Monday, November 3, 2008

I hate to be a spoil sport, but...

I hate to be a spoil-sport, but, I fear the priorities in the new admin...
...will include Obama's minimum wage, a dollar below LBJ's, 1968, $10/hr, double the average income later; instead of half the "true" average income or $13/hr (LBJ and Ike really pushed it at two-thirds the true average; last year it was at one-sixth, this year one-quarter, Obama's plan is one-third, I would see it at half -- the "gov" average wage not comprehensive and grew only 20% as per capita income doubled)...
...will include a card check, labor law leftover from the 40s that some bright labor lawyer happened to notice or we apparently would not have anything to talk about; not the world wide (third, second and first worlds) answer to the race to the bottom: sector-wide labor agreements, the perfect answer to Wal-Mart.

If we could have foretold to folks of 1968 that 40 years hence the economy would be in recession -- and that, oh by the way, the minimum wage of 1968 would become the 25 percentile 2008 wage -- the folks of 1968 would have forgotten to yawn over the current recession while throwing a fit at the seemingly impossible prediction of a "great wage depression." What could they possibly have guessed would be the cause: civil war, multiple depressions or even plagues?

But try to tell our progressive elites to focus on what should have been this impossible economic history -- on what should be taken as today's most extreme if never ending (boring?) economic emergency. Maybe if their affluent next-door neighbors were reduced to less than $150,000/yr, maybe then they would achieve all-out focus on the wage depression that exists for MOST of our workforce and maybe then they would be willing to take some "risks" to -- quickly! -- do something about it, like doubling the minimum wage in a hurry (causing only direct 3% inflation) and importing the answer to the race to the bottom used all over the globe, legally mandated sector-wide labor agreements.

Our progressive super economists can perform 20X the volume of academic labor that I am capable of in one day, but they somehow cannot keep 2 things in mind at the same time: this years financial mess and the endless wage depression.

****** which history professor James Livingston explains simply that if business squeezes too much money out of labor, then, demand drops and business has no healthy place to invest its excess profits (plant and equipment) and heads out in search speculative paper which the only alternative ( start ups with no realistic business model, risky real estate): leading us from bubble to bubble. which Livingston saith:
"By 1937, industrial output and national income had regained the levels of 1929, and the volume of new auto sales exceeded that of 1929." "That rising demand was a result of net contributions to consumers’ expenditures out of federal deficits, and of new collective bargaining agreements, not the eradication of unemployment."

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