by Goldy, 10/19/2010, 8:28 AM

Last month I wrote about Attorney General Rob McKenna’s cynical effort to reinterpret Washington’s voter-approved minimum wage statute, so as to avoid an increase this year. And as predicted, this week L&I announced that it would ignore McKenna’s opinion, by raising the minimum wage another 12 cents an hour.

Labor & Industries spokeswoman Kim Contris said the state ultimately made the decision to raise the rate “based on how we believe a court would interpret the law.”

“We really wanted to correctly implement the law,” she said. “We recognize there could be confusion and additional cost if we made a mistake and the court overturned the decision.”

That’s right, the state ignored its own attorney’s opinion because they were concerned about the legal cost of following it. Huh. Perhaps the state should fire its attorney?

No doubt there are policy arguments to make in favor of keeping the minimum wage flat during a time of slow job growth and high unemployment — for example, the stupid, arrogant and profoundly anti-worker arguments made by the Columbian — but the problem for McKenna is that the legal arguments just weren’t there. The law is clear: L&I is instructed to adjust the minimum wage “by increasing the current year’s minimum wage rate by the rate of inflation,” and since inflation went up this year, however slightly, so will the minimum wage.

To ignore the plain meaning of the word “by” in the service of fabulating alternative formulas may be creative lawyering, but as L&I rightly determined, it wasn’t likely to hold up in court. Which in the end, not only calls into question McKenna’s abilities as an attorney, but as a politician as well.

52 Responses to “In which Goldy proves a better attorney than Attorney General Rob McKenna”

1. masaba spews:

Is McKenna still considered a moderate Republican? If no, then what Republicans in this state would be considered moderate?

2. Mr. Cynical spews:

Increase Minimum Wage==Decrease Entry Level Jobs.
Goldy, do you know how many young people are unemployed in Washington? They are going back to school to study to becone ?? when they hit 40 YO or so.
It’s really sad. Kids with massive student loan debt and living hand-to-mouth with jobs dwindling.
I know you are talking about the law Goldy. And perhaps you are correct. If so, good for you. I guess some business group needs to sue the state to really find out. But even if you are right, What are the Consequences?
Do you think raising the Minimum Wage again will create more jobs Goldy? On what basis??

3. masaba spews:

@2

Giving our kids better education and sending them to get 4 year degrees for a reasonable price at state supported schools = more entry level jobs, Cynical.

I’m sure that paying all those minimum wage workers another 12c an hour is really going to cripple Wall Mart. You’re spouting a right wing red herring, Cynical. You’re parroting what you hear on Rush and O’Reilly.

4. masaba spews:

And before you come back with some other random argument, Cynical, let’s do a little math. Assume that a small business has 5 minimum wage employees. They now make $0.12 more per hour. At 40 hours per week * 52 weeks in a year, that is $250 per year per employee. So, with 5 minimum wage employees, that is $1250 per year. That is not an entry level job. The overhead costs of adding a new employee are probably more than that.

5. jeff spews:

@2 I doubt that raising the minimum wage by $.12/hour will have much of an effect. As for evidence that raising the minimum wage can create jobs there was a study done about New Jersey raising their minimum wage and how it led to more jobs in the fast food industry.

http://www.uvm.edu/~vlrs/doc/min_wage.htm

6. Perfect Voter spews:

What good would it do McDonald’s, say, to pay people wages so low they couldn’t afford to pay for meals at their restaurants?

Remember Henry Ford; he reasoned that by paying the then-unheardof wage of $5/day, his workers could afford to buy a Model T.

7. Mr. Cynical spews:

Just 12 cents/hr. more….on top of huge increases in L&I and Unemployment Taxes, Property Taxes the list goes on & on.
12 cents/hr. =$250/yr. for each FTE (full-time equivalent employee)
20 FTES=$5000 plus FICA and other wage based benefits.
It’s easy for you folks to tell businesses struggling to survive that it’s only another 12 cents/hr.
Look at it in context of all the other cost increases.
Last year, L&I’s actuary said in a Public Meeting they needed to raise rates 23%..but Governor Gregoire only approved 7.6% due to the economy. So what happened to the other 15.4% that wasn’t charged? She kicked the can down the road to this year.
Now businesses want private insurers to compete with L&I and the leftists are against it which will eventually result in major increases.

