Far-left, Anti-Austerity Party Triumphs in Greek Election.

[piscator]

By way of example, raising the minimum wage causes low-income entry-level workers to lose their jobs or not be hired in the first place

Raising the minimum wage means I as a tax payer don't have to subsidise corporations to pay to keep these people alive.

If its a choice between corporations paying someone wages or me as a tax payer I choose the corporation

After all, a corporation is a collective, like a kibbutz, except it's organized to individualize monetary profit and socialize and externalize risk and liability solely for its own benefit.

[Seth]

By way of example, raising the minimum wage causes low-income entry-level workers to lose their jobs or not be hired in the first place

Raising the minimum wage means I as a tax payer don't have to subsidise corporations to pay to keep these people alive.

No it doesn't, it creates more people who have no job at all that you have to support.

If its a choice between corporations paying someone wages or me as a tax payer I choose the corporation

Problem is, it's not, it's still you, to a greater extent than without the regulation. The government cannot force a company to keep on employees that are superfluous, redundant or too expensive to retain based on their skill set. When government raises my wage, you lose your job because the money that the corporation was spending to give you a token job as a gesture of charity because of your fundamental uselessness and incapacity goes to me, and you're just fucked.

[Hermit]

By way of example, raising the minimum wage causes low-income entry-level workers to lose their jobs or not be hired in the first place

Raising the minimum wage means I as a tax payer don't have to subsidise corporations to pay to keep these people alive.

Good point.

Raising the minimum wage also causes low-income entry-level workers to spend more money.

9 Months On, Koch Fears Realized After Town Raised Minimum Wage To $15
Author: Nathaniel Downes September 14, 2014 5:16 pm

In January, the town of Seatac, Washington, put in to effect a new $15 per hour Minimum Wage. No ramp ups, no tiered implementation. One day it was the state standard, the next, the highest minimum wage in the nation. The Koch Brothers sank a fortune to fight this measure, which fell on deaf ears as the town rejected their trickle-down theories and instead voted for the measure. The result is that for one town, they became a test bed, to put the theories behind trickle-down economics to the test.

Now, nine months on, we are witnessing one of the most dramatic recoveries in the Pacific Northwest.

Last July, business owner Scott Ostrander claimed that the increased wage would force him to lay off staff, if not shut down his businesses.

• I am shaking here tonight because I am going to be forced to lay people off. I’m going to take away their livelihood. That hurts. It really, really hurts. . . . And what I am going to have to do on Jan. 1 is to eliminate jobs, reduce hours — and as soon as hours are reduced, benefits are reduced.

Instead, his business, the Cedarbrook Lodge hotel, is expanding, adding 63 more beds to meet demand. Instead of layoffs, he needs to hire more people. And his story is not the only one.

Tom Douglas, who runs fifteen restaurants in the Seattle area, warned that a higher minimum wage law being considered by Seattle would force the shutdown of a quarter of his restaurants. Instead, after the results in Seatac, he is opening five new restaurants to meet demand. And this story is being repeated, over and over again, throughout the region.

Well paid employees pump money in to the local economies. This is basic economics, dating back to Adam Smith.

(Continued here.)

[piscator]

Just got asked to put a bid together for design work on "A Large diameter natural gas pipeline crossing Interior Alaska". Scope includes work for 5 or 6 well-equipped field crews and about 5 new office staff to manage and support them. I expect each new hire to cost a minimum of $60/hr, after bennies and payroll taxes. Field crews will work a minimum of 80 hours/week in all weathers, so there's OT and Double Overtime on top of the projected $34/hr base for an instrumentman and $39.70/hr for a party chief, which is up from where it would have been, had I been asked to submit a bid last quarter, before the voters decided to raise Alaska's Minimum Wage.

Do I give a shit that I have to pay 2 people $8/hr more to do a topo than I did last year? Absolutely not, this job is a lucrative mother%&@#$$er. I wish I had to pay them $50/hr more to do it.

[pErvinalia]

You STILL don't get it. Demand requires cashed up customers. If the majority of customers are seeing their wealth (and more pertinently wages) reduce, then they are going to be more hard pressed to support demand.

