What About Jobs?

Column 2017-2 (1/30/17)                                 

     During the 2016 campaign candidates talked much about
jobs.  After a politician speaks the first question to ask is, What
is the truth?  This is at least doubly true when politicians talks
about jobs.  There is something about jobs that causes
politicians, and others, to slip into a fantasy world that defies
reality.

     Donald Trump proclaimed that he would be the greatest
jobs president ever.  Was he talking about snow jobs?  The jury
is still out on that.  He didn't set the bar very high.  I don't
recall the last president who was great at creating real jobs. 
Anyone with access to money, his own or someone else's, can
easily and quickly create make work jobs.

     Before continuing we need to consider a simple question,
What is a real job?  Businesses don't hire employees for the
pleasure of writing pay checks.  Hiring is worth while only when
the employee produces more value than what he costs.  That cost
includes taxes, insurance, fringe benefits and all other expenses
resulting from the hiring.

     It is often impossible to determine exactly how much
value each employee contributes to production.  The total value
all employees contribute can be calculated.  For a business to be
profitable and survive total employee cost must be less than the
total value created by the employees.

     If the business pays some employees more than they
produce, it must pay others less.  Employees who are paid
substantially less than what they produce are likely to find
greener pastures elsewhere.  For any business, losing its most
productive employees is a serious problem.  Thus, businesses
have plenty of incentive to pay employees in accordance with
their value to the business.

      When minimum wage laws would force an employer to
pay more than the worker is worth to the business, the business
can't afford to hire the worker.  Thus, the least productive
workers have no jobs and no income.  For them the minimum
and maximum wage is zero.

     An honest calculation of the impact of minimum wage
laws requires including in the calculation those with no wages
because of the laws.  Of course, we can never be certain exactly
how many jobs are lost to minimum wage laws.  This leaves
plenty of room for advocates of minimum wage laws to lie.

     By trampling on freedom in the marketplace businesses
can find other options when the employees don't produce enough
to pay their costs.  Businesses ask government to protect them
from competition.

     The sugar industry is a prime example.  Thanks to
government protection of the sugar industry you pay twice as
much for sugar compared to sugar prices in most other countries. 
Among other things, government protection of the sugar industry
has pushed hard candy makers out of the US.

     If protection isn't enough, businesses plead for outright
subsidies to cover their losses.  Either way the inefficient,
wasteful production goes on.  The taxpayers and customers are
forced to pay for the losses.  Under our crony capitalism,
government interference with competition causes vast amounts of
waste that drag down our standard of living.  Various studies
find that without the government caused waste, our incomes
would be twice or more what they are.

     Should it come as a surprise that the younger generation
considers capitalism to be a dirty word?   Crony capitalism is
the only capitalism they have ever seen.  Free choice in the
marketplace is what matters.  Provide that and willing investors
will provide all the capital we need to have a vigorous,
prosperous economy.

     Presidents don't create productive jobs.  They protect
wasteful inefficient jobs.  The heart of Trump's job plan appears
to be the protection of inefficient jobs.  The most good a
president can do is to get government out of the way.  Then free
people working together will create productive jobs that
efficiently make the things people want to buy.

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Copyright 2017
Albert D. McCallum

What Is Wrong With Businesses?

Column 2017-1

     During the recent election campaign politicians and others
devoted many words to the subjects of businesses and jobs.  If
you found it all confusing, don't feel alone.  It was bad enough
that the speakers disagreed with each other.  Far worse, some of
them couldn't utter two sentences without contradicting
themselves.

     The primary purpose of work is to produce things people
want to use.  Businesses and jobs aren't ends in themselves. 
Both are only means of producing consumer goods, including
services.  If an enterprise, whether a business or some other
entity, doesn't produce something of value to consumers it has
failed.  This failure wasted resources that could have been better
used to produce value.

     The ultimate mission of a business is to earn profits. 
When we have freedom in the marketplace there is only one way
for any business to earn profits.  The business must create value.

     The business buys resources, including human resources.
The business sells its products.  If the business sells its products
for more than its resources cost, it has created value and earned
a profit.  If the opposite happens the business has destroyed
value and suffers a loss.  In free markets the business must soon
find a way to create value or else end up on the rocks of
bankruptcy.

     Consumers have the final say on how valuable the
products are.  Businesses must please their customers or perish. 
Businesses may disappoint their customers.  Those disappointed
customers aren't a good source of future sales.  There is a reason
why con artists don't work the same neighborhood twice.

