Monday, April 27, 2015

The 2015 British General Election

British party leaders debate on April 2. - Euronews
On May 5, Britons will go to vote for which party will lead their country for the next five years. This election will decided the direction for the United Kingdom and is important to us because Americans should want a strong ally in Europe on both the domestic and foreign policy fronts. I want to explain how British general elections work because they are lot different than American presidential elections. The British House of Commons is basically one huge House of Representatives. This legislative body, which has 650 total members, is dominant in passing legislation. There are no major checks and balances in the British system.

British voters vote based on party more than anything else, whereas in the United States we vote based on individual at the presidential level. British political parties nominate between their members who the party leader will be. This is person who can best articulate their message. The party that wins the most seats usually gets their party leader to be prime minister and then it is his or her job to manage and pass legislation that the party wants (as well as what they themselves might want). The current major British political parties are:

The Conservative Party - The center-right political party of the UK led by David Cameron, who is currently the prime minister. They have 302 seats. They often heavily argue for balanced budgets and fiscal responsibility, but aren't as socially conservative as they used to be. They are generally skeptical of the Eurozone (continental Europe's single currency economic system), which they are not part of and Cameron says that if he wins a second term then he will push for a national referendum on continuing EU members.

The Labour Party - The center-left political party of the UK led by Ed Miliband, who is the leader of the opposition against Cameron's government. They have 256 seats. They usually stand for more spending and Keynesian economics, but lately have favored some compromises in order to win back blue-collar workers. However, they still reject neoliberal free trade unlike the Conservatives. They look more favorable to the European Union and the Eurozone.

The Liberal Democrats - A highly centrist political party that favors social liberalism. They are led by Nick Clegg with 57 seats. No party is more middle-of-the-road than the Liberal Democrats. As whole, they want more spending, but also make attempts at balancing the budget. They are more committed to Europe than to other allies.

The Scottish National Party - A party that mainly exists to represent the interests of Scotland and favors Scottish independence. Since they lost the independence referendum last year, they intend to do what it takes to work with other political parties to support the Scottish people. They are led by Nicola Sturgeon with 6 seats. They are center-left and favor more economic intervention in the economy as well as Scottish nationalism.

The Party of Wales - Known by the Welsh as Plaid Cymru, this part is similar to the Scottish Nationalists because it focuses on policies that will help Wales. Their leader is Leanne Wood and it has three seats. They hold views of independence, but the Welsh independence movement is weak compared to the Scottish independence movement. They endorse democratic socialism and want to bring back the Welsh language in Wales for a bilingual system.

The United Kingdom Independence Party - This party became widely popular over the last few years as the British people, specifically those on the right, became angry at the establishment of the Conservatives and the Liberal Democrats. UKIP, as it is called, is led by Nigel Farage and only has two seats. UKIP has become the populist right-wing party in British politics. The party advocates for supply-side economic policies and an end to the inheritance tax in the UK. They are in favor of leaving the European Union in order to remain close with Anglosphere countries like the United States, Canada, and Australia.

The Green Party of England and Wales - With the word "green" in it, it should be immediate to most people that this party is heavy on the environment. The party is currently led by Natalie Bennett and has only one seat in the House of Commons. The party holds leftist political positions that focus on protection of the environment and they advocate for more social justice. Other positions include more spending on welfare and less military responses to foreign policy issues.

There are other political parties in the UK, but these are the most important. Smaller parties could be the key if no single party wins a majority in 2015 and a coalition government is needed. As we get close to the election date, I will post a prediction as to who the winners will be. There are still many days left for the political situation to chance, but as of now it looks very tight between the Conservatives and the Labour Party. It is clear that this election isn't a conventional British election where usually a majority can be captured by the two major parties. Many people don't like the top three parties, so they have moved to others who want more action like UKIP and the Greens.

