More basics of economics - The Minimum Wage

I didn't watch the State Of The Union. Every time I see or hear King Barry I, I get an animalistic urge to throw poo at the electronic device spewing his voice. That aside, I heard clips and the one that made me yell "FUCK YOU!!!" to the screen was the typical Progressive line that people can't live off the minimum wage and we can't have that so we need to raise he minimum wage.

My pretty much exact phrase that night was "Fuck you, you fucking dumbass retard! You have NO CLUE how business works!"

Why does the minimum wage suck and why it does nothing positive for "the poor" and only hurts?

Pretty much all companies have jobs that need to be done that are menial, ultra-low skilled, and 'entry-level'. As a business is small, these jobs are done by the owner (as they're the only employee at the start), but then it can become a team effort: Everyone refills the coffee pot. While she's handling all the accounting tasks, Pam also orders the office supplies. Karen, who's the senior sales person (because she's the only one), sweeps the floors before heading home. Dave, who's the software programer, buys and restocks the coffee supplies weekly. You get the idea. Now, as the business expands and these people work more and more, these jobs STILL need to be done. You, as the owner, decide that you need to hire someone. So, you need someone to sweep floors, clean the toilet, order supplies, restock the coffee, and maybe even answer phones.
Question: How many people walking the Earth can do that job? Excluding young children, language barred, the retarded, infirmed, and those just physically incapable of doing it, about 95% of the people out there can do this job. Efficiencies aside, I could hire a teenage kid, still in high school to do this job.
Second question: How valuable is that work when I can hire just about anyone to do it? Shoe-level low. So why should I pay any one with ZERO experience, ZERO work history, and ZERO background on how well they work, anything more than a couple dollars an hour?
"You can't live off that!" Cries the Progressive.
You're not supposed to! These jobs that are as simple as shitting are of such low value is that I probably could hire a retard and they'd perform most of the tasks just fine.
"So why should these people take these jobs?"
To get work history. To be able to show another employer, for a higher skilled job, that you're dependable, that you've worked 40 hour weeks, showed up on time, made your employer happy, etc... The $5.00/hour  ain't pretty, but it's something. It's $200 a week you didn't have before. Want more, learn a skill and find a better job.

Now, let's add in "The Minimum Wage". Right now, it's about $7.25. I have two people coming at me for this shit job. If I have to pay them $7.25 an hour, who will I hire - Joe, who's 15, never had a job in his life beyond mowing lawns, he's still in school, he's an average student. Or Jane, who's 32 with a child at home, who worked 3 jobs successfully, growing into new positions, and only left the job market because she had a baby, and she's a college graduate. Ding, ding, ding, Jane, you have a job. Why? Even without asking anything, if Jane says she's a mom, I can generally assume she's responsible (I know, that's definitely not a guarantee, but...) because she has to care for a child. I can make an assumption that she is looking for extra money for something; why come back to work if she didn't have to? She has a history of work, so I could ask for a reference and would maybe find she's been reliable. Joe has no benefits to me, Joe gets no job. BUT... what if Joe was willing to take $6.00 an hour and Jane wasn't? Now Joe is a benefit to me. I can get the same work done for less money. I give Joe a chance. Maybe Joe thanks me by staying loyal to me and as his skill increase, maybe Joe stays with my company and grows into new jobs for me.
How many kids are working at jobs that were open to teenagers before. My first jobs were shoveling ice cream, then stocking shelves, stocking produce, cleaning a charter boat. These jobs suck. But I earned money, I got work experience, I showed my value. Look around now and who's doing these jobs? Adults!
"They deserve a fair wage!" Cries the Progressive.
That is fair. Why? Because if I can't pay the wages these people want, I just don't hire them. I still have the rest of my staff performing the jobs because they still need to be done!
"You're a greedy business owner who is keeping all the profit!"
To be considered a successful business, you have to be maintaining an 8% net profit margin. This allows you to grow in the following year(s), re-invest in the company, maybe buy a new company etc...  About 4% is considered being stagnant. Anything less, but over 0, is struggling to survive. So if I take anything out of those profits to increase the pay of my employees and don't receive any additional benefit from it or increase my revenue, I'm losing money. The business will collapse. Or...
To increase the money I'm paying my employees, I increase my prices. If I'm one business doing this, not a big deal, people can chose to do business with me or not. Maybe my products are worth the additional prices I'm charging. Maybe not. If I don't get the increased revenue, I can't afford to pay my people, people get pay cuts, get laid off, etc... Now, what if ALL businesses do this? The prices for EVERYTHING go up. The additional money that person making minimum wage got by the government mandated increase, now becomes absolutely worthless because the price of everything increased by the same percentage their wage increased. If you don't think this is happening, you've got shit between your ears because it DOES happen. Every single time the minimum wage is increased, the prices increase.

