The buzz word lately is Benghazi...
The cover up that keeps holding the flame in the heart of the demoralized army of libertarians, petrified Conservatives, and dumbed down Tea Partiers, who still can't believe they actually lost the last election...
The question on everyone's mind is: why does the loyal opposition keep flaming the ashes of the Libyan story, even that was not the first, nor the only attack on a US embassy compound.
Well...the plot thickens when one remembers how the Benghazi story just changed the target, from The Presidents "misconduct", to his Secretary of States "incompetence"...
Little does it matter to GOP that none of their twisted manufactured information has any back up in the real world of foreign affairs, nor does it matter that the investigation concluded nothing but the following protocol that led to the tragic end...nothing matters to the GOP...
When you can't run on merit, when you have nothing else to offer to the people who's votes you need for election or reelection, the only thing you can do is pander to your most faithful zealots with stories that they want to hear...ergo Benghazi...and wait for the opposition to make a mistake that you can really use against them...
The story of Benghazi is not old...GOP will say anything, will stop on nothing, will use anyone in order to win...but all they do is smear their own constituency...
The good news is that the majority of the American people do understand and are fairly educated to know the difference between facts and fiction...between important news and media static...
What is then the real story that is underlining Benghazi and all the rest of the culture wars? Why the many divides in our political structure? Why do we as people get pulled in their vortex of blame games in order to forget it?
Wealth and Income inequality...the wage divide, the income stagnation that keeps falling behind productivity, behind inflation, behind the growth and pile up so much wealth on one side that becomes something this country never agrees on and not many are even aware of it...
Wages...
Taboo theme rarely anyone talking about on TV, and even when one does talk it their misconception is so great that is unbelievable...
To the bleeding heart libertarians it's a no brainer...keep the Government out of the labor markets and abolish even the minimum wage and let the market work its wisdom...so simple, right, except when you ask them...
-What does the market set as minimum wage?
Instantly that same bleeding heart libertarian refuses to accept the market, that he so faithfully adores!
To the hard core conservatives minimum wage is no brainer either...you get paid what your labor is worth on the market, but ask them the same question and you will see how shallow their faith in market truly is...
To the slick Republican its also no brainer...they are more educated and they know their economics 101...till you apply mathematics to verify their claim, mathematics that does not add up...then you will instantly see how their face changes and the ugly, selfish, primitive business owner pop up as Mister Hyde...
I do not blame them...
Every dime they pay their workers less in wages, is a dime that will boost their profit and enrich their portfolio...of course they all will sing the same tune and forget every issue that distinguishes them from one another...
Wages...the old question of capitalism...the only question of capitalism that unites the wealthy across the borders of religious, national, or cultural spectrums...
I do not blame them...
I understand them...
I do not understand the rest of us...we who work for a living, who can't make our ends meet, who work second or third jobs, we who may not work for minimum wage, but still work for paychecks, we who comply to work paycheck to paycheck and never bother why is that...
I do not understand why we do not bother to learn the truth!
Some of us, poor souls will be fast to answer:
No, no, no...Government! set the minimum wage!...
How easily we are eager to accept and not question the obvious...
Does the Government really set the minimum wage, or is it just trying to adjust the minimum wage with the cost of living?
The real question is not what set the minimum wage, the real question is what set the minimum price of labor?
The Distinction between minimum wage and the minimum price of labor is deliberately erased from everyday talk, because if it is defined the minimum cost of labor then the minimum wage will be easily understandable to every single worker in every possible trade, across all geographic lines too...
Then why do we not know it...after all, it is our livelihood?
If one asks any business owner how much his product costs, he will tell you the price to a dime...he knows exactly how much he paid the supplier of the material, how much he paid his workers, how much exactly he invested in his product that he is selling...
If one asks a housewife how much a cake she made cost her, she will also know how to calculate the price of her cake, cause she knows what she paid for the eggs, flower, milk and sugar...
Yet we as workers we do not know what makes minimum wage...the base cost of our labor...
If you ask one owner he will know that if he does not recoup all his expenses in the course of the business cycle, his business will cease to exist...He knows...and he will fight tooth and nail to prevent its bankruptcy or closure...
We on the other hand...We the workers, did we forget that poverty is just the end of the equation when wages do not cover the base expenses that are necessary for labor to replenish its own cost of living...
It is utterly sad to listen, to witness a rich man being comfortable talking about how important it is for businesses to recoup every cost in the process and hope the market will grant more than the cost of operation, namely profit, the more, the merrier, but will deny his own workers the same philosophy...
Government does not meddle in setting the price of rent in one city, nor does the Government set the price of food in any grocery store, nor does the Government tell a retail store what the price of clothing will be...
The market sets those prices...
Rent is set by the housing market...
Utility are set by the energy market...
Food is set by the agriculture goods market...
Clothing is set by the manufacturing goods market...
No worker is able to lower the price of any of these goods and services he desperately needs in order to sustain himself...
If one tells the business owner the cold reality of his own market creed, he will turn and readily twist those bare cost of living from necessity into a choice, like its an indulgence, not the minimum...
