kudlow is such an oinker.

how about no wage? that would be good for the plantation owner and give the teen worker a big break. oh i forgot, they already have that and it's called "interning."

Interns get the jobs at high profile offices. But even Sonic drive-in lets their local church group or school group be the car hops for a few evenings for a fund raiser. Of course, the Sonic drive-in owner doesn't have to pay the "volunteers" for a few nights, and the regular employees don't get paid any subsitute hours. Yep, chairitable organizations are the wave of the future. They will help take jobs away from the low wage workers. Instead of organizing to provide health care to low wage workers, they get business to let them work for free! Yes! This is the answer to big business problems.

In Australia mimium wage is over $13 per hour. We in the US has fallen be hind the world in health, income and buying power. Our CEO and heads of corperation have moved well ahead the world in earings.

I believe Mr. Sirota did an EXCELLENT job of showing the world what lyeing IDIOTS the repugs are.

it's all about selling soap

maybe not hurt, but seriously deliver a blow to moral if a guy worked for 5 yeras to achieve the wage of $7 per hour only to see someone get hired immediatly for the same wage.

Max Elliot said , "In Australia mimium wage is over $13 per hour."

(1) The legal federal Australian minimum wage is actually $12.30 per hour, according to the Australian Council of Trade Unions.

(2) More important, that's in AUSTRALIAN DOLLARS! At current exchange rates 12.30 AUD is about 9.10 USD.

(3) Australian labor laws generally provide Australian workers with more favorable basic employment benefits than does US law. Useful international comparisons should include such information as this affects the total value of compensation.

Long Live the Tyrant Bush!

the problem with mr stossel is theat he is a little man and he gives little men a bad name

I can't believe that anyone would go on tv to make such a idiotic statement as Stossel did!

The fact is when Americans are making a good wage, that is representative of the cost of living, they are able to invest more in the community, buy more , and save more. Our national debt is over 2trillion and most Americans have are in debt over their heads, credit card companies are charging outragous rates, and Big Corps can file bankrupcy while the American who is bankrupt will pay till they die and then their children will have to take on that debt. This all spells out Facsism to me! But, what is Stossel making? How would he know what it is like to struggle? He is playing their game so he doesn't get paid minimum wages.

"it could sort of hurt some Posted by scott on Jun 18, 2006 12:54pm maybe not hurt, but seriously deliver a blow to moral if a guy worked for 5 yeras to achieve the wage of $7 per hour only to see someone get hired immediatly for the same wage."

No, the $7 hr worker would also get a raise. Fears about inflation are overblown, when considered against the added tax revenues that would accrue to states, localities and the federal government . If lower-paid workers were able to contribute more to the tax system due to increased wages, perhaps then tax cuts for the more affluent could be justified.

I know this current adminstration loves to do character assasination against whoever threatens them, but I don't think we Democrats should follow suit.

I suggest we stick to the facts and stop resorting to using sophmoric insults like calling Stossel a "a smarmy looking liar" or referring to Rush as a " Big fat liar" or calling Ann Coulter every misogynistic term in the book.

When I hear anyone in a debate going hyperbolic and choosing insults over logic and fact then I become suspect that person is using the former because he's run out of the latter.

Bottom line: Let's not loose our cool, stick to the facts, hold ourselves to a higher standard and we shall prevail.

What a stupid position Stossel takes. If the minimum wage goes UP, then there will be NO MORE, NOR LESS skilled workers as he states. "Why would they give a kid a starting job at the minimum wage, when it is $10/hr, when they can get a more skilled person." And where would this person come from? They would still have a job, just now get more $$ for it. So, the BS that there all of a sudden would be an influx of skilled workers, is wrong, becasue what would happen is that the unskilled would come pouring into the state due TO the higher min wage, and now there would be MANY more lower end workers to choose from, not the other way around. Higher Min wage + Increased demand > increasing supply to fill demand. Simple economics 101

Also, The BS line well why not just increase it to $10 or $20/hr? Stupid remark. What happened when Henry Ford opened his new fangled factory to make automobiles. He gave the workers a huge paycheck, MUCH more than the going rate, and workers flocked to work there. He did this why? To GURANTEE that there would CONSUMERS who had the requisite money to buy his cars. ANd looky see what happened? Did the earth stop rotating? Did we have a cataclysmic collapse of the economy? No, it started a boom, unlike any in human history.

I would like to have the states listed that have raised min waged and succeeded in growth

Where is the rest of the video?

I note that the host thanked Stossel for being on the show but did not say the same thing to Sirota. Liberal bias in the media my ass.