Yup, exactly. And how do they get their wages and disposable income up? By having jobs, in which they can input labor to produce wealth that keeps the company that they work for from falling into bankruptcy, like General Motors. But there is a delicate balance between the costs of production represented by wages and the profitability of the product that the employer has to keep carefully under control. When, for example, the government intervenes in the markets (including the marketplace of labor) and mandates that the employer pay the employee a "living wage" or otherwise coerces the business owner (as in legally favoring unionization) into paying more for the labor necessary to produce the product at an acceptable profit margin, the business owner must find a way to cut costs to bring things back into balance. The owner can cut other non-labor expenses to some extent in order to try to retain trained and valuable employees under the wage mandate, but if the wage requirements are too high, the only place to cut is in the number of employees themselves, which results in fewer employees working harder to do the same amount of labor at the mandated wage rate.

The others are now unemployed and are therefore unable to input labor to the economy to generate wealth from which they would, and used to, receive their disposable income. They become dependent on government for basics, which taxes the producer to pay for the social welfare programs, which reduces the producer's profit margin again, which causes him to have to lay off more employees, who become dependent on government for basics, which taxes the producer to pay for the social welfare programs, which reduces the producer's profit margins again, which causes him to have to lay off more employees right up until his ability to make a profit disappears and he closes the business, which makes EVERYBODY who worked for him unemployed, at which point they become dependent on the government for basics, which taxes some other producer to pay for the social welfare programs, which reduces that producer's profit margins, which causes him to have to lay off employees, which makes them dependent on the government for basics, and the whole thing repeats itself over and over and over until the economy is completely destroyed by the tax and spend policies of a government that hasn't the intestinal fortitude to tell people that they either have to work or starve and that there is a limit to the amount of largess that the treasury can afford to dole out to them when they aren't working.

I only skim-read this, but it seems that you are finally agreeing with me that without demand, supply is useless. Thank fuck for that.

You really have such a blinkered view of how economies work. You really do think that supply creates demand. You need to read more widely than von Mises.

Sometimes it does. Most time it doesn't. But the supply/demand function only works properly when there is free capital available to create and market the products that are being demanded by the public. Without that free capital, and without capital owners willing to risk that capital on capital improvements in anticipation of a profit, no widget factories get built and nobody is employed to make widgets. It takes money to make money, and when the government taxes away or (as Obama is proposing now) simply confiscates wealth, that money is not available for capital expenditures that create jobs in which people can input labor to produce wealth that keeps the whole thing running.

You STILL don't understand that every cent taxed goes back into the economy and becomes available as free capital. Looks like you've still got a way to go.

And your capacity for demand has been reduced as the average (median) American has got poorer over the last 30 years.

Except it hasn't. It's increased. Even the economic status of the poor has risen more than 14 percent in the last 30 years. The poor, and everybody else, are much better off today than they were 30 years ago. Sure there have been ups and downs, but the overall trend remains upward.

Bullshit. I was not quite correct about "wealth", and perhaps should have said "income" as it is more pertinent to demand, but wealth for the bottom 90% of people is at the same level as it was in 1982. - http://equitablegrowth.org/research/exp ... ed-states/ , and has plummeted in the last 8 years.

And we have the Marxist Progressive-in-Chief Barack Obama to thank for that.

Umm, no you don't. You have the GFC to thank for that. The 1% got heaps wealthier during the GFC. Perhaps you should be thanking Chief Marxist for looking after your homies so well.

On income:

The main culprit behind the languishing fortunes of America’s middle class is slow wage growth. After peaking in the early 1970s, real (inflation-adjusted) median earnings of full-time workers aged 25-64 stagnated, partly owing to a slowdown in productivity growth and partly because of a yawning gap between productivity and wage growth.

Since 1980, average real hourly compensation has increased at an annual rate of 1%, or half the rate of productivity growth. Wage gains have also become considerably more unequal, with the biggest increases claimed by the top 10% of earners.

