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Minimum Wage Laws Push Young Blacks Out of the Workforce

in Business and Economy, Economic Liberty, Liberator Online, News You Can Use by Advocates HQ Comments are off

Minimum Wage Laws Push Young Blacks Out of the Workforce

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Unemployment is in the news again. But the media’s focus on the presidential elections seems to keep Americans from discussing the ongoing economic disaster we haven’t had the time to deal with since 2008. But as the Federal Reserve chairwoman shows signs of mild nervousness, more news outlets begin to pay attention. Still, few choose to dig deeper, and the great majority of the American electorate remains oblivious to the root causes of the problems they are dealing with now.

Walter E WilliamsIn order to help his fellow Americans understand the realities of government-management of economic policies, economist and professor Walter E. Williams wrote an article discussing the shift in unemployment rates and demographics over the past decades, helping us understand how bad the consequences of government interference are.

According to Williams, the unemployment rate of African American teenagers in 1948 was 9.4 percent while in 2016, the black teenage unemployment rate is about 30 percent. Still in 1948, the unemployment rate of white teens was higher, at 10.2 percent, while in 2016, it’s at 14 percent.

To the libertarian economist, what has caused this problem we have at hand is the elitist mentality.

In his article, Williams points out to comments made by another economist, David Howell, to illustrate the shifting mentality.

When talking about minimum wage laws and the reasons why we should embrace a higher minimum wage policy, Howell, who Williams calls a New School economist, says that we should not be worried about one of the most devastating consequences of raising the minimum wage: job losses. “Why shouldn’t we in fact accept job loss?” Asked Howell. But it was another scholar, Economic Policy Institute economist David Cooper, whose comments appeared to have truly triggered Williams.

“What’s so bad about getting rid of crappy jobs,” Cooper says, “forcing employers to upgrade, and having a serious program to compensate anyone who is in the slightest way harmed by that?” To Cooper, working fewer hours but making more money is all that matters, even if millions end up struggling to have access to entry level jobs due to the tough wage requirements.

To Williams, a “crappy job,” economically speaking, is a job. And being unemployed means being out of a job.

Whether Americans do not look fondly back to the 1940s and 1950s, Williams explains that, back when wage policies weren’t as interventionist, teens took jobs that would seem undesirable to the New School economists of today.

When Williams was a teen, he explained, he and his buddies would rise early during summers to board farm trucks headed to New Jersey. His jobs then varied a great deal. At times, Williams would pick blueberries, but sometimes he washed dishes and mopped floors, but he also worked unloading trucks at Campbell Soup.

Unfortunately for many teens living in poverty nowadays, the same jobs are either unavailable or not “good enough” for big city kids. Instead of allowing people to choose what job they are willing to take in order to make some kind of money, those who support interventionism in the economy prefer to see the poor unemployed and unskilled to see them fend for themselves.

If Williams is correct and current black leadership is all in favor of this view, things are only going to get worse.

Aluminum Industry Wants Tax Deal, but Nobody Wants to Cut the Red Tape

in Economic Liberty, Economics, Liberator Online, News You Can Use, Taxes by Comments are off

Aluminum Industry Wants Tax Deal, but Nobody Wants to Cut the Red Tape

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Many think of crony capitalism as the source of all problems we face as a nation. They are not entirely wrong.

Take the domestic aluminum industry for instance. Despite the taxpayer investment, producers are losing their share of the market. Without freedom to compete, members of the industry take part in political games, using their influence with state governments and Washington politicians to beg for privileges that no other aluminum producers enjoy. The result? Major trouble for the consumer, employer, and worker.

Aluminum

In America, there are three companies that produce primary aluminum. Alcoa is the largest producer, operating multiple primary plants in New York, Washington, Indiana, and Texas.

In early November 2015, Alcoa announced that it would have to permanently close its Massena West smelter in New York. At the time, town supervisor Joe Gray said that the jobs Alcoa would take away if the smelter closed would be “next to impossible to replace,” considering the aluminum giant has been the major employer in the region for quite some time.

