Archive for the ‘Economics’ Category

Corporations Are People

January 26, 2014

The title of this post is taken from the 1973 film Soylent Green, set in the dystopian, overpopulated world of 2022. The bulk of the world’s population subsists on manufactured food called Soylent Green. Charlton Heston plays a police detective charged with investigating the murder of a wealthy businessman. At the end of the movie, Heston discovers that Soylent Green is made from human remains and, seriously injured, he tries to spread the word that Soylent Green is people.

Corporations are not people in a physical or moral sense, of course. No corporation could be mistaken for a human being. Nevertheless, corporations are considered to be persons in a legal sense. Before I get into explaining this, I should begin by saying just what a corporation actually is.

Many people on the Left seem to think  that a corporation is some sort of alien entity that dropped down from outer space and is intent on using up all the world’s resources. While there are certainly corporations that act like that, that is not what a corporation is. A corporation is simply an entity that has been incorporated through legislation or a registration process established by law. A corporation is one of three ways in which businesses are legally organized in the United States, the others being sole proprietorships and partnerships. A sole proprietorship is owned by one person while a partnership is owned by more than one person. In each case, the owners of the business are entirely responsible for any debts or damages the business accrues and there is no legal distinction between the owners of the business and the business itself. With a corporation there is a legal distinction the  between the owners of the business (the shareholders) and the business itself. A corporation is a separate legal entity from its owners and this is where corporate personhood comes in.

Because a corporation is a legal person, the owners or shareholders can enjoy limited liability for the debts or damages incurred by the corporation. They are separate from the corporation and are not financially responsible for the corporation beyond what they have invested in it. There are actually some very good reasons why corporations are considered persons.

Suppose you own a few shares of Acme Widgets. This makes you a part owner of Acme Widgets, even if the shares you own are only .01% of the total number of shares. Now, suppose someone is injured when one of Acme’s widgets explodes and he decides to sue Acme Widgets for negligence. If the corporation were not a separate legal entity, or a person, you could be held partially responsible for Acme’s negligence and you could be required to appear in court, along with thousands of other shareholders. If the court rules against Acme, you could be required to pay part of the damages. If Acme Widgets goes out of business because their widgets keep exploding, you could find Acme’s creditors at your door, demanding that you pay your share of Acme’s debt. Also, that man who decided to sue Acme Widgets might find it very difficult to sure a thousand separate owners of Acme Widgets. Since the corporation is a legal person, it can be represented in court as a person, and found liable for damages, indicted for crimes, etc. Considering corporations as persons makes it much easier for the courts to deal with them.

This limiting of liability is the most important advantage the corporation has over other ways of organizing business. Because liability is limited, investing in the company is less risky. Were it not for limited liability, only the very wealthy, or reckless, would be able to invest in the stock market, and companies would find it much more difficult to raise capital. There are a number of controversial issues relating to corporate personhood, especially regarding just what rights corporations have compared to actual human beings, and like anything else, the concept can be abused, but the idea of corporate personhood itself is a beneficial one.

 

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Who Creates the Jobs?

January 5, 2014

In an economy in which it is necessary to provide more jobs to people, everyone should agree that encouraging the people who create the jobs should be a high priority. The question is, who actually creates the jobs and what policies should be perused. There are many on the right who have argued that “rich people” create the jobs and that tax cuts for the rich are necessary to grow the economy. There is some truth to this assertion, but it is not the whole truth, as I’ll explain. Lately, liberals have retorted that it is not the rich who create the jobs, but the customers, and that policies that redistribute wealth from the rich to the middle class are necessary to provide more money for the customers to buy things. Again, there is some truth to this idea, no company can prosper unless customers buy its products. But, again, it is not the whole truth and the remedy suggested is not likely to help anyone, except the politicians.

So, who are the real job creators? The real job creators are not customers or “the rich”. The people who create the jobs are the investors, the people, rich or not, who provide the capital necessary to establish or expand a business. Customers are an important part of the process, as are the employees who create the goods or services that the company sells, nevertheless, none of the process of creating the products or the company would be possible if the capital were not available. Customers cannot buy a product that is not available or that does not yet exist. Investors provide the funds that enable a company to be established before its first sale to any customer. Investors provide the funds for research and development to create new products before customers ever decide they want to buy them.