Moreover, technological change and globalization have reduced the share of middle-skill jobs in overall employment, while the share of lower-skill jobs has increased. These trends, along with a falling labor-force participation rate during the last decade, explain the stagnation of middle-class incomes.

For most Americans, wages are the primary source of disposable income, which in turn drives personal consumption spending – by far the largest component of aggregate demand. Over the past several decades, as growth in disposable income slowed, middle- and lower-income households turned to debt to sustain consumption.

http://www.project-syndicate.org/commen ... on-2014-11

Sounds to me like employees need to find ways to make themselves more valuable to employers so that their wages can go up.

Sounds to me like I've got to edumacate you some more. Wages will only rise while unemployment is low (which it hasn't been in your country for a long time) and union advocacy is strong. Otherwise, all the power is with the employer. They can set whatever wage they like (within the law; and sometimes outside the law).

{snipped idiotic Marxist rant}

On the point of education, what you fail to understand is that neoliberalism wants an education system like wealth and power distribution. That is, highly unequal and bloody good for the elites. It ensures that an unfair oligarchic system continues. Teaching the masses how to think properly only undermines that system, as they then start to see realise they are being used and abused by a tiny majority of elites.

No, we're not discussing that, as no one here will discuss socialism with you as you have no fucking clue what it is. What we are discussing here is your failure to understand that reducing the income and wealth of the consumers in a society is economically disastrous, and no amount of supply can overcome a lack of demand.

We're not in disagreement about that at all.

Are you split-personality?!? The other Seth has been in severe disagreement with that for pages now in multiple threads.

We simply disagree as to why this is happening and who is responsible for it and how to fix it. Then again, the reduction in income and wealth of the middle class is not at all accidental or a function of Capitalism or free markets, it's part of an express and well-understood agenda of the Marxist Progressives to maintain political control of the nation by permanently suturing more and more people to the federal tit.

What a load of shit. Corporate welfare MASSIVELY outweighs welfare safety nets. You really have swallowed the neoliberal cool-aid.

Anybody with a lick of sense or a modicum of awareness or knowledge can clearly see that the Obama administration's agenda is not to improve the economy, it is to destroy the economy through regulations that wipe out the ability of the producers to produce in order to create just the sort of artificially induced economic crisis that will permit full-blown Marxism to take over.

You are a paranoid delusional. Head to bunker, boss. Bamy is comin' for ya!!1!

By way of example, raising the minimum wage causes low-income entry-level workers to lose their jobs or not be hired in the first place. The direct impacts of this 40 to 50% unemployment rate for young black males in urban areas who can't even get a job flipping burgers at McDonalds is that they become more dependent on government as employers hire more experienced, more mature unemployed workers driven into unemployment by over taxation of their previous employer, thus driving down wages for everyone by driving marginal businesses out of the market.

So how come McDonald's can operate successfully in high wage Scandinavia (and Australia)???

This is not an accident or an artifact, it's part of a deliberate, calculated long-term plan by Marxists, using their Progressive useful idiots to create the conditions necessary for Marxist revolutionary action, as we saw plainly demonstrated in Ferguson, where Marxist agitators incited riot in an attempt to start a general uprising by blacks in St. Louis.

You really are a nutbag.

[pErvinalia]

By way of example, raising the minimum wage causes low-income entry-level workers to lose their jobs or not be hired in the first place

Raising the minimum wage means I as a tax payer don't have to subsidise corporations to pay to keep these people alive.

Good point.

Raising the minimum wage also causes low-income entry-level workers to spend more money.

9 Months On, Koch Fears Realized After Town Raised Minimum Wage To $15
Author: Nathaniel Downes September 14, 2014 5:16 pm

In January, the town of Seatac, Washington, put in to effect a new $15 per hour Minimum Wage. No ramp ups, no tiered implementation. One day it was the state standard, the next, the highest minimum wage in the nation. The Koch Brothers sank a fortune to fight this measure, which fell on deaf ears as the town rejected their trickle-down theories and instead voted for the measure. The result is that for one town, they became a test bed, to put the theories behind trickle-down economics to the test.

