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Wednesday, January 24, 2007

Minimum Wage

posted by on January 24 at 11:55 AM

The Senate—the Dem-controlled Senatejust shot down the raise in the minimum wage passed with much fanfare by the Dem-controlled House.

UPDATE: Sloppy, hungry me. I tossed this post up quickly on my way out the door for lunch. To clarify: the Senate’s failure to raise the minimum wage is entirely the fault of the Republicans. The GOP provided all the votes—all 43 of them—necessary to prevent the majority in the Senate from voting on, and passing, the $2.10 hike in the minimum wage.

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1

Read the story a bit more carefully, Dan. All Democracts and a number of Republicans voted for it, but in the Senate, the minority can block a vote with procedural methods. That's exactly what happened. This is a filibuster.

Posted by Gitai | January 24, 2007 12:03 PM
2

Whoa. Norm Coleman voted with the Dems?

Posted by Brie | January 24, 2007 12:08 PM
3

Bullshit, Dan. The Times got their facts wrong-- a majority did NOT reject the minimum wage increase. What happened was that fewer than a super majority of sixty senators voted for cloture, which is the motion to end debate and move to a final vote. This is known as a filibuster, and is a procedural tactic employed by the minority.

Posted by Chris | January 24, 2007 12:09 PM
4

Yeah, that first paragraph is very misleading. The rest of the story clears it up, though. You can say this for the Rs: they sure are predictable.

Posted by Levislade | January 24, 2007 12:10 PM
5

Dan --

I think you need to correct this. Essentially the dems were unable to defeat a Republican filibuster of the raise in the minimum wage. Period.

You need 60 votes to shut off debate.
The vote was 54 to 43 in favor of shutting off debate - that is to pass the raise. All the Democrats (minus the one in a coma) voted in favor of the raise. A big majority of Repubs voted against it, with 5 Repubs joining the democrats.

Come on, Dan.

Posted by Jonathan | January 24, 2007 12:11 PM
6

Actually -- we also need to rip the NYT a big one for this bullshit reporting.

Posted by Jonathan | January 24, 2007 12:12 PM
7

You know, if you're the minority party and facing 22 seats up for reelection compared to the opposition's 12 in 2008, it seems like it's a bad idea to filibuster a measure that 80% of America supports (according to some polls).

Evidently Senate Republicans disagree.

Posted by tsm | January 24, 2007 12:13 PM
8

This is going to be an interesting session. If the republicans are willing to filibuster a minimum wage increase, a wildly popular proposition, I cannot imagine the fights to be had over more controversial topics.

Posted by golob | January 24, 2007 12:13 PM
9

A question: can't the Senate Democrats just flatly refuse to let ANY Republican bills/pet projects through until the minimum wage increase goes through? (Ah, the joys of being the majority ...)

And will they have the courage to do so?

Posted by tsm | January 24, 2007 12:16 PM
10

If I understand it correctly, the Repubs want to attach tax breaks for small businesses. If that's what it takes, that's fine with me.

Posted by Matt from Denver | January 24, 2007 12:22 PM
11

I doubt this will do any good, considering this article got past an editor in the first place, but I've emailed Byron Calame, the public editor, at public@nytimes.com. I suggest anyone, including Dan, disgusted with the Times' flagrantly false reporting do the same.

Posted by Chris | January 24, 2007 12:23 PM
12

Wow. Just wow. The Republican fuckheads are going to filibuster the minimum wage? They're going to filibuster EVERYTHING, then. The day after the Prez lied another "bipartisan, working together" lie. What a bunch of contembtible asswipes.

Remember a couple years ago when the Rs tried to kill filibustering? The Dems should have let them do it. Imagine how much fun it would be to watch those motherfuckers fume today. Instead, they're gloating.

Go ahead, assholes. Dig that hole a little deeper. I hope the Republicans get down to 30% and stay there for a hundred years.

Posted by Fnarf | January 24, 2007 12:24 PM
13

Matt @ 10 has it right, the Senate wanted to attach a tax-cut for small businesses to help offset the increased costs the minimum wage would impose. All this gnashing of teeth and bashing is just misplaced at this moment, it seems.