By late November, however, a deal was reached and the upstate New York smelting plant was saved. What happened? New York Governor Andrew Cuomo unveiled a $69 million incentive package that benefited Alcoa. At least 600 jobs were saved.

The plan was backed by Cuomo and Sen. Charles Schumer (D-NY), who made the announcement at the Alcoa plant in Massena. As union bosses celebrated the special relationship between the New York government and industry leaders, the incentives weren’t widely criticized, mainly because tax incentives aren’t seen as handouts by many. Instead, people often believe that tax incentives are good.

During the announcement event, Cuomo claimed that the incentives plan “is the state’s way of stepping up.” Yet none of those present were able to criticize the existing red tape that makes it so hard for companies to function in America in the first place.

If the cost of doing business in the country was not an obstacle, more competitors would fill up the gap, and cheap aluminum coming from China would have a hard time staying relevant. Instead of working to remove red tape and help all entrepreneurs and existing businesses to flourish, the state decided to give one group access to privileges that others in the same industry simply do not enjoy.

But as Alcoa enjoys the $30 million it got from the New York incentive package, things continue to look bad for the aluminum producers and its employees. Except now, the issue is not New York, it’s Indiana.

According to IndyStar.com, southwestern Indiana residents are now concerned that the Alcoa smelter in their state will shut down, shedding 600 jobs in the process. Early in January 2016, Alcoa announced it would be closing its Warrick Operations smelter by the end of March. This is a “major economic event,” said Warrick County Chamber of Commerce director Shari Sherman. But to Alcoa, the shutdown makes sense because the Indiana facility is not “competitive.” Meaning the cost of keeping it open is a burden.

The facility has been operating in Indiana for the past 55 years. As the smelter closes, multiple families brace for the impact. As workers struggle, so do companies that are finding it much harder to compete. The issue? They have a hard time covering the costs of doing business in America.

If workers and consumers are serious about seeing fewer job losses in their states and more prosperity, they’d be urging lawmakers to cut the red tape, not backroom deals.

Libertarians Are Actually Less “Isolationist” Than Other Political Views

in Communicating Liberty, Liberator Online, One Minute Liberty Tip by Sharon Harris Comments are off

(From the One-Minute Liberty Tip section in Volume 20, No. 2 of the Liberator Online. Subscribe here!)

Libertarians who advocate a foreign policy of peaceful non-intervention in the internal affairs of other nations sometimes get labeled by critics as “isolationist.”

The words “isolationist” and “isolationism” are smears. Further, they inaccurately describe what libertarians believe. I’ve written in the past on ways to respond to this charge.

Libertarian InternationalismLast month Simon Lester, a trade policy analyst with Cato Institute, wrote an excellent column entitled “Libertarian Internationalism” at Townhall.com in which he debunks the notion.

“[T]he reality is that libertarianism is among the most internationally minded philosophies,” he writes. “Examining several key areas of international relations makes this clear: International trade, diplomacy and the military, and institutions.”

Here are some of his arguments, which are helpful to anyone in discussing this issue.

1. International trade.

“The most obvious place where libertarians are internationalists is economic relations. True libertarians advocate the free flow of trade and investment, without government restrictions. This is about as international as you can get. For libertarians, the origin of a product or service is irrelevant. People around the world should be able to buy and sell from each other without government interference. …

“Unfortunately, in most countries today, there is a strong sentiment for favoring domestic economic actors over foreign ones. This feeling manifests itself in various forms, such as tariffs and Buy National procurement policies. Libertarians stand almost completely united against this nationalist feeling, believing that trade and other economic interaction with foreign actors benefits us all.”

2. Diplomacy and the military. 

“Diplomacy and the military is a more complicated policy area, involving a number of instances of potential relations between domestic and foreign. Here, though, there is a strong case that libertarians are more internationalist than most others. Of course, in part this depends on what one means by internationalism.