I also want to emphasize that the current British government is a coalition between the Conservatives and the Liberal Democrats. Back in the 2010 general election, Labour under Prime Minister Gordon Brown had become unpopular and the election was clearly going to the Conservatives. The problem was that in order to obtain a majority, the Conservatives needed to control 326 seats. They fell short of that goal:

Conservative Party (David Cameron) - 306 (+97)
Labour Party (Gordon Brown) - 258 (-91)
Liberal Democrats (Nick Clegg) - 62 (-5)
Scottish Nationalists (Alex Salmond) - 6 (+/-)
Party of Wales (Dafydd Wigley) - 3 (+1)
Green Party (Caroline Lucas) - 1 (+/-)
UKIP (Lord Pearson) - 0 (+/-)

In order for there to be a coalition, Cameron and other key members of the Conservative Party went to Nick Clegg and the Liberal Democrats for a coalition government of 363 seats. This meant the Conservatives and Liberal Democrats would have to work together on passing legislation and neither party would get entirely what they wanted, but would nevertheless come close since they weren't highly ideologically different. Five years later, voters are mostly concerned with economic issues. Cameron became the prime minister in the midst of a weak recovery from the recession that hit in 2007 and 2008. The unemployment rate was at 7.8 percent in May 2010, but has went down to 5.5 percent in December 2014:

As you can see, unemployment remained high for the first three years of the Cameron government (leading his opponents to call it a double-dip recession), but starting at the end of 2013 it began to decline at a rapid pace and is now even with the unemployment rate of the United States after six years into the Obama recovery. The economic plan Cameron wanted to launch was an austerity plan where spending would be cut and most taxes maintained or increased to seek a balanced budget. The intention was to slash $131 billion in order to get rid of a disastrous budget deficit. The problem is that the austerity Cameron sought was difficult to get. The deficit never went away and spending has been difficult to roll back:

M&G Investments
It doesn't make a difference if you look at central government spending as a percentage of GDP, which is still higher than it was under the Labour government pre-recession years. Cameron has made cuts when looking at gross domestic product, but this came after huge spending increases under the Brown government in response to the recession. The deficit has come down, but it hasn't been eliminated as Cameron would have hoped. Meanwhile, the debt has exploded. In the next five years, Cameron has promised to hold the course because a surplus is projected under his budget plans. Miliband wants to achieve the goal of balancing the budget, but his policies would call for an increase in spending, which would threaten the projected surplus. If anyone is curious about British politics and wants to watch one of debates, here's one with all the party leaders. There are actually many issues in America that are also concerns in the UK like healthcare and immigration:

Saturday, April 25, 2015

Our Chaotic World

Gary Varvel
There have been many periods of destruction in the history of human life. The crisis of the late Middle Ages is an example. Another is most of the 20th century, when the world suffered from two horrific global wars and a "silent" one afterword. I feel that we are currently in a similar situation now. At the end of January, our allied government in Yemen fell, which Al Qaeda and ISIS can exploit. The situation in Libya is just as atrocious. Around 700 people were trying to flee the violence in the country aboard a migrant ship, which capsized leading to almost everyone dying. ISIS has also executed up to thirty Christians in Libya just a matter of days ago.

While terrorist groups make gains across the Middle East, the Obama administration has been trying to make a deal with Iran that regards the country's nuclear program. The deal President Obama is trying to make is one where Iran can still enrich uranium, but has strict limits to the enrichment program that would delay obtaining a nuclear weapon by a decade. In exchange, the Iranian government hopes to get some economic sanctions eliminated in order to help their economy. Iran has proven itself to be the most highly aggressive nation in the Middle East. They have actually shown this by fighting ISIS, which is an enemy of both the Americans and the Iranians. Despite their recent actions in opposing our enemies, they still should not be considered trustworthy in both the short-term and the long-term.

