I don't really have time for this either, in fact, I definitely don't, but here goes before I firmly close my email client for the afternoon. I agree with most of what you say here, except that microeconomics does not apply at the level of the local government afaik -- we are still dealing with large numbers. The issues in microeconomics as it was taught to me were far more along the lines of what is the proper pricing level for my product? How much can I charge before people quit buying? The other problem with your argument is that China and Mexico already offer a cheaper alternative in terms of hourly wages for manufacturing jobs and for that matter for programmers and technical support people too, as IT has learned to its sorrow. So even if you pay your help desk people the federal minimum wage of $5.15 India has people who will do it cheaper. The question there is, is it really cheaper if the cost-benefit analysis is done properly. But my point is, those who are looking to cut that metric are already not looking at Albuquerque as a place to put the call center. The same would seem to apply to manufacturing jobs, so why is the city chasing those?
As someone who was against the tax cut, I see your point, but here is the distinction. Beyond a certain income level the money goes into savings, which are invested by banks and IRAs and fund managers, sure, but the effect is much more indirect. Now, if I am Walmart, the question becomes whether it is still possible to make a profit in the Albuquerque market. This is not really a micro question, because the effect of more money circulating in the local economy has to be taken into effect. A lot of people would spend their first extra twenty bucks on new shoes for the kids. At Walmart. For *my* business now, it's a micro question, ie can I afford to hire someone at all this year. So yes, except it's more complicated than that. Dana PS - I am not saying I'm dropping out of the thread, just that I really really got to go. I'll get to any answers tomorrow probably. On 9/27/05, Cameron Childress <[EMAIL PROTECTED]> wrote: > > On 9/27/05, Dana <[EMAIL PROTECTED]> wrote: > > Gruss, Keynes has been around for almost a hundred years now. I can't > argue > > economics with someone who isn't familiar with the prevalent model. > > I've been watching a little of this thread with interest, trying hard > not to be dragged into a conversation I don't have time to actually > participate in, but here goes... > > Keynesian economics are mostly macroeconomics - big decisions, small > nudges, tinkering with the economy on a grand scale to effect a > certain outcome. It tends to have the effect of causing big > government, and big government spending. > > Keynesian economics are the backbone of the Bush's tax refund a few > years ago. The Multiplier effect is axactly what Bush was talking > about when he said he wanted to increase spending by giving people > more money. Just about everyone on this list was against that - > rabidly. You can't turn around and use the same arguement for > govenment meddling in spending on the wage level. > > In principle I agree with a living wage, I think people should be able > to make a living. Here's where Keynesian economics falls on it's face > when it comes to wage law in a local economy - we live in a global > economy (macro) and wage rules are only effective on a local level > (micro). Essentially, it's not a level global playing field and > adjusting up the price in one place will not always have the overall > long term desired effect of increasing the standard of living. > > In the micro, a forced increase in wage will always force the employer > to make a decision of: > > 1) Paying/eating the increase > 2) Paying zero dollars (doing the job him/herself or shutting down) > 3) Paying someone else somewhere else. > > The multiplier only goes into effect if option one is chosen all of > the time. If there is an option to move the buiness to another plae > or country for the same wage or less, then it will move - plain and > simple. > > With a forced wage increase in the short term, everyone might get paid > a little more for a few months or a few years, but in the long run, > those companies will make the decisions that they have to make. > MacDonalds and Walmart have to have employees on the ground, but that > manufacturing plant downt he street can move to Mexico > > Whoops, now in the long run we've chased away more jobs and all that's > left are jobs at MacDonalds and Burger King. The next rung in the > ladder of income (the manufacturing plant) has moved away, so everyone > who was hopig to use that to take a step up is screwed. Now we have a > low income class working flipping burgers, and an executive class, but > no blue collar class. Oops... > > Now here comes the replies - there goes my day - Bring It! > > -Cameron > > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Save $10 Download ZoneAlarm Security Suite http://www.houseoffusion.com/banners/view.cfm?bannerid=66 Message: http://www.houseoffusion.com/lists.cfm/link=i:5:175297 Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5 Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5 Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