Posted by chunkstyle | January 24, 2007 12:28 PM
14

"All this gnashing of teeth and bashing is just misplaced at this moment, it seems."

Actually, it doesn't seem that way. The minimum wage increase is hugely popular, and it is being blocked by a Republican filibuster. If the Republicans want a tax break for small businesses, then they should write up a bill, not hold this one hostage.

Posted by Gnasher | January 24, 2007 12:43 PM
15

This move was totally anticipated when the House passed the bill. Senate rules require a level of compromise not needed in the House. The Times' reporting of this more is weak, though.

Posted by DOUG. | January 24, 2007 12:43 PM
16

Oh, and this is why a sitting Senator has not won the presidency since Kennedy. Remember, "I voted for it before I voted against it..."?

Posted by DOUG. | January 24, 2007 12:47 PM
17

You'll note that all US States and territories are covered by this proposed minimum wage hike, except American Samoa. Why American Samoa? Well, StarKist operates there to get tuna, and they happen to be based right in Madam Speaker's hometown of San Francisco. If raising the minimum wage is such a good idea, why are they being exempted?

Posted by chunkstyle | January 24, 2007 12:47 PM
18

Dan,

First rule of Senate politics, you need at least 60 votes to get ANYTHING done. I am not surprise it failed without the tax break. And things will get more ugly when both houses pass any sort of legislation. There are not enough votes to overturn a presidential veto.

Hence why 2006 was the START of taking back the country for the good guys. We still have much work to do. Much much to do...

Posted by Andrew | January 24, 2007 12:53 PM
19

Really, Dan - The Dem's barely control the senate, and they all voted for the increase. No need to attack them - at least on this particular issue.

Why don't you re-read, and then post a new, more accurate accounting of what happened?

btw, why this would come to as a suprise to anyone is beyond me. The GOP is a bunch of assholes.


Posted by catalina Vel-DuRay | January 24, 2007 12:53 PM
20

Yes, yes -- 60 votes, sorry about that. I saw the NYT piece, read the headline, and tossed it up on my way out the door for lunch. Now I'm back and I'l correct the post...

Posted by Dan Savage | January 24, 2007 1:00 PM
21

Until the Senate is at least 60 to 40 the Dems are going to have to give something to the GOP for support on anytyhing which royally sucks.

Posted by Andrew | January 24, 2007 1:02 PM
22

The NYT corrected their story.

Posted by Levislade | January 24, 2007 1:16 PM
23

@ Matt from Denver: true, they could capitulate to the tax break, but (I guess) they are sick of tax breaks and just want a straight raise.

@ chunkstyle: this isn't misplaced. Everyone knows that "tax breaks for small businesses" is code for "more tax breaks for the rich." Again, the Dems wisely know that there have been enough tax breaks the last 6 years, and they simply insist that the min wage be increased without the quid pro quo. Also, isn't it a bit childish to point out the Starkist thing? I'm not defending the exemption (I would have preferred they leave it out just to avoid even the appearance of impropriety). I just think you (and all the other conspiracy theorists) are desparately grasping for straws...

Posted by Mike in MO | January 24, 2007 1:20 PM
24

Enough with the tax breaks. Our tax code is complicated enough as it is, and there's a fucking war on.

Posted by keshmeshi | January 24, 2007 1:34 PM
25

No big deal, Savage. Happens to the best of us. That being said I'm not at all surprised. What do you expect from a pig but a grunt? The last thing we need is another goddamn tax-cut...

Posted by JessB | January 24, 2007 1:34 PM
26

Mike, I'm not so sure. I do work at small business that's already feeling the pinch from a popularly passed miminum wage hike here in Colo. The federal increase probably won't factor into that (our min. wage is $7/hr and set to go up with inflation rates) but I know your concern. But look at it this way, Bush has said he would sign it if it included those breaks, and the smarmy little fuck will probably veto it without them. Do we want to compromise to get what we want or hold firm and get nothing?

