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http://www.friesian.com/stats.htm
"Vedder and Gallaway's simple thesis, well substantiated, is that unemployment is simply to be correlated with the level of wages. "Full employment," to the extent that this means anything, and historically it seems to mean unemployment at less than 2%, is achieved by allowing wages to fall to market clearing levels. (The freer economies in Asia, like that of Hong Kong, where unemployment was 1.9% in 1994, reflect this.) Why this produces the unprecedented prosperity of the turn of the century, the 20's, and the 50's, rather than some Marxist impoverishment of the masses, is explained by Say's Law. The observed secular increase in unemployment, as well as the anomaly of unemployment in the Depression, is mostly due to the political manipulation of wages and labor costs, either seeking to deliberately drive up wages (through the minimum wage, special powers for labor unions, or "prevailing wage" rules for government contracts) or by imposing costs that do not appear in wages (social security taxes, workmen's compensation costs, health insurance, OSHA requirements, ADA requirements, "family leave" costs, etc.). Since it continues to be the political strategy in the United States and elsewhere to increase the compensation of labor through legally mandated wages and benefits, the secular increase in unemployment can be expected to continue, as it has in Western European countries, where the European Economic Union as of 1994, with far more socialized economies than in the United States, still averaged unemployment above 11%.
Although the U.S. economy was very slow coming out of the 1990 recession, and the election of both a Democratic Congress and President in 1992 threatened the renewal of irresponsible taxing, spending, and regulation, the damage done was relatively mild, and the election of a Republican Congress in 1994 helped forestall some of the most grandiose threats. The failure of many promised Republican reforms does not bode well for the future, but meanwhile the comparative advantage of the U.S. economy has told against the European community.
In 1997 France still suffered from double digit unemployment, with low to negative real growth, while in the Spring of 1997, U.S. unemployment actually dipped below 5% for the first time in more than 25 years. A conservative government in France failed in its efforts to reform the mediaeval labor situation, with the stranglehold of the unions on the economy, and the voters curiously responded to this in 1997 by returning to power the socialists, who can only be counted on to make things worse (promising a shorter work week, public service jobs, etc.). Indeed, early in 1998, the French government had accomplished basically nothing, and the long-term unemployed began to demonstrate for their promised free lunch -- as they have begun to do in Germany, with similar levels of unemployment, as well. Following the example of the French, the British and, now (199 , the Germans have returned the socialists to power, with the expectation, apparently, that more socialism will improve their economies.
The prospect for continued stagnation in Europe compares favorably in the United States, even though the growth of burdens on American business has only slowed, not stopped, and the so-called "balanced budget" deal for 1998 negotiated between the Republican Congress and President Clinton was a fraud that merely postponed the day of reckoning behind a smokescreen of optimistic projections and postponed promises, as usual, for real spending reductions. Prosperity, sadly, defers the need for reform, while recessions bring out much of the same kinds of New Deal, anti-capitalist rhetoric and bogus nostrums."
Over the weekend one of the fellows I saw on the news said that in the 1950's black unemployment was very low. It was his contention that welfare has massively increased black unemployment. But then, he was black.
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The above is a reply to the following message:
Does the Federal Government have the right to promote social welfare?
By: Zimbler0
in
POPE
Mon, 06 Jun 11 9:40 PM
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Msg. 37195 of
65535
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http://www.learntheconstitution.com/social-welfare.html
Zim: I found this to be an interesting article.
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In the Preamble of the Constitution we are told that one of the reasons the U. S. Constitution was set up was to promote the general welfare of the people.
This provision anticipates the RIGHT of Americans to have its government serve the welfare of the people in their collective needs–that is, their GENERAL welfare–and not use the resources of the people for the benefit of certain states or certain people, which would be SPECIAL welfare.
The term “general welfare” was used in the Articles of Confederation and elsewhere to refer to the well-being of the whole people. The Founders did not want the power and resources of the federal government to be used for the special benefit of any one region or any one state. Nor were the resources of the people to be expended for the benefit of any particular group or any special class of citizens. (Making of America p 244)
The entire American concept of “freedom to prosper” was based on the belief that man’s instinctive will to succeed in a climate of liberty would result in the whole people prospering together. It was thought that even the poor could lift themselves through education and individual effort to become independent and self-sufficient.
The idea was to maximize prosperity, minimize poverty, and make the whole nation rich. Where people suffered the loss of their crops or became unemployed, the more fortunate were to help. And those who were enjoying “good times” were encouraged to save up in store for the misfortunes which seem to come to everybody someday. Hard work, frugality, thrift, and compassion became the key words in the American ethic.
Within a short time the Americans, as a people, were on the way top becoming the most prosperous and best-educated nation in the world. The key was using the government to protect equal rights, not to provide equal things. Samuel Adams said the ideas of a welfare state were made unconstitutional by the Founders:
“The utopian schemes of leveling (redistribution of the wealth) and a community of goods (central ownership of all the means of production and distribution) are as visionary and impracticable as those which vest all property in the Crown. (These ideas) are arbitrary, despotic, and, in our government, unconstitutional.”
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Zim: The article does go on - about how we should
help our needy. But a section credited to Benjamin
Franklin is most telling:
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Franklin wrote a whole essay on the subject and told one of his friends: “I have long been of your opinion, that your legal provision for the poor (in England ) is a very great evil, operating as it does to the encouragement of idleness. We have followed your example, and begin now to see our error, and, I hope, shall reform it.”
A survey of Franklin ’s views on counterproductive compassion might be summarized as follows:
Compassion which gives a drunk the means to increase his drunkenness is counterproductive.
Compassion which breeds debilitating dependency and weakness is counterproductive.
Compassion which blunts the desire or necessity to work for a living is counterproductive.
Compassion which smothers the instinct to strive and excel is counterproductive.
Nevertheless, the Founders recognized that it is a mandate of God to help the poor and underprivileged. It is interesting how they said this should be done.
Franklin wrote: “To relieve the misfortunes of our fellow creatures is concurring with the Deity; it is godlike; but, if we provide encouragement for laziness, and supports for folly, may we not be found fighting against the order of God and Nature, which perhaps has appointed want and misery as the proper punishments for, and cautions against, as well as necessary consequences of, idleness and extravagance? When ever we attempt to amend the scheme of Providence , and to interfere with the government of the world, we had need be very circumspect, lest we do more harm than good.”
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Zim: There is much more to the article than I
cross posted. If one truly desires to learn what
made America great, and how we are consigning
ourselves to a slow painful death, this is worth
reading and cogitating over.
Zim.
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