Debunking the Progressive Elitist Claim that Minimum Wage Laws Increase Employment

Back during the Great Depression, the Progressive Elitist mantra was that if only companies would pay their employees more, all would be well in the economy.  FDR pressed businessmen on this over and over, while many unemployed people would have been eager to work for less.  Record unemployment lasted for a decade due to this wrongheaded Progressive policy, along with a host of other economically illiterate Progressive policies.

Recently, there have been a host of Progressive Elitist claims that raising the minimum wage results in more employment and an improved economy.  I will address that claim, but first it is important to realize that minimum wage laws are an immoral deprivation of very fundamental and essential individual rights.  Everyone owns their own mind and body.  They have the right to associate with others according to their own choice in the very broadest sense.  Specifically, the right to cooperate with others for economic purposes and to earn a living is a very broad right.  The employer has a right to hire and others have a right to provide their labor under a voluntary agreement between the employer and the employee.  It is this panoply of rights and voluntary choices to cooperate between individuals that the Progressive Elitists want to trample.  They are determined to use force to impose their own imperious will upon others.

A great many Americans believe that it is not practical to be a man of principle, so the moral argument holds no sway with them.  They are determined to march out into a complex world as unprincipled as they can be, but for some vague notion that they want to help the underdog or the greatest number of people.  Now this means they are perfectly willing to hurt many other people and they are willing to substitute their judgment for that of others, even though they may not know those whose judgment is over-ridden and do not know the circumstances that might affect their choices.  As though not knowing the people affected by their directives to the government is not enough, they have to understand the many results set in motion by their directives without the aid of principles.  The simplifying and integrating functions of principles having been given up, the Progressive Elitists are without sufficient rational tools to understand reality and the consequences of their tyranny over others.  The chaotic results seldom match their intentions and are generally harmful to those whose individual rights and choices have been trampled.

 The Democrat Party is on a campaign to see the minimum wage raised in as many locales and states as possible.  They would also like to see the federal minimum wage increased.  There are more and more columns and articles about how some community raised the minimum wage and there was no local economic disaster in this or that town.  More recently, two University of Delaware economists, Saul W. Hoffman and Wai-Kit (Ricky) Shum have claimed there were no negative effects due to increases in the minimum wage in 13 states between 1 January 2011 and 1 January 2014.  This recent study, actually not even complete yet, is supposed to make us forget the history of the last staged increase in the federal minimum wage in 2007, 2008, and 2009.  See Democrats Eat the Young: Minimum Wage Case in Point, where I agree with the old Economics 101 viewpoint that higher wages mean fewer jobs, just as higher prices mean fewer sales.  Joe Conason wrote a recent column calling this a myth and citing the work of Hoffman and Shum as his proof.

Apparently, Conason not only does not know economics, but he does not read very well.  He claims that 13 states raised their minimum wage above the federal minimum wage earlier this year.  This is not true.  Hoffman and Shum looked at the 13 states that raised their minimum wage from 1 January 2011 to 1 January 2014 as noted above and Conason apparently did not even take note of that.

I am going to present some data dealing with the factors that affect the minimum wage impact on a state by state basis and the resulting employment of young people between the ages of 16 and 24 in the table that follows.  One very important point is that the minimum wage impact on a local economy is going to be proportionate to the cost of living in that local economy.  For this reason, as I have often argued, the policy of setting a federal minimum wage is very foolish.  The following table will provide an effective comparative minimum wage adjusted for the differing costs of living on a state by state basis.  One of the things you will see is that many of the states that have increased their minimum wage above the federal minimum wage are actually on an adjusted basis below most of the states whose minimum wage is the federal minimum wage.  If their cost of living adjusted minimum wage is below that of other states who use the federal minimum wage, then they actually have an effectively cheaper youth labor force and the employment of such young people should actually benefit from that cost advantage.

State	Cost of Living Q2 - 2013	Minimum Wage 2012 ($)	Minimum Wage Adjusted for Cost of Living ($)	Unemployment Ages 16-24 2012 (%)	Mercatus Economic Freedom Score For 2011
Alabama	92.4	7.25	7.85	16.3	31.33
Alaska	131.1	7.75	5.91	14.8	7.21
Arizona	100.8	7.65	7.59	17.6	34.35
Arkansas	91.0	7.25	7.97	17.7	-8.56
California	128.6	8.00	6.22	20.2	-71.82
Colorado	99.7	7.64	7.66	16.7	11.56
Connecticut	133.8	8.25	6.17	17.0	-21.17
Delaware	106.9	7.25	6.78	15.2	24.43
Florida	97.8	7.67	7.84	16.4	21.67
Georgia	92.0	7.25	7.88	20.6	31.89
Hawaii	161.7	7.25	4.48	13.5	-56.36
Idaho	89.4	7.25	8.11	17.3	51.82
Illinois	94.9	8.25	8.69	18.5	-13.19
Indiana	90.0	7.25	8.06	14.9	14.62
Iowa	91.3	7.25	7.94	11.0	18.66
Kansas	91.8	7.25	7.90	13.2	9.03
Kentucky	90.1	7.25	8.05	16.9	5.05
Louisiana	94.2	7.25	7.70	16.7	-7.74
Maine	109.0	7.50	6.88	16.6	-35.51
Maryland	122.3	7.25	5.93	13.4	-17.31
Massachusetts	121.2	8.00	6.60	12.2	-7.03
Michigan	94.4	7.40	7.84	16.9	-5.36
Minnesota	100.9	7.25	7.19	11.0	-7.79
Mississippi	88.7	7.25	8.17	23.0	-19.25
Missouri	92.9	7.35	7.91	16.1	30.64
Montana	98.4	7.65	7.77	11.1	30.53
Nebraska	88.9	7.25	8.16	8.9	17.35
Nevada	94.9	8.25	8.69	17.6	1.68
New Hampshire	120.2	7.25	6.03	13.4	41.17
New Jersey	129.5	7.25	5.60	18.2	-69.19
New Mexico	92.5	7.50	8.11	12.6	3.50
New York	134.5	7.25	5.39	18.0	-133.59
North Carolina	95.6	7.25	7.58	18.8	12.80
North Dakota	99.7	7.25	7.27	7.2	65.72
Ohio	92.3	7.70	8.34	12.6	-2.54
Oklahoma	90.0	7.25	8.06	10.8	50.10
Oregon	106.9	8.80	8.23	17.9	5.62
Pennsylvania	101.1	7.25	7.17	13.4	0.75
Rhode Island	125.8	7.75	6.16	17.2	-35.89
South Carolina	95.0	7.25	7.63	22.9	22.45
South Dakota	99.7	7.25	7.27	9.9	72.76
Tennessee	89.7	7.25	8.08	13.5	62.12
Texas	91.4	7.25	7.93	13.5	30.52
Utah	93.0	7.25	7.80	11.9	37.72
Vermont	118.3	8.46	7.15	13.1	-39.39
Virginia	95.9	7.25	7.56	16.8	45.10
Washington	101.6	9.04	8.90	16.7	2.69
West Virginia	96.6	7.25	7.51	15.7	-35.97
Wisconsin	95.1	7.25	7.62	12.9	-13.33
Wyoming	99.5	7.25	7.29	12.7	-16.35