Now, nine months on, we are witnessing one of the most dramatic recoveries in the Pacific Northwest.

Last July, business owner Scott Ostrander claimed that the increased wage would force him to lay off staff, if not shut down his businesses.

• I am shaking here tonight because I am going to be forced to lay people off. I’m going to take away their livelihood. That hurts. It really, really hurts. . . . And what I am going to have to do on Jan. 1 is to eliminate jobs, reduce hours — and as soon as hours are reduced, benefits are reduced.

Instead, his business, the Cedarbrook Lodge hotel, is expanding, adding 63 more beds to meet demand. Instead of layoffs, he needs to hire more people. And his story is not the only one.

Tom Douglas, who runs fifteen restaurants in the Seattle area, warned that a higher minimum wage law being considered by Seattle would force the shutdown of a quarter of his restaurants. Instead, after the results in Seatac, he is opening five new restaurants to meet demand. And this story is being repeated, over and over again, throughout the region.

Well paid employees pump money in to the local economies. This is basic economics, dating back to Adam Smith.

(Continued here.)

[laklak]

Apparently the rest of Europe isn't willing to let Greece just have all that money without paying it back, so the new junta has come up with another idea. Ready?

Borrow more money.

Yep. When you are 323 billion Euros in debt, the best thing to do is borrow more money. But not to worry, it's not actually borrowing more money, not really, it's swapping existing debt (due later this month) for "growth bonds". Well, not exactly a swap, more like a partial swap, a bit of cash, and a guarantee for the banks that the Eurozone bailed out on the last go round. And not ordinary bonds, the kind that you have to pay back on a certain schedule, no these new bonds will only come due after the Greek economy "grows". That's why they're "growth" bonds, geddit? No indication of the metrics they'll use to measure growth, but details, details. We need to look at the big picture here.

Hey, color me ready to invest! Just because they reneged on every previous promise doesn't mean they're going to renege on this one. Greeks are really trustworthy, particularly when they're bringing a gift.

http://money.cnn.com/2015/02/03/news/ec ... index.html

I'll call this "Wimpy Economics", as in "I'll gladly pay you Tuesday for a hundred billion Euros today".

[laklak]

I'm thinking I can utilize this new economic paradigm in my private financial life. I'll borrow a shitload of money from the bank and spend it. Then, a week before I have to pony up I'll swap it for a lesser shitload of money and a piece of paper that says I'll pay it back at some unspecified point in the future. I'll let you know the exact dates later, you can trust me. What could possibly go wrong? I think my bank manager will jump on it, particularly if I bring her a nice box of chocolates.

[klr]

The ECB turns up the heat on Greece:

The European Central Bank is suspending a waiver allowing Greek banks to use government debt as collateral for loans, depriving the banks of a key avenue to much-needed cash.

"Suspension is in line with existing Eurosystem rules, since it is currently not possible to assume a successful conclusion of the programme review," the ECB said in a statement.

The announcement came just hours after new Greek Finance Minister Yanis Varoufakis held his first talks with ECB chief Mario Draghi, as part of the country's push to renegotiate Athens' €240bn EU-IMF bailout.

...

continued: http://www.rte.ie/news/2015/0204/677686-greece/

[piscator]

I'm thinking I can utilize this new economic paradigm in my private financial life. I'll borrow a shitload of money from the bank and spend it. Then, a week before I have to pony up I'll swap it for a lesser shitload of money and a piece of paper that says I'll pay it back at some unspecified point in the future. I'll let you know the exact dates later, you can trust me. What could possibly go wrong? I think my bank manager will jump on it, particularly if I bring her a nice box of chocolates.

Works like a charm if you're too big to fail. Borrow $100k, the bank owns you. Borrow $100M, you own the bank.

[Seth]

Apparently the rest of Europe isn't willing to let Greece just have all that money without paying it back, so the new junta has come up with another idea. Ready?

Borrow more money.

Yep. When you are 323 billion Euros in debt, the best thing to do is borrow more money.

They are taking a page from the Obama Manual of Marxist Progressive Economics.

