I Believe

I believe in America—

What an emotional week for the country—and not just because of the election. This week, I talked with some fired-up cattle producers who believe federal agencies overstepped their authority. May we all be gracious in our interactions.

Many Americans fear for their ability to forge the means to achieve heat in the house and food on the table. There’s no quick fix for this systemic problem. Systemic problems require systemic solutions. Over the last year, we spent almost half of our effort thinking about how to improve the economy for families across America. This was the decisive effort of the year. We need governance to serve the people and set conditions that enable individual Americans to work and succeed.

Some fear for the security of our borders. At the same time, we recognize the benefit and talents legal immigrants bring to America. Even if we disagree with the premise that drastic changes are necessary to secure our borders, the perception of doing nothing leaves a foul taste in the mouths of Americans. We spent an entire month posing a multi-pronged approach to address border security in an efficient and respectful manner.

Some fear for their liberty or the liberty of others. If we give the government the power to take individual liberty away from any group, we give the government the power to take away our liberty. Inherent in the inalienable right to life is the right to make decisions about ourselves. We may have opinions and personally disagree with others’ choices, but government interference with individual choice violates liberty. No legislative body can support liberty better than stating that men and women of able mind have the right to make their own healthcare decisions. We must protect each other’s rights to ensure our own.

Some fear for the integrity of the institution that is our democratic republic. Few attain the privilege of swearing an oath to the Constitution, and we need to hold those who violate their oath for personal gain accountable. Government exists to serve the people. Any leader who serves themselves is a disgrace to the nation. Too many serve proudly and take this oath as almost a condition of their lives to allow us to water down the commitment of others.

If we were angels, we would need no government

These challenges are not new. Principal framer of the Constitution and later President James Madison outlined the inherent difficulties of governance in Federalist 51.

He addressed setting conditions for governance to secure liberty and justice for Americans.

He helped establish a system of separated powers, ensuring each branch holds the others accountable. The premise is that individual Americans must have the liberty and justice to succeed on their own merits. Government has two aims: securing liberty and justice for individuals and then controlling itself.

Liberty is the freedom to choose how you will live and act, within a framework that respects the same rights for others.

Justice is fairness, ensuring that social and economic structures benefit everyone, even the least advantaged, while correcting wrongs under the law.

Madison famously wrote, ‘If men were angels, no government would be necessary.’ He emphasized our duty to prevent one group from oppressing another. Stated another way, we need to set conditions enabling individuals from disadvantaged backgrounds to have the same opportunity to achieve prosperity as those from privileged ones. This is the essence of justice. Madison verbatim states we must “guard one part of the society against the injustice of the other.”

Our fears today reflect the same fundamental concern: how to preserve liberty and justice when human nature is flawed.

The fundamental bedrock of America is that we are conceived in liberty. No matter our group, we must protect each other’s rights to ensure our own. America demonstrates she will go to war for liberty.

The ambitious promise of America is justice for all. No matter our upbringing or whether we live in urban or rural America, we need to have heat in the house and food on the table. Individuals need to be able to achieve these necessities through the effort of their work.

In sum, the government exists to ensure liberty and justice for all.

I believe in America. Some are worried about our future, but I am not.

The “Father of the Constitution,” James Madison, expressly stated the primary purpose of the document was first individual liberty and justice, and then control of the government. America bows to no king.

The system Madison and others put in place is resilient.

America will continue to strive for liberty and justice. Just as America was born at war, fighting for liberty, Americans will rise against any group that threatens their inherent rights.

Our challenges today are of liberty and justice, but again, I don’t fear for our future—I know we will overcome them.

May God bless the United States of America.

Did the American Founding Fathers support the Electoral College?

Days at elk camp are long. We rise in the wee hours of the morning and hike with headlamps through the mountains in the dark to be where we think elk will be at first light. At the end of the day, we wait where we think the elk will be at last light and hike out with headlamps. We meet at camp at night to share our experiences, food, and drink. Success in the field probably means your group is the last to return to camp, but no one sleeps until everyone returns.

Over food and drink, we catch up. Several camp veterans won’t have seen each other in a year or more. We share pictures of kids and talk about life changes.

We chat generally about anything. We rarely talk about religion, but we talk about God and existence. And we talk about politics.

We don’t all agree on every topic, and there are some strong disagreements. But we accept each other's views, communing over beer and food. We know that the next day, the person you share your disagreement with will help you carry out a heavy load, and they’ll wait for you to return to camp to go to sleep.

A topic at camp this year was representative government. One of the hunters lives in a rural area in a populous eastern state dominated by city politics. He expressed frustration because the city negates the state's interest in the rural area.

The issue at hand is a critique of “winner-take-all” state election systems. In a winner-take-all system, the candidate who receives the majority of the popular vote in a state wins all of that state's Electoral College votes. If cities vote differently than rural areas, the city still dominates the state’s electoral choice. States prefer this approach as it gives their preferred candidate the maximum advantage. In 1800, only two states had a winner-take-all system. By 1836, all states except for South Carolina used a winner-take-all system. Today, all states except for Maine and Nebraska use a winner-take-all system.

For all the critique of the Electoral College, a winner-take-all system equally undermines the democratic principle of one person, one vote. It distorts the national popular will. Those who argue that “land doesn’t vote, people do” often still support a state winner-take-all system, negating the rural influence in their own state. The result of both winner-take-all and the Electoral College is to amplify the power of swing states.

Because there’s nothing new under the sun, this issue has been hotly debated since America was born at war and by none other than the brilliant primary framer of the Constitution and later President James Madison.

August 23, 1823. A letter from James Madison to US District Judge George Hay

James Madison was the primary framer of the US Constitution and a driving force behind the 1787 Constitutional Convention, which created the structure of the American government. His detailed notes from the convention are the most complete of any delegate.

Following the convention, Madison wrote 29 of the 85 Federalist Papers to explain the Constitution and convince states to ratify it. When the states refused to ratify the Constitution without explicit protections for American individual liberty, Madison was the primary author of the Bill of Rights. These amendments protect the liberty of citizens and states.

In short, Madison was central to the creation and ratification of the Constitution. He served the nation as a Congressman, Secretary of State, and was later the fourth President of the United States, serving in that capacity from 1809 to 1817. He was a staunch advocate for states' rights and a rational pragmatist. He recognized that while a states’ rights approach has strong merits, there are practical limits that sometimes necessitate federal intervention.

At the Constitutional Convention, Madison recommended using the national popular vote to decide the office of President. He stated that "the people at large was…the fittest" to choose the executive. But his perspective changed over a lifetime of national service.

In an 1823 letter to George Hay, Madison discussed a potential Constitutional amendment: district-based voting to select Presidential Electors instead of the current Electoral College system. He reflected on the 1787 Constitutional Convention's difficulty in determining a method to elect the President. He acknowledged the compromise that led to the Electoral College system, which was influenced by the need to balance the interests of small and large states and strongly influenced by slave states. He mentioned that the compromise agreement became necessary due to time pressure and the long deliberative process.

Madison suggested that the Electoral College was an imperfect solution.

Towards the end of the letter, Madison outlined his proposal:

Electors should be chosen by districts… If no candidate achieves a majority… the President should be chosen by a joint ballot of both Houses of Congress

Madison’s proposal identifies that each voting district should cast its own vote for the president. Instead of the winner-take-all system or the current Electoral College system, voting districts should each have their vote counted.

In the letter, Madison also doesn’t explicitly discuss the concept of a direct national popular vote for electing the President. Instead, he focuses on the mechanics of the Electoral College and the potential benefits of district-based voting. Madison critiques the current Electoral College system, particularly emphasizing the shortcomings of the winner-take-all approach and the disproportionate influence it can grant to smaller states or individual electors.

Madison’s discussion is more about improving the representational fairness of the Electoral College rather than advocating for a shift to using the national popular vote directly for electing the President. He suggests reforms that would make the Electoral College better reflect the diverse preferences across different regions of the states, aligning Electoral College outcomes more closely with popular vote distributions within those states. His proposal aims to balance the representation of smaller and larger states and address the issues that arise when a few electors or a small number of densely populated areas can determine the majority of electoral votes for an entire state.

As a strong supporter and advocate of a democratic republic and states’ rights, Madison grew to recommend not abandoning the flawed Electoral College but making the system more closely represent the vote of the populace.

So, Why do we have the Electoral College?

Slavery shaped the structure of the Electoral College during the Constitutional Convention of 1787 due to the significant political and economic divisions between slave-holding and free states.

Slave-holding states were concerned about their political influence under a direct national popular vote system. The South had large populations, but a significant portion of those populations were enslaved individuals who had no voting rights. In a popular vote system, these states would have less voting power than the more populous free states if the president were elected purely by the popular vote of free citizens.

To reach a compromise, convention delegates agreed on the Three-Fifths Compromise, which counted three out of every five slaves as people for congressional representation and taxation. The Electoral College agreement gave Southern states more electoral power than they would have had if slaves were not counted at all.

The Electoral College was also a means for Southern states to influence presidential candidates. Under the compromise agreement, these states could push candidates to consider Southern interests, particularly the preservation of slavery, to seek support from Southern electors.

Right or wrong, the Electoral College helped maintain the union of the states by giving each state—regardless of North or South, large or small—a proportionate influence in the electoral process. It also perpetuated slavery.

Did the American Founding Fathers support the Electoral College?

The American Founding Fathers supported a democratic republic and representative government.

At the Constitutional Convention, James Madison himself recommended using the popular vote to determine the president. But the Founding Fathers could reach no such agreement. The Electoral College was a compromise that became necessary for slave-holding states to agree to the method of selecting a President.

Madison had a different recommendation after serving as Congressman, Secretary of State, and President.

We should keep the Electoral College districts, but instead of a winner-take-all system that disregards the one-person, one-vote principle, we should tally each voting district’s vote individually.

It's a compelling idea from one of America’s greatest leaders, who dedicated his lifetime in service to the nation.

May God bless the United States of America.

What does it mean to vote?

You voted for me to go to war in Iraq

A little more than ten years ago, I had a conversation with a woman who strongly opposed the war in Iraq. By then, the war was hugely unpopular. Iraq wasn’t a threat to American sovereignty. They didn’t have weapons of mass destruction ready to rain down on our allies. They maybe didn’t need a new form of government and certainly didn’t want America to help them get there.

Since I had carried a rifle in Iraq, I thought she could cut her lecture short. After some more minutes of lecture, I got frustrated. I should have kept quiet, but I made the situation worse by saying, “You voted for me to go to war in Iraq.”

Of course, that got her going again. Not everyone appreciates that I’m a truth-teller. But it was absolutely true.

Voting in our democratic republic is a willful act to transfer our personal autonomy to a representative.

At the individual level, voting on Election Day is our attempt to choose representatives to whom we delegate further choices. We may or may not vote for our chosen candidate, but a candidate will win. At the end of the vote tally, we know our elected representatives.

That elected representative will then assemble and cast further votes on our behalf.

Because we delegate our vote to an elected representative, their vote becomes ours.

You voted for me to go to war in Iraq because our delegated representatives in the House and Senate passed the Authorization of the Use of Military Force for Iraq in October 2002. Even if your preferred candidate didn’t win, you still have an elected representative. Even if your elected representative voted against using military force in Iraq, the House and Senate still passed the measure.