     Consumers acting in free markets weed out wealth
destroying enterprises while rewarding and encouraging
expansion of wealth creating businesses.  This process is far
more efficient and effective than anything politicians and
bureaucrats can devise.

     For so long as consumers are free to choose in the
marketplace, businesses can't make a career of ripping off
consumers.  Only when consumers lose the freedom to choose
can businesses endlessly rip off those customers.

     Only "do it my way or I will hurt you" government can
empower businesses to exploit customers.  Many businesses
today are ripping customers off.  The ripoffs are possible only
because licensing laws and a swamp full of regulations protect
politically connected businesses from real competition.

      The "occupy Wall Street" crowd made a valid point
when they claimed many big businesses were thriving on ill
gotten gain from exploitation.  They went completely off the
track with their proposed solution.  More laws, regulations and
bigger government weren't the answer to a problem caused by
too many laws and too much government.

     The only reason businesses grow "too big to fail" is that
government protects them from competition and bails them out
when they grow too big to succeed on their own.  The real
problem is crony capitalism where government and big
businesses conspire to take care of each other at the expense of
everyone else.

     Inefficiency, waste and exploitation are always on
defense and fighting losing battles when businesses are free to
produce as they see fit and fully depend on satisfied customers
free to reject any and all products.  The same formula works
equally well with non business enterprises.  Yes, government
schools, I'm looking at you.

aldmccallum@gmail.com
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Copyright 2017
Albert D. McCallum

What Is Wrong with Social Security?

Column for week of June 15, 2015

     Most people seem to have at least an inkling that all is
not well with Social Security.  Many if not most believe that
we should do something to fix Social Security.  A tweak here,
a tuck there, a bit more tax, a slight increase in the retirement
age, and all will be well.

     It won't be that simple.  The Social Security system is
so flawed that it is unfixable.  The US economy is in a death
spiral.  The one single event that started the plunge and put the
USA on the downward course was the creation of Social
Security.  How does it work?

     Our great productivity is built on investment.  Instead of
putting all of our efforts into making things for immediate
consumption, we put part of our efforts into research,
development, factories, office buildings, mines, etc. that will
produce consumer goods in the future.

     Our investment in these production facilities increases
the productivity of workers.  This investment doesn't merely
defer consumption.  It increases total production allowing us to
consume more in the future.  This is how we raise our standard
of living.

     Thus, people who save and invest for retirement
increase our productivity.  This makes it easier for those still
working to produce for the retired.  The retired sell off their
investments and buy what they consume.

     The retired aren't a burden on the producing generation. 
The producing generation saving for its retirement buys up the
investment.  They may add to that investment providing for a
better retirement and further increasing productivity.

     When the  producing generation buys the investment of
the retired, the producers are merely repaying the retired for the
aid the retired gave the producers by investing and increasing
the workers' ability to produce.  Everyone benefits.

     With Social Security there are no savings and no
investments.  All Social Security taxes are spent immediately
by the government, either to pay benefits, or for general fund
spending.  The so-called Social Security Trust Fund is a myth. 
It is merely a collection of government IOUs for consumed
wealth.  The only way to pay those IOUs is to take wealth
from someone.

     Social Security doesn't provide one dime of investment
or even one widget of increased productivity.  It also
discourages workers from saving for retirement and investing
the savings.

     All Social Security payments are taken from the
producing generation and transferred to the retired generation. 
This is totally a burden born by the producers.  The producers
have less to spend on food, clothing, education, medical care,
and everything else in order to provide more for the retired.

     As the ratio of retirees to workers increases the burden
on the producers grows.  In the beginning many workers
supported one retiree on Social Security.  We are fast
approaching the point where there will be one retiree for each
worker.  Each worker will be supporting one retired person.

     The effect of Medicare is the same as that of Social
Security.  Presently Social Security and Medicare payments per
retiree are more than $25,000 per year.  Even with no increase
in payments, each worker will have to pay at least $25,000 per
year to support a retiree.  How are these burdened workers
going to save anything to invest in increasing, or even
sustaining, productivity?

     We have two choices.  We can get rid of Social
Security and Medicare replacing them with savings based
retirement.  The alternative is to continue riding the dying
Social Security horse until it collapses.  Either way Social
Security and Medicare will end sooner or later.