Please note that I did not say rich people. The income or amount of wealth that an investor has is irrelevant, except that a wealthy person is more likely to possess more money to invest. A rich person who keeps all of his money in a money bin, like Scrooge McDuck is doing absolutely no good to anybody, least of all himself. A person of modest means who invests his life savings in a 401k account or even has a savings account is providing capital that will eventually be used to create jobs.

Scrooge's signature dive into money.

Rich people don’t actually do this. (Photo credit: Wikipedia)

If you want a growing economy that provides jobs for people, you must pursue policies that encourage people to invest their money to provide the capital necessary to create and expand businesses. This includes keeping taxes low, not just for the wealthy but for everybody. Taxes and regulations should not be so onerous as to make potential investors decide that it would be easier to keep their money hidden in their mattresses or send it to a tax-free account in the Cayman Islands. Punishing people who have become successful is simply not helpful. To put it another way, we don’t want policies that benefit rich people, we want policies that encourage people to become rich, and thereby benefit others.

 

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The Triumph of Capitalism

December 23, 2013

Cracked.com is a humor website that besides being funny is also surprisingly informative. You can learn all sorts of interesting facts from the writers while laughing. One recent article listed five amazing pieces of good news that nobody is reporting. News reporting usually focuses on dramatic events and these stories are happening in the background without anybody really doing anything, so they tend not to be noticed. I remain a little skeptical about number 5, we are closing in on world peace.

This one seems laughable — mankind has gone from fighting with swords, to muskets, to machine guns — right up to the modern era of poison gas and nukes that can murder every human on the planet in minutes. Mankind’s technological growth has been marked mainly by increasingly efficient ways to slaughter each other.

Sure enough, the 20th century had to have been the most violent in human history. Two world wars, conflict in Southeast Asia, constant war in the Middle East — and those were just the ones that America was directly involved in. At the beginning of the 21st century, with Afghanistan, Iraq, Libya, and rumblings of war with Syria, it seems like the world is a pack of rabid dogs about to pounce on a Snausage pinata.

The Good News:

Even with wars in Afghanistan and Iraq, the first decade of the 21st century saw the number of annual battle deaths at its lowest ever in history.

Professor Joshua Goldstein put it best: “If the world feels like a more violent place than it actually is, that’s because there’s more information about wars — not more wars themselves.” Overall, we’re in the midst of an unheard of “long peace,” as no major powers have clashed since World War II, replacing them with smaller wars that historically would count as skirmishes — the U.S. lost 3,400 soldiers in Afghanistan, which is terrible, but during the American Civil War, 4,700 troops were killed on one side of one single battle. Here it is in graph form:

Via Wsj.com
Sans screaming.

OK, so maybe this is just a temporary breather after the bloodbath that was the previous century? Nope — it’s part of a long-term trend. As crazy as it seems to suggest it, the past couple of hundred years have been the most peaceful in world history. That’s including the world wars.

Yes, in absolute numbers, more people died violently in the 20th century than in any other century — but that’s because there are so many more people now. The chances that a person living in the 20th century would die violently were about 3 percent. That’s a historically low number — it was five times higher in prehistoric societies. In tribal societies, war was a daily occurrence — just the process of everyone settling down into large-scale governments, even violent ones, was an improvement. If our hunter-gatherer ancestors could see us now, they’d be confounded by the complete lack of annual head smashing and face stabbing (if you ever unfreeze a caveman, show him our violent video games — he’ll go nuts for that shit).

And it’s not just war, it’s all violent deaths — in 14th century England, some cities had a homicide rate as high as 110 per 100,000 citizens. London’s homicide rate in 2012 was just under 1 per 100,000. And we’ve previously talked about how violent crime is dropping to historic lows, even in the gun-crazy USA. No matter how you break it down, violence is slowly going out of style.
Maybe, but they were making similar statements back in 1913 and the international situation today is frighteningly similar to the situation just before World War I.
But I am more interested in the last piece of good news they present, number one, world-wide, poverty is dropping at a shocking rate. Please excuse the language.
For decades now, we’ve watched commercials that feature some retired actor stumbling through some impoverished village in some undisclosed location to make viewers feel bad enough to donate money. Considering that we’re mired in a worldwide recession, it’s a sensible question: “Does any of this shit even make a difference?”

