You can probably predict my answers on most of these questions, so I'll focus more on the supporting explanations.
Business and Domestic
1. Should the government abolish Minimum Wage?
The minimum wage is a welfare tool. If it were abolished, the poverty rate would increase considerably. That much is indisputable: The free market drives wages down to the lowest competitive rate, and large corporations (which are in many ways independent of the free market) collude to achieve the same result or worse.
The theoretical trade-off is that there would also be a possibility of greater economic expansion, at least in the short term, since the money not paid to workers could potentially be used as capital instead. In practice, however, not only does that inherently not work (because the cost of living increases when the economy expands), but most of the time it isn't even an issue, because most of this money is not used as capital. It goes into the hands of the shareholders and executives, who invest it for the enrichment of themselves and anyone else who can competently play the markets. When that's where the money goes, the free market's pressures on labor costs are a form of wealth redistribution from the lower to the upper classes. It is hard to overstate how destabilizing that is to a society. Lesser societies have crumbled under that kind of stress.
The simple reality is that this short-term trade-off does not live up to its theoretical potential. This aspect of economic conservatism is simply wrong, flat out. The economy grows both more and more healthily when the lower income brackets are upwardly mobile, and the minimum wage is a net positive influence on upward mobility, especially to the working class. Abolishing it would profit a few, but it would harm the economy as a whole.
Let's remember, also, just what kind of a minimum wage we're talking about. It's true that many people who earn the minimum wage today would earn considerably less were it abolished (although this would be offset somewhat by state minimum wage laws in most states, which are separate from the federal minimum wage, which I presume is what you were talking about). However, already, the minimum wage is not a "livable" wage, meaning that someone working full-time on the federal minimum wage would currently gross $14,500 a year. The federal poverty threshold, meanwhile, for a two-person family is $14,570 a year. In a legitimate sense, therefore, we can think of the minimum wage as "not existing," because it is low enough that lower wages would mostly be offset by government welfare. The minimum wage in America is not a gold-plated plan. It's not even tin-plated. It's cheap, almost to the point of irrelevancy. (Until Democrats raised the federal minimum wage a couple of years ago, there was barely a state in the Union that didn't have a higher state minimum wage.) We would have to raise the minimum wage a whole hell of a lot before it were to reach the point where it would be capable of legitimately destabilizing the economy due to downward wealth redistribution. (I'm not actually aware of any country having ever gone broke by being overly generous with its lower class, but it is at least theoretically possible.)
People who can barely afford to live are not going to be spending money to grow the economy: They're paying their rent, their groceries, their phone bill...stuff like that. If you're a company in any other industry, these people don't exist to you. The best you can do is get them to buy your shit on credit, which runs up American consumer debt, which is an economic hazard that benefits almost nobody. You need to understand that rich people are not the only ones who know how to use money. Where economic growth is concerned, it's actually the middle class which supports the economy the most. They're the ones who spend the most money, as a group, on goods and services directly. The upper class spends more per capita, but is much smaller in membership. The lower class is both smaller in overall size and spends less per capita. A weak minimum wage protects the lower class, but a strong minimum wage would empower the middle class, making it far more relevant to the wider economy. In my view, we should raise the minimum wage to a point where everybody who puts in a full day's work is guaranteed to make enough money to be able to spend a little extra cash on luxuries on a regular basis. We should certainly not abolish the minimum wage.
I would add that, at the federal level, the minimum wage should be tied to local cost-of-living figures. $7.25 in Podunk, Mississippi is a livable wage. $7.25 in Seattle would be a joke. (It's not relevant, though, since Washington's minimum wage is higher.) I actually worked for $7.01 in Seattle a few years ago, when the minimum wage here was $7.01. High living it warn't.
Business and Domestic
2. Should the government impose a "Windfall Tax" on the excess profits of oil companies?
In the free market, companies earn very small profits. Those that can differentiate themselves will do a little better. Many others will go out of business. A few will do spectacularly well and earn large profits and grow larger. In an uncompetitive market, profits are much higher because companies use their leverage to raise prices. That much is simple economics. It leads into the question of what to do about corporate profits because it reminds us that profits, in a truly competitive market, are small. Huge profits anywhere are a sign of one of only two things: Either the company making those profits is truly a superior alternative to the competition, or the company is effectively stealing.
Profits themselves can be a good thing; they're a tangible reward in our capitalist system. They're a strong incentive to do business. But they can be, and often are, ill-gotten. Oil companies are an example of an oligopolistic industry where vast amounts of wealth are diverted to the executives and shareholders without commensurate benefit to customers or the economy as a whole. Because of the infrastructure required for an oil company to operate, small businesses have a hard time starting up in this industry. There simply isn't competition. That is reflected in how high on the hog these executives live. Is the work they do really worth the tens of millions of dollars they can earn in a single year? No, it's not. The free market would prove that, if it were able to pressure the industry. But it can't. Only two powers can pressure an oligopolist: conscience, and government.
Once you've all stopped laughing at the thought of these people exercising their conscience by limiting their personal wealth voluntarily...