Everyone else - no one is filibustering the bill. (Yet.) Let's not get carried away until that happens.

Posted by Matt from Denver | January 24, 2007 1:36 PM
27

Ah, guess it isn't true. And here I was hoping that maybe Senate Democrats had some of the economic sense their House brethren were lacking. Apparently, that is not the case.

Posted by anonymous coward | January 24, 2007 1:38 PM
28

The NYT had it right (whether they knew it or not).

The Ds knew the Rs would not support this without the tax relief for small businesses. The Rs would have supported this with it. This is politics at its most cynical. Instead of allowing a vote on the legislation that could have passed, the Ds went with the one they knew could not pass. This resulted in a triple win for the Ds (1. they voted for it, 2. the Rs voted against it and 3. (most importantly) the Ds preserved the issue for the next election cycle) the net plus of which is more valuable to them politically than having actually passed the legislation.

It’s the same sort of political stunt the Rs pull every time they try to pass the marriage amendment or draconian abortion legislation. If they really wanted them, they could probably get them by including recognition of some sort of domestic partner status or recognitions of the right to abortion under certain circumstances.

The power of red meat is in that you keep your constituency hungry for it. Wave it around a lot, but never let them actually taste it.

Posted by You_Gotta_Be_Kidding_Me | January 24, 2007 1:49 PM
29

Time to start burning Repug senators in effigy.

Posted by Will in Seattle | January 24, 2007 1:52 PM
30

FILAPWN3D!!! ELEVENTY!!!

Posted by seattle98104 | January 24, 2007 1:55 PM
31

I just wish that low-end workers weren't being used as political pawns for the Congressional parties. I see the political gain here--the Dems can say the GOP is blocking the minimum wage--but in terms of passing an agenda now, there were better ways to go. They could have passed the compromise bill with all the business giveaways, and then taken away all or most of the giveaways in conference before sending the final bill to the president. Though, I suppose Bush would just have vetoed.

Posted by Cascadian | January 24, 2007 1:58 PM
32

Why keep calling them "tax breaks"?

They're cash advances, just like you can (irresponsibly) get from any credit card.

Given from whom we're borrowing, there more like payday loans.

When the federal government is running massive deficits, all reductions in taxes come out of our pockets, just magnified years down the line.

Posted by golob | January 24, 2007 2:00 PM
33

Mike in MO @ #23:


I hope you're not lumping me in with conspiracy theorists for pointing out the exemption.


And no, it doesn't seem childish or straw-grasping to ask why. If raising the minimum wage is good, as its proponents apparently think, why exempt a company that is based in the district of the Speaker of the House? It would be more consistent to have it be effective everywhere.


The tacit assumption behind this action is that raising the minimum wage will put a burden to some degree on a company, so we will grant a special dispensation. It is an acknowledgement that this legislation will impose a (slight?) burden on all to whom it applies, which won't include certain constituents.

Posted by chunkstyle | January 24, 2007 2:01 PM
34

As to "Tax Breaks" JFK believed and proved (and any economist worth his salt will agree) that lowering taxes increases tax revenue. Why are we still even debating that point? I’ll tell you why: only for its value in class warfare.

Posted by You_Gotta_Be_Kidding_Me | January 24, 2007 2:09 PM
35

Keshmeshi, If simplification perfects the tax code, then by all means move to a poll tax, or at least a flat tax, on all citizens. That would be just and equitable, and I would support you in that effort. Otherwise, stop worrying your pretty little head over how complicated it is to pay your taxes. (You do pay taxes don’t you?)

Posted by You_Gotta_Be_Kidding_Me | January 24, 2007 2:15 PM
36

So, are we going to get a gawddamn raise or are we going to have to wait for another 100 years?
Are they going to keep proposing it or modify it, as in lets take awy 5 more cents from the original offer?
Is this really a major issue with voters on why they voted Dem?
most likely not.
And whats it the hell are we going to do when that meteor that went by in 2004, comes within our orbit in 2026,
and is then going to be in a direct path with the Earth in 2039.
Does really spending all our military surplus and taxpayer pocket change and getting involved in other countries political futures going to save the gawddamn planet from a Asteroid collision?
We better all get our prioreties in shape, or I'm going to believe that any endevor on this planet is futile compared to what I saw in Seaven Deadly events that could destroy the planet on the Science channel. So what are our scientists of the world trying to do about that. And if anybody needed a payraise give it to them, stupid politicians. The scientists are the ones who are going to really save our hides when it comes down to it.

