Blumneconomics XIV: the solution to poverty

Though I'm still waiting for Robyn "Blumñata" Blumner to plug another Western European socialist country, we at least have installment XIV in the Blumneconomics series with her "Poverty is not a character flaw" column from last week.

Blumner got the laughter rolling early:

Sen. Bernie Sanders, a liberal, political independent and all-around good egg, has put together a book of excerpts of letters he's received from Vermonters who are struggling through the recession.

Liberal.  Political independent.  All-around good egg.  Socialist.

Blumner may have decided to omit that label because of the regularity with which comments on her columns tag her with "communist" or "socialist."  So here she is lauding the socialist Bernie Sanders in her column.  Perfect.

And Sanders put together a book!:

In short, blunt paragraphs, the writers tell of how they are falling out of the middle class:

"I can't find a job to save my soul that will pay enough to make a difference," says Sue, who is described as "jobless since April" and "facing foreclosure."

Can't find a job that pays enough to make a difference?  The difference between something and nothing is still something, isn't it?  Or maybe Sue's receiving jobless benefits and won't take a job that "will pay enough to make a difference."  It makes a difference to taxpayers, if that's her situation.

Next!:

"I patch together a full-time job making $12/hour and various painting jobs and still can't afford to get myself out of debt, or make necessary repairs on my home," laments a single mom in her late 40s.

Bummer.  I wonder if marriage has crossed her mind a second (third?  I dunno) time?

Next!:

"I am a 35-year-old man living paycheck to paycheck trying to make ends meet while working at a chain retailer. I feel I am being overworked and underpaid," offers a writer from Middlebury who lives with his parents because he can't afford housing.

We have a winner!  How can a person live "paycheck to paycheck trying to make ends meet" while living with their parents?  Even working only 30 hours per week at minimum wage he's got to be taking home about $600 per month.  A person who can't get by on $600 per month while living with their parents probably has issues with budgeting.

That was all for the poverty parade.  But now comes Blumner's economic nonsense for a few paragraphs:

While Republicans in Congress push to unravel more of America's frayed social safety net, they have no plans to help rock-ribbed, hard-working Americans earn a decent living.

Sure they do.  Do what worked in the past.  Harness the free market and let American ingenuity do the rest.  If that won't work then we have no alternative with a proven history of success.  People who fail to understand that are often called "socialists."

Do conservative politicians think, if you're not rich, you're not working hard enough? No one works harder than a roofer in the Florida sun or a tomato picker. But in the GOP's world, it is as if poverty indicates a character flaw. It's an unconscious bias that metastasizes into contempt for people who are struggling economically.

It isn't that poverty is a character flaw.  It's that poor job skills lead to low-paying jobs in a market economy.  And no economy can fool the market indefinitely.  That's why bubbles burst and the business cycle cycles.  A roofer can make pretty good money because it takes a certain degree of skill.  Tomato pickers don't need much skill.  But the market doesn't reward work simply because it is physically difficult.  If I go dig a ditch that nobody wants there's no need to doubt that the work will prove very difficult.  Dirt is pretty heavy, kind of a like thousands of tiny little rocks.  But I don't get a dime if the work is not valuable to a person or persons.

And that's