Again? My argument in terms of the original question asked has already been made by others. I'm discussing TSGracchus's solution.

Sorry, I see that now, continue.

There is no way I can address your points one by one without repeating myself, so I will only address a few.

Hamilton, the friend of the bankers, was not a friend to limited government. I am sure you are aware of the debate between Hamilton and Jefferson on the constitutionality of the national bank, in which I side with Jefferson and you likely side with Hamilton. Madison was also against a National Bank.

The constitution was written as a limit on federal power. Most of the founding fathers didn't want a government powerful enough to oppress the people like that of England.

When you broadly define the "general welfare" you take away many of the limits placed on the Federal Government.

The 16th amendment is a travesty and should be repealed. It tramples the right of the people to be secure in their papers.

I again thank you for this civilized discussion, but we are too far apart on several aspects of constitutional law to likely agree on very much.

You seem like a very honest person from your responses, which I appreciate and respect.

Your claim that "Remember that the Constitution was enacted expressly for the purpose of strengthening the federal government" is wrong in my opinion. I believe the constitution was enacted to place limits of the Federal government, alleviating worries from the states that the FEDGOV could become too powerful.

The Constitution is not perfect, it does have flaws, like you say, but the flaws can be corrected simply by looking at the "original intent" of the founding fathers.

You seem to disagree.

SO here we are at a stalemate and I see little hope of any agreement. You agree that the prohibition of marijuana is moronic, but fail to see how it is unconstitutional as well.

While states are legally allowed to make prohibition laws, the FEDGOV IS NOT, which is why an amendment was needed for the prohibition of alcohol.

The FEDGOV has no right to tell states they can't legalize medical marijuana, that they can't grow industrial hemp, as well as a host of other oppressive restrictions.

Once again, thanks for the discussion.

Then I don't understand your explanation. Do you care to try again, or do you want to keep asserting that government can simultaneously choose sides and not choose sides?
No, it's not. If deterrence were the reason for law, then reality points to the ineffectiveness of law since we have law breakers. The purpose of law is to define what will happen after the law has been broken.
The law does not protect me against would-be robbers. If I am robbed, the law has not protected me. If I am not robbed, there is no crime and therefore no reason for protection.
How is power naturally on the side of capital? How effective is capital without labor? Power is not naturally on the side of capital. If it is, then it is capital of a personal sort in that everyone has their own capital - their own bodies - and can use it as they choose.
So, the wealthier people get the less they consume? Doesn't really support your argument that a wealthier society is going to consume more.
No, I don't mean to say that. That's why I used the word "mitigated." You will not get the gains you're trying to imply.
You'll simply have to prove to me that everyone, within a year, had everything they had foregone purchasing. It's simply not true. The demand for products lasted well into the 60s.
I'm not equating growing markets with growing population. Growing population is merely one thing needed for growing markets. In fact, it's the base criteria. If you don't have a growing population, at best you have stagnant growth. You could accomplish a growing market with migration from lower classes to higher classes, but if you don't have a growing population you don't have new people to sell to. Eventually, you have a population that is all in the upper class. Even if this population stays the same, you merely have stagnant growth. The population must increase in order to have new people to sell to.

I used growing population as merely one aspect lacking in your attempt to use the growth of the 50s and 60s to demonstrate rising wages will outpace rising prices. There is no growing population now, your analogy is not valid.
It does need to stop growing, but that doesn't negate my economic model. The laws of supply and demand simply aren't going to go away because we're over- or underpopulated.
Then explain to me how you can have growth when every year there are fewer people to sell to?
What?! I asked, "Do you have any evidence that wages would go up by a greater percentage than the increase in prices?" Since you're arguing for increased wages, which will lead to increased prices now, I wanted to know what evidence you were using to support that wages would grow faster than prices now. Your answer was, "There's the evidence of history. This sort of capital migration has only been going on to any significant degree since 1980. The economy of the 1950s and 1960s shows what we can reasonably expect." That was then. Assuming you were actually answering my question in that post, one would have to assume you believe wages will increase proportionately more than prices will because wages increased more than prices did in the 50s and 60s, and we can "reasonably expect" the same results because the 50s and 60s are comparable to today. Now you're trying to tell me they aren't comparable and that provides evidence that wages will outpace prices?!

You're remarkable, TSGracchus.

Let's go back to the beginning then. What evidence do you have that increasing wages will outpace increasing prices?
Well, their consumers are the ones who make the decisions about what to buy. Of course, you can forbid them from buying these things. But if even one country denies your morality, they become the manufacturing hub of the world. How are you going to combat this?
It would do no good, and it's beside the point. If you don't feel changes in tax law change behaviour, if you don't think higher taxes encourage greater attempts at not paying them, then, I'm saddened to say, you simply have no grasp of tax law or history. And it's an education I'm neither willing, nor competent enough, to give you.
Why? Too harsh? Taxation is the taking, by force, of citizens' property. Progressive taxation is the taking of greater portions of citizens' property based upon one factor: earnings. Earnings are a measure of achievement. Therefore, progressive taxation is the taking of greater portions of citizens' property based upon their achievement; the more they achieve, the greater percentage of their property you take. I simply want to know how much we should punish someone for their achievement.

You don't want to answer the question because it causes some very ugly questions to be raised in your brain. I've offered for you to sugar coat the issue and call it by whatever PC name you want. Call it "contribution" if you want, though that would be a direct contradiction it might be easier for you swallow, "How much of thier achievement should we force someone to contribute?"

I am not certain I would side with either one. Your observation about Hamilton is certainly correct. I have a dim view of the man, but I'm also conscious of the fact that this dim view may be colored by my own post-industrialization perspective. Hamilton's position was that he wanted to amass capital for purposes of industrializing the company, which is why he was a "friend to the bankers." Also a friend to rich industrialists. From today's perspective, I am very leery of that; however, at the time, when the country was not yet industrialized and did need to become so, he might have been right. I'm not certain.

