Mitt Romney Mitt Romney: Minimum Wage Should Rise With Inflation

[Cutlerzzz]

Okay. I will try one more time.

Sound money "rings" when dropped on a hard surface. Sound money is not unlimited in supply because the limits are defined by how many resources can be mined, how much product can be grown, and how many goods can be manufactured. (i.e. the limit of how much can be mined, grown, or sewn at any given time). Sound money is representative of valuable products and services.

Sound monetary policy is based on valuable exchanges between traders. For example, if a doctor "sets" your broken bone, then you should "pay" the doctor something of value that he requests. It could be a piece of gold, a certificate for a weekend in Hawaii, or a week's worth of dining for two at a fine restaurant. Whatever the doc wants. If he charges too much, then his reputation for overcharging will alert him to that fact and he will bring his price back in line with the value of his service.

So, in a monetary system of sound money value is exchanged for value. The doctor should not be required by law to charge a minimum or maximum for his services. That transaction is between the customer and the provider. Minimum wage laws only distort value in the system of honest sound money.

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The world's economic systems were based on sound money until the printing press came into being. Now, most of the world's economy is based on central bank's fiat money and however many zeros they decide to add to the balance sheet. Of course nobody knows what amount that is because our representatives refuse to audit the Fed, but nonetheless the rules change.

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Fiat money is "created" out of thin air because laws and security teams force people to use their legal tender ... The Federal Reserve Act of 1913. Side note: In fact money is not "elastic" and cannot be "created" out of nothing. That is a distortion of reality, and the money still comes from production indirectly ... but I digress. Unlimited amounts of fiat money can be printed or added to bank accounts by adding zeros to the end of the number.

If the powers-that-be determine the world's money supply should be one $Quadrillion, then they must "indirectly control" how much the doctor charges for his services and they must direct employers the minimum amount to pay employees. They do in fact control the amount of money in the world by force of law and guns. Supply and demand forces are seriously distorted.

What happens if the powers-that-be determine the money supply should grow from one $Quadrillion to one $Septillion? Well the doc should get a raise and so should the employees. The markets are controlled by policy. To be fair, the minimum wage should go from $7.00 per hour to $7,000,000,000,000.00 per hour to keep pace with inflation. Minimum wage laws, and price controls, become important and should be tied to inflation in a system of unlimited money supply.

Therefore, minimum wage laws should be enacted, as long as, smart Ivy League Anglo-American power-elite graduates control the money supply.


Applying sound money principles to an unsound system of fiat money doesn't work and visa versa.

Why did you bother typing this? It does not explain how fiat money makes the market incapable of using supply and demand, or how the laws of economics cease to apply.

If the powers-that-be determine the world's money supply should be one $Quadrillion, then they must "indirectly control" how much the doctor charges for his services and they must direct employers the minimum amount to pay employees. They do in fact control the amount of money in the world by force of law and guns. Supply and demand forces are seriously distorted.

Do you realize that the market prices indirect price controls? That is why governments now tend to favor indirect price controls.

What happens if the powers-that-be determine the money supply should grow from one $Quadrillion to one $Septillion? Well the doc should get a raise and so should the employees.

They DO get a raise if the government increases the supply of money. On average throughout the economy, that raise will be equal to the increase in price level.

To be fair, the minimum wage should go from $7.00 per hour to $7,000,000,000,000.00 per hour to keep pace with inflation.

That will only raise unemployment.

Since you still have not taken the time to look up an econ 101 entry on price controls, I will post one for you.

http://mises.org/books/lessons_for_the_young_economist_murphy.pdf

Enter page 162 for the chapter on supply, demand, supply and demand curves, and supply and demand schedules.

Enter page 266 for the chapter on price controls.

Murphy was nice enough to post this online for free. He is an Austrian Economist with a PhD from NYU. Please, do not call him a Keynesian and tell him he needs to read some 60 page book to understand sound money.

 

[Travlyr]

Why did you bother typing this?

The more people who are exposed to the difference between 100% redeemable currency vs. irredeemable fiat, then the sooner we End The Fed and get the peace and prosperity that honest sound money delivers to productive individuals and societies.

