A) What do I need to do to take or atleast audit the course?

and B) Can you explain why as much as some complain and natter, no one even considers that we ought just part ways as philosophical and irreconcilable strangers? Only Walter E. Williams has posed such a resolution, but he let it lie and did not follow up. Beyond the “little” threat of war, are there other daunting difficulties in such an idea? I’m exhausted with decades of debate with people who adhere to dogma that renders constitutional principle not even as understandable and respected as a treatise written in a foreign language.

One social debate after another would fairly dissolve if people just separated. Let the government interventionists have everything their hearts desire from single-payer health care to a command economy and everything else, without we pesky dinosaurs to hinder their progress or to blame for their failures. Have it all; just leave us out of it.

Why in the lengthening course of dramatic acceleration of unconstitutional folly and the intense reaction that it has inspired, is scarcely anyone even breathing the suggestion of so simple a solution? I have no ambition to reclaim a muddled authority to stand with our foots upon the throats of a squirming and bleating 40-49%. Just be done with it. I have used the same analogy that Williams did, comparing our situation with that of a couple that no longer agrees on or respects the terms of the marriage contract. Why is this evidently such a daunting prospect? Is it only a fear of the American military which in fact may be less than anxious to impose unconstitutionality on peaceful dissenters? We seem a far cry from the citizens who took up arms to defend creator-endowed rights, pledging their lives, their fortunes, and their sacred honor.

“..it’s hardly necessary for the unemployed to get a job by making a new business. But that said, government is what stands in the way and makes it so expensive to do.

“A lot of the costs of starting a business are due to government regulations (licensing, inspections, zoning laws, etc.)”

I have some special expertise on the sand government regulations throw in one’s gears when we want to start a business. I’ve been down to Licenses and Permits many times. The fees aren’t so bad, although the paperwork’s really tedious. The big thing is that you have to take so many expenses out of an employee’s total payroll kitty. Workmen’s comp, withholding and benefits. That’s why it has become so popular to use subs. They’re classified as independent contractors, so you just give them a statement of earnings, from which they issue you a bill, and you pay them gross. They have to sign a statement for you to have on file, stating that they are independent, use their own tools, set their own hours, etc. Works fine, and satisfies The Man.

And consider the alternative. A world full of unlicensed businesses, on uninspected premises. Professionals would still offer you a measure of safety, assuming that professional licensing entities were untainted by self-interest. That is, one could be assured that accountants, say, were faithful to the job assigned them by their clients: issuing one set of books for Uncle Sam (cloudy) and another for the shareholders (rosy).

But concrete? Huge sums stand to be made from slightly jiggering the proportions of sand and cement used in the product’s composition. Countries that don’t micromanage the grades of commercial pour they allow to go on sale have one characteristic in common: their bridges and apartment buildings tend to fall apart after the first few years.

Construction contractors don’t put in rebar (which no one sees anyway). Tire mfr’s don’t add expensive annealing agents. Medical labs don’t clean their equipment. Meat packers… well, I think you know the answer to that one. No one’s responsible for what is unseen.

I pay extra for the privilege of living in a first-world country. You would too, I bet, if you thought about it.

Being self employed is the nobler thing, but like art it usually doesn’t pay very well. Any employment that pays well is subsidized by government violent coercion somehow whether direct government employment, employment by government contractors, employment in occupations licensed by the government, etc. Even the very use of money itself is based on government coercion in enforcing the use of money. There is no longer enough freedom for self employment to be much of anything but another form of government employment.

Michael, this is the way things have been for most of recording history, and certainly prehistory as well. How did this change? It changed when capital goods were advanced enough to drastically increase the productivity of labor. Then, and only then, could laborers work and expect to have more than a subsistence living. In 1933 this increase in productivity was just beginning.

“So we invented something the businessmen would have had no need to come up with: a national retirement plan for wage earners.”

Let’s say there is a high demand for the products that a business makes; let’s say it doesn’t have enough labor to keep up with demand for its products; let’s say profits are high; let’s say that there is a shortage of qualified labor at the wage they are currently paying. If these conditions are met, then the business will have to do something to attract the laborers it wants. One thing the business could do to attract laborers would be higher wages. Another could be a retirement plan. If the conditions I gave are met, then using government to pay for such a plan would be unnecessary.

Your continued error is in assuming that if businesses cannot afford such a plan, then the government could somehow implement it in a way that would not have a net negative impact on society. You assume this because you want it to be true. That does not mean that it is true. You let wishful thinking unduly influence your economic beliefs.

“And we made that plan self-financing.”

What complete and utter horseshit. Social Security was never, and is not now, self-sustaining. That would imply that the “trust fund” is real, and peoples’ payments go into it. Payments that people make today go into checks that other people receive tomorrow. SS is no more self-sustaining than any other Ponzi scheme, in the long run.