The choices our elected representatives make become our choices. Since we are accountable for the outcomes of our choices, it is our duty to hold our leaders and power structures accountable for their character and decisions. We may delegate our authority, but we can’t delegate our responsibility.

Representation and voting are a central premise to our democratic republic. They are so crucial that America was born at war, fighting for the right to representation.

Thomas Paine and the American Revolutionary War

The Revolutionary War wasn’t just a fight for independence from British tyranny. It was a fight for representation. In the Declaration of Independence, American founders identified several disputes with British rule related to representation. These included…

King George III refused to approve laws in the public's best interest. He refused to pass laws that would give more people representation in government, even though we were willing to give up other rights in exchange. He suspended colonial legislatures and declared he had the power to make laws for them. He dissolved representative assemblies that opposed his policies. He refused to call new elections after dissolving assemblies, leaving the people without representation.

In short, we fought for our right to decide our future through elected representatives.

In 1776, at the dawn of the seven-year war that we fought for independence and representation, British-born philosopher, writer, and revolutionary figure Thomas Paine wrote Common Sense. Paine had moved to the American colonies in 1774 and penned ideas central to the debates surrounding independence from Britain.

Common Sense advocated giving people the power to elect their representatives. Paine saw voting as the core of a new social contract—an idea that resonated with the American colonists who were denied representation in British governance.

This new social contract included a government that derived its authority from the consent of the governed rather than from hereditary monarchy or divine right. His social contract redefined the relationship between the people and their government. It advocated for government based on the people's will, established through free and fair elections. It required representation, wherein elected officials act on behalf of the citizens.

Unlike monarchies, where rulers are not accountable to the people, Paine’s social contract promoted the idea that all citizens are politically equal and government officials are accountable to the electorate. It rejected hereditary rule and argued that no one has a natural right to rule over others simply by birth. He called for breaking these systems and establishing a republic where people chose leaders based on merit and public trust.

Last, he viewed government as a safeguard for liberty and believed the role of government should be to protect the liberty of its citizens. He viewed the government’s role as safeguarding individual freedom rather than imposing control or oppressing the populace.

When we vote, we exercise a fundamental right to shape our government based on our choices. Voting is our opportunity to hold our government accountable. Today, voting is a modern form of delegating decision-making to a representative—a concept that aligns with the principles Paine advocated for in Common Sense.

Paine would remind us that just because a system has been in place for a long time doesn’t make it right. He would challenge us to hold our leaders and power structures accountable and urge us to vote to prevent abuse, ensure accountability, and secure the freedom and security he believed were the ultimate purpose of government.

Paine and the American Revolution laid the foundation for our right to representation, but the story of personal freedom doesn't end there. Let’s fast forward to the 20th century and Jean-Paul Sartre, who logically joined individual liberty and personal responsibility.

Paine advocated for our right to choose our government. Sartre challenged us to embrace the weight of those choices in an indifferent universe. Though separated by time and context, both thinkers converged on a sobering idea: our actions—or inactions—define ourselves and our society.

Jean-Paul Sartre, Radical Freedom, and Personal Responsibility

The existential philosophy of radical freedom by Jean-Paul Sartre reverberates with the act of voting.

Sartre believed in radical freedom—the idea that individuals are free to make their own choices in an indifferent universe without a predetermined purpose. He famously said we are "condemned to be free" because our freedom comes with heavy personal responsibility.

Every person defines themselves through their actions. We can’t blame external forces for our choices and outcomes—we are entirely responsible.

Tied to this notion of personal responsibility, voting in our democratic republic directly means we are accountable for the outcomes of choices our representatives make on our behalf. We delegate our authority to elected officials, but we can’t delegate the responsibility for the consequences of their decisions.

This philosophy is starkly relevant in the context of modern voting. Let’s consider some examples. First, a disillusioned voter who decides not to vote. They might think their single ballot won't make a difference. Sartre would argue that the choice to withhold their vote is still one for which they're entirely responsible. By choosing to refuse to vote, they accept any outcome as their choice because they gave up their voice and power to influence change.

Then there’s the individual who votes strictly along party lines without holding their own party accountable. Defaulting to the status quo is still a choice we make. Elected officials swear an oath to the Constitution; some violate their oath. We're responsible for the consequences of electing leaders who subvert their oath to the Constitution or don’t align with American values.

Individuals create meaning through their actions, and we shape the future of our society through the choices we make at the ballot box. We are responsible for those choices.

Voting, then, is more than just a right—it’s an exercise in radical freedom. We are condemned to it and responsible for the leaders we elect and their policies. While heavy, the burden of that responsibility is essential to the functioning of a free society.

In sum

Representation is so essential America was born at war over it. At imminent peril, we pledged to each other our Lives, Fortunes, and sacred Honor for the right to vote.

I don’t believe in political parties. I believe in America.

Individual liberty and personal responsibility are the foundation of the nation.

Liberty is the right to participate in choosing our representatives. The choices our elected representatives make become our choices.

With liberty comes responsibility. Since we are accountable for the outcomes of our choices, it is our duty to hold our leaders and power structures accountable for their character and decisions.

You are accountable for the choices of your elected representatives.

I am accountable for the choices of my elected representatives.

As an American who swore my oath to support and defend the Constitution for nearly my entire adult life, including days carrying a rifle on foreign soil, I will vote for the Constitution.

As a daughter's father, I will vote for her future to have the individual liberty and personal responsibility that comes with making her own healthcare decisions.

I believe in individual liberty. I will vote for the right of states to protect their interests. I will vote for the right of states to have their votes counted. I will vote against any measure that threatens the individual liberty of any American.

I believe in personal responsibility. I will vote for leaders who uphold the rule of law and against any leader who does not.

May God bless the United States of America.

Here we are, celebrating our second anniversary. One hundred and four weeks in a row. Hooray for us!

I believe in the institution of the American democratic republic and its foundational ideals of individual liberty and personal responsibility. I aim to strengthen the American philosophy that the Almighty grants us all freedom of choice. Freedom of choice is the opportunity to struggle and overcome. President and Chief Justice William Howard Taft said, “We must dare to be great, and we must realize that greatness is the fruit of toil and sacrifice and high courage.”

I also know we have problems to overcome. And we need to address them. We can’t love our country and not our countrymen.

Our biggest challenge is Americans from all classes having food on the table and heat in the house. You can’t put food on the table without the money you get from your work to buy food. And you can’t heat your house unless you have one.

Fighting for food on the table and heat in the house means fighting against a moving bureaucratic machine with rules set to benefit the economic system and corporations. Those rules might benefit the elite, but they exclude individuals. Politicians from both parties feign like they want to address the problem. They take the advice of economists, who recommend funneling taxpayer money through the bureaucratic machine to fund “temporary” social welfare programs. The economists claim that once the system is working, we won’t need social programs anymore. Those temporary programs become permanent. The system perpetuates itself, and today, half of American families depend on social programs.

I can’t think of a worse design. Instead of setting conditions to enable Americans to succeed, we set conditions to benefit the elite and the bureaucratic machine.

Over the last two years, we’ve considered many ideas to enable Americans to succeed. Many of those pieces present ideas to address wages for all classes of American workers and problems in the housing market.

Addressing these two challenges will improve Americans’ lives more than anything else. There are no silver-bullet solutions. It’s a complex system that requires a systemic approach to address several areas.

Let’s get started with our first step: restoring institutional legitimacy.

Restore Institutional Legitimacy

The American people award money to companies through grants and contracts.

A simple overview of this process is the government collects taxes and allocates that money to federal agencies to spend—this is the federal budget. Those agencies purchase goods and services by requesting companies compete to win contracts. If a company wins a contract, the government purchases its goods or services. The companies win awards by being the lowest acceptable bidder.

In some cases, those companies are competitive to win an award because they pay wages less than the social program threshold. But the American people don’t know that.

Then, the American people give those same workers taxpayer money through social programs, even though they already gave the company the funds to pay their workers.

If we asked the American people whether a company should receive precious taxpayer money and then pay poverty wages, I’m confident the answer would be ‘no.’

We would say ‘no’ because it’s an illegitimate use of taxpayer funds.

So, the first step in enabling Americans to succeed is to restore the legitimacy of taxpayer spending. A company either needs to be on board with the American people, or the American people should leave that company behind. In other words, if a company wants to enjoy the benefit of federal contracts, it needs to commit to paying every individual in the company a wage above the poverty level. 

We need to codify this standard first by Executive Order and then in law:

No agency shall award any federal dollars to any entity (including any company, subsidiary, or company that operates on property supported by federal dollars or any entity that sells a product to the people of the United States) that pays workers wages below the poverty level plus 50%, assuming the worker and three dependents, for that locality.

You can read more about the idea in Double Taxation.

The Executive Order isn’t just about wages. It would make businesses that pay good wages more competitive for awards and enable the government to award legitimate winners. It would represent a legitimate use of taxpayer dollars.

Next, we need to pull wages up by investing in the infrastructure of human capital—the knowledge, skills, and abilities of American workers.

Revitalize Talent to Pull Wages Up

Human capital is foundational infrastructure similar to bridges, roads, and dams. This infrastructure supports the national capability that underpins and enhances the nation’s overall capability.

Human capital represents a key piece of the market. It’s the training and preparation of individuals. We can’t say there’s a market failure in job training but no market failure in wages. A failure in one area leads to a failure in the other. If low wages indicate a problem in human capital, then a problem in human capital means a problem in wages.

Our lack of relevant training for the working class degrades our ability to drive world markets. Our high schools (and many university programs) don’t teach students lessons directly applicable to the job market. This lack of relevant education further undermines our economic competitiveness and social cohesion. Companies need knowledgeable and experienced professionals to help them innovate.

The need for more relevant worker training is an infrastructure deficiency. We build roads and bridges to enable citizens and businesses to move goods and provide services. Businesses have a vested interest in the infrastructure that is a skilled workforce. Government should invest in education and infrastructure to create higher-quality jobs, making work more valuable.

To increase the capability of American workers and pull wages up, we need to ensure that education and training systems are responsive to the market’s needs. When there’s a surplus of some skills and a shortage of others, wages reflect that imbalance. Addressing this requires improving our educational institutions and reducing barriers that prevent workers from acquiring new skills, without needing a college degree.

By allowing students to learn about real-world problems and develop potential solutions, we can help them develop the skills they need to innovate and succeed in the workforce.

To achieve this goal, we need to:

Create a network of training and education innovation hubs. With support from local communities, we need to use the nation’s community college infrastructure as an initial base.

Partner with academia to enable students with no education beyond high school to acquire training and professional certifications upon completing the programs.

Partner with businesses to create relevant and engaging educational materials.

You can read more about the idea in Reskilling America: A New Plan for the 21st Century Economy.

In addition to pulling wages up, we need to help small businesses generate revenue so they can pay higher wages.

Generate Small Business Revenue to Increase Wages

If businesses don't increase revenue, they can't raise wages.

