Of Magical Thinking and Leftist Economics

Saturday, May 2, AD 2015

I have often thought that Leftists must believe that unicorns or good fairies bring wealth, because their approach to economics always requires magical thinking.  Seattle has mandated a $15.00 an hour minimum wage.  Predictably businesses unable to pay the increase are going out of business.   That this takes many erst-while supporters of this exercise in prosperity through fiat by surprise is very amusing.  Ian Tuttle at National Review Online gives us a case in point:
I’m hearing from a lot of customers, ‘I voted for that, and I didn’t realize it would affect you.
Hibbs opened Comix Experience on April Fools’ Day, 1989, when he was just 21 years old. Over two-and-a-half decades, the store has become a must-visit location for premier comic-book artists and graphic novelists, and Hibbs has become a leading figure in the industry, serving as a judge for the prestigious Will Eisner Comic Industry Awards and as a member of the Comic Book Legal Defense Fund’s board of directors. He notes with pride that his store has turned a profit each year — no small task — since its very first year.
 But that may not last. Hibbs says that the $15-an-hour minimum wage will require a staggering $80,000 in extra revenue annually. “I was appalled!” he says. “My jaw dropped. Eighty-thousand a year! I didn’t know that. I thought we were talking a small amount of money, something I could absorb.” He runs a tight operation already, he says. Comix Experience is open ten hours a day, seven days a week, with usually just one employee at each store at a time. It’s not viable to cut hours, he says, because his slowest hours are in the middle of the day. And he can’t raise prices, because comic books and graphic novels have their retail prices printed on the cover. What is a small-businessman to do?

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16 Responses to Of Magical Thinking and Leftist Economics

  • While a move would involve its own set of expenses, perhaps Mr. Hibbs should
    consider relocating to a saner state– he’d likely do well here in Texas.
    Once again we see the pattern of liberals spending other people’s money to
    make themselves feel good about themselves, without giving much thought to
    how their choices actually affect people. It is astonishing that they’re so out of
    touch with reality that they do not see this result coming. It’s sad that many
    mom-and-pop businesses in Seattle will be driven out of business and be
    replaced with chains that have deeper pockets and operate with more economy
    of scale. The people of Seattle were worse than fools to vote for this and
    frankly, they deserve what they get. Idiots.

  • Maybe this will actually get through to people?

  • @Clinton: I was also going to say….Move to Texas….but Texas doesn’t need any more transplanted liberals, do they? I say he should find another state that at least hasn’t succumbed to this idiocy (yet) but stay out of Texas, please.

  • In determining the amount of the wage, the condition of a business and of the one carrying it on must also be taken into account; for it would be unjust to demand excessive wages which a business cannot stand without its ruin and consequent calamity to the workers.


  • That’s

    Paragraph 72

  • This was an initiative of Mayor. The mayor’s capsule biographies do not give his employment history prior to 1990. Evidently he earned a degree in sociology from the University of Portland in 1980 (that’s a Catholic college run by the Holy Cross fathers). He’s made a public point of his homosexuality for 35 years, so you can see his schooling was decisive. He’s also a seminary dropout. All of his admitted employment since 1990 has been in the public sector or for philanthropic concerns. Big f****** surprise.

  • The nine member city council includes a dyke and an SDS veteran (who also lived on a commune for twenty years). Three have worked as attorneys and three have worked as journalists. Two have some kind of business background (one of whom was a company GC). One was a computer programmer (but at this point in her life is some sort of commie). Big F***** surprise.

  • The Democrats must really love poor people; they make so many.

  • Also, maybe I’m reading too much into the article (“I was appalled!” he says. “My jaw dropped. Eighty-thousand a year! I didn’t know that. I thought we were talking a small amount of money, something I could absorb.”) but I’m having a hard time feeling sorry for someone who appears to fit the definition of the useful idiot who just realized what the customer wanted the rope for.

  • I’m not seeing how the store owner assented to this at any point, just that his initial thought was he could absorb the cost.

    You ‘create a job’ when two parties come together for a common purpose. The wage is a crucial influence on whether than agreement is worth it to the parties. Characters like those on the Seattle City Council look upon businesses as suitable objects for looting and nothing more.

  • I recently read that Obama may return to community agitating when he finishes wrecking our country.
    Here’s how he helped de po’ people way-back-when.

    “President Barack Obama was a pioneering contributor to the national subprime real estate bubble, and roughly half of the 186 African-American clients in his landmark 1995 mortgage discrimination lawsuit against Citibank have since gone bankrupt or received foreclosure notices.

    “As few as 19 of those 186 clients still own homes with clean credit ratings, following a decade in which Obama and other progressives pushed banks to provide mortgages to poor African Americans.

    “The startling failure rate among Obama’s private sector clients was discovered during The Daily Caller’s review of previously unpublished court information from the lawsuit that a young Obama helmed as the lead plaintiff’s attorney.”


    “Magical Thinking and Leftist Economics” greatly contributed to the recent Great Recession.

  • Obama’s a lawyer who fancies that underwriting is something banks do not know how to do so need to be told by lawyers, or he fancies that they need to be told by lawyers to eat the cost of bad business decisions because lawyers and their clients are just damn better than loan officers, or he fancies that lenders leave money on the table due to spite so routinely they need to be told by lawyers not to do that.

  • Art: You are giving the zero (and the rest of the wrong people running the country) too much credit, both for intellect and for hionesty – both of which are totally absent.
    One doesn’t need to be Einstein to realize that the Feds still want banks to lend to “low-to-moderate” income peoples: Community Reinvestment Act (CRA). One doesn’t need to prove “discrimination.” All needed is to show “disparate impact” or what they used to call the “effects test.” As in whatever the bank did (it don’t matter what) if it had the effect of discrimination it was discrimination.
    Clinton’s appointed his late term HUD Secy. Cuomo who ordered FNMA and FHLMC to buy up to 50% of their paper volume in “low-to-moderate” income peoples’ bad paper. Bush and his country club GOP saw the profits and ractchetted it up. After 2008, the corrupt, incompetent politicians and the lying liberal media blamed the banks, say, Wells Fargo for forcing subprime loans on poor blacks and foreclosing on their homes. As if a banker ever existed that wanted to foreclose on a “low-to-moderate” income slum.


  • I think Freddie Mac slashed underwriting standards in 2003, not 1997.

  • When corrupt Clinton took over wrecking America, the US homeownership rate was 63%. When he left the WH, penny-less, the rate was 68%. The rate topped out at 69% under Bush, not a meaningful increase.
    By 1997, Fannie was offering to buy 97% loan-to-value mortgages. By 2001 (Bush first year and he never changed management), it was offering to buy mortgages with no down payment at all – 3% to zero (traditional down payment is 20%, plus debt payments to income ratio of say 28%) less owner’s equity is not a material factor. NB prices were inflated by the excess liquidity ($$$ chasing real estate) that the GSE’s and CRA-pushed banks pumped into the market. So, values were fairy-tale/mark-to-make-believe values based on government interference. Later, they allowed low teaser rates and negative amortization, without analyzing whether the obligor (lawyers use that noun) could pay the regularized payments. The myth was (despite the S&L crisis and several RE bubble-bursts in living memory) that RE sales prices rise forever.
    The Bush dynasty’s country club/chamber of commerce backers were as wrong about housing as they are about open borders. The idiotic libs’ “minimum wage” rants are even more ruinous/stupider.
    FYI Fed rate rises were nothing when adjusted for annual real estate price increases/inflation, resulting in negative perceived/real (nominal rate less inflation rate) interest rates for such loans.
    Will Rogers would know the problem with the wrong people running America. “The problem isn’t what people don’t know. It’s what people know that isn’t so.”

  • Where was the bishop?

    The moral superiority of free trade was worked out by late-medieval Scholastic Catholic scholars. The immorality of coveting thy neighbor’s goods is of older knowledge and much higher authority. And it’s not as if bishops in America’s hotbeds of left wing socialist economics and Social Justice Bullying are being asked to stand up to murderous national socialists. Yet.

In Other News, Water is Wet

Wednesday, February 19, AD 2014

One of the most beloved fairy tales in this country is that the Government, which seems unable to balance its own books, can by fiat, with no consequences to employment, tell employers that they must pay a minimum wage.  Economist Thomas Sowell, who, like me, began his career earning less than the then mandated minimum wage, explains what an appallingly bad idea this is:

One of the simplest and most fundamental economic principles is  that people tend to buy more when the price is lower and less when the  price is higher. Yet advocates of minimum wage laws seem to think that  the government can raise the price of labor without reducing the amount  of labor that will be hired.

