The Virtuous Cycle Created By Raising The Minimum Wage (Thom Hartmann Rant #2)

The following is an excerpt from the Thom Hartmann Radio Program, 5/26/2015, which I edited for brevity and clarity. Thom discusses how raising the minimum wage creates a virtuous cycle.

Thom: If you go back and look at the history of the minimum wage, every time the minimum wage is increased, over the next three years... which is about how long it takes for something like that to work it's way through the economy... what you see are, two things... number one, you see consequential significant economic stimulation. Typically the economy will grow at least 2 or 3 percent, after every minimum wage hike.

Because people with minimum wage have more money in their pocket now to spend. That money then goes into the marketplace and creates demand. And the consequence of creating that demand is that it creates more demand for jobs as well. As there is demand for more jobs, because the economy has been stimulated, the competition [between companies for workers] goes up, which means all wages go up.

Whenever the minimum wage goes up... all the midrange wages all increase by roughly the same amount. There is a very simple economic reason for that which I just laid out.

If minimum wage had kept pace with productivity it would be at $17 an hour right now. If it had just kept up with inflation it would be at $12.60 an hour.

[End Thom Hartmann Rant]

Increasing the minimum wage creates a virtuous cycle that reverberates through the economy, which is why we need a minimum wage that is indexed to inflation.

On the other hand, not raising the minimum wage creates a vicious cycle.

The Capitalist's Case for a $15 Minimum Wage: The fundamental law of capitalism is that if workers have no money, businesses have no customers. That's why the extreme, and widening, wealth gap in our economy presents not just a moral challenge, but an economic one, too. In a capitalist system, rising inequality creates a death spiral of falling demand that ultimately takes everyone down. Low-wage jobs are fast replacing middle-class ones in the U.S. economy. Sixty percent of the jobs lost in the last recession were middle-income, while 59 percent of the new positions during the past two years of recovery were in low-wage industries... By 2020, 48 percent of jobs will be in those service sectors. Policy makers debate incremental changes for arresting this vicious cycle. But perhaps the most powerful and elegant antidote is sitting right before us: a spike in the federal minimum wage to $15 an hour. (The Capitalist's Case for a $15 Minimum Wage by Nicolas J Hanauer. Bloomberg Business 6/19/2013).

The plutocrats at the top of the foodchain don't care that they're destroying the American economy. Wealthy people can move anywhere in the world, and there are other markets to exploit. The rest of us, however, are suffering the consequences of their unbridled greed. It is time for us Americans to say NO to the world's oligarchy and do what's necessary to save our economy before it's too late.

Which would be to index the minimum wage to inflation and, more importantly (although these are two very important steps in saving America)... raise tariffs and bring our jobs home. If not we're screwed. America is done.

SWTD Tags: Minimum Wage, Thom Hartmann.

DSB #8

Proselytizing Lester

This absurd and utterly off base comment from the blogger Dennis Marks in response to a comment from me directed at Lester Nation in which I suggest Lester might consider voting Bernie Sanders for POTUS.

Dennis Marks: There are some who seek validation and satisfaction by completely converting others to the entirety of their views, and do not accept any partial agreement or even a consensus. And watching such, it is less like a rational conversation and more like a proselytization attempt. With one-sided zeal like with a religion. (5/19/2015 AT 10:25:00 AM EDT. Comment from the blog "rAtional nAtion uSA").

Lester agreed, adding a comment that (once again) plays off the lie from Dennis that I "worship Stalin" (follow the link for more info concerning this Dennis idiocy).

Lester Nation: PRECISELY! Those with such mindsets are the type who often, although not always, would be totalitarian if ever in a posistion of authority or power. (5/19/2015 AT 10:39:00am EDT. Comment from the blog "rAtional nAtion uSA").

I say "once again" because Lester keeps making similar comments.

Lester Nation: We respect your right to be a proud totalitarian communist in the vein of Joseph Stalin. We simply exercise our right to think you a bit nuts for doing so. (5/09/2015 AT 9:07pm. Comment from the blog "Sleeping with The Devil").

I consider myself a Democratic Socialist. I believe the United States needs to move in a much more Socialist direction, but we need to do it democratically. So Lester suggesting I "would be totalitarian" is total bullshit. Which I told him the last time he spun this fable. He keeps doing it anyway.