Think about it. If you’ve ever owned a business like I have, you have a better appreciation for all the costs & hours involved trying to make payroll and keep folks working and to get a reasonable return on your investment (aka PROFIT).
Some of you may actually get it…just don’t care. Others really don’t get it.

8. headlesshorseman spews:

As the state law commands, “The adjusted minimum wage rate shall be calculated to the nearest cent using the consumer price index for urban wage earners and clerical workers, CPI-W, or a successor index, for the twelve months prior to each September 1st as calculated by the United States department of labor” (Emphasis added).

A plain language reading would support the conclusion that only the interest rate for the past 12 months is legally considerable.

Why would McKenna stand in the way of workers earning a fair wage? Well, in 2008 McKenna received $1,825 in campaign contributions from the WA Restaurant Assn. PAC, and $100 from their chief lobbyist, Bruce Beckett. A group that lists its among its legislative priorities for 2010, “Defeat living wage proposals that increase Washington’s minimum wage.”

McKenna is again playing political games with the AG office.

9. Michael spews:

@2

There have been about umpteen studies over the years that show that Washington’s minimum wage law has a net positive impact on jobs. The 12¢ increase will create more jobs than it kills off.

10. Michael spews:

Sam Katz, he kicks children in the face.
http://www.youtube.com/watch?v=TLfbtduLaho&feature=player_embedded

11. masaba spews:

@7

If you are really concerned about the things you mentioned, then I guess you are definitely voting for I-1098. It eliminates B&0 taxes for small businesses, which will have a much bigger impact than a $.12 minimum wage increase.

12. Jason Osgood spews:

Mr Cynical @ 7

If you’ve ever owned a business like I have, you have a better appreciation for all the costs & hours involved…

Interesting. So you’re saying that controlling healthcare costs is key to economic vitality and job growth?

Which reminds me…

In your libertarian utopia, who pays for the administration of our courts and elections?

13. Brenda Helverson spews:

It is time to start referring to Boy-Governor-In-His-Own-Mind McKenna by his proper title.

14. Mr. Cynical spews:

Michael at 9–
Please show me a couple of those studies and the sources…
When were they done Michael?
If done during boomtime, you would likely have a different result than something done in the heart of a tough recession.

15. rhp6033 spews:

Cynical @ 7 said: “…If you’ve ever owned a business like I have, you have a better appreciation for all the costs & hours involved trying to make payroll and keep folks working and to get a reasonable return on your investment (aka PROFIT)….

I’ve owned a business before. Quite frankly, the minimum wage was never an issue for me, because I didn’t want to pay minimum wage. If I did that, I would be getting employees who couldn’t get a job anywhere else.

The old saw “You get what you pay for” applies to employee wages as well as other things.

16. Mr. Cynical spews:

Jason–
ObamaCare does not control health care costs. The numbers have been revised negatively several times with more to come.
And even if costs are miraculously lowered (and I don’t consider paying for something for 10 years to get 6 years of benefits as credible in evaluating savings)…what will be the impact on quality.

I was at an event where a billionaire spoke laughing about the guise of Gates & others that we need to tax rich people. He said rich people have lots of options to avoid taxes like borrowing on assets, using trust vehicles etc.

He also criticzed ObamaCare and had talked with numerous high level doctors who support it. Said he asked them one question..
WHERE WILL THE DOCTORS COME FROM TO SUPPORT 35-40 MILLION NEWLY INSURED PATIENTS??
Said he never got a coherent answer.
Here are a couple articles–
http://www.voanews.com/english/news/usa/Doctors-in-America-in-Short-Supply–85332477.html

http://www.nytimes.com/2009/04/27/health/policy/27care.html

http://www.youtube.com/watch?v=WCe-EgK0AhI

We need to think thru the consequences of these feel-good actions. The only logical outcome is RATIONING!
Severe Doctor Shortage + 35-40 Million New Insureds===RATIONING.

What other option is there?
Wave a magic wand and create more docs??
We have 3 docs in our family.
One just retired and the other 2 are ready to retire. They are killing themselves with long hours and have had enough. They see no end in sight to the demands on too small of a supply.
Address this ObamaCare advocates–

17. Mr. Cynical spews:

rhp–
I didn’t pay minimum wage either…except to a few interns who were going to school. We trained them and paid them and helped with their school costs. But in many industries like food service, it does matter.