Posted by sputnik | January 24, 2007 2:22 PM
37

Thanks for correcting, Dan.

Posted by Jonathan | January 24, 2007 2:36 PM
38

As to "Tax Breaks" JFK believed and proved (and any economist worth his salt will agree) that lowering taxes increases tax revenue. Why are we still even debating that point? I’ll tell you why: only for its value in class warfare.

YGBKM, you're deluded, and don't know any real economists, if you honestly think it's that simple. JFK cut taxes at a time when the top tax bracket paid a whopping 91% of their income in tax, which bears no resemblance to the state of taxes today.

Posted by tsm | January 24, 2007 3:15 PM
39

The Ds knew the Rs would not support this without the tax relief for small businesses.

Tax relief? Give me a fucking break. No one in this country needs "relief" from taxes. Our taxes are ridiculously low considering the size of our military budget, the size of our national debt, and the simple fact of the United States being the world's only superpower. If you want low taxes, move to Haiti, Mozambique, or Somalia. Their low taxes seem to be working out real well for them.

Otherwise, stop worrying your pretty little head over how complicated it is to pay your taxes. (You do pay taxes don’t you?)

My pretty little head? How wonderfully condescending. Odds are that my head and IQ are significantly larger than yours.

Since I don't qualify for itemized deductions, my taxes are very simple, thank you very much. My problem with our complicated tax code is that all of the Republican giveaways have allowed wealthy individuals and companies to bail out on their responsibility to support our society and infrastructure. The top bracket supposedly pays 37 percent of their income, but when you factor in all the bullshit deductions and tax breaks, they pay much less. Where are you in the income bracket, YGTBKM? If you're anywhere near the middle class, you pay a higher percentage of your income in taxes than the rich. Enjoy that much?

Posted by keshmeshi | January 24, 2007 3:35 PM
40

@35 - a poll tax? Man, once you Red Bushies get started, you just can't come back to reality, can you?

Posted by Will in Seattle | January 24, 2007 3:47 PM
41

The appropriately-named Arthur Laffer lives on. Actually, YGTBKM, zero serious economists believe that cutting tax rates increases tax revenue, because it's simply not true.

And the other points made here are correct: our current tax code, all ten zillion pages of it, is entirely built around the desire for rich people to avoid paying. Flat tax is a joke, but a greatly simplified graduated income tax, with a decent-sized bite up at the top of the scale, and NO DEDUCTIONS FOR ANYTHING, would be a great, but politically impossible, idea. So would a national consumption tax, which would have the benefit of protecting the rich's precious capital gains, and otherwise encouraging investment, and shifting the load onto spenders.

Posted by Fnarf | January 24, 2007 3:48 PM
42

Actually, I do know more than a couple actual economists. Because they are predominately conservatives or libertarians you will probably dismiss them and their opinions on those grounds but they all pretty much agree that further reductions in the tax rate would continue to increase tax revenues baring further government interference in the current economic trends while increased tax rates or increased government interference would produce the opposite effect. Lower taxes result in increased economic growth (private investment and a free market grow the economy more efficiently than government spending and market regulation) yielding a larger tax base and increased tax revenue.

The Regan tax cuts combined with the legislative gridlock of a split government resulted in the surpluses of the Clinton years. While neither party is responsible enough to curb increases in spending when they have control of all branches of government, the split government of the next two years affords us certain opportunities to grow the economy faster than the government is likely to grow and get spending more inline with tax revenue. Of course reductions in government spending and regulation would also be helpful. Hopefully at least Bush’s proposal reforming earmarks will be passed into law.