The only way a person making a shit wage can increase their pay is to increase their skills, increase their worth to the person/people who have or are willing to hire them . If you're making $8.00/hr at Walmart, then A) Find a better job than stocking shelves at Walmart or B) Show you're more valuable to Walmart so they can put you into a job that is commiserate with your work.

Market driven economy

Thanks to the assclowns in Washington... okay... around the country... the cost of anything having to do with guns has gone up dramatically. A mere 3 months ago, I could get a box of 50 .223 rounds for about $20. Now? I saw them recently going for as high as $35 for 20. AR based rifles, if you can find them, are at least $300 more than 3 months ago.
Because of this, the shouts of price gouging can be heard everywhere. "Those greedy fuckers are trying to rip me off!" says the sheep, who has no understanding of economics, yet believes what he's told by his 'masters'. We've been conditioned to think that when the price of a product goes up dramatically like now, it's because people are greedy. And I will concede there's definitely some of that, but the greater forces at work are the market responding to demand.

Unless you live in a hollow, removed from society, you've probably heard the phrase "supply & demand". See below:

When you have a high supply of a product, .22LR ammo, and the demand is low, you can get 500 rounds for $15 or so. Last summer, I bought two bricks totaling 1,000 rounds of it for about $35. I bought AR mags at about $15-20, depending on quality. I bought a Del-Ton AR for $700. Demand was low. But then, as November approached, the prices of these things began climbing. Why? Demand increased because it looked like King Barry I was going to be selected again. Nothing ridiculous, but more demand.
Why does this affect price? Greedy business person is just trying to rip me off!
Actually, you're to blame. I walk into a store and say "I want to buy that Pepsi for $.50." It's the only one. You want that Pepsi more than I do. You offer them $.60. I come back with $.65. You say $.70. I give up the fight. Does the store sell you the Pepsi for the original $.50 that the store was offering it at? No. You offered them $.70 so they'll take it. You affected the price of it because the supply was low and you felt that the Pepsi was worth $.70. I didn't, so I walked away. This allows the product to remain on the market, but then it's up to the consumers to determine what they value more; that product whose price is higher because of more demand or something else.
Now here's the funny thing. Unless affected by government (it's all affected by government, but...), these higher prices will open up the market for more competition because other people will see a benefit in offering their comparable products. This should increase supply and this should bring the price down. Demand could increase more because there's now more supply, so more people enter the market, but that should also increase the suppliers. While in theory, you can reach a level of market saturation, where the amount of suppliers can't increase anymore and demand doesn't recede, but the chances of that are small. External factors (like government) are usually to blame for that; why aren't more and more gun manufacturers coming to market, for example.

If the price is artificially kept low, whether by government or by the businesses themselves, there are a couple outcomes.
1) Limited supply - Because the price is lower, you'll buy a crap load of them when you don't need them, making them unavailable to others. During Hurricane Katrina, there were people buying shelf-loads of flashlights, multiple generators, 500 rolls of toilet paper. Why? Because the government implemented "price controls" to keep them lower than the market demanded, people bought more than they needed right now. AND, it kept new producers from entering the market or the current producers from adding to the market because they didn't see any value in it. There were people in surrounding states that had generators and supplies to sell. They didn't bring them to Mississippi or Louisiana because they were told "You have to sell them at the same price they were at before the hurricane." Why am I going to drive hundreds of miles out of my way to sell a product at the same price I bought it at? If I can't make a profit on it, fuck that.
2) Rationing - Again, by government or the business, they restrict your access to supply. Not by market, but by 'force'. "You can only buy 2 of those." "Limit 1 per customer." There's a gun shop nearby and they're my go-to shop for my gun purchases. Prices are usually low, stock is usually high, staff is knowledgeable and the owners are just good people. They have limited the ability of people to purchase products (limit 1 per customer) because they want to keep the price low. On their Facebook page, people are praising them for not 'price gouging' like the other stores in the area, but they've corrupted the market by denying your access to the product. The stock is still gone in minutes, it just means more people are going there for it. How many people ran out and bought AR's, AK's, pistols, ammo, etc... who generally didn't buy them before?

