FROM FACEBOOK
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Seems to me that it’s a spectacular leap of illogic to assume that allowing employers to pay subsistence (or worse) wages to all would somehow help with the problem of youth unemployment.
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Well, I’m just a fat old white guy injineer, but Austrian economists don’t seem to see it as such a big leap. If all labor rates have a floor, then the inexperienced, who can’t present a value equation greater than the artificial floor, will go unemployed. If I’m a shop owner and have a dirty floor that is worth 4$ to clean, I can hire the local kid to sweep it without falling a foul of the Gooferment diktat. The work goes undone, or the shopkeeper does it himself. And, the local kid loses an opportunity to learn critical skills — show up on time, do a good job, and be polite to all. And, that’s how you get 40% minority unemployment. A diktat precludes a free marketplace for labor. If you’re still unconvinced I can tell you about my cousin the elevator operator.
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Anytime the Gooferment creates a “price support” (i.e., minimum wage, milk prices, sugar tariff, tobacco subsidy) or a “price ceiling” (i.e., rent control, financial interest rates, ATM fees) they are screwing the little people and enriching their political contributors. Support for milk farmers means that poor people pay more than they have to. Why is a gallon of milk cost as much as a gallon of gas? Just visualize the effort into gas versus the effort for milk. Rent control ensures that rental units are in short supply and “hogged” by politician like Rangal who had 4 rent controlled apartments. Why do people get to inherit a rent controlled apartment? Guess poor people don’t need good affordable housing. Argh! The politicians and bureaucrats have done a great job fooling “We, The Sheeple”.
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Price support translate to being forced to pay more than you should have to. It’s a transfer of wealth from the buyer to the seller. The seller can sell as many units as they would with out interference. The buyers have less to spend. And, at the margins, there are people who can’t afford the product at the higher price.
Price ceiling translate to being unable to buy what you want (i.e., shortages). Rent controlled apartments are NOT offered as they would in a free market because the owner can’t recover their true costs.
Seems obvious in both Keynesian or Austrian economics.
We have prosperity because of capitalism, the division of labor, and the free markets. The invisible hand of the market assures tht everyone gets an equal amount of “happiness” with the minimum of overhead (i.e., Buyers and sellers don’t trade unless both are better off. Non-buyers and non-sellers don’t trade because neither would feel better off. The free market is an immense calculator that uses price to balance supply and demand. It’s a beautiful “thing” that makes us cooperate to everyone’s betterment. Until the Gooferment gets in and messes things up.)
Argh! Sigh!
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Reinke Faces Life 