Hello Econominauts,
(This is my first post in what will hopefully be a series into my political ideas concerning citizenship, political systems, and the New Way at large)
Normally I feel like it would be necessary for me to explain in length what Cap and Trade economic principles are, however, It's 1 A.M. and I believe in everyone's ability to use a google search engine. As always, leave the moral rants at the door, this is about economics and solving problems.
Let it begin!
So how do you solve the immigration issue, increase the number of people in the middle class and keep the population in check? You create incentives that lead your goal, you create Cap N' Trade.
How does this work? At the age of 18 every citizen in the United States would be granted 1.5 citizenship tokens. If they choose to have children, they can use these tokens to grant their children citizenship (level 1 citizenship, but that's for another post). If they don't choose to have children, they can sell them in the marketplace. The price of the token (and half tokens) is completely determined by the laws of supply and demand. Anyone in the world can buy these tokens. While this system sounds incredibly simple, the effects are far reaching. I'll go into each area affected.
Immigration- Currently the word on every candidates lips, immigration has become a hot topic because of Trumps antics and a "us vs. them" mentality among a lot of Americans. The problem is simple enough, the people who are trying to get in legally are having an incredibly tough time and the people we don't want are just swimming over. Obviously everything is a little more complex than that, but my citizenship plan fixes a lot of these issues.
1. Wealthy foreigners who want to start a life here can purchase citizenship instantly for themselves and their whole families. No muss, no fuss. Every time a wealthy foreigner becomes an American our tax base expands, this helps everyone out.
2. Those with family already here can be donated an excess coupon and be brought over.
3. There has to be some ramification for those who try to take part in the benefits of citizenship without actually paying for it (i.e illegal immigrants). I have yet to find a suitable solution to this problem namely for moral reasons, however, the simple solution is to make them purchase one from the marketplace using a government loan at a fixed Interest rate. They have a set amount of time to pay it off, if they fail to, they're deported.
Expand the Middle Class- The middle class expands when a couple things happen. A) people are born into it and then stay in their strata. B) those in a lower class achieve escape velocity and then maintain footing. C) The upper class loses their money and power and descends.
Shrinking poverty levels and giving those in that class an escape hatch is paramount to a stable economy. Currently the poorer half of the population is growing faster than the wealthier half. It's been known for decades that poor people tend to have more children than their wealthier counterparts. By implementing my token based citizenship approach we're giving those born into poverty a way to make money by incentivizing they have less children. By selling their token in the marketplace we're ensuring they're having less children (until a later, richer, date when they can afford the price of a token on the marketplace) and they have enough money to (probably) achieve some form of higher education. This helps increase the middle class by stopping the inherent population growth of the poverty class and by boosting those already in it into the middle class.
Conclusion- As with anything, the devil's in the details. How do you make sure people aren't having children when they don't possess any citizenship tokens? What happens if someone fails to pay for them? Can we really deny a child rights because their parent didn't have the proper token? These are all messy issues we'd have to work out, however, I feel confident that the net benefits of this system far outweigh what we are currently doing.
Preview- My next blog post will outline my plan for tiered citizenship levels and will hopefully justify to readers why I don't believe in democracy. Yep, the cats out of the bag, I think democracy sucks.
JEE
Sunday, October 4, 2015
Saturday, October 3, 2015
On Bernie Sanders Trillion Dollar Economic Plan
Hello Econominauts,
First and foremost let me say that I think Bernie Sanders is a fine human being whom I share a lot of views with. Unfortunately none of them are on the economy. Today's post will be about his plan to rejuvenate the American economy by spending an additional 1 trillion dollars to create jobs in the infrastructure sector. Supporters will claim that this plan is similar to FDR's approach when building the building the blue parkway among other national beautification projects, and while it's true they share some similarities, America wasn't 18 trillion dollars in debt at the time, so it was a more reasonable solution.