When the price goes up, a vendor who believes in the market will take the "extra" profit, reach back to their distributors and try to get more stock. Or they'll search for new distributors to find new sources for that product. They'll now have the money to go down those new avenues that may have been restricted to them before. After the first coronation of King Barry I, the prices of ammo shot up. But, within a couple months, the market became saturated because new manufacturers came to town, vendors now had access to overseas makers, and the price settled back down.
As long as the Corky's in Congress don't forget to wipe their asses and remember they're 'heads are on the chopping block', the market should settle back down, the availability of products will increase and the prices will drop.

Thanks to Wirecutter for getting my head thinking about this.

Fiscal Cliff - Yup, gonna go right over

The stupidity of government is almost palpable. I'd say their actions are illogical, but that would imply they actually think about what they're doing and I say it's pretty obvious they don't.

We (the greater We) have a spending problem. Period. It's not a matter of revenue (I.E. taxes), but of spending. Governments, on all levels in the US, are spending money they do not have. From towns to counties to states to the federal level; they are borrowing money or "creating" it out of thin air and giving it away to their cause du jour.
And before some fool tries to make the claim that the Democrats want to spend it on the poor and middle-class (what ever that means) and the Republicans want to spend it on the rich and corporations: Show me the politicians at all levels who have NOT gotten wealthy while serving in government and I will show you the politicians who actually want to reduce spending. Both parties distribute money to corporations and "the rich", it's just a matter of what purpose they serve that party.

Obama's proposals are ludicrous at best, blatantly stupid, and lack any understanding of simple math. The sound bite is his proposal will raise $1.6 trillion dollars. What is left off that sound bite is "...over 10 years." Here's some simple math to show the ignorance:
The deficit (the "revenue" the federal government has raised  - the money the federal government has spend= deficit) for fiscal year 2011 was approx $1.4 trillion. That was in ONE YEAR. His proposal is to attempt to raise just over last years deficit, over a span of 10 years. So, annually, he proposes to raise the money to cover just over 1/10th of that years actual deficit. This means we will go deeper into debt by approx $1 trillion dollars per year! It's fighting a forest fire with a garden hose.
Now, deeper into this and with the help of history, we see that EVERY government that has attempted to raise more "revenue" by raising taxes and has projected how much they'll raise, has come pathetically short of that target by BILLIONS of dollars. You don't have to go that far back. If memory serves, England tried it last year and came up short by over half. It doesn't work!
And he's not serious about solving the problem. Why do I say that? Boner... sorry, Boehner, the slimy coward he is, proposed cutting deductions and "loopholes" for those making over $250k, which supposedly would have generated the same "revenue", along with spending cuts, and Obama rejected it. "Raises tax rates!" cried Barry. "Give me the power to raise the debt limit!" shouted Dear Leader. "And if I feel like it, I may chose to cut spending in the future. If I'm in the mood." Boehner, Mr. Dickbag himself, scurried back to his rathole, cried himself to sleep a few nights, then came back and said, "Fine... we'll raise rates on those making over $1 million. But we need those cuts, you know. Please. I'll be good." With a laugh, Chairman Maobama shooed him off and said, "Silly little clown, I said EVERYONE making over $250K. Not $1 million. Away with you and come back with what I want or I'll blame you like I did Bush." I will guarantee Boehner capitulates and proves he's as useless as a mesh condom.