Businesses generate revenue through the sale of goods or services. Business leaders use part of this revenue to pay wages, but wages aren’t the only expenditure. Businesses have to build and maintain infrastructure, including physical facilities and technological systems they use to operate. They have to pay taxes. They need to make their product and expend revenue to generate raw materials, manufacturing, and logistics. They have to conduct research and development to improve their offerings.

A business’s ability to maintain healthy wage levels depends on revenue being high enough to support its other costs. In lean years, wages that are too high threaten financial stability. This can lead to a business failing to invest in infrastructure to modernize and compete with new businesses. It could cause a loss of talent due to wage freezes, reductions, or layoffs. It could reduce the ability to move into new markets, slowing growth and strangling the business. Every time a business fails to achieve one of these marks, one of its competitors does. If it misses too many, it dies.

Due to the constraint that high wages threaten business growth and survival in lean years, one principle business leaders consider is their payroll-to-revenue ratio. For many businesses, a good guideline is 15-30% of revenue. In fat years, wages may only be 15% of revenue. In lean years, wages could be 30% or more.

In the long run, businesses can only afford to raise wages if they can increase their revenue. If the business needs to raise wages by 10%, it needs to grow revenue so the payroll-to-revenue ratio is healthy.

In addition to the reality of wages and revenue, small businesses face steep challenges. They are less able to generate revenue than large corporations. They operate on a smaller scale. They have less access to capital, market power, and regulatory influence. They use less infrastructure than large corporations and put less stress on that infrastructure. They have a smaller physical footprint, require fewer resources, and generate less strain on public services like roads, utilities, and waste management. Many are owner-operated and can't pay themselves poverty wages.

To enable small businesses to pay higher wages, we need to help them generate revenue. So we need to give them tax incentives to raise wages. At the same time, we have a public responsibility to make sure those dollars get to the workers. Giving small businesses a tax incentive to pay higher wages will only keep Americans off social programs if those small businesses actually pay livable wages. To receive the tax incentives, small businesses need to prove they paid their workers livable wages.

To achieve this goal, we need a tax incentive for small businesses:

We will reduce the tax burden for small businesses that pay livable wages by 10% across the board and target specific industries, such as retail and food service, with even more significant tax breaks.

You can read or listen to this idea in If Businesses Don’t Increase Revenue, They Can’t Raise Wages

And Earned Income Tax Credit and Small Business Taxes.

Whereas small businesses need more revenue to raise wages, large corporations have access to greater revenue sources. Because they have different capabilities, they should have different requirements.

Achieve Livable Wages

We need to encourage businesses to strive for profits and ensure they pay their workers a wage that lifts them above the poverty level. We also need to keep business taxes low, as low business taxes spur investment in America. We need to make sure workers benefit from America’s great business environment. We need strong corporations to strive for profits.

As with small businesses, we have a public responsibility to ensure individuals can survive without social programs. Americans can earn money from two sources: their work or the government.

Choosing to allow corporations to pay low wages means choosing to support social programs.

We need to legislate a fair corporate minimum wage that adjusts automatically over time and takes the cost of living in different areas into account:

Publicly traded corporations shall pay full-time wages representing a rate no less than the poverty level plus 50%, assuming the worker and three dependents, for that locality.

From a business competition perspective, this levels the playing field in urban and rural America. The above requirement is locality-based. A federal poverty threshold benefits businesses in more expensive urban areas by requiring companies in low-cost rural areas to pay the same wages as businesses in more costly areas. This federal approach would hurt business activity in less expensive rural America.

From a states-rights perspective, it allows states to influence the cost of living in their state through appropriate locality pay. Different areas have different costs of living. For instance, the cost of living in Manhattan, New York, is very different from that in Manhattan, Kansas.

From a legislative perspective, it is more feasible than taxing the rich but still provides income to American workers. It doesn’t require legislative updates as living costs across the nation rise.

It saves the American taxpayer by reducing the need for social programs. It is not a tax proposal and does not impose a tax burden on the American people.

You can read more about the idea in Horses and Sparrows.

So far, we’ve addressed restoring the legitimacy of the government spending taxpayer dollars, improving the infrastructure of American human capital, and two initiatives to improve Americans’ ability to put food on the table. Now they need a house to put that table in.

Increase the Supply of Homes

John Locke’s great philosophy became the foundation of the US Constitution. He identified people agree to be governed to preserve their property; that is the chief role of the institution. Everyone owns property, even if that property is owning yourself.

To preserve property, we need to create conditions enabling citizens to secure property. Securing basic needs allows individuals to pursue prosperity and stability. You can’t put food on the table without a home to put the table in.

The economic principle of supply and demand strongly influences the housing market. In simple economic terms, as the supply of an item rises relative to the demand for that item, prices in the market will decrease. But the housing market has become untenable. Housing per capita has decreased since 1970, and the supply of first-time homebuyer houses is especially low.

The government needs to set conditions to reverse this trend, but it can’t do so by building government housing. If the government were the lead agent to provide housing for Americans, would everyone get a trailer to live in? That would be ridiculous. The government must work through the market. Building homes must be profitable. If it’s not, builders will find other work.

We need to work through the market to increase the supply of homes for low- and middle-income families.

Working through the market to increase supply means improving the profitability of builders who build small homes.

The Small Business Innovation Research (SBIR) program is the best government mechanism to incentivize small businesses. SBIR programs are federal grant programs that encourage small businesses to bring desired products to market. SBIR is competitive and provides the incentive to profit from innovation through commercialization.

There is already an SBIR grant program that, with minor changes, could be used to build small, affordable homes in rural America. The US Department of Agriculture (USDA) sponsors an SBIR grant program for Rural and Community Development.

Rural and Community Development aims to improve the quality of life in rural America by creating and commercializing technologies that address critical economic and social development issues or challenges. The applications need not be centered on agriculture but may be focused on any area that has the potential to significantly benefit rural Americans.

The Executive Branch must direct USDA to expand its scope and earmark some of this SBIR money specifically for small, affordable homes in rural America.

In urban areas, America could convert empty lots and warehouses, no-longer-used parking lots, and dilapidated housing into small, affordable housing. The US Department of Housing and Urban Development can lead the way. Unfortunately, the US Department of Housing and Urban Development does not sponsor an SBIR program.

We need legislative action to establish an SBIR program under the US Department of Housing and Urban Development that earmarks funds for small, affordable housing in urban areas.

We must implement rules to ensure these homes are sold to owner-occupiers, particularly first-time homebuyers, to prevent them from being snapped up by investors.

You can read or listen to this idea in Small, Affordable Homes.

And in Has Capitalism Failed the Housing Market?.

Increasing the supply of affordable housing will help with housing in the long term, but young Americans still living at home don’t need help with housing eventually. They need help now.

Set Young Americans on the Path to Financial Success

Young Americans don’t just need more housing. To strengthen financial security for young Americans, we need to start by addressing home ownership.

Young Americans need to be able to secure their financial future early in adulthood. This means our young generations need to be able to qualify to purchase their first home at a low interest rate.

We need a first-time-homebuyer incentive of a 3% interest rate, and we need to combine this low interest rate with a US Department of Housing and Urban Development loan, which requires a 3.5% down payment.

After their one-time use, if a family wants to purchase a more expensive home, that’s their decision. If they want to own the asset, they own the risk and higher interest rate that comes with the asset. This plan further needs to disqualify any private equity money or investment firms from receiving these terms. We need to specify single-family homes, single-unit duplexes, apartments, etc.

The initiative’s point isn’t for someone to purchase a commercial building and rent out all but one apartment. That’s an investment.

The initiative aims to improve the financial stability of young Americans. To achieve that goal, all young Americans must be able to take advantage of it.

This proposal benefits young Americans who attend college and those who take up trades. It benefits young Americans who grew up in trailers and suburbs, as well as young Americans in rural and urban America.

You can read more about the idea in Financial Security for Young Americans.

In sum, we need a systemic approach to addressing our biggest challenge: Americans having food on the table and heat in the house. You can’t put food on the table without the money you get from your work to buy food. And you can’t heat your house unless you have a house.

There are no silver-bullet solutions. It’s a complex system. Over the past two years, we’ve considered many ideas. Some were eliminated after more thought, and some weren’t possible. Six big ideas have survived.

We need to restore institutional legitimacy when spending taxpayer dollars.

We need to invest in the infrastructure of human capital to pull wages up.

We need to help small businesses generate revenue so they can pay higher wages.

We need to ensure workers benefit from America’s great business environment and achieve livable wages.

We need to work through the market and increase the supply of homes for low- and middle-income families.

We need to strengthen financial security for young Americans, starting with addressing home ownership.

Addressing our challenges with these ideas will make life better for Americans.

May God bless the United States of America.

Postscript.

Fall in the mountains is a beautiful time. I’m going elk hunting. I’ll see you in a couple of weeks. Maybe three.

A one-size-fits-all approach to both small businesses and large corporations isn’t appropriate.

We need to legislate livable wage requirements for large corporations and give small businesses that pay livable wages tax incentives.

The Social Responsibility of Business Is to Increase Its Profits

In September 1970, the New York Times published an article by Nobel laureate economist Milton Friedman titled The Social Responsibility of Business Is to Increase Its Profits.

Friedman wrote the article responding to the growing public and academic interest in corporate responsibility regarding environmental issues, civil rights struggles, and consumer protection. His controversial perspective dismissed social, ethical, or environmental concerns unless they directly contributed to profit. Others argued that businesses should consider broader stakeholder interests, including employees, communities, and the environment.

Friedman's premise was that the business of business is business. He emphasized that diverting from pursuing profit is equivalent to spending someone else’s money—shareholders, employees, or customers—for purposes that hadn’t been mutually agreed upon. He likened this spending of other people’s money to taxation without representation.

Friedman argued that a business's primary responsibility is to increase profits, and corporate executives should focus solely on maximizing shareholder value within legal and ethical boundaries. He posited that corporate social responsibility blurs the lines between the private and public sectors.

Let me repeat that.

Friedman believed businesses, particularly corporations, should maximize shareholder value and profits. Any deviation toward social justice or environmental concerns is outside a business’s fundamental responsibility unless it directly contributes to profitability. Instead, he asserted that the public sector—or government—should fulfill these societal roles. Addressing and managing social justice and general welfare issues falls under the umbrella of public responsibility.

Friedman posited that we should not blur the lines between corporate and public responsibility. Famous economists tell it like it is: there’s corporate responsibility and public responsibility.

If the business of business is business, and the responsibility of corporations is to increase profits, then what is public responsibility?

Government of the People, By the People, For the People

On November 19, 1863, President Abraham Lincoln gave a short speech to dedicate the battlefield cemetery at Gettysburg, Pennsylvania. The Gettysburg Address became the most quoted speech in history. It ends with the words, “that government of the people, by the people, for the people, shall not perish from the earth.”

The concept of government for the people binds our public responsibility. Lincoln conveyed that governance derives legitimacy from its ability to represent and serve the people, an idea rooted in the US Constitution. The Constitution is the agreement the American people and the states in the Union made to form a government.

Let me emphasize again that the people and states willingly chose to form a government, and they further chose that elected representatives would use the ratified Constitution as its governing document.