     If we stay on the present course our economy will die
with those worn out horses.  We can act now to keep the
Social Security bus from running off the cliff.  Or, we can
relax and enjoy the ride.  Those of us who see what is coming
are not likely to greatly enjoy the ride.  Perhaps ignorance is
bliss, for a while.

aldmccallum@gmail.com
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Copyright 2015
Albert D. McCallum

Who Should Define Marriage?

Column for week of June 8, 2015

     One of the hottest of the hot button issues of recent
years has been same sex marriage.  There is plenty that should
be considered about government involvement in marriage.  The
same sex marriage issue does more to obscure the basic issues
than to move toward any solution.

     The traditional definition of marriage is a relationship
between members of opposite sexes.  The number of each may
vary.  Even in a polygamist marriage the wives aren't
considered married to each other.  To call same sex relations
marriage corrupts the English language and reduces the
usefulness of the word marriage for purposes of
communication.  "Marriage" must now be accompanied by a
modifier if it is to express what "marriage" used to mean.

     Marriage is a partnership between individuals.  The big
question isn't about the names we use to describe those
partnerships.  The big issue is, Who will define those
partnerships?  Presently marriage is defined by government. 
Anyone desiring to participate in a government marriage must
jump through the government hoops and accept a relationship
governed by government rules.

     Individuals may, and do, form partnerships not
sanctioned by government.  Some of those partnerships are
expressly forbidden by government.  Others, government courts
merely refuse to recognize and enforce.

     Why are some individuals so determined to have their

partnerships recognized as government marriages?  

Government grants many privileges and benefits to 

participants in a government marriage.  If a partnership isn't 

recognized as a government marriage, those privileges and 

benefits don't apply.

     Making partnerships work and endure isn't easy.  Half
or so of government marriages end up on the rocks.  Having
the terms of the partnership dictated by government doesn't
increase the odds that the partners can make it work.

     There is no good reason why government should be in
the marriage business.  There are a number of reasons why it
shouldn't be.  Individuals should be free to negotiate such
peaceful uncoerced partnerships as they choose.  The number
and gender of the individuals should be for them to choose.

     Government should also refrain from granting special
privileges to any partnership.  Individuals would be free to
refuse to be part of any partnership of which they don't
approve.  They could also try to persuade others not to join
some or all such partnerships.

     Government should allow all partners equal access to
government courts to resolve disputes in voluntary, peaceful
partnerships.  Encouraging and discouraging partnerships
should be left to individuals and voluntary associations of
individuals.  The most that government can add to partnerships
called marriage or by any other name is "Do it my way or I
will hurt you" rules.

     "Reason" magazine published an article by an attorney
who represents individuals forming non traditional partnerships. 
These partnerships may involve two, three or four individuals. 
Obviously when three or more are involved, some must be of
the same gender.

     I don't buy the garbage about everyone being free to
invent their own gender.  Like it or not individuals are stuck
with the gender they are assigned biologically.  An individual
can mutilate its body to obscure its gender.  So far that doesn't
change the chromosomes.

     Some people are going to pursue such partnerships
whether or not government, or anyone else approves.  What is
to be gained by forcing such individuals to form their
partnerships in a legal twilight zone where disputes can be
resolved and agreements enforced only with underworld style
tactics?

     Peaceful partnerships should be forged to fit the needs
and desires of the partners, not to please government
busybodies.  Only partnerships for non peaceful purposes
should be discouraged with force.

aldmccallum@gmail.com
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Copyright 2015
Albert D. McCallum

Free Trade or Forced Trade?

Column for week of May 25, 2015

     We all trade.  Mostly we produce things we don't want
and trade them for what we want.  Typically we exchange what
we produce for money.  We then exchange the money for what
we want.  When we spend the money we are really spending
what we traded away to get the money.

     In theory an individual might survive by consuming
only what he produces himself or finds in nature.  The only
tools and equipment the self sufficient individual would have
would be those he produced himself.  If everyone were self
sufficient, no one would have much.  Even the most primitive
of people to some extent trade with each other.

     We trade because we gain by specializing and trading.
Without trade humans couldn't rise beyond being
hunter-gatherers practicing very primitive agriculture.  The
question isn't, Will we trade?  The question is, How will we
trade?

     Individuals could steal from others rather than trade. 
Stealing is really the ultimate forced trade.  The victim
exchanges something for nothing.