“Libertarians are most frequently accused of isolationism when they object to military intervention in foreign territories. That libertarians usually object to these interventions is not in doubt. However, use of the military cannot always credibly be called internationalist. Colonialism and conquest, although they do require contact with foreigners, are not generally a positive form of international relations. …

“Thus, for libertarians, war and government aid do not reflect true internationalism. To some extent, they are really about government bullying and condescension towards foreigners, the idea that we are superior to them and can use our power to re-make them in our image. In contrast, libertarians believe in treating citizens of other countries with respect and acting with humility.”

3. International institutions. 

“This is the area where libertarians are most likely to reject what is conventionally thought of as the internationalist position, as they worry about the power of these institutions. In reality, libertarians are not rejecting the idea of international institutions, but rather the specific policies pursued by some of these institutions. … If there were international institutions that supported balanced budgets (or protected property rights), for example, libertarians would likely be supportive. There is no fundamental libertarian objection to international cooperation through institutions; the only concern is on specific issues of substance.”

Finally, Lester argues that libertarianism is inherently internationalist, not isolationist.

“At a more conceptual level, the idea of limited government inherently pushes us away from nationalism and towards internationalism. As things stand now, most power is in the hands of national governments, who often use this power in ways that conflict with the interests of other governments. In other words, putting power in the hands of nation-states leads naturally to national conflict. By contrast, devolving power to local governments more closely connected with the people reduces the role of national governments and nationalism. It makes power more disbursed, and allows communities to connect with each other, regardless of the nation in which they are located.”

These are excellent points, and sharing them with critics can help refute and perhaps eventually bury the tiresome “isolationist” smear.

Read Lester’s complete argument at Townhall.com

They Said It… With Ron Paul, The Libertarian Party and More

in Communicating Liberty by James W. Harris Comments are off

(From the They Said It section in Volume 19, No. 19 of the Liberator Online. Subscribe here!)

UBER BRINGS WEALTH TO THE MASSES: “Once, only the privileged few, the studio bosses and pampered starlets, could afford to have a chauffeur and a waiting car to transport them around sprawling Los Angeles. Now anyone with a credit card can enjoy that freedom. … A short ride through downtown in UberX, the company’s lower-priced service, introduced here last spring, can cost as little as $4.” — journalist Melena Ryzik, “How Uber Is Changing Night Life in Los Angeles,” New York Times, Oct. 31, 2014.

RON PAUL FEELS A DRAFT:
Ron Paul“As the burden of our hyper-interventionist foreign policy increases, it is increasingly likely that there will be serious attempts to reinstate the military draft. … This is an issue that has long united authoritarians on the left and right. … It is baffling that conservatives who (properly) oppose raising taxes would support any form of national service, including the military draft. It is similarly baffling that liberals who oppose government interference with our personal lives would support mandatory national service. Mandatory national service is a totalitarian policy that should be rejected by all who value liberty.” — Ron Paul, “National Service is Anti-Liberty and Un-American,” weekly column, Oct. 19, 2014.

CIA NAZIS: “In the decades after World War II, the CIA and other United States agencies employed at least a thousand Nazis as Cold War spies and informants and, as recently as the 1990s, concealed the government’s ties to some still living in America, newly disclosed records and interviews show.

“At the height of the Cold War in the 1950s, law enforcement and intelligence leaders like J. Edgar Hoover at the FBI and Allen Dulles at the CIA aggressively recruited onetime Nazis of all ranks as secret, anti-Soviet ‘assets,’ declassified records show. They believed the ex-Nazis’ intelligence value against the Russians outweighed what one official called ‘moral lapses’ in their service to the Third Reich.”  — Eric Lichtblau, “In Cold War, U.S. Spy Agencies Used 1,000 Nazis,” New York Times, Oct. 26, 2014.

THE LIBERTARIAN PARTY AND THE BALANCE OF POWER: “Libertarian candidates may have decided the winner in at least six federal and governor races, despite record-shattering spending levels in support of the Democratic and Republican candidates. Each race where a Libertarian threatens to affect the outcome of an election puts pressure on the old parties to move in a libertarian direction by reducing government’s size, scope, and authority.