The Preamble states the purpose and intent of the document. It includes the words:

We the People of the United States, in Order to…establish Justice, insure domestic Tranquility… (and) promote the general Welfare…do ordain and establish this Constitution for the United States of America.

Let's expand on the verbiage in the Preamble just a bit.

We've already touched on the first words, "We the People." Lincoln referred to this as government of the people, by the people, for the people. The purpose of government is to serve the people. Friedman later referred to this purpose as the responsibility of the public sector.

So we could rephrase that portion of the Preamble to “It is the responsibility of the public sector and our elected representatives to…”

Next, we address “establish justice and insure domestic tranquility.” Last week, we discussed the concept of justice in the context of Plato. Justice is fair and equal treatment under the law, individual liberty, and the equitable distribution of resources that enable individual opportunity.

Justice creates a society where individuals fulfill their roles and contribute to the state's overall well-being. Addressing inequality reduces societal tension, maintains social order, and fosters a peaceful society.

Justice enables people to work and command a livable wage. It’s the equitable distribution of resources like education, healthcare, and housing that allows people to work and earn a good living. Access to resources gives everyone a fair chance at economic success. Achieving justice ensures domestic tranquility.

Justice isn’t a handout. Government shouldn't continuously redistribute wealth. Instead, we need to create a fair system where opportunities for housing, fair pay, health, education, and economic advancement are accessible to all. Justice is the government setting conditions and rules that enable individuals to achieve success.

With a shared understanding of justice, let’s build on our statement. We can expand it and say: “It is the responsibility of the public sector and our elected representatives to…create a society that strives toward individual opportunity and equitable distribution of resources…”

Now, we can move on to “promote the general welfare.”

The general welfare is the well-being of citizens. This requirement identifies a responsibility to create conditions that improve the quality of life for all Americans.

Our final expanded statement can be: “It is the responsibility of the public sector and our elected representatives to…create a society that strives toward individual opportunity and equitable distribution of resources… to enhance the well-being of Americans, and to achieve these goals we establish this Constitution for the United States of America.”

This language juxtaposes Friedman’s view of corporate and public responsibility. The business of business is business, and corporate responsibility is to increase profits. The business of the public realm is to set conditions and rules that ensure individual success through legislative and regulatory means.

Corporate profit is essential for economic growth. The goal of corporations is to earn profits.

Public responsibility counterbalances the corporate drive for profits. It ensures economic progress contributes to the well-being of citizens and not just corporations. The institution is to maintain a balance between the corporate market and individual justice.

How would this institution of public responsibility achieve this balance?

Why do we treat small businesses like publicly traded corporations?

Like much of economic theory, Friedman’s argument focuses on the role of large corporations in maximizing profits. But there's an apparent disconnect when we apply this framework to small businesses.

Small businesses operate on a smaller scale than corporations. They have less access to capital, market power, and regulatory influence. Despite these differences, policies and expectations often treat them as equal players in the same market.

This leads us to our question: Why do we treat small businesses like publicly traded corporations?

Shouldn't small businesses with fewer resources have more support and different requirements than large corporations? Let's consider two obvious ways small businesses differ from corporations and why they should have different requirements.

First, small businesses use less infrastructure than large corporations and put less stress on that infrastructure, so they shouldn't have the same infrastructure tax requirements. They have a smaller physical footprint, require fewer resources, and generate less strain on public services like roads, utilities, and waste management. While corporations provide goods and services to the public, they also heavily utilize infrastructure—which is a business cost, not a socialized public fund. Businesses are responsible for their operating costs.

Second, many small businesses are owner-operated and can't pay themselves poverty wages. They face the reality of needing a house to heat and food to put on the table. They should get tax cuts to incentivize higher wages, whereas we should have a livable minimum wage standard for corporations. Large corporations have more resources and greater financial capacity; a minimum wage standard for corporations ensures workers are compensated fairly and can contribute to the economy. Tax incentives for small businesses and wage standards for corporations seek a competitive balance.

However, public responsibility still needs to achieve a goal. All Americans need justice, which means food on the table and heat in the house. Furthermore, a second intended outcome is to reduce reliance on social programs by ensuring sufficient wages. Giving small businesses a tax incentive to pay higher wages will only keep Americans off social programs if those small businesses actually pay livable wages. To receive the tax incentives, small businesses need to prove they paid their workers livable wages.

The business of business is to maximize profits. The business of the public realm is justice and the welfare of America. We need to encourage businesses to strive for profits, and we need to ensure corporations pay their workers a wage that lifts them above the poverty level.

We don't need a complex law. We need to legislate a fair corporate minimum wage that adjusts automatically over time and takes the cost of living in different areas into account:

Publicly traded corporations shall pay full-time wages representing a rate no less than the poverty level plus 50%, assuming the worker and three dependents, for that locality.

And for small businesses, we need a tax incentive:

We will reduce the tax burden for small businesses that pay livable wages by 10% across the board and target specific industries, such as retail and food service, with even more significant tax breaks.

Another benefit of treating small businesses differently than corporations is that it makes them more competitive. A visit to downtowns across America tells a common story about how big-box stores drove small retailers out of business. Large corporations leverage economies of scale to offer lower prices that small businesses can’t match, leading to a decline in local economic diversity. This phenomenon has reshaped downtown areas, resulting in economic blight and decreased community cohesion. We’re not going to put publicly traded corporations out of business, but we need to make small businesses more competitive.

A one-size-fits-all approach to both small businesses and large corporations isn’t appropriate.

The business of business is to maximize profits.

The business of the public realm is justice and the welfare of America. Justice is food on the table and heat in the house.

We need to legislate livable wage requirements for large corporations and give small businesses that pay livable wages tax incentives.

May God bless the United States of America.

This didn’t push to the podcast hosts; reaccomplishing.

—

I am against socialism.

If we oppose socialism, we must champion individualism.

Supporting individualism means we have a duty to enable every individual to succeed.

Milton Friedman (our subject of the last two weeks) wasn’t the only renowned economist of the 20th century whose ideas continue to influence US economic policy. Friedman was influential, no doubt. From the 1980s to the early 2000s, his emphasis on monetary policy, central banks controlling inflation, and the belief in free markets became the mainstream approach to economic management in many parts of the world.

But John Maynard Keynes is the father of macroeconomics. Each economist’s prominence fluctuates with the economic conditions of the time.

Since we considered our questions using Friedman’s ideas as a guide last week, we’ll start with Keynes this week.

To appreciate Keynes ideas, we need to explore the foundational concept of justice articulated by the ancient philosopher Plato. Plato’s justice provides a foundational understanding of societal roles and responsibilities.

Plato and Justice

Plato (427 to 347 BC) was a Greek philosopher and one of the most influential figures in Western philosophy and culture. He was a student of Socrates and taught Aristotle. The three form the foundational trio of ancient Greek philosophers whose ideas have shaped much of Western thought.

Plato founded the Academy, one of the world’s first universities. Many of his writings come from his time teaching there. He wrote in dialogue style, using stories to convey ideas.

His still-influential The Republic explores the “soul of a nation and an individual.” Its central theme is justice—how to create a society where individuals fulfill their roles and contribute to the overall well-being of the state. Plato divided society into three classes: rulers (philosopher-kings), warriors (auxiliaries), and producers (farmers, artisans, etc.). Each class has its specific role, and society achieves justice when each class fulfills its responsibilities.

It’s worth repeating: we achieve justice when each individual fills their role. Justice means individuals should be treated fairly and equally under the law, but it also means society upholds individual liberty for all. Justice for all means society strives toward individual opportunity and equitable distribution of resources like education, healthcare, and housing. While Plato didn't discuss modern concepts like public education or healthcare, we can extend his emphasis on each person fulfilling their role in today's context. Ensuring access to education and housing allows individuals to develop their abilities and contribute to society, aligning with Plato's vision of justice.

Justice includes education and housing. Justice enables people to work. Let’s consider an example from today’s America with a question:

Can you work and command a good living from society if you can’t access proper education and suitable housing? No.

Do the American people, acting through our elected representatives, sponsor and fund education and training, and control the conditions to shepherd the housing market? Yes.

Are we really saying it's the individual's fault if they can't secure a good job due to a lack of education and training or afford a home in our absurdly inflated market?

It’s a challenging question that John Maynard Keynes thought about a lot. Plato envisioned a just society where each individual fulfills their role for the common good. Similarly, Keynes argued that when the market fails to provide opportunities for individuals to contribute, it becomes the government's responsibility to step in. Both perspectives highlight that a society thrives when members are empowered to reach their potential.

John Maynard Keynes and Government Spending

John Maynard Keynes (1883 to 1946) was a British economist and the father of macroeconomics. More than any other economist, his ideas profoundly influenced modern macroeconomic theory. He is best known for developing Keynesian economics, a school of thought that advocates for active government intervention in the economy, particularly during recessions, to manage aggregate demand and maintain full employment.

In simple terms, this idea suggests that the government should help the economy during tough times, like recessions, by boosting spending to keep people working and ensure there's enough demand for goods and services.

Recent real-world examples of Keynesian economics are the government responses to the 2008 financial crisis and COVID-19. The economy was in trouble. The government injected stimulus funds by increasing spending, offering financial aid, and giving money to businesses and individuals. The goal was to boost demand to get people to buy things and keep people employed, helping the economy recover faster.

Keynes believed governments should actively manage economic cycles. He argued for deficit spending during depressions and recessions—borrowing money to finance public projects, infrastructure, and social programs. And he argued for government austerity during healthy periods. He claimed deficit spending would jump-start the economy, and once the economy recovered, the government could reduce spending and pay down the debt. During World War II, Keynes argued for funding the British war effort and that it was better to prioritize winning the war and maintaining the economy than to worry about balancing the budget.

Keynes understood that markets don’t always self-correct. People can’t just "work harder" to succeed. His solution was clear: when the private sector can’t provide enough jobs or income, the government has a responsibility to step in and keep the economy running by spending on public projects, infrastructure, and social programs.

He argued that when the market isn’t working, people need support. This support helps the individual and stabilizes society as a whole.

And he argued for government intervention as a temporary measure for use during periods of economic crisis. His central idea was that government should stimulate demand and create jobs when the private sector couldn’t. His goal was to jump-start the economy so that individuals could find employment and earn a good living once conditions improved.

In The General Theory of Employment, Interest, and Money (1936) he wrote: The boom, not the slump, is the right time for austerity at the Treasury.

Keynes argued that work should be the primary source of income for individuals. He believed the government should correct the market failures of too few good jobs. He argued the government should invest in education and infrastructure to create higher-quality jobs, making work more valuable. He supported a livable minimum wage as a means to distribute wealth fairly.

He wrote: The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes.

Keynes did not advocate for permanent dependency on social programs. He argued for government intervention when the market failed to provide full employment and fair wages. His writings emphasized temporary government support, focusing on creating the conditions for self-sufficiency by addressing market failures.

In short, Keynes believed in setting rules that supported individual success. He advocated for government intervention in challenging times and for governments to pay off their debts in good times.

Though a couple thousand years apart, Plato’s philosophy and Keynesian economics agree on many points.

Plato and Keynes Intersect

Let’s break down Plato’s philosophy.

We achieve justice when every individual fulfills their role in society.