Government can come in and say "Your profits are the result of an oligopoly. We will allow you to continue to earn large profits, but we will tax them severely so that your success is the nation's success." That is, essentially, a windfall tax: If you make a shitload of pure profits, you will pay a disproportionately higher tax on it. The question of whether a windfall tax is a good thing depends on where that money goes if it is left in the hands of the highly profitable industry, and where it goes if it is taxed by the government. The latter half of the equation depends on your assessment of the value of government spending. The former half requires a "follow-the-money" exercise where you track these private profits to see how they are spent. You're welcome to take such an excursion, but I'll tell you right now that most of that money goes into the markets as investment. This is how a millionaire salary can produce a multi-millionaire or even a billionaire. Some of these people follow the Bill Gates path and make huge charitable contributions. Others don't. They hold onto their money, trying to grow it without actually spending much of it. This is poison for the economy, as these individuals are essentially acting as humongous wealth sinks where wealth goes to disappear. It still shows up in the economic numbers, and certainly in the market numbers, and it still gets taxed to the extent these people can't cheat their way out of paying, but it isn't actually used. It's dormant money. The actual, functional economy is that much smaller. It's like stuffing money under your mattress: It doesn't really exist until you use it. It has potential, and potential has value to the economy, but not usually the parts of the economy that ordinary people interact with on a daily basis. For most of us, a working economy works best when money trades hands. The ultra-rich who do not reintroduce their money into the economy through capital investments or charity are not allowing that money to trade hands. That's a very bad thing. You may be aware that a fraction of the people in this country control the majority of its wealth. An alarming proportion of that wealth, for all intents and purposes, does not exist.
I am in favor of a progressive windfall tax that takes into account the absolute magnitude of a profit, the relative magnitude of a profit with respect to revenues, and the relative magnitude of a profit with respect to previous years (which would protect companies undergoing major growth). In all three cases, the windfall tax would be higher when the profit is that much more out of proportion with other measurements.
Understand that I am a capitalist myself. I don't favor income caps. I don't think a corporation should be told "You are not allowed to make more than X percent profits." I think a corporation should be able to make as much money as it legally can...and then should be taxed to the point of tears. It's profit, so the company is still making money. It's just not making as much money. That's how it should be, because not only is that what the free market would declare, but I also value government spending (economically and socially) above the judgment of the very rich. That's an eminently democratic position, and one that libertarians have a hard time reconciling because of their knee-jerk reaction against government anything.
Business and Domestic
3. Should the government replace Income Tax with a National Sales Tax (aka "Fair Tax")?
Here is something everybody should understand about economics: Not all dollars are equal. Absent welfare and charity, if you don't earn enough dollars to eat, you're dead. If you don't earn enough dollars to put a roof over your head, you're homeless. These dollars in a person's overall income are worth far, far more than the dollars that come after them. Beyond the necessities, there are pseudo-necessities like healthcare and education which one can technically live without, but only at great personal loss. The dollars to pay for these things are worth a lot, but not as much as the dollars to survive. Next, there are material luxury dollars: candy, toys, cars. These dollars make a survivable life enjoyable, and they're worth a lot, but not as much as the ones that precede them. Then there are the wealth-growth dollars, the dollars which enable investment, entrepreneurship, and lavish material luxury. These are also very important. They grow the economy and give ordinary citizens something to aspire toward. Finally there are the "I don't know what to do with this money" dollars. This is when you make so much money you'd have to work hard to spend it all. You can buy your own airplanes, your own islands, yachts, mansions in multiple states. But mostly you invest your money in the markets. That's all there is to do with it, really. This money is not worth very much.
These divisions correspond roughly with the economic classes--the impoverished, the working class, the lower middle class, the upper middle class, and the upper class. But the really interesting thing is how a sales tax and an income tax affect these different levels of dollars.
Sales taxes are disproportionately borne by people who buy stuff. That's partly the working class: they buy food and basic luxuries. In particular, however, it's the lower and upper middle classes. They buy the most stuff, by far, when considered as an economic unit. Their furniture and wild salmon and sailboats and microwaves and big-screen televisions would all be subject to a sales tax. And it hits the lower middle class harder, because they're operating in a lower income range where their available dollars are worth more on average. A sales tax, therefore, is a tax centered on the lower middle class, with significant overspill on the classes directly below and above it. Economically speaking, a sales tax is a strong, stable tax, because the lower middle class is the backbone of the economy. And though a sales tax is highly susceptible to economic downturns, making it undesirable as a sole general revenue source, it is generally one of the two strongest broad-based taxes out there, because in our economy there will always be the sale of goods on a massive scale.
However, this sales tax completely ignores most of the wealth in the country. The upper class, which controls the majority of this country's wealth, spends proportionally next to nothing on sales taxes. Contrast that with a member of the working class, for whom the sales tax on a burger can make the difference between buying it or not. A sales tax fundamentally avoids the money with the least value...and yet it is the money with the least value that should be taxed the most, because it's a lot easier to justify taxing a person's "I think I'll buy a golf course" money than their "I think we'll have steaks this Sunday" money...because, to the individuals, the golf course money is worth a lot less than the steak money, but to the nation as a whole it's all the same: Revenue is revenue. This is why, absent other factors, the cheapest money should always be taxed the hardest while the most critical money should never be taxed at all. Yet a sales tax does indeed reach into the working class and even the poor class. It shouldn't. But how do you control that? The only way to do it is to write a dazzlingly complicated tax code which specifically addresses various classes of goods in various instances. Most sales taxes only address this problem in the most generic sense if they address it at all.