Yes! Even though lately it seems like the whole world is in a race to the bottom, the poorest of the poor are actually climbing out of the financial shithole. From 1990 to 2012, the number of the world’s extreme poor was cut in fucking half. In case you were wondering, that would be the first significant global decline in extreme poverty.

Ever.

Not bad, right?

And these aren’t just statistical tricks here — when they calculate this, they’re not just counting income, they account for total living conditions — infrastructure, schools, access to clean water, everything. A billion people have that stuff for the first time. And what’s really encouraging is that this all happened three years ahead of the official estimates, which pegged 2015 as the soonest such a lofty goal could be achieved.

So how did this happen? International aid helped, but the big jump has been in the increased participation of previously isolated countries in international trade. You know how people are always complaining about how “they’re shipping our jobs overseas!” Well, this is where they went — to people who previously had no jobs at all. And that boom that swept across China and India is expected to continue in places like Sierra Leone, Ethiopia, and Rwanda — all of the places you previously only heard about in the context of heart-breaking ads begging for donations. If things continue at this pace, countries like Nepal and Bangladesh would likely see extreme poverty shrink to near-nonexistent levels.

What is the cause of this amazing reduction of poverty all over the world? The expansion of international trade and also the expansion of free market economics or capitalism. No system of economics or politics made by human beings is perfect and capitalism does have its flaws. Nevertheless, the expansion of free market reforms has been responsible not just for a reduction in absolute poverty but also for the rise of a middle class throughout the developing world. Countries like India and China, where the great mass of people have known nothing but poverty and near starvation now, at least, have a chance to live with some small degree of prosperity. For the first time in human history, the obese outnumber the starving.

Yet capitalism continues to be maligned as a system that enriches the few and impoverishes the many. Why is this? Are the critics of capitalism simply ignorant of these facts? Perhaps. Or, it may be that many of the fiercest critics of capitalism prefer to see the poor stay poor. Capitalism has a way of disrupting hierarchies. In a free market; the ambitious, the inventive or the hard-working can rise. The lazy or foolish can sink, even if they belong to an old family or a special caste. It is perhaps no coincidence that the defenders of the idea that the markets must be controlled and regulated tend to be those already on top. Think of how many grandchildren of successful industrialist embrace various forms of Socialism, or how successful European firms didn’t have a problem with Fascism or Nazism, or even Democratic Socialism. The biggest supporters of Big Government tend to be Big Businesses. As long as they have a hand in setting the rules,they can set them to their advantage. And, if you advocate the redistribution of wealth, you have many opportunities of redistributing wealth and power to yourself and your cronies.

I am a defender of capitalism because I am a defender of freedom, and because I would prefer that the poor not starve. As a system defined by the free exchange of goods and services, capitalism is the only economic system that promote freedom. Other economic systems such as Socialism or Feudalism are based on the forcible taking of goods and services from those that produced them to those deemed deserving by some elite. That way lies slavery and poverty.

 

Awkward Holiday Debates

December 20, 2013

Once again, the Democrats are ready to help out with those awkward holiday political debates. This time the Truth Team has sent some talking points to use against that conservative relative.

David –

We all have that one relative — we won’t name names — who just loves to argue about politics.

It’s like clockwork — every year, the same conversations. And you just know that health care is going to come up this year — this time, make sure you’re ready. There’s a lot of good news on our side.

So here’s an extra large serving of truth, in the form of must-read Obamacare success stories from news outlets across the country.

Check them out and pass them along:

– Got a relative railing about health care costs? Well, according to The New York Times piece, thanks in part to Obamacare and its cost-control measures, “the slowdown in health care costs has been dramatic.” Not only that — according to the Times, the biggest savings might be yet to come. (Share on Facebook | Share on Twitter)

– Here’s a great round-up of a few success stories from the Los Angeles Times your relative probably missed, including this great quote from a new enrollee, “If not for the Affordable Care Act, our ability to get insurance would be very limited, if we could get it at all.” (Share on Facebook | Share on Twitter)

– A personal enrollment story featured in The Huffington Post from a self-employed blogger, including how much he loves his new coverage, and what he thinks about the push-back from his conservative friends. (Share on Facebook | Share on Twitter)

– A great story from a recent health care enrollee in North Carolina featured in the Raleigh News & Observer — and how easy it was for her to sign up. (Share on Facebook | Share on Twitter)

If you have a good talk about health care this holiday season, be sure to share your story with us — funny, inspiring, or even challenging, we’d love to hear how your conversations are going.