We know our allies are against the deal with Iran. Israeli Prime Minister Benjamin Netanyahu has made that very clear when he made his address to Congress in March. A bigger problem is if the United States can successfully enforce the agreement if Iran fails to hold its part of the nuclear deal. The Obama administration is very cautious in the Middle East and while using a few drones and ordering some bombings from the air is great, it isn't enough compared to sending actual armed forces on the ground or using the airspace advantage to full potential. Many people are skeptical of Iran for good reasons. It has never been a close ally of the United States since the 1970s and if the Iranians break their end of the bargain we need someone who can respond forcefully, which at times President Obama has been unable to do.

We know that Iran is not a trustworthy nation. History proves it. Different polls show that the American people are divided on the issue, with some saying that the majority of Americans want the Iranian nuclear deal while others say the majority do not. Even if the deal makes the Middle East a little safer, it does not eliminate the threat from Iran, but simply kicks the can down the road. What happens after a decade when the deal ends? Would that mean Iran has the right to have a nuclear weapon? These are important questions that would just be pushed to whoever the president will be in ten years. The deal does not address the terrorism Iran sponsors around the world, just like how our military doctrine isn't strongly pushing ISIS back.

There are many holes in the Iranian nuclear deal. Allies might feel discredited and create their own nuclear programs to counter Iran's program. Iran might not uphold to the deal if it can find ways to hide enriching uranium, such as keeping their facility at Fordow open for "other purposes". Enforcement must be fierce if Iran ignores the requirements from the United States. Right now, this deal doesn't solve anything, but simply prolongs the issue for younger generations to deal with later and that is scary if no real decision is made to allow Iran to have a nuclear weapon or not. We aren't exactly in Europe in 1938, but there are many similarities.

Monday, April 20, 2015

Supply-Side Reforms Coming America's Way!

Marco Rubio and Mike Lee announce tax cut bill. - Deseret News
With the Republicans controlling Congress, I'm happy to see supply-side legislation coming up. It is about time we get an economic plan that will boost the American economy rather than the slow growth we have received as a result of President Obama's demand-side stimulus policies. My explanation of why President Obama's fiscal policy has failed will be in another post, but this research from the Mercatus Center by economist Scott Sumner does it best. Basically, demand-side policies of fiscal stimulus are supposed to create growth by increasing consumption (people spending money on more goods means companies have more money and they pay workers who will then spend more and the cycle goes on). The other key part of economic policy is the monetary stimulus of the Federal Reserve.

I will summarize what Sumner argues here. Let's say the Fed wants to target inflation at 2 percent and unemployment at 6.5 percent with an expansionary monetary policy. Since fiscal stimulus, if it works as implied, is supposed to reduce unemployment and increase inflation anyway, then the Fed is set to contract earlier than what might be necessary. When the government decides to cut back, the Federal Reserve will do more to reach its expansionary goals because the government is not making an effort to do so. Since the Fed usually plans a more long-term policy, this situation is highly beneficial to the economy. Sumner writes:
If policymakers were able to increase aggregate supply, then the Fed would be under no pressure to offset the effects with tighter monetary policy. That’s because supply-side tax cuts actually tend to lower the inflation rates and raise growth. A good example is a cut in the employer-side of the payroll tax, which would encourage hiring but would not boost wages or prices. Indeed, the cost of labor from the firm’s perspective would decline, whereas workers would see no change in take-home pay. Some economists believe that cuts in taxes on investment income might also boost aggregate supply. 
Enter Republicans Marco Rubio and Mike Lee. These two senators, favorites of conservative Republicans, want to enact supply-side policies and they have a great tax plan that can do so called the Economic Growth and Family Fairness Tax Plan. The bill, as typed briefly about in my previous post, reduces the number of tax brackets to just two from seven. These are 15 percent for incomes under $150,000 for joint filers and under $75,000 for single filers) and 35 percent. The corporate tax rate is also reduced from 35 percent to 25 percent. Double taxation on businesses and shareholders is gone because there would no longer be a tax on capital gains. Many itemized deductions will be gone, as would the Alternate Minimum Tax. To make up for this, the child tax credit is expanded to $2,500 per child and a new personal tax credit covers $2,000 for individuals and $4,000 for joint-filers.

