Galt's Gulch

Ted Cruz

Posted by $ mkgoodwin 11 years, 6 months ago to Politics
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He seems to make some sense. Would Ayn Rand agree? Do you agree?

SOURCE URL: http://www.youtube.com/watch?v=PQJboCc-kLw

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  • Posted by CircuitGuy 11 years, 6 months ago
    I reject the claim that the president can do much about income inequality. Income inequality is real. People are worried about it. Politicians try to blame the other side for it.
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    • Posted by khalling 11 years, 6 months ago
      I agree. A union bread maker should not be earning or have the retirement benefits of a mid level accountant. That's not capitalism. Now if that breadmaker owned his own bakery, and had the same earnings and benefits, that would be capitalism. If one artificially prices entry level jobs out of the marketplace you end up with skilled labor performing unskilled labor. Inefficient and causes high unemployment for non skilled labor which leads to increased welfare.
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      • Posted by Robbie53024 11 years, 6 months ago
        Why shouldn't the union bread maker have the same earnings and benefits? So long as it is determined by free-market forces. That is how shortages/overages and low/high valued activities are rewarded or not. Income inequality is not only good it is absolutely necessary to the proper functioning of an economy. Without it you end up with shortage and excess.
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        • Posted by khalling 11 years, 6 months ago
          My point is a free market would not sustain that.
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          • Posted by Robbie53024 11 years, 6 months ago
            Ah, but that's not what you said. You seemed to intone that you wanted to control the pay/benefits of both the bread-maker and accountant so that they achieved what you felt was equitable compensation.
            Now that you've stated that is not the case, I concur. Let the free-market establish equity.
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            • Posted by khalling 11 years, 6 months ago
              mk has the right of it below. unions FORCE an artificial supply. My market for labor is artificially low. Nope, I never said anything about control. I did talk about fairness in the sense of "just." progressives should not have the ownership on that word-which they have changed the meaning of to actually mean power.
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              • Posted by Robbie53024 11 years, 6 months ago
                As much as I abhor unions, these factors are relatively short term. May be on the order of years or even decades, but eventually the market makes even these imbalances come to resolution. Only when government weighs in and upsets the market forces is that not the case.
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          • Posted by $ mkgoodwin 11 years, 6 months ago
            Your example hits home particularly for me: I am an accountant, and if I took a trade, I would probably have been a baker - or more accurately a pastry chef (I have a sweet tooth)!
            I don't believe a baker should earn the same wage as an accountant due to the extra education/skills etc. required for the role, but I suppose it's a case of supply/demand, as Robbie53024 points out.
            My thoughts are perhaps a bit clouded as I am suspicious of any unionised workforce because I believe unions to be inefficient and contrary to productive outcomes.
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            • Posted by Robbie53024 11 years, 6 months ago
              Perfect. Yes, a pastry chef or high end bakery (wedding cakes anyone?) can command more than many accountants. It is all about supply/demand and how the different products/services provided are valued. If I were on a deserted island, an accountant would be of virtually no use to me (unless she were good looking, but that would not be an inherent accounting skill) whereas a baker might provide skills to help us survive.
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              • Posted by khalling 11 years, 6 months ago
                you would be your own baker on a deserted island. I have already said the entrepreneur owner of a bakery or *highly skilled* baker might command more than an accountant. I don't think they are unionized-
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            • Posted by khalling 11 years, 6 months ago
              My point is in a closed system (union controlled) salaries are not tied to the market at all. Especially these retirement packages which can end up killing companies, and perhaps our country. In the end, due to unions, we are paying more than we should have to for products and services. Benefits few at the top who then give part of it right back to ONE party. and many of them have turned out to be gangsters! what a surprise!
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              • Posted by Robbie53024 11 years, 6 months ago
                In the long run, systems tend to shake even those issues out - look at Hostess. Only when governmental interference (see the auto bailout) affects the outcome does imbalance persist.
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                • Posted by khalling 11 years, 6 months ago
                  Let's see, the owner of 1/10th of the stock market in Mexico- many of whose gains are tied to the corruption in that government, buys a US based company made weak by more corruption. How is that not govt interference?
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                  • Posted by Robbie53024 11 years, 6 months ago
                    I was referencing specifically the union aspect. These unions cut their own throats and were subsequently eliminated.
                    There are always convoluted aspects to any deal that might not be pure or support a specific theory.
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                    • Posted by khalling 11 years, 6 months ago
                      I did not know the unions no longer existed. I do know only 20-25% of those workers were hired by the new non-union company. Those who before were making $16.25 and hour plus benefits were now offered 11-14/hr. That's quite an adjustment.
                      Many of the former employees have benefited from government re-training programs that allows them to pursue Associate's degrees with high skill sets. Some who are currently unemployed do not regret striking.
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                      • Posted by Robbie53024 11 years, 6 months ago
                        If the new wage is $11-14/hr and people are taking it, then that's the "real" wage for the work. They had been being overpaid.
                        As for those that do not regret striking, it is because they are still getting paid unemployment.
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      • Posted by CircuitGuy 11 years, 6 months ago
        Yes. The Pareto principle tends to hold true. I would not be surprised to learn that 20% of non-union employees focused on making bread earn 80% of the wages. Unions sometimes throw a monkey wrench into

        I follow what you're saying about any price floor leading to surplus supply. That's true in the market for anything. I don't think it's happening with labor. In other words, I don't think minimum wage and unions are having that much effect on wages.
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  • Posted by Robbie53024 11 years, 6 months ago
    Income inequality is the only mechanism available to allocate resources efficiently. All other mechanisms are inefficient and result in shortages/excesses that are not beneficial to the society.
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  • Posted by fivedollargold 11 years, 6 months ago
    For any society to prosper, there MUST be income inequality. The key question is whether or not there is opportunity for people at the bottom to improve themselves. Clearly, the answer is YES or so many people wouldn't be trying to sneak across our borders. What government can do is get out of the way and let people earn, save the fruits of their labor, and move up the economic ladder through their talent and effort.
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