Society suffers if individuals cannot fulfill their roles due to a lack of opportunity, education, or resources.

Every individual must be able to contribute according to their abilities.

But what happens if you can't work to your potential due to a lack of education and training?

If you can’t access these resources, you can’t fulfill your role in society.

You’re stuck trying to survive, worrying only about basic needs like heat in the house and food on the table.

This condition is injustice because individuals are denied the opportunity to contribute and thrive.

And we examine Keynesian economics.

Work is the primary source of income for individuals.

Government must invest in education and infrastructure to create higher-quality jobs and make work more valuable. Plato argues that these are the same tools individuals need to fulfill their roles in society.

If the market doesn't provide adequate employment opportunities or wages, the government has to set rules for livable wages.

The intent is to create conditions for self-sufficiency, which reduces dependency on social programs and aligns with Plato's idea of enabling individuals to fulfill their societal role.

To lighten the mood and offer a fresh perspective, let’s introduce Jessica, insightful comedian, to share her thoughts on the state of our economic policies.

Jessica: Hey folks! Let's dive headfirst into the circus we call life, shall we? You ever notice how everyone has the ultimate fix for all our problems? It’s like being at a potluck where everyone brings their “world-famous” casserole. You've got the kale enthusiasts over here, chanting, “Kale will save us all!” Sure, Brenda, because nothing says “solution” like bitter leaves that taste like freshly mowed lawn.

Then Aunt Karen rolls in with her legendary tofu surprise. Surprise! It still tastes like disappointment. Listen, Karen, tofu wasn’t on anyone’s wish list unless that list is titled “Things That Pretend to Be Food but Aren’t.”

And speaking of solutions, let's talk about Uncle Sam’s idea of help these days. Handing out cash without any real support is like giving someone a spoon when they’re drowning. “Here, maybe you can paddle your way out!” It’s like tossing a life jacket to someone in a desert—thanks, but that's not really addressing the problem, is it?

Now, let’s chat about paychecks. You ever open yours and think, “Is this a typo or a cruel joke?” You work like a dog all week, and your bank account’s like, “Better luck next time!” It’s like ordering a steak dinner and getting served a single crouton and a side of air. “Enjoy your meal!” Oh, I will, once I find it.

We’re setting the bar so low, it's a tripping hazard. People celebrating that they can afford rent this month like they've won the lottery. “Yes! I get to live indoors for another 30 days!” Congratulations, you've achieved the bare minimum required for survival. Next up: dreaming about affording that extra guacamole at the burrito place.

Life shouldn’t be about just scraping by. It should be about thriving, reaching for the stars, and maybe snagging a moon rock or two. And let's be honest, who doesn't want a slice of cake to celebrate the little victories? Cake is essential, people! It's the edible high-five.

At the end of the day, we need to stop serving the same bland policy porridge and start whipping up a recipe that actually tastes good. Can we please retire the economic microwave dinners? I'm tired of peeling back the plastic to find half-cooked ideas and freezer-burned promises.

So let’s roll up our sleeves and cook up a feast where everyone’s invited, the portions are fair, and nobody leaves hungry—or hangry, for that matter. Because success isn’t about handing out snacks to keep people quiet; it's about giving them the ingredients to bake their own gourmet creations.

Thanks for tuning in, everybody! Remember, individualism isn't just about surviving—it's about giving people the tools to thrive and maybe, just maybe, a chance to have their cake and eat it too. Who’s up for dessert?

The Reality of Economics

The reality of economics is people don’t run on hope.

Jessica's witty observations highlight how quick fixes and handouts fail to address the root causes of economic hardship. Systemic solutions empower individuals.

People need a house to heat and money to put food on the table. This benefits the individual and society writ large. The proof of this statement is that liberal and conservative economists alike recommend social programs to alleviate poverty. They know if people don’t have enough money to survive from their work, the other source is the government.

But instead of thinking about how to make social programs work better, we need to think about how to eliminate the need for social programs.

We can make the rules work for individuals without hurting small businesses. We can pay for things like improving education to enable individuals to succeed.

If we refuse to do those things, we choose to pay for social programs.

Some argue that social programs lead to socialism. But socialism emerges when individualism fails.

I am against socialism.

If we oppose socialism, we must champion individualism.

Supporting individualism means we have a duty to enable every individual to succeed.

May God bless the United States of America.

I am against socialism.

If we oppose socialism, we must champion individualism.

Supporting individualism means we have a duty to enable every individual to succeed.

Milton Friedman (our subject of the last two weeks) wasn’t the only renowned economist of the 20th century whose ideas continue to influence US economic policy. Friedman was influential, no doubt. From the 1980s to the early 2000s, his emphasis on monetary policy, central banks controlling inflation, and the belief in free markets became the mainstream approach to economic management in many parts of the world.

But John Maynard Keynes is the father of macroeconomics. Each economist’s prominence fluctuates with the economic conditions of the time.

Since we considered our questions using Friedman’s ideas as a guide last week, we’ll start with Keynes this week.

To appreciate Keynes ideas, we need to explore the foundational concept of justice articulated by the ancient philosopher Plato. Plato’s justice provides a foundational understanding of societal roles and responsibilities.

Plato and Justice

Plato (427 to 347 BC) was a Greek philosopher and one of the most influential figures in Western philosophy and culture. He was a student of Socrates and taught Aristotle. The three form the foundational trio of ancient Greek philosophers whose ideas have shaped much of Western thought.

Plato founded the Academy, one of the world’s first universities. Many of his writings come from his time teaching there. He wrote in dialogue style, using stories to convey ideas.

His still-influential The Republic explores the “soul of a nation and an individual.” Its central theme is justice—how to create a society where individuals fulfill their roles and contribute to the overall well-being of the state. Plato divided society into three classes: rulers (philosopher-kings), warriors (auxiliaries), and producers (farmers, artisans, etc.). Each class has its specific role, and society achieves justice when each class fulfills its responsibilities.

It’s worth repeating: we achieve justice when each individual fills their role. Justice means individuals should be treated fairly and equally under the law, but it also means society upholds individual liberty for all. Justice for all means society strives toward individual opportunity and equitable distribution of resources like education, healthcare, and housing. While Plato didn't discuss modern concepts like public education or healthcare, we can extend his emphasis on each person fulfilling their role in today's context. Ensuring access to education and housing allows individuals to develop their abilities and contribute to society, aligning with Plato's vision of justice.

Justice includes education and housing. Justice enables people to work. Let’s consider an example from today’s America with a question:

Can you work and command a good living from society if you can’t access proper education and suitable housing? No.

Do the American people, acting through our elected representatives, sponsor and fund education and training, and control the conditions to shepherd the housing market? Yes.

Are we really saying it's the individual's fault if they can't secure a good job due to a lack of education and training or afford a home in our absurdly inflated market?

It’s a challenging question that John Maynard Keynes thought about a lot. Plato envisioned a just society where each individual fulfills their role for the common good. Similarly, Keynes argued that when the market fails to provide opportunities for individuals to contribute, it becomes the government's responsibility to step in. Both perspectives highlight that a society thrives when members are empowered to reach their potential.

John Maynard Keynes and Government Spending

John Maynard Keynes (1883 to 1946) was a British economist and the father of macroeconomics. More than any other economist, his ideas profoundly influenced modern macroeconomic theory. He is best known for developing Keynesian economics, a school of thought that advocates for active government intervention in the economy, particularly during recessions, to manage aggregate demand and maintain full employment.

In simple terms, this idea suggests that the government should help the economy during tough times, like recessions, by boosting spending to keep people working and ensure there's enough demand for goods and services.

Recent real-world examples of Keynesian economics are the government responses to the 2008 financial crisis and COVID-19. The economy was in trouble. The government injected stimulus funds by increasing spending, offering financial aid, and giving money to businesses and individuals. The goal was to boost demand to get people to buy things and keep people employed, helping the economy recover faster.

Keynes believed governments should actively manage economic cycles. He argued for deficit spending during depressions and recessions—borrowing money to finance public projects, infrastructure, and social programs. And he argued for government austerity during healthy periods. He claimed deficit spending would jump-start the economy, and once the economy recovered, the government could reduce spending and pay down the debt. During World War II, Keynes argued for funding the British war effort and that it was better to prioritize winning the war and maintaining the economy than to worry about balancing the budget.

Keynes understood that markets don’t always self-correct. People can’t just "work harder" to succeed. His solution was clear: when the private sector can’t provide enough jobs or income, the government has a responsibility to step in and keep the economy running by spending on public projects, infrastructure, and social programs.

He argued that when the market isn’t working, people need support. This support helps the individual and stabilizes society as a whole.

And he argued for government intervention as a temporary measure for use during periods of economic crisis. His central idea was that government should stimulate demand and create jobs when the private sector couldn’t. His goal was to jump-start the economy so that individuals could find employment and earn a good living once conditions improved.

In The General Theory of Employment, Interest, and Money (1936) he wrote: The boom, not the slump, is the right time for austerity at the Treasury.

Keynes argued that work should be the primary source of income for individuals. He believed the government should correct the market failures of too few good jobs. He argued the government should invest in education and infrastructure to create higher-quality jobs, making work more valuable. He supported a livable minimum wage as a means to distribute wealth fairly.

He wrote: The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes.

Keynes did not advocate for permanent dependency on social programs. He argued for government intervention when the market failed to provide full employment and fair wages. His writings emphasized temporary government support, focusing on creating the conditions for self-sufficiency by addressing market failures.

In short, Keynes believed in setting rules that supported individual success. He advocated for government intervention in challenging times and for governments to pay off their debts in good times.

Though a couple thousand years apart, Plato’s philosophy and Keynesian economics agree on many points.

Plato and Keynes Intersect

Let’s break down Plato’s philosophy.

We achieve justice when every individual fulfills their role in society.

Society suffers if individuals cannot fulfill their roles due to a lack of opportunity, education, or resources.

Every individual must be able to contribute according to their abilities.

But what happens if you can't work to your potential due to a lack of education and training?

If you can’t access these resources, you can’t fulfill your role in society.

You’re stuck trying to survive, worrying only about basic needs like heat in the house and food on the table.

This condition is injustice because individuals are denied the opportunity to contribute and thrive.

And we examine Keynesian economics.

Work is the primary source of income for individuals.

Government must invest in education and infrastructure to create higher-quality jobs and make work more valuable. Plato argues that these are the same tools individuals need to fulfill their roles in society.

If the market doesn't provide adequate employment opportunities or wages, the government has to set rules for livable wages.

The intent is to create conditions for self-sufficiency, which reduces dependency on social programs and aligns with Plato's idea of enabling individuals to fulfill their societal role.

To lighten the mood and offer a fresh perspective, let’s introduce Jessica, insightful comedian, to share her thoughts on the state of our economic policies.

Jessica: Hey folks! Let's dive headfirst into the circus we call life, shall we? You ever notice how everyone has the ultimate fix for all our problems? It’s like being at a potluck where everyone brings their “world-famous” casserole. You've got the kale enthusiasts over here, chanting, “Kale will save us all!” Sure, Brenda, because nothing says “solution” like bitter leaves that taste like freshly mowed lawn.