It does not explain how fiat money makes the market incapable of using supply and demand, or how the laws of economics cease to apply.

I am confident that some people understand. You like to obfuscate the issue by saying stuff like that ^^^ which is not at all what I wrote. I wrote that the laws of supply and demand are distorted by policy not that they cease to apply... sheesh. Careful reading is important to understanding.

Do you realize that the market prices indirect price controls? That is why governments now tend to favor indirect price controls.

Governments favor price controls and market manipulation because it lines their pockets and favors their friends. The powers-in-charge, read carefully now, distort the market with Ethanol Subsidies. In a free market where 100% redeemable currencies were legal to use Ethanol would be a tiny market because there would not be a high demand for it. In other words, the laws of supply and demand apply to Ethanol production but they are greatly distorted by policy.

They DO get a raise if the government increases the supply of money. On average throughout the economy, that raise will be equal to the increase in price level.

They may eventually get the raise, but if minimum wages were tied to inflation, then their wages would maintain their purchasing power real time rather than being disadvantaged by the manipulated system. It would be similar to the way it would work in laissez-faire free markets. That is why I claim Mitt Romney is right on tying the minimum wage to the rate of inflation. Plus, average wage increase is not good for those earning below average.

That will only raise unemployment.

I understand how minimum wage laws will raise unemployment in free markets when currency is sound and 100% redeemable like we had before 1913.

I don't understand how your claim is valid in the manipulated markets that we endure today with an unlimited fiat money supply. Please elaborate.

Since you still have not taken the time to look up an econ 101 entry on price controls, I will post one for you.

http://mises.org/books/lessons_for_the_young_economist_murphy.pdf

Enter page 162 for the chapter on supply, demand, supply and demand curves, and supply and demand schedules.

Enter page 266 for the chapter on price controls.

Murphy was nice enough to post this online for free. He is an Austrian Economist with a PhD from NYU. Please, do not call him a Keynesian and tell him he needs to read some 60 page book to understand sound money.

Do you somehow think that to be a voluntaryist that you have to be a jerk? Why would anyone call Robert Murphy a Keynesian? Why would you suggest I would? That's asinine. I don't tell anyone what to read. I do however suggest reading Ron Paul's "Gold, Peace, and Prosperity" as a great introduction to sound money.

I've studied Macro, Micro, and have read quite a bit about Keynesian economic policies. I understand the difference between a laissez-faire free-market economy that uses 100% redeemable currency and a controlled market of irredeemable counterfeit fiat currency. The first promotes liberty, peace and prosperity for individuals and the second promotes tyranny, wars, and prosperity for the ruling class. That is what we are working to change.

For others who are interested, Dr. Edwin Vieira Jr. is quite knowledgable in sound money and constitutional law.
The Purse & The Sword

 

[Cutlerzzz]

Governments favor price controls and market manipulation because it lines their pockets and favors their friends. The powers-in-charge, read carefully now, distort the market with Ethanol Subsidies. In a free market where 100% redeemable currencies were legal to use Ethanol would be a tiny market because there would not be a high demand for it. In other words, the laws of supply and demand apply to Ethanol production but they are greatly distorted by policy.

The fact that indirect price controls are subject to supply and demand (and government is using supply and demand as its tool) means that by definition supply curves apply. There is nothing to debate.

I understand how minimum wage laws will raise unemployment in free markets when currency is sound and 100% redeemable like we had before 1913.

I don't understand how your claim is valid in the manipulated markets that we endure today with an unlimited fiat money supply. Please elaborate.

Because the monetary system is unrelated to a supply curve, as I have already explained and had Murphy show in depth. It does not matter what the currency is, or how much value it has, or what it's change in value is. All of that is priced into the supply curve. That's kind of the point of the market. It actually adjustes to changes in supply and demand through price signals, which is the entire point of this "debate". You don't think a market operates by the laws of supply and demand, and there is nothing more to it.

I've studied Macro, Micro, and have read quite a bit about Keynesian economic policies.

Please, a few posts ago you claimed that supply curves are Keynesian. You don't even know what a supply curve is, and have not addressed anything in Murphy's book. Respond to Murphy's book's chapters on supply curves(which have stood for 200 years and are accepted by every school of economic thought), or concede.