An analysis from the Heritage Foundation finds that the Rubio-Lee tax bill would be huge for our economy and is an opportunity we can't pass. It makes 2016 more important because if a Republican wins the presidency or not (doesn't matter if it's Rubio), then it is likely that this tax plan would be passed. The reduction in the corporate tax rate puts the United States on par with the rest of the developed world as defined by the Organization for Economic Co-operation and Development (OECD). The overall reduction of income taxes helps people, but income taxes could have been cut even more had they not increased the child tax credit and added a new personal tax credit. Usually lower marginal rates are more effective for supporting people and creating economic growth.

The Tax Foundation's research also finds that the Rubio-Lee tax bill needs to be passed to help the economy. If the tax cuts are put into place then the economy is estimated to grow as much as 15 percent! If this is put over a period of ten years, then additional annual growth would be 1.44 percent. Not forgetting the Laffer curve, eventually the tax plan would bring an annual $94 billion to federal coffers as the economy gets better. For those concerned about the poor and income inequality, you don't need to worry. An estimated 2.7 million jobs would be created if the plan is implemented and wages would be raised by 12.5 percent. Overall, it's a huge win for the poor, especially by the more realistic dynamic figures which show what economically happens over time with the bill:

Tax Foundation
This isn't the only tax reduction being proposed in Congress by Republicans. The other is a repeal of the estate tax (also known as the death tax). This bill, sponsored by Senator John Thune of South Dakota and Representative Bill Flores of Texas, would be another great benefit for the American economy. First off, the estate tax raised $12.7 billion in 2013, but that is highly insignificant to the $2.8 trillion of federal government revenue from that year. Liberals might cry that this only benefits the rich, but most of the wealthy don't have to deal with the estate tax because of the army of lawyers that can support them. Billionaires often hide their money in tax shelters. In fact, the estate tax has reduced capital stock (a firm's equipment, intellectual property, etc.) by an approximate $1.1 trillion. The estate tax has proven to reduce the savings of people who would want to leave some capital for their children.

The estate tax, which liberals argue decreases income inequality, is actually counterproductive. Most post-communist nations in eastern Europe got rid of their estate taxes because they found it useless. Only 2 percent of "income inequality" can be linked to inheritances. A big problem with the estate tax is that family businesses and farms don't often have enough liquid assets to cover the estate tax bill and so a source of wealth more most middle class families, who don't have many lawyers and tax shelters to defend themselves, is evaporated.

The next two years will be very important for the tax debate. It is safe to say that if Hillary Clinton or another Democrat gets elected then these bills will not pass, but if an enthusiastic Republican is elected then these bills will and we could see very rapid economic growth in the next four years (and onward if it is a Republican presidency of two terms). These bills represent a great chance to get this country back on track.

Saturday, April 18, 2015

Marco Rubio is Running for President

Senator Marco Rubio declares run for president - US News
After Hillary Clinton announced her presidential run, the Republicans gained another candidate for their nomination with Senator Marco Rubio of Florida. The GOP now has a sort of "big three" in the Senate running for president, which will clearly make a very competitive nomination race. Rubio announced his campaign for president with a speech in Miami where he attacked Clinton by calling her "a leader from yesterday" and that he will bring the country to the future.

Rubio has many strengths. He is one of the youngest candidates (helps with the age demographics) for president and he has strong working class roots unlike Clinton or Jeb Bush. As a Cuban-American, he will get loyal support from Hispanics for the Republican nomination and in the presidential election. His candidacy hurts Bush, who was a political mentor to Rubio when Bush was governor of Florida and Rubio was in the state legislature. Centrist Republicans who favor Bush will have a big battle against Rubio if both make it to the crucial Florida primary.

More importantly for the Republican National Committee as whole, if Rubio gets the nomination then his candidacy makes Florida's Senate election more difficult to win. Rubio cannot run for both the Florida Senate in 2016 and for president at the same time (Rand Paul also has that problem). Public Policy Polling's polls show that the Senate election would be an easy GOP hold if Rubio stays to run for Senate, but if he continues with his presidential campaign then the race is, as of now, a toss-up. If Rubio is the nominee though, I think a Republican would win Florida because it is Rubio's home state (easy to win at the presidential level) and many people will vote down ticket in the election.