Then Aunt Karen rolls in with her legendary tofu surprise. Surprise! It still tastes like disappointment. Listen, Karen, tofu wasn’t on anyone’s wish list unless that list is titled “Things That Pretend to Be Food but Aren’t.”

And speaking of solutions, let's talk about Uncle Sam’s idea of help these days. Handing out cash without any real support is like giving someone a spoon when they’re drowning. “Here, maybe you can paddle your way out!” It’s like tossing a life jacket to someone in a desert—thanks, but that's not really addressing the problem, is it?

Now, let’s chat about paychecks. You ever open yours and think, “Is this a typo or a cruel joke?” You work like a dog all week, and your bank account’s like, “Better luck next time!” It’s like ordering a steak dinner and getting served a single crouton and a side of air. “Enjoy your meal!” Oh, I will, once I find it.

We’re setting the bar so low, it's a tripping hazard. People celebrating that they can afford rent this month like they've won the lottery. “Yes! I get to live indoors for another 30 days!” Congratulations, you've achieved the bare minimum required for survival. Next up: dreaming about affording that extra guacamole at the burrito place.

Life shouldn’t be about just scraping by. It should be about thriving, reaching for the stars, and maybe snagging a moon rock or two. And let's be honest, who doesn't want a slice of cake to celebrate the little victories? Cake is essential, people! It's the edible high-five.

At the end of the day, we need to stop serving the same bland policy porridge and start whipping up a recipe that actually tastes good. Can we please retire the economic microwave dinners? I'm tired of peeling back the plastic to find half-cooked ideas and freezer-burned promises.

So let’s roll up our sleeves and cook up a feast where everyone’s invited, the portions are fair, and nobody leaves hungry—or hangry, for that matter. Because success isn’t about handing out snacks to keep people quiet; it's about giving them the ingredients to bake their own gourmet creations.

Thanks for tuning in, everybody! Remember, individualism isn't just about surviving—it's about giving people the tools to thrive and maybe, just maybe, a chance to have their cake and eat it too. Who’s up for dessert?

The Reality of Economics

The reality of economics is people don’t run on hope.

Jessica's witty observations highlight how quick fixes and handouts fail to address the root causes of economic hardship. Systemic solutions empower individuals.

People need a house to heat and money to put food on the table. This benefits the individual and society writ large. The proof of this statement is that liberal and conservative economists alike recommend social programs to alleviate poverty. They know if people don’t have enough money to survive from their work, the other source is the government.

But instead of thinking about how to make social programs work better, we need to think about how to eliminate the need for social programs.

We can make the rules work for individuals without hurting small businesses. We can pay for things like improving education to enable individuals to succeed.

If we refuse to do those things, we choose to pay for social programs.

Some argue that social programs lead to socialism. But socialism emerges when individualism fails.

I am against socialism.

If we oppose socialism, we must champion individualism.

Supporting individualism means we have a duty to enable every individual to succeed.

May God bless the United States of America.

Supporting low wages inherently means relying on social programs.

Milton Friedman, the famous Nobel laureate economist, presented a dichotomy. He argued that government solutions don’t solve problems and often make them worse, yet he also recommended government solutions to address poverty.

Last week, we explored the first of two questions about this dichotomy. We determined that higher wages don’t cause inflation, so there's no inflationary reason not to pay livable wages. Resolving the inflation question leads us to reconsider the government's role in economically supporting individuals. Without inflationary concerns, there’s less reason not to support livable wages.

This week, we explore our second question by having an AI-enabled discussion with the late Dr. Friedman. That question is:

If government intervention inherently makes problems worse but is needed to address poverty, then government intervention is necessary in either case. If it's necessary regardless, why wouldn’t we use the government to make rules supporting the individual rather than funneling money through the bureaucracy?

Since government intervention is necessary to address poverty caused by low wages, we should prioritize policies that directly support individuals by promoting livable wages instead of relying on bureaucratic social programs that perpetuate dependency and inefficiency.

Dr. Friedman and I don’t agree on everything. His work suggests he viewed the economic system as more important than the individual. I agree with his premise, but I'm against dependency on social programs. When wages are too low, we throw money at the bureaucracy—giving some of that money to other people, and the machine eats the rest.

I recognize the importance of the economic system. I believe individuals having heat in the house and food on the table is more important than the system itself, and I recognize that a healthy system is the best way to achieve that goal.

Let’s get started with an introduction to Milton Friedman.

Milton Friedman

For those who didn’t get a chance to listen to last week’s piece, Milton Friedman (1912 to 2006) was a Nobel laureate and a leading figure in the Chicago School of Economics. He significantly influenced national economic policy, particularly during the 1970s stagflation and into the era of Reaganomics.

His economic brilliance at the University of Chicago led to advisory roles for Presidents Nixon and Reagan. He shaped modern economic thought by advocating for free-market capitalism and minimal government intervention. His theories laid the foundation for supply-side economics, widely known as Reaganomics. Reaganomics promoted major tax cuts, reduced regulation, and controlled the money supply to stimulate growth and curb inflation.

Reaganomics was a solution for its time but increased poverty and inequality over the long term. Forty years of stagnating wages point to a diseased system. Reagan himself expanded some social programs.

Friedman was a brilliant and accomplished economist with a conservative flair. But he presented a fascinating dichotomy. Despite his advocacy for minimal government, he proposed a government-administered solution to address poverty.

Let's explore this intriguing contradiction in more detail.

Friedman’s Dichotomy

Friedman disavowed government solutions to economic problems. In An Economist’s Protest (1975), he wrote:

I think the government solution to a problem is usually as bad as the problem and very often makes the problem worse.

At the same time, Friedman recognized that some lived in poverty, and we had a shared duty to alleviate that poverty. In Capitalism and Freedom (1962), he wrote:

We might all of us be willing to contribute to the relief of poverty, provided everyone else did. We might not be willing to contribute the same amount without such assurance.

This dichotomy begs a question:

If government intervention inherently makes problems worse but is also needed to address poverty, then government intervention is necessary in either case. If it's necessary regardless, why wouldn’t we use the government to make rules supporting the individual rather than funneling money through the bureaucracy?

Friedman was skeptical about governmental influence on the economy but pitched a social program to reduce poverty. Instead of advocating for a minimum wage for the lowest earners, he had another idea: a Negative Income Tax (NIT). NIT embodied a practical resolution to Friedman’s dichotomy—in his view, an attempt to minimize government interference while addressing poverty.

Negative Income Tax

So, what exactly is the Negative Income Tax?

As theorized by Friedman, NIT was a system intended to replace various welfare programs by providing direct financial assistance to individuals below a certain income threshold. He introduced this idea as a more efficient and less bureaucratic alternative to traditional welfare systems.

Under NIT, anyone with earnings below a certain income threshold would receive governmental supplementary pay to boost their income to a specified minimum level, ensuring a basic standard of living. This support would provide enough to meet basic needs without discouraging work.

Unlike welfare programs that cut benefits once an individual reaches a certain income level, NIT would gradually phase out as the individual’s income rises. This design was meant to avoid the "welfare trap" that discourages beneficiaries from earning more because they would lose benefits at a rate that negates the value of working.

Friedman theorized that NIT would reduce the need for a large bureaucracy to administer various welfare programs since the existing tax system could be used to distribute the negative income tax. It would further incentivize work by allowing individuals to keep a portion of their earnings along with the tax benefit.

Let’s look at a couple of examples for clarity.

In our first example, assume an individual earns $30,000 annually. Under our NIT program, the income threshold is $50,000, and the negative tax rate is 50%. The individual would receive no other benefits like food stamps, housing vouchers, or other forms of direct aid. The difference between the individual’s income and the threshold is $20,000. Applying the negative tax rate, the individual would receive a supplemental payment of $10,000 from the government. This would increase their total income to $40,000, bridging part of the gap between their actual earnings and the threshold while providing an incentive to earn more without losing all benefits.

In the second example, assume the individual has no income at all. Again, they receive no other benefits like food stamps or housing vouchers. The difference between their income and the $50,000 threshold is the full $50,000. With a negative tax rate of 50%, the government would provide this individual with a payment of $25,000. This amount represents the guaranteed minimum income level under this NIT system, ensuring every individual has at least $25,000 in annual income, regardless of their actual earnings. This setup was designed to provide a safety net that discourages poverty without disincentivizing additional income generation through employment.

You can watch Friedman discuss the Negative Income Tax here:

NIT may sound similar to Universal Basic Income (UBI), but they take different approaches to income support. UBI is unconditional money, theorized to provide all individuals with additional funds regardless of their income level or employment status. Instead of moving low earners to a suitable income level, UBI intends to create a universal safety net. Further, UBI programs lack conditions tied to receiving the benefit; they do not depend on income, employment, or other criteria.

NIT also resembles another social welfare program: the Earned Income Tax Credit (EITC) program, which President Reagan significantly expanded. However, EITC targets working individuals and families—particularly those with children—and aims to incentivize work. NIT was broader and designed as a general income supplement for all individuals, potentially replacing other forms of welfare. NIT would provide a basic income guarantee regardless of work status, though the benefit would decrease as income increases.

As Friedman originally envisioned, NIT would replace existing social welfare programs, streamlining support into a single system to reduce bureaucracy and administrative overhead. In contrast, EITC operates alongside other social welfare programs such as food stamps and housing vouchers.

Friedman's NIT was a bold proposal aimed at reducing poverty while minimizing government intervention. But how does this theory hold up in the context of our modern economy?

Social Program Relevance for Today

Now, let's add some relevance to our discussion of social welfare programs.

Supporting low wages inherently means relying on social programs.

Individuals have two sources of money: their work or the government, which represents the American people’s money.

We have a systemic job skills and wage problem. There are approximately 84 million families in America. Of these, 42 million, or half, receive social program dollars. Many of these Americans don’t even realize they're getting social program support because it’s hidden in their tax filings and again in this year’s federal deficit.

Half of American families need social program support because wages are too low. My question for Friedman would be: when would you argue to raise wages instead of supplementing the wages businesses pay with social program funds? Would it be when 75% of families need government support? 90%?

A key piece of the market is the training and preparation of individuals. We can’t say there’s a market failure in job training but no market failure in wages. A failure in one area leads to a failure in the other.

At what point does the scale of reliance on social programs to supplement wages indicate a fundamental problem in the market itself?

The Interview

To think about our questions, I fed ChatGPT with Friedman's writings and asked it to answer as if it were Dr. Friedman for an interview.

Joel: If we told American high school students that they have a clear path to prosperity through specific training opportunities and provided them with the means to pursue this training, most would likely seize the opportunity.

Friedman: Absolutely. It's crucial to inform high school students about effective training paths that lead to prosperity. If they know that specific skills are in demand and that acquiring them will lead to better job prospects, most would take advantage of these opportunities. It's essential that educational programs align with market demands and remain accessible, ensuring students are equipped for the evolving job market.

Joel: But of course, the job market doesn’t do that, and sometimes these Americans end up with misaligned job skills and low wages. Don't low wages indicate a failure in the market?