When you turn from economic principles to hard facts, the case  against minimum wage laws is even stronger. Countries with minimum wage  laws almost invariably have higher rates of unemployment than countries  without minimum wage laws.

Most nations today have minimum wage laws, but they have not  always had them. Unemployment rates have been very much lower in places  and times when there were no minimum wage laws.

Switzerland is one of the few modern nations without a minimum  wage law. In 2003, “The Economist” magazine reported: “Switzerland’s  unemployment neared a five-year high of 3.9 percent in February.” In  February of this year, Switzerland’s unemployment rate was 3.1 percent. A recent issue of “The Economist” showed Switzerland’s unemployment rate  as 2.1 percent.

Most Americans today have never seen unemployment rates that  low. However, there was a time when there was no federal minimum wage  law in the United States. The last time was during the Coolidge  administration, when the annual unemployment rate got as low as 1.8  percent. When Hong Kong was a British colony, it had no minimum wage  law. In 1991 its unemployment rate was under 2 percent.

It therefore came as little surprise to me yesterday when the CBO estimated that raising the minimum wage would kill off half a million jobs in 2016:


President Obama’s proposal to raise the minimum wage to $10.10 per hour would cost 500,000 jobs in 2016, according to a report released Tuesday by the nonpartisan Congressional Budget Office.

The report also found hiking the wage from $7.25 per hour would raise income for about 16.5 million workers by $31 billion, potentially pulling nearly 1 million people out of poverty.

The White House and economic groups on the left immediately pushed back at the CBO’s conclusions on jobs even as they hailed the findings on poverty, saying its conclusions on jobs ran counter to other research.

“CBO’s estimates of the impact of raising the minimum wage on employment does not reflect the current consensus view of economists,” Council of Economic Advisers Chairman Jason Furman wrote in a blog post. “The bulk of academic studies, have concluded that the effects on employment of minimum wage increases in the range now under consideration are likely to be small to nonexistent.”

Given its findings on poverty alleviation, Furman told reporters the CBO report was an overall positive for the White House.

“Sometimes you have to have a respectful disagreement among economists,” Furman said in a conference call. “I think a lot of economists who have looked at [the] literature would summarize it differently than CBO has done here.”

Democrats are hoping to make the minimum wage a top issue in the 2014 midterms if the GOP blocks passage of a bill, but the CBO report would bolster Republican arguments for stopping a wage hike.

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21 Responses to In Other News, Water is Wet

  • My son started working at the tender age of 11. (They call it “volunteering”.) Five summers later (at the end of summer) they finally hired him–he is now 16. Now that he is on staff, he is very part time and doesn’t get called to “work” as much. He is deeply concerned what the proposed minimum wage hike laws will mean for his job (they have proposal in our state to raise the minimum wage up to $10.10, which is nearly $2 more than what he currently gets)–which is in a very competitive environment.
    I can’t help but notice how the same people who want to raise minimum wage extol such things as volunteerism and unpaid internships. Personally, I think it is little more than State-sanctioned-high-school-required slave labor.
    We could probably fix the illegal immigration problem in this country by eliminating State supported welfare and ending minimum wage laws. I can’t help but think many illegal immigrants are hired simply because they have a greater flexibility to working “under the table” in the underground economy.

  • ” . . . many illegal immigrants are hired simply because they have a greater flexibility to working “under the table” in the underground economy.”
    Exactly, and once legitimized, will form another Peoples’ Democratic Party voting bloc.

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  • I suppose another beloved fairy tales in this country is that the Government, which seemed unable to abide by its treaties with the American Indians, can by fiat, with no consequences, enforce contract law. Another is that the Government, which has willingly used terror as a weapon in both WW2 and the Cold War, can denounce and fight terrorism. Yeah, anyone can play that game, tearing down not only the government acts that you hate but also those you dearly love. Just don’t drag the Catholic Church into your fallacious reasoning. Donald R. McClarey speaks for himself and the owners of this web site, which (in spite of its name) does not speak for the Catholic Church.

  • I dunno. If we go big, really big, with our magical thinking, maybe those half million lost jobs are going to come out of the two million lost FTEs due to Obamacare allowing people to escape job lock. Win-win!

  • Howard,
    I’m trying in earnest to make sense of your rant. Are you suggesting that the government can (or should) force employers to hire or retain an employee at a wage such that the employer regards himself as better off without the employee?

  • “Yeah, anyone can play that game, tearing down not only the government acts that you hate but also those you dearly love.”

    Thank you Howard for a demonstration of the inability of some people to grasp the simplest economic concepts.

  • Was it Reagan that quipped:

    “An economist is someone who tells you why something that works in practice can’t work in theory”

    I guess the corollary to that is:

    “An economist is someone who tells you why something that can’t work in practice works in theory”

    Reminds me of that joke about the economist stranded on a desert island trying to open a coconut with his bare hands – “First, assume a hammer”.

  • I’m trying in earnest to make sense of your rant.

    Midday tippling.

  • Teen unemployment was quite high in the latter part of the 1970s as well. The NAIRU, the rate of unemployment congruent with price stability, was on an upward trajectory throughout the 1960s and 1970s and was at its peak (prior to 2008) around about 1979.

  • I guess the point of raising the minimum wage IS to secure “another Peoples’ Democratic Party voting bloc.”

    Abit like how the left here rally for the illegal immigrants- they hope that when the illegal are made citizens, they will vote for them for life- regardless of how skewed their policies are.

  • Half-a-million unemployed isn’t an unfortunate consequence of an increase in the minimum wage, its a half million more people motivated to vote for assistance from government.

  • Re illegal immigrants being hired to work “under the table”: this happens less often than people think. Many, perhaps even the majority, of illegals are hired to work for regular wages and get regular paychecks with taxes withheld from them — often using fake or stolen Social Security numbers for that purpose. It happens so frequently that 1) the IRS makes accomodations for persons who don’t have SSNs (the vast majority of whom are illegals) to file income tax returns using Taxpayer Identification Numbers in place of the SSN, and 2) the Social Security Administration acknowledges that contributions from workers of questionable legal status amounts to billions of dollars annually, and has the same effect as if the Social Security tax rate were raised by a couple of tenths of a percent. In other words, illegals are making payments into the Social Security system (which, contrary to rumor, they are NOT allowed to draw benefits from) that at least partly compensate for those not being made by the children Baby Boomers and Gen Xers did not have.

  • Perhaps Elaine, but I doubt if most of the illegal aliens congregated as work pools outside of Home Depots are being hired on the books, ditto servants, ditto those who tend lawns and ditto those who work in restaurants for non-chains. Additionally I have zero confidence that some illegal aliens are not receiving social security benefits. Opening up a checking account to receive social security benefits with a fake driver’s license or social security card for bank id is simplicity itself, although I imagine this would not occur often. This also ignores of course the welfare costs for illegal aliens. I see no way that illegal aliens are not a heavy net loss for the tax payer.

  • A Guy:

    I guess that’s the reason two of the dying, dead-fish wrappers (the New York Times and Wash. Post-it) recently printed that unemployment is “liberating/uplifting.”

    The oligarchs running both the dem and rep parties want illegals legalized. The dems see them as millions of additonal, solid voters and the reps see cheap labor.

    It is no secret to anyone with eyes to see. The power that be see as acceptable collateral damage the unreported destructions of the American family and middle class.

  • Don,
    In my experience Elaine is exactly right. Most employers of illegals withhold and remit taxes precisely because getting in trouble with the INS is a mild inconvenience compared to getting in trouble with the IRS. And in most cases the income tax withholding is largely refundable, but refund claims are never filed; and social security benefits cannot be and therefore are never claimed. Employers often know that the SSNs are phony, but they also know that the IRS doesn’t care as long as it gets the dough. All this is true even of maids and gardeners, who typically work for employers as opposed to directly for consumers. This is not to say that illegals don’t pose an expensive burden on an array of social services, or that we should be indifferent to laws and the policy challenges of assimilation, but the idea that illegals are avoiding taxes is much overstated. Although “off the grid” tax avoidance by illegals is hardly rare, its incidence is probably not all that different from the general population given comparable income levels.

  • Your experience differs from mine Mike. Around Central Illinois I know more than a few employers who do not withhold wages even on legal Americans, attempting the old “independent contractor” scam. Now needless to say this does not normally involve large corporations since such shenanigans would end up costing them far more than they are worth. However, for many small businesses and shell corporations in central Illinois such tax evasion schemes are far from rare. In regard to homeowners who hire illegals, for example, to roof their house, I think withholding for taxes would be a rare bird indeed which is probably why such transactions are not uncommonly conducted in cash. (I tend to get called in when the homeowner is dissatisfied with the work and I explain that taking a judgment in such a case is as futile as the government expecting to get taxes from such a transaction.) Of course discussions like this are frustrating because we have no good estimates on the underground economy size. I think the two trillion dollar estimate is probably low but all estimates in this area are just guess work.