I recommend to everyone...read David's book. You will then have a very good handle on wages in this country, Yay for David Sirota.

The corp. I just retired from is now hiring at eleven cents less that people that have been there five years and are excellent employees. This is the way corporations pay workers back for loyalty, timeliness, and hard work. ' This is why we will always need strong unions. The business will always put the business first, the worker last, unless you are top managment.

What needs to be said and repeated over and over is "congress has given themselves 8 raises due to the increase in the cost of living and that during the same time the minimum wage has stayed at $5.15. Why?" Can you live on $10712 per year?

'More important, that's in AUSTRALIAN DOLLARS! At current exchange rates 12.30 AUD is about 9.10 USD.'

Yes, but

1) $9.10 is still more than $5.15 - it's nearly twice as much.

2) The cost of living seems to be lower here than in the US. A mininum wage worker here can usually cover rent, food and most other necessaries. From what I've read, this is almost impossible in many parts of the US.

The problems here are

1) Minimum wage workers trying to support children. (Not recommended!)

and 2) the fact that a third of the workforce is employed only on a casual or part-time basis, meaning that hourly rates, however generous they may be when compared to the US, do not necessarily translate into decent weekly incomes.

Notice that the insult to which you took exception was introduced into this televised debate by Stossel himself. In addition, he prefaced this offensively defensive move by pretending to recognize Sirota only at the last minute - yet he had the exact quote from Sirota's Amazon.com book review readily at hand.

Cheap chicanery and puffed up ego are all Stossel has going for him...oh yeah, that and an amazingly powerful media forum handed to him by the people he lies for. Don't fall for his crocodile tears.

If I'm not mistaken, Mr. Stossel was merely trying to discredit the causal link between raising the minimum wage above federal level and creating jobs. Thus his "Why not $40?" rhetorical question. I think this is a perfectly topical answer to Mr. Sirota's contention that jobs are created because people with minimum wage jobs are more likely to spend rather than save, thereby stimulating the economy. Had Mr. Stossel been allowed to continue, he might have pointed out that such logic is not valid in the limit as minimum wage is increased toward infinity. Then Mr. Sirota could have refuted this by pointing out that it at least works for small increases in minimum wage.

Actually, Stossel got the best of Sirota. Sirota was the one who tried to change the subject when Stossel made the point about raising the minimum wage to $20 or even $30 an hour if it works so well. Sirota is a typical lib and said Stossel was changing the subject! He had NO response to that. Sirota also called Stossel a liar which is typical for libs to name call people they can't debate with. They are racists, sexists, liars, fat, etc. Stossel burned Sirota who is just as nutty on TV as he is on Huffinstuff.

Please go back and read your Adam Smith. Theoretically there is a "natural price of labor" that reflects the relationship between oportunity costs and the physical and social requirements of life for the laborer. The force of the labor market and "rents" claimed by capitalists are imposed onto this equation from outside of this ideal condition.

According to Smith's attempts to boil this ideal out, an absolute minimum wage for a full-time worker and a part-time child-rearing spouse must be sufficient to keep a family of four (in a stable economy) or larger (in a growing economy) alive, healthy, and content. Otherwise the economy and the society are in big trouble.

Does the current $5.75, or whatever it is, accomplish that? Ha!! Would $8.00? I don't think so. Don't laugh at $20, $30, or $40 as an option; the misunderstood icon of economic conservatives (Smith) just might be on board.

Sirota goes on and on about states where the minimum wage was raised having prospered, but he in no way proved that the increase in minimum wage caused that. If the increase in minimum wage did cause it there should be some correlation between the amount of the raise in minimum wage and the amount of economic benefit seen in each state. It should also be seen in states that didn't raise the minimum wage, that they either had economic down turns or didn't prosper as much.

I think you will find that this correlation doesn't exist and the minimum wage increase was not the reason these states were better off. Simple logic will tell you that a small change in the minimum wage can't have that significant effect.

Sirota is wrong - not to say Stossel is right.

I have watched Stossel for years and his facts on most subjects are never substantiated.He should have someone on the show to rebutt his outlandish claims.I believe he has no credibility.

Well, the "science" of economics in no way deserved that title, as the only possible laboratories are in the minds of weird people called economists, or out in the real world where no level of variable control is possible. History is about the best we can do tro see how such policies as a minimum wage act on society.

But look at the New Deal/WWII. Roosevelt's policies (minimum wage, GI Bill, 90% tax bracket for the wealthy,...) caused an unnprecedented redistribution of wealth to the working base of society - and the economy took off like crazy. America was suddenly a middle-class society.