Here is Bernie's plan straight from his own website (https://berniesanders.com/issues/creating-decent-paying-jobs/)
"Introduced legislation which would invest $1 trillion over 5 years to modernize our country’s physical infrastructure, creating and maintaining at least 13 million good-paying jobs while making our country more productive, efficient and safe."
On the surface this seems like an idea that could work. Invest money to create jobs which in turn boosts America's infrastructural ability to cope with increased commerce. A lot of people can get behind that, however, the math just doesn't add up.
1 trillion over 5 years equals 200 billion a year.
200 billion/13 million workers equals $15,384.61 per worker....this is where it stops adding up. Current minimum wage workers only make a little below that number now. Once you figure in Bernie's plan to raise minimum wage to $15 (see previous post), you see that this is FAR less than he believes people should be making at a minimum.
Then you have that pesky problem of affording building materials. But who needs that for infrastructure?
JEE
First and foremost let me say that I think Bernie Sanders is a fine human being whom I share a lot of views with. Unfortunately none of them are on the economy. Today's post will be about his plan to rejuvenate the American economy by spending an additional 1 trillion dollars to create jobs in the infrastructure sector. Supporters will claim that this plan is similar to FDR's approach when building the building the blue parkway among other national beautification projects, and while it's true they share some similarities, America wasn't 18 trillion dollars in debt at the time, so it was a more reasonable solution.
Here is Bernie's plan straight from his own website (https://berniesanders.com/issues/creating-decent-paying-jobs/)
"Introduced legislation which would invest $1 trillion over 5 years to modernize our country’s physical infrastructure, creating and maintaining at least 13 million good-paying jobs while making our country more productive, efficient and safe."
On the surface this seems like an idea that could work. Invest money to create jobs which in turn boosts America's infrastructural ability to cope with increased commerce. A lot of people can get behind that, however, the math just doesn't add up.
1 trillion over 5 years equals 200 billion a year.
200 billion/13 million workers equals $15,384.61 per worker....this is where it stops adding up. Current minimum wage workers only make a little below that number now. Once you figure in Bernie's plan to raise minimum wage to $15 (see previous post), you see that this is FAR less than he believes people should be making at a minimum.
Then you have that pesky problem of affording building materials. But who needs that for infrastructure?
JEE
Thursday, October 1, 2015
Why increasing minimum wage is the worst idea ever
Dear Econominauts,
Over the past year we've heard tirade after tirade about how increasing minimum wage is the only way to get America back on track. It'll create a middle class, let low wage earners afford college, decrease crime, and if you don't support it you're a huge monster asshole who supports corporate greed and should be tied to a splintery post and flogged.
The part they leave out is how it will utterly destroy America's economy and lead to a global depression that makes 1930's Boston look like a utopia.
Before I really tear into this issue let me say that at NO point will I discuss the morality of increasing minimum wage, which, unfortunately, are the only reasons against it I typically hear. I personally wish everyone on earth owned a jet ski, had a private buffet in their 4000 sq ft mansion, never got sick, and had orgasms on command. Alas, it is not so (but it's a goal).
Let the thrashing begin!!! The sections are outlined below.
1. Think like a small business owner
2. Think like an American worker
3. Macro Impact
Part 1: I own the busty bagel breakfast joint and have 5 minimum wage workers underneath me. Since they all work 40 hours a week, I have a $1450 weekly labor cost. When minimum wage jumps to $15, this increases to $3000. To offset this so that I don't foreclose on my home and lose my wife to a life of vein thumping and pimp humping I can do one of four things.
A. Increase prices
B. Cut workers
C. Cut production costs
D. Increase production efficiency (the scary one)
In reality I'll probably end up doing all four, however, for now we'll focus on them one at a time.
Increase Prices- To deal with the increase of labor, I decide to increase the prices of all my busty bagels. As anyone who has ever taken an economics class knows, when you increase the price the demand for your product decreases. As a smart business owner, you had already price tested your products and knew that your current prices represented the perfect intersection of supply and demand. By increasing your prices, less people are wanting to buy your product. Now you have two problems. You have to pay your employees more and there are less customers. This solution will not work. (I will focus on the problem of inflation once I take a more macro look at the problem).