Because Democrats are more eager than Republicans generally to raise the minimum wage and Democrat-controlled states are usually higher cost of living states, the small increases in the minimum wage in those Democrat states do not usually make them expensive states in which to hire young people.

Now let us compare the results for those states with an adjusted minimum wage under $6.90 with those having an adjusted minimum wage greater than $7.60:

These states have an adjusted minimum wage under $6.90:

State	COL Adj Min Wage ($)	Unemployment Ages 16-24 in 2012 (%)	Mercatus Economic Freedom Score
Alaska	5.91	14.8	7.21
California	6.22	20.2	-71.82
Connecticut	6.17	17.0	-21.17
Delaware	6.78	15.2	24.43
Hawaii	4.48	13.5	-56.36
Maine	6.88	16.6	-35.51
Maryland	5.93	13.4	-17.31
Massachusetts	6.60	12.2	-7.03
New Hampshire	6.03	13.4	41.17
New Jersey	5.60	18.2	-69.19
New York	5.39	18.0	-133.59
Rhode Island	6.16	17.2	-35.89
Average	6.01	15.81	-31.26

The states in blue above have a state minimum wage greater than the federal minimum wage.  Six of the twelve states, or exactly 0.50 of these cheap youth labor states have minimum wages higher than the federal minimum wage.

These states have an adjusted minimum wage over $7.60:

State	COL Adj Min Wage ($)	Unemployment Ages 16-24 in 2012 (%)	Mercatus Economic Freedom Score
Arkansas	7.97	17.7	-8.56
Colorado	7.66	16.7	11.56
Florida	7.84	16.4	21.67
Georgia	7.88	20.6	31.89
Idaho	8.11	17.3	51.82
Illinois	8.69	18.5	-13.19
Indiana	8.06	14.9	14.62
Iowa	7.94	11.0	18.66
Kansas	7.90	13.2	9.03
Kentucky	8.05	16.9	5.05
Louisiana	7.70	16.7	-7.74
Michigan	7.84	16.9	-5.36
Mississippi	8.17	23.0	-19.25
Missouri	7.91	16.1	30.64
Montana	7.77	11.1	30.53
Nebraska	8.16	8.9	17.35
Nevada	8.69	17.6	1.68
New Mexico	8.11	12.6	3.50
Ohio	8.34	12.6	-2.54
Oklahoma	8.06	10.8	50.10
Oregon	8.23	17.9	5.62
South Carolina	7.63	22.9	22.45
Tennessee	8.08	13.5	62.12
Texas	7.93	13.5	30.52
Utah	7.80	11.9	37.72
Washington	8.90	16.7	2.69
Wisconsin	7.62	12.9	-13.33
Average	8.04	15.51	14.42

In these expensive adjusted minimum wage states, 11 of the 27 states or 0.41 of them have minimum wages set higher than the federal minimum wage.  So, in 2012 a larger fraction of the actually inexpensive states had a minimum higher than the federal minimum wage compared to the expensive adjusted minimum wage states.  Despite having the advantage of a slightly cheaper effective minimum wage, the states with an adjusted minimum below $6.90 had a slightly higher youth unemployment rate of 15.81% compared to the effectively more expensive youth wage states with an unemployment rate of 15.51%.

Why were these inexpensive youth wage states not better at employing youth?  The answer lies in the last column in which I have provided the Mercatus Center state economic freedom rating for 2011 from their Freedom in the 50 States, 2013 Edition.   All of the inexpensive states have costs of living greater than the national average.  This is usually associated with a dense population and/or with Democrat Party control.  The average Mercatus Center economic freedom rating of -31.26 is very low compared to that of the expensive youth wage state freedom rating of 14.42.  Youth employment tends to be better when businesses thrive and businesses definitely thrive better with greater economic freedom.  People at the minimum wage level are the least productive workers in the economy, so their effect on how the economy flourishes is rather small.  The effect of a flourishing economy on them is much greater!

Now let us examine the list of 13 states that increased their minimum wage between 1 January 2011 and 1 January 2014.  These were the states examined by Hoffman and Shum.  The average cost of living index in these states is 110.2 and the adjusted minimum wage is just $7.55.