Republican trickle-down mantras are preposterous bullshit. We need to legally establish a substabtial minimum wage, and ferociously tax the fat-cats down to a reasonable maximum wage (no more that 15 to 20 times higher than the minimum). Then we'll see a healthy, prosperous, peaceful, well-educated society.

The "concept" of someone working for 5 years to acheive the princely sum of $7 and then being offended when someone is hired off the street at the same wage is too silly to be taken seriously by anyone who had ever actually work at the bottom of the food chain for even the shortest period of time. The workers at this level have no perceived "value", so Stossel's point is empty rhetoric. In the corporate mindset the job is what has value, exceptional performance of such jobs has little if any value. So Stossel, get off your brain and go work at one of these places for a little while and find out the truth, or at least one version of it. Jerk. I mean soda jerk, of course. Working for a low wage. No, actually I didn't. Since we are being honest, I really think that Stossel is a jerk. Or at the least I think the views he holds on this subject are jerkish. I don't know the man personally, and if this is any indication of the content of his character, I thank god for small favors (the favor of being fortunate enough to not know him).

I can see this forum is filled with economic majors! Er, ok - perhaps not. :\ OK kiddies, lets get remedial here...

If the gov't set a min price for eggs would you: a.) buy more b.) buy the same c.) buy less d.) buy no more because you're annoyed the fed is telling you what you should pay for eggs.

If you don't get the metaphor then you can resort to name calling.

b) i'd buy the same.

But the money would go to the same egg-producer who could go along putting out the same amount for capital expenditures, and could sock the rest away to buy the egg-farm owner a big palace on Long Island.

Now assume I was paying each egg in the carton the per-egg portion of this government-controled sum to make me breakfast, or to provide some other services. Then each of these eggs would begin to pay taxes, purchase the necessities of life, and create a home and better life for its own little carton of dependent eggs. Pretty soon demand for all manner of goods would escalate, and all eggs would share in the benefits.

OK fine, but do you understand that the B answer is the minority choice and most people would pick C? This is the crux of Stossel's argument - that increased costs result in reduced demand - but I don't like to argue against minimum wage that way.

Min. wage laws are harmful because, even if they provide 'greater goods,' they are inherently unjust. Who am I to decide how much value *you* should put on my labor (or the other way around)? At the end of the day, min. wage laws subvert the ability of people to freely interact with each other. That is wrong, in any context.

OK fine..we can stop equating human workers with staple food commodities if you would like.

you said:

"At the end of the day, min. wage laws subvert the ability of people to freely interact with each other. That is wrong, in any context."

Same could be said, and is true, of international borders! Maybe there's someone out there that doesn't want the government to subvert the ability of his lead pipe to interact with the back of my head, enabling him to freely acquire my wallet?

Society is a complex medium in which people interact, and it is up to society -in our constitutional democracy - to structure this medium in a way that twarts as far as possible the systematic victimization of individuals or entire classes of people.

Adam Smith, as clinical as he reads, was a progressive in that his theoretical economy (defined in "The Wealth of Nations") is built from the bottom up. Wages, he argues, are best set based on the needs of the workers, not on the profit margins of the "masters".

Based upon your lead pipe story, may I assume you don't like thugs or thieves? Cool, neither do I; I knew we could find common ground here! ;)

People freely interacting with each other doesn't include theft, because as soon as he pulls out his lead pipe, I've just lost my freedom. The same applies to minimum wage laws.

In fact, to take your metaphor further, is there much of a moral difference between the thug w/ the pipe & the person that passes minimum wage laws? To be sure, the latter steals for others while the former for himself. But what comfort is that to the victim?

With all due respect for Mr. Smith, there is zero credibility in any theory of society needing to resort to theft for its own betterment. Are you certain you're quoting Smith? That theory sounds more like Karl Marx's 'class struggle' then Adam's 'invisible hand' theory.

I actually joined this discussion because I was concerned about the future of rhetoric, because what passes for "debate" on TV is two or more talking heads yelling at each other. The fact remains that Sirota did *not* start quoting "The Wealth of Nations" to disprove the veracity of Stossel's argument; instead, he chose to call it non-topical and thereby restrict the possible rejoinders to his argument to one type only: name-calling.

I'm sure Ken would have done a much better job if he had been in front of the camera, and that's not sarcasm. That's not to say there aren't problems with his arguments, though. Would Adam Smith really have believed that the state or federal government should determine what level of income keeps the workers fed, clothed, and happy? Or would he prefer that the workers, on an individual basis, set that bar for themselves and refuse to work for less? If the answer is that the government should determine the price of an hour of labor, why should the price be based on the assumption that the laborer is supporting a family? How many heads of family actually work for minimum wage? Having worked for state minimum wage some years ago ($5.25/hr), I can tell you that most of my coworkers were childless high school students like myself. If every job were priced for the head-of-the-family, only the head-of-the-family would have a job.

