There is a few ways to answer this question. For one, apartment complexes might not be forced to pay all of their employees so much & would be able to offer lower rates for living there. Secondly, our country provides free education through highschool & pretty dirt cheap education with community colleges. We cannot force people to educate themselves - we make it available to them & it is their responsibility to follow through with this. It has nothing to do with how much money they make/we force companies to pay them. Also, no minimum wage may further encourage education. And lastly, I don't know whether this has ever been researched before or not, but I have a theory about a possible hidden harmful effect of having a minimum wage - and that is that it creates a subjective level for young/unskilled employees to price their labor at, because the minimum wage is basically the government telling businesses & employees what that labor is worth. This minimum wage level could quite possibly be beneath what employees would naturally value their labor at for many jobs. Thus, the minimum wage in effect raises the wages of jobs that don't deserve it (creating market inefficiencies), and also decreases the wages of jobs that would deserve a little bit higher (reducing the ability of people to move out of the lower class). To be clear, I am referring to minimum wage in a bit of a broad since, not the exact $5.15/hour or whatever it is. Many jobs pay $5.75/hour, but for this discussion I would still consider that minimum wage because it is still a number largely based on the minimum wage, just adjusted slightly, but still just as subjective. They should give me a phd for this stuff. Describe why you think capitalism creates power vacuums & voids, and what you mean by that. You keep mentioning it, and I'm not sure I completely understand your point.
My position is that strict capitalism may be financially efficient, but it does not give any data about social costs. I think, especially if we open the borders, that the demand for minimum wage workers will be much less than the supply, causing the new "minimum wage" to drop. Without traditional minimum wage income, I fear that the new "minimum wage" will be less than the living wage. Researching the complex factors of supply and demand and social costs requires more work than I care to give at this time. I am reluctant to accept that a philosophy will work exactly as drawn up on paper considering the real world values that are not considered by that philosophy. PS = Power vacuum or void (in regard to capitalism) = a "ghetto" in the US
I think you underestimate capitalism's positive social effects. It is not a matter of some abstract theory that we can only look at on paper. We can learn much from history. Capitalism has been to great benefit of this country. It has resulted in the lowest social costs of any economic system. It is the other philosophies which have failed to consider real world values & only look good on paper. Capitalism itself may not show us social costs, but by looking at data & history we can see that in reality, it does not result in high social costs. In fact, I would argue that ghettos & your "power vacuums" are more exaggerated by a lack of capitalism than anything else, reference the high amount of unemployment & lower standard of living in Europe. In America, our broke poor live better than than the lower class of most countries. To further expand upon your power vacuums idea... The government, by interfering with capitalism, has created these power vacuums - not capitalism like you think. Welfare programs & the projects (government programs, non-capitalistic) have created ghettos & was quite possibly the worst thing they could've done for poor people. What they created was a lower rung of society which is almost impossible to move out of. With no minimum wage, I think the lowest wage most people would be willing to accept would still be relatively close to what it is now, maybe a little bit lower for some jobs. But those jobs can only exist with no minimum wage laws, so is it better to have people working for not much money - or not working at all? Ask yourself honestly, which one has the larger negative effect on society? As for opening the border, I do not at all favor opening the borders, but I am for allowing work permits (which are enforced & actually require they go back to their country) - the low paying jobs that Americans will not accept & it is not worth paying more for would be filled - benefiting those mexicans who can make more with those wages than they could in Mexico & also us by keeping inflation low.
Please explain exactly what you would have done after the Great Depression. Point out exactly what FDR and his administration should have done in response to an extremely dire situation.
Okay, the great depression... Well, first off, I'll say that the free market economy has a self-correcting mechanism, which indicates it would have fixed itself. However, many of the causes for the depression were brought about by governmental policies that abosultely required changing, including the policy of the Federal Reserve during & after WWI - these are the things the government should have focused on while mostly allowing the economy to correct itself. The "new deal" had some good elements & some bad ones. Creation of the FDIC was crucial to restoring people's confidence in the banking system - and was a very good move by FDR. The financial services industry needed regulating & the creation of the SEC was also an intelligent decision. Creation of the Civilians Conservation Corps was okay. Ideally, it would have been the government offering contract work to businesses for specific infrastructure work which could then employ the young men, but considering the economic situation at the time, I have no problem with the decision. Some problems with the new deal include paying farmers not to grow food - even destroying crops to lower supply while some people were starving. Also, I believe that urging worker unions was not productive & a large part of why unemployment stayed so high for so long. If you read up on the National Recovery Administration, you'll see they basically started the minimum wage & was completely uncapitalistic. The result? Production dropped 25% & the cost of doing business went up 40% (according to wikipedia). Hmmm... interesting. The big thing about the new deal... The Social Security Act, which included welfare. Of course the main flaw with the social security act was having people pay for the benefits of others. We are seeing the negative effects of this now with the baby boomer generation. Social security was originally voluntary, which I don't have a problem with, making it mandatory was a mistake. Welfare was absolutely a bad idea from the beginning. I'll mention the how we decreased the abilities of the free market by instituting higher tariffs & decreasing international trade. The idea was simple & made some sense, buy american thus helping our own economy. But economics shows us that international trade is beneficial to all countries involved, and would have reduced the effect of the depression, but would have required working with other countries to have them lower their tariffs as well. The government should not have been favoring the farming industry throughout this process. Part of why the recovery took so long was because the economy was naturally evolving to other professions while the government was still trying to support a rural, agricultural society. Federal spending should have been increased & we should have not needed to balance the budget every year. Ultimately, we learned this lesson & it helped our economy rebound. In the end, there were some good decisions made & some bad ones. The good ones still remain in effect & were vital to a recovered economy. The bad ones made the recession worse than it was & some have continued to plague our economy.
Proof? Evidence? The Great Depression was not simply a big recession. It was unprecedented and only the draft and the economic engine of war production in the 1940's brought us completely out of it. Nevertheless, the New Deal was very effective in keeping people from starving and keeping them working . . . but it was hard times and it scarred the people who lived through it, my parents included. They became penny-pinchers who wasted nothing and practiced frugality, even after they became prosperous. My dad died at 87, still worried that the Hard Times might return some day. For sure. Encarta says: "But there was an underlying economic problem. Income was distributed very unevenly, and the portion going to the wealthiest Americans grew larger as the decade proceeded. This was due largely to two factors: While businesses showed remarkable gains in productivity during the 1920s, workers got a relatively small share of the wealth this produced. At the same time, huge cuts were made in the top income-tax rates. Between 1923 and 1929, manufacturing output per person-hour increased by 32 percent, but workers’ wages grew by only 8 percent. Corporate profits shot up by 65 percent in the same period, and the government let the wealthy keep more of those profits. The Revenue Act of 1926 cut the taxes of those making $1 million or more by more than two-thirds. As a result of these trends, in 1929 the top 0.1 percent of American families had a total income equal to that of the bottom 42 percent. This meant that many people who were willing to listen to the advertisers and purchase new products did not have enough money to do so." Sound familiar? They were not favoring the farming industry. They were favoring the family farm. 1930's America was a very different place than you've experienced. Rural electrification had not happened and most Americans lived and made a living on small farms which constituted 25% of the economy.
I don't have any idea. I just think that certain of FDR's governmental policies as well as the rapid industrialization of WW2 were instrumental in rebuilding the prosperity of our nation.
if you do not understand what caused the great depression, i dont think you are qualified to say that FDR fixed it.