  • “I can’t help but notice how the same people who want to raise minimum wage extol such things as volunteerism and unpaid internships. Personally, I think it is little more than State-sanctioned-high-school-required slave labor.”

    Exactly. Slave Labor. Volunteerism, commanded and demanded by the schools for graduation is slave labor. The virtue of charity must always be guided by man’s conscience and his means, not by the state. We are slowly sinking into the slave mentality. The danger is that by demeaning the virtue of charity and the JOY that is begotten by the charity, man will forget how to practice the virtue of charity and man may even forget he is a man, a man who loves his neighbor. This is already happening with the people demanding that the state take on the virtue of charity instead of they, themselves, as though only the state may dictate the virtues. Separation of church and state, the freedom of man’s body and man’s soul.

  • Elaine Krewer: I was injured at work.There were twenty people at the lawyers’ office. The receptionist spoke Spanish. Of the twenty people, I was the only white, non-Mexican worker claiming benefits. Just thought I would add to the pot.

  • I don’t doubt that there are still plenty of illegals working off the books. However, enough of them are actually paying into the Social Security system that it probably at least partially explains why the feds aren’t all that eager to halt illegal immigration. It’s a net gain for them but a net loss for state/local governments.

  • I’m scratching my head. Those people say they could never deport all the illegals, but seem to think they can lock up all the 85,000,000 American gun owners.

Progressives Are Not Cynical Enough About Business

Friday, July 16, AD 2010

One thing my study of economics has taught me is that businesses will tend to act in whatever way they think will bring them the most profit. There may be rare exceptions, and of course businessmen often have mixed motives. But the overall tendency in this direction is very strong.

My guess is that if you surveyed people, many more self-described progressives would say that they agreed with the statement than self-described conservatives. Indeed, progressives often criticize conservatives and libertarians for being insufficiently attuned to the rapacious self-interest motivating businessmen.

Yet oddly enough, it seems to me that one of the main problems with progressive thought is that they don’t take the idea that businesses act to maximize profit seriously enough. For a group that claims to have a low opinion of businessmen, progressives have a strange habit of advocating policies that will only work on the supposition that businesses won’t act to maximize profit, and then react with shock when they proceed to do so.

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0 Responses to Progressives Are Not Cynical Enough About Business

  • ” If progressives would only be more consistent in their cynicism, their policy prescriptions might improve.”

    Progressives who become more consistent in their cynicism become Marxists.

  • It is not a question of progressive’s being cynical enough, more like being clueless enough of how economic life actually works. Government always trumps private, Federal vs. local. They are extremely ideologically consistent in this. The law of unintended consequences is automatically ignored in staying true to this worldview.

  • Progressives who become more consistent in their cynicism become Marxists.

    A more consistent cynicism might lead progressives to become Marxists, or it might make them into libertarians.

  • Whether it leads to marxism or libertarianism is unimportant. The Progressive movement is utopian, denies original sin, and Jesus Christ. It was condemned prior to Vatican II and Catholics can not be Progressives. Thought you’d like to know.

  • @Tim McCarthy
    What you’re saying isn’t completely right. The Vatican always argues for a “balance” between pure capitalism and socialistic capitalism. I think, for instance, that they would’ve agreed with the raise of the minimum wage; even though some companies are now apperently cutting working hours, a large share of companies simply can’t so their poorest employees are earning more.
    Sure, the idea that we can create a utopia with socialism is obviously not realistic and not in line with Catholic teachings, but I certaintly believe that a Catholic or christian government or business must protect their poorest employees or citizens. We can obviously not stop sin but caring for our brothers and sister is most definitely effective. Again I’m not saying people should adopt socialism, just that there should be some social elements in capitalism.
    See for instance Rerum Novarum and the social teachings of the church.
    Maybe you know all this and I just understood you wrong, I don’t mean to be patronizing (or socialist BTW), but at least others should know this.

  • Richard, you’re right on track. And we can all thank you for reminding us here of what the Church actually has to say about the matter as opposed to letting people like Glenn Beck define our terms for us. Actually, I don’t feel any strong desire to rehabilitate the term Progressive. I do want to point out, though, that when liberals or progressives or Democrats or whatever you want to call them decry the abuses of big business, it is actually an opportunity for conservative enablers of big business (through irresponsible deregulation) to wake up from THEIR doey eyed naivete.

  • Mark,

    Here’s a list of the irresponsible (bank) deregulation since 1864.

    1. National Bank Act of 1864 (Chapter 106, 13 STAT. 99). Established a national banking system and the chartering of national banks.
    2. Federal Reserve Act of 1913 (P.L. 63-43, 38 STAT. 251, 12 USC 221). Established the Federal Reserve System as the central banking system of the U.S.
    3. To Amend the National Banking Laws and the Federal Reserve Act (P.L. 69-639, 44 STAT. 1224). The McFadden Act of 1927. Prohibited interstate banking.
    4. Banking Act of 1933 (P.L. 73-66, 48 STAT. 162).
    Glass-Steagall Act. Established the FDIC as a temporary agency. Separated commercial banking from investment banking.
    5. Banking Act of 1935 (P.L. 74-305, 49 STAT. 684).
    Established the FDIC as a permanent agency of the government.
    6. Federal Deposit Insurance Act of 1950 (P.L. 81-797, 64 STAT. 873). Revised and consolidated earlier FDIC legislation into one Act.
    7. Bank Holding Company Act of 1956 (P.L. 84-511, 70 STAT. 133). Required Federal Reserve Board approval for the establishment of a bank holding company.
    8. International Banking Act of 1978 (P.L. 95-369, 92 STAT. 607). Foreign banks in the federal regulatory framework. Deposit insurance for branches of foreign banks engaged in retail deposit taking in the U.S.
    9. Financial Institutions Regulatory and Interest Rate Control Act of 1978 (P.L. 95-630, 92 STAT. 3641). FIRIRCA. Created the Federal Financial Institutions Examination Council. Established limits and reporting requirements for bank insider transactions. Electronic fund transfers.
    10. Depository Institutions Deregulation and Monetary Control Act of 1980 (P.L. 96-221, 94 STAT. 132). Established “NOW Accounts.” Began the phase-out of interest rate ceilings on deposits. Granted new powers to thrift institutions. Raised the deposit insurance ceiling to $100,000.
    11. Depository Institutions Act of 1982 (P.L. 97-320, 96 STAT. 1469). Garn-St Germain. Expanded FDIC powers to assist troubled banks. Net Worth Certificate program. Expanded the powers of thrift institutions.
    12. Competitive Equality Banking Act of 1987 (P.L. 100-86, 101 STAT. 552). CEBA. Expedited funds availability. Recapitalized the Federal Savings & Loan Insurance Company (FSLIC). Expanded FDIC authority for open bank assistance transactions, including bridge banks.
    13. Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (P.L. 101-73, 103 STAT. 183). FIRREA – restore public confidence in the savings and loan industry. Abolished the Federal Savings & Loan Insurance Corporation (FSLIC), and the FDIC was given the responsibility of insuring the deposits of thrift institutions in its place. FDIC insurance fund created to cover thrifts was named the Savings Association Insurance Fund (SAIF), while the fund covering banks was called the Bank Insurance Fund (BIF). Abolished the Federal Home Loan Bank Board. Two new agencies, the Federal Housing Finance Board (FHFB) and the Office of Thrift Supervision (OTS), were created to replace it. FIRREA created RTC as a temporary agency of the government. The RTC was given the responsibility of managing and disposing of the assets of failed institutions.
    14. Crime Control Act of 1990 (P.L. 101-647, 104 STAT. 4789). Title XXV of the Crime Control Act, known as the Comprehensive Thrift and Bank Fraud Prosecution and Taxpayer Recovery Act of 1990, greatly expanded the authority of Federal regulators to combat financial fraud.
    15. Federal Deposit Insurance Corporation Improvement Act of 1991 (P.L. 102-242, 105 STAT. 2236). FDICIA greatly increased the powers and authority of the FDIC. Major provisions recapitalized the Bank Insurance Fund and allowed the FDIC to strengthen the fund by borrowing from the Treasury. The act mandated a least-cost resolution method and prompt resolution approach to problem and failing banks and ordered the creation of a risk-based deposit insurance assessment scheme. Brokered deposits were restricted, as were the non-bank activities of insured state banks. FDICIA created new supervisory and regulatory examination standards and put forth new capital requirements for banks.
    16. Housing and Community Development Act of 1992 (P.L. 102-550, 106 STAT. 3672). Established regulatory structure for government-sponsored enterprises (GSEs), combated money laundering, and provided regulatory relief to financial institutions.
    17. RTC Completion Act (P.L. 103-204, 107 STAT. 2369.
    18. Riegle Community Development and Regulatory Improvement Act of 1994 (P.L. 103-325, 108 STAT. 2160). Established a Community Development Financial Institutions Fund, a wholly owned government corporation that would provide financial and technical assistance to CDFIs.
    19. Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (P.L. 103-328, 108 STAT. 2338). Permits adequately capitalized and managed bank holding companies to acquire banks in any.
    20. Economic Growth and Regulatory Paperwork Reduction Act of 1996 (P.L. 104-208, 110 STAT. 3009
    21. Gramm-Leach-Bliley Act of 1999 (P.L. 106-102, 113 STAT 1338) Repeals the Glass Steagall Act of 1933. Allows national banks to underwrite municipal bonds. .
    22. International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001* (P.L. 107-56) The law requires financial institutions to establish anti-money laundering programs and imposes various standards on money-transmitting businesses.
    23. Sarbanes-Oxley Act of 2002 (P.L. 107-204) Sarbanes-Oxley establishes the Public Company Oversight Board to regulate public accounting firms that audit publicly traded companies. It prohibits such firms from providing other services to such companies along with the audit. It requires that CEOs and CFOs certify the annual and quarterly reports of publicly traded companies. The Act authorizes, and in some cases requires, that the Securities and Exchange Commission (SEC) issue rules governing audits.
    24. Fair and Accurate Credit Transactions Act of 2003* (P.L. 108-159)
    25. Dodd/Frank – In 2,300 pages the culmination of all that preceeded.