Last, but certainly not least — I want to say thank you for being such a champion for health care this year. You’ve been critical in helping get the good word out about Obamacare — and supporters like you will be all I’m talking about with my family this holiday season. You are inspiring. And you’re why I know that no matter what special interests throw at us, they won’t beat what we’ve got.

Have a healthy, relaxing holiday — don’t worry, there’s more truth coming soon.

Erin

Erin Hannigan
Health Care Campaign Manager
Organizing for Action

I certainly hope they won’t start naming names. It might be slightly creepy, in a Orwellian sense if Organizing for Action knew which of my relatives liked to argue about politics. Actually, they probably do have access to NSA files. Anyway, it seems to me that the best way to have a healthy, relaxing holiday might be to avoid getting into debates about politics with your relatives. Besides, who wants to turn into this guy?

Douchey-Obamacare-Guy

Not me!

 

The Only Good Marxist

December 17, 2013

I have not weighed in on Pope Francis’s recent remarks on economics and capitalism in part because I was afraid that I might be misunderstanding his comments in context and also in part because, not being a Roman Catholic, I do not feel obliged to follow his lead on any subject, nor am I under any obligation to defend him. I do take some exception to some things the pope said when clarifying his positions.

Pope Francis, who made headlines in recent weeks by lambasting ‘trickle down” economic theories as unfair to the poor, is shrugging off criticism from political conservatives who dubbed him a Marxist.

“The Marxist ideology is wrong,” Francis told the Turin-based newspaper La Stampa for a story released this weekend. “But I have met many Marxists in my life who are good people, so I don’t feel offended.”

Marxism is an ideology that is responsible for the deaths of tens of millions of people throughout the world. It has condemned billions to lives of poverty, fear and oppression. Every country that has adopted a politics based on Marxist principles has become a vile tyranny with no regard for the lives of its citizens and the greatest persecutors of religion in history. The Marxist ideology is more than simply wrong. It is evil.

Those who call themselves Marxists are associating themselves with the most ruthless and evil tyrannies in the history of the world. To say that that there are Marxists that are good people is the same as saying that Nazi ideology is wrong but there were many good Nazis. There were good people who were Nazis, just as there have been many good people who have been Marxists, but their support of an evil, murderous ideology outweighs whatever good they may have done. They are not, then good people.

Was Jesus a Liberal?

December 14, 2013

A theme that I have noticed lately over the Internet and Facebook, etc is the idea that Jesus was a liberal, that is to say that the compassion for the poor that Jesus taught is best fulfilled by some sort of big government system of wealth distribution. I is more than a little inappropriate to try to classify the teachings of a first century  Jew in terms of contemporary politics and still less so to claim the mantle of the Son of God for any political program.  It is also more than a little interesting that people who formerly had little use for any religion, particularly Christianity, are suddenly teaching us the precepts of our own religion.

This passage in Matthew explains what to do to help others.

16 Just then a man came up to Jesus and asked, “Teacher, what good thing must I do to get eternal life?”

17 “Why do you ask me about what is good?” Jesus replied. “There is only One who is good. If you want to enter life, keep the commandments.”

18 “Which ones?” he inquired.

Jesus replied, “‘You shall not murder, you shall not commit adultery, you shall not steal, you shall not give false testimony, 19 honor your father and mother,’ and ‘love your neighbor as yourself.”

20 “All these I have kept,” the young man said. “What do I still lack?”

21 Jesus answered, “If you want to be perfect, go, sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me.”

22 When the young man heard this, he went away sad, because he had great wealth.

23 Then Jesus said to his disciples, “Truly I tell you, it is hard for someone who is rich to enter the kingdom of heaven. 24 Again I tell you, it is easier for a camel to go through the eye of a needle than for someone who is rich to enter the kingdom of God.”