I do know that, as a person, Hamilton was remarkable for his integrity, as well as for his courage when serving in the Continental Army. I seem to recall that Jefferson looked long for any sign that Hamilton had enriched himself through his political efforts, in vain. He did come up with some dirt about an extramarital affair, which he chose not to use, much to his own credit IMO.

Anyway, it's true that Hamilton was no friend to small government, which is why, given the vague empowering language in the Constitution, I wonder how much influence he had on the document compared to Madison.

The second sentence is true, but the first is certainly not. We must compare the Constitution with what preceded it, and what it replaced. That was not the government of England, but the government of the United States under the Articles of Confederation. The Constitution was adopted to strengthen the federal government, not to limit it. Certainly it contained limits on government (otherwise, why have a constitution at all?), but less stringent ones than the Articles represented. Its adoption resulted in a stronger federal government than would have existed it if had not been adopted.

I cannot argue with this; nevertheless, the language is there to be so defined. As I pointed out, if the goal was to have a weak and contained federal government, that language was unnecessary and counterproductive.

You're entitled to your opinion on this; naturally, I disagree. The government must have revenue. An income tax is the fairest and most progressive way for it to acquire that revenue, except possibly for a wealth tax.

As a practical matter, I do. (Also because it could not be relied upon, since anyone would be free to disagree with the framers. We would need to actually rewrite the document to expressly and unambiguously reflect that intent. Also, bear in mind that Hamilton was one of the framers, and an important one, and he certainly, as we have agreed, didn't share that intent.)

Thank you as well.

All right, I'll try again using slightly different language.

The transaction in which labor is hired for work is the primary means whereby wealth is distributed in this economy. There are certain factors impinging upon that transaction which affect the way in which the labor market sets wages and salaries, and which are of necessity subject to government regulation; these include immigration, trade, and the right to bargain collectively. If the government regulates these in one way, wages are pushed down, and so wealth gaps increase. If the government regulates them the other way, wages are pulled up, and so wealth gaps narrow. As narrow wealth gaps are healthier for the economy than wide ones, the government ought to take the latter set of actions, not the former.

That's really all I was saying. It does amount to "taking labor's side" in the labor/capital dispute, within the arenas where government action is proper. I believe, based on the evidence of history as well as common sense, that doing it this way (through setting the parameters of market forces via trade, immigration, and labor policy) produces much better results than more overt and direct methods such as wage controls.

Deterrence need not result in total eradication in order to be considered effective. Do you seriously contend that the number of attempted robberies is no smaller than it would be if there were no law?

Because in almost any hiring transaction, the employer does not need any individual employee nearly as much as the employee needs a job. The employer's need for labor is collective, while the employee's need for a job is individual. If the employee loses his job, he's screwed; the employer is equally screwed not if he loses ONE employee but only if he loses ALL of them. And even then, in most cases he can survive even a catastrophic hit to his business such as having his entire staff walk out on him for longer than an employee can survive going without work.

That is why workers resort to artificial constructions such as collective bargaining, to rectify this natural power imbalance.

As a percentage of their total wealth, yes. In absolute quantities, no, they consume more.

Well, look at it this way. What you're arguing is that there were shortages of consumer goods after the war, which is true. What happens when you have a shortage? Prices go up, and there are waiting lists to buy. Both those things happened immediately after the war. But prices had stabilized by the end of 1946, and there were no waiting lists for goods any more; you could count on being able to go into a store and find a television, refrigerator, or whatever, or going to a dealer and finding the car of your choice. So by the end of 1946, there was no longer a shortage of consumer goods, which means that the pent-up frustrated wartime demand had been met and satisfied.

Certainly the demand for products lasted well into the '60s (and beyond), but that's because it didn't emerge from wartime frustration. It emerged from the normal process in which people make money and then spend it. Wartime frustration was a strictly temporary aberration. The higher wages of the postwar economy produced permanently higher levels of demand.

I disagree with this. What you need for a growing market is increased amounts of purchasing power chasing a finite supply of goods. Whether that comes from having more people each with the same amount of money, or from having the same number of people each with more money, is almost irrelevant (although not entirely so). What you will certainly not get, though, is a growing market from an increased number of people who each have enough less money that the total purchasing power chasing the goods experiences a net decline. And that is what we have achieved by having our goods produced by downtrodden sweatshop workers rather than highly-paid union workers.

The laws of supply and demand do not predict the outcome you're describing, though.

(Sigh.) Cato, come on. Obviously what we have NOW is not comparable to the economy of the '50s and '60s. But we may use the economy of the '50s and '60s as an indicator of what we COULD have if we adopted policies similar to what existed in those years: those aimed at so shaping the market parameters as to drive wages up. Understand? I'm arguing for adopting certain policies, and what happened when we used them before is a good indicator of what would happen if we used them now. It's not rocket science.

The reason that wages would rise faster than prices is because the cost-plus model of pricing is, for most industries, not an accurate description. Prices are a function of supply and demand. Rising wages sometimes do result in price increases, at least temporarily, but not because they increase the cost of production; rather, it's because they inflate the demand side of the equation and that normally does drive prices up. On the other hand, it also provokes a reaction from business in increased production to meet the demand, so prices tend not to rise all that much.

One assumption here is that productivity will continue to rise, but that's a reasonable assumption unless technological progress were to come to a halt for some reason. Over time, wealth has tended to be produced more efficiently measured by output per labor-hour. Rising wages in response ensure that the wealth so produced will be broadly distributed leading to a healthy economy; slack or falling wages result in demand deficits and a credit-dependent, insecure economy subject to collapse. If for some reason productivity stopped rising, then of course wages would have to hold in place as well, but even so they should hold at a higher level than they are now. The ratio of wages to productivity is really the key factor.