But not to worry, it's not actually borrowing more money, not really, it's swapping existing debt (due later this month) for "growth bonds". Well, not exactly a swap, more like a partial swap, a bit of cash, and a guarantee for the banks that the Eurozone bailed out on the last go round. And not ordinary bonds, the kind that you have to pay back on a certain schedule, no these new bonds will only come due after the Greek economy "grows". That's why they're "growth" bonds, geddit? No indication of the metrics they'll use to measure growth, but details, details. We need to look at the big picture here.

"I'll gladly give you a dollar Tuesday for a hamburger today." J. Wellington Wimpy

Hey, color me ready to invest! Just because they reneged on every previous promise doesn't mean they're going to renege on this one. Greeks are really trustworthy, particularly when they're bringing a gift.

Oh, well said, well said indeed!

I'll call this "Wimpy Economics", as in "I'll gladly pay you Tuesday for a hundred billion Euros today".

Ah, dammit, I should have read the whole post first. I've been trumped.

[Seth]

By way of example, raising the minimum wage causes low-income entry-level workers to lose their jobs or not be hired in the first place

Raising the minimum wage means I as a tax payer don't have to subsidise corporations to pay to keep these people alive.

Good point.

Raising the minimum wage also causes low-income entry-level workers to spend more money.

9 Months On, Koch Fears Realized After Town Raised Minimum Wage To $15
Author: Nathaniel Downes September 14, 2014 5:16 pm

In January, the town of Seatac, Washington, put in to effect a new $15 per hour Minimum Wage. No ramp ups, no tiered implementation. One day it was the state standard, the next, the highest minimum wage in the nation. The Koch Brothers sank a fortune to fight this measure, which fell on deaf ears as the town rejected their trickle-down theories and instead voted for the measure. The result is that for one town, they became a test bed, to put the theories behind trickle-down economics to the test.

Now, nine months on, we are witnessing one of the most dramatic recoveries in the Pacific Northwest.

Last July, business owner Scott Ostrander claimed that the increased wage would force him to lay off staff, if not shut down his businesses.

• I am shaking here tonight because I am going to be forced to lay people off. I’m going to take away their livelihood. That hurts. It really, really hurts. . . . And what I am going to have to do on Jan. 1 is to eliminate jobs, reduce hours — and as soon as hours are reduced, benefits are reduced.

Instead, his business, the Cedarbrook Lodge hotel, is expanding, adding 63 more beds to meet demand. Instead of layoffs, he needs to hire more people. And his story is not the only one.

Tom Douglas, who runs fifteen restaurants in the Seattle area, warned that a higher minimum wage law being considered by Seattle would force the shutdown of a quarter of his restaurants. Instead, after the results in Seatac, he is opening five new restaurants to meet demand. And this story is being repeated, over and over again, throughout the region.

Well paid employees pump money in to the local economies. This is basic economics, dating back to Adam Smith.

(Continued here.)

They're all going to be fucked when the inertia of the economy swings the pendulum the other way and their costs skyrocket because of the minimum wage and they have to raise prices and fire employees, who will then be...well...unemployed.

"Oh, look at the pretty sparkles from that long string-thingy attached to that barrel full of gunpowder."

Can you say "petard?"

[laklak]

Works like a charm if you're too big to fail. Borrow $100k, the bank owns you. Borrow $100M, you own the bank.

Back during the savings and loan debacle in the late 80s, my sister and brother-in-law were commercial property developers in New Jersey. My b-i-l's philosophy has always been to use somebody else's money, so when it all went tits up and commercial real estate crashed they were about $10,000,000 in debt. He said he'd never been treated better by a bank.

[pErvinalia]

Apparently the rest of Europe isn't willing to let Greece just have all that money without paying it back, so the new junta has come up with another idea. Ready?

Borrow more money.