25 When the disciples heard this, they were greatly astonished and asked, “Who then can be saved?”

26 Jesus looked at them and said, “With man this is impossible, but with God all things are possible.”

27 Peter answered him, “We have left everything to follow you! What then will there be for us?”

28 Jesus said to them, “Truly I tell you, at the renewal of all things, when the Son of Man sits on his glorious throne, you who have followed me will also sit on twelve thrones, judging the twelve tribes of Israel. 29 And everyone who has left houses or brothers or sisters or father or mother or wife[e] or children or fields for my sake will receive a hundred times as much and will inherit eternal life. 30 But many who are first will be last, and many who are last will be first. (Matt 19:16-30)

Now please note what Jesus did not ask the young man to do. Jesus did not tell the young men to go to Pilate or Herod and demand that they take money from the rich to give to the poor. Jesus told the young man to sell his own possessions.

Here are some more passages.

Jesus entered Jericho and was passing through. A man was there by the name of Zacchaeus; he was a chief tax collector and was wealthy. He wanted to see who Jesus was, but because he was short he could not see over the crowd. So he ran ahead and climbed a sycamore-fig tree to see him, since Jesus was coming that way.

When Jesus reached the spot, he looked up and said to him, “Zacchaeus, come down immediately. I must stay at your house today.” So he came down at once and welcomed him gladly.

All the people saw this and began to mutter, “He has gone to be the guest of a sinner.”

But Zacchaeus stood up and said to the Lord, “Look, Lord! Here and now I give half of my possessions to the poor, and if I have cheated anybody out of anything, I will pay back four times the amount.”

Jesus said to him, “Today salvation has come to this house, because this man, too, is a son of Abraham. 10 For the Son of Man came to seek and to save the lost.” (Luke 19:1-10)

I wish many present day tax collectors felt as Zacchaeus did.

Here,Paul gives instruction to the Christians of Corinth.

Now about the collection for the Lord’s people: Do what I told the Galatian churches to do. On the first day of every week, each one of you should set aside a sum of money in keeping with your income, saving it up, so that when I come no collections will have to be made. Then, when I arrive, I will give letters of introduction to the men you approve and send them with your gift to Jerusalem. If it seems advisable for me to go also, they will accompany me. (1Co 16:1-4)

There is no need for me to write to you about this service to the Lord’s people. For I know your eagerness to help, and I have been boasting about it to the Macedonians, telling them that since last year you in Achaia were ready to give; and your enthusiasm has stirred most of them to action. But I am sending the brothers in order that our boasting about you in this matter should not prove hollow, but that you may be ready, as I said you would be. For if any Macedonians come with me and find you unprepared, we—not to say anything about you—would be ashamed of having been so confident. So I thought it necessary to urge the brothers to visit you in advance and finish the arrangements for the generous gift you had promised. Then it will be ready as a generous gift, not as one grudgingly given. (2 Co 9:1-5)

Again, Zacchaeus and the Corinthians are asked to give their own money to the poor,not money taken by force from someone else. The apostles and many in the early Church seem to have lived a communal life.

32 All the believers were one in heart and mind. No one claimed that any of their possessions was their own, but they shared everything they had. 33 With great power the apostles continued to testify to the resurrection of the Lord Jesus. And God’s grace was so powerfully at work in them all 34 that there were no needy persons among them. For from time to time those who owned land or houses sold them, brought the money from the sales 35 and put it at the apostles’ feet, and it was distributed to anyone who had need.

36 Joseph, a Levite from Cyprus, whom the apostles called Barnabas (which means “son of encouragement”), 37 sold a field he owned and brought the money and put it at the apostles’ feet.

1 Now a man named Ananias, together with his wife Sapphira, also sold a piece of property. With his wife’s full knowledge he kept back part of the money for himself, but brought the rest and put it at the apostles’ feet.

Then Peter said, “Ananias, how is it that Satan has so filled your heart that you have lied to the Holy Spirit and have kept for yourself some of the money you received for the land? Didn’t it belong to you before it was sold? And after it was sold, wasn’t the money at your disposal? What made you think of doing such a thing? You have not lied just to human beings but to God.”

When Ananias heard this, he fell down and died. And great fear seized all who heard what had happened. Then some young men came forward, wrapped up his body, and carried him out and buried him.

About three hours later his wife came in, not knowing what had happened. Peter asked her, “Tell me, is this the price you and Ananias got for the land?”

“Yes,” she said, “that is the price.”

Peter said to her, “How could you conspire to test the Spirit of the Lord? Listen! The feet of the men who buried your husband are at the door, and they will carry you out also.”