This argument is way beyond minimum wage at this point, and that is entirely appropriate.

To move ahead logically with Chester's argument that a minimum wage (an by implication a myriad of other much needed progressive government initiatives) represents a governmental "taking":

When GM pulls out of a town to find cheaper labor in Mexico, the workers in that town have lost their freedom to continue their stable, secure lives as well; when a pharmaceutical company manipulates the market on a new life-saving treatment in order to raise its price to exorbinate levels, low-income patients loose their access to a freedom available to more wealthy sufferers.

In a country in which the Supreme Court has explicitly equated "Money" with "Free Speech" (Buckley v Valeo, 1976) the workers being forced by their capitalist employers to accept lower pay or to hit the road by definition suffer from a significant "freedom" deficit. Without significant measures toward the redistribution of wealth, the Buckley decision renders our entire top-down economy unconstitutional.

"Freedom" - as you aptly pointed out in questioning the propriety of my lead-pipe example - exists when equals interact on equal terms. In our current system great wealth means more democracy/more political power for the well-heeled- and its only getting worse.

Oh yeah - far from a "theory", as you claim, the "invisible hand" concept was actually an off-hand sarcastic joke by Smith included once and once only deep in his book to point out the foolishness of ignoring crucial variables that spell sustainability or failure for a particular enterprise, or an economy.

- that this mantra of the oligarchs has been erroniously enshrined as Smith's legacy in recent years is a tragedy.

...and of course it's a class struggle! Haven't I been clear?

The bargaining you describe was once attended to by labor unions - but what's become of them now? The great-grandfather's of the rising oligarchy once paid armies of goons to shoot or crack the heads of workers who attempted to organize for leverage, but they lost the battle as the depression was brought to a close by labor-first policies. More recently; Reaganism, two Bush's, and apathy or complicity on the part of wealthy "Democrats" has destroyed waht was left of the unions that helped build the middle class, and have created an "every-man for himself" situation for the working class.

You ask a great question: How many heads of households work for minimum wage? I don't know the answer offhand, but I do intend to look for it - and I'll wager that its more than it was 10 and 20 years ago. And by stint of competition, you can bet your ass that more heads of Households - even if not reduced to minimum wage - are working for less today than in the latter half of the 20th century. I do know as an officially recognized fact that Real Wages are down, and still dropping. We're also working longer hours and compelled at a greater rate to take on multiple jobs.

Remember Bush gushing about "how uniquely American " it was that a woman he spoke to at a public event held three jobs? I think he missed the point....

You called him a smarmy looking liar? That's chaulked up as a win for you on a debate show? That's really kind of pathetic. What Stossel is talking about is fundamental macroeconomic theory not just some political talking point meant to keep down the lower class. Every attempt at government control of a market always has numerous unintentional bad consequences. That's common knowlegde.

Facts speak louder than insults Posted by Bloomington on Jun 18, 2006 05:43pm

Facts speak louder than insults Posted by Bloomington on Jun 18, 2006 05:43pm

But Rush is a big fat Liar, a hillbilly heroin junkie and a nazi gasbag.

Ann Coulter is a syphallitic, skeletal drag queen, and john stossel is a smarmy looking liar. These are facts!

I would have liked to hear a little more of Sirota's factual arguments as well, but in all fairness there are a couple of variables you need to look at:

Stossel was on Free-Marketeer Kudlow's show for the "entire hour", the host said as he signed off - Sirota apparently got his half of the duration of the little clip linked above. - in short, his appearance was engineered to be a caricature.

More inportantly, as I pointed out in an earlier post - it was STOSSEL himself who introduced the "smarmy looking liar" comment into the forum in question. Apparently Sirota said it once before (and I believe with full empirical legitimacy) in a book review - but STOSSEL pulled it out of his buttt on TV to act as a straw man. Sirota merely had the integrity to own his previous statement whe confronted with it out of context.

I hope my argument won't be construed as advocating violence against union organizers or illegalization of unions. On the contrary, I believe that unions are part of the negotiating process by which individuals--collectively, but voluntarily--get compensation from their employers that they believe is necessary for their livelihoods and fitting for their type of work. In fact, I spent about three months working for a major retailer (I'll give you a hint: it was founded by a guy named Sam) whose orientation session included a 20-minute anti-union video, and I found it somewhat creepy.

