bring us into a typical Socialist dictatorship; that is their real but hidden agenda.
Consider this: if you paid for your kid to go to college and get a better education, did you expect and hope that your kid might thereby make more money as a result?
Would you have spent the money to send your kid to college if the only hope for your kid’s future was pay comparable to everyone else’s pay, and should your kid have gone through the difficulty of all that study for no greater financial reward?
Marxists are anti-Americans, and they are dream killers.
At the other end of the spectrum we are stuck with an annually increasing minimum wage law that produces nothing but increased unemployment among the poorest and least qualified workers in America. That’s about all it produces. I believe unemployment of the poorest among us is the purpose for the law; it’s just too obvious to have any other true reason for being. The purpose is to increase discontent among the poor, and sympathy for them among the middle class. Again, this is stoking class envy, wealth envy, and social guilt.
The existence of a vast market for lower wage workers in America is born out by the huge illegal workforce currently working “under the table” in the orchards, vineyards and fields of America. Many if not most of the workers are here illegally – they came here to work jobs that pay less than the minimum wage. There are millions and millions of them. Their very presence here proves that there is a giant market for less than minimum wage workers in America. The market will be satisfied.
Eliminating the minimum wage would bring these people out from hiding – at least the ones who are here legally. It would also go far to eliminate or at least minimize the mistreatment and exploitation of these workers by unscrupulous and even criminal employers, and open up the job marketplace so that legitimate employers could compete with each other for good workers. Lower wage workers are definitely in demand, or there wouldn’t be so many of them already here and working.
Marxists claim that the illegal aliens who get jobs here are “only doing jobs Americans would not do.” I don’t believe it. Americans are doing these jobs; however, they are doing them illegally, because they are breaking the minimum wage laws, and so they are working under the table. If it were not against any law, plenty of other Americans would be willing to do the same work. Preferably, they would do the work above the table, where everyone could see what was going on.
I previously said, in Kill the Illegal Alien Market Place, among other pages, that it would be relatively easy to get our current illegal alien population to leave us, on their own. At least, those of them who are not here under the auspices of organized crime families or gangsters. The workers among them. (That was before I had studied the Fair Tax -- I now concede that my national sales tax is less thought-out and researched than the Fair Tax, which should be implemented.) Getting rid of the minimum wage, instituting Fair Tax, prosecuting and shutting down illegal alien employers would do the trick. Americans and legal aliens could then compete for legal jobs at the lower end just as CEOs do at the upper end of our economy.
Bottom line, the government needs to get out of the free market’s way and let it operate. In describing the Rule Of Subsidiarity we described the American principle of the lowest jurisdiction possible handling problems, not the highest, and we described a private sphere of activity completely beyond the scope and reach of government. This rule is almost a definition of proper liberty of man in a moral culture.
Today, we have a President, Obama, who dares to hire and fire CEOs of private corporations; and who dares to oversee and direct bankruptcy reorganizations in the place of the court; and who previously publicly lied about billions of our dollars in a bail-out that specifically would prevent his pre-planned and orchestrated bankruptcy reorganization, and this is just the beginning.
How? By what authority? Has he already become supreme dictator?
The other two so-called co-equal branches of government, meanwhile, sit on their hands and do nothing.
And yet, the American principle remains, in spite of Obama’s travesties against the free market and liberty. Corporate executive pay and bonuses are what they are because the free market demands it, and free market competition establishes it. And it’s the same with all wages for work, including the lowest ranking ones. There is no dishonor in honest work, and there is no dishonor in accepting one’s pay, even when the Marxists don’t like it, and this remains true no matter how much they politicize and publicly demonize it.
Truth has a life of its own.
Pray for America.
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