18. rhp6033 spews:

Let’s examine wages for a minute, and their effect on the economy historically.

Countries with very low wages tend to be very backward, technologically. It’s not just that it’s a poor country, but it’s a cause-and-effect relationship.

Take China, for instance. There is part of a river there where generations of workers would toil by pulling on tow ropes to move boats up the river. Hundreds at a time would sometimes be used to pull the boat up several miles of river. It was crushing, back-breaking work. The operators of the tow service would pay the workers a pittance, and the tow service would charge each boat a toll.

This system lasted, unbelievably, until less than ten years ago. Why? Because the amount paid to the workers was so miniscule, there was no incentive to make it more efficient. They could litterally pay the workers less than the cost of using horses or mules to handle the same burden, much less the idea of damning the river and building a system of locks to raise the boats to the higher waters.

Even the boat captains didn’t see any incentive to buy boats equiped with engines – it was cheaper just to keep the non-powered barges and pay the workers the minimal price.

Yes, it created jobs. But at a minimal subsistance level, and at the cost of a great amount of ineffiency. Over time, the operators of this system (the tow operators and the ship’s owners) became reliant on it to the point that they fought hard against any attempts at modernization, or any attempt to educate the workers so that they had options outside of the back-breaking labor experienced by their ancestors for several generations before them.

19. Richard Pope spews:

So where is the SOCIAL SECURITY COLA for 2011? The federal government is not increasing social security benefits for 2011, in spite of there being an increase in the cost of living this year. Looks like the Obama administration decided to follow similar reasoning as McKenna was advocating in this state.

Sure — you can argue that no COLA for 2011 is appropriate, when the increase in cost of living during 2010 is less than the decrease in cost of living during 2009. But this probably won’t go over so well with the tens of millions of Americans receiving social security — who tend to be a very active demographic when it comes to voting regularly.

20. Goldy spews:

Richard @19,

Come on… you’re an attorney. What matters here is the language of the statute, and the language of WA’s minimum wage statute is unambiguous, despite McKenna’s clearly bogus claims.

As for Social Security, I’m not familiar with the wording of the underlying laws and regulations. Perhaps it uses a different index?

21. rhp6033 spews:

Now, let’s compare that with the historical American experience.

There was always a labor shortage in America, which tended to cause wages to rise. Employers attempted to solve this by using endentured servitude to import workers, but as soon as they were free of their obligations they made quite a bit more money competing with their former masters. Apprenticeship had the same problem.

So instead slavery was used to import and keep labor at the lowest level of cost. Being unable to pick up and leave, the slaves were bound to their job and whatever subsistence benefits their master chose to provide. A capitalist paradise!

But as the American Civil War showed, slave labor created a society which couldn’t compete, economically, with a free society. Rising wages in the north attracted more and more immigrants, even during the war. In the South, however, slavery had kept investment in infrastructure to a minimum, because it was cheaper to use slaves to perform manual labor than to hire skilled workmen to build factories and railroads. Moreover, the white population, which was actually outnumbered in several states by the slave population, had to apportion a number of it’s manpower to making sure the slaves stayed in line (overseers and militiamen) which were exempt from the draft, further compounding it’s manpower shortage. Despite bravery, bravado, and a few excellent generals, it was the economic disparity which ensured the Confederacy’s demise. During the war, the North not only built factories and railroads to support it’s war effort, it even opened up the west to settlement with the Homestead Act, and authorized the start of construction of the Transcontinental Railroad (although the bulk of that effort was post-war).

Most importantly, the labor shortage during the war never declined after the war ended. The vast expanse of the mid-west needed workers to harvest crops, and there were never enough men to do this, so wages kept going up. This created the impetus for a large number of labor-saving devices, especially mechanical harvesting and threshing machines, making farming much more efficient and resulting in the drop in food prices as the cost of production dropped as well.

But the former farm workers weren’t out of work for long – it freed them up for the migration to the cities where the industrial revolution of the late 1900′s turned them into skilled workmen with iron and steel.

So higher wage costs can actually improve productivity, by encouraging capital investment in labor-saving devices, which end up moving the labor on to higher-value skilled labor jobs inbuilding and maintaining the capital improvements. You can see this in the improvement in office productivity with computer usage – skilled typists were replaced by computers which allowed the administrators to draft and send their messages without relying upon yet another level of workers. But these workers moved on to become administrators themselves, or computer programmers or IT professionals.

