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May 7, 2018 - Freedomain Radio - Stefan Molyneux
19:49
4082 Bernie Sanders's Job Guarantee: $15/Hour and Benefits For All Americans!
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It's a strange thing that those who say they want to be in charge of the economy end up really qualifying for the job by rampant and bottomless Mariana Trenchdale depths of economic ignorance, if not anti-economic thinking.
So Bernie Sanders recently said he's going to announce a plan for the federal government in the United States to guarantee a job paying $15 an hour plus health care benefits to every American worker, quote, who wants or needs one.
Now, this is the kind of large scale open up the bomb bays of cash, not over Iran, but over American voters that Democrats have not done for quite some time.
And of course, the magic word infrastructure, environment, education, other things that might be nice is how it is justified.
And they say every American is going to get a job under this plan, he says this, or receive job training to be able to do so.
Now, a representative from Sanders' office said, well, they've not really got round to doing a cost estimate yet or deciding how the plan would be funded because they're still crafting the proposal.
Because, you know, if you keep polishing a turd, you can make it into a sandwich.
So this is just astounding stuff, and it is testament to the horrors of government education that this proposal is not immediately laughed out of the Square Circle Hall of Fame, because it is completely insane, completely ridiculous.
First of all, at some point, at some point, I'm not holding my breath, but at some point, American politicians are going to start noticing That they have $180 trillion in unfunded liabilities and an over $20 trillion debt at the moment.
At some point, they will kind of notice that when you're a hole, maybe the first thing to do, just stop digging, at least for a little while, because this is a completely mad plan.
First of all, All human desires are infinite.
All human desires are infinite.
All resources are finite, which is why you need to figure out what you're gonna spend your money on, what you're gonna spend your time on, what you're gonna spend your life on.
Everything you do is something else that you're not doing.
I have never once practiced the cello while recording a video because I give up everything else just to speak with you, just to be with you, my friends.
So knowing that, knowing that, we have to remember.
And it's not that hard to figure out.
Maybe it's hard for people to kind of stay with it, but it's really not hard to figure out to begin with.
We have to figure out this one basic thing, the seen versus the unseen.
So you can say, well, we're going to give everyone a job, and that's $15 an hour plus healthcare benefits and so on and training, all these kinds of good things.
The question is not what are you spending, On, the question is, what are you not spending on?
And the answer is, of course, everything else.
I mean, this is going to probably cost trillions of dollars and so on.
Those trillions of dollars have to be taken out of other people's hands.
They have to be borrowed. They have to be printed into existence.
And the very important question is, Is your investment going to pay off?
So absolutely, bridges need to be repaired.
Roads need to be maintained.
And you can come up with a wish list or a checklist of everything that you want to be done in the world and say, well, all of these things would be great.
But that's a child's fantasy of Santa's Christmas wish list.
This has nothing to do with a rational analysis of things in the world.
In the real world, not in the world of fantasy government checklists, in the real world, things are very limited.
Things are very limited. If you spend $5 million to create 50 jobs, then you have 50 jobs.
And the people who are receiving the money for those 50 jobs think, yay, this is great, I have a job.
And that's the scene.
Now what is the unseen is the money that was taken from everyone else in order to fund those jobs.
So this $5 million was taken from other people, or it was printed in consistence, or it was borrowed.
And the question is, if it was taken through taxation, then that's $5 million less that other people have to spend.
So a whole bunch of jobs weren't created, a whole bunch of things weren't bought because this $5 million was taken and spent.
Now, of course, if you'd left the $5 million in the hands of the people who had earned it, Then they would have spent voluntarily on what they themselves preferred to buy.
Which is, of course, their fundamental human right.
Property rights, one of the most fundamental human rights.
Bodily integrity and property rights.
That's really all it's about.
And so by taking money by force, you have created a bunch of jobs.
And you've created a bunch of dependents.
And that is, of course, what governments like.
They like to cut ribbons on new things.
Like, yeah, I built something new. I got a whole bunch of new jobs.
Here's a new factory that I helped to fund or whatever with your money.
They love to do that, but the unseen is a much, much bigger problem for them, of course.
Because you can easily track and say that you had these people who have these jobs because of this $5 million.
You cannot find out what else would have happened.