No, they won't.

Let's look at a specific example. Suppose the U.S. were to adopt a different trade system, restricting imports from countries with poor labor policies, but pursuing free-trade agreements with countries that have good ones. And let's say those countries include (I'm leaving some out here, I realize) Canada, the E.U., Australia, Japan, New Zealand, Thailand, and South Korea. Now, let's suppose that all of those countries except for Japan do the same thing, but Japan insists on continuing with free-trade agreements with China and other third-world thugocracies.

Japanese companies can go build factories in China, employing Chinese slave-labor. They can produce goods much more cheaply than those produced in any developed economy, including in Japan itself. But where are they going to sell them? Well, because of the free trade agreements they can sell them in Japan, but they can't do so in the U.S., Europe, Canada, Thailand, Australia, or New Zealand, because those goods, even though they're produced by Japanese companies, are produced in China, not in Japan. So where would they be better off? All they'd be doing is reducing the standards of living of Japanese workers, to no gain of anybody.

Excuse me, but you were saying something much more specific: that every historical tax increase had resulted in a decline in revenue. "Changes in tax law change behavior" is NOT an equivalent statement! I don't dispute that changes in tax law change behavior; what I do dispute, and know to be false, is that every tax increase has resulted in a decline in revenue. Prove that, please.

Misleading. I am not interested in "punishing success," and I will not answer that question for the same reason I won't answer "are you still beating your wife."

The government already protects the right to bargain collectively. Should government force employers to accept the demands of employees engaged in collective bargaining? Wouldn't this put government firmly on the side of labor?

If you want government to be firmly on the side of labor as regards to immigration, shouldn't government set immigration quotas to zero? Assuming your answer would be, "No", what metric should government use? Should it simply reduce immigration quotas if wages begin to decline, and raise them when wages begin to rise? Will "Supreme Secretariat of Wages" be a cabinet post, or will it be part of the Congress?

As to trade, should government not allow importation of products which compete with domestic products? Or is your disagreement only with the labor policies of foreign nations; that once they agree to your moral code you'll allow them to compete with American products? And if others still outsell us because they're more efficient, will you demand government establish some form of efficiency equalization tariff?
No, I contend that the purpose of law is not deterrence. The purpose of law is retributive. It is ex post facto. Its purpose is to punish those who have broken the law. It provides no more protection than what would normally be expected from any individual. If you're going to argue people don't break the law because there is a law, then you're arguing they have moral compass enough to know that one follows the law. If they have moral compass enough to know that one follows the law, they also have moral compass enough to know they shouldn't take another's property.

To bring this back to our original discussion, laws against robbery favor me no more than they favor any other person, even the would-be robber. Until the robber actually robs me, he is protected against being robbed himself. If he does rob me, government will, ex post facto, favor me, but that is not the same as government choosing my side before the crime is committed. You're proposing that government choose sides before a crime is committed. You're proposing that government favor one class of its citizens (those who make up "labor") at the expense of another class of its citizens (those who make up "capital"), when the citizens of the latter class have committed no crime against those of the former.

What makes the citizens of the labor class more entitled to government use of force than those of the capital class? To argue they are both making use of government powers because those of the capital class would get the same (unnecessary) rights, as you've tried to do, is as flawed as arguing blacks have the same rights to vote as whites they just have to travel 100 miles away from where they live. A right denied, or impossible to enjoy, is no right at all.
Government protects the right of collective bargaining, therefore an employer is as equally screwed as the single employee. In fact, probably more so since a single employee could find another job much faster than an employer could retrain an entire new workforce and get them up to the same efficiencies as the one that walked out on him.

Of course, we would have to go through the different classes of jobs, but I'm assuming you're talking about manufacturing jobs. Our economy is not a manufacturing economy, our economy is a service economy; a white collar economy where skills are much more highly valued. In such an economy, the argument can be made that employees have even more power than their employers since it's easier for skilled employees to find a new job than it is for employers to find skilled workers. Furthermore, skilled employees in a service economy are much more able to start their own businesses to compete with their former employers.

Claiming that capital has all the bargaining chips is simply class warfare speak neither supported by reality nor facts.
That's simply not the case. If you have any literature that describes how manufacturers produced the millions of goods demanded by millions of households within a year I would love to read it.

Regardless, we have no pent up demand now - not even a year's worth. We also don't have billions of dollars (a comparative sum) lying in savings accounts waiting to be spent. We don't have tens of millions of babies being born that would sustain demand for decades into the future. For all of these reasons, the 50s/60s are not comparable to today.
No, we can't. The two economies are so widely dissimilar as to preclude any kind of comparison. The characteristics of the economy in the 50s and 60s enabled it to handle the increase in wages - increases that were largely market driven, by the way. You're arguing for an artificial, non-market driven increase in wages and expecting that to drive an economy. It's simply not going to happen. To argue it will happen is to advocate raising wages ad infinitum; that we can raise wages as high as the economic growth we desire. We'd raise the minimum wage to stratospheric levels, but we don't even have a minimum wage that's above the average wage and still our economy grows.
First of all, increased amounts of purchasing power chasing a finite supply of goods is not a recipe for market growth. It's a recipe for inflation. Markets don't grow because people have more money, profits do. Markets grow when there more demand for a product and that product can be supplied. There's no other definition.