  • My opinion of liberals/progressives tells they think businesses and Republicans will to act in whatever manner necessary to make Obama look bad.

    For example, today the racists are selling off the NYSE just to cause people to think that Obama’s socialist agenda is not salutary. The villains!

  • I think you ought to read the documents. It still stands that Progressivism is utopian and as such denies original sin and by extension Jesus Christ. Their was never any teaching allowing socialistic capitalism. What is that ? Socialism and Communism and Progressivism are condemned. Subsidiarity is what is approved. The means of production owned by working men is approved. Re-distribution of wealth is condemned. Moreover what is socialistic capitalism ? Do you mean Distributism written about by Chesterton and Belloc ? Glenn Beck has nothing to do with me, I was taught by the Church prior to Vatican II in the 1950’s. The Church can not change it is until the end of this age, and no lib modernist influence has any place in the Church.

  • Humanistic ideal: “Man is the measure of all things and that our job is to make life worth living.”

    “But it is not necessary here to argue whether the other-worldly or the humanistic ideal is ‘higher.’ The point is that they are incompatible. One must choose between God and Man, and all ‘radicals’ and ‘progressives’ from the mildest liberal . . . have in effect chosen Man.”

    Orwell: “Reflections on Gandhi”

  • @Tim McCarthy Doesn’t subsidiarity imply a kind of involvement of the government in for instance health care? Helping society organise systems like that?

  • The most important goal of business is survival. If a business does not survive it can do no good or anything. The main goal of a progressive politician is to get elected; just like his or her conservative counterpart. Ergo, he or she will do or say whatever it takes to stay in office. Why state the obvious. Everybody knows that business people or politicians or bureaucrats driven by fear or lust for power or greed make poor choices that harm themselves and many others and then try to cover their tracks. On the other hand great leaders driven by Faith, Hope and Love make inspired choices that enrich themselves and the world at large. Let’s quit bemoaning human weakness and spread the One True Faith that will once again make a positive difference.

  • @ Richard. No it doesn’t. It means the decision should be taken as close to the action as possible. No Federal nothing unless it can not be resolved at the lowest level. For example parents decide what their children are taught not the Federal Government. But to the contrary the Federal Government should maintain interstate roads. They should regulate interstate trade, getting rid of obstacles for the free flow of commerce. There is no reason not that by applying subsidiarity and free market principles we couldn’t have better cheaper health insurance than what is currently going on. I’m not for turning back the clock, but if we took a look at how the laws were back then and adapted them to now we would be better off. On the one hand we have the party of death, and on the other the zionist neo-cons, and to paraphrase Fr. Malachi Martin when asked who he’d vote for Kerry or Bush he said he intended to be in St. Pats in NYC praying God would deliver us from both of those evils. Progressives are the enemies of the Church.

  • Without the assistance of government, business is shackled by the consumer. If the consumer is vicious, the business will be vicious. If the consumer is virtuous, the business will be virtuous.

    Government has a role; however, a vicious electorate will elect a vicious government and business will secure its authority through the power of the gun. Then there is no check on evil.

    Progressives, especially well-intentioned progressives are dangerous and destructive.

    Capitalists, as capitalism has come to be practiced are corporatists. They secure profits and eliminate competition with the power of the guns of government.

    To think that modern capitalists and progressives are different is simply foolish – they are exactly the same. Big Business and State Socialism are very much alike, especially Big Business – Chesterton.

    A government of virtuous men will curtail our disordered appetites and leave the natural free market to serve. No one goes into business, in a genuinely free market, unless they think they have a way to serve others and their profit is the measure of the degree of success they achieve in serving others.

    In a progressive corporatist capitalist construct only those with the lust for power will go into business and should anyone else manage to get in, they will be crushed by the corporate government.

    Debating capitalism, socialism, progressivism, etc. in the current paradigm is a fools errand. The terms we are using are incorrect, the intentions are masked and the idea of Christian justice doesn’t enter into the equation.

    Progressive aren’t cynical about business. Progressives are very much in favor of business provided they control consumer choices – no happy meals with toys, plenty of prescription drugs with deadly side effect, no guns in the hands of the common man, the right to murder a human being simply because of their current location – inside the womb or in the nursing home. They also want to control the businesses – no free market in insurance, managed pools of mandatory insurance instead, no parochial schools, plenty of government indoctrination centers.

    This is the stuff of a ‘scientific dictatorship’, one in which the slaves enjoy their servitude. It is a technological feudal system – we are the serfs and the progressives are the lords. The first thing our lords must do is eliminate the only Lord we should have – His Name is Jesus Christ.

    No King but Jesus Christ for me.

  • Psalm 146:3, “Put not your faith in princes . . . “

  • Someone help me out here – is there a reason the author of the article is not posted with the article – I have never seen a blog that doesn’t list the author. It is EXTREMELY annoying an unprofessional.

  • Jim, the author shows at the bottom of each post on the main page. The individual pages don’t for some reason (and I agree it’s unfortunate, but it’s not that big of a deal once you know where to look). Blackadder was the author of this post.

  • “It is EXTREMELY annoying an unprofessional.”

    Professional? Jim, we are just a rag-tag bunch of unpaid volunteers! 🙂

    As RL said you can see the authors on the main page for each post before clicking on the post. Alternatively, on the main page clicking on a contributor’s name will bring up all the posts of the contributor clicked on.

  • That businesses optimize is a useful assumption in constructing ideal types. I think you will find in practice that businesses satisfice rather than optimize.

    In the case of wage and hour laws, rules on the terms on consumer credit, and the regime in health care finance, public policy imposed costs. Parties to economic transactions make adjustments which distribute the costs between workers, proprietors, and customers. Some of the politicos who imposed those costs did so with the assumption that proprietors would eat all the new costs.

    It may be that these pols are insufficiently cynical. It may also be that they are ignorant or have not come to the realization that other people have their own agendas and their own fish to fry and are not merely characters in Henry Waxman’s doll house. I come from Upstate New York. We have twelve members of Congress. Perhaps four have some familiarity with business or economics from the occupations they have followed or from academic study. Ignorant would seem likely. The extent of narcissism would be harder to determine.

  • After reading this discussion I’m baffled by the republican party. They seem to get the vote of most serious christians (and rightly so, as they are against abortion), but they often seem very unchristian. Seen from Europe I get the impression that they are often a little xenophobic and very warlike. Also the ties politicians in the United States often have with the business world seems very unhealthy for a democracy.
    Are these impressions just wrong? BTW the presidential candidates are obviously the most visible in Europe, so that’s most of all where I’m basing these conclusions on.

  • “Are these impressions just wrong?”


  • ““Are these impressions just wrong?”