“Which is fine, in a sense. You can’t expect businesses to hire more people than they need. That would be counterproductive. Yet it sets up a larger problem, that we have an increasingly large number of people who can’t find a space within the system. The number of workers needed to run the world keeps decreasing, while population keeps increasing.”

By “the number of people needed to run the world keeps decreasing”, I assume that you mean that the labor needed to run the world keeps decreasing. That would mean that productivity is increasing, and thus prices of products are decreasing. This would mean that people would need less money to live, and thus could afford to work less hours. The labor needed to run the world will simply be spread out across more people, each of which does less labor. Working a 20 week, and still being able to afford a decent lifestyle, sounds good to me.

Irrational expectations of performance. Whether it’s a real estate bubble, a stock bubble or any other kind, people want to believe that the thing they’ve invested in will just keep growing, and growing, and growing… that there’s no limit to growth.

Like that, Michael? Out of the blue, they expect their investment to grow exponentially? Or are they being fooled by something?

Let’s leave aside “the fallacy of just compensation” as being irrelevant to my actual argument. Consider all employees in the aggregate. Consider how much purchasing power they have. They can therefore afford to buy quantity A of total industrial output.

You would be saying that the wage level should be such that workers can buy the output of a certainl industry. Is that the case? In that case, which industry? because saying “industry A” is too vague for me.

If total potential industrial output is >A, then capacity has to be shut down, and employees laid off. If, however, aggregate purchasing power A increases, than as a direct consequence, total industrial output can increase– for the reason that they have customers for more goods.

You make the assumption that it is consumption which pulls production. It is actually the other way around – we as humans produce in order to consume, not consume do that others can produce.

Ford’s advances had a ripple effect on business.

That’s just an ad hoc explanation, Michael. YOU said he raised the wages so that HIS employers could buy Fords. NOW you bring up this “ripple effect” when the absurdity of what you said was pointed out to you.The fact is that Ford raised the wage levels to reduce employee turnaround, and not for the purpose of allowing them to buy Fords. It was the lowering of the cost of manufacture that allowed MORE people to buy Fords (i.e. increased PRODUCTIVITY), but not raising their wages SO they could buy them.

I work in the cement manufacturing business, and the wage leves are not offered to workers so that they can buy a 50lb sack of cement.

Gil: “The unemployed are supposed to create new industries and create greater technological process. Maybe the answer to the paradox is those who lost their job are the least creative and least likely to start new businesses.”

(I would agree. In fact I’ve just said so, above.)

Russ: “Nah, that is ungenerous, to say the least. The way it’s supposed to work is that businessmen are supposed to retool their capital goods so they can match the real market’s demands, not the bubble market’s demands. Then the displaced workers can be hired again.”

Businessmen can be relied on to enhance the bottom line of their company. That is their function. We can leave them to pursue that reasonable goal.

But society ends up with certain serious needs unmet, when all economic activity is left to the businessmen. One thing we found prior to 1933, for example, was that workers only made enough money to cover their families’ basic needs. So when they got too old to work, they were broke. Which meant they then had to die penniless.

So we invented something the businessmen would have had no need to come up with: a national retirement plan for wage earners. And we made that plan self-financing. Since then it has worked pretty well, throughout changing economic eras. It only needed one tweak back in 1982, and will need a second tweak sometime before 2018. Then it will continue to serve the needs of its public: those who can’t seem to be able to get ahead otherwise.

Then there’s this:

Gil: “The agricultural sector has, for the past 300 or so years, been engaging in permanent job destruction. In other words, people have been losing jobs on the farms and not getting them back because of the rise of the new industries which in turn hired them.”

That’s been the story of our whole economy. Over time, economies of scale favor larger and larger combines, and make the little guys (individual entrepreneurs) redundant. They can’t compete, by and large, and few can even make a humble living in the face of giant agricultural conglomerates. In fact they can’t even give up and get hired by such giant combines.

Which is fine, in a sense. You can’t expect businesses to hire more people than they need. That would be counterproductive. Yet it sets up a larger problem, that we have an increasingly large number of people who can’t find a space within the system. The number of workers needed to run the world keeps decreasing, while population keeps increasing. The world of tomorrow is not going to be a pretty sight. In fact, most of the world today really sucks already.

It’s not the place of business to have to find places for all these people… it’s up to society to find some other mechanism. And the one we have is the one that supplies the system with its money.

Tempting to just forget them all and let them go their own way. But that won’t work. Get them angry enough and they turn into revolutionaries (as they did in the early 20th century), and the costs of containing the consequent destruction become higher than the costs would have been to find better ways of addressing the problem.

As a beginning, I would let Bush-era tax cuts expire, put a halt to our useless wars and start bringing the budget into balance again. In other words I’d reset the economy to 1997-2000. And I’d extend direct educational and small business loans to individuals out of government money, rather than loan that money to private markets so they could either gouge or ignore their customers. I’d put the Treasury Dept. into the banking business, as necessary competition to the private banks.