     When individuals voluntarily trade, each expects to
benefit from the exchange.  If any party to the trade didn't
expect to benefit, he wouldn't participate.  The trade wouldn't
happen.

     When an individual will not trade unless forced, he
believes the trade is not beneficial to him.  Something is stolen
from him.  Forcing that individual to trade is involuntary
servitude, sometimes called slavery.

     Individuals seek different things in different ways. 
Everyone's ultimate goal is to maximize his  satisfaction.  No
individual is capable of getting inside the head of another and
discovering what will satisfy that individual.  Anyone forced to
trade is a victim forced into involuntary servitude.

     Still many people have bought the idea that businesses
should be forced to serve anyone who walks in the door.  Keep
in mind that businesses are just people producing and offering
to trade their products to others.  A business may be one
person or thousands.  Any service provided by the business is
provided by one or more individuals.

     Some may argue that the individuals can avoid the
involuntary servitude by not going into business.  The only
way to avoid the involuntary servitude is to refrain from
offering to trade with others.   In other words, the only escape
from involuntary servitude is into the world of self sufficiency
and the poverty that is inevitable in that world.

     Individuals who work in businesses earn their livelihood
by serving and pleasing customers.  Businesses that turn away
many paying customers don't thrive.  They may not even
survive.  If businesses are so eager to turn away customers,
Why did government and organizations such as the Ku Klux
Klan deem it necessary to threaten business people with
imprisonment and even death to stop the businesses from
serving black customers?

     A key business strategy is to seek to serve customers
that are unserved or under served.  Someone will be seeking to
serve rejected customers.   There is no compelling reason why
everyone has to be able to demand service from every business. 
Customers aren't forced to patronize most businesses.  Why
should individuals in businesses be forced to involuntarily serve
customers?

     The latest epidemic of involuntary servitude involves
providing services for "gay weddings."  Part of the tragedy here
is that the wannabe customers aren't even wannabe customers. 
They aren't really seeking to be served.   They seek to find
businesses who will refuse service.  Then they have the
business persecuted for the welcome refusal.  I have yet to hear
of even one instance where any same sex couple had to go
without a wedding cake because no one would bake it.

     "Solutions" forced by government commonly do more
harm than good.  The cure is worse than the disease.  In this
case there isn't any disease to cure.  The more we turn from
free trade to forced trade, the sicker our nation becomes.

aldmccallum@gmail.com
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Copyright 2015
Albert D. McCallum

It Bugs Me

Column for week of May 18, 2015

     The best our esteemed legislators could do for fixing the
roads was to offer a plan so gruesome that four out of five
voters rejected it.  This was a historic smack down.  No other
proposed amendment to the present Michigan constitution was
so thoroughly drubbed.  Until now I suspected that it might be
impossible for the legislators to come up with something that
voters would so soundly reject.

     Now that the sales tax increase and all of its baggage
are road kill in the rear view mirror the legislators can get on
with important matters.  One of those pending matters is a bill
to designate an official state insect.  The current nominee is the
ladybug.

     There are supposedly over 5,000 types of ladybugs.  I
don't know if there are as many types of gentlemen bugs.  Do I
see a hint of gender discrimination?  The proposed law doesn't
specify which of the ladybugs is to be honored.  Perhaps each
will get a turn.  We could have a different state insect each day
for more than 13 years.  I'm so excited I can barely type. That
is no big deal.  I can barely type when I'm not excited.

     Perhaps we should limit the honor to ladybugs that live
in Michigan.  Naturally this will require appointment of a
subcommittee to study and identify the ladybugs living in
Michigan.  This could take years.  Don't even ask what it will
cost.

     The bigger question is, How much longer can we
survive without an official state insect?  The legislators have
been fumbling the ball on this one for longer than they have
been tripping over pot holes.

     Speaking of potholes, Why not have the legislators take
time off from choosing bugs and go fill some pot holes?  For
what we are paying them, we ought to get a bit of useful work
out of them.

     In recent years four bills have been offered to designate
the monarch butterfly as the official state insect.  What chance
do ladybugs have in a contest where the mighty and colorful
monarch failed four times?  Is it possible that there are
unenlightened heathens who don't recognize our dire need for
an official state insect?