Secondly, what do you think people in these low-wage countries were doing before they started working in sweat shops? Do you imagine they were earning more? That we came along, ripped them from their high-paying jobs, and forced them to work for lower wages? If so, how come the fastest growing middle-classes on the planet are in the same countries with these sweat shops? Where did all the international demand for our products come from? Do you imagine the fastest growing markets for what little we do produce is in developed nations? You're making an unfounded, and blatantly wrong assumption that low-wage workers in other countries have been taken from high opportunity to low opportunity, that they're poorer now than they've ever been. That simply doesn't comport to the reality of the situation. They have money to buy what little we produce, and they're earning more in the hopes that they can demand more from us. Now, as they begin to demand more and more from us, you want to cut them off and cut us off.
Yes, they do. Raise the price of something, demand goes down.
Wow. Have you ever run a business with employees? Let me make sure I'm understanding you, and let's keep it simple. Suppose the cost of materials for a new car is $3000 and the cost of labor to produce that car is $2000. If I sell that car for $6000 I make a profit of $1000. If my cost of labor goes up to $3000, why would I sell the car for $6000? Because I can sell a whole lot more for no profit?
You're making my point for me. First of all, you're supposing that everyone wants to follow us into the grave. I'm arguing they're not going to want to. Your plan doesn't work unless everyone does, and it only takes one to not want to follow us for the whole thing to fall apart.

Secondly, so Japan doesn't follow us, why would we not buy from them? They're pro-labor in their own country. They keep their government firmly on the side of their labor, what beef do we have with them? All they have to do is have liberal labor laws in their country. They can either keep their manufacturing in China, or simply buy from Chinese manufacturers and pass these products on to the rest of the world. Their costs of production are lower and they'll sell more of their products.

So you argue that not only must we hope other countries raise their wages and adopt your moral code, but we must also hope other countries won't buy from countries which don't accept your moral code, nor will they manufacture in countries which don't accept your moral code. And, if they do, you're arguing for returning the people in these low-wage countries to the dismal lives they had before Western nations invested in them. All because you want to pressure them into accepting your morality.
You insisted that punishment have an aspect of changing behaviour, therefore taxes cannot be punishment because there is no change of behaviour. Now, you're agreeing that changes in tax law does change behaviour. Interesting. In order to draw attention away from this you're going to see if I'll spend my time researching every tax increase to support an assertion with a conclusion you agree with.

All right, you win, I'm wrong and not every tax increase has resulted in decreased revenue. But the fact remains that changes in tax law change behaviour. The criteria of your definition has been satisfied and progressive taxation is punishment.

" As a 1982 JEC study pointed out,[1] similar across-the-board tax cuts had been implemented in the 1920s as the Mellon tax cuts, and in the 1960s as the Kennedy tax cuts. In both cases the reduction of high marginal tax rates actually increased tax payments by "the rich," also increasing their share of total individual income taxes paid."

The 1993 Clinton tax increase appears to having the opposite effect on the willingness of wealthy taxpayers to expose income to taxation."
Not misleading, just too truthful for you to accept. How 'bout this: how much more progressive does our tax system need to be?

Well, I have posted several quotes, from founding fathers, who supported strong states rights and a limited role for the Federal Government.

I can post many more, but do not want to since we have been off topic long enough, even though it is related.

I had the General Welfare discussion just a few months ago here on another thread.

Madison, the "Father of the Constitution" had this to say.................

"The power to regulate commerce among the several States" can not include a power to construct roads and canals, and to improve the navigation of water courses in order to facilitate, promote, and secure such commerce with a latitude of construction departing from the ordinary import of the terms strengthened by the known inconveniences which doubtless led to the grant of this remedial power to Congress.

To refer the power in question to the clause "to provide for common defense and general welfare" would be contrary to the established and consistent rules of interpretation, as rendering the special and careful enumeration of powers which follow the clause nugatory and improper. Such a view of the Constitution would have the effect of giving to Congress a general power of legislation instead of the defined and limited one hitherto understood to belong to them, the terms "common defense and general welfare" embracing every object and act within the purview of a legislative trust. It would have the effect of subjecting both the Constitution and laws of the several States in all cases not specifically exempted to be superseded by laws of Congress, it being expressly declared "that the Constitution of the United States and laws made in pursuance thereof shall be the supreme law of the land, and the judges of every state shall be bound thereby, anything in the constitution or laws of any State to the contrary notwithstanding." Such a view of the Constitution, finally, would have the effect of excluding the judicial authority of the United States from its participation in guarding the boundary between the legislative powers of the General and the State Governments, inasmuch as questions relating to the general welfare, being questions of policy and expediency, are unsusceptible of judicial cognizance and decision.

A restriction of the power "to provide for the common defense and general welfare" to cases which are to be provided for by the expenditure of money would still leave within the legislative power of Congress all the great and most important measures of Government, money being the ordinary and necessary means of carrying them into execution."

James Madison: Veto of federal public works bill, March 3, 1817

While people are free to disagree, I believe Madison was one of the most intelligent of the founding fathers and one of the most practical as well. Not quite as idealistic as Jefferson.

I have provided quite a bit of evidence to support my view, while you only state how vague parts of the constitution are, when in reality, all one has to do is read the writings of the founding fathers, read the debates, and then the vagueness of the constitution disappears.

It is also not to the point of the discussion we're having, off-topic or not. I don't dispute the fact (which is obvious) that many of the framers favored a small, restricted federal government. I simply dispute that that has any bearing on the interpretation of the document they drafted, and also that it was undisputed among them.

The Constitution was an exercise in compromise: between advocates and opponents of slavery, between the interests of large states and small ones, between believers and doubters in democracy, between those who saw the need for a stronger federal government and those who feared it would become a threat to liberty. It is pointless to seek the intent of the framers not least because there was no single such intent. The compromise between strength and restraint of the federal government is there to be seen, just as clearly as any of the other compromises. The vague empowering language is there, however Madison may have seen it; the fact that he felt a need to explain it is proof enough that it didn't clearly say what he intended. Madison was not the only architect of the document. There were many people who were involved. There's no point in presenting more of his writings. I'm aware of them, and don't dispute that he wrote them; I dispute, however, the reasoning that says if he did then we must go by his wishes.

