How The Government Thinks

One popular catch phrase nowadays is “thinking outside the box,” which refers to thinking beyond one’s normal purview. The next logical question is “how big is this box?” When it comes to the government, the various boxes are so small, one can only laugh. Unfortunately, there are so many boxes, there is no aspect of life not covered by a government box.

The government actually likes to make its boxes, or boundaries of responsibility, as small and numerous as possible. Building a house in Denver, for example, requires the approval of 9 separate departments, occupying 3 separate buildings.

Those are small boxes, but the regulatory small thinking goes nano whenever technology is concerned. The government, in general, regulates technology rather than markets. For example DSL and Cable modems are essentially the same thing in the eyes of consumers, but they are regulated entirely differently by the FCC. Likewise, cable TV and satellite TV are separate markets to the small box thinkers in Washington.

In the latest absurdity, one should not be surprised to learn that old fashioned radio and radio delivered over the internet are governed differently. Sure, they both deliver music to people. Sure, they are the same things based on different technologies, but shouldn’t the government treat them equally? Indeed, since internet radio doesn’t consume valuable radio spectrum, shouldn’t internet radio get a break?

Well, no. Internet stations pay a much higher royalty fee than satellite or old fashioned radio. Indeed, Pandora, one of the most popular internet radio stations, predicts they will go out of business if royalties are not corrected. The government alone is causing a burgeoning industry that provides valuable diversity in media content to shut down.

All this is another symptom of the government mentality – small minds in small boxes making damaging decisions. Since the nature of government gives no rewards for risk taking or “thinking outside the box,” don’t expect change any time soon. If an obscure government office can single handedly shut down internet radio, imagine what other harm is done every time we give a little more control of our lives to Washington.

Another Health Care Scam

Among the laundry list of Colorado constitutional amendments this fall, labor unions have put up Amendment 56, which forces businesses with more than 20 employees to pay for employee health care. The very concept of Amendment 56 exposes the cynical self interest of unions, and a willingness to sacrifice Colorado’s economy to their power agenda. Also, Amendment 56 shows how liberals believe that only the government knows what is best for regular people.

Unions operate under the basic assumption that employers are immovable, reliable, cash wells for their exploitation. Unions think that companies are a family and that employers must take care of employees as a part of a social compact.

While many CEOs give lip service to the stakeholder concept, those that do not deliver market returns for shareholders are quickly replaced with those that do. Employees are not stakeholders, and corporations are not families. Companies hire employees to provide essential services so the companies can profit. Whether an employee earns a high pay with no benefits or a lower pay with many benefits makes no difference to a company. Only the total cost to employ, including employer matching taxes, is the relevant measure.

This is why unions seek measures like minimum wage hikes and Amendment 56. They know that their above market compensation packages hurt the companies they infect. In order to keep non-union companies from outpacing union ones, they use their political influence to force union rules and compensation on all employers. This raises costs on all companies and reduces the competitive disparity with open shops. The real result is, of course, that most traditionally union jobs have moved overseas, beyond union political influence.

Forcing companies to pay for health care will not increase the compensation of employees, it will only shift the mix of pay vs. benefits more toward benefits. This is because the services of any employee are no more valuable to a company with or without Amendment 56. Companies will either lower cash wages or lay off employees to keep costs in line.

Some other likely results will be the relocation of mid sized companies to other states, the general avoidance of Colorado by companies looking to relocate or expand, smaller companies avoiding expansion, the layoff of marginally valuable employees, decreased wage growth, an increase in outsourcing, and an expanded black market for unregulated labor. Anything to keep labor costs competitive with other states and countries.

Despite these many troubles, unions are unconcerned. Their primary mission is to punish employers and employees who don’t want to participate in the union racket.

If simply mandating employee health care does not increase total employee compensation, the real result of Amendment 56 is essentially to force employees to buy health care whether they want it or not. Amendment 56 says that if you want a job in Colorado, you must buy health care.

Why punish people for working? Instead of requiring people to buy health care in order to work, why not require people to buy health care in order to drive a car? Why not health care before buying cable TV, or buying liquor, or buying Broncos Tickets, or taking a vacation? There are untold indulgences and frivolities other than employment that the government could use to strong arm people into buying health care.