On the other hand, I should point out that just because the rise of unions has an historical proximity to the end of the Great Depression, this does not necessarily mean all the changes they have wrought are good ones. Some have proven simply unsustainable. The aforementioned General Motors is currently enjoying a negative profit margin. Major airlines, whose pilots are unionized, are negotiating to end pension plans (Delta and United have cut their pension plans in the face of roughly $20 billion dollars in projected shortfall for the penions of their current pilots).

Based on these examples, I suspect there is a threshold for employee compensation, above which the cost of labor will make it impossible to produce whatever product a given industry is making. And I believe the threshold is different from industry to industry. Unions are aware of this, and often accept cuts in compensation when they are convinced that the industry they depend on will cease to exist if they don't charge less for their labor. Laws enacted by state and national government, by contrast, tend not to make this distinction; nor are they as dynamic as labor agreements between one company and one union can be. To illustrate: if minimum wage were raised to $20/hr across-the-board, certain types of products would vanish from the marketplace. Fast food, I think, would be the first to go (and boy do I love my cheeseburgers!).

You said "I hope my argument won't be construed as advocating violence against union organizers or illegalization of unions"

Of course, that was not my point at all. I was merely try to illustrate the the illegitimacy of the the point that you and Chester have been putting forth; that labor issues in this country is can be left to the working out of "free" agreements between the worker and the employer in which bargaining satisfies all requirements of fairness. (an earlier post of mine already presents my case on this particular issue)

It is true what you say in regard to too high a minimum wage potentially damaging some traditional industries,- but I cannot dismiss the truism - enshrined for centuries in conservative icon Adam Smth's misconstrued ans misused writings - that wisdom dictates that a person's labor should support him/herself and a variable number of dependents.

One could say that each fast-food restaurant must therefore pay from its proceeds a living wage to its employees, and in such a case it may be that the business could not sustain such an expenditure and would disappear. Another poster above has argued that this would be appropriate - that if a particular business has something in its nature or structure that causes the business to fail by merely doing the obviously necessary thing, then that business doesn't deserve to exist. There is certainly some logical merit to this argument. Why would we want or need enterprises taking up space that cannot pay their own way? (the same goes for all manner of externalities - managing polutants, worker safety...anything that industry today is all too happy to leave to greater society to pick up the tab).

But it is not the only solution. A wise government could ameliorate the shortfalls of workers in certain poorly structured but essential or beloved industries (fast-food may rank as one of these for some people) by providing essential services for its entire population. Universal medical care, assured housing, education at any level, and a reasonable base-line of food and clothing ought to be provided or made avaiable throught the pooled purchasing power of our taxes. Oooh, taxes....

As I've written above, the wealthy in this country are out of control.. they need the living hell taxed out of them. No one "earns" fifteen-thousand times more money than any other fully employed, hard-working person - but this is just a sample of the preposerous discrepencies in the dispensation of "wages" in this country. Its a system of crass entitlement that our societiy's decision-makers in the top three percent of income make avilable so that they or their children might some day be admitted into the top one-tenth of one percent. And then these same people bitch when someone demands $8.00 an hour for ten-hour days in the chicken-killing factory. Totally honorless and self-absorbed.

So to close this overlong post - perhaps my point is that setting a minimum wage is nowhere near as important as enforcing a "maximum wage" in order to bring material wealth/political power in this country back into a scale approriate for a democracy.

I didn't have time to reply to this post today (Wednesday); I do have a response cooking in the old brain, though, so hopefully I'll get a chance to write it tomorrow.

I don't know what the 3% working for minimum wage is based upon, but according to the U.S. Department of Labor, 2004 minimum wage workers statistics, there are 1,505,000 adults over 20 working for $5.15 or less an hour and 497,000 teens (16-19) working for minimum wage or less. Even if you didn't consider inflation since 1997 or increases in the cost of medical care, these individuals can easily be classified as struggling to exist. I would like to know how upping the minimum wage for 1.5 million people, 2 million including teens, is going to break our economy and cause national economic instability. We are a nation of 290 million people. I think that if we can spend $8 BILLION a month slaughtering people in Iraq, we can afford to pay working people a couple more bucks an hour, which still really wouldn't even be classified as a living wage.

http://www.bls.gov/cps/minwage2004tbls.htm#1

I'll keep checking back for a couple of days - its hard to find a civil discussion with a conservative these days.

Believe me, civilized--and moderately informed--debate is a rarity in the public forum. I like to think that our Congress has a few of these discussions when no one is watching them. The speaches that make the evening news are always the extremely hyperbolic arguments.