Do you somehow think that to be a voluntaryist that you have to be a jerk?

No, I'm a jerk to you because you're an ignoramus. This is not a matter of disagreement. You do not understand this highschool level subject, and continue to post about it no matter how obvious it is that you do not know what a supply curve is.

It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.

Murray Rothbard, Making Economic Sense (1995)

I don't get into arguments with people about the Ugandan Economy, or into complex arguments about the history of the derivative market. If you don't understand something, don't argue about it. Learn about it if you're interested.

 

[Travlyr]

Cutlerzzz, your reading skills are so poor that there is no reason to take you serious. Indeed starting with the name calling indicates that you bring very little substance to the debate.

I am confident that some people understand. You like to obfuscate the issue by saying stuff like that ^^^ which is not at all what I wrote. I wrote that the laws of supply and demand are distorted by policy not that they cease to apply... sheesh. Careful reading is important to understanding.

And then you just say it again ...

The fact that indirect price controls are subject to supply and demand (and government is using supply and demand as its tool) means that by definition supply curves apply. There is nothing to debate.

And again...

Because the monetary system is unrelated to a supply curve, as I have already explained and had Murphy show in depth. It does not matter what the currency is, or how much value it has, or what it's change in value is. All of that is priced into the supply curve. That's kind of the point of the market. It actually adjustes to changes in supply and demand through price signals, which is the entire point of this "debate". You don't think a market operates by the laws of supply and demand, and there is nothing more to it.

Without a doubt your incompetent reading skills are a pattern: http://www.ronpaulforums.com/showth...tes-Ron-Paul&p=3888514&viewfull=1#post3888514

The word distortion has a meaning. Distort the market is not equal to the laws of supply and demand do not apply.

Do you have a dictionary? Look-up the meaning of the word "distort."

Please, a few posts ago you claimed that supply curves are Keynesian. You don't even know what a supply curve is, and have not addressed anything in Murphy's book. Respond to Murphy's book's chapters on supply curves(which have stood for 200 years and are accepted by every school of economic thought), or concede.

No, again, careful reading skills are important. Maybe you can go back through the thread and show the rest of us where you get this crap. I did not write what you claim I wrote. I do know what a supply curve is. What I claim is that the supply curve for fiat money, since it is unlimited in quantity, is not a valid indicator of what would occur in a sound monetary system of virtual limited money supply. In other words, applying sound principles to unsound systems fail to deliver accurate results.

No, I'm a jerk to you because you're an ignoramus. This is not a matter of disagreement. You do not understand this highschool level subject, and continue to post about it no matter how obvious it is that you do not know what a supply curve is.

It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.

Murray Rothbard, Making Economic Sense (1995)

I don't get into arguments with people about the Ugandan Economy, or into complex arguments about the history of the derivative market. If you don't understand something, don't argue about it. Learn about it if you're interested.

No, you are a jerk to me because you are a jerk in real life and just can't have adult discussions.

Rothbard tried to get you to understand that relying on charts and graphs will distort your understanding unless you really understand it. "The Mystery of Banking" by Murray Rothbard

Conventionally, and for convenience, economists for the past four decades have drawn the demand curves as falling straight lines. There is no particular reason to suppose, however, that the demand curves are straight lines, and no evidence to that effect. They might just as well be curved or jagged or anything else. The only thing we know with assurance is that they are falling, or negatively sloped. Unfortunately, economists have tended to forget this home truth, and have begun to manipulate these lines as if they actually existed in this shape. In that way, mathematical manipulation begins to crowd out the facts of economic reality.

But the bigger point is that it does not take a Ph.D. in economics to understand that when counterfeiters with a printing press quadruple the money supply that prices will eventually quadruple and minimum wage earners suffer in the process because they lack the negotiating skills to get an increase in their wages every time. In controlled markets, if their wages were tied to inflation, then they could keep up. Free markets are different.

 

[PaulConventionWV]

I understand the premise of minimum wage. I even respect people who want it for the views supported by that premise. But it doesn't quite hold up to a deeper logical inquiry. Romney knows better.