But note that it does require an investment in education for the tranfer to be more timely less painful for those directly affected.

22. masaba spews:

@18 and 21

Thanks for posting that. It was a very interesting and well thought out read.

23. rhp6033 spews:

One final note:

Neither of the extremes work. Pay scales at subsistance levels hurt the economy on many levels.

Also, minimum pay laws which are unrealistically high can cause some job losses.

So how much is too high? None of us can realistically peg it a specific level in advance, within a dollar or two margin of error. But it doesn’t seem to me that a 12 cent per hour increase is going to cause the house to fall down, rhetorically speaking.

And given that the fast food industry locally (Seattle area) is paying $10 per hour or more (unless they are relying on illegal immigrant labor), a minimum wage anywhere in the $8.00 to $9.00 per hour range doesn’t seem that out of reason.

24. Richard Pope spews:

Actually, Social Security recipients will tend to get LOWER net benefits in 2011 — because the monthly deduction for Medicare premiums will increase in 2011, while social security benefits will remain flat.

Medicare Part B premiums were $96.40 per month in 2009, and rose to $110.50 per month in 2010. Normally, the federal government announces both the COLA increase and the Medicare premium increase in October. This year, they are putting off the Medicare premium announcement until after the November election. However, private estimates are that Medicare Part B premiums will increase to $120.20 per month for 2011.

If a retiree only receives social security benefits for their income, then they are protected from their net monthly check being reduced, by limiting the dollar amount of Medicare premium increase to the dollar amount of social security premium increase. However, if a retiree gets enough other income (such as pensions, investments, etc.), then their net social security check will actually DECREASE in 2011, just as it did in 2010.

Add to all of this the decision to fund the new health care reform bill by taking substantial amounts away from the Medicare program — perhaps as much as $500 billion according to Republican claims — and a lot of senior citizens (who voted heavily for Obama in 2008) are rather pissed off.

At least minimum wage workers in Washington will have another 12 cents per hour to spend in 2011. If some wish to unwisely buy candy or cigarettes, these extra pennies can offset some of the added tax liability. And they can always try to find more work to offset other tax increases — an option not available to probably a majority of the social security recipients.

25. Richard Pope spews:

Goldy @ 20

You are entirely correct on the law. The social security COLA law is different — benefits express never deflate (just like WA law implies at least), but they expressly look back to the last adjustment year when inflation follows a period of deflation (while WA law appears to only look back to the previous year).

26. Mr. Cynical spews:

Richard–
With so fewer people working and paying into the SS system, it has reached critical mass. Yes there is cash available TODAY…but our kids will have zero unless something drastic is done. Same with State Retirement Systems. And look at the mess around the world…even France. Unsustainable government benefits.
Minimum Wage is merely an articially set government benefit. If the market would find folks for $5/hr. qualified to do a job…yet the minimum wage is $8/hr. set by the government…what do you call the $3/hr. difference. It is a government benefit.

I remember flipping burgers for $1.10/hr. in the late 60′s. I always had a job…and some of them sucked like working on a mink farm. It was awful….but $2/hr.!!
Young people today have to come to grips with the current fiscal reality of what has been done to them and what continues to be done to them in terms of government entitlements combined with the huge National Debt. Things are getting worse…although you can feign the appearance of things getting better by printing more money like Bush/Democrats & Obama/Democrats have done, especially the past 4 years.
When will America’s youth show the outrage?
They should be marching with the Tea party!
And some are.
And more will.
2012 will be the pivotal election…not this one.

27. Richard Pope spews:

Mr. Cynical @ 16

So you are admitting that the 35 to 40 million Americans (according to your count) who do not have health insurance are not getting ENOUGH HEALTH CARE?

Are you advocating “demand side economics” for the health care industry? If we don’t have enough supply (i.e. shortage of doctors), then we should reduce demand by making sure poor people don’t have the ability to receive as much health care as they need?

Frankly, that is one of the most ridiculous arguments I have heard from either side in the health care debate.

28. Steve spews:

One reason you go down the road of unwarranted smugness, conceit and arrogance is that you use that to cover the mess of insecurities that lay underneath that shallow surface personality of yours. I see through it and that is no doubt very threatening to you. So of course you’re damned angry. It’s a very predictable response.