“It’s also a sign that more Americans reject the argument that there’s any substantial difference between Democratic and Republican politicians. Voters are seeing that which of the two wins is of little consequence.” — Libertarian Party,  post-election blog post, “Libertarians play key role in highly contested races,” Nov. 5, 2014.

National Service: Should Young Americans Be Forced To Serve the Government?

in Ask Dr. Ruwart, Liberator Online, Libertarian Answers on Issues, Libertarian Stances on Issues by Mary Ruwart Comments are off

(From the Ask Dr. Ruwart section in Volume 19, No. 12 of the Liberator Online. Subscribe here!)
National Service

QUESTION: I believe we shouldn’t be forced to participate in some kind of national service. However, some of my friends say we owe some duty to our country for being born here and living here. What about a citizen’s duty to country?

MY SHORT ANSWER: If “doing our duty” is equated to providing “service,” who decides what is service and what is not? If young Steve Jobs had been forced into some type of national service instead of being left alone to tinker in his garage, he might never have invented the personal computer. The resulting increases in everyone’s standard of living would have been lost or delayed because of a bureaucrat’s uninformed decision about what was good for the country.

Freedom is what is good for a nation, especially one that wants to help its poor. More freedom means more wealth creation and less poverty. Government interference, even well-intended, backfires. (For some examples and more detail, see my book, “Healing Our World.” The 1992 edition is available as a free download at www.ruwart.com. The updated 2003 edition is available at the Advocates online bookstore.)

Most people give generously of their time and money if this is the voluntary custom. For example, tipping is not mandatory, but almost everyone does it. Before government got involved in social welfare, almost everyone helped a less fortunate neighbor individually or as part of a formal organization because that was the custom. You were either a charity case or a provider of charity; few people wanted to be in the former group.

To return to this way of charitable thinking, the government should stop forcing people to “give at the office” through taxation and resist the temptation to force people into service. Doing so will only create resentment towards those in need, leaving little sympathy for the poor when their “help” disappears in the shifting political tides.

LEARN MORE: Suggestions for further reading on this topic from Liberator Online editor James W. Harris:

* “Shhh… Don’t call Obama’s national service scheme a ‘draft‘” by Jerome Tuccille. National service is seemingly off the front burner, but don’t let down your guard; the idea continues to circulate. This article, written in 2008 when the idea was being more strongly pushed by both Democrats and Republicans, points out the insidious nature of the concept.

EXCERPT: “Under Barack Obama’s plan, a refusal to participate in a national service program touted at the federal level will be punished by the withholding of high school diplomas by the school district in your town. And without that diploma, few colleges or employers will even bother to look at your application.

“It’s a softer sort of authoritarianism which requires no draft boards, muddles the identity of the ‘bad guy’ and produces no martyrs in handcuffs for the evening news. You just can’t get a job if you don’t do as you’re told.”

* “National Service? Puh-lease“ by Michael Kinsley, TIME, Sept. 04, 2007. Liberal journalist Kinsley does a great job of gutting the whole “national service” notion. Ignore the couple of paragraphs in the middle about democracy and taxation; the rest is brilliant and marvelously written.

EXCERPT: “Problem number one with grand schemes for universal voluntary public service is that they can’t be both universal and voluntary. If everybody has to do it, then it’s not voluntary, is it? And if it’s truly up to the individual, then it won’t be universal. What advocates of this sort of thing generally have in mind is using the pressures of social conformity and the powers of the state indirectly to remove as much freedom of choice as possible, while still being able to claim that everyone who signs up is a ‘volunteer.’”

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Short Answers to Tough QuestionsGot questions?  Dr. Ruwart has answers! If you’d like answers to YOUR tough questions on libertarian issues, email Dr. Ruwart

Due to volume, Dr. Ruwart can’t personally acknowledge all emails. But we’ll run the best questions and answers in upcoming issues.

Dr. Ruwart’s previous Liberator Online answers are archived in searchable form.

Dr. Ruwart’s latest book Short Answers to the Tough Questions, Expanded Edition is available from the Advocates, as is her acclaimed classic Healing Our World.