Did anyone really expect anything else out of Mitt Romney?

 

[PaulConventionWV]

Care to explain how a fiat money system can change a supply curve?

It can't, but the point is that, while we are using fiat money and the supply inevitably increases, minimum wage should keep up with inflation. It's going to lead to catastrophe in the end, but as long as we're propping up a fiat system, why not let the people get a good share of it? They can work at whatever businesses receive government subsidies and outgrow the market until we actually get to the point where we have competing currencies and can allow other businesses to compete.

 

[PaulConventionWV]

Can you explain why it is that supply and demand do not impact the economy today? Why do supply curves not matter? At what point did supply and demand stop effecting the labor market?

Who says they don't?

 

[erowe1]

It can't, but the point is that, while we are using fiat money and the supply inevitably increases, minimum wage should keep up with inflation. It's going to lead to catastrophe in the end, but as long as we're propping up a fiat system, why not let the people get a good share of it? They can work at whatever businesses receive government subsidies and outgrow the market until we actually get to the point where we have competing currencies and can allow other businesses to compete.

All of the arguments against minimum wage are arguments against letting it rise with inflation. If a minimum wage exists, then the lower it is the better. And if inflation causes the minimum wage effectively to decrease over time, that's a good thing.

 

[Travlyr]

Did anyone really expect anything else out of Mitt Romney?

I agree with Mitt. The minimum wage should be tied to inflation since the supply of money is controlled and unlimited. If it was a free market, then he would be wrong, but the markets are controlled and manipulated. Does that make sense to you?

 

[PaulConventionWV]

Applying sound monetary policy to an unsound monetary system is fail and visa versa.*

The supply curve for money is not applicable to 100% redeemable currency because all effects are market controlled. In other words money is a commodity. Supply and demand set the price for all goods and services because money is virtually limited in supply along with all goods and services.

The supply curve for money affects markets controlled by policy of created out of nothing money. Fiat money is not a commodity. Commodities are limited in supply but money is unlimited. Prices are distorted and set by policy.

It's "vice versa." There is no 'a' in 'vice'.

 

[Travlyr]

It's "vice versa." There is no 'a' in 'vice'.

That's a good point. visa versa would be like a credit card.

 

[falconplayer11]

Wants to Raise Minimum Wage



Mitt Romney advocated (two days ago, I think) pegging the minimum wage to the CPI to make sure it increases proportionally to costs of living. While this seems to make sense if we are indeed going to have a minimum wage, it only hurts his prospects of decreasing unemployment if he is elected.

Here's a good response that channels Murray Rothbard's analysis of the minimum wage (which creates a permanently unemployed class of workers).

Here's my question: Does he seriously not understand this basic economic fact? Or is he so blatantly unprincipled that he will just go along with popular opinion regardless of what effect it has on the economy? I just don't understand it.

 

[TheTexan]

I think we should raise minimum wage to the OWS recommended $20. This would solve everything!

 

[falconplayer11]

Here's a good response on why Romney is wrong.

http://hanseconomics.com/2012/01/16/romney-is-wrong-on-minimum-wage/

 

[Cutlerzzz]

Let's take a look at that Rothbard quote you posted.

Conventionally, and for convenience, economists for the past four decades have drawn the demand curves as falling straight lines. There is no particular reason to suppose, however, that the demand curves are straight lines, and no evidence to that effect. They might just as well be curved or jagged or anything else. The only thing we know with assurance is that they are falling, or negatively sloped. Unfortunately, economists have tended to forget this home truth, and have begun to manipulate these lines as if they actually existed in this shape. In that way, mathematical manipulation begins to crowd out the facts of economic reality.

Do you have any idea what this statement means? It means that he agrees with me. He is telling us that we know that Demand falls at a higher price.

If you knew what a Demand Curve was, you would realize this and would not have posted it. Once again, you have done my work for me, and shown everyone that you have no idea what a Demand Curve is.

Cutlerzzz, your reading skills are so poor that there is no reason to take you serious. Indeed starting with the name calling indicates that you bring very little substance to the debate.

Your ignorance is so extreme that it is difficult to take you seriously. See above.

Distort the market is not equal to the laws of supply and demand do not apply.