29. Steve spews:

Oops, wrong thread. Ignore. I was just helping Lost to understand why he’s so fucked up in the head.

30. Jason Osgood spews:

Mr. Cynical @ 16

ObamaCare does not control health care costs.

Interesting. So now you agree that universal healthcare with single payer is the best way to control healthcare costs.

See? I knew that eventually even you could put aside your tribalism and vote in your own self interest.

Which reminds me…

In your libertarian utopia, who pays for the administration or our courts and elections?

31. Troll spews:

Pssst, comment section sheep, he’s trying to distract you from something. Don’t take the bait.

32. Ekim spews:

26. Mr. Cynical spews:

Richard–
With so fewer people working and paying into the SS system, it has reached critical mass. Yes there is cash available TODAY…but our kids will have zero unless something drastic is done.

Bzzzzt. Wrong. You must be drinking that right wing cool-aid again. Where do you get your “facts” anyway? From Billo, the fat guy on the radio, or the foam at the mouth guy Beck?

The Social Security system was designed as a pay-as-you-go system. However it was noted back in the 1980s that us baby boomers caused a bit of a problem. The fix was the SS Trust Fund. We got to pay extra into the system to make up for the projected shortfall for when we are collecting our benefits. That extra went into the Trust Fund. Once we die off there won’t be a need for the Trust Fund any more.

In other words, the Trust Fund was designed to zero out at some point.

33. Jason Osgood spews:

rhp @ 18, 21

I agree with masaba, great posts.

I don’t know how this fits…

My experience working in software — handling labor, capital investment, and operations costs — has always left me confounded.

Typically…

We developers are huge expensive. But given crap tools (hardware, software) to use. And not enough of it. Seems that when labor is expensive, I’d do everything I could to make them more productive. (Joel Spolsky preaches this strategy.) Not so.

So instead of the needed capital investments, the bean counters want to cut labor costs. Send the work overseas. Hire junior developers. To date, I haven’t seen it work. For many reasons. Mostly due to organizational psychology and “culture”.

More people means more communication overhead, means less actual work done.

By “culture”, I mean any disconnect between customers and developers. Imagine my team trying to make products for China. Success is highly unlikely. But flip it around and the bean counters suspend disbelief.

Meanwhile, the two biggest costs are making the wrong product and missing the market opportunity. (My buddy in Phoenix does plumbing for silicon fabs. No expense is spared. Once online, it’s like printing money. Any day not online means millions of lost revenue, if not worse.)

It’d be nice if some of the bean counters had some business sense. Too much to ask?

34. Proud To Be An Ass spews:

Pope,

If you did a wee bit of reading you would find that the Social Security COLA is tied to the last COLA increase (2008), but the State minimum wage increase, though tied to the same index, is calculated year over year (in this case August, 2009)….different starting point.

This stuff is not rocket science.

35. Jason Osgood spews:

rhp @ 18, 21

Follow up to @ 33, as separate post, because I want to emphasize…

There’s two avenues to increase profits: cut costs or grow revenue.

Revenue growth requires investment.

I was present thru 4 independent efforts to send my work overseas. The bean counters want to cut costs. I never understood how they’d grow the business thru cutting costs.

Now, I’d understand if our product(s) were in mature markets. Computer Associates has been buckets of cash riding the long tail at the end of the S curve.

But my products were for emerging markets. Brand new. HUGE potential. It’s a turf battle, grab as much marketshare as quickly as you can.

I can see how a noob (like me) can be ignorant about these things.

I’ve always been an inefficiency nut. Working at Starbucks, it drove me crazy that we “wasted” money. What I didn’t understand then is opportunity costs, any effort at efficiency meant forfeiting growth.

All these people sending our work overseas are supposed to be educated about this stuff. MBAs.

To me, if you’re trying to cut costs, it signifies that you’ve given up.

The way out of the rat hole the Republicans (and some complicit Democrats) have created for us is investment. In business, in government, in education, in public health.

That they’re all focused on cutting costs tells me they’ve forfeited, they’re just taking out profits while the taking is good, they’ve given up on the American Dream.