  • American Knight’s analysis is spot on. The question is how do we affect real Catholic change. The right are corporatists or zionist trotskyites ( Krystal and Strauss founders of neo con were trotskyites first)
    The Dems are the party of death and it matters little which modifier you use; liberal, socialist, or progressive. My latest suggestion is to keep throwing the incumbents out until they listen to us.
    We are to bring forth the Social Kingship of Christ, not play patty cake with evangelicals that think they are bringing the latter day rain.

  • I find it difficult to understand what this blog post has to do with Catholicism. Following the author’s logic, we should abolish minimum wage, indeed, all regulation of business, because it will affect prices. And it is of course not true that “progressives” are surprised by the reactions of (certain) businesses. If I may quote from your own comments’ policy:
    “I will not exaggerate others’ beliefs nor make unfounded prejudicial assumptions based on labels, categories, or stereotypes. I will always extend the benefit of the doubt. (Ephesians 4:29)”

  • Perhaps a better title for this post would have been “Progressives Are Not Skeptical Enough Of Business.” You see, there’s a big difference between being skeptical and being cynical.

    It’s OK to have a healthy skepticism of business, government, or even (up to a point) the Church. Ronald Reagan’s “trust, but verify” rule encapsulates that quite well. Blind and unquestioning faith in the fallen human beings who comprise any institution usually leads to trouble. Being prepared for the POSSIBILITY that one might be decieved, or that the other party has ulterior motives, doesn’t hurt.

    However, that is not the same as cynicism — the attitude that automatically ASSUMES people or institutions to be stupid, evil, or corrupt until (or even if) proven otherwise, and never expects any better from them. Cynicism, like flippancy (an attitude that automatically treats everything as a joke) dulls the intellect instead of sharpening it, and if unchecked turns into a cancerous contempt for others that is extremely toxic to one’s spirtual life.

  • “Seen from Europe I get the impression that (the Republican party) are often xenophobic and very warlike… Are these impressions just wrong?”

    What you are seeing, Richard, is a focus on the most extreme elements of the conservative movement/Republican Party. Every movement or political faction has its “fringe” elements, which don’t represent the majority of people involved, but which unfortunately tend to attract most of the media attention. I’m sure the same thing happens in your country.

    In fact, we in America probably get an equally simplistic, stereotyped or distorted view from OUR media of what’s happening in Europe and elsewhere in the world. It’s just the nature of the news media to do that. I hope that answers your question.

  • America is large and not Europe, though our politicos wish it were and work to change it into it. Look at the stats when this country was strong and wealthy after the last war we did not export but 5% of GDP. We made all kinds of things and now we do not. This is key to prosperity we make things to create wealth we do not take in other’s laundry that’s called service. It is parasitic. This is part of the reason for this crisis we have more parasites than are healthy for a political organism. We must rid the
    body of these parasitic diseases and promote healthy activities like small businesses, while getting rid of the terminal diseases like the Federal Reserve and fractional banking, the IRS, reduce the Federal Government to about 10% of it’s current size. Well you get the idea. We need to stop supporting Europe and pull all of our Nato troops and war machines out. Let the Russians take over. The EU has put obstacles in the way of American free trade in Europe so have a nice day, we are out of there. We can do it alone just like we did in the past and be the wealthiest country on the globe. The US is fighting a proxy war for the EU, or the Mohammedans would have taken over the Continent due to their physical superiority to the fighting forces in the EU. Remember France it was on TV and the French police looked like little skinny girls and could not control the Mohammedans. Fortress America with Catholic Ghettos are what we need again.

  • Tim,

    I agree on many of your points especially the Fed and fractional-reserve banking (usury); however, I would not call service oriented businesses parasitic. All businesses serve, some provide and intangible benefit, some provide manufactured goods, some facilitate (service). All are legitimate; however, we do need to get back to having a manufacturing base, not because there is something wrong with service, but because wealth is created by mixing man’s labor (with the intent on sanctification) with God’s creation for His glory.

    In truth the USA barely needs to import anything and we should be exporting our massive surplus to help the world and enculturate the world to freedom.

    As for letting the Russians take over – I am not cool with that at all. I do think we need to stop our imperial military and have the biggest baddest military around, but not send them anywhere without a firm purpose for defeating an enemy – utterly defeating an enemy. Our military should not be the policeman of the EU, we should not be nation-building and we should most certainly not be using our soldiers within the borders of the USA (on the borders – I am all for that). That being said, we cannot create a vacuum because the Russians, the Muslims and the Chinese will fill it – we can’t have that.

  • We have no surplus to export. We don’t make anything any more. Agri-business has killed vegetable farming we export corn syrup, soy oil, corn oil, etc. We need to import everything, we need food, we need clothes, we need tv’s nothing is made here any more.
    The service industries like accounting are now counted as part of the GNP thanks to Billy Clinton. Accountants do not make anything they count what has been done. This is perverse. It adds no wealth. Service business are a cost of manufacturing which produces wealth. They do not create wealth they suck it out of the economy, but they are clean jobs for college educated clerks.
    The most important thing is this the Chastisement which Our Lady explained at Fatima has not been fulfilled and Russia has not been consecrated. This chastisement which is coming will be worse than the Deluge.

    We have protected Europe it is time they grew up. If they can protect themselves Russia will not take over but I’m betting on Russia, because EU is effeminate

  • @tim mccarthy Russian is Orthodox now, and the EU atheist, so, it’d be an improvement.

  • Tim,

    Most accountants are progressives because they earn their livelihood as a result of burdensome government regulation and graduated income tax scheme. However, their are some services that are useful. Retail is one of those. Most people purchase the goods we used to manufacture through service retailers. Financial services professionals are usually progressives too because they tend to favor the evil Fed and corporatism. Some actually help people make smart decision about the stewardship of their wealth, sadly those are few and far between.

    Not having a manufacturing base is part of the globalization plan to erode the sovereignty of the United States of America. The intent is to kill the shining city on the mountain and it eventually will happen, but it does not have to be now.

    The kings of the earth who had intercourse with her in their wantonness will weep and mourn over her when they see the smoke of her pyre.
    They will keep their distance for fear of the torment inflicted on her, and they will say: “Alas, alas, great city, Babylon, mighty city. In one hour your judgment has come.”
    The merchants of the earth will weep and mourn for her, because there will be no more markets 5 for their cargo:
    their cargo of gold, silver, precious stones, and pearls; fine linen, purple silk, and scarlet cloth; fragrant wood of every kind, all articles of ivory and all articles of the most expensive wood, bronze, iron, and marble;
    cinnamon, spice, 6 incense, myrrh, and frankincense; wine, olive oil, fine flour, and wheat; cattle and sheep, horses and chariots, and slaves, that is, human beings.
    “The fruit you craved has left you. All your luxury and splendor are gone, never again will one find them.”
    The merchants who deal in these goods, who grew rich from her, will keep their distance for fear of the torment inflicted on her. Weeping and mourning,
    they cry out: “Alas, alas, great city, wearing fine linen, purple and scarlet, adorned (in) gold, precious stones, and pearls.
    In one hour this great wealth has been ruined.” Every captain of a ship, every traveler at sea, sailors, and seafaring merchants stood at a distance
    and cried out when they saw the smoke of her pyre, “What city could compare with the great city?”
    They threw dust on their heads and cried out, weeping and mourning: “Alas, alas, great city, in which all who had ships at sea grew rich from her wealth. In one hour she has been ruined.
    Rejoice over her, heaven, you holy ones, apostles, and prophets. For God has judged your case against her.” – Apoc 18:10-20

  • The lunacy on this blog is beyond belief. Certainly beyond catholic belief.

  • Why thank you for your kind remark Professor Simons. I am sure you are used to an ideological spectrum at Dartmouth that goes from far left to lunatic left, so I can understand your distress at being exposed to uncongenial currents of thought.

  • I understand the importance of having a strong manufacturing, and for that matter an agricultural, base to the economy — i.e. making, selling, and buying stuff — but since when are service jobs now classified as being bad and unnecessary? Doesn’t this imply that the ONLY “real” economic wealth or value lies in material goods? Aren’t knowledge, independence, skill, and just plain enjoyment of life economic goods as well?

    Service jobs are simply doing for others what they do not have the time, ability, or inclination to do for themselves — thereby freeing them to devote their time to do the things they CAN do, or want to do. When this comes about as a result of genuine demand — and isn’t artificially forced on people through excessive government regulation or other causes — how is that bad? And finally, isn’t the notion that real wealth only lies in “things” and not in serving others basically un-Christian?

  • Spot on Elaine. Although material wealth is measured only by the things produced, so in that sense service isn’t wealth; however, some services enhance wealth. Education and apprenticeship for example, without those how will most people have any idea how to create material wealth?