As of now, Rubio has a lot of time to make that decision and if he falls short of the Republican nomination with little momentum over the next several months, then it would be in his best interest to drop out of the nomination race for the safety of his Senate seat. Currently, Rubio's popularity should make Jeb Bush supporters worry. It has only been days since he announced his run and a lot of big donors, especially from Florida, are throwing their money behind the senator. Rubio has quickly received $40 million for his campaign right now.

In terms of policy, Rubio will come under fire for his work on immigration reform that would give a pathway to citizenship for illegal immigrants. He will have to deal with this problem by the time the debates come around or risk getting attacked from more conservative Republicans on immigration policy. Tax policy, however, is a completely different story and it is one most Republicans will love. Rubio is pushing for supply-side economics regarding the tax system. His tax cut bill would reduce the corporate tax rate from 35 percent to 25 percent. It would also turn the personal income tax system into two brackets, one for lower income people at 15 percent and one for higher income people at 35 percent (the current top rate is 39.6 percent). Rubio and Senator Mike Lee of Utah are the creators of the bill.

To recap, Rubio has a lot of strengths. He will get support from Hispanics, he is from a battleground state that could easily lean to the Republicans in 2016 if he is the candidate, and he also attracts younger voters. He is a conservative and will get some Tea Party support, but will have problems with immigration policy. His new tax plan is one that Republicans will love. Long-term the RNC might worry about Florida, but if Rubio is the nominee and wins Florida then the Republican Senate candidate should too. As of now, it can be said that the first candidates are in the race to garner early support, but we will see over time if they sputter out or keep their momentum. You can find Rubio's announcement speech here:

Friday, April 17, 2015

Hillary Clinton Announces Candidacy for President

Lisa Benson
It has now been several days since former Secretary of State Hillary Clinton has announced her candidacy for president as a Democratic candidate and we can already see several problems she's running into even though she might be trying to dispel them. For one, the Clinton campaign decided to try a more technological way to announce her candidacy, which was through a video on YouTube and Twitter:

Now the big problem with Clinton's announcement video (aside from the fact that a booming speech with enthusiastic supporters is always better) is that it is very difficult for her to be a "champion" of hardworking Americans while she herself is very wealthy. I'm not necessarily saying that rich people don't know exactly how to support Americans of lower incomes. Every president with the exception of a small amount have had an income of over $1 million. However, it seems that Clinton is going to go for a campaign strategy in which she appears relatable, which in my opinion is going to fall flat on its face. I think it would have been much better had she not went incognito when she bought food at a Chipotle in Ohio. Could you imagine how those people would truly feel had they seen a possible future president simply walk through the door as they were eating. It would have been more powerful than trying to hide.

While she races through Iowa, the media embarrassingly chases her campaign vehicle called "Scooby" (I'm thinking another dumb attempt to make her seem relatable to everyday Americans by implying that she watched cartoons as a kid), which they don't do with any Republican candidate. While Republican candidates go to the media to talk about what they want to do or problems they want to refute from their past regarding policy positions, Clinton has not done any such thing, but she will probably have to in the future. Her campaign logo looks silly. It's like something out of MS Paint:

CBC News
Her campaign fundraising goal is $2.5 billion, more than both the Barack Obama and Mitt Romney presidential campaigns combined ($2.14 billion if you're curious). That isn't just planned money spent from her own campaign, but super PACs that will support her as well. Overall, the start of her presidential campaign is outright embarrassing. She is trying to shed the identity of the elitist that she is rather than just being comfortable in her own skin (then again, liberals didn't think Romney would be a good president because they said he was out of touch, even though many presidents were in the past). Usually, when a presidential candidate tries to do this they flop enormously. Clinton is trying to be someone she is not and that is a weak strategy. Meanwhile, her poll numbers are lower and Republicans are now more competitive as she tries to pretend to be like Elizabeth Warren even though she isn't Elizabeth Warren. Get ready folks because we are going to be seeing this for the next few years.