Friedman: Low wages can indeed indicate a mismatch between the skills workers have and those that are in demand. However, I wouldn't necessarily call it a market failure. Markets are dynamic and adjust over time. The key is to ensure that education and training systems are responsive to the needs of the economy. When there's a surplus of certain skills and a shortage of others, wages will reflect that imbalance. Addressing this requires improving our educational institutions and perhaps reducing barriers that prevent workers from acquiring new skills.

Joel: But you’re against government intervention, even though people need to be able to have food on the table and heat in the house.

Friedman: While I advocate for minimal government intervention, I recognize that a safety net is necessary to support those who are truly in need. The challenge is to provide assistance in a way that doesn't create long-term dependency or distort market incentives. Programs should be designed to help individuals get back on their feet and become self-sufficient, rather than fostering reliance on government support.

Joel: Didn’t you propose a social program that became the Earned Income Tax Credit? This program perpetuates government dependency today because half of American families receive benefits from it.

Friedman: I proposed the Negative Income Tax as a more efficient alternative to the myriad of welfare programs. The idea was to simplify the system, reduce administrative costs, and provide direct assistance to those below a certain income level without discouraging work. If a significant portion of the population relies on programs like EITC, it suggests deeper economic issues such as inadequate education, lack of opportunities, or policies that inhibit economic growth. The goal should be to address these root causes rather than viewing the assistance program itself as the problem.

Joel: If government intervention is necessary regardless, why wouldn’t we use the government to make rules supporting the individual rather than funneling money through the bureaucracy?

Friedman: My preference is always for solutions that minimize government intervention and maximize individual freedom. If intervention is necessary, it should aim to empower individuals rather than expand bureaucratic systems. Direct support mechanisms, like the Negative Income Tax, are designed to help individuals without the complexities and inefficiencies of a large administrative apparatus. By simplifying the process and reducing bureaucracy, more resources can reach those in need, and individuals retain the freedom to make their own choices.

Joel: What do you think about a system in which businesses receive tax incentives after they prove they pay wages above the poverty line?

Friedman: Providing tax incentives to businesses that pay higher wages could be a market-friendly approach to encouraging better compensation. It rewards positive behavior without imposing mandates that might lead to unintended consequences like reduced employment opportunities. However, it's important to consider the potential for manipulation and ensure that such a system doesn't create distortions or unfair advantages. The best solutions typically involve creating a healthy economic environment where businesses naturally compete for workers by offering better wages and conditions.

Joel: Dr. Friedman, thanks for the chat. Do you have any final thoughts?

Friedman: Thank you for the engaging discussion. In closing, it's important to remember that economic policies should aim to enhance individual freedom and responsibility. By fostering a vibrant, competitive market and ensuring opportunities for all to participate, we can address many of the challenges we face. Government interventions, when necessary, should be carefully designed to support—not replace—the mechanisms that allow individuals to improve their own circumstances.

While Dr. Friedman and I agree on the importance of a healthy economic system, we differ on how to best support individuals within that system.

Reflecting on Government Intervention

If government intervention is necessary regardless, why wouldn’t we use the government to make rules supporting the individual rather than funneling money through the bureaucracy?

Friedman was a brilliant economist, but we don’t agree on everything. His work suggests he viewed the economic system as more important than the individual. In his view, paying wages higher than the market dictates distorts the system. He would rather preserve the market and use the tax system to pay for social programs.

I agree with his premise about the importance of a healthy economic system, but I'm against dependency on social programs. When wages are too low, we throw money at the bureaucracy—giving some of that money to other people, and the machine eats the rest. Friedman viewed social program support as temporary, but trickle-down economics has demonstrated it doesn’t work. It doesn’t improve the financial position of low earners; they stay on social programs.

I’m not against Americans who need social programs. I'm not against the social programs themselves, even though we acknowledge their inefficiencies, because they still manage to help our fellow Americans. But if half of American families rely on social programs, the rules designed to enable individual Americans to succeed have failed.

I recognize the importance of the economic system. I believe individuals having heat in the house and food on the table is more important than the system itself, and I recognize that a healthy system is the best way to achieve that goal.

Of course, the wage problem is systemic and doesn’t have a simple solution. Systemic problems require systemic solutions.

We won’t be able to eliminate social programs, but we need to address low wages, social program dependency, and the problems that cause them.

Since government intervention is necessary to address poverty caused by low wages, we should prioritize policies that directly support individuals by promoting livable wages instead of relying on bureaucratic social programs that perpetuate dependency and inefficiency.

May God bless the United States of America.

This week, we explore a pivotal economic question inspired by Milton Friedman. Do higher wages cause inflation, or are they a tool for economic stability?

It's important to remember that supporting low wages inherently means supporting social programs. So, should we raise wages for the lowest earners, or should we allow the bureaucracy to manage the funds? If we choose to raise wages, does this lead to increased inflation?

This question forms the basis of our discussion today and is the first of two key inquiries related to Friedman’s economic theories.

Milton Friedman

Milton Friedman (1912 to 2006) was a highly influential American economist, statistician, and leading proponent of the Chicago School of Economics. He taught economics at the University of Chicago for over 30 years and advised Presidents Nixon and Reagan on economic policy. In 1976, he won the Nobel Memorial Prize in Economic Sciences for his achievements in economics. In the 1970s, during a period of severe economic stagnation and high inflation known as stagflation, Friedman gained notoriety by disproving prevalent economic theories that did not consider stagflation possible.

We remember Friedman for his strong belief in free-market capitalism and skepticism of government intervention in the economy. He argued that the primary responsibility of a business is to be profitable and return value to stakeholders. In doing so, these stakeholders would have the resources to make decisions and achieve autonomy consistent with their values. He believed that the role of government in the economy should primarily be to increase the money supply at the same rate as the potential growth of gross domestic product (GDP) and to otherwise not interfere. Increasing the money supply at a rate faster than economic growth only increases inflation without driving economic growth.

During Ronald Reagan's presidency, Friedman’s advocacy for free-market principles significantly influenced supply-side economics. Supply-side economics became commonly known as Reaganomics. Core aspects of Reaganomics included significant business tax cuts intended to stimulate investment and economic growth by increasing the after-tax return on investment.

Reaganomics reduced government regulation. Friedman argued this effort would eliminate inefficiencies and encourage entrepreneurship. To address inflation, Reaganomics intended to control the money supply, a direct application of Friedman’s monetary theory. Finally, the push for reduced government spending reflected Friedman’s skepticism about the government's role in the economy. He advocated for a system where market forces could operate with minimal government interference. These policies intended to reduce government influence in the economic sector, enhance individual freedom, and promote economic growth.

Reaganomics, while aimed at economic revitalization, also increased poverty and inequality. Reagan himself expanded some social programs. We’ll remember that as related to the theme for next week.

This nuanced outcome leads us to Friedman's dichotomy: the economist who disavowed government solutions to economic problems also recognized the necessity of addressing poverty.

Friedman’s Dichotomy

Friedman famously disavowed government solutions to economic problems. In An Economist’s Protest (1975), he wrote:

I think the government solution to a problem is usually as bad as the problem and very often makes the problem worse.

But in an interesting twist, Friedman recognized that some lived in poverty, and we had a shared duty to alleviate that poverty. In Capitalism and Freedom (1962), he wrote:

We might all of us be willing to contribute to the relief of poverty, provided everyone else did. We might not be willing to contribute the same amount without such assurance.

Friedman’s dichotomy, which states that government solutions don’t improve problems while recognizing the need for government solutions to address poverty, raises two inherent questions.

* Friedman spent much of his professional career addressing the causes of inflation. We often hear others say that we can’t raise wages because doing so would drive inflation. Do higher wages cause inflation?

* If government intervention inherently makes problems worse but is needed to address poverty, then government intervention is necessary in either case. If government intervention is necessary regardless, why wouldn’t we use the government to make rules supporting the individual rather than funneling money through the bureaucracy?

First is the inflation question.

Wages and Inflation

Several factors cause inflation. These include demand-pull inflation, cost-push inflation, and monetary inflation.

In simple terms, think of these as inflation being caused by three separate forces. In the first, demand pulls prices up. For the second, costs push prices up. The third involves devaluing money, so you need more to buy something, which looks like prices are increasing.

First, demand-pull inflation. As summarized by Forbes, “Demand-pull inflation is when growing demand for goods or services meets insufficient supply, which drives prices higher.”

When demand exceeds supply, prices rise because some people are willing to spend more to outcompete others. This is a significant driver in today’s housing market. Because demand exceeds supply, and some are willing to spend more to outcompete others for a house, prices rise dramatically.

However, unlike the housing market, increased wages for low-income workers don’t increase demand-pull inflation because workers don’t have more money. There are two sources an American can get money. One is their work. The other is the government, which represents the American people’s money. If wages rise for low-income workers, they might get more money from their labor and less from social program support, but the total resources available are roughly the same.

Ultimately, the net effect of higher wages on demand-pull inflation is negligible.

Second, cost-push inflation. A University of California - Los Angeles (UCLA) study examined The Concept of Wage-Push Inflation: Development and Policy. Daniel Mitchell and Christopher Erickson led the effort. An excerpt:

Wage-push inflation…was associated with powerful, aggressive unions pushing wages up. In its simple form…costs go up which hapless employers are forced to pass through as price increases. The price increases trigger compensatory wage increases by unions and the cycle repeats…Few economists ever subscribed to such a simplistic view which suggested that the process occurred indefinitely without regard to economic circumstances. Nonetheless, popularizing the simple view was seen as advantageous to elements of the business community….

In cost-push or wage-push inflation, the costs of production increase (like raw materials or wages), and businesses pass these higher costs onto consumers in the form of increased prices.

But arguing against higher wages using a wage-push inflation argument negates the reality that if employers can’t, or refuse to, pay higher wages to control costs, they push the true cost of that labor onto the American taxpayer. If your business model requires you to pay poverty wages to maintain competitive prices, it’s not sustainable.

Ultimately, arguing that higher wages push prices higher is an argument in favor of passing the actual cost of wages onto the taxpayer. Wages indeed represent a business cost. The business, not the taxpayer, is responsible for paying for the cost of its labor.

The third type of inflation to consider is monetary inflation. When the total supply of money in the economy exceeds the country’s economic growth, this decreases the value of money and leads to higher prices. The stark rise in inflation following COVID was caused by government officials generating excess money that was not offset by productivity growth.

Dr. Friedman studied monetary inflation. He believed that the role of government in the economy should primarily be to increase the money supply at the same rate as the potential growth of gross domestic product (GDP) and not interfere otherwise. Increasing the money supply at a rate faster than economic growth only increases inflation without driving economic growth.

Higher wages don’t drive monetary inflation. Monetary inflation is a government phenomenon that is not associated with wages.

In sum, higher wages don’t drive demand-pull inflation.

Further, wages above poverty levels are irrelevant to the argument for cost-push inflation.

Finally, higher wages don’t drive monetary inflation.

So, higher wages don’t affect any of the inflation drivers. It seems that businesses paying higher wages doesn’t impact inflation after all.

Counterarguments

Higher wages can disproportionately impact small businesses, which operate on tighter budgets than large corporations. This is true, especially in the short term.