    As for the true wealth – we know that can’t be measured.

    Look where your treasure is, for there your heart will be also.

  • Simons,

    Care to elaborate? Levying an attack like that without any substance, hmm? When did that stop being beyond Catholic belief?

    You may have a little something in your eye.

  • We have no surplus to export. We don’t make anything any more.

    This is a myth, albeit a widespread one. America’s manufacturing output is actually much much higher now than in previous decades.

    What trips people up is that while the U.S. is making more stuff than ever before, we’ve gotten so efficient at doing it that it takes fewer people than before, so manufacturing employment has declined even as output has risen (the same is true, btw, for agriculture).

  • Bravo BA! That is a simple fact, but one that seems to elude most people.

  • I was a Manufacturing Engineer for thirty five years. I worked start-ups and turnarounds I am the wrong guy to try to bamboozle. This idea that we make as much now as then is another Progressive piece of bent truth. The dollars as a number have remained the same but our share of the industry as a percentage has diminished. I saw it, I fought against it. A single aside in the Chicago Metro Area when I started we had 1200 job shops there. We now have less than 100. These companies were forced out of business by the progressive force of ISO conformance to the EU. The regs were intended to put America out of business. Nafta sent the rest of the jobs to China and India. It is all about how little they pay them, it has nothing to do with anything but that.
    What you really need to do is stop getting you info from the liberal news, watch fox news, but not the talking heads like Hannity etc, they are apostate Catholics which endorse contraception.

  • This idea that we make as much now as then is another Progressive piece of bent truth. The dollars as a number have remained the same but our share of the industry as a percentage has diminished. I saw it, I fought against it. A single aside in the Chicago Metro Area when I started we had 1200 job shops there. We now have less than 100.

    I’m not saying that the U.S. makes as much now as in the past. It makes more. That’s just a fact, as the chart I linked to illustrates.

    It’s true that as a percentage of the world total, U.S. manufacturing output has declined in recent decades. But it doesn’t follow from this that U.S. manufacturing output has declined. Suppose, for example, that total manufacturing output worldwide doubles while America’s share of output falls from 20% to 15%. Our share of industry as a percentage would diminish, but we would still be making more stuff and before. This is basically what has happened (though the numbers are just for purposes of the example).

    Likewise, as I noted previously, a decline in manufacturing employment doesn’t imply a decline in manufacturing output. Indeed, one of the reasons manufacturing employment has fallen is that the manufacturing sector has become so productive that they can produce lots more stuff with fewer people.

  • Today’s Sunday I’m taking a day of rest.

  • A single aside in the Chicago Metro Area when I started we had 1200 job shops there. We now have less than 100. These companies were forced out of business by the progressive force of ISO conformance to the EU.

    In addition to Blackadder’s point, which is undeniable, it’s worth noting that the upper midwest does not the entire US make (although in regards to manufacturing they’re used to thinking so.) The amount of manufacturing employment in the South and in Texas has increased over the last couple decades, even as the Great Lakes states have seen decreases in manufacturing employment (though not necessarily output.)

0 Responses to Just How Much Is a Just Wage?

  • These are interesting formulations to find out what a just wage might be today.

    But, one would have to add in the college expense factor for today’s times. In Father John Ryan’s time it was not a necessity for people to attend college or a trade school to earn a decent living wage. Now attendance at either college or trade school is a necessity and the sum per month that one pays for their loans can be quite high.

    I will be checking into Father Ryan’s book soon.

  • Father John Ryan’s time it was not a necessity for people to attend college or a trade school to earn a decent living wage. Now attendance at either college or trade school is a necessity.

    I’m pretty sure you don’t need a college education to earn $6.15 an hour.

  • Even if a single person lived on $6.15 an hour that wage would be very hard to meet all the necessities of life nowadays. With this low wage a single person and especially a family would need government help. While help from the government is one thing for a temporary period of time, I don’t think that $6.15 per hour would be considered a fair wage to live on especially when it seems evident that one would need permanent assistance from the government if the person/family tried living on $6.15 per hour. This seems more like a college student’s wage or a teenager who lives at home with his parents.

    If a family meets the minimum cost of living in a given country is that really acceptable according to Catholic Social teaching?

  • Interesting– federal minimum wage is over a dollar more than that.

  • I haven’t read or even heard of Father Ryan’s book before, but it’s interesting that he actually made an effort to define how much a living wage was. It’s also interesting that his calculations, even when adjusted for inflation, still come out well below the current federal minimum wage. Also, his hourly figures are somewhat skewed by the fact that the average work week was considerably longer in his time (48-60 hours, as opposed to 40 today), meaning the baseline annual wage figure was being spread out over more hours.

    I don’t know how he arrived at his figures for 1919 but I’m guessing they probably did NOT include the cost of owning an automobile, since that was not yet considered a “necessity” for most people, especially in cities where public transportation via streetcars and trains was readily available. If he included electric and telephone service in his estimates (those would have been available in urban areas but many rural areas lacked those services well into the ’20s and ’30s), well, that would have been for a very rudimentary level of service — just a few lights and maybe one party-line phone line — nowhere near what most households require today for appliances and electronics. The main household heating fuels at the time would have been coal or wood, and I’m not sure how those costs would compare to heating oil or natural gas today.

    In general I think a living wage should be paid for all full-time jobs that require education or training beyond high school. But, did Father Ryan ever tackle the question of whether unskilled entry-level jobs that were usually performed by children, teenagers, or housewives simply to supplement their family income, or provide pocket money for themselves since they did not have to support themselves, also required a living wage? If it were morally obligatory to pay the kid who mows your grass every week or the girl who babysits your kids while you go to a movie a “living wage,” very few people would be able to afford such services, and young people would lose the opportunity to gain valuable experience in handling their own money.

  • One of the significant differences between today and 1900 is housing expense. In 1900, I’ve seen figures between $400 and $4000 for housing. If we take a 1/3 of your proposed living wage today for housing, we end up with ~$400 to go towards housing for 5 people. Using the federal poverty guideline, you end up with $700/m. There are quite a few places in the country where you will have extreme difficulty finding housing with that budget.

  • Not sure how accurate this is, but this site has a “time capsule” for 1918.
    Price of a Gallon of Milk $.55 (9.32, modern)
    Price of a Loaf of Bread $.10 (1.41, modern)

    Milk is artificially controlled, but even the most fancy-smancy organic stuff in glass bottle is maybe six bucks a gallon. I don’t know what the bread they had looked like, but bargain loafs can be gotten for .99c (those ones with the roman on the emblem?) and up to about six bucks for the fancy ones.

    It also says the cost of a home was 4,821.00, which would be $68,102.96 in modern costs; There are houses at that price…. (Chose Spokane because they’re in neither a boom nor a bust.)

  • They didn’t have all the non-wage employment costs back then, either, did they? I know the shorthand formula I’ve been told for small businesses is figure hiring someone will cost half again their salary. (One of those radio finance shows where folks call in, so who knows.)

  • One of the significant differences between today and 1900 is housing expense. In 1900, I’ve seen figures between $400 and $4000 for housing.

    If you look at an inflation-adjusted Case-Shiller, it looks like real housing prices were only a little higher in 2000 than they would have been in 1900, though there were some sizable swings in the middle (and of course average house size has more than doubled over the period).

  • Even if a single person lived on $6.15 an hour that wage would be very hard to meet all the necessities of life nowadays.

    No doubt what Father Ryan (and others writing at the time) would have considered a normal and sufficient standard of living would now be considered intolerable poverty. Standards for what is sufficient seem to be a bit like our shadow; as we move forward it follows right along behind us. Which suggests that it may not be even possible to have a society where everyone receives a “living wage.”

  • “I don’t know what the bread they had looked like”

    In 1919 it still came in solid loaves that purchasers had to slice themselves. Pre-sliced bread was first marketed in the late 1920s, and was such a popular innovation that it prompted the expression “the greatest thing since sliced bread.”

  • That does help a bit, but I was thinking more like was it the size of a “bread loaf” you get from a loaf-tin, or a “bread loaf” you get at the store (think wonderbread) or the “bread loaf” that’s baked on a pan after being formed? How much bread was there, what sort of grain was it?

  • I’m pretty sure you don’t need a college education to earn $6.15 an hour.

    I’m sorry Teresa, BA’s retort gave me a good chuckle.

    If you’re willing to use the bus, split the rent with more than one person in an apartment, and not eat out, you certainly can live off of $6.15/hour.

    Maybe if you rent the couch for $100/mo, then it’s certainly possible to live off of that.