So, please spread the word that Amendment 56 is a job killer, an economy stifler , and a union ploy to entrench their political power. Further, Amendment 56 is a cynical lie in that it pretends that employers will magically increase real employee compensation, and that employees are incapable of deciding how to spend their pay without government guidance.

How Wrong Can The GOP Be?

Many Republicans, and a few Democrats have fallen into immigrant bashing over the past few election cycles. Colorado voters are most familiar with Tom Tancredo, a retiring GOP Congressman who essentially calls for complete and strict enforcement of the US’s immigration laws. Such “just enforce the law” politicians essentially preach the deportation of every illegal worker in the US, about 12 million people. Even the isolated incident of an illegal who recently caused a fatal traffic accident has mobilized Colorado’s far left Governor, Bill Ritter, to take action on illegal immigration. The “deport them all” movement is, in fact, a xenophobic pandering to nativists who fear change and do not understand the immense benefits of immigrants to the US.

The crime of undocumented workers is to dream for a decent life in a great nation, to work hard for a reasonable wage, to contribute more than to take away. Such a crime is truly without victims. The penalty of deportation is more than the loss of a job and harsh trip back to a native land. Millions of illegals own homes and have US Citizen children. Deportation destroys families, depresses property values, and disrupts businesses.

Some myths of illegals must be debunked. Illegals, aside from the crime of working without a green card, are much less likely to commit serious crimes than native born citizens. Some fear that the open boarders of the US allow criminals or even terrorists to enter the country. Such threats exist because millions of otherwise honest illegals have entered along with thousands of criminals. If the US had an open immigration system available to the millions of illegals, they would surely use it, allowing police to focus on the remaining few criminals.

Illegals do not drain the US’s social services system. Most illegals pay the full range of taxes, but do not reap many of the associated rewards, such as unemployment insurance, social security, and medicare. In this regard, illegals contribute more than their share.

There is no evidence that illegals drive down wages. Nearly all illegals are paid above the minimum wage, and most work side by side with naturalized employees for the same wage. Supply and demand do influence wages, but the value of a worker’s skills is the primary long term determinant of pay. Illegals are valuable not only for competitive pay, but also for their hard work and dependability. Rather than drive down wages, competent new workers expand opportunity and increase the standard of living for everyone.

Most illegals do not experience poor work conditions. Indeed, immigrant workers have much better conditions than the labor exported to other nations. Unreasonable labor laws and unions have driven many jobs overseas where wages are extremely low and conditions sometimes are unsafe. Because labor is expensive and over regulated in the US, the entire manufacturing process is sent overseas, and the entire US suffers. Illegals in the US work on jobs such as construction and restaurants, where importing finished goods is impractical. At least in these fields, businesses can enjoy market labor costs while contributing to the domestic economy.

If immigration policy became fully open, there would not be a new flood of immigrants into the US. The doors are already open, and 12 million have already stepped in. Indeed, many immigrants have returned home in response to the recent tough economy, demonstrating that the US has already reached an equilibrium.

If undocumented workers cause no harm and contribute to society, why is punishing them such a hot political idea? The real cause for immigrant bashing is a latent desire to prevent change. People have feared the cultural influence of immigrants since the Irish flooded Boston and New York. Isolating immigrants such as the Irish, Polish, German, and Chinese has always failed. The cultural and ethnic face of the US is unrecognizable compared to 100 years ago, yet the US continues to be the best place on earth for the common man to work and live. The US has proven more than capable of assimilating cultures. Every time an American drinks Budweiser, eats pasta, dips a tortilla chip into salsa, or even eats an apple pie, he is unwittingly enjoying an ethnic treat assimilated since the founding of this country. Thank goodness, because the English culinary tradition is a worse crime than illegal immigration by far.

The correct response to the millions of illegal immigrants is to make them legal. The US should allow for a limitless influx of guest workers, provided they can demonstrate they are not criminals. This would only formalize the current reality. Open immigration is the real American way because it uplifts people, spreads prosperity, and demonstrates to the world the power of our way of life.

The greatest shame for the GOP is its failure to recognize that the cause of immigrant laborers is the cause of free enterprise, hard work, and opportunity. These are the values the GOP trots out for each election, yet they are turning their backs on principle to squeeze a few extra votes. The GOP should instead raise the flag for opportunity and principle by supporting immigration reform and rejecting the various myths behind immigrant bashing.