So there we have it. Supply and Demand apply in a distorted market. That by definition means that a Supply Curve is in effect.

What I claim is that the supply curve for fiat money, since it is unlimited in quantity, is not a valid indicator of what would occur in a sound monetary system of virtual limited money supply. In other words, applying sound principles to unsound systems fail to deliver accurate results.

A supply Curve Applies in a system with or without money. People could be bartering goats, and a Supply Curve would still apply. If you knew what it was, you would realize this.

No, you are a jerk to me because you are a jerk in real life and just can't have adult discussions.

Why should I have an adult conversation with someone with the mind of a child? I've tried adult conversations with you before, as have other people. They don't work. You have gotten into debates before where you argued Thomas Woods was not an anarchist (and proceded to have a meltdown, swear at people, and start giving negs), fiercely debated that wages are denominated in steak, claimed wealth is a zero sum game, and have had some of the most laughable "arguments"(I can't even type arguments with a straight face) against anarchy. There is no reason to take you seriously.

 

[Cutlerzzz]

It can't, but the point is that, while we are using fiat money and the supply inevitably increases

I'm stopping right here. The supply of labor does not inevitably increase. That has nothing to do with a fiat money system.

 

[PaulConventionWV]

I learned that stuff back in high school, along with the concepts of supply and demand.

You have absolutely no understanding of economics. All you do is make posts that vaguely talk about sound money without any detail, as you do not have any indepth understanding of monetary policy. Having fiat money does not somehow alter the laws of supply and demand so that price controls do not cause shortages and surplus's.

Your posts stink of arrogance. Stop being a bitch, please.

 

[PaulConventionWV]

I'm stopping right here. The supply of labor does not inevitably increase. That has nothing to do with a fiat money system.

I didn't say labor, I meant fiat money.

 

[Travlyr]

So there we have it. Supply and Demand apply in a distorted market. That by definition means that a Supply Curve is in effect.

A supply Curve Applies in a system with or without money. People could be bartering goats, and a Supply Curve would still apply. If you knew what it was, you would realize this.

That is what I have said over and over again. Supply and demand curves are accurate with sound money and inaccurate with unsound money. I am having a hard time understanding why you don't understand it.

Sound money is real.
Supply and demand in a system of honest sound money determine price based on value. Supply and demand curves accurately portray exchange values if sound monetary policy is implemented and the curves are accurately drawn.

Fiat money is fake.
Fiat means "let it be so" which is pretend. Fiat is fake based on force of law and guns to protect insiders who are privileged. The result of that is a fiat system (fake) of money supply and demand curves that give false results.

For example, why do Goldman Sachs bankers make millions of dollars each year for golfing, sitting in meetings, and pushing paper back and forth while farm laborers till the soil, plant the seeds, cultivate the plants, and harvest the crop for $8.00 per hour? Certainly the demand for quality food is higher than pushing paper. The farmer provides a valuable product while the Goldman Sachs banker provides no value to society.

In a pretend world, real charts and graphs can be anything or nothing. It is pretend. Fiat is pretend. Fiat is just like monopoly money... unlimited in supply. Commodities are limited fiat is infinite. It makes a difference no matter how many times you pound your fists and feet on the floor.

Fiat money distorts supply and demand curves.

I do not post this stuff for you Cutlerzzz. I endure your childish name calling in order to promote the idea that a free society must use honest sound money as taught by Mises, Rothbard, Paul, et. al.

 

[PaulConventionWV]

All of the arguments against minimum wage are arguments against letting it rise with inflation. If a minimum wage exists, then the lower it is the better. And if inflation causes the minimum wage effectively to decrease over time, that's a good thing.

No, being against it in a sound money system is not the same as being against it when the money supply is expanding and putting the low earners at risk.

While I agree that the issue is slightly distorted by the fact that we all, first and foremost, would like to stop inflation and return to a sound money system. However, I am thinking in the here and now, and while I would not even argue on this point if it were all just theoretical, I am one of those people who makes below average pay. I remember when the minimum wage was 5.15, and if it were still that, people like me would be undcer ridiculous pressure. In an economy with an expanding money supply, we need a raise.