Meanwhile, an income tax can be graduated, which means that tax brackets can be established at which income is charged at different percentages. This is how the federal income tax is currently structured: The first few thousand dollars a person makes are effectively not taxed at all. The next few thousand are taxed at a low rate. The next few thousand are taxed at a slightly higher rate.
Check it out.. Note the marginal tax rate in the left column. Note how sharp the increase is at first, from bracket to bracket, and how it levels off in the upper brackets. There are a lot of politics backed into that one little curve. The steepness of the early brackets means that the lower middle classes get taxed pretty hard pretty early. The shallowness of the latter brackets means that the rich get taxes very lightly. This is a bad thing: That curve should be inverted; the lower brackets should be shallow and the upper brackets should be steep, which follows from the premise that low-level dollars are worth more than
high-level dollars.
Thus you can see that the current income tax structure in this country is imbalanced to favor the ultra-wealthy at the expense of the lower middle class. It also indicates that our income tax rates overall are surprisingly low, given what we expect our government to be able to do. Thus, income taxation in America today is in a bad way. But the curious thing is that we could easily fix it: We could change those marginal rates to be more progress--that is, to tax higher dollars at a higher rate, and lower dollars at a lower rate. In one fell swoop, we have a solution to the problem of how to stop the sales tax from disproportionately punishing the poor. The income tax is inherently capable of reflecting the fact that not all dollars are equal, while the sales tax is not. Thus, an income tax is preferable to a sales tax. (Moreover, an income tax is more stable during recessions than a sales tax is.)
(Incidentally, if you've ever heard people arguing for a "flat tax," what they're usually talking about is an income tax with no brackets, and one single rate that treats all dollars equally. You can see why the rich would want that. But it'd be disastrous for the economy: Not only would the rich pay far less in taxes, but the poor would be horribly overburdened. For someone who's just getting by, every tax dollar hurts. A flat tax would be a recipe for social disaster and economic inequity out of control.)
Educational
1. Should the government abolish Affirmative Action?
Reagan did something similar in the 1980s, and "black America" went into a cultural tailspin. Without the extra social spending on the poor (and blacks were and still are disproportionately poor in this country), more kids turned to gangs and drugs, and we're seeing the costs of that today.
Affirmative action itself doesn't seem to be as effective as its advocates have hoped. It's also filled with constitutional problems. But what do you do when a whole segment of your population is effectively shut out from the material progress of the nation as a whole? There are all kinds of people on the right whose solution is, more or less, "Screw 'em. Let 'em figure it out for themselves." At best, this sentiment is civically irresponsible, selfish, and un-neighborly. In fact, however, it's often much worse than that, because the underlying emotion is not selfishness but enmity. In other words, many of the people who take this position are, frankly, racist. There are segments of the population with even worse poverty than blacks, such as Appalachian whites. I notice that these people are not the recipients of that same conservative enmity for "welfare."
We've forgotten what "welfare" actually means. It's not a government giveaway for deadbeats. "Welfare" is something every nation requires. Deconstruct it: It means "faring well." Everybody should have that, and governments should do what they can to foster it. When a culture has failed within a larger society, there are only two solutions: forcible correction and passive empowerment. Forcible correction is out of the question in this case. The reason black culture is as troubled as it is is that blacks were enslaved here for hundreds of years. Our ancestors broke the back of black culture. The same problem exists with our Native American population, following the genocide we visited upon them in years past. There are simply no easy answers here, but forcible anything is absolutely off the table.
That leaves passive empowerment...but how does that even work? What do you do to teach a child who doesn't want to learn? What do you do to welcome an adult into your culture who hates and distrusts you as much as they themselves have been hated and distrusted by people from that very culture? Affirmative action is one attempt at giving minorities and blacks in particular a leg-up. For all its own shortcomings, it seems to have done more good than some of our other efforts, such as the projects. But if you've got a better idea, that doesn't involve "Screw 'em," I'd love to hear it, because race relations in this country may be better than they were in the past, but they're still shit awful.
2. Should the government provide vouchers for private schools?
This probably deserves its own topic. In a word, no. Why? Because the very premise assumes that public education itself is inadequate (except in extremely remote locations). It's a self-defeating solution.
3. Should the states require K-12 students to complete Minimum Skills Tests?
This would probably fit into the "its own topic" that I just mentioned. I'll leave it for another time. In a word, yes. Why? Because evaluation (i.e., testing) is the only way to objectively measure how well the education system is working, without resorting to the context of economics.
If anyone would be willing to engage in a wholesome, scholarly discussion about these questions I had, it would ease my concerns (not so much that I'm losing sleep over it).
There you go. Since you asked. =)