You're well-read enough that I imagine you've read some of the works of the anti-federalists during the Constitution debate? Are you aware of some of the concerns that were expressed, and the reason why a bill of rights was insisted upon as a condition for ratification? If you've read the Federalist papers, you will find Hamilton arguing that no bill of rights is needed, yet obviously in this he was mistaken. The anti-federalists had a point. The document, as written and adopted, and especially if the Bill of Rights were not a part of it, DOES lend itself to a virtually unlimited federal government. True, there are many checks and balances within it to prevent any one man or one branch of the government from becoming too powerful, and there are elements of public accountability built in (more today than in the beginning), but there is nothing to prevent the federal government itself, as a whole, from becoming all but omnipotent. The anti-federalists were quite right. There are, in practice, no omittive restraints on the federal government at all -- no powers it cannot exercise because there is no language granting it the authority. The only effective restraints are the affirmative ones, language that says clearly what the government can't do, as detailed in Article I Section 9, or in many of the Amendments especially including the first 10.

I realize that goes against the intent of some of the framers. Obviously, though, it did not go against the intent of others, because the vague empowering language is there. We have already agreed that Mr. Hamilton was no friend of small government, and that he was instrumental in crafting the document, perhaps as much so as Madison. My best guess is that the language I'm referring to is there because he wanted it there. He failed to get a lifetime presidency, but he got a lot that he did want.

A bit too firmly. Let me offer you an axiom which is not going to sit well with your idealistic, utopian free-market libertarian soul, but which nevertheless I believe to be sound: any good principle pushed to an extreme becomes bad. That is as true of the government siding with labor, as it is of any other principle, e.g. of preserving a free market.

This leaves things somewhat messier than if we could simply say "always do X" and leave it at that, but so goes the world. We can't. It is necessary to compromise, to find a balance point where the greatest good is achieved. There are steps the government could take to remedy wealth gaps which would be too heavy-handed, too harsh, and ultimately counterproductive; I have already given one example in economy-wide wage controls. The government's task, I believe, is to set the parameters and rules within which market forces operate, not to try to replace those forces completely with its own micromanagement.

However, you are mistaken about one thing; the government does not protect the right to form a union, except on paper. There is nothing to stop an employer finding a pretext and firing an employee who tries to get his coworkers to organize. The laws are still on the books, but they are not enforced.

The latter.

Not necessary. The problem isn't other countries' companies competing successfully with American ones; you still, it seems, are thinking of this in classical terms under which capital doesn't cross borders: American companies hire American workers, Japanese companies hire Japanese one, Chinese companies hire the Chinese, and so on. But that's not how it works any more, and this has nothing to do with nationalism at all.

Actually we have a historical example of an industry where foreigners have competed very successfully, for reasons having nothing to do with labor costs: the auto industry. At this point, we have Japanese and German brand-name cars being made in the U.S. by American workers meeting market niches that U.S. automakers refuse to meet, being wedded to their high-profit-margin SUVs, and I see nothing wrong with that. Capital crossing borders is not a problem as long as the two nations involved are using the same rulebook. In that case, the other country's capital is as likely to be invested here as ours is to be invested there. Both sides benefit, and the only losers will be companies that get lazy, arrogant, or stupid.

I notice that you didn't answer my question. Do you seriously believe that the incidence of armed robbery is no less now than it would be if it were legal?

If you do not, then it is a fact that the law DOES deter armed robbery. Whether that is the intent of the law is an exercise in mind-reading, or possibly in common sense. I invite you to answer the question, and then to engage in one or the other of those.

The only reason that is so, is because our manufacturers have been allowed to exploit cheap, downtrodden labor in foreign countries, as they should never have been able to do.

It is possible for an economy to "grow beyond" a certain category of wealth production, as we "grew beyond" being an agricultural economy when we industrialized. Did we stop farming after that? No. We simply made our farming more efficient through the use of machinery, which allowed most farm workers to move to the cities and the factories.

Is it possible that we can become "post industrial" in the same way that we became "post-agricultural"? Certainly: automation can reduce the need for industrial labor in much the same way as it did for agricultural work. And if that happened, industrial workers would become service workers and we would have a "service economy" properly so called. But our industrial sector would be as strong as ever, or stronger -- as our agricultural sector is stronger today than it was when we were an "agricultural economy" -- not the hollowed-out shell it is now. And also, service wages would be higher than the old union industrial wages, as those wages were higher than those of farm workers -- not lower, as they are now.

Cato, once again, I invoke that commodity which you seem to want to avoid: common sense. What makes it so unlikely to you that the greatest industrial powerhouse in the world, that had produced a few years earlier the greatest war machine in history from a standing start of military abject weakness, could not produce cars and refrigerators and radios and televisions and stoves and homes and clothing on a similarly massive scale? Of course the demand was met! To suggest otherwise is to belittle the achievements of American industry and it does not deserve that slur.

As for evidence, I point once again to the lack of waiting lists for durable goods or any other sign of consumer frustration by 1947. "Pent-up consumer demand" is, from the consumer's point of view, a PROBLEM, and if that problem existed there would also have been complaints (as indeed there were in 1945 and early 1946).

True, but since the boom lasted for years and years after that pent-up demand had vanished, irrelevant.

No more so than happened in the '50s and '60s. Yes, the increase in wages was market-driven, but as I explained, "the market" is not God moving in mysterious ways, but a fairly well-understood dynamic that is amenable to government influence in various fashions. Because of the changes to government policy that had taken place in the 1930s, the government supported labor more than capital in the disputes, encouraged the formation of unions, and regulated the conditions under which labor could be employed. This changed the parameters and rules under which the market operated and THAT is why "the market" drove wages up.

Now, capital has found an end-run around all those changes by moving operations to foreign countries where they have not been implemented. The New Deal is still on the books here (if unenforced in some ways), but foreign oppressed workers have become part of "our" work force for purposes of this dynamic, and that is why "the market" is driving wages down. Reverse this, and it will drive them up again.