You said "No one "earns" fifteen-thousand times more money than any other fully employed, hard-working person." In the free market, however, we pay for goods based on what they are worth. Therefore, the laborer is payed for what his/or her labor is worth, and not what he or she deserves. Suspending, for a moment, the merits of the system, let's consider its obvious corollary: if someone's labor is worth 15,000x as much as someone else's, then you should expect the employer of the former to pay $15,000 for each $1 that the latter's employer pays. Making me a cheeseburger is a minor task that I could maybe do for myself, given enough motivation (and rudimentary tools like a fire containment unit and a sesame seed bun). By contrast, a CEO of a major company could be responsible for the value of the retirement investment portfolios of tens of thousands of individual employees, and the investment value of thousands more shareholders. Assuming each contributor paid a nominal fee to have their funds managed by the corporate executives of their company, then the CEO's take could easily be in the millions, not because he or she deserves it, but because the employees and the shareholders are, collectively, willing to pay that much.

Now, let's get down to defending this system by a somewhat drawn out analogy. Consider professional athletes. Their job is to play a game for money, which most people would happily play for free during their down-time. If we paid them what they deserved for this, they'd all be working for free, but of course under Ken's system we'd have to pay them at least $20/hr anyway, for every hour spent playing, practicing, conditioning, and endorsing soft drinks.

Now, I contend that the product of the athlete is not just entertainment, nor is it to teach the rest of us how the game is played. The *product* that they sell to consumers is notoriety for their sponsors, most particularly the city or state for which they are named. (If you disagree, I would like you to consider what happens when the local team wins the championship: does everyone who watches the sport start dancing in the streets? No. Only fans of the local team--i.e., the locals--take the party to the public space.) Now, I ask, how much are people willing to pay for this product? Based on professional athletes' salaries, the answer must be "A lot." Someone, a long time ago, realized that teams with really good players tended to win lots of games; further, someone realized that you could attract really good players to your team--and by extension, improve your team's record--if you paid them a lot of money. That, I think, is how professional athletes started to earn far more than they deserved.

Now, let's observe the fact that many sports have some sort of salary cap, put in place to increase competitiveness by preventing rich teams from signing all the best players and winning all the games. This is roughly equivalent to a "maximum wage." The explicitly stated intention of this policy is to prevent one team from becoming unbeatable. The net result is that no single team is able to consistently produce its product for its fans.

Now let's take the analogy back to the general corporate world. Competition is enforced through quality and cost of product; therefore, no company can blindly pay its CEO more money than profits justify. But if attracting a good CEO (or providing incentives for your current CEO to do a better job) means improved production efficiency and increased value for customers, employees, and shareholders alike, any expenditure is justified. A maximum wage, imposed on a company's executive staff, unfairly limits the way in which customers, employees, and investors may safegaurd the value of their product, retirements, and investments, respectively. I suggest, through my analogy to professional sports, that such a wage cap merely ensures that no CEO will ever consistently produce his or her product. Poor industries that aren't important will be every bit as able to attract valuable (not necessarily good) leadership as rich, extremely important industries.

You said: "Competition is enforced through quality and cost of product; therefore, no company can blindly pay its CEO more money than profits justify."

I'm sorry, Eric, but this is not supported in the least by empirical scrutiny of corporate shenanigans in recent years. Almost categorically, CEO compensation has become completely detached from any index of successful leadership. In the now rare cases in which an overt failure of an executive is forced out by the diminishing power of stockholders, he is sent packing with a jaw-droppingly huge golden parachute.

Corporate America no longer has any interest in "competition" - it has become a feudalistic system of which monopolistic control of a market is the objective, and in which profuse CEO compensation represents the symbol of the system's tautological entitlement that its most avid supporters hope (usually beyond any feasible hope) will someday reward them beyond any exertion or performance on their part. Its a magical system, a lottery in which networking can advance your chances of a jackpot. By rewarding the most abysmal bumblefucks with hundred-million dollar severance packages, the system keeps the greedy faithful - hopeful that they too can get theirs, if their golf-game and wise-cracks keep entertaining the Big Cheeses. These immense and unearned compensation packages are like communal sacrifices to the Gods of Free-Market Fundamentalism - just do it and have faith; never look at the real world.

Back to the subjects of competition and quality: Why do modern toasters last only two years, when my parents only recently retired theirs tthat hey received as a wedding gift in 1950, and that because it was so battered it no longer resembled a toaster? Why do industrial-grade woodworking tools made today suck so bad? I have a 22-year old Delta table saw used harshly on a daily basis for that entire time, and it still purrs like a kitten. I wouldn't take a new market Delta anything today if you paid me to - their precision is gone, and they fall apart within a couple of years under any degree of use. This is likewise true now of all major producers in the power-tool market: Makita, Hitachi, DeWalt, Milwaukee...its a downward spiral to the lowest common denominator.