The money would do far more work out on the street than it would as reserves in the vaults of our major investment banks.

A lot of the costs of starting a business are due to government regulations (licensing, inspections, zoning laws, etc.)

Not to say that some of these wouldn’t exist to a degree in communities by contract, but I think individual choices would generally be much more free so that there wouldn’t be so much capital required to start something like a restaurant, bakery, etc. The reason you end up needing a separate store building just to get off the ground is because of government interventions in the market place.

I’m not saying those separate buildings wouldn’t exist, but competition is certainly possible by smaller businesses just based on their nearness to the customer. Product differentiation is also a strong challenge to economies of scale. Taco Bell may make cheap food but it also sucks and it’s workers tend to represent the worst who can’t even get orders right 50% of the time (no exaggeration on my particular Taco Bell).

The other reason people remain unemployed (even if they are willing to accept any wage at all) is price controls like the minimum wage. They can’t accept a lower wage because it’s illegal to do so.

Now certainly there are also those who are unemployed by choice, but only by choice because they can’t find something that pays enough to support their current obligations (debt burden on the house, etc. ) Unfortunately there is no easy answer for them.

Many of them will have to face bankruptcy and still accept the lower paying job. It is not their fault that the industry they were in existed due to malinvestment. But it is also not the fault of anyone born into a poor family that they are poor, etc. Life is not fair. And trying to make it fair is the very cause of so many situations like this.

michael wrote:
“This sounds very much like an unexamined assumption. If by growth you mean something like increases in our GDP, how does the destruction of jobs contribute to it?”

The canonical example is buggy whip makers. When the automobile industry started to take off, it put buggy whip makers out of jobs. There simply wasn’t much demand for whips anymore. Would we be better off if buggy whip makers were subsidized, or if automobiles were taxed to make them prohibitively expensive, so that there would still be a demand for buggies, and hence buggy whips?

New, better products that push old, inferior products out of the market necessarily displace workers, at least temporarily. This is unfortunate, but necessary, if we are to benefit from new products, and not be forced to subsidize old products that we no longer want.

This sounds very much like an unexamined assumption. If by growth you mean something like increases in our GDP, how does the destruction of jobs contribute to it?

We’ve recently seen the sudden destruction of many millions of jobs, in 2007-08. Did we also see a concomitant Great Leap Forward? Or, barring such a great stride being entered in the evidence, can we even come up with some theory linking this destruction of personal income on such a scale with even the potential for an enhanced GDP?

I’d look forward to your fuller explanation.

However you both ask a pertinent question here: “why didn’t the unemployed start their own businesses?”

Mostly, the fact is that only a minority among us have the inclination, the drive, the specialized knowledge and the fiscal backing to start a successful business. They need a job. That’s their orientation. I suppose we could cut them off the lifeline, but they do constitute a majority of the population.

Second, most small businesses that do start fail in their first couple of years. People out of work know that, and are hesitant to flush what remains of their savings down that drain.

Third, capital for new startups is always hard to come by. And at no time more than now. Most available capital is directed at large firms with a track record, not out of work individuals with a bright, untested idea.

Fourth, There are few marketing niches left, other than in high-tech areas. Joe Smith can’t compete with the national chains any more, whether he wants to open a restaurant, a clothing store, a hardware, you name it. Economies of scale have driven small entrepreneurs out of business. They have been replaced by huge national chains. The few instances where niches still remain are filled with tiny entrepreneurs. Hair parlors, second hand stores, karate studios and the like.

And fifth, commercial real estate rates make most profitable business plans evaporate in the summer sun. The numbers just don’t work out for one person wanting to open one business. The number of pizza slices you can sell at the mall don’t justify the rents. You’d have to sell hundreds of slices each hour you were open, just to reach your break-even point.

I was able to do so successfully (transition from employment to self-employment), by finding a niche requiring little capital, one with a previously unexploited and largely untapped need. However there aren’t enough of those niches to satisfy the needs of 18-20 million people suffering from forced unemployment.

It would be nice if they all could. Imagine, a world in which 20 million new businesses could get off the ground!

Nah, that is ungenerous, to say the least. The way it’s supposed to work is that businessmen are supposed to retool their capital goods so they can match the real market’s demands, not the bubble market’s demands. Then the displaced workers can be hired again. It’s not the workers’ fault that they happened to work in market segments that existed mainly due to easy money. And in an economy based on a division of labor, expecting laborers to also be successful entrepreneurs is somewhat unreasonable.

Also, Ford was probably not paying more just out of the goodness of his heart. That was just effective self-marketing. He was probably paying more to try to attract the better workers to his firm, and leaving other firms with the more marginal workers.