     The nomination of the green darner dragonfly also
failed to gain ratification as the official state bug.  It appears to
be more difficult to get an official state bug confirmed in
Michigan than to get a Supreme Court justice confirmed in D.
C.

     Is it possible that the legislature will choose the brown
Japanese ladybugs?  They are the ones that congregate on the
south side of my house every October and then attempt to
sneak inside for the winter?  Even I might be ever so slightly
offended if they chose those pests.  Besides, wouldn't it be
unpatriotic to designate a recently arrived foreigner as the
official state bug?  At least it wouldn't be quite as bad as
choosing the Japanese betels that eat my raspberries.

     The last time I checked Michigan had an official state
bird.  I believe that at the time someone was campaigning to
replace it.  I don't know who won.  What would happen if the
official state bird ate the official state insect?  Perhaps the
result could be designated the official state indigestion.

     Other matters the legislators have pondered include
designation of an official state poem and official state cookie. 
How about considering a return to a part time legislature?  A
legislature that has time to worry about an official state insect
and state cookie has far too much time on its hands.

aldmccallum@gmail.com
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Copyright 2015
Albert D. McCallum

Tax Dollars at Work

Column for week of May 11, 2015

     The headline was an eye catcher -- "Ohio killer caught
after more than 50 years on the run."  Just seeing the headline
will likely make some people feel safer.  What is more
dangerous and threatening than a killer on the loose?

     Headlines are written to attract attention to the articles,
not to accurately describe them.  This headline was up to its
job.  On the other hand, the article was worth reading.  The
real message of the story wasn't that anyone was safer because
a killer had been removed from circulation.

     The killer was convicted of manslaughter for running
into and killing a pedestrian in 1957.  His sentence was one to
20 years in prison.  This sentence was suspended by the judge
who placed the killer on probation.  Apparently even then the
judge didn't believe the defendant was public enemy number
one.

     The defendant was eventually sent to prison for
violating probation by getting a drivers license.  "Man
apprehended for getting a drivers license 56 years ago" might
not be an exciting headline.  It would be far more accurate
though.  The man escaped from a prison camp in 1959.

     The killer was caught once before in West Virginia in
1975.  The governor of West Virginia refused to grant
extradition to Ohio.  After that the man was released and
moved on.  Apparently he still hadn't been promoted to public
enemy number one.

     Even based on what we have seen so far, Why was
Ohio spending time and tax dollars to find this man who was
now almost 80 years old?  Ohio must be a really safe place if
it faces no greater threats to public safety.

     Law enforcement and imprisonment should be about
making the world a safer place, not about some detective
scoring a headline grabbing catch.  How much better off is
anyone in Ohio for having the privilege of paying to catch and
imprison this 79 years old convicted of manslaughter?  Of
course, the Ohio taxpayers might get a break.  Perhaps the
governor of Florida will follow the example set by the
governor of West Virginia and refuse to grant extradition.

     This is a reoccurring story.  Individuals who have
escaped the grip of government get caught after decades of
living a clean life.  What are the benefits of spending a small
fortune to then send them to prison?

     Such imprisonments are merely blind allegiance to
arbitrary rules.  Anytime people blindly enforce rules without
any understanding of, or regard for, the purpose of the rule,
foolishness happens.  Such foolishness is merely an example of
zero tolerance run amok.

     Rules serve one legitimate purpose.  That is to be
guides to harmonious, peaceful living.  Any rule enforced
without regard for its purpose is a trap waiting to spring on
someone.  Rules that become ends in themselves are disasters
waiting to happen.

     Bureaucrats usually lose sight of the purpose for the
rules.  Even if they recognize the purpose of the rule, they are
commonly discouraged from considering the purpose when
enforcing the rule.  This is one of the big reasons why
government is so ham handed and counter productive.

     There is an interesting sidelight to the story of the day. 
The killer was convicted for being a bad and dangerous driver. 
For years after that the man worked as a truck driver.  During
this time apparently he never did anything worthy of legal
attention.

     Perhaps some still believe the man has not been
adequately punished for getting a drivers license in the 1950s. 
Might having to live on the run for 56 years be almost enough
punishment?

     These "justice delayed" stories sometimes end with a
different twist.  I recently read of a man who turned himself in
after years on the run.  It wasn't a matter of conscience of
tiring of life on the run.  It was his way of seeking medical
treatment he couldn't afford.

aldmccallum@gmail.com
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Copyright 2015
Albert D. McCallum