To mitigate the impact on America’s small businesses, we can offer tax incentives to small businesses that pay higher wages to help offset the increased labor costs. We can provide access to training to improve business efficiency and help small businesses manage higher wages without sacrificing profitability.

Retail and hospitality, which traditionally rely on low-wage labor, might be particularly vulnerable to wage increases. Higher labor costs could lead to higher service prices, potentially reducing consumer demand.

We should offer more tax incentives to small business service industries to keep low-margin small businesses competitive with large corporations.

Further, higher wages would lead to increased consumer spending, stimulating economic growth. This increase in demand could offset the impact of higher costs on businesses. Higher wages would also lead to lower employee turnover and higher productivity, offsetting some of the costs of higher wages for businesses.

Critics argue that higher wages might squeeze the margins of small businesses, leading to job cuts or business closures. Proponents argue for a different perspective. They suggest that a dynamic economy, spurred by increased consumer spending, small business tax relief, and dedicated support, can more than offset the initial challenges associated with rising wages. This approach addresses small businesses’ immediate financial concerns and promotes long-term economic growth and stability for individuals, reflecting Friedman’s advocacy for a robust and adaptable market economy.

Milton Friedman’s dichotomy, which states that government solutions don’t improve problems while recognizing the need for government solutions to address poverty, raises two inherent questions.

Friedman spent much of his professional career addressing the causes of inflation. We often hear others say that we can’t raise wages because doing so would drive inflation. Do higher wages cause inflation?

Higher wages don’t drive demand-pull inflation. If wages rise for low-income workers, they might get more money from their labor and less from social program support, but the net effect of higher wages is negligible.

Livable wages are irrelevant to the argument for cost-push inflation. Arguing that higher wages push prices higher favors passing the actual cost of wages onto the taxpayer. The business, not the taxpayer, is responsible for paying for the cost of its labor.

Finally, higher wages don’t drive monetary inflation. Monetary inflation is a government phenomenon that is not associated with wages.

It seems like businesses paying higher wages doesn’t impact inflation after all.

Next week, we can consider our second question: If government intervention inherently makes problems worse but is needed to address poverty, then government intervention is necessary in either case. If government intervention is necessary regardless, why wouldn’t we use the government to make rules supporting the individual rather than funneling money through the bureaucracy?

May God bless the United States of America.

Can beer and the NFL unite America?

What a ridiculous question.

Team Colors and Community Ties

Recently, I was in my local grocery store early on a Saturday morning, wearing a Kansas City Chiefs hoody, though I now live in the Mountain West region. It’s August, but many mornings are cool year-round when you live at 6200 feet elevation.

For those of you unfamiliar with the Chiefs, they are a professional American football team. I was born in Kansas City and grew up watching Chiefs games. As a kid, my favorite players were Christian Okoye and Derrick Thomas. There were enough fans in my town that church let out early when the Chiefs played the first game on Sunday so everyone could be home by kickoff.

While shopping this particular Saturday morning, a woman I didn’t know passed and remarked she hated my sweatshirt. The comment might elicit a negative response in many scenarios.

I gave the obvious response, “Thank you!” The Chiefs have won three of the last five Super Bowls, played in another, and have the world’s biggest pop star on our side (that would be none other than the illustrious and acclaimed singer-songwriter Taylor Swift). Chiefs’ colors attract some attention. I followed the stranger’s challenge by predicting Bo Nix and Sean Payton would make our division tough this year. I’m less than two hours north of Denver, and most people who comment on my team colors are Denver Broncos fans.

She laughed and said she was a Dallas Cowboys fan. After sharing her thoughts on her team, she went about her shopping way.

In my experience, that’s a pretty normal encounter with fellow NFL fans. I’ve come to understand that if I’m going to wear team colors, I will meet other fans who expect I’m current on events, and I will share brief conversations with strangers about the league. If you’re going to wear Chiefs colors, you need to know the Las Vegas Raiders took us out behind the woodshed and bloodied our mouths on Christmas Day last year, Russell Wilson is now with the Pittsburg Steelers and not the Broncos, Bo Nix won the starting Broncos quarterback job, and the Los Angeles Chargers brought in Jim Harbaugh to right the ship.

Many of these conversations start with a pseudo-challenge or feined insult. But they end up with smiles and fist bumps, even when we root for rival teams.

May we strive for the same in all of our encounters. We have differences, but we should emulate the respect NFL fans share for each other, even when we root for rivals. Part of that respect is how we interpret intent—we need to orient our perspective to assume others mean us no ill will. And part of that respect is that we mean no ill will towards others.

Humans are inherently social animals; we support and are supported by our communities. The ancient Greek philosopher Aristotle extensively explored this notion.

Philosophy of Society

Aristotle (384 to 322 BC) was a Greek philosopher and scientist. He is one of Western philosophy's most important founding figures, and philosophers still study his works today. At a time when the world had few texts for education, Aristotle created texts that we still use 2000 years later. His ability to systematically explore and document various fields formed the cornerstone of Western education and encouraged critical thinking across diverse disciplines.

Aristotle studied under Plato and later tutored Alexander the Great. His writings cover many subjects across philosophy, politics, and science.

Aristotle’s concept of the "social animal" is foundational to his philosophy. He posited humans inherently form communities to survive. He detailed this concept in his work Politics, which explored society's origin, structure, and purpose.

He declared,

Man is by nature a social animal; an individual who is unsocial naturally and not accidentally is either beneath our notice or more than human. Society is something that precedes the individual. Anyone who either cannot lead the common life or is so self-sufficient as not to need to, and therefore does not partake of society, is either a beast or a god.

Society is natural, and humans are inherently driven to form social bonds. Society exists primarily to enable citizens to live a good and virtuous life. Happiness can only be developed within a community. Every person has a role to fulfill, contributing to the common good and supporting individual development and well-being.

Individuality and Community

Let's use Aristotle's logic that flourishing comes from living well within a community to conduct a thought experiment that examines individuality and community:

Humans have a duty to support our communities if society precedes the individual, and we can’t survive outside of it. This interdependence defines human social structures.

If we must support society at the individual level, humans from varied backgrounds must be able to support their community. Individual liberty is the means to express our contribution to society.

Liberty is necessary for human development. Liberty enables us to make choices, leading to personal growth. We all require individual liberty because individuality promotes vibrant and supportive communities.

To secure liberty for ourselves, each of us has the duty to ensure liberty for others. We are all a part of humanity. Some would strip rights from others. One day the bell will toll for us. When one of us loses our rights, we all lose.

Acknowledging that others will make choices, we must accept that some will be different from our own. Embracing differences fosters a tolerant and resilient society.

To willingly accept others making different choices, we must build mutual respect for those choices. We cultivate this respect through shared experiences and consensus-building.

One way we share and build consensus is to engage in communal activities, such as drinking beer together. These shared moments allow us to bridge differences, understand new perspectives, and reinforce our communal bonds.

Presidential Perspectives

We don’t need the fermented grain and hops liquid we know as beer, but we need the community we gain by sharing beer. We build consensus by forming communities.

A quote from President Abraham Lincoln:

I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts, and beer.

Beer represents community, and we need community.

President Franklin D. Roosevelt, on the occasion of signing the repeal of prohibition, said:

I think this would be a good time for a beer.

FDR highlights a great point. When is a good time for a beer?

Classrooms and Communion

We can’t confine the philosophy of individuality and community to classrooms or sports rivalries. It extends into our personal lives.

In September 2017, I led a squadron that stood watch over America day and night, ready to provide decisive effects at all times worldwide. It was our privilege to provide combat capability for the nation.

That same month, one of our teammates passed away. Most of the squadron traveled to the member’s small hometown for the funeral, with support from our sister squadrons for the watch.

We arrived the day before the funeral to attend the visitation. Due to the small town, I expected a small gathering. I was mistaken. When we arrived, dressed in Service Dress Uniform, we were greeted by more than a thousand people who had traveled from neighboring communities for the service. The Catholic Church was full, with a line stretching out the door and around the block. The crowd made way and welcomed the squadron past the line.

The family had reserved the squadron the front two rows of the beautiful church. Ushers led those who wished to share in the Sacrament of Communion to the priest. I wanted to participate in Communion, but being Protestant, I crossed my arms over my chest to demonstrate I could not participate in the ceremony as a Catholic.

The priest looked at me with unmistakable grace, made the sign of the cross on my forehead, and prayed for me and the squadron. I have seldom felt such love and unity in our shared grief as I did during his prayer for us.

We helped lead the ceremony the next morning. The squadron carried the body to the grave, stood at attention, saluted the flag during Taps and the gun salute, and cried in place.

At the request of the deceased member’s father, the squadron remained behind at the gravesite following the service. We pinned our combat “wings” on the casket and shared a beer.

The father said he had wanted to travel to his son’s duty location to have a beer with his son and his military friends, but he never got the chance. He brought out several coolers at the gravesite to share that beer with us alongside his son.

I know we didn’t all have the same views. The squadron was a melting pot. We had long-established Americans, immigrants, men and women, LGBTQ members, and kids who grew up from Brooklyn to rural Nebraska. We had only one commonality—we all raised our hands to volunteer to serve, and it was our privilege to provide combat capability for the nation.

That September morning, we set aside our differences to share a second communion over a beer. No priest stayed to say a prayer. Instead, we told stories about the fallen with his parents at a gravesite in America’s heartland.

Can beer and the NFL unite America?

Beer and the NFL alone can’t help fix societal issues. But they represent a seed of shared experiences that bridge divides and strengthen community bonds.

Instead of asking if beer and the NFL can unite America, let’s rephrase the question.

Should we orient our perspective to assume strangers don’t mean us ill will, even when our views are opposed?

Should we intend no ill will towards others, even when we disagree with their choices?

Should we set aside our differences, respect the individuality that strengthens our communities, and share communion?

May God bless the United States of America.

Postscript.

Today marks the 52nd consecutive week, or year, of I Believe's audio version. In addition to researching the topics, I’ve learned a ton about audio editing and production.

I recorded the first audio version with the built-in computer microphone in one take. Because I didn't use or even have audio editing software, I couldn’t edit any portions of the audio that weren’t good.

But I knew it was important to start. I knew I would be unsatisfied with the quality, and I would make it better. Much of my professional life has focused on innovation through relentless process improvement, which may be the most critical lesson ingrained in Air Force Weapons School students. I may no longer study or teach there, but you don’t forget those lessons.

After a couple of episodes, I started using a decent dynamic microphone. I learned to use professional audio software, Adobe Audition, to enhance audio sections and reduce background noise and unwanted sounds. I created, changed, and recreated a podcast intro. The introduction is 12 seconds long because I personally hate watching a video and wasting precious minutes listening to a prolonged introduction.

I discovered ElevenLabs technology, which opened up a world of audiobook voices as storytellers. I audio-dubbed my voice and recorded two podcasts in which my voice spoke foreign languages, including Spanish and Ukrainian, along with the English version. My audiobook characters give extra variety to each episode and help highlight alternating points of view.

If you only read the articles, thank you. I invite you to try out the audio version. The varied voices bring extra clarity to the sometimes complex topics. You can subscribe at Substack, where you will get a written and audio version on the same screen, or to Apple Podcasts and Spotify podcasts. Or enter your email below.