State	Min. Wage($) 1 Jan 2014	Cost of Living Index 2013	Adjusted Min. ($) Wage for COL	Mercatus Center Economic Freedom
Arizona	7.90	100.8	7.84	34.35
Colorado	8.00	99.7	8.02	11.56
Connecticut	8.70	133.8	6.50	-21.17
Florida	7.93	97.8	8.11	21.67
Missouri	7.50	92.9	8.07	30.64
Montana	7.90	98.4	8.03	30.53
New Jersey	8.25	129.5	6.37	-69.19
New York	8.00	134.5	5.95	-133.59
Ohio	7.95	92.3	8.61	-2.54
Oregon	9.10	106.9	8.51	5.62
Rhode Island	8.00	125.8	6.36	-35.89
Vermont	8.73	118.3	7.38	-39.39
Washington	9.32	101.6	8.46	2.69
Average	8.25	110.2	7.55	-12.67

These 13 states were compared to the remaining 37 states.  Seven of those remaining states had state minimum wages that were higher than the federal minimum wage.  What is more, since the states with changes had an average cost of living index of 110.2, the 37 remaining states had to have an average cost of living index of 96.4.  If we assume that each of these states had a minimum wage at the federal level of $7.25, the cost of living adjusted average would be $7.52.  This is almost equal to the $7.55 adjusted minimum wage to which Hoffman and Shum are comparing these states.  In fact, the seven states with higher than the federal minimum wage who did not raise their rate in the time-frame of the Hoffman and Shum study more than make up the difference.  Taking their rates into account yields an average adjusted minimum wage for the non-raising set of 37 states to $7.64.

So, Hoffman and Shum are trying to claim that a higher minimum wage does not hurt those states which actually have a slightly lower adjusted minimum wage when you compare them to states with a higher effective minimum wage!  Well, surprise, surprise.  How wrongheaded can you be Hoffman and Shum?

On average, the states that have raised their minimum wage rates above the federal level have done so because of the high cost of living in their state.  This is most definitely not an argument for raising the national minimum wage rate, which would only hurt the lower cost of living states to the advantage of the higher cost of living states.  This would also have the moral effect of hurting the freer states to the advantage of the more enslaved states.

Neither does the Hoffman and Shum comparison tell us anything about whether the increases in the minimum wage in the 13 states they compared to the non-raising 37 states gained or lost relative to the economic results they would have had without raising the minimum wage.  The study is useless on that question.

But from the above table we do see that these minimum wage raising states suffer with low economic freedom ratings.  Their attempt to interfere with voluntary employer-employee cooperation is consistent with that low regard for individual freedom.  We know for sure that the states with more economic freedom do out-perform those states with less economic freedom in terms of job growth and goods and services production growth.

The Hoffman and Shum and the Conason arguments for raising the minimum wage are here shown to leak like a sieve.

A Clearly Rational Federal Court Decision Against the IRS Rule to Offer Subsidies on Federal ObamaCare Exchanges

Among the cases challenging the IRS rule that subsidies for individuals and tax penalties for non-complying individuals and companies would be administered in all fifty states and the District of Columbia, is the case brought by Scott Pruitt, the Attorney General of the state of Oklahoma.  Oklahoma and 35 other states did not choose to establish PPACA or ObamaCare exchanges, as the PPACA law tried to get them to do by taxing every American, but only allowing individual subsidies in those states establishing an ObamaCare exchange.  Non-complying states were to be penalized with taxes and the loss of any partial return of that tax money in the form of subsidies.  That this was the intent was very clear to those who followed the progress of the PPACA legislation through Congress.

Of course, it was also very clear that PPACA was a revenue bill which violated the constitutional requirement that it originate in the House of Representatives.  It is further clear that the only justification for the collectivist claim that the collective gets to dictate how every American maintains his or her body's and mind's health is based on a claim of collectivist ownership of everyone's mind and body.  This is a very clear and certain violation of the American Principle of a very limited government dedicated only to the protection of the equal, sovereign right of each and every individual to life, liberty, and the pursuit of happiness.  I for one am exceedingly furious that the government considers me its slave by depriving me of self-ownership and the right to pursue my own happiness.

United States District Judge Ronald A. White of the Eastern District of Oklahoma ruled on 30 September 2014 that "the IRS Rule is arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law, pursuant to 5 U.S.C. [paragraph] 706(2)(A), in excess of statutory jurisdiction, authority, or limitations, or short of statutory right, pursuant to 5 U.S.C. [paragraph] 706(2)(C), or otherwise is an invalid implementation of the ACA, and is hereby vacated."

Judge Ronald A. White provided a very rational decision, which is very much appreciated in light of the three judge panel in King v. Burwell who decided that they would not help the plaintiff destroy the PPACA by ruling in accordance with the language of the law.  No, instead they decided on the basis of how they claimed Congress intended the law to work while not considering the actual history even of constraints on Congress in forcing the states to comply with handing control over health care insurance to the federal government.  Neither did they consider the actual discussions and trades within Congress needed to acquire even sufficient Democrat votes to pass the bill.  Similarly, the dissenting judge on the three judge panel that vacated the ObamaCare subsidies and tax penalties in Halbig v. Burwell for the District of Columbia Court of Appeals exercised a similar flight of fancy in interpreting the PPACA.

The Honorable Ronald A. White read the bill as written and said that if Congress had intended the bill to operate otherwise, it would have written the bill differently.  What is more, if Congress decides that the application of the law as written is not what it wants, then Congress can readily pass legislation to change the law.  This is exactly the way a rational person would expect laws to be applied.  Neither the IRS nor the federal courts are the legislative body and neither has the constitutional power to enact or to change laws.  How the 3-judge panel of the 4th Circuit Court that decided the King v. Burwell case could have decided that the law was ambiguous is incredible.  What is more, if it were ambiguous, then it is up to Congress, not the IRS, to eliminate any such ambiguity.  Ridiculous consequences would result from any other principle and the People would lose all power to control any government operating as the 4th Circuit Court ruled government should work.

Unfortunately, the entire District of Columbia Circuit Court decided to rule on Halbig v. Burwell and the Democrat appointed judges are now in the majority on that Circuit Court.  They will hear the case in December.  What is more, the decision by the Honorable Ronald A. White will be appealed to the entire 10th Circuit Court on which 7 of the 12 judges were appointed by Democrats.  The case of Indiana v. IRS is also yet to be decided.  Given the otherworldly ability of Democrat-appointed judges to misinterpret clear English and to ignore the history of the passage of this law, the People of the United States may not be relieved of the ObamaCare tyranny.