The minimum is not a choice...the minimum is the lowest price of those goods and services...period!
If one person works and he makes less than the cost of those bare necessities for survival, the person will suffer malnutrition, stress and eventually get some chronic disease and face death in the long run...in other words, just as the business that cant recoup its cost of operation ceases to exist, so does a worker who cant recoup the cost of living...
The tragedy of humanity is that we can group together and help each other, and that process of help is well known under names that we are familiar with: ancient charitable soup lines got replaced by food stamps...shelters replaced by low income assisted living...you know, the Church and Government Welfare...but those programs just prolong the inevitable end result...they create the illusion of help and manufactured a burden of shame and guilt...
None of that is true...
Poverty is nothing but mathematics...simple if I may say...
The only reason the rich, the business owners and their management representative are able to get away with piling up more and more wealth during the last few decade is because we as workers let them get away with it by forgetting our own workers history that "gave" us all the benefits and lifted millions from poverty into the middle class, the same benefits that are shifting away from beneath our feet...middle class wages who were way above minimum wages due to Union contracts and Government Laws...
I do not know exactly how did that happen, cause I was not here in America, but I do know it started with Reagan...
The morning in America that introduced to the American people an economic doctrine that created the chart below...
Well if you are Republican, I doubt you read past my few sentences, much less will you open the video...but ignorance is a bliss America can not afford anymore...
The chart show how big is the misconception of wealth in America...
I believe in numbers...I am macroeconomist after all...
Wealth inequality starts with income... The income that every one of us gets paid is our source of wealth, and the minimum wage is the starting point...if the minimum wage is below the cost of living, then the whole pyramid of more expensive skilled labor is also depressed and has no space for growth...
If the minimum wage is set below the cost of living, the cost of bare necessities such as food, housing and clothing, then people on minimum wage will end up on Government Welfare programs, while every other wage labor will just fill the gap on its own and have no disposable income to accumulate wealth...multiply that for few decades, and it is so obvious how the wealth inequality came to be reality of the American middle class...its just the perception of being better off, cause one makes way above the minimum wage that blur peoples vision...
When I first saw these table statistics, it took me a while to come to my senses as an economist...
Not every day an economist is able to see a perfect example of David Ricardo's "Iron Law of wages" that has befallen America, and set the middle class on the road of extinction...
Table 643. Annual Total Compensation and Wages and Salary Accruals Per Full-Time Equivalent Employee by Industry: 2000 to 2009
[In dollars. Wage and salary accruals include executives’ compensation, bonuses, tips, and payments-in-kind; total compensation includes in addition to wages and salaries, employer contributions for social insurance, employer contributions to private and welfare funds, director’s fees, jury and witness fees, etc. Based on the 2002 North American Industry Classification System (NAICS); see text, section 15]
Industry Annual salary and wages
2000 2005 2008 2009
Domestic industries. . . . . . 39,157 45,537 51,059 51,615
Private industries. . . . . . . .38,862 44,717 50,144 50,462
Agriculture,
forestry, fishing,
and hunting. . . . . . . . . . . .22,154 28,600 33,129 34,159
Mining. . . . . . . . . . . . . . . 57,983 73,161 88,615 87,214
Utilities. . . . . . . . . . . . . . 64,742 77,409 86,667 87,578
Construction. . . . . . . . . . 38,563 43,948 51,226 52,321
Manufacturing. . . . . . . . .43,933 50,909 56,373 57,374
Wholesale trade. . . . . . . .50,853 57,922 65,089 64,896
Retail trade. . . . . . . . . . . 26,585 29,230 30,861 31,195
Transportation
and warehousing. . . . . . . 39,057 43,865 48,286 48,453
Information. . . . . . . . . . . .62,582 68,330 76,747 77,231
Finance and insurance. . . 64,561 77,981 88,034 84,555
Real estate
and rental and leasing. . . .37,146 43,708 47,849 47,290
Professional, scientific,
and technical services. . . .62,568 69,767 79,266 80,077
Management of companies
and enterprises 1. . . . . . . .74,201 87,971 101,450 96,586
Administrative and waste
management services. . 25,035 31,370 35,961 36,761
Educational services. . . . .29,243 34,844 39,221 40,785
Health care
and social assistance. . . . .35,269 42,286 47,071 48,354
Arts, entertainment,
and recreation. . . . . . . . . .32,479 37,149 43,746 43,219
Accommodation
and food services. . . . . . . 18,047 21,018 23,121 23,405
Other services,
except government. . . . . . 25,989 30,465 34,217 34,885
Government. . . . . . . . . . . 40,767 49,894 55,891 57,320
Federal. . . . . . . . . . . . . . .46,470 64,184 70,785 73,765
State and local. . . . . . . . . 39,164 46,174 52,058 53,056
Source: U.S. Bureau of Economic Analysis, Survey of Current Business, April 2011.
- Houston we have a problem....Houston, this is not anemia, but a case of advanced economic leukemia...
We can indulge in debate about God and guns...we can debate Obama Care, Medicare, Social Security, Benghazi, Iraq, drones and vouchers...but if we do not address the income inequality in America, we will get nowhere...
Marie