10 At that moment she fell down at his feet and died. Then the young men came in and, finding her dead, carried her out and buried her beside her husband. 11 Great fear seized the whole church and all who heard about these events. (Acts 4:32-5:11)

The sin of Ananias and Sapphira was not in holding back some of the money they received for their property but in lying to the apostles and trying to get more credit than they deserved. Peter acknowledged that they could do whatever they like with their own money. The communal life of the apostles was entirely voluntary. They did not demand that the Roman government force people to live in communes.

The problem seems to be that our progressives blur the distinction between private acts of charity and government policies. Helping the poor and unfortunate is a praiseworthy act. Charity with other peoples’ money at little cost to oneself is less praiseworthy. Robbing the rich to give to the poor is still stealing. A political platform based on arousing feelings of envy is covetousness. Remember,”Thou shalt not steal”, and “Thou shalt not covet”.

If you want to help the poor, then go out and help the poor. Don’t use the excuse of wanting to be compassionate to justify taking the property and freedoms of others.

Food Justice

December 5, 2013

I had never heard of the concept of “food justice” before receiving e-mail from Moveon.org.

Dear David, 

I’m Michael Pollan, author of The Omnivore’s Dilemma, In Defense of Food, and Cooked. For many years now, I’ve been passionately outspoken about the food justice movement, and low-wage workers represent a key front in the fight for fair and just food.

That’s why I hope you’ll join me and millions of MoveOn members across the country in expressing solidarity with the fast-food workers going on strike for fair wages today. 

Those of us working in the food movement often speak of our economy’s unhealthy reliance on “cheap food.” But cheap food only seems cheap because the real costs of its production are hidden from us: the exploitation of food and farm workers, the brutalization of animals, and the undermining of the health of the soil, the water, and the atmosphere.

As a society, we’ve trapped ourselves in a kind of reverse Fordism. Instead of paying workers well enough so that they can afford good, honestly-priced products—as Henry Ford endeavored to do so that his workers might afford to buy his cars—we pay them so little that the only food they can afford is junk food destructive of their health and the environment’s.

If we are ever to right this wrong, to produce food sustainably and justly and sell it at an honest price, we will first have to pay people a living wage so that they can afford to buy it. Let’s start with the people who work so hard to feed us.

Please stand with the brave fast-food strikers by sharing this image on Facebook.

In solidarity,

Michael Pollan

P.S. There are nearly 100 fast-food worker rallies at 12:30 p.m. local time all across the country today. Head over during lunch and show your support in person. Click here to find a rally near you.

Henry Ford did not decide to pay his workers the then exorbitant wage of $5 per day solely out of humanitarian concerns for his workers. He wanted to eliminate the heavy turnover in his factories and to attract the best workers he could. It was a shrewd business decision on his part that also gained him a great deal of good publicity. There was a slightly dark side to his benevolence. The $5 a day wage only applied to workers who had six months employment at Ford’s factories and were of good moral character. Ford’s Social Department investigated workers’ personal lives to ensure that they qualified.

But enough of Henry Ford. Mr. Pollan’s argument is that we must pay fast food workers higher wages so that they can afford to buy higher priced sustainable food to eat instead of the crap they are already eating. I am not sure he has the best interests of those workers in mind, however. I am not sure too many of these workers are all that interested in sustainable food. They, quite naturally, would prefer to be paid higher wages. Now, the question is, is there labor worth the higher wages? Ford’s factory workers proved to be worth the high wage he paid them, other wise Ford would have had to discontinue the program or go out of business. Ford was trying to attract skilled workers as well as unskilled workers willing to work on an assembly line for 8-12 hours a day. Not many fast food workers can be classified as skilled labor. Many of them do not have all that much in skills or experience to offer an employer, otherwise they would be working elsewhere. The question is, will doubling their wages result in increased productivity that will increase the value of the company that employs them. If yes, than they will do well.

If no, than the company will have to increase prices, considering that people go to fast food restaurants because the food is fast and cheap, and no for the fine dining experience, there may be limits on how much they can raise prices. They can also reduce expenditures. The company can close stores that are no longer profitable. They can decide not to hire as many people and to automate as much as possible. It may well turn out that the fast food workers that Mr. Pollan claims to care about will find themselves hard pressed to afford junk food, much less the sustainable food he wishes them to eat.