Wednesday, April 15, 2015

An Amazing Computer Game about the Titanic

This blog has always been primarily political, but I am a casual gamer and do like to talk about gaming once in a while. This is one of those cases. As someone who wants to become a history academic, I have an interest in many events, especially in western history. One of these interesting events that I first learned about was the sinking of the RMS Titanic and his topic is fitting since today is 103rd anniversary of the sinking. Everyone knows the story of how a British passenger liner in 1912 carrying over 2,200 people (but only enough lifeboats for roughly half) hit an iceberg on her maiden voyage and sank with a great loss of life.

Like 9/11 today, the sinking of the Titanic did leave a major impact on western society. Over 1,500 people died at a time when the western world had a sense of high confidence and thought the problems of the world were all coming to an end. Think of the sinking as a prelude to the more horrific World War I that would strike in 1914. When I was younger, I became interested in the Titanic after watching James Cameron's iconic blockbuster. Since then, I own many books on the ship and have seen many media adaptions. What is being developed now has caught my attention and I have followed it for a while. Currently, a computer game that will be called Titanic: Honor and Glory is in the works and I love this idea.

Video games can be used today to teach history in a way that books and documentaries cannot. Video games are interactive and there are many historical video games out there. The Total War series for the computer is a perfect example, as is the Hearts of Iron series. Even games that focus on historical fiction like Mafia 2, which has a fictional city and characters, but is at the same time occurring during World War II and the Cold War, can be learned from. Titanic Honor and Glory would be a perfect example of another game that brings history to life. Imagine being a passenger aboard the historic vessel in 1912 meeting actual passengers and crew as well as fighting to survive during the sinking. I highly recommend that my readers donate to the group just like I have, by clicking here. Just to give you a taste, there's a free early demo that you can download on their website and here's the teaser:

Sunday, April 12, 2015

My Favorite Political Drama TV Shows

I like political dramas, so I decided to name five I like the most which are currently on TV or have recently concluded. To me, politics can be very great if you put in a way that people get interested. Here are some of those political dramas that I like, but I think a lot of others can as well.

House of Cards (2013 to the present)

This one is probably the most obvious. One of the trends in political television dramas is that they create protagonists out of power-hungry politicians even though most people would find such a politician undesirable. The primary example right now is House of Cards with Frank Underwood. This series is the best that's on right now.

Boardwalk Empire (2010 to 2014)

Going back to the Roaring Twenties, now we have "Nucky" Thompson, who controls Atlantic City with an iron fist as the county treasurer. With Prohibition becoming official, Thompson and his subordinates decide to keep New Jersey and other parts of the country flowing with alcohol during the time of one of the worst laws in American history.

Boss (2011 to 2012)

Now I'm picking something that was canceled, but in my opinion shouldn't have been. Mayor Tom Kane of Chicago is the powerful political machine boss that holds a considerable say in his party over Illinois politics. As he continues to keep power, Kane realizes soon that his age is catching up with him as he is diagnosed with a neurological disease, but doesn't want to leave politics. As he tries to keep his power, he experiences how difficult it is his illness a secret.

The Kennedys (2011)

The Kennedys was a mini-series that brought a look at the influential political family around the time John F. Kennedy is president. The TV shows focuses on the sacrifices they made as a family as well as the ambition of Joe Kennedy to get his sons to hold power. It looks at the big issues JFK had to deal with as president such as Cuba, civil rights, and the Berlin Wall.

Black Sails (2014 to the present)

This show about pirates and the times they lived through has some politics to it as well. The island Nassau is a pirate base where many can seek refuge from the Spanish and British fleets, but there is always a power struggle to control the economy of the island. At the same time, some pirates want legitimacy and are tired of having to race from powerful ships controlled by the European empires, so starting in season two some pirates try to make political moves in order to be accepted by Britain.