36. Roger Rabbit spews:

The Extremists Get Extremer

“Tea Party favorite Christine O’Donnell, the Republican candidate for Senate in Delaware, questioned Tuesday whether the First Amendment to the Constitution requires a separation between organized religion and government. ‘Where in the Constitution is the separation of church and state?’ she said in a debate with Chris Coons, her Democratic opponent. When Coons told her the First Amendment prohibited government from establishing any religion, according to the Associated Press and WDEL radio, O’Donnell replied, ‘You’re telling me that’s in the First Amendment?’”

http://www.politicsdaily.com/2010/10/19/christine-odonnell-on-the-1st-amendment-where-is-separation-o/

Roger Rabbit Commentary: Um, yes, Christine, it is.

The extremists of the far right are getting crazier by the minute. Their stupidity would be funny except for one thing: These people are dangerous. What we’re talking about here is a candidate for U.S. Senate who believes the power of government can be used to impose her religious beliefs on you and your family. The U.S. Constitution says she can’t do that to you. The fact she doesn’t know that is scary.

I’m not an atheist. I believe in God. And I’m praying for her defeat.

37. Blue John spews:

@35. Interesting post. There’s two avenues to increase profits: cut costs or grow revenue.
Revenue growth requires investment.

So you think that any company that is more focused on cutting costs than investing to make new revenue is giving up? They are sucking the profits they can get out of the biz, and going to let it die. Sounds like the Junk Bond Traders, the Gordon Geckos of the 1990s.

38. Proud To Be An Ass spews:

It’s interesting that cons such as our own dear Losty were recently bemoaning the fact that the one time SSI disbursement of $250 was “useless” and “peanuts”, but will scream to the heavens about the same yearly amount paid as an increase to some poor schlepp working for minimum wage.

Sheesh.

39. Blue John spews:

Economic Benefits for an Increased Minimum Wage
# The extra money earned as a result of a minimum wage increase is funneled back into the economy. Recipients of the extra funds most likely spend their increased wages on food, child care, rent and some nonessential items, which helps local businesses and builds the local tax base. Higher wages also can reduce the need for government assistance. In the workplace, minimum wage increases can result in reduced absenteeism, less turnover and overall stronger morale in employees. According to the Economic Policy Institute, no evidence exists that teenagers or under-educated employees lose work as a result of a wage increase. In a multi-state study, economics professors at Princeton University found that employment rates actually increase when the minimum wage increases.

http://www.ehow.co.uk/list_7216320_positive-effects-increasing-minimum-wage.html

40. rhp6033 spews:

# 32: Well, true enough about the Social Security Trust Fund, but the problem is that the money isn’t being piled up there. It is being invested – not in Wall Street (thank God!), but in Treasury Certificates. Sure, they don’t earn much interest, but it’s better than nothing.

Except for the fact that the Social Security Trust Fund now holds a large inventory of Treasury Notes in it’s portfolio. At some point in the future, it will have to collect them – from the General Fund. At that point whatever generation is working then will have to pay for them through taxes on their current earnings.

So, as much as I hate to say anything which might appear to be in agreement with Cynical, there is an issue there. The solution is to pay off the federal debt, over time, to the point where the Treasury Certificates are replaced by cash in the Trust Fund.

That doesn’t mean that I agree that we should elect Republicans. As history since 1977 has shown, Democrats have a better history of reducing the budget deficit and the national debt than do the Republicans, all their claims to the contrary notwithstanding.

And when your house is on fire, you don’t argue about the cost of the water for the fire department to put out the fire. Especially when it’s the arsonist who is complaining the most loudly.

Fiscal discipline is a delicate balance. In good times you should pay down the national debt and possibly even put off capital improvements because the government competing for labor and materials will drive up the cost for both public and private projects. But in bad times the government needs to borrow money to invest in capital improvements, because it is cheeper then and the economy could use the extra cash flowing through the system. It’s completely contrarian to the private sector, I know, but that’s the role which the federal government should play. It’s a delicate balance, one which doesn’t respond well to insistence on short-term fixes and sloganeering.

41. Proud To Be An Ass spews:

There’s two avenues to increase profits: cut costs or grow revenue.

Jason….there are others: Monopoly pricing (patents are the legal form this takes), increased productivity, theft (outright stealing, law evasion, smoke & mirrors accounting, price gouging, collusion, etc.), and increased leverage…just to name a few.

With all due respect.

42. Proud To Be An Ass spews:

“So, as much as I hate to say anything which might appear to be in agreement with Cynical, there is an issue there.”

No, there is not.