But, the state of Oklahoma, Governor Mary Fallin of Oklahoma, Attorney General Scott Pruitt of Oklahoma, and the Honorable Ronald A. White of the United States District Court for the Eastern District of Oklahoma have all proved themselves Heroes for in their efforts to preserve the rights of the individual in this desperate fight to protect self-ownership against the brutal onslaught of ObamaCare.

Obama Cannot Kill King Coal

Some time ago I wrote an article called King Coal Will Continue to Rule the World.  To follow up on that with aspects of the current situation let us note that:

• Japanese demand for natural gas increased greatly following the Fukushima disaster.  This fueled an increase in natural gas prices throughout Asia and Europe.
• With natural gas prices so high in Europe, where little fracking is taking place, natural gas is affordable for energy production for electricity only during peak demand periods.
• What is affordable in Europe and elsewhere is American coal.  US coal exports increased from 50.1 billion tons six years ago to 129 billion tons.  This is an increase by a factor of 2.57 times!
• If you buy into the garbage idea that man's CO2 emissions have a catastrophic impact by causing severe global warming, is it really better that US coal be burned around the rest of the world and not in the electric generating plants of the US?  Does it really make sense for us to increase our electricity costs by not using coal so the rest of the world can lower their costs by using American coal?
• If you believe that coal-fired power plants produce very harmful emissions such as mercury and sulfur, is it better to have our coal burned in power plants most of which are not as well scrubbed as our power plants?  Of course, I have shown that mercury is not the problem our EPA has made it out to be here and here.

Prof. Walter E. Williams on the State of American Blacks

Professor Walter E. Williams, George Mason University, asks these very challenging questions of those who believe in the politically correct viewpoint of the Progressive Elitist and of those who simply do not think about such issues:

"Is the reason the black family was far healthier in the late-1800s and 1900s  because back then there was far less racial discrimination and greater opportunities?  Or, did what experts call "legacy of slavery" wait several generations to victimize today's blacks?"

When I ask similar questions, I am very frequently called a racist, though I am merely making the inquiries any rational person with a minimal knowledge of history and a normal respect for the abilities of one's fellow man would.  Even Prof. Williams is presented with a problem on how to get readers to acquire sufficient knowledge that he can ask these questions without having them simply dismiss him and the remainder of his article.  He provides several paragraphs of relevant black history in America before he chances posing these questions.  Those of us with such viewpoints as Prof. Williams are very much aware of the ignorance of those who vehemently claim the state of American blacks is explained by the "legacy of slavery."

His article is one that very much needs to be read by most "educated Americans", who are most noteworthy for their university-programed ignorance.  Our universities almost never have the intellectual integrity and courage to ask the questions Prof. Williams asks in this article.  They are unwilling to demonstrate how absurd the politically correct viewpoint is in the light of history, whereas Prof. Williams is a man of admirable courage and integrity.
He also does his homework.  All you have to do is read and a wee bit of thinking.  Of course, you are also welcome to check up on his facts.

If he is wrong about his facts, I want to hear about it.  I would not bet that he is, given that the formidable Dr. Thomas Sowell has a very similar viewpoint.  And while this may mean nothing to the reader, so did the highly esteemed Virginia Baker of Norfolk, Virginia.

The Significance of the NASA SABER Observation of a Massive Solar Storm for Catastrophic Man-Made Global Warming

Recent observations of the effects of a massive solar storm on the Earth’s atmosphere made by NASA using the SABER instrument on the TIMED satellite have very important implications for the two main classes of hypotheses backing the idea of catastrophic man-made global warming.  During this solar storm, gigantic quantities of energy were dumped into the Earth’s upper atmosphere by highly energetic particles.  The SABER instrument measures the infrared emissions from the Earth’s upper atmosphere.  The NASA measurements of those infrared emissions during the solar storm showed that 95% of the energy dumped into the upper atmosphere was quickly re-emitted into space.  There was no significant warming of the Earth’s surface.

The significance with respect to the various man-made global warming hypotheses of this observation has often not been well-explained by critics of catastrophic AGW.  The fact that the energy arrives in the atmosphere as energetic particles has often been glossed over in such commentaries, yet this is very important.  The energy of the solar storm is not of the same nature as the mix of UV, visible light, and near and mid infrared radiation which provides the Earth with heat energy on a daily basis.  Though this important difference exists, the results of the solar storm energy measurements by NASA are still crucially significant for one of the principal global warming hypotheses and somewhat significant for the other main AGW hypothesis.

There are two standard hypotheses for the global warming mechanism that CO₂ is supposed to provide at a catastrophic level:

1)  A large back-radiation effect near the Earth surface caused by water vapor and CO₂, which warms the surface.  This warming effect is supposed to be so large that it provided about a 33C temperature increase at the surface decades ago and this is now increasing due to added CO₂.

2)  A delay or decrease in radiation lost to space from the upper troposphere or stratosphere caused by increased CO₂ and NO.

As I have discussed many times on my blog, most recently in Simple Explanation of Why Greenhouse Gases Do Not Warm the Earth’s Surface, back-radiation at the Earth’s surface is insignificant because the mean free path for the infrared radiation absorptions of water vapor and carbon dioxide are very short and the corresponding temperature differences between the surface and the lower few meters of the atmosphere are therefore very small.  The smaller than claimed infrared radiation from the surface is very quickly absorbed and distributed to nitrogen, oxygen, and argon in the air due to the very high collision rate in the lower atmosphere.  These primary air molecules do not radiate this energy and it is then mostly transported by convection upward or toward the poles.  Water vapor and CO₂ actually slightly increase the rate of energy transport upward following the downward temperature and density gradients.  The generation of water vapor at the surface is a powerful cooling effect, though at night this may be reversed by condensation.  Water and CO₂ absorb incoming solar radiation and prevent it reaching the surface, which is a cooling effect.  At night, fog and clouds slow down cooling by scattering and absorbing infra-red radiation.  Yet, averaged over the daily cycle, the net effect of all the greenhouse gases on the surface temperature is small compared to the claimed 33C effect.  Much the greatest of that smaller effect is due to water vapor and not to carbon dioxide.  Thus Hypothesis 1 fails to make physical sense.  As more and more proponents of catastrophic AGW have realized this failure, they have turned to the second hypothesis as the justification for AGW.