Yep. When you are 323 billion Euros in debt, the best thing to do is borrow more money. But not to worry, it's not actually borrowing more money, not really, it's swapping existing debt (due later this month) for "growth bonds". Well, not exactly a swap, more like a partial swap, a bit of cash, and a guarantee for the banks that the Eurozone bailed out on the last go round. And not ordinary bonds, the kind that you have to pay back on a certain schedule, no these new bonds will only come due after the Greek economy "grows". That's why they're "growth" bonds, geddit? No indication of the metrics they'll use to measure growth, but details, details. We need to look at the big picture here.

Hey, color me ready to invest! Just because they reneged on every previous promise doesn't mean they're going to renege on this one. Greeks are really trustworthy, particularly when they're bringing a gift.

http://money.cnn.com/2015/02/03/news/ec ... index.html

I'll call this "Wimpy Economics", as in "I'll gladly pay you Tuesday for a hundred billion Euros today".

You can't argue with facts and reality, Lak. You can't cut your way out of recession. You have to restore spending. Everyone but the extreme 'free marketeer' economists understand this. As unpalatable as it sounds, the only way to restore spending is to borrow money and raise taxes.

"Austerity is a seductive idea because of the simplicity of its core claim -- that you can’t cure debt with more debt. This is true as far as it goes, but it does not go far enough. Three less obvious factors undermine the simple argument that countries in the red need to stop spending. The first factor is distributional, since the effects of austerity are felt differently across different levels of society. Those at the bottom of the income distribution lose proportionately more than those at the top, because they rely far more on government services and have little wealth with which to cushion the blows. The 400 richest Americans own more assets than the poorest 150 million; the bottom 15 percent, some 46 million people, live in households earning less than $22,050 per year. Trying to get the lower end of the income distribution to pay the price of austerity through cuts in public spending is both cruel and mathematically difficult. Those who can pay won’t, while those who can’t pay are being asked to do so.

The second factor is compositional; everybody cannot cut their way to growth at the same time. To put this in the European context, although it makes sense for any one state to reduce its debt, if all states in the currency union, which are one another’s major trading partners, cut their spending simultaneously, the result can only be a contraction of the regional economy as a whole. Proponents of austerity are blind to this danger because they get the relationship between saving and spending backward. They think that public frugality will eventually promote private spending. But someone has to spend for someone else to save, or else the saver will have no income to hold on to. Similarly, for a country to benefit from a reduction in its domestic wages, thus becoming more competitive on costs, there must be another country willing to spend its money on what the first country produces. If all states try to cut or save at once, as is the case in the eurozone today, then no one is left to do the necessary spending to drive growth.

The third factor is logical; the notion that slashing government spending boosts investor confidence does not stand up to scrutiny. As the economist Paul Krugman and others have argued, this claim assumes that consumers anticipate and incorporate all government policy changes into their lifetime budget calculations. When the government signals that it plans to cut its expenditures dramatically, the argument goes, consumers realize that their future tax burdens will decrease. This leads them to spend more today than they would have done without the cuts, thereby ending the recession despite the collapse of the economy going on all around them. The assumption that this behavior will actually be exhibited by financially illiterate, real-world consumers who are terrified of losing their jobs in the midst of a policy-induced recession is heroic at best and foolish at worst.

Austerity, then, is a dangerous idea, because it ignores the externalities it generates, the impact of one person’s choices on another’s, and the low probability that people will actually behave in the way that the theory requires. To understand why such a threadbare set of ideas became the Western world’s default stance on how to get out of a recession, we need to consult a few Englishmen, two Scots, and three Austrians."
http://www.foreignaffairs.com/articles/ ... y-delusion

[pErvinalia]

I'm thinking I can utilize this new economic paradigm in my private financial life. I'll borrow a shitload of money from the bank and spend it. Then, a week before I have to pony up I'll swap it for a lesser shitload of money and a piece of paper that says I'll pay it back at some unspecified point in the future. I'll let you know the exact dates later, you can trust me. What could possibly go wrong? I think my bank manager will jump on it, particularly if I bring her a nice box of chocolates.

If you were in charge of millions of labourers, business regulations and tax revenue, then it's not as bad as it sounds. Sure, if some bum from Florida did that, it would be silly. But a country isn't a bum from Florida.