  • Btw, Father Ryan’s book is available for free via googlebooks.

  • I gather it was about the same size and shape as the bread loaves you see today. If you google “sliced bread”, you can find pictures of the 1928 newspaper advertisements for the very first bakery to sell sliced bread, the Chillicothe (Missouri) Baking Company. The loaves pictured look about the same as bread loaves today do. The town of Chillicothe, Mo., in fact, now bills itself as the “Home of Sliced Bread” and has an annual Bread Fest to commemorate its place in culinary history.

  • I don’t know how Fr. Ryan arrived as his figures but I would insist that a living wage be relative to the standards of the community one lives in. The entire purpose of a living war is to ensure that every man can live a life of dignity. You can live in Zimbabwe in dignity without running water. You can’t do that in America.

    And why use a family of 5 and not a family of 10? Are we supposed to let the family of 10 live off less than a living wage? A living wage necessary varies according to the number of dependents. Any family receiving less should be aided.

    Adjusting for inflation isn’t necessary the best way to adjust Fr. Ryan’s figures. Real GDP per capita grew faster than inflation. In other words, Americans got wealthier. Using Fr. Ryan’s figures today adjusted for inflation would be appropriate if real GDP per capita was stagnate for 89 years. In 1919, GDP per capita was $805. If you only adjust for inflation, that would be $9,897 today. That’s somewhere between Cuba and South Africa. So $6.15/hour would be an appropriate living wage for a family of 5, in Cuba.

    If instead we adjust for unskilled labor wage increase (4.24% annualized since 1919), $1,400 to $1,500 then would be $56,388 to $60,416. That’s probably closer to what Fr. Ryan had in mind.

    Based on rough calculations I did a few years back, I think the federal poverty guidelines are too low. For a single person, I think $14,000 is appropriate and $5,500 for each dependent. For a family of 5, that would be $35,500.

  • The (mid-range neighborhood, new complex, Tacoma, gated community) place across the road has two bedroom apartments “perfect for roommates” at $650/mo, and three for $1060. (Actual cost would be roughly 700 and 1100, assuming the worst case of everything–they’re run by the same company as ours.)

  • My dignity is unharmed by someone else having three new BMWs while I have a used minivan, or a bicycle.

  • Some want to provide everybody with a just wage. I think it should be done by government programs that could be expanded. But, first . . .

    One: Every charitable person wants everybody to earn a just wage that will allow all men (how sexist! the traditional head of the now-defunct nucular family) to support himself, his wife and children.

    Two: you probably cannot have a real-life economy where every man has a just wage. It is impossible in the real (even in the USSR, China, Cuba, Greece, Spain, Zimbabwe, etc.) world.

    Three: you may not condemn/demagogue the American, private sector because you cannot have numero One above. You cannot wage an unjust (nonviolent) war against your fellow citizens that own businesses. It is not charitable.

    Look it up. Don’t believe me. The federal government’s Internal Revenue Code has the “Earned Income Tax Credit.” It pays a negative tax (money for nothing from the government, i.e., my children and grandchildren) for a FAMILY man/person that files a tax return and has AGI below a set level. Try expanding that.

    PS: I can’t imagine that even this would be feasible in the volume needed, even without 50,000,000 more poor people coming in over the next 10 years.

  • Looks like 1910 is a funky year… it’s when they automated bread baking for the first time, so those loafs looked like now….

  • Adam Smith put it best.

    Wealth of Nations:

    By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But in the present times, through the greater part of Europe, a creditable day-laborer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct. Custom, in the same manner, has rendered leather shoes a necessary of life in England. The poorest creditable person of either sex would be ashamed to appear in public without them. In Scotland, custom has rendered them a necessary of life to the lowest order of men; but not to the same order of women, who may, without any discredit, walk about barefooted. In France they are necessaries neither to men nor to women, the lowest rank of both sexes appearing there publicly, without any discredit, sometimes in wooden shoes, and sometimes barefooted. Under necessaries, therefore, I comprehend not only those things which nature, but those things which the established rules of decency have rendered necessary to the lowest rank of people.

  • Thanks for the google book tip, Blackadder. I just downloaded the book and will read soon.

    Tito, I am glad you got a chuckle out of Blackadder’s retort. Blackadder’s response even gave me a laugh.

    It would seem that what is considered a just wage would depend on different variables such as inflation , GDP per capita, and varying prices for housing, food, etc. according to the various locations.

  • A wage “sufficient to enable [a man] to support himself, his wife and his children.”

    Whatever the income necessary, every child should be a member of a family housed with decency and dignity to enable it to grow up in a happy fellowship, without want for food, or clothing, or overcrowding, or slum surroundings. And every child should have the opportunity to attend school and/or college to attain its full development. Father Ryan knew not that our secular society would sacrifice children so as not to be inconvenienced. If he had known of the heinous sacrifice of children to occur in the future, it seems to me that a “just wage” would have been deemed irrelevant to him. I think his computations might have been on the assumption that the family would be inspired by faith in God and focused on worship. He never envisioned the present breakdown of family and society.

  • RR-
    has nothing to do with your attempt to shift to GDP, or relative wealth of the nation.

    Feel free to define what you think is the abject minimum someone needs for a minimum wage job but which wasn’t needed back then.

  • I’d consider a phone a necessity today. Electricity, indoor plumbing, a refrigerator, and education through high school. Do you disagree?

  • To be most efficient, I’d add in some sort of POV– even if it’s a motorcycle with a sidecar. There’s just too many things you need a vehicle for if you have a family, and transportation opens up a much wider range of jobs.
    POSSIBLY a bicycle with a cart would work, but I’m not sure it’s feasible for buying in bulk or getting to the doctor with three kids.
    (Buying in bulk for two on foot was not possible in any affordable housing, and public transportation is often not safe for someone who would be as tempting a target as a woman with three small children and a massive load of groceries.)

    Basic medical care is required for the gov’t schools– I believe there is help for this, though I can’t remember if it’s gov’t or private.

    It might be cheaper to use a track phone rather than having a line in the house– I’ve never had a land line, let alone an incoming-and-local-only one.

    Clothing–can be gotten from Goodwill etc at very decent prices, and often you can find footwear that would be rather expensive for a good price.

  • RR,

    “I would insist that a living wage be relative to the standards of the community one lives in. The entire purpose of a living wa[ge] is to ensure that every man can live a life of dignity.”

    Hmm. We agree this time. There’s no point in talking about a “just wage” unless these relative factors are taken into account.

    Of course, I favor reducing dependency on wages and replacing it with various forms of income earned through direct ownership of property.

    A “wage” is the market price of labor. Instead of talking about a just “wage”, we ought to talk about a just income and how it can be acquired.

  • I can imagine the shock and incredulity on the faces of my clients if I upped my fees to provide what I think is a “just fee” for my legal services. I would see the look on their faces of course only until they vanished in search of other attorneys who could provide them with legal services at what they considered a more reasonable cost according to prevailing market conditions. The problem with the concept of a “just wage” is that unless it is simply for informational purposes or philosophical musings, it takes a huge state to enforce it. Perhaps a better path is for most people, those able to compete in the market place, to arm themselves with the education, training and work experience necessary to allow themselves to get the highest income possible for the services they provide. Private charity, and government assistance, can aid those unable to compete.

  • Fr. Ryan offered that justice required a wage floor which exceeded the earnings of 48% of the male workforce and (scribbling on the back-of-the-envelope) would have been somewhere in the range of 2/3d of the national mean of a country already quite affluent by historical standards (though befouled). Catholic Social Teaching is a work in progress…

  • Well, there ARE things we can do to make wages more likely to support a family– remove regulations that currently prevent the simple, zero-experience jobs from being done by children and the deeply disabled for a low price, control the supply of labor (not in the crazy scifi or China way, but by controlling our borders– in terms of people and goods), lower the cost of raising children by removing tax related expenses to it, make unions for only one business instead of several (as those that ‘serve’ several businesses have less worry if one goes out of business), lower the costs of business (my mom does crafting out of the house in addition to a full time job- maybe five, ten shows a year, and her profits are lower than the gov’t costs alone), reform lawsuits so they cannot be used as a source of income or a harassment tool, lower the level of government control as much as possible (local politicians have a MUCH higher level of risk if they target a local industry for cheap grace or benefit)….

    There are two ways to try to get a fair wage:
    *control everything and enforce your goal (there will still be an underground economy, unless you’re in a police state such as the world has not yet seen)
    *try to set up a situation where your goals can most easily be achieved without triggering a profit-impulse towards subverting your goals
    Basically, forced and chosen; trying to avoid a false choice, but you either get to choose to do good or you’re forced to do it, so I think I managed….