Unless the government actually overrides the market with wage and price controls -- which I agree is usually a bad idea -- it is always "the market" that sets wages. However, the rules and parameters of the market, and hence the outcome of its operations, are within the ability of government to control to a large extent.

I said "finite," not "fixed." As demand grows, producers respond to that increased demand by increasing production. Prices do sometimes rise, but not by nearly as much as wages do, unless something prevents production from increasing.

No, but that's not to the point. I'm not saying our capitalists are doing harm to foreign sweatshop workers by building factories to employ them, I'm saying they're harming the overall global economy by doing so. The blame for the conditions of the sweatshop workers falls on their own governments, not our corporations. Our corporations are simply, in the pursuit of profits which is their job, taking advantage of the situation. And it is secondarily the fault of our government for setting up the conditions that encourage them to do so. A corporation is an amoral instrument of naked greed. That's what it is, and you can't blame it for being what it is. A government, though, is supposed to be a collectively responsible instrument in service to the public good, and when it fails to fulfill that duty by serving the narrow interests of corporations instead, then IT is certainly to blame.

Regarding pricing: no, I have not run a business with employees, but I have studied business administration and I know something about how prices are set. Roughly speaking, graph two lines. One plots volume of sales as price increases (this line goes down), and the other plots revenue per sale as price increases (this line goes up). Where the two lines cross, cost permitting, is the optimum pricing point. Generally speaking, for most industries, it is way above the minimum price dictated by cost of operations if one is to make a profit at all. There are some exceptions such as the grocery business and the fast-food industry, but in most industries that's the case. Prices are set by supply and demand, not by cost of operation. If you raise wages, in most industries you do not thereby increase prices unless the market will bear the increase.

Of course nobody is going to sell anything for no profit, but most of the time an increase in costs doesn't raise that specter.

I'm talking about not buying from China, not from Japan. It's entirely possible to track whether goods bearing a Japanese brand name, such as a Toyota car, were actually made in Japan or in some other country.

No, I insisted that punishment must be INTENDED to change behavior. Just about anything that impacts a person and allows a response will have the RESULT of changing behavior, but unless suppressing a given behavior is the intent behind it, it's not a punishment.

By the way, you're contradicting yourself here, because you suggested in the armed-robbery context that punishment -- the real, legal kind -- was intended only for retributive purposes after the fact and not to change behavior at all.

Thank you. That's all I was saying.

I read your link arguing that cuts in the top marginal tax rates had increased revenues, and the only factual statement I could find in it supporting that argument was this:

"The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988."

Two important points: 1) The top 10 percent of taxpayers never paid the top marginal rate; the percentage is much smaller. And, 2) this fact does not take into account the change in wealth distribution during those years, and the fact that the top 10 percent of taxpayers were hogging a larger share of the nation's wealth than before, and hence paying a larger share in taxes.

It is an indisputable fact that the Reagan tax cuts, like those of Kennedy before him and those of Bush after him, resulted in an increasing federal deficit. This does not argue for a revenue increase, normalized for the size of the economy. It is also an indisputable fact that the Clinton tax increase had the opposite effect. One must go through considerable gyrations, and use yardsticks other than "more or less money," to claim an increase in revenue from a cut in taxes.

There are good things to be said about low taxes. However, high revenues are not among those good things.

Good post.

Some founding fathers didn't want to include a Bill of Rights, since this could be taken as all inclusive, when it was not intended to be that way. As the 10th amendment says,

The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

Of course this is no longer the case. The FEDGOV has been abusing it's power since shortly after this nation was born.

The constitution prohibits the government from using direct taxes, unless they are apportioned among the states. However, our courts can't even agree if the income tax is a direct tax, or an indirect tax. All the rulings have only clouded the issue.

See..

Uncertainties of the Income Tax

As to the Bill of Rights, I can't think of a single amendment of the first 10, that has not been trampled.

States don't even have any rights anymore, which medical marijuana shows, as well as the use of highway tax dollars for coercion.

The 2nd amendment states we have the right to "bear" arms, but it seems the American people think the word "bear" means a black or brown animal which likes honey.

The 5th amendment is trampled every day by the IRS,

The right to petition government is a joke. What good is it if the government can just ignore the people? The right to peacably assemble has been trampled. You need a permit to assemble, you need to follow all their rules, often times having to stay in a roped off area.

The 3rd amendment is one of the few I have never seen abused, although it happened during the civil war.

The 4th amendment doesn't even exist if you are in your car. The police don't even need probable cause anymore to search your car.

As you have pointed out, parts of the Patriot Act are unconstitutional. It tramples numerous rights, especially the 4th and 6th amendments.

The 8th amendment has been trampled by oppressive drug laws. People with a few rocks of crack doing more prison time than murderers, is cruel and unusual punishment. Allowing prisoners to be raped in prison is cruel and unusual punishment, but it is allowed every day in the US.

Few Americans even seem to know that the 9th amendment exists.

It has been nice having this discussion with someone who is well read.

For all the work and effort put into the constitution and the bill of rights, both are merely scraps of paper in today's world. The government pays lip service to these documents, but doesn't allow any pieces of paper to stop what they want to do. As Kissinger once said........

"The illegal we do immediately. The unconstitutional takes a little longer." — Henry Kissinger, former US Secretary of State (Source: New York Times, Oct. 28, 1973)

'Strengthen' and 'limit' are not mutually exclusive. A guard dog kept muzzled and in a kennel is indeed useless. To remove the muzzle and allow it to wander within a building after hours is empowering it, but limiting it from biting customers and/or terrorizing the neighborhood. You argue that taking the muzzle off the dog implies an intent for it to eat the neighbor's children.