I can understand why supporting higher wages for fast food workers is popular, both politically and emotionally. It feels good to support the little guy, the hard-working people who aren’t being rewarded properly for their efforts. It costs nothing, since you do not have to worry about how the companies are going to handle the increased payroll expenses. Indeed, you can simply assume that the companies have infinite amounts of money to spend or that they need not show a profit. But, feeling good does not necessarily make good policies. You must consider the consequences. Even the most well-intentioned policies can have disastrous consequences and hurt the people they are meant to help.

 

The Future of Fast Food

November 14, 2013

While automation has eliminated many jobs in the manufacturing sector of the economy, so far the service sector, especially the fast food industry has remained labor intensive, employing hosts of young and unskilled workers. That may be changing, however. Perhaps the future of fast food can be found at Bolt Burgers, a new restaurant in Washington D. C. What makes Bolt Burgers a little different is that when the restaurant opens, the process of ordering and getting your food will be as computerized and automated as possible. The Washington Post has the story.

No restaurant in D.C. has been better outfitted for the iPhone generation than the forthcoming Bolt Burgers. It is a restaurant full of screens — touchscreen systems for ordering your food and making your drinks, tablets at every table, and a 16-foot-wide projected TV screen to watch while you wait for your order.

You can order food without having a single interaction with another human being, which, for millennials who prefer texting and online ordering through Seamless to picking up the phone, is a major plus.

Michael Davidson, Joe Spinelli and other partners at Bolt Burgers are banking on it. When the 3,200-square-foot restaurant opens by Thanksgiving at 1010 Massachusetts Ave. NW, they’ll have put more than 18 months into perfecting the computer systems behind Bolt, a concept they plan to franchise.

There are several ways to order a Bolt burger, and one of them can be done from your office. An online pre-ordering system will allow customers to order in advance for both take-out and dine-in: Give the server your order number when you arrive and, if all goes according to plan, your food will be at your seat within 10 minutes.

If you haven’t pre-ordered, a server will present you with a table number if you plan to dine in. Use that to place your order at one of the touchscreen kiosks, or through the touchscreen tablet at your seat.

One of the technological centerpieces of Bolt Burgers is a no-flip burger grill. The device can cook a six-ounce burger in exactly three minutes, to the exact same level of doneness every time. It can make 1,200 burgers an hour. “I think it’s fantastic,” said Clayton. “I have the confidence that the guy at the grill will hit a button and get a perfect burger every time.”

The restaurant’s opening, in approximately three weeks, will depend on getting all of its systems up and running. “There’s a lot of complicated electronics that have to work,” Davidson said. When Bolt opens, it will seat about 80 people indoors and about 40 on the patio. It’s located in an area near the D.C. convention center that doesn’t yet have much competition — until the restaurants in the new Marriott Marquis open, at least — but is at the intersection of daytime workers, evening residents and out-of-town guests.

I don’t expect to see McDonald’s or Taco Bell doing anything like this soon. The costs of retooling and automating their restaurants would, at present, be far greater than any benefits they might gain from reducing their workforces. That could change if well meaning activists manage to have the minimum wage increased or making fast food restaurants pay their workers a living wage. Then,we could see a lot more places like Bolt Burgers opening up. I know that trying to make a living on $7 an hour is not much fun, but it is better than making $0 an hour, which might very well happen. It is not enough to be well meaning. You have to consider consequences.

 

The Word is Slavery

November 5, 2013

One of the problems with Medicare and Medicaid is that the amount these programs pay physicians is often not enough to cover their costs in treating the patient. For this reason, an increasing number of doctors are refusing to see patients with medicare or medicaid. This is a problem that is likely to grow. Fortunately Kathleen Murphy, a Democratic candidate for a seat in the Virginia House of Delegates has the solution, pass a law to force doctors to accept medicare and medicaid patients. Here is an account by the Mason Conservative.