"The rich need to pay their fair share!!!" Is the rallying cry of the Sheeple.
Define fair share? Pull any tax record you want; 10% of the population pays about 70% of federal income taxes. Obviously, being they make more money, they will naturally pay more. Isn't 70% of the income tax "revenue" fair enough?
But let's stop for a moment and open this up a little.
Yes, there are people who's salaries are in this $350K and above range (~$350k is that entry into the top 10% range). However, many of these "income earners" are small businesses, whose tax filings put them in the "individual bracket", as opposed to a business. AND, I would say a vast majority of this income when you get into $1 million range, is in the form of capital gains.
"What are capital gains?" In short, they're returns on investments. An interest payment. I loan  you $100 dollars so you can buy a new widget to increase your production capabilities. In return, I charge you 5% interest, so I expect to get back $105. The Sheeple will say this is greedy and I'm trying to make a buck off the "workin' man", but let's put stupidity aside for a moment. A) If you don't increase production and thus increase your profits, my $100 is toast. Gone. Bye-bye. B) Without my $100, you can't increase production for a long time, so you can't hire more people, make more goods for others, make more money for yourself and your employees, etc... So for letting you use my money in the short term, you're saying "Thank you."
AND... that investment money I gave you? That came from my income, which thanks to tax rates, was already taxed before I loaned it to you! So then I try to make that money work, loaning it to others, and when they pay me back with a little more, I then have to pay taxes on that little more! Fuck me in the goat ass! Tell me how that isn't theft!?

Our government is overspending. No amount of tax "revenue" is going to solve the problem. NONE. If your child is spending more money than you give them for allowance, you don't keep giving them more. You ground them and then give them EVEN less, to make up for their stupidity.
At the current rate, it needs to spend approx $1.6 trillion LESS per year. Let's call is $2 trillion. How?
Military - Gut it! Yes, gut it. We have a presence in 70 something countries around the world. This is asinine on a biblical scale. I will guarantee you could spend 1/10th  the amount and still be able to protect U.S. interests abroad. Other countries? Deal with your defense yourself. We have our own problems. And to the assmonkey who claims we'd be defenseless? Nuclear fucking weapons. We're the only country on the globe to use them and it made us the big cheese. Tell people that if they mess with us, they'll be lucky to get nuked. War sucks and if you're not ready to play for keeps, don't even get in the fight.
Foreign aid - Fuck you all! That goes for the UN, too. The US is by far the largest contributor to the UN, borrowing money to do so, and for this we get pissed on. Let China and Russia pay for it.
Social Security - If you're not on it or not going on in within say the next 5 years, too bad, so sad. Your government lied to you. They stole your money, spent it elsewhere and said, "Oh well." THE MONEY IS GONE! If you get on it now, you're not getting your money. You're getting your kids money. Or you grandkids. Cut out the middle man and go live with your kids if you didn't plan for "retirement". No kids? There are (or at least were before the Fed got involved) organizations who help those truly in need.
Medicaid/Medicare - Same as Social Security. The money is long since spent.
State "aid" - If a state can't pay for its own programs, that's its own fault. The people of North Carolina shouldn't have to pay for the retirement, welfare, healthcare, road issues, etc... of the people of New York or California or Oregon or Massachusetts or the dozens of other states that OVERSPENT! We have our own problems. Go eat a dick!

Long winded, but that's me.
I truly believe we have gone too far. There is no returning to fiscal normalcy, if you'll forgive the term. Like society as a whole, who buys everything on credit, our government is a reflection of Us and as such, it will collapse upon itself. Look at Europe and explain to me how we're different. We're going down the exact same path as the EU, following in lockstep.
2010 was the last year we could have turned back. Republicans promised they would return to fiscal sanity and hoping against hope, like those who voted for Obama in 2008, I thought they could do it. But like so many who through Barry was different, I too was let down and the leadership kept playing the same game. Sure, there were and are some in office who are trying, but it's like a gang rape; it stops every so often, but that's only until the next animal gets on.
The future is bleak. Sorry to be the downer, but it's not going to get better. Surely not any time soon. But like all collapses, there's opportunity to start again. To rebuild. The question is: Do we rebuild like where we came from? From the late 18th century; a land ravaged by war, but with hope and courage to build and prosper. Or do we rebuild like post WWI Germany? Or post WWII China? Totalitarian states where pain and suffering became a way of life for all but the privileged.