Maximum defense

2014-03-21 Maximum confusion

A few days after finishing my previous post, it just hit me that I left out the most important arguments. It is no accident that I did. I will explain at the end.
I will have this now as a separate post, but I will eventually work it into the previous one. Picture it inserted just before the last paragraph.

When Mr. Dube mentioned the $14.- you were looking for, you were very quick to remind him of the missing 75 cents. Where that money went is indeed an interesting question. What happened to that $14.75? Your question insinuates that those evil capitalists and the even more evil family businesses must have gobbled it up.

Strangely, corporate profits seem to be one of the most reliable constants in economics at around 6% average. Average return on investment hoovers around that figure for pretty much the entire time that we are keeping track of it.
There are other things that are not constant the same way. 100 years ago, the government controlled about 7% of the GDP. Today the number stands at 40% and going up. That is an over fivefold increase. Even if we take the 1960 figure it is up 30% since then. Not the absolute numbers, the rates.

According to this scholarly study, the federal regulations alone are responsible for lowering economic growth by about 2% per year. The number of pages in the Federal register went from 19,335 in 1949 to 134,261 in 2005, a sevenfold increase.  Here as in taxation, the only constant seems to be the growth of the burden on businesses. The rate of corporate return on investment did not change much in the past 100 years while the size, scope and power of the government most definitely did.

Businesses cannot escape taxes and the cost of regulations; they just have to factor it into the cost of doing business. What they pay to the government, they clearly cannot pay to their workers. We have no way of knowing  what percentage of the money would have gone to minimum wage workers absent of those burdens but when you are asking for the $14.75 that you managed to identify with such uncanny precision, maybe you should start looking at your own backyard because the money you are looking for sure did not go to the employer either.

The study quoted above suggest a far greater harm than the $14.75 you are looking for in the minimum wage but I would like to give you the benefit of the doubt. Once you account for the $14 that the government is responsible for then we can start looking at the remaining 75 cents.

 Elizabeth Warren is what I would call a trump-card liberal.
She is making a preposterous, emotional and moralizing statement with the hope that it will work like a trump card that you will not be able to counter. It worked even on me. If you think about it, it is the most obvious point that we can make on the subject yet most of us, when facing this type of pompous liberals, take the question seriously and start defending the free market. Key word: defending.

The typical statist tactic is to attack the opponents of any of their policies as if they were the cause of the problem. This is exactly what Elizabeth Warren was doing here just as she was with the “you didn’t build this” argument: trying to put her opponents on the defensive with a stunningly stupid statement or question. Our natural instinct when we are attacked is to defend ourselves. We have to learn how to hit back quick and hard.

Ben Shapiro did that amazingly well when he turned the tables on Piers Morgan putting him on the defensive. We have to learn to do that all the time.

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  1. […] myth) A perfect storm (when minimum wage meets maximum confusion in the head of Elizabeth Warren) Maximum defense (explaining the missing 14 […]

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