Cut Workers- I really liked the number of people I was employing before, but now that they've voted for a moron who artificially increased their pay...I have to fire those fuckers. To bring my labor costs back down to $1450 a week, I can only employee 2.41 people. Since I haven't hired any midgets, I'll need to round this up to 3, I now only have 3 people doing the work it normally took 5 people to do. No body is happy, my business isn't running properly, and unemployment has increased. Wonderful.
Cut Production Costs- So I've decided that I simply can't part with any of my little turds, even though they voted for the anti business christ and threw their own lives and lives of billions into the gutter, I do love them and don't want to see them destitute. So I start using rat meat. All of my once busty bagels are now smaller, more A cup bagels, and I've decided to use old product instead of throwing it away. It's okay though, because now that everything I serve comes in a frozen bag it makes cleaning up a breeze. Except when my loyal customers decide that they don't want to pay the same price for an inferior product. They every stops coming and the business goes down and we're all hustlin crack for a cheese burger.
Increase Efficiency- I'm going to cut the shtick on this one and just tell you what I mean. When businesses are forced into increased costs they look for ways to become more efficient. Innovation is what drives capitalism and this scenario will produce the greatest increase in efficiency since the industrial revolution. I'm talking about the replacement of human workers with automated processes. Don't laugh at this one. It's already happened. Go into any industrial complex today and you'll see human and robot working side by side on the assembly line. The only reason the service sector hasn't went fully automated is because of the cost of inventing and implementing the technology. Once the cost of human labor is greater than the cost of automating the process, you better believe you'll be ordering food from mcdonalds from SIRI and Cortana. They can already recognize your accent and use of slang, it's not that far off that they'll be able to take your order at the drive through, take your money at the window (electronically or physically) and then extend a double cheese burger and fries without a human hand ever touching it. Our current economic structure seriously cannot handle this. Increasing minimum wage is done in the spirit of decreasing the wage gap. Once the only people who are employed are the high level skill positions that can't be automated, it will be millions of times worse. It would cause a global revolution that would cripple the world economy. We have not planned for this and while it's an inevitability, we can stave it off long enough to create a plan, let's not be premature about our own cultures destruction.
------------------------------------------
Part 2- Now lets think like an average college educated, middle-class, American worker. Let's say you currently make $35,000 a year at a really stressful firm and have no kids. Minimum wage increases to $15 and now every minimum wage worker who is a full time employee is making $31,200. Is it really that big of a difference? Do you REALLY value that extra $3,800? Why work 60 hours a week as a salaried employee when you can go pop popcorn and tear tickets and make nearly the same amount of money? You won't, and the people who currently have these minimum wage positions, the ones who want the increase, will be fired because of the increased competition for their positions from college educated persons. As a business owner why would you keep on the girl who barely got her GED when you could hire someone with a B.A in sales management?
------------------------------------------
Part 3- Lets discuss macro trends below:
Increased unemployment- Businesses will be letting people go because of the bottom line. Those who aren't let go immediately will be replaced with those who previously held skill positions but no longer saw the responsibility as worthwhile.
Decrease in college educated individuals- Counter intuitively the number of college graduates will actually decrease due to the decreased reward for completing a degree. While those with degrees will have first dips at the jobs, no longer can you be promised a significantly higher salary for the effort you put into education.
Inflation- As I mentioned in part 1, businesses will look to increase prices. While some businesses have products that are very price sensitive and may shy away from losing consumers on a macro level it will happen. Increasing labor costs will lead to increased prices, every example of the minimum wage increasing ever has proven this. When inflation rises the value of money decreases, which means those who did not get an appropriate level bump in pay i.e. everyone who isn't a minimum wage worker, will now have a lower standard of living. This post cannot possibly cover everything that happens to an economy that goes through rapid inflation, but needless to say a few civilizations have been destroyed by it.