No, the language is there to be so misinterpreted. The 'general welfare' clause modifies the taxation power within the enumerated powers; it is not an enumerated power in itself. I don't deny that yours is the prevailing and legally binding misinterpretation, but we've also already established in discussion of the takings clause that 'legally binding' and 'reasonable and correct' are two different, and unfortunately sometimes unrelated descriptions of jurisprudence.


Another factor that everyone here seems to ignore is that the majority of workers of the 50s and 60s generally had first hand experience with the Depression and/or WWII. Having to beg for a handful of bread, see others die often due to nothing more than bad luck of location, and/or be drilled in following orders sometimes even unto death can have a significant psychological effect. Those workers were glad to be alive, glad to have a job, and glad to be doing something productive (and not life-threatening). Too many workers today feel entitled to start off at above-entry-level wages, to work as little as possible to avoid getting fired, and generally approach life with an entitlement attitude. The 50s-60s were a time of productive workers, with post-war fallout of improved technology, supplying exaggerated markets recovering from war destruction, against competition that was playing catch-up. Higher wages were not the driver of middle-class wealth so much as both were concurrent 'symptoms' of the circumstances of the world economy at the time. Now if TSG's plan included starting off with a major war to destroy some major portion of the rest of the world's productive capacity, it might be workable...


Most of the time. But what about when it does? A friend of mine closed his record store and let at least 2 people go when his costs went up (rent rather than labor, but the result would be the same) because he couldn't afford a family on the reduced profits and getting rid of the store seemed preferable to getting rid of his daughter. I'm sure any 'reasonable' plan wouldn't result in wholesale closings of businesses, but what happens to the 1% or so who find out first hand that increased wages result in fewer jobs available? Especially when the fewer jobs have more competition to get into, given that they have 'new, improved TSG wages'?


But the whole plan still falls apart. Japan deals with China to get cheaper goods. This effectively reduces the markets available to the other, 'truly moral' companies, resulting in incrementally fewer jobs. Meanwhile Japanese workers are making 'moral' wages while paying 'immoral' prices for goods. This may result in their standard of living becoming notably higher than that of their 'moral' bretheren and inducing jealousy. More likely, or perhaps in conjunction, Japanese companies can/will cut workers' wages (or perhaps just raise them more slowly than the 'moral' average) - given their lower consumption costs, Japanese workers will still effectively be the richest workers in the world, so they won't have much room to complain. Meanwhile, these lower costs would enable Japanese companies to undercut 'truly moral' producers' prices, again resulting in incrementally fewer jobs in the 'truly moral' countries. As taxes rise and/or wages resultantly drop for the 'truly moral', the gap in the standard of living compared to Japanese workers increases, again making room for a reduction of Japanese wages, resulting in a spiral of more production and jobs being available in Japan, and less for the 'truly moral'. At some point some equilibrium would be reached since Japan cannot produce everything for everyone in the 'moral' world, but there would be a permanent gap in both the employment rate and standard of living between Japanese workers and the 'truly moral' ones. In the face of such differences, the 'truly moral' will soon adopt the 'Japanese model' and we're essentially back where we started, with the net effect having been a transfer of wealth from the 'truly moral' to the Japanese during the course of the experiment.


This made me think how your plan depends on our being able to bully other countries into following the plan, which we may or may not be able to do. So what about applying it to an environment we theoretically Can control - The internal US economy?

We don't have a lot of manufacturing jobs in Detroit in particular, and cities in general. It seems whenever new manufacturing is set up, it does so in the comparative boondocks of Tennessee, or central Illinois (vs Chicago-area), or small-town Ohio, or someplace comparable. Are the companies doing this not exploiting cheap, comparatively downtrodden labor in non-urbanized areas? Shouldn't they be required to pay big-city wages to these small-town workers? It would seem so, based on the TSG-morality plan.

Thus considerable inflation and economic disruption are introduced to the small towns as they adjust to this largess, until such times as the manufacturers figure out that they aren't really saving much if anything anymore, and they abandon the small towns for the larger labor pools, increased infrastructure, and proximity to sales markets that city manufacturing entails. The net result? Disruption in the small towns that have factories, Major disruption in those that Had factories, higher costs for all consumers, and decreased competivity of US goods in export markets.

Not the same problems that a world-wide implementation would face, but certainly indicative of a plan that hasn't been thought all the way through.

__________________
Today's forecast: Government corruption.

Tomorrow's forecast: 100% chance of more 'politics as usual'

Maybe it's finally time to vote Libertarian

Evil_inKarlate,

Good post. I especially liked the guard dog analogy.

I'm not sure what evidence I gave to imply I'm some extremist, but I would agree with that statement. Evidenced in this thread by my disagreement with you that government should be firmly on the side of anyone.
We already have economy-wide wage controls - minimum wage.
What evidence do you have of this? Or is just some of that "common sense" which has no dependence on reality?
Hmmm, not sure what gave you that idea. I've been discussing the transfer of capital across borders since my very first post. If anything, you're arguing for the cessation of this, which really underpins my disagreement with you from the start.

You skipped a big part of my post. I'll restate it:

Since you would probably argue government would be too firmly on the side of labor if it set immigration quotas to zero, what metric should the government use? Should it simply reduce immigration quotas if wages begin to decline, and raise them when wages begin to rise? Will "Supreme Secretariat of Wages" be a cabinet post, or will it be part of the Congress?
So, as long as their efficiency is not based upon things like an oversupply of labor, or lower standards of living, foreign companies are free to compete with us? As long as they pay their employees at a level which is equal to what an American worker would be paid, everything's fine?
I didn't answer your question because it's a red herring. You're trying to shift the issue from the purpose of law to the effects of law. The purpose of law is not deterrence. The purpose of law is to codify what is not allowed by the reigning authority and what retribution will be delivered should the law be broken. This may have the effect of deterring some from committing the crime, but that is not its purpose. Were it the purpose, and law served its purpose, then we would merely have to enact a law for whatever activity we didn't want and that would be the end of it. We wouldn't need to establish what happens when someone breaks the law because the law would serve its purpose and deter everyone from breaking the law.