There's no alternative reality timeline that you can say, here I can tell exactly what would have happened if we hadn't used the power of the state to scoop $5 million out of people's pockets and spend it on our pet projects.
Here's what would have happened. And what would have happened is something better, something more economically productive, without a doubt.
When someone forces you to do something, then by definition, it is something you don't want to do.
I mean, that's the difference between lovemaking and rape.
Lovemaking is voluntary, and rape is coercive.
And so when someone forces you to do something, you don't want to do it.
And so people don't want to pay these Americans $15 an hour to do whatever it is the government wants.
It says that they should be doing.
Let's say it's, I don't know, repairing a whole bunch of roads.
No, that's actually not a great example because that's all government stuff to begin with.
But we know for sure that these people are not worth $15 an hour in the current marketplace.
Otherwise, they would be hired.
Or they don't want to work because they don't want the $15.
Maybe they prefer the time off with welfare or maybe they have other sources of income and so on.
Maybe they're criminals and they don't want to work.
So we know for sure that at the moment all the people who would end up being hired by the government under Bernie Sanders' plan would not be hired or are not being hired or not looking for work in the current remnants of the free market.
That we know for sure. That we know for sure.
So you're overriding people's wills, desires and wishes and you are creating Artificial demand where no demand exists.
In other words, you're going to steal, print, or borrow the money.
You're going to create, pay for all of these jobs, and you're going to destroy the rest of the economy.
Let's say you print the money. Well, what happens is, because you print the money, you drive up inflation.
Inflation is the increase in the money supply, which then cascades down Venezuela-style or Zimbabwe-style to create rising prices.
So what happens, of course, is that when you print a whole bunch of money to pay Millions and millions of people, 15 bucks an hour plus healthcare benefits.
What happens? Well, you drive down the value of money, which means that you're doing a soft tax on everyone else, particularly the poor, particularly those on a limited income.
So saying that you can even pay people $15 an hour is false, because if you have to print the huge amounts of money required to pay them, then you're going to degrade the quality of that money to the point where it's worth $10 an hour, $5 an hour.
I mean, eventually, what is it, three bananas and two eggs to get a haircut in Venezuela?
You can drive around in a cab for a carton of cigarettes, and it's all devolved down to medieval trade and barter, and it's like hunter-gatherer-style barter at the moment.
So you can't do that. Also, of course, when you drive up inflation, you drive up interest rates, right?
Because interest rates is the price of money.
And if the value of money is declining, then you need more money at the end to be paid off, right?
So if inflation is running at 5% and you want 5% interest rate, then you actually have to charge 10%, right?
5% to cover the lowered value of money and then 5% that you actually want.
So you drive up a whole bunch of interest rates.
And when you drive up a whole bunch of interest rates, people want to borrow less.
And when they want to borrow less, they spend less, they invest less, they create businesses less, which means that you're going to decay All of that.
And also, of course, when you drive interest rates up through inflation, what ends up happening is that people have to pay more in their loans, right?
So they have to pay more for their mortgages, and they have to pay more for their cars and so on.
And people on short-term variable rate mortgages, as we saw in 2007-2008, their interest payments go through the roof, their mortgage payments go through the roof, their car payments go through the roof, their visa payments, maybe even their student loan payments go through the roof, and then they Don't have much money to spend.
So this is all ridiculous.
If you borrow the money, then what happens is somebody has to lend you the money.
And so let's just say you borrow the money domestically for sake of ease of analysis.
You borrow money domestically and what happens is There's less money than available to start businesses to lend out to money.
You have decreased the amount of money that's available to be lent to other people because the government is borrowing it all.
And that means that interest rates are also going to go up because people have a demand to borrow money and if the government is taking a trillion dollars out of circulation, there's that much less supply, although the demand has remained relatively constant.
In fact, the demand may increase because you're paying all these people now These $15 an hour workers, and so it's gonna again drive the price of money up, drive interest rates up, and forestall any potential economic growth.
Again, is this brain surgery?
I don't think so.
I don't think so. I have a degree in history with a focus on the history of philosophy.
It's not that hard to figure out.
Maybe you just have to have actually run a business rather than, I don't know, not being able to afford a decent haircut since you were 22.
I'm talking about Bernie Sanders.