“The solution is to pay off the federal debt, over time,”

That would reduce the holdings of private financial assets–i.e., a reduction in private financial wealth.

“to the point where the Treasury Certificates are replaced by cash in the Trust Fund.”

The idea is to spend down the Trust Fund. That’s why it’s there.

When you write stuff like the above, you play right into the hands of the privatizers. Read some Dean Baker on Social Security. You might learn a thing or two.

Thanks.

43. rhp6033 spews:

Jason @ 35: You might be interested in who is investing in America now:

Bangalore company buying Bothell’s Cardiac Science

Yep, you saw that headline right. A medical equipment company based in Bangalor, India is buying out (cash purchase) a Washington company, Cardiac Science.

44. Proud To Be An Ass spews:

rhp,

The government can create money from nothing. If the Trust Fund was all cash bills the government could just burn it. Having a lot of cash lying around is NOT an asset to the government.

Give this some thought.

45. Proud To Be An Ass spews:

“In good times you should pay down the national debt”

No. You grow out of it.

“….and possibly even put off capital improvements”

Why?

“…because the government competing for labor and materials will drive up the cost for both public and private projects”

deficit spending when the economy is at maximum output would be inflationary, all things being equal. However, if the budget is in balance under conditions of full employment, the government should still undertake capital investment that the private section will not or can not undertake (clean air, clean water, transportation, education, etc.). This is known as socially investing for the future. Who’s to say that paying people more than the private sector for something that has a 100 year payoff is a bad thing?

That’s why we have politics.

46. Jason Osgood spews:

proud @ 41

Nice list. Haha. I was limiting my discussion to ethical, legal options. At the risk of losing some members of the audience (e.g. Mr Cynical).

I’d argue that increased productivity comes through investment. “Quality is free” is funny talk for positive ROI.

47. Jason Osgood spews:

proud @ 45

“In good times you should pay down the national debt”

No. You grow out of it.

This is the correct answer.

48. Steve spews:

@36 “When Coons told her the First Amendment prohibited government from establishing any religion, according to the Associated Press and WDEL radio, O’Donnell replied, ‘You’re telling me that’s in the First Amendment?’”

I don’t know if you heard the clip from the debate, Roger, but the Widener University audience laughed at her, as should the rest of our nation’s citizens – at least those who have a functioning brain.

How telling. The teabaggers keep telling us that they want to return us to the constitution and yet their whack-job leaders don’t even know what’s in it.

49. sarge spews:

If you can afford to hire someone at $8.55, but not $8.67, then you shouldn’t be in business. Give it up, and go back to school. Nobody has a right to exploit workers. That is why we have minimum wage laws, and OSHA, L&I, etc…

High wages were what made us the greatest economy in the world. The assault on wages that has occurred over the last 30 years do to outsourcing and union busting has directly caused the decline in the middle class and our consumer economy.

Germany’s unemployment is much lower than ours. Their wages are higher. 50% of boards of directors by law have to be made up of labor. They have protected their workers, and by extension their industrial base. Their economy is 30% manufacturing (ours is about…11%, it think?). They have a robust consumer economy and expect to reach full employment (4.5%, I think) within the near future. And they have done this with protectionism, decent wages, and universal health care on top of a month of vacation.

Low wages are the enemy of a world class economy. They are what define third world countries.

Lowering wages just furthers our demise.

50. headless lucy spews:

Historically, anytime a middle class has gained the clout to unseat the elite, that is exactly what they have done — hence, the attempted destruction of the American middle class by the ‘Pinochet-lite’ uber-elite in the USA.

But the middle class survivors this time around are only more entrenched and doubly cynical (in the real sense of the word).

A chance will present itself, and the Klown aristocracy will fall. 2006 and 2008 are merely precursors of the fall.

51. headless lucy spews:

How awesome is the strength of an upper class that must desperately appeal to the most confused and ignorant among us (‘baggers)to maintain any semblance of political strength?

How pathetic that they must seat a SCOTUS (a multi-generational scheme that has finally come to fruition)to accord filthy lucre the rights of political speech that only the truly living enjoy?

An idea has more strength in the long run than any amount of dollars that you can mount against it.

52. headless lucy spews:

Freedom is not the carte-blanche approval of all and sundry to pursue a stinking buck at whatever cost to the greater good.

You only vainly attempt to set yourself on a pedestal should that be your pursuit.