In conclusion. If the minimum wage increases every single thing will go to shit and it will actually be the worst on those who were supposed to benefit the most. If you love your friendly neighborhood fry cook, do not under any circumstance vote for someone who wants to raise the minimum wage. His life, America's economy, and truly the world's financial structure depend upon it.
Over the past year we've heard tirade after tirade about how increasing minimum wage is the only way to get America back on track. It'll create a middle class, let low wage earners afford college, decrease crime, and if you don't support it you're a huge monster asshole who supports corporate greed and should be tied to a splintery post and flogged.
The part they leave out is how it will utterly destroy America's economy and lead to a global depression that makes 1930's Boston look like a utopia.
Before I really tear into this issue let me say that at NO point will I discuss the morality of increasing minimum wage, which, unfortunately, are the only reasons against it I typically hear. I personally wish everyone on earth owned a jet ski, had a private buffet in their 4000 sq ft mansion, never got sick, and had orgasms on command. Alas, it is not so (but it's a goal).
Let the thrashing begin!!! The sections are outlined below.
1. Think like a small business owner
2. Think like an American worker
3. Macro Impact
Part 1: I own the busty bagel breakfast joint and have 5 minimum wage workers underneath me. Since they all work 40 hours a week, I have a $1450 weekly labor cost. When minimum wage jumps to $15, this increases to $3000. To offset this so that I don't foreclose on my home and lose my wife to a life of vein thumping and pimp humping I can do one of four things.
A. Increase prices
B. Cut workers
C. Cut production costs
D. Increase production efficiency (the scary one)
In reality I'll probably end up doing all four, however, for now we'll focus on them one at a time.
Increase Prices- To deal with the increase of labor, I decide to increase the prices of all my busty bagels. As anyone who has ever taken an economics class knows, when you increase the price the demand for your product decreases. As a smart business owner, you had already price tested your products and knew that your current prices represented the perfect intersection of supply and demand. By increasing your prices, less people are wanting to buy your product. Now you have two problems. You have to pay your employees more and there are less customers. This solution will not work. (I will focus on the problem of inflation once I take a more macro look at the problem).
Cut Workers- I really liked the number of people I was employing before, but now that they've voted for a moron who artificially increased their pay...I have to fire those fuckers. To bring my labor costs back down to $1450 a week, I can only employee 2.41 people. Since I haven't hired any midgets, I'll need to round this up to 3, I now only have 3 people doing the work it normally took 5 people to do. No body is happy, my business isn't running properly, and unemployment has increased. Wonderful.
Cut Production Costs- So I've decided that I simply can't part with any of my little turds, even though they voted for the anti business christ and threw their own lives and lives of billions into the gutter, I do love them and don't want to see them destitute. So I start using rat meat. All of my once busty bagels are now smaller, more A cup bagels, and I've decided to use old product instead of throwing it away. It's okay though, because now that everything I serve comes in a frozen bag it makes cleaning up a breeze. Except when my loyal customers decide that they don't want to pay the same price for an inferior product. They every stops coming and the business goes down and we're all hustlin crack for a cheese burger.
Increase Efficiency- I'm going to cut the shtick on this one and just tell you what I mean. When businesses are forced into increased costs they look for ways to become more efficient. Innovation is what drives capitalism and this scenario will produce the greatest increase in efficiency since the industrial revolution. I'm talking about the replacement of human workers with automated processes. Don't laugh at this one. It's already happened. Go into any industrial complex today and you'll see human and robot working side by side on the assembly line. The only reason the service sector hasn't went fully automated is because of the cost of inventing and implementing the technology. Once the cost of human labor is greater than the cost of automating the process, you better believe you'll be ordering food from mcdonalds from SIRI and Cortana. They can already recognize your accent and use of slang, it's not that far off that they'll be able to take your order at the drive through, take your money at the window (electronically or physically) and then extend a double cheese burger and fries without a human hand ever touching it. Our current economic structure seriously cannot handle this. Increasing minimum wage is done in the spirit of decreasing the wage gap. Once the only people who are employed are the high level skill positions that can't be automated, it will be millions of times worse. It would cause a global revolution that would cripple the world economy. We have not planned for this and while it's an inevitability, we can stave it off long enough to create a plan, let's not be premature about our own cultures destruction.