These are some of the more recent television shows that relate to politics, but there are some older ones too. The West Wing is a perfect example, but as of now I would recommend these shows, specifically House of Cards and Boardwalk Empire.

Friday, April 10, 2015

Rand Paul Declares Candidacy for President

Rand Paul announces presidential run. - International Business Times
Another presidential candidate has officially entered the race for the Republican nomination on Tuesday. Rand Paul, the senator from Kentucky, is the second official presidential candidate for the 2016 election. His declaration speech will give him a bit of a boost in the polls. A recent Republican nomination poll, which was surveyed by Fox News from 3/29 to 3/31 before Paul made his candidacy official, shows Scott Walker with 15 percent, Jeb Bush with 12 percent, Ben Carson with 11 percent, and Mike Huckabee along with Ted Cruz tied at 10 percent. This poll is significant in that the CNN and ORC International poll before Cruz's speech had him at 4 percent. Cruz has experienced a bump that has put Paul in single digits, but now Paul is also a candidate.

Paul has 9 percent in the Fox News poll, but before Cruz's candidacy Paul had 12 percent. It should not be that hard for Paul to move back into double-digits. As for presidential election against Hillary Clinton, Paul is a very competitive candidate based according to recent polls by Quinnipiac University in swing states that were released on Tuesday:

Quinnipiac - Colorado (3/29-4/7): Paul 44%, Clinton 41% - Paul +3
Quinnipiac - Iowa (3/29-4/7): Paul 43%, Clinton 42% - Paul +1
Quinnipiac - Virginia (3/29-4/7): Clinton 47%, Paul 43% - Clinton +4

The libertarian movement now has their standard-bearer in the GOP, but the big question is if Rand Paul, unlike his father Ron Paul, can expand his appeal to others. In 2008 and 2012, Representative Ron Paul of Texas lost the Republican primaries despite an enthusiastic libertarian base, largely made up of young voters. Rand Paul will inherit this base, but it has been proven to be not enough to easily win the nomination. The Kentucky senator will benefit if the Republican field will be as divided as it seems, but if there are less candidates than expected and some start polling over 20 percent then he will have a problem.

While the libertarians offer a loyal base to Paul, he will still have to overcome the problems with social conservatives and the militarists (as well as neoconservatives). Libertarians argue for more American withdrawal from the world stage to deal with problems at home and slash the military budget. The problem with libertarians like Rand Paul is that they are at odds with conservatives who like America's standing the world as a superpower. Paul will come under pressure against the militarists. Another problem will be some of his shifts in political positions from radical libertarian stances to more compromising ones. We will see in the future how Paul will handle these attacks on him once they are made. As for now, here's Senator Paul's speech declaring his run for president:

Monday, April 6, 2015

Nobody Seems to Remember Religious Freedom

Governor Mike Pence of Indiana - New York Daily News
I don't know who first came up with the argument, but the idea that Indiana's Religious Freedom Restoration Act discriminates against homosexuals is entirely wrong and those who say it does don't understand what the law is. Those who oppose the law, which was passed and signed by Indiana's Republican state legislature and Governor Mike Pence, don't seem to understand what religious freedom is. Religious freedom laws in other states allow all people to have the liberty to worship and express their religion with their private business. Religious freedom laws in other states have greatly benefited people who are protected from government activities that burden their faith.

Indiana's case is no different. Everyone follows the law and no one has an advantage with the Indiana Religious Freedom Restoration Act. Although I don't have a problem with gay marriage, I do feel that everyone should have the liberty to express their religious beliefs in accordance with their private businesses. I also know that the right of religious liberty should not encroach over other rights. What the new Indiana law does is simply give individuals the right to have their case reviewed in a court. It does not decide what the outcome of a case will be. The only thing that happens with Indiana's law is that the government is prevented from immediately forcing someone to violate their own religious beliefs. Instead, the situation would go to a trial to see if the government does have an interest to do so or if the customer is being seriously burdened.