But I have no problem with Lester believing in any ideology he cares to believe in, even one as evil as "Objectivism". I would NEVER try to "proselytize" him. To begin with, it would be a complete waste of time. I know damn well he is not going to change his mind in regards to his admiration of the sociopathic Ayn Rand.

The reason for the remark was because of a number of extremely odd comments I've noticed from him lately. Odd, in that they are completely antithetical to the evil of Objectivism.

First this one from 12/6/2013.

Lester Nation: Medicare as a model for universal healthcare, with some modificartions (improvements to insure long term fiscal viability) may not be such a terribly bad idea. (12/6/2013 11:43:00 AM EST. Comment from the blog "rAtional nAtion uSA").

Then this one from 4/26/2015.

Lester Nation: Many democratic socialist countries have done and are doing just fine. In fact much, as in majority, of their population are quite happy. You really need to seperate totalitarian socialism and democratic socialism fot any meaningful discussion to occur. (4/26/2015 at 2:51 AM. Comment from the blog "Contra O'Reilly").

Lastly, this one from 5/1/2015.

Lester Nation: I am a capitalist. Call me a benevolent capitalist if you like. Something along the lines of a Thomas Paine style capitalist, one who grasps what "the common welfare" (or good) actually meant. Democratic socialism while better than 20th century communism or fascism loses out to benevolent capitalism hands down. Period. (5/1/2015 AT 07:33:00 PM EDT. Comment from the blog "rAtional nAtion uSA").

So, I copied these comments and later asked him (on his blog) why he (as an Ayn Rand admiring Objectivist) was talking positively about things that Ayn Rand would have rejected as encouraging the parasites.

His response to me quoting him?

Lester Nation: ...you make a huge stretch in quoting something I did mot say. But I realize that is just you. Disingenuous, but as long as you are comfortable with it that is fie by me. Frankly I couldn't give a sh*t less. But it is likely why you have been banned from several sites. (5/01/2015 AT 07:33:00 PM EDT. Comment from the blog "rAtional nAtion uSA").

I guess I "misquoted" him by copying and pasting what he wrote (and linking to it in order so anyone could check that it was 100 percent accurate). Yet he did "mot" say it. And yet he did say it. And if he did not remember saying it he could have clicked the link and refreshed his memory.

And I've been banned from several sites (apparently) for this kind of dishonesty... quoting someone and asking what they meant (attempting to engage people in conversation... a ban-able offense in Lester's mind).

Yeah, this guy strikes me as someone who could be proselytized, which is why I made the effort to convert Lester to Socialism. No wait, despite his comments I was (and remain) positive he would not consider for even one second switching ideologies. I asked because I found his statements confusing given his Objectivism.

Me suggesting he should vote for Bernie Sanders was (partially) a joke (and based on the comments I quoted above, which I found odd, given my positivity that he has NOT abandoned Objectivism/Libertarianism). I was, however, also partially serious, in that his choice (Gary Johnson or some moderate democrat) either has no chance or is not running.

But he got extremely offended by my suggestion for some reason that made absolutely no sense. And then he tossed out a non-sequitur suggesting that I'd go all totalitarian if ever in a position of authority or power.

I think I'm going to exercise *my right* to think Lester is more than a bit nuts.

SWTD Tags: Ayn Rand, dmarks delusions, Rational Nation.

7/6/2015 Update: If Lester did abandon Objectivism/Libertarianism/Fiscal Conservatism for Democratic Socialism, this would cause his (former?) buddy Willis Hart (who de-friended Lester on Facebook) to not trust him.

DSB #7

Why The United States Operates Under An Expansive Interpretation Of The General Welfare Clause

The General Welfare Clause (GWC), as viewed by the Right, has been abused by the Left. Overtaxing to fund social programs that are "unconstitutional" in their view. Congress should only be able to collect taxes to pay for something it is authorized to do under the enumerated powers.

So, how has the Left been able to get away with imposing their socialism on our nation? Against the will of the Founders, no less? Turns out that not all the Founders held to a strict interpretation to the GWC.

Time out. What is the General Welfare Clause? Wikipedia notes that "Article I, Section 8, Clause 1 of the United States Constitution, grants the federal government of the United States its power of taxation". Congress has the power to tax in order to "to pay the Debts and provide for the common Defence and general Welfare of the United States".