Hypothesis 2 also fails.  See: Does Increased CO₂ Cause a Decrease in Infrared Emission to Space?  Once again the lack of a significant temperature gradient in the upper troposphere for radiation purposes and no temperature gradient in the tropopause is one significant  problem for this hypothesis.   It is hard to change the temperature much of the CO₂ emitters.  Another problem is that more and slightly warmer infrared emitters causes any warming in the upper atmosphere to be reduced because more emitters are sending individually increased radiation into space.  For the same reasons that Hypothesis 1 fails, it is also not possible for the warming CO₂ absorbers to transmit energy back to the Earth's surface by radiation, so any effect of warming remains in the upper atmosphere.  The major significance of the NASA SABER measurements on how effectively CO₂ and NO eliminated the energy of the solar storm is that this is confirmation of my argument that Hypothesis 2 fails.  A local warming high in the atmosphere does not result in a warming of the surface of the Earth.  Indeed, the infrared gases are highly effective in cooling the atmosphere, especially in the upper atmosphere where the mean free path for infrared absorption by CO₂ and NO is longer than near sea level.

As I initially pointed out in Slaying the Sky Dragon, the back-radiation effects claimed for infrared active gases were so small that the role of such gases in absorbing solar radiation before it could arrive at the surface of the Earth was a very significant cooling effect of these wrongly designated greenhouse gases.  A warming of the atmosphere thousands of meters above the surface is not an equivalent warming of the surface where we live.  Very little such atmospheric energy is transported to the surface.  This remains true as I have more thoroughly explained more recently here:  Infrared-Absorbing Gases and the Earth’s Surface Temperature: A Relatively Simple Baseline Evaluation of the Physics.

The fact that I have pointed to my own explanations for the failures in the physics of Hypothesis 1 and Hypothesis 2 is not a claim that I am the only scientist who has understood the bad physics of these crucial catastrophic man-made global warming arguments.  Fortunately, more and more scientists have come to understand the physics either wholly or in good part.  More and more scientists have come to understand that the two hypotheses used to explain catastrophic AGW are either wrong or at least dubious.

Atlas Shrugged Day Commemorates Human Creativity and Productivity

This is an update of a 2 Sep 2010 post:

On September 2, 1946, Ayn Rand began writing Atlas Shrugged and she finished her great novel in time for publication in 1957.  Throughout the novel, September 2 is the date of a number of events:

• In the opening scene of the novel, a bum asking Eddie Willers for a handout, asks "Who is John Galt?"  This and the way it was asked bother Eddie.  As he walks through NYC he is also bothered by the gigantic calendar hanging from a public tower and announcing the date as September 2.    
• On that date, Hank Rearden and Dagny Taggart decide to take a vacation together.  On that vacation they discover an abandoned motor that should have revolutionized the use of energy in the world.
•  Francisco D'Anconia makes his speech on money on September 2.  He proclaims money to be the tool of free trade and the result of noble effort, not the root of evil.  Those who call money evil choose to replace its use with the force of the gun.
• D'Anconia Copper is nationalized on 2 September, but the date on the calendar is replaced by "Brother, you asked for it!"

So, on this day of 2 September 2014, let us give thanks to Ayn Rand for her incredibly dedicated effort in writing this path-breaking novel we are finding so important in our lives 57 years after its publication date and 68 years after she started it on 2 September 1946.  This should be a day celebrated much as Thanksgiving Day is celebrated, but without any religious overtones, as a day to respect the creativity and productivity of all the heroic men and women that Ayn Rand's heroic novel commemorates.

At the top of our list of most respected heroes and heroines, we should recognize Ayn Rand herself.  Her great achievement is still a vital inspiration for many an intelligent, hardworking, and creative human being.  Those she has so inspired are among the best among us.

When an American Multinational Company Moves Its Headquarters Abroad It Is Patriotic

Unlike Obama, I do not measure patriotism in terms of the amount of taxes paid to and the amount of paperwork prepared for an over-weaning government that uses its revenues and its ever mounting debt to suppress our individual rights.  No, I look at the issue of American multinational companies moving their domicile to other nations with lower internal taxes and which do not tax earnings in the U.S. as a very real act of patriotism. This is fully consistent with the American Principle of limited government whose only purpose is the protection of our equal, sovereign individual rights.  It is very patriotic to punish a malfeasant big government with a decrease in tax revenues.  The lower its revenues, the less mischief it can perform.  This includes a reduction in its anti-business agenda.

In most cases, changing a company's domicile does not actually mean it moves its headquarters.  This is usually very like the case in which hundreds of thousands of U.S. companies are incorporated in the state of Delaware, but have their actual headquarters in a different state.  The location of domicile is chosen for tax and legal reasons and does not imply that any or most of a company's activities will be at the location of domicile.

The federal tax rate on U.S. corporations is 35% and it applies that highest in the developed world rate to all profits made in the U.S. and to any profits a U.S. multinational corporation makes abroad.  So a U.S. multinational corporation pays the nation in which its profit is made the lower tax they levy on corporate taxes.  Then if the U.S. corporation decides to bring that profit back to the U.S. to invest it here in R&D, new facilities, new hires, or new manufacturing operations, the corporation has to pay the difference between the rate charged by the nation in which the profit was made and the higher U.S. tax rate of 35%.  This drastically reduces the amount of profits earned abroad which are brought back to the U.S.  This plays a big role in slowing down the growth of the U.S. economy, which means it slows down the growth in our standard of living.