Planned obsolescence has become the hallmark of production in American (and now Global) capitalism (broken shit creates demand!), while competition has been relegated to retail alone (who can get the biggest box store in the biggest markets).

Take a close look at the orthodoxies you embrace - you'll find they are nothing but shine on a big venal turd.

I'd like to add a few observations regarding your very interesting discussion of salary caps in major league sports. Your breakdown of the "product" of a sports team, and the purpose of salary caps is spot-on - but I have to tell you that I think your application of these constructs to the corporate world provides excellent support for my points.

You say that the product of a sports team is the mobilization of a local demographic. You also suggest that any hindrance (e.g. through salary caps) of a particular team's ability to consistently maximize this product (i.e. by winning consistently) represents an unnatural obstacle to the fulfillment of the game's natural objective: the domination of the sport through monopolization of the best talent. Personally, though in no way an avid sports fan, I tend to think this improves the game in that perennial predictability would have a negative impact on the visceral appeal of the "competition". Fans addicted to the sport for reasons other than excitement (sadistic schadenfreude?) would flock to the wealthy, continually winning team, who alone would profit from the increasingly centralized - though in toto decreasing - proceeds of the game.

This is American capitalism today! The stock market is said to show "healthy profits"(the investing class henceforth to be known as "the winning team"); but real wages drop; our society is in unprecedented, literal hock to China and a number of middle eastern oil kingdoms; our trade deficit is a disgrace; government services and essential agencies/institutions have been gutted; and the word "career" is now a sarcastic euphemism (lower class, working class, middle class; henceforth to be known as "perennial losers").

Did you know that the board-game "Monopoly" was originally designed by an enclave of Quakers as an object lesson in the folly of a faith-based free market? As such, I think it’s a fairly successful facsimile: one player eventually rules the board and is unbeatable - eliminating one competitor after another and absorbing their assets until he alone remains solvent. The one change in the game's rules I would make in order to better reflect our political/economic system today would be to allow the winning player - the moment his wealth grows significantly ahead of the others - to begin to set the rules as he sees fit, and perhaps to carve out pieces of the board itself and convert them into the games’ toy currency for his further faux enrichment.

I tried to de-euphemize the term "venal turd". The best I could come up with is "shit you can buy," which I guess accurately describes the vast majority of goods that we Americans consume each year. It may surprise you to know that I, too, lament the rise of cheap, disposable crap as much as you do, although I attribute the cause not to corporate desire to produce such crap, but rather the infinite ability of consumers to buy it (how else could "Reality TV" have become so popular?). You can still get house-hold appliances that last for decades (like the legendary Rainbow Vacuum Cleaner), but what enterprising couple would go in halfsies on something that will probably last longer than their marriage?

Anyway, Ken, you briefly trotted off on a long diatribe about the supposedly malevolent motivations of corporate fat cats ("Big Cheeses"), but you did a lot of what I call "begging the question", with nary an example or fact-based analysis to show that your poor opinion of Big Cheeses is anything but a lament that not everyone can be rich. At any rate, a lot has been written about how the selfish instinct and the will to power are two important aspects of the free market, and here I think Adam Smith would agree with me. If wealthy people in positions of power seem to be unfriendly, elitist, self-centered assholes, it is because the free market rewards such amoral behavior. I really love this phrase of yours: "By rewarding the most abysmal bumblefucks with hundred-million dollar severance packages, the system keeps the greedy faithful." Why does this trouble you so much?

Now, I want to pre-empt an introduction, by you, of the Enron scandel as an example of how bad it is to pay the greedy faithful so much money. Before you point out how much damage Enron's Biggest- and Second-Biggest Cheese did to the market, let me point out that their actions were not in keeping with the free market; in fact, they were *illegal*. Through some economic slight-of-hand called "Mark to Market" accounting, they swindled their employees and shareholders into believing they were producing a product, when in fact they were producing bugger-all.

One last point: it seems you've turned my sports analogy on me. Let me try to turn it back. An important difference between the analogy and the business world is that consumers of sports only buy "the product" from the local team, whereas consumers have roughly equal pick of Hitachi, DeWalt, and Milwaukee, and it would be ideal if at least *one* of them consistently produced usable power tools. (I'll allow that companies often try to gain market share by forcing retailers to sell only one brand in one place; I think that violates one of the sacred tenets of the free market, and I deplore it). Perhaps what you fear is the old bait-and-switch: after a company demolishes the competition and acquires monopoly, it can arbitrarily raise its price on its products. But again Adam Smith would probably argue that the old companies would re-appear to bring the price back down again. So you *want* someone to consistently win, but you also want to structure the market so that newcomers to the market can un-seat the winner if the winner ever stops producing and sits down on its laurels.