OK, so while some of the Founders argued for the "enumerated powers" view concerning taxation, Alexander Hamilton believed otherwise.

Hamilton argued for a broad interpretation which viewed spending as an enumerated power Congress could exercise independently to benefit the general welfare, such as to assist national needs in agriculture or education, provided that the spending is general in nature and does not favor any specific section of the country over any other.

A expansive interpretation of the GWC is what the United States is operating under today... much to the horror of those who believe in a "strict" reading of the Constitution (Libertarians among them).

Wikipedia says "Hamilton's view prevailed during the administrations of Presidents Washington and Adams, [but] historians argue that his view of the General Welfare Clause was repudiated [after] the United States Supreme Court imposed a narrow interpretation on the Clause [with] Bailey v. Drexel Furniture Co" in 1921.

But future SCOTUS rulings reversed the narrow view ruling of 1921.

This narrow view was later overturned in 1936 with United States v. Butler. There, the Court agreed with Associate Justice Joseph Story's construction in Story's 1833 Commentaries on the Constitution of the United States. Story had concluded that the General Welfare Clause was not a general grant of legislative power, but also dismissed Madison's narrow construction requiring its use be dependent upon the other enumerated powers. Consequently, the Supreme Court held the power to tax and spend is an independent power and that the General Welfare Clause gives Congress power it might not derive anywhere else. However, the Court did limit the power to spending for matters affecting only the national welfare. Shortly after Butler, in Helvering v. Davis (1937), the Supreme Court interpreted the clause even more expansively, disavowing almost entirely any role for judicial review of Congressional spending policies, thereby conferring upon Congress a plenary power to impose taxes and to spend money for the general welfare subject almost entirely to Congress's own discretion. Even more recently, in South Dakota v. Dole the Court held Congress possessed power to indirectly influence the states into adopting national standards by withholding, to a limited extent, federal funds. To date, the Hamiltonian view of the General Welfare Clause predominates in case law.

So there you have it. Initially the US operated under the Hamiltonian view of the GWC (despite several Founders disagreeing with Hamilton). We briefly switched to the narrow interpretation with a SCOTUS ruling in 1921, but then the SCOTUS reversed itself in 1936.

And in every subsequent ruling since has expanded the power of Congress to tax for whatever "General Welfare" purpose it wishes. SCOTUS precedent has codified the Expansive Interpretation, which we have been living under since 1936.

Sorry, Narrow-Interpretation-favorers, argue all you want, but the Expansive Interpretation is here to stay. As a Leftist I'm all for it.

DSB #6

Free Trade Is Racist (Thom Hartmann Rant #1)

The following is an excerpt from the Thom Hartmann Radio Program, 5/22/2015, which I edited for brevity and clarity. Thom discusses how neoliberalism (free trade) is racist.

Thom: The reason why poverty in communities of color has been going up for the last 30 some odd years is because of Reaganism and free trade. The reason that parts of Baltimore and Detroit are a wasteland is because of these free trade deals.

As evil the Cleveland police were in trying to say Tamir Rice was "a criminal guilty of aggravated menacing and inducing panic"... a 12-year-old kid playing with a toy gun in a public park.

As evil as it is the Cleveland police were saying that the victims of Tamir Rice were the State of Ohio, Officer Loehmann who shot and killed him and Officer Garmback who drove the vehicle.

As evil as that is, you would not have poverty in that neighborhood if there was a good factory there. You would not have these problems if there were good union wages available. And they have left this country because of this so-called free trade dimension of Reaganism... embraced by Reagan, embraced by Bush Senior, by Clinton. Embraced by bush Junior, and is now being, not just embraced but pushed by President Obama.

This is a racial issue as much as any other part of this stuff. When you destroy the Middle Class of America, when you reduce the standard of living in the United States, who goes first? People of color.

Minority communities are impacted hardest and disproportionately because they don't have 20 generations of White privilege of accumulated cultural and financial equity as it were.

Folks are electing Democrats because they're hoping the Democrats can push back, but the problem is that we have a national trade policy... I mean, no matter how much the mayor of Baltimore Stephanie Rawlings-Blake wants to revive Baltimore [she can't]... Baltimore used to be a big manufacturing town.

Literally, from the George Washington administration to the Reagan era, they made things in Baltimore. ... they don't make any of it anymore. It's all made in China.