------------------------------------------
Part 2- Now lets think like an average college educated, middle-class, American worker. Let's say you currently make $35,000 a year at a really stressful firm and have no kids. Minimum wage increases to $15 and now every minimum wage worker who is a full time employee is making $31,200. Is it really that big of a difference? Do you REALLY value that extra $3,800? Why work 60 hours a week as a salaried employee when you can go pop popcorn and tear tickets and make nearly the same amount of money? You won't, and the people who currently have these minimum wage positions, the ones who want the increase, will be fired because of the increased competition for their positions from college educated persons. As a business owner why would you keep on the girl who barely got her GED when you could hire someone with a B.A in sales management?
------------------------------------------
Part 3- Lets discuss macro trends below:
Increased unemployment- Businesses will be letting people go because of the bottom line. Those who aren't let go immediately will be replaced with those who previously held skill positions but no longer saw the responsibility as worthwhile.
Decrease in college educated individuals- Counter intuitively the number of college graduates will actually decrease due to the decreased reward for completing a degree. While those with degrees will have first dips at the jobs, no longer can you be promised a significantly higher salary for the effort you put into education.
Inflation- As I mentioned in part 1, businesses will look to increase prices. While some businesses have products that are very price sensitive and may shy away from losing consumers on a macro level it will happen. Increasing labor costs will lead to increased prices, every example of the minimum wage increasing ever has proven this. When inflation rises the value of money decreases, which means those who did not get an appropriate level bump in pay i.e. everyone who isn't a minimum wage worker, will now have a lower standard of living. This post cannot possibly cover everything that happens to an economy that goes through rapid inflation, but needless to say a few civilizations have been destroyed by it.
In conclusion. If the minimum wage increases every single thing will go to shit and it will actually be the worst on those who were supposed to benefit the most. If you love your friendly neighborhood fry cook, do not under any circumstance vote for someone who wants to raise the minimum wage. His life, America's economy, and truly the world's financial structure depend upon it.
About Who? Me?
So what the hell is this blog all about? Why the pretentious name? As of right now, I know just as much as you do. Nothing. I'm building this ship as I fly it and not setting down til the entire world wants a seat. What I DO know is that I'll discuss a mix of political and economic ideas, some of my own, some by others, and will attempt to find a middle path between the extremes. To create third a political party, a new economic force, and a new way to say hooray.
Here are a few things I DO know:
1. I'm neither a Republican or a Democrat. I'm not a Libertarian, a Tea-Partier, a Green Goblin, a Socialist, a Communist, or any other "ist" or "ism." I'm searching for the new way.
2. I believe most of our problems, even very human problems, can be solved using advanced Economics. It's the art of doing the most with the least, which seems to be Dao of life itself.
3. I'm by no means an expect. I have no formal degree. But I do have a lot of ideas and this blog is my sounding board. If you disagree, that's awesome, but never do so from a moral stance. This blog is all about the economics.
Thanks,
JEE
Here are a few things I DO know:
1. I'm neither a Republican or a Democrat. I'm not a Libertarian, a Tea-Partier, a Green Goblin, a Socialist, a Communist, or any other "ist" or "ism." I'm searching for the new way.
2. I believe most of our problems, even very human problems, can be solved using advanced Economics. It's the art of doing the most with the least, which seems to be Dao of life itself.
3. I'm by no means an expect. I have no formal degree. But I do have a lot of ideas and this blog is my sounding board. If you disagree, that's awesome, but never do so from a moral stance. This blog is all about the economics.
Thanks,
JEE
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