So, there's also ripple effects in other areas.
So, let's say that you're a business and you're paying people $12 an hour.
Because, tragically, after 12 years or more of government education, that's all they're worth, $12 an hour.
And then they find out that they can go and get $15 an hour working for the government.
They're going to quit your business.
They're going to go and work for the government.
So, now you're going to have to raise...
It depends what you're paying, 12 bucks an hour, whether there's healthcare involved as well.
But you're gonna have to match, at least match the government in order to compete with it, right?
So that means anybody who's paying anywhere close to 15 bucks an hour is going to have to increase what they're paying.
Otherwise, they're gonna lose all their workers to the government.
So the government's gonna budget for a certain amount of workers, say, oh, we're gonna hire this many millions of workers.
And then what's gonna happen is a whole bunch of other people are gonna quit.
And then they're going to come work for the government.
Now, when you're a government employee, you pay taxes out of the revenue you're getting paid for by the government.
You understand? So if you pay $2,000 a month in taxes or $1,000 a month in taxes, that's not money coming into the government in a sense because the government is taxing other people to pay you and then taking some of the money back in taxes.
It's not coming in from outside the government system if you're generating these things in the remnants of the free market.
And so what's going to happen is people are going to quit and they're going to go work for the government.
What that means, of course, is that less money is coming in from taxes outside the government system.
Because if you're working as a landscaper and you're being paid and you're paying taxes, money's flowing into the government.
But if you start working for the government, the government's borrowing to pay you the money which you then give some back in the form of taxes.
But it doesn't come in from outside the system.
It's still negative sum gain.
So that's going to be a huge problem as well.
Let's say that you pay someone who's not very healthy.
You pay someone $15 an hour but no healthcare or maybe the healthcare premiums aren't quite high or maybe the deductibles are very high because of Obamacare and so on.
In which case this guy, even though he's not going to get an increase in salary, he's going to quit your job and he's going to go over to the government where he can get a better job.
There may be people, even if you're paying them $12 an hour or $13 an hour or maybe even $10 an hour, of course they're going to move over right away.
But what if you're paying them $20 an hour With healthcare benefits, you'd say, oh, well, that person's definitely going to be safe.
No problem, right? Ah.
But you see, when you work for the government, there are lots of intangible benefits.
You're going to get probably instant access to a union that's going to make sure you never get fired.
You're going to get job security and you're going to be gloriously free of market forces.
So when you go and work for the government, I mean, it used to be back in the day before governments got all these unions, right?
There was never supposed to be any need for unions in the public sector, right?
The government was never supposed to need unions because the argument is that the need for unions is driven by the capitalist desire to drive down the wages of the workers so the capitalist can make more profit.
But of course, in the government, there is no capitalist, there is no profit motive, no profit drive and no desire to drive down, no innate hunger to drive down the wages of the workers.
So, if you leave your landscaping job, even if you're being paid more, well, you get access to the healthcare benefits, collective bargaining with regards to driving down healthcare costs, you get probably access to other benefits, you get a better pension, probably you get job security, you get access to union lawyers, and you really won't have to work that hard.
Because it's the government and there's no driving force for efficiency and hard work and stick-to-it-ness and staying late.
It doesn't matter. There's no competition.
So the intangible benefits of working for the government will almost certainly vastly outstrip the benefits of working for someone else, unless it's significantly higher in terms of wages.
So, you know, if you're tempted by a $15 a year job with healthcare benefits, your skillset probably isn't that high.
And because your skill set isn't that high, the jobs that you're doing are probably not that much fun.
It's a lot of manual labor, a lot of waiters, a lot of facilities.
They're just going to quit and go and join the government to make sure that they can't get fired.
And also, if you're part of the government, in general, you're out of the cycle of business where, you know, hey, the restaurant business is doing great.
Let's hire a bunch of people. Oh, the restaurant business is not doing great because you live in New York.
Let's fire a bunch of people.
So you're kind of out of that cycle.
So all of these intangible benefits are going to be enormous.
And what it's going to do is it's going to decimate the wage calculations of everyone else.
It's always the ripple effect that people forget.
Oh, 15 bucks an hour plus health care.
Well, there are this many people who are unemployed, this many people we can get under these jobs.