You would think that when your party is burying a hole that is getting harder and harder to get out of, you wouldn’t want to that hole get deeper faster.  But here is Kathleen Murphy, Democrat running for the House of Delegates against Barbara Comstock, telling a forum in Great Falls that she believes it should law to force doctors to accept Medicare and Medicaid patients.  Forced by government decree, mind you.  A birdie sent me this:

FYI last night at the Great Falls Grange debate, Democrat delegate candidate Kathleen Murphy said that since many doctors are not accepting medicaid and medicare patients, she advocates making it a legal requirement for those people to be accepted.  
She did not recognize that the payments are inadequate to cover the doctors’ costs.  She also did not recognize there is a shortage of over 45,000 physicians now and that it is forecast to be 90,000 in a few years.  
Democrats appear to want to make physicians slaves of the state, but Democrats don’t admit they would just drive more doctors out of practice into retirement and other occupations.  The Obamacare law and regulations are causing millions of people to lose their health insurance, drop many doctors and hospitals. The HHS internal forecast is 93 million Americans would lose their health insurance due to the Obamacare law and rules about adequacy of insurance.
There is a word for forcing people to work without payment or their consent. That word is slavery.

 

The Truth Team Tackles the Obamacare Fail

November 2, 2013

In the latest message that I have received from the Truth Team, they straighten out the lies and misconceptions that so many people have about the recent introduction of Obamacare, especially the silly idea that people are hurting because their insurance plans have been cancelled.

David –

This one’s important:

We’re hearing a lot of hot air out of Washington these days about some insurance plans that are changing — for the better — because of Obamacare. It can be pretty confusing to follow, and some people on the other side aren’t making it any easier by being intentionally misleading.

Let’s be clear: What they’re talking about is the fact that if insurance companies decide to downgrade or cancel an insurance plan that doesn’t include the minimum consumer protections legally required, they must offer you an alternative plan that does include those protections — like the guarantee that you won’t run up against lifetime caps on coverage, you won’t have to pay for preventive care, and you can’t be denied coverage due to a pre-existing condition.

We think President Obama said it best on Wednesday — share what he said with your friends and family and help clear the confusion:

When you boil it all down, the “controversy” here is really about the fact that — thanks to Obamacare — Americans are going to get better, more affordable coverage.

The people who want you to think that it’s some scandal are going to have a tough time explaining it, once everyone knows the facts.

Share the truth about this on Facebook:

http://my.barackobama.com/Share-the-Truth-FB

Or tweet it out now:

http://my.barackobama.com/Share-the-Truth-TW

Thanks,

Erin

Erin Hannigan
Health Care Campaign Manager
Organizing for Action

When you boil it all down, the very real controversy is that the President specifically said that if you like your plan, you can keep it. That has turned out not to be true. Either President Obama did not know what was in the most important legislation of his administration, or he was lying.

I have noticed that in their defense of these insurance cancellations, the Progressives have been letting the mask slip a little bit to reveal them for the power hungry authoritarians they really are. If your insurance got cancelled it was because they have decided it was not good enough for you. If you want a choice between a cheaper plan that doesn’t cover so much and a more expensive plan that covers everything, well too bad. Your betters will decide what kind of coverage you need.

And again, as I have kept saying, nobody will get more affordable coverage if the insurance companies are obliged to accept anybody with any pre-existing condition and are compelled to offer mandated levels of coverage, whether or not their customers want or need them. If health care reform makes it more expensive for insurance companies to operate, they will have to pass on the costs to their customers, or go out of business. If health care reform increases demand for health services without a corresponding increase in the supply available, health will get more expensive. Barack Obama may believe that he can control the tides. He and the Democrats cannot simply ignore the laws of supply and demand indefinitely.

Update: This is what I was talking about.

Appearing on Piers Morgan’s CNN program on Tuesday night, HBO’s Bill Maher explained that while President Obama did indeed lie to the American people about keeping their insurance, he had to do so in order to help the dumb Americans. “I think the country in general is on a decline,” Maher explained. That’s because, Maher said, Americans are getting “stupider.” And that means that they must be lied to: “It sure is hard if you’re a politician—not that I’m really that sympathetic to them—to try to get information into people’s heads. I don’t think Obama should’ve lied to people…”

Maher then explained that it was insurance companies’ faults that Americans were losing their insurance programs. Then he continued, “But, yeah, he probably should’ve not been so blatant about saying you…iron clad guarantee. On the other hand, since he got no Republican votes and no Republican help. And since three years after it’s a law, they’re still fighting it, can you imagine what it would be like if he said, ‘Yeah, some people, your rates are going to go up.’ I mean the thing passed by this much. If they had said that, they might’ve lost the whole thing.”

I can’t imagine what watching a show with both Bill Maher and Piers Morgan must be like.


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