U.S. multinational companies which do not bring back their profits from abroad also greatly reduce the burden of producing the tons of paperwork in the form of reports demanded by the IRS.  This is a very great reduction of expenses and consequently a boost to profits earned abroad relative to those earned in the uphill battle at home.

To be sure, U.S. corporations do not generally pay the full 35% tax rate on profits earned in the U.S.  There are many exemptions, tax credits, and deductions, though these come at the expense of the added paperwork to claim them.  Nonetheless, the average percentage paid on profits by American companies is about 30%, while their rivals headquartered in other countries pay an average of about 23% on their profits.  Consequently, American companies are paying about 30% more taxes on their profits than are foreign companies.  This is a very sizable competitive disadvantage.

The Burger King acquisition of Tim Horton's, a Canadian company, is a case given much attention in the news lately.  Moving the Burger King domicile to Canada, a nation with more economic freedom than the sorry present U.S., reduces its corporate income tax rate to 15%!  Canada will only tax the profit made in Canada and will not tax Burger King on its profits made in the U.S. or in any of the other many nations it operates in around the world.  This will actually allow Burger King to bring the profits it has made in those many nations back to the U.S. for investment here, because the U.S. government can no longer tax these profits made by a Canadian company.

It is essential that every American multinational company put as much pressure on the far too voracious American government to reduce its taxes on productive work and to reduce its power to coerce people in violation of their rights to earn a living and to generally pursue their happiness.  A great and patriotic way to do this is to move their headquarters abroad.  If that has the eventual effect of forcing the far too big and nasty federal government to lower its tax rates and to decrease its incredible paperwork burden, it will do much to allow Americans a future with a decent increase in our standard of living coupled with a much improved environment of economic freedoms.

Why I Refuse to Sign the United Nations Global Compact

As owner and president of a materials characterization and failure analysis laboratory, one of my customers has stated that I must sign the United Nations Global Compact if they are to continue doing business with us thanks to one of their biggest customers who is requiring this of them.  The summary of that U.N. Global Compact is very vague but is intended to lock companies into a very extensive plan that will greatly change our way of life and limit our freedoms.  It follows:

The Ten Principles  

The UN Global Compact's ten principles in the areas of human rights, labour, the environment and anti-corruption enjoy universal consensus and are derived from:

• The Universal Declaration of Human Rights
• The International Labour Organization's Declaration on Fundamental Principles and Rights at Work
• The Rio Declaration on Environment and Development
• The United Nations Convention Against Corruption

The UN Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labour standards, the environment and anti-corruption:

Human Rights

• Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and
• Principle 2: make sure that they are not complicit in human rights abuses.  

Labour

• Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
• Principle 4: the elimination of all forms of forced and compulsory labour;
• Principle 5: the effective abolition of child labour; and
• Principle 6: the elimination of discrimination in respect of employment and occupation. 
   

Environment

• Principle 7: Businesses should support a precautionary approach to environmental challenges;
• Principle 8: undertake initiatives to promote greater environmental responsibility; and
• Principle 9: encourage the development and diffusion of environmentally friendly technologies.   

Anti-Corruption

• Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

I am refusing to sign this compact because of its moral, civic, and scientific errors.  I expect to lose a customer, but one of the main reasons I founded my company was to be free of association with an organization as an employee whose moral behavior did not meet with my standards.  Generally, when I take on work from a client company now, I can do so without subjecting myself to its moral imperfections and I can more easily refuse to work with any company whose standards are known by me to be too low.  As a result, I sleep well and remain calm and happy.

I will explain my objections to each of the three categories: Human Rights, Labor, and Environment in this U.N. Global Compact.

Human Rights:

The problem here is that the The Universal Declaration of Human Rights does not understand what a human right is.  It correctly names many human rights, but it also claims that there is a body of human rights which require that services and goods must be delivered to every individual at the expense of the labor of others who may not be willing participants.  For instance, by right every child may demand that others throughout a nation may be forced to educate that child.  This is a form of slavery, though of a limited nature.  It is nonetheless a violation of the rights of individuals.  One of the very reasons that education is critically important is so that the citizen understands his rights and learns how to assert and protect them.  The process of becoming educated should not require trampling on the rights of others to life, liberty, and the pursuit of their own happiness.

Articles 1 - 13:  I agree with them.

Article 14:  I do not agree that asylum is a right, though I do agree that it is good practice for the USA to offer it.

Articles 15 - 21:  I agree with them.

Article 22:  This does not have a clear meaning, but I suspect it is a misunderstanding of rights, especially because rights pertain to an individual and arise from the nature of man, not from society and culture as implied here.  It seems likely this is interpreted by most to imply that some people have the right to demand goods and services or income from others to maintain their own "social security."

Article 23:

"(1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment."  Well, no.  Employment is like happiness and one is not able to claim it from others by right, but only to be free to be self-employed or to work out a free trade of one's work for employment with an employer.  If one does not think the employment conditions are just or favorable, then one can leave the job.  One should be free to purchase unemployment insurance from a willing provider should there be one, but one is not free to impose the costs of unemployment on others by the use of force.

"(3) Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection."  No again.  How can a person who works for himself be guaranteed clients without violating the rights of the clients?  A person who works for an employer may or may not add enough to the income of the employer for him to provide the worker with an income sufficient to ensure his and his family's existence worthy of human dignity.  So, ultimately, this provision requires others in the society to provide this worker with goods and services or income that will allow his and his family's survival with human dignity.  This can only be accomplished by violating the rights of others.  In particular, it violates a large number of the rights this very document pretends to protect.  Who even knows what that requirement for minimal human dignity is when phrased in such a context?  I think human dignity is achieved when one is capable of sustaining one's own life through one's own efforts to think rationally and to apply that thought to securing and flourishing life.  Others are not responsible for providing the human dignity that only one's own efforts can achieve.  One has a right to pursue human dignity, not to be provided it.