Let's use some of that common sense you accuse me of lacking. Are laws written like this: "No one will kill another person." Or are they written like this, "If anyone kills another person, here's what will happpen:" followed by a listing of the punishment to be delivered?

What makes the citizens of the labor class more entitled to government use of force than those of the capital class?
They were downtrodden before we got there. We lifted them up as evidenced by their burgeoning middle-classes. You want to take that all away from them. Suppose you get your wish and everyone on the planet has the same labor policy. What do you think is going to happen? Do you think we'll still have the same production we had before? Would any foreign nation go to China to produce goods and employ their citizens? Why? Even just accounting for shipping costs it would be far cheaper to produce in their own countries.

I'm sure you would argue that production would increase, and yet you have no evidence of that.

You want American companies to stop using the labor in low-wage countries, despite the fact that, although lower than American wages, these people are creating far greater wealth than they ever have. So, we stop using their labor and put millions out of work. I suppose you can justify this with a strong nationalist bent, but for someone who just chided me for assuming I don't recognize the transfer of capital across borders this doesn't sound very conducive to that reality. In fact, its directly contrary.

Regardless, you've managed to shift the argument again. We were talking about the fact that American workers have as much power as American employers.
You know, it's funny that you have a monopoly on common sense, yet I'm supposed to validate everything I write. Interesting.

Something tells me that if a statement is self-evident then there would be no disagreement as to its validity. If there are questions about its validity it must not be self-evident. If it's not self-evident perhaps you should frame your assertions in a way which doesn't imply them to be verifiable facts and then accuse others of being idiots because they question your made-up premises.
Well, let me see if I can borrow some of your common sense.

1) Not everyone returned from the war theater at the same time. Therefore, demand would be spread out.
2) Even the massive build-up for war-time production required two years to get up to the speed that made it remarkable. Even then, it would be another year before production hit its peak.
3) There was a strong national effort made in order to achieve what was achieved. Everyone was in it. Everyone wanted to sacrifice. Everyone wanted to reach those levels of production, and the government was the primary driver. Natural supply and demand don't have this kind of initiative. Natural supply and demand wouldn't get anywhere near the kind of production you're talking about within a year.
4) It takes time to retool, rehire, and retrain. Lots of time when you're talking about nationwide supply for nationwide demand.
5) It takes time to provide the infrastructure for supplying that demand where infrastructure doesn't exist, and time to re-configure existing infrastructure.
6) Most savings were in US bonds, which didn't all simply come due now that the war was over. Those payments were spread out over many years. Therefore, the ability to buy wasn't some lump some available for use immediately, or even within the first year.

I could go on, but I'm getting a headache from all this common sense.
Not only were there waiting lists for durable goods, but there were also waiting lists for the raw materials to make them. We suffered from many materials shortages well into the 50s. So much so that the government continued to control their prices.
It's not irrelevant. Without that pent-up demand you have no spark to start the fire. Without available savings to effectuate demand, the fire won't even smoulder. Without millions of new consumers coming into being, the fire would die within years.
No, it didn't, at least not to the level you're recommending. The market wanted to drive wages much higher than the government would allow. The advent of benefits packages owe their start to the fact that employers needed to find some way of attracting high skilled workers without paying them more.

Furthermore, we've had the same labor laws, by and large, for the past 70 years. If anything they've become more skewed to the employee at the employer's expense. If your theory were true, and we could expect the same results of increasing wages as we experienced in the 50s and 60s, then any period between 1935 and 1980 (when you claim the end-run began) should be comparable. Clearly, they aren't. So, why not assert your proposal will have the same effects as the 70s?
I wrote "finite", too. If production is increasing, then it's not finite - it's infinite. Unless demand is also infinite, then infinite production isn't going to do you any good. In fact, it's going to destroy your economy. Much like cutting off demand by refusing to sell to the largest markets on the planet will do.
They're doing harm by providing people with inexpensive products? Which is stronger, a world economy which sells pants only, or a world economy which sells pants and shirts? Clearly, the latter. Right now, we can afford pants and shirts. You want to jack up the price of both so we can ony afford one. Demand will fall for both, production will decrease, some will lose their jobs, and everyone will be walking around half clothed. And this is benefitting the overall global economy?
Probably the most fascinating part of your post. It's amoral for government to serve the narrow interests of corporations, but moral for it to serve the narrow interests of laborers?
I think you should get some real-world experience. But let's just exercise that common sense muscle of ours (I think I'm beginning to like it!). If it costs me $5,000 dollars to build a car that I can sell for $6,000, and my labor costs go up $1,000, am I going to make a profit because now more people can buy my car? Will I still want to employ my capital in making cars?
This is where the real-world experience would really benefit you. Prices are set by supply and demand, but if the costs of operation do not allow a profit then there will be no supply.
We won't buy from Japan if they manufacture in China, right? I mean, I thought that was what you were arguing.
pun·ish (pnsh)
v. pun·ished, pun·ish·ing, pun·ish·es
v.tr.
1. To subject to a penalty for an offense, sin, or fault.
2. To inflict a penalty for (an offense).
3. To handle roughly; hurt: My boots were punished by our long trek through the desert.
v.intr.
To exact or mete out punishment.

Nothing about intent.
How is this a contradiction? The purpose of tax law, its intent, is to raise revenue. The effect of progressive tax law is to punish, to inflict a penalty, for achieving more. Another effect of progressive tax law, as a function of the penalty, is to deter, to discourage, taxpayers from paying taxes - either through reduced production or through evasion.

So, how progressive should our tax policy be? How much of their property should we allow people to keep? How harshly should we punish achievement?