That's my calculation. That's all back of the napkin fantasy land.
You set things in motion and things begin to change.
The butterfly effect can happen with a butterfly's wing, let alone a massive economic intervention in this kind of way.
So then what happens of course is that private businesses are going to have to bid up their wages in order to keep people.
Some of them will be able to survive and some of them won't.
But of course there's no magic pile of money that business owners have.
In like, oh, we need to raise wages, $10 an hour, $5 an hour.
I'll just take a scoop to my bag of gold in the bathroom.
It's not the way it works.
I mean, usually, if you're making 5%, 6%, 7%, maybe 8% profit in a business, you're doing pretty well.
That's the average over a long period of time.
So there's just no money. So what that means is you've got to raise the wages of the people who are working for you.
And what that means, of course... Is that you have to raise the prices of what you are selling.
And so what that means, people who leave you, let's say you're making $12 an hour, you go to make $15 an hour, that means that you can only be replaced at, say, $20 an hour because you've got to include the value of...
Not being able to be fired, union access, easier work conditions, healthcare, other benefits, better pensions, and so on.
So the guy's got a, I don't know, just up his salary to $20 an hour.
So that's a pretty significant increase.
And that means that you're going to get paid $15 an hour, but in the long run, you're probably going to be able to buy less with that $15 an hour.
than you were with the 12 bucks an hour when you were working in the private sector because everyone in the private sector who deals with this kind of labor is going to have to raise their prices and then even if you don't deal with this kind of labor you're buying from people who deal with this kind of labor And therefore, everyone's prices are going to start going up because you've created this artificially high watermark of wages with this 15 bucks an hour plus health care.
Everyone else is going to have to raise their wages, raise the prices of what they're selling, and that flows upward, creates a huge amount of inflation, which decays the value of the $15 below the 12 bucks that you originally started with.
But again, people, they think that there's some magic exclusion to the laws of economic reality and mathematics when you have this kind of stuff.
So, I mean, this is one of the very unfortunate things that is occurring, is that these kinds of policies coming from the left in general are just kind of intelligence tests.
And it is another way, as I said before, it's another way of masking or covering up.
The terrible disservice being done to young people by the government educational system.
Quote, educational system. It's not at all an educational system.
It's an indoctrination system and a hostage-taking system.
It's just a comment that was on a YouTube video.
I have no way of verifying it, but it struck me.
And with regards to government education, this guy wrote, and he said...
He said, I, for many years, was a sound technician at union meetings for educational unions, and over the many years that I recorded their meetings and attended their meetings, I never once heard them ever talk about the benefit of the children.
They talked about what benefits they wished to accrue to themselves, which pension benefits they wanted, which political affiliations, They should serve in order to further their power.
And these kinds of conversations went on incessantly, but not once in the many years that I covered these events did I ever hear them talk about the well-being of the children.
And of course, people follow incentives.
So the fact that government education is producing people with virtually no economic value is going to be covered up by another government program called Higher Wages, which literally is going to wreck the economy, is going to wreck the economy.
You could get a thousand people to dig in holes and another thousand people to fill them up and you can pay them 15 bucks an hour, but you haven't done anything useful at all.
When the government starts embarking on massive infrastructure programs, they bid up the price of raw materials.
They bid up the price of steel, of iron, of silver, of you name it, right?
Of earth, of tar, of machinery, of gasoline.
They bid up all these prices. Who knows if it's valuable or not?
Who knows if it's the best use of resources?
And the answer to that is that nobody knows.
Nobody knows the best use of our scarce resources.
Nobody. And if you think about, well, what's the very best way to spend your life?
Well, that can be hard for people to figure out when it's their own life.
Trying to figure out what other people should do with their lives, other than, you know, be basically moral and respect the non-aggression principle and property rights.
Knowing what other people should positively do with their lives is a grandiose fantasy.
And because nobody knows, nobody knows, How our scarce resources should be allocated or spent.
Not one single person.
This is why we need freedom. It's a negotiation.
We would no longer, sorry, we would no more imagine that there would be a rational or moral department of free speech.
So why on earth is there a department of free money?
It's not free. It's not rational.
And if you can't see that, I don't even know what to tell you other than please, please, pick up a book or two.
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