Article 24:  "Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay."  Yes, everyone has a right to seek rest and leisure, but no one else is obliged to provide him with the means to rest and to take his leisure.  Neither government nor society have any business limiting the right to contract or to earn a living by imposing limits on working hours or requiring an employer to provide pay for holidays.  If an individual wants these things, he is obliged to provide them to himself as a self-employed person or to work out a mutually and voluntarily agreed upon contract with an employer.

Article 25:

"(1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control."  Like happiness, everyone has the right to pursue these objectives, but no one else is obliged to provide them.  No one would have the right to life, liberty, and the pursuit of happiness if they are required to provide these values and services to everyone else who may need them, even if for reasons beyond their control.  This is just a way of saying you are free, unless someone else needs you to serve them.  Someone else is always needy and some of them for reasons which governments do not find it convenient to acknowledge to be due to their own lack of effort and foresight.  Those who have planned their lives poorly and make little effort to secure their own lives have no right to enslave those who are better off than themselves simply by virtue of their need.  Of course there are many good reasons why those who are well off may choose to act benevolently toward others in need, but they should not be responding to fulfilling the rights of others at the loss of their own rights.  The benefactor should be free to decide for himself who he will provide charity to and how he will do so.  He is also free to provide no charity to anyone.  Once again, this provision is contradictory to many earlier valid rights in this document.

"(2) Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection."  This is a worthy viewpoint, but it confers no rights.  Once again, it implies obligations of service contradictory to real and valid rights if it had the status of a right.

Article 26:

" (1) Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit."  Once again, everyone has the right to pursue an education, but no one else can be obliged to provide that education without depriving them of their rights.  Education is important and it is worthy of great consideration for charitable giving, but there is no right to have it.

"(2) Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms. It shall promote understanding, tolerance and friendship among all nations, racial or religious groups, and shall further the activities of the United Nations for the maintenance of peace." Education should be devoted to the development of rational thinking skills and to an understanding of rights as a non-contradictory freedom of action and thought needed by every individual to sustain their life in security and to flourish in life.  The U.N. has shown that its concept of rights is contradictory.  While it is ultimately to be hoped that everyone will be able to at least live in peace with one another, this possibility is not independent of the actual beliefs prevalent in some nations or in some religious ideas.  It is certainly not independent of peoples respect for real human rights either.

Article 27:  I agree with this one.

Article 28:  "Everyone is entitled to a social and international order in which the rights and freedoms set forth in this Declaration can be fully realized." This is wrong for the above reasons.

Article 29:  "(1) Everyone has duties to the community in which alone the free and full development of his personality is possible.  (2) In the exercise of his rights and freedoms, everyone shall be subject only to such limitations as are determined by law solely for the purpose of securing due recognition and respect for the rights and freedoms of others and of meeting the just requirements of morality, public order and the general welfare in a democratic society."  To the degree that a community of people actually do protect the rights of the individual to life, liberty, and the pursuit of happiness, one does have a duty to that community, but it is unwise to make that duty enforceable by law.  The exercise of duties should be voluntary, not forced.  The general welfare of a society is only achieved by the thorough and non-contradictory protection of individual rights.  This is only possible when rights are properly understood as endowing a freedom of action upon an individual and not an obligation of service to others.  The U.N. clearly does not understand this.

Article 30:  "Nothing in this Declaration may be interpreted as implying for any State, group or person any right to engage in any activity or to perform any act aimed at the destruction of any of the rights and freedoms set forth herein."  In the name of securing my own real rights as an individual, I must object to the false U.N. declaration that I can be compelled to provide goods and services to others in the name of false and contradictory rights.

Labor:

Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining  This statement is internally self-contradictory, at least in the context of how it is meant.  Every individual has a broad right to freedom of association.  This applies to business owners, managers, and non-management employees.  Employees have the right to organize to perform collective bargaining, but owners and managers cannot be obliged to give up their own freedom of association by being required to come to an agreement with such an employee bargaining unit.  They are equally free not to employ those individuals who engaged in the collective bargaining, which is contrary to the intent of the U.N. and to unjust laws in the USA.

Principle 4: the elimination of all forms of forced and compulsory labour  I agree with this.

Principle 5: the effective abolition of child labour  I agree with this.

Principle 6: the elimination of discrimination in respect of employment and occupation  Some types of discrimination are necessary in hiring, such as discriminating in favor of intelligent and hard-working employees who allow a company to add enough income that it can thrive.  Because the U.N. proved such an unthinking instrument with respect to human rights, I cannot trust that its concept of proper and improper discrimination is correct.  I do not believe either racial or gender discrimination makes sense in a business.  There are however ideas that some individuals have which are highly corrosive to trust and confidence and they do justify discrimination.

Environment:

• Principle 7: Businesses should support a precautionary approach to environmental challenges;
• Principle 8: undertake initiatives to promote greater environmental responsibility; and
• Principle 9: encourage the development and diffusion of environmentally friendly technologies.  

I would agree to these if

• "precautionary approach" were "rational precautionary approach" and that rational precaution covered precautions against needlessly causing human beings misery, such as forcing them out of coal mining jobs, coal-fired power plant jobs, or to pay much higher electricity costs and to risk freezing in severe winters when wind and solar power would fail them.
• "promote environmental responsibility" recognized that at some point one is doing enough
• and if this were not taken to be an agenda determined by the U.N. rather than me.

My laboratory is constantly engaged in helping clients to use and process their materials to minimize environmental harm, while raising the standard of living of human beings.  I am confident that the private sector can manage this process very well and that it will continue to turn to my laboratory for materials characterizations critical to this progress.