"Before you point out how much damage Enron's Biggest- and Second-Biggest Cheese did to the market, let me point out that their actions were not in keeping with the free market;... "

Exactly! That is because, I hate to inform you, the "Free Market" is a myth. All human reciprocity operates on rules and agreements - even in absolute anarchy, if such existed, the rule would be constituted by a tacit agreement of "take this if you can". Sadly, the current economic system of the United States seems intent on approximating that condition. By the oligarch-freindly strategy euphemistically labeled "deregulation" today's corporate culture has been systematically dismantling the democratically derived set of laws designed for the protection of the people's commons from irresponsible and self-interested spoilage by industry. By doing so, the corporate interests manage to facilitate looting of resources that are by rights the property of greater society, and to pass many of their most significant costs of doing business ("negative externalities") on to someone other than themselves (e.g. society at large; anyone living downstream or downwind of the rendering plant). So basically, the "Unregulated Free Market" is in reality a situation in which industrial parties of sufficient power and influence have acquired the ability to set the rules to their own benefit and exercise arbitrary corporate tyranny over the rest of us. Its not the fact that the "Cheeses" are rich that makes me angry - its the fact that in a just world they would never be able to get rich on such a preposterous scale.

You pointed out that the Enron pirates are a matter of discussion and prosecution because what they did was illegal, and that is true. But the influence given by this corporatist administration to Ken Lay and others not bound for prison in establishing the regualtions that purportedly "govern" their industries IS now the law (please see "Fox guarding Henhouse").

And what about the oil company executives who were treated as princes by that little toad Senator Stevens (R - Alaska) when they "testified" before congress? They were most emphatically NOT sworn in, despite minority demands that they be, and so their monopolistic collusion masquerading as free and open competition became the smelly skid mark on the flimsy square of tissue once known as "the Constitution".

So no, Adam Smith would most definitely NOT share your conclusion that re-entry could occur in these markets when the current winners stop delivering to the demand and benefit of consumers. In an example of his day from his classic treatise, he clearly distinguished on the crucial bases of economic health, justice, and sustainability between the colonies in the East Indies, which he saw as suffering under their mercantile system of corporate slavery in which the well-healed businessman was absolute prince, and the system of law, justice, and wisdom that prevailed in North America under the constitutional government of Great Britain.

That was, of course, just a short while before the mercantile system of corporate slavery began to rear its head in the Thirteen Colonies and turned some of the gentlemen there into very irrate rebels and terrorists.

And you missed my point about the power tools, I think. I was not suggesting that there was no choice - these brands are consistently available side-by-side. Its that the competition seems to involve who can make the cheapest tool that will break the soonest, thereby creating demand for the industry as a whole. I submit that Walmart, Lowes, Home Depot, etc (conceptually the same entity) are calling the shots here: anyone making a device of too high a quality which will not require imminent replacement will be denied shelf-space in these big-box stores, which have made it their business to eradicate any independent retail competition in their extended vicinities. Have you ever heard of a Mom/Pop hardware store "re-entering" the market after the Waltons come to town?

So I will here correct and augment my discussion in this regard: Grizzly Tools still Rock! They are based in Muncie PA, if memory serves, and operate primarily by catalogue/internet. Their products are highly durable, powerful, and reasonably precise. You will also NEVER see one in a Walmart, Lowes, etc.

You said:

"I really love this phrase of yours: "By rewarding the most abysmal bumblefucks with hundred-million dollar severance packages, the system keeps the greedy faithful." Why does this trouble you so much?"

- because its a scam - a classic bait-and switch pyramid scheme that prompts the "greedy" to support a system that bleeds society dry and funnels the decreasing returns into only a few well-placed pockets. Most of the deluded rank-and-file go to their graves as failures in their own eyes - blaming "commies", or "wetbacks", or gay marriage, - or some other straw-man set up by the hucksters - for the fact that they never got their promised piece of the pie.

Correlation is a great statistical tool. By the same measure we can blame blacks for electing George Bush twice. All the states with the highest percentages of blacks are indeed Red states.

What is going on here is that states who already have rapidly growing job market have very few people making minimum wage. Because of this, the increase in the minimum wage was a more palatable to the population and passed.

States that had many people already making minimum wage knew they would be pricing many workers out of jobs and decided against a minimum wage increase.