All you need to do is look at increases and decreases in tax rates graphed against increases and decreases in tax revenue and you will see that tax revenue moves predictably as a legging indicator in the inverse direction of tax rates. It always amazes me that reasonable minds that can see the empirical evidence in support of the global warming theories have scales on their eyes when they look at economic tax theories supported by empirical evidence of at least equivalent, if not greater, weight.

Posted by You_Gotta_Be_Kidding_Me | January 24, 2007 4:15 PM
43

Fnarf,

I would 100% scrapping the entire tax code a replacing it with a federal consumption tax with no deductions, income tax, inheritance tax or capital gains tax.

Tax all revenue. Tax it only once. Tax it equally, and tax it at the time it is used to buy goods or services for consumption (other than food, medical, clothing or housing).

Posted by You_Gotta_Be_Kidding_Me | January 24, 2007 4:35 PM
44

"problem with our complicated tax code is that all of the Republican giveaways have allowed wealthy individuals and companies to bail out on their responsibility to support our society and infrastructure."
Keshmeshi thats so true, and not only that they don't give a damn about protecting this planet, not from enemies on the ground but a far more potent situation that is going to come if we do do not put a foot up the asas of the powers that be that fund these ventures. And what do we need to find out if there is life on another planet , when we need to fund a active research in deflecting an Asteroid from hitting the earth.
We saw one , but it was too late, explanation here....
http://news.bbc.co.uk/2/hi/science/nature/2056403.stm

And if you really want to see where the other debates of where our Tax money goes and Military Surplus, and the Superpowers wasteing of money on military endeavors---- Who cares if Iran takes over Iraq,or that they have Nuclear capability....the real threat is from outerspace. Where the hell is our venture in protecting this planet and its future. No one is paying attention. So what does anything matter now. Who cares. Well This Taxpayer does.

We watch this world sink into chaos every moment and each event on Earth compared to what is out there around the Universe and heading for this little planet is why I'm upset. Its in the future we all say. It will not effect my lifetime. Bullshit. Were toast if the scientists doesn't get any backing for the projects. We are wasting to much money that should be for saving the planet into saving little countries at war. I give up. Whats it all matter anymore, Iraq? Iran? Russia? China? India?Pakistan?
USA?

Is it going to be a Bolt from the Blue(great name for a band)that wakes us all up...to damn late?

Bolt from the blue'excerpt from BBC Science monitor.

A major issue of concern centres on how late this object was picked up.

Dr John Davies, of the Royal Observatory Edinburgh, has calculated the orbit of the asteroid from the Linear data.

He concludes that the asteroid came out of the Sun and was impossible for Linear to see until one hour after its flyby of the Earth on the 14th.

Dr Davies said: "...if an asteroid were to approach close to an imaginary line joining the Earth and the Sun it would never be visible in a night-time sky and would be quite impossible to discover with normal telescopes. Its arrival would come, literally, as a bolt from the blue."

Space-based telescopes, such as Hubble and the future European Gaia spacecraft, are the only means of searching for asteroids in the daytime sky.

I hope we legalize weed by that time for it will not matter who the real dopeheads are. It will be our dumb ass politicians not giving any support to our scientistic community who should be locked up.

Posted by sputnik | January 24, 2007 4:43 PM
45

Fnarf,

I think a more fair synopsis of the tax debate would be to say it is all about most of the people who pay taxes trying to find ways to pay less in taxes and most of the people who don’t pay taxes trying to find ways to make the people who do pay taxes pay even more in taxes. It’s a two way street with bad actors on both sides.

Posted by You_Gotta_Be_Kidding_Me | January 24, 2007 4:49 PM
46

YGBKM: Some of us understand the difference between correlation and causality.

Far more believable and rational explanations for the Clinton-era surpluses include: *increased* taxation of investment income (during stock market boom), decreased public subsidy for private enterprise (i.e. "tax credits" for companies to do things they did anyways), a long period of non-military intervention and pay-go budget-making policies.


Want to play a correlate to causality game: Both Bush Jr and Clinton have presided over a booming stock market. Clinton raised capitol gains taxes, and balanced the budget. Bush cut these same taxes and ran up the largest deficit in history.