Key U.N. Documents Cited on the Environment:

• The Rio Declaration - a statement of 27 principles upon which nations agreed to base their actions in dealing with environmental and development issues. The Rio Declaration built on the previous Declaration of the United Nations Conference on the Human Environment which was adopted in Stockholm in 1972. The Stockholm conference was the first global environmental meeting of governments, which stated that long-term economic progress needs to be linked with environmental protection.
• Agenda 21 - a 40 chapter, action blueprint on specific issues relating to sustainable development that emerged from the Rio Summit. Agenda 21 explained that population, consumption and technology were the primary driving forces of environmental change and for the first time, at an international level, explicitly linked the need for development and poverty eradication with progress towards sustainable development
• The 'Brundtland Report', 'Our Common Future' which was produced in 1987 by the World Commission on Environment and Development, also laid the foundations for the Environment Principles. This landmark document highlighted that people needed to change the way they lived and did business or face unacceptable levels of human suffering and environmental damage.

While the Rio Conference led to a great deal of discussion of restrictions on CO2 emissions, the statement of 27 principles in the Rio Declaration on Environment and Development do not mention any specific pollutant or threat to the environment.  This surprised me.  But knowing that the U.N. has a very different idea of what these threats are from my own still gives me great concern about signing on with the U.N.  Indeed, the vagueness is useful to get people to sign on to the agenda and to allow planners and other government bureaucrats maximum flexibility in implementing their ever-tightening limitations on human activities and property use in the name of the environment.

Agenda 21 is a huge document that arose from the 1992 Rio Conference.  It is also largely an effort to use government planning, often at the local level, to restrict land use and to force people to live in more dense communities with much more land further outside of towns left fallow or agricultural.  As such, Agenda 21 limits property rights, economic development, drives up housing costs, and encourages government subsidies for lower income persons as a bribe to get them to move into more crowded developments.  There is no good reason for governments to so limit individual choices and to inhibit the free use of land and capital resources.

While not much discussed explicitly in the summary portions of Agenda 21 or the Rio Declaration on Environment and Development, it is clear the U.N. is eager to lump its failed hypothesis of catastrophic man-made global warming into its precautionary protection scheme and its claims for the nature of sustainable development.  I have written many posts on the bad physics behind the claims that CO2 emissions will cause warming at a catastrophic level or even a significant level.  I have written many posts on the wrongful manipulation of the temperature record to make the temperature appear to rise at a more significant rate than it has.  I have also written about how the actual predictions of the U.N. endorsed climate models have failed, most especially in predicting a continued rise in temperature over the last 17 years which has not occurred.

See for example my articles going back through 2013 on the fallacies of CAGW as pushed by the U.N., the U.S. government, and many other governments:

Simple Explanation of Why Greenhouse Gases Do Not Warm the Earth's Surface 

Maintaining Climate Change Alarmism: Replacing Cool Weather Station Data with Warm Station Data 

AGW Theory: Back Radiation Insignificant for Surface Temperature

Mann v. Steyn to Determine if Opinion Contrary to Government Science is Permitted

Governmental Exaggeration of the Increase in Global Temperature 

The Anti-Science IPCC Global Warming Report 5

Claims of Long Life for Man's CO2 Emissions in Atmosphere are False 

The Unsettled Science of Global Warming Revealed by the Climate Models

NASA Alters Iceland Temperature Record to Produce Warming

NOAA Surface Temperature Changes Show Little Correlation to CO2 Changes Since 1880

Earth Surface Cooled from 1982 to 2006 According to Satellite Data

United Nations Does Not Take Global Warming Seriously

What if the Atmosphere had no Greenhouse Gases?

The Stefan-Boltzmann Law at a Non-Vacuum Interface: Misuse by Global Warming Alarmists

A Hypothetical Earth Atmosphere of Carbon Dioxide and Comments on Vertical Mixing

The Earth Surface Temperature without Greenhouse Gases: The Shade Effect of Infra-Red Active Gases

An Unsettling Removal of Atmospheric CO2 by Plankton

Do All Atmospheric Gases Absorb and Emit Electromagnetic Radiation?

Is the Earth Still Warming?

The Ocean Acidification Myth

CO2 Increases Lag Temperature Since 1982

The Unsettled Earth Energy Budget

The Most Essential Physics of the Earth's Temperature

Infrared-Absorbing Gases and the Earth's Surface Temperature 

Blackbody Radiation and the Consensus Greenhouse Gas Theory

Big Government and Race Relations

I made the following comment in a response to an article that talked about race relations under the Obama administration:

Good race relations are based on mutual respect and ultimately, respect has to be earned.  It is not earned by those long dependent on government or by those who use the force of government to take what they want from others.  A consequence of this is that Big Government, which does make some dependent and does take values by force from many, is itself a major force creating disrespect.  Having done so, that disrespect tends to become racial disrespect if there are differences by race in the likelihood of being dependent or in that of being robbed or forced to contribute services by government.

There are many, many reasons for opposing Big Government.  The most fundamental one is that Big Government is necessarily a violator of our sovereign individual rights.  As such, Big Government shows its disrespect for every individual.  That heavy disrespect is propagated throughout a society governed by such a Big Government.  This makes it very unlikely that the people of that society will not often treat others with disrespect.  This is terribly corrosive to the good-will and the sense of benevolence with which we should be able to treat our fellow man in a free society.  The subsequent loss of good-will and respect degrades the quality of life in how we trade with others and how we live with others as neighbors.  And for the reasons I outlined in my quote above, it is very corrosive of racial relations.

It is no surprise then that racial relations have not been well-served by Obama's unrelenting commitment to Big Government.  The cancerous growth of long term unemployment benefit, food stamp, Social Security disability, Medicaid, subsidized ObamaCare, and many other programs for dependents upon the government, has created many more dependent persons, who have lost the respect of many more productive and self-reliant individuals.  The cost of these programs has placed increased burdens on those productive people and at least some of them have naturally become angry at those dependents who receive the benefits of their hard work.  It is very hard for productive people to respect unproductive people when those unproductive people show so little respect for productive people by using government as their agent to take what they want by the use of force.