    Sadly, our current situation falls into the first one, since we’ve got minimum wage that at least meets the theory’s level of support, but that law is widely subverted (under-the-counter pay, not legally hiring babysitters and lawn-mowing teens)

    {Since we haven’t figured out a reasonable cost to live, I’m using the only number we have.}

  • LOL so we are into child labor and allowing big businesses get away with it again! Yes, that will help with the money! Child labor! Of course that will just put more money into the system making each person’s contribution that much less, just as it happened when it became two-income families! So let’s make it tougher on one-income wage earners!

  • Another factor to consider is that most families don’t have three children and that both spouses work. That may not be what Catholics want but it is a fact. Catholics also have to realize that while current standards dictate a car, phone etc., there are things we really don’t need. We need a refrigerator but we really don’t need a phone. Certainly don’t need iPods and air conditioning. Don’t need TV, cable, game systems, and many people do not need cars. Many do not need to own homes.
    There are a lot of “needs” that are ultimately wants. Even in an affluent society. And that is a Catholic perspective.

  • Most forms of employment require a way to quickly contact the worker when he is not a work– even fast food workers require a phone of some sort.

  • That’s become a manufactured need. If we are talking about restructuring society, let’s talk about real needs. Most people don’t need to be contacted by work quickly, that’s what some may want but its not a need. Fast food workers don’t really need a phone. If the manager of the McDonalds needs a replacement he can do what people did in the past – make due with who he had and do the line work himself. That’s what happened when McDonalds first started.

  • Who said anything about restructuring society? Government or law, yes, but society is notoriously resistant to control.

  • I’m talking about restructuring what we perceive of as needs and that can happen at the personal level. I can recognize I don’t need cable, iPods and other things. Individuals can, and do, live without phones. We don’t need air conditioning to survive. We don’t need lots of things to survive. If people begin to live that way, then society will follow.

  • Most forms of employment require a way to quickly contact the worker when he is not a work– even fast food workers require a phone of some sort.

    Father Ryan thought that telephones were an inappropriate luxury. Nowadays, of course, it’s hard to imagine life without one (even kids in Africa have cell phones).

  • Perhaps hard to imagine life without one, but possible to live life without one.

  • It’s possible to live life without indoor plumbing and electricity, just as my family did for some twenty plus years after Fr. Ryan was writing. (I actually know the exact year my mom’s family first got indoor plumbing– ’58, because they moved that year.)

    A lot of places you can’t live without air conditioning– the solutions that work when you’re in a two-room shack don’t work when you’re in an apartment complex, and heat can kill as easily as cold. (possibly easier, just less often– depends on if you mean “distance outside of the comfortable norm” or “likelihood it will kill you, on average”; a 45* rise in temp over “room temp” puts you at 120, while the same drop is 35*– which one shuts down cities?)

    Laws aside, there’s no reason a five-person family can’t live in a one-room apartment, even if current population levels mean it would have to have indoor plumbing, power and (in some or most areas) some sort of air conditioning.

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  • Having lived in the South for years without AC as well as the Southwest for 18 without, it is possible to live without.

  • I agree that AC is a luxury, especially since I’m living without it right now. A phone is a necessity since most, if not all places of employment, need a contact number to hire you and then to get in touch with you during your employment with that company. Cell phones (even long distance land lines are not necessary) cable, and the internet are not necessities. There are community centers and libraries that have free or low-cost internet access for those who do not have internet access in their homes.

  • I for one would be much more impressed with this austerity blather about how little one needs if the people proposing it would voluntarily live it. I’m afraid reading much of this is like hearing virgins discuss sex.

  • Its kinda like those who talk about redistribution who don’t pay income taxes.

  • “Father Ryan thought that telephones were an inappropriate luxury.”

    My paternal grandfather also thought that. My grandmother did’t get a phone until after my grandfather’s death in 73. They also didn’t have a car, and didn’t have an indoor toilet until 68. Raising six kids on what a shoemaker could make in the Great Depression in Paris, Illinois left habits of thrift for a lifetime.

  • I think, in general, a pre-paid cell phone provides a family a greater value than the money saved by a land-line. An AC isn’t necessary in most circumstances but try telling your kid to do his homework in 120 degree weather. Possible? Yes. But the cost of bringing the temperature down to 85 for a few hours may be less than the value even the poor place on the comfort and increased productivity.

  • I’ll agree AC helps with productivity. Don’t know how people worked in offices in the summer prior to AC. Do know working outdoors in the summer heat in the South is a major drain.

  • Its kinda like those who talk about redistribution who don’t pay income taxes.


  • Don’t know about how much they pay. I’m thinking more along the lines of the roughly half of Americans who don’t pay any or minimal income taxes. That would include a lot of our Academic betters.

  • I’m thinking more along the lines of the roughly half of Americans who don’t pay any or minimal income taxes.

    The reason so many people pay no income tax is because of the child tax credit. IIRC, M.Z. has several kids, and so it wouldn’t surprise me if he fell into that category. On the other hand, I’ve always found the idea of conservatives complaining that people aren’t paying enough taxes a bit unseemly, particularly given the pro-family aspect of the thing.

  • I don’t have a problem with people not having high taxes. Just pointing out that some who speak the loudest for redistribution pay little if any taxes. Kinda like virgins talking about sex.

  • I for one would be much more impressed with this austerity blather about how little one needs if the people proposing it would voluntarily live it.

    No one is proposing that austerity be mandatory or morally required. The point is, rather, to think about how much money people have a right to demand that other people give them. Clearly if Peter is demanding that Paul give him free money, Paul has a right to think about how much money Peter really needs.

  • And needless to say, Paul isn’t obliged in any way to live at the same level of austerity that Peter does (when living on money taken from Paul).

  • JD,
    Unfortunately, I don’t think that is needless to say at all.

  • Keeping a baby in a house that’s 100+ degrees is likely to make you a family of four, one way or another, especially when the least expensive housing doesn’t have the option of a crossbreeze for cooling. Ditto for older family members, or anyone else who is not in good normal health. (Thus, why I used words like “some” and pointed out that housing now is different from housing then.) Look at the deaths from that heat wave in France a few years back, or the emergency “cooling centers” in Seattle just last week. (I wouldn’t put Seattle on a list of places that need it to live, since our dangerously hot days are limited enough that you can set everything aside to go find a public place that is cooler, it’s just a recent example of high-profile response to heat risk.)

    arguments are not more or less accurate by who is offering them; it’s more than a little odd to see the traditional slam against Catholic priests talking about chastity and marriage on a site like this. If the root of someone’s argument is their own experience, then it’s about them, but there’s nothing inherently inaccurate about “virgins discussing sex.”

  • Just using MZ’s line for rhetorical effect. I actually have no problems with virgins discussing sex.

  • AC is not a luxury in Phoenix, let me tell you – old people can die without it, and even healthy people can easily succumb to heat stroke.

    Any assessment of necessities has to take in the society in which one lives – to simply exist physically at some location within a society is not enough, a person has to be able to participate to some minimal degree.

    Everyone needs a telephone, a means of transportation (even if its just a bus pass or a bike in some cases), I would say everyone needs a computer, though people without Internet could always use a public terminal. Certain appliances, electricity, plumbing, etc.

    I’m not saying it is the duty of the state to provide these things, but any discussion of “need” has to take them into account. Otherwise you’re just being silly.

  • “Don’t know how people worked in offices in the summer prior to AC.”

    I believe they had shorter hours, shut down for several days or more when it got dangerously hot, and I’m guessing, learned to have a much higher tolerance for sweat and body odor.

    “AC is not a luxury in Phoenix”

    I suspect that air conditioning is probably one of the biggest factors responsible for the economic prosperity of the Sun Belt states — that and the removal of racial segregation laws probably have done as much if not more to contribute to the economic growth of the South and Southwest as have low taxes and right to work laws.

  • Just so Elaine. People wouldn’t live there before AC and the vast majority of those that lived there prior to AC, well, lived there. But we were talking about a living wage for a husband and wife and the children they were raising. So again, they don’t really need AC even if the elderly might (or they might move to cooler climes.) I know. I lived in the Southwest without AC. Also in Southern Spain where almost nobody has AC. Hits 120 in spots during the summer.

    Agree not everyone needs a computer as those can be found in libraries. Phones used to be found throughout towns and cities. Once upon a time it took ten cents to work one and then 25 cents. If you didn’t have enough money could do something called a collect call. Those phones could easily make a comeback.

    Again, many things we want, not so much we need.

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