Why can't the other side understand?

Discussion in 'Economy' started by NBarnes12, Jun 21, 2012.

  1. NBarnes12
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    NBarnes12 Rookie

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    Why can't the other side understand simple economics? Please, someone tell me how the programs enacted under their administrations justify, if you will, a capitalist society? It recently came to me that they simply can't. It's impossible.

    Look at the minimum wage law. Although it had well intentions (Like most of their programs), its results are devastating. But, we'll just stick to the facts and not debate the effects and results it has on the US economy.

    Any person who has ever studied simple economics knows about supply and demand. It's a basic function for a capitalist nation. But, it seems to me that one side never really got this part of economics 101. Look at supply and demand quickly. Supply and demand generates an equilibrium point, where the producer and consumer are both satisfied with whatever that price may be. Just like in supply and demand for labor, the employer pays a worker for his labor, and that wage must justify his labor or else he wouldn't work. However, the minimum wage law tinkers with the invisible hand and sets a wage above the wage that would prevail in the free market (The market equilibrium point).

    Now, once this happens, you have employers supplying less labor than the demand for labor, which results in unemployment. THESE ARE FACTS that can't be disputed. We will not talk about the law being a good one or not.

    My simple question to everyone is: Doesn't this law contradict the very capitalist nation we claim to be?
     
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  2. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    1) we never claimed to be a pure capitalist nation. In Econ 101 our economy was always described as a mixed economy
     
    Last edited: Jun 21, 2012
  3. Polk
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    Polk Classic

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    Except it's not a fact. It's a model, and one built on a faulty assumption. An elementary supply/demand model doesn't work for the labor market because different individuals have different marginal propensity to consume. Raising the minimum wage, ceteris paribus, shifts income toward lower income earners. Since those earners have, on average, a higher marginal propensity to consume, they'll buy more goods and services, increasing aggregate demand beyond what it otherwise would be. The balance between this factor and the simple clearing approach you're talking about is why increases in the minimum wage don't increase unemployment.
     
  4. CrusaderFrank
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    CrusaderFrank Diamond Member

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    We need a $75,000 annual minimum wage
     
  5. Polk
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    Polk Classic

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    Go play in the yard Frankie, the adults are trying to have a conversation.
     
  6. CrusaderFrank
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    CrusaderFrank Diamond Member

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    Translation: I'm trying to pass off a system with a 100% Guaranteed Fail Rate as plausible and you're ruining it for me
     
  7. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    thats like saying the death penalty doesn't deter murders. Does it encourage murders??

    how nice for liberals that raising the minimum wage doesn't deter employers, it mysteriously leaves then saying, no worry the more we pay the more they buy so there is no big deal lets be nice and raise it to 20 or 40 a hour.
     
  8. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    if you're a liberal it doesn't work for health care or free trade or the environment or monetary policy or the minimum wage or anywhere. Maybe its because a liberal is in reality a dumb socialist





    ]
     
    Last edited: Jun 21, 2012
  9. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    why not!!!!! the more a business pays in wages the higher the demand for his products!!! I say try $100,000 annual minimum!! I'll never understand why the USSR didn't work. The liberals got to try try every anti-capitalist scheme in the book!
     
    Last edited: Jun 21, 2012
  10. DSGE
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    I'm all for getting rid of the minimum wage, but I'm just gonna make this side point:

    Econ 101 is bullshit. What's taught in an introductory course is invariably over-simplified, unsophisticated, out of date hogwash. Things taught in Econ 101 are there for a tractable introduction to economic thinking; usually that means being unnuanced and over-simplified to the point of being completely useless in actual economic analysis. Being in Econ 101 doesn't mean something is a basic truth, it means it's a useful lie to help you eventually understand what's actually going on.
     

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