[End Thom Hartmann Rant]

Note that Thom does not say the words "free trade is racist" and the title of this commentary is mine and is my characterization of what Thom said. Although I think you absolutely infer that is what he's saying. "Free trade" has negatively impacted middle class Black families, Detroit being an example of free trade destroying good paying jobs.

What this shows, IMO, is what utter BS it is when the free trade supporting "fiscal conservatives" blame "the policies of the Left" for the decline of once prosperous cities. You can't have prosperity without jobs.

SWTD Tags: Black Lives Matter, Free Trade, Republican Racism, Thom Hartmann.

DSB #5

The Difference Between Crony Capitalism & NeoLiberalism

Neoliberalism is the "freeing" of business by government getting out of the way, while Crony capitalism is government inserting itself into the free market with regulations to help corporations. Or with contracts, bailouts, etc. Any way the State can help the corporation (except by getting out of the way), that's crony capitalism.

Progressives hate both neoliberalism and crony capitalism, while Libertarians love neoliberalism. The reason is because they believe that corporations can crush workers and further enrich the oligarchs without government help. Unlike the Republicans (who favor both Neoliberalism and Crony Capitalism). Because, while they agree with the Libertarian goal of crushing workers and enriching the oligarchs, they additionally believe the politicians should get rich too (by helping the oligarchs).

Although I must note that Conservative Dems (Bill Clinton and Barack Obama) favor both as well (although to a lesser degree). Because both parties are beholden to the oligarchs that fund their campaigns. Even more so now thanks to Citizens United, the SCOTUS decision that gave the go ahead to the Oligarchs to assume complete control of our elections.

DSB #4

Concern For The Wealthy Number One Concern For Non-Duped Libertarians

A comment submitted to the rAtional nAtion blog, in response to the following from another commenter after I stated the truth concerning Libertarianism, which is that it is an ideology that revolves around doing what is best for the wealthy.

dmarks: As for the wealthy, concern about them has nothing to do with libertarian ideology in general. And absolutely nothing to do, of course, with libertarian reasons to oppose drug laws and prostitution laws. (Wed May 20, 2915 @ 05:04:00 AM EDT).

My Response...

The difference between Libertarians and Conservatives is that Libertarians believe government should get out of the way and allow the plutocrats to rule, while Conservatives believe governmental politicos should help the plutocrats (while enriching themselves, of course).

Both ideologies call for the further enriching of the already wealthy by screwing workers. Both here and in other countries. They hope to achieve this goal by pitting groups of workers against each other. Low wage minority workers against low wage White workers (by eliminating the minimum wage) and American workers against low wage workers in 3rd world countries (by eliminating tariffs). Their hope is that groups of workers will fight each other for who will work for the least amount of money.

[end comment. Submitted 5/20/2015 @ 4:15pm CST. Status: Published]

See SWTD #213 "Libertarian Dream Of Plutocrats As The New Feudal Lords & Everyone Else Their Vassals" for further thoughts from me on Libertarians.

DSB #3

The Truth Regarding The Conservative & Libertarian Desire To Eliminate The Minimum Wage Because It Will Reduce Unemployment For Black Youths

They SAY that (one of the reasons) is because it will reduce unemployment among Black teens, but I say they're full of it. They're not concerned about Black youth unemployment at all. The non-duped Conservatives and Libertarians only pretend pretend to be concerned about unemployed Black youths. The real reason they desire elimination of the minimum wage is racist in nature.

In their view Black labor is worth less than White labor and (the lie is that) by not allowing business to pay lower wages to Blacks the result will be higher Black unemployment. The truth is they believe racially biased White business owners will (when there is a minimum wage) favor the hiring of Whites. And obviously, if they're forced to pay more, they'll go with the workers who are worth the higher wage (White workers).

But if there isn't a minimum wage? Then Black workers (youths and adults) can be hired for what they're really worth. It's a win-win in their minds. Blacks get jobs that would go to Whites in the presence of a minimum wage. Because they can be hired for what they're really worth, which is LESS than they'd pay a White worker.

It is also a win for wealthy business owners who can add the difference between the White wage and the Black wage to their bottom line.

(excerpted & adapted from SWTD #281).

SWTD Tags: Minimum Wage.

DSB #2