Even by the lowly standards of proof that come with economic "science", the tired supply side theories are widely and *correctly* discredited as public policy disasters.

So, be condescending to the notion that decreasing revenue and increasing spending results in larger and larger deficits if you'd like. I suspect there are jobs available for you at GM or Ford.

Posted by golob | January 24, 2007 4:51 PM
47

As it now stands, the budget submitted by the Bush Administration for NASA would slash $3 billion from the planned exploration of the solar system, as well as from space science research and analysis.

In addition, the budget cuts astrobiology, the study of and search for life beyond Earth, by a full 50%. University research funding would be cut 15% across the board, eliminating many bright young people from the field of space science.


My point is with all is If all we are doing is funding nefariuos Wars and insepid human political crisis with our tax money we do not have anybody to observe or do something in the future, that scientists are doing now to understand, predict and prevent a catastrophe like Asteroid NT2002, which is swinging like a Pendulum around our orbit.
Well support this, Taxpayer.
Tired of your money going to stupid human wars and the destruction it causes. And are you tired of the Admnistration and Politicians not concerned about anything but War and Business. well some people are. Thank god for science.

http://www.planetary.org/programs/projects/advocacy_and_education/sos/update_20060525.html

Posted by sputnik | January 24, 2007 5:07 PM
48

golob,

So you feel the way to grow the economy is to raise taxes? Then lets really go for it! How's 40 points across the board do ya?

Posted by You_Gotta_Be_Kidding_Me | January 24, 2007 5:12 PM
49

@42, those aren't economists. They're corporate lackeys who say what their CEOs want them to say.

Posted by Will in Seattle | January 24, 2007 5:14 PM
50

#49 Right on. And were paying for it.
Man were doomed. I might as well give my money to some blackmarket smugglers.
At least they are more honest in what they are doing with my money. I know here its going etc. etc.

Save the planet from Asteroids.com.
someone want to start a new organization.

Posted by sputnik | January 24, 2007 5:26 PM
51

Re #17: While Pelosi is a weasel for inserting that provision, I believe the bill was amended to remove it before leaving the House. Ironically, the same Republicans who oppose *any* increase in the minimum wage are the ones who made the most noise about it.

Posted by Orv | January 24, 2007 5:36 PM
52

YGBKM: I'm always tempted to not respond to your posts, given how troll-like (condescending and combative) they are. Perfect example is the straw man you just set up. Who said anything about a 40% increase in taxes across the board?

Yes, I believe combining wise public investment in infrastructure with balanced budgets is good for growth.
Some taxes should be raised, some should be reduced, but overall we MUST balance spending with revenue. Call me crazy for believing in basic accounting principles. And I further believe that the worst thing to do is to just blindly cut spending. Much of government spending (aside from the gross excesses in the military) is actually quite reasonable and critical for economic growth. Look at what the half-decade of cuts (in real dollar terms) to the NIH budget have done to the US biotech industry.

And not all revenue increases have to come through raising taxes. Simply by encouraging better income distribution (raising the minimum wage) both rewards people for working AND increases revenues. Remember when the US was considered a "classless society?" Rewarding the hard work of people cleaning toilets, preparing food, driving buses seems like a far more successful way of encouraging growth in productivity than giving ever larger wads of cash to incompetent CEOS.

Do you honestly believe the best thing for you to do right now is max out your credit card with cash advances, pay the minimum due each month and go on a wild luxury spending spree? That's the household version of the Bush supply-side budget process (devised by a man who couldn't chew pretzels successfully.)

Posted by golob | January 24, 2007 5:49 PM
53

golob,

I assume you think that anyone that does not toe the Liberal line is condescending and combative.

Put simply I believe government is the problem more often than the solution, a free market distributes wealth more equitably than a welfare state and that an individual has a stronger moral and ethical claim to the wealth and property that he (or his forbearers) earned then the State or his neighbor does.

I realize that this flies in the face of the Liberal eat the rich and keep the poor on the tit dogma.