I think nobody realizes that many other states haves similar laws and the federal government does as well. The only reason an uproar has occurred is because people are misinterpreting what the Indiana Religious Freedom Restoration Act is. They viewed a simple law protecting religious liberty for private businesses so outrageous that they wanted the NCAA to boycott Indiana for the Final Four (go Badgers, by the way). The NCAA then went out of its way to lecture the nation about the problems with the law, even though it wouldn't have taken effect until July. The NCAA should realize that it should never get involved in politics.

There are currently many cases of religious liberty getting violated. Examples of this happening are usually linked to weddings. Florists and bakers who denied working with weddings because they celebrate same-sex marriages are put into court and forced to serve that wedding. Just because someone has a different opinion than you does not mean they should be forced to celebrate your view. This also means that businesses don't have a problem with serving gays and lesbians, but do have a problem celebrating something they do not agree with. Next time you see someone overreacting about this law, chances are they don't know the whole story or think of it critically.

Saturday, April 4, 2015

The Start of Seattle's Minimum Wage Disaster?

Over the last few months several restaurants have been going out of business in Seattle, Washington. It just so happens that Seattle's city council decided to raise the city's minimum wage to $15 an hour, which will be phased-in over time (for example, this week the minimum wage is set to go to $11 an hour, but will eventually hit $15 an hour later). There are many reasons a restaurant might decide to close its doors, but it would be foolish to say that the minimum wage isn't one of those possibilities because it no doubt is. The increase in the minimum wage will naturally lead to more labor costs for businesses. As of now, it is too early to see the full affects of a $15 minimum wage. New restaurants will be opening just as older restaurants close, but if we see a long-term trend of more worker layoffs and more restaurants closing than before, then it is likely that the minimum wage will have an overall negative effect and restaurants won't be able to keep a profit.

Paul Guppy, vice president of the Washington Research Center, has researched the negative effects of a $15 minimum wage in Seattle. He reports:
Advocates of a high minimum wage said businesses would simply pay the mandated wage out of profits, raising earnings for workers. Restaurants operate on thin margins, though, with average profits of 4% or less, and the business is highly competitive.
When prices rise consumers seek alternatives, a behavior economists call the “substitution effect,” which results in lower demand for the higher-priced product.  In the case of restaurants, consumers have access to the ultimate substitution – they can stay home.
It is obvious to everyone that businesses are not a city council, or the state, or the federal government because unlike an institution that is able to borrow, private enterprises cannot or have a very hard time doing so. Workers are significantly hurt from the minimum wage because the first action taken by a business when the profit margin lowers to a precarious level is to reduce benefits and the cost of labor. While some workers benefit from a $15 minimum wage, others will not because they risk getting fired. When that happens, more workers might have to work additional hours in order to keep up production. An alternative would be to raise prices, but businesses would prefer to avoid that since that directly hurts consumers who might be compelled to not purchase goods at a higher price. Additionally, jobs that could have been created before the minimum wage hike might not be created at all.

The cost of labor problem isn't just a situation in Washington, but also here in Wisconsin. In this case I am specifically talking about prevailing wages, not the minimum wage. Prevailing wages were created in Wisconsin to prevent private contractors with low-wage workers who weren't local from underbidding local contractors on public projects. However, a study from the Wisconsin Taxpayers Alliance finds that prevailing wages have been higher than true market averages because the primary respondents to mandated surveys are union contracts, even though 75 percent of the state's construction industry is not part of a union.

Higher increases in the cost of labor will damage any economy if private enterprise cannot handle the costs. Next time you hear people complain about low wages at places like Walmart, remember that this company with supposedly "limitless" wealth operates at a slim 3 percent profit margin. Meanwhile, McDonald's is raising the minimum wage to 90,000 of its workers, but don't expect that to stop people who claim it isn't enough, even though the minimum wage they want is financially unacceptable.