I believe that it is the government’s fundamental responsibility to make and enforce laws, not redistribute wealth and manipulate markets. That is not to say that I believe the desperately poor should be left out in the cold to starve either. I recognize that their must be a safety net, but no more.

Government spending should be limited to only those functions that can not be accomplished by private individuals or other institutions. (The founding fathers thought that was the Treasury, Postal Service and Military. I’m not convinced they were wrong.)

As to your question “Remember when the US was considered a "classless society?" I’d have to say no. I know that some like to think that at some point maybe we were, but that’s a perpetually reoccurring fiction made out of whole cloth to manipulate nostalgic fools. If anything, we are more of a classless society today than ever before.

To imply that the only hard working people are those cleaning toilets, preparing food, driving buses is just obtuse. Lots of people (even CEOs) work hard and sacrifice for their carriers, most are rewarded for doing so.

I have never agreed with the Bush budget process (or much that he has done or proposed since he took office) but even 8 years of Bush is not enough to make an economic Liberal out of me.

Posted by You_Gotta_Be_Kidding_Me | January 24, 2007 7:27 PM
54

YGBKM

Have you read Adam Smith's _Wealth of Nations_?

It is a tough read but worth it. As much as the Declaration of Independence and the Constitution, it is a founding document of our nation.

I'll (re)-read it with you, and then we can have a good discussion about the real meaning of American economics.

Posted by golob | January 24, 2007 9:00 PM
55

"Our merchants and master manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods both at home and abroad. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effcts of their own gains. They complain only of those of other people."
Adam Smith, "The Wealth Of Nations", pg. 104

Posted by sputnik | January 25, 2007 12:46 AM
56

golob,

Its been along time since I read Smith, but both The Wealth of Nations and Theory of Moral Sentiments are informative. I hold to his belief that an individual's self-interest and sympathy are adequate in themselves to achieve social benefits. I also like Hume's theories concerning the distribution of private property (though I agree with Locke that private property is a natural right), but its Chydenius' nightwatcman state that really draws my admiration.

While I'd like to go back and re-read all of these, I'm committed to Gibbon at the moment.

Posted by you_gotta_be_kidding_me | January 25, 2007 1:20 AM
57

sputnik,

Not surprisingly, the passage you quote appears to mean something that it does not when presented, as in this case, out of context. The “bad effect of high profits” or “pernicious effects of their own gain” to which Smith refers are in reference to the phenomenon he outlines earlier in this same section wherein he points out that “In reality high profits tend much more to raise the price of work that high wages.” He is not (as you appear to imply) commenting on greed and social welfare, but the monetary cost of work.

The principal he is laying out in this section is that “Countries with low profits can sell as cheap as those with low wages; and in reality high profits tend to raise prices more than high wages.” This is a discussion of the cost of profit in financial terms, and follows a long dissertation on interest rates describing how the proportion of interest to profit fluctuates with the rate of profit.

To imply that the polemic content of The Wealth of Nations is anything less than an endorsement of the free market and a condemnation of government regulation and the welfare state is obtuse.

“The natural effort of every individual to better his own condition, when suffered to exert itself with freedom and security, is so powerful a principal, that it is alone and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often incumbers its operations; thought the effect of these obstructions is always more or less either to encroach upon its freedom, or to diminish its security.”
-Adam Smith, The Wealth of Nations (p. 581).

Posted by You_Gotta_Be_Kidding_Me | January 25, 2007 1:40 PM
58

So the Minimum Wage Increase is the victim of a Republican fillibuster. So much for bi-partisanship, Pelosi's hundred hour pledge gave a minimum wage increase of a lousy $2.15 over TWO years!! And yet these greedy sob's want more and more.
Then when I read that 28 senators voted on a bill they presented to get rid of the Minimum Wage entirely, and that the media had not even reported this disgusting greedy bill and it's votes, I hit the ceiling.
I had to do a cartoon on this topic since people will read a cartoon before they read an article.
to see the cartoon, "Minimal progress with the Minimum Wage" at my website;
www.whatnowtoons.com

Posted by what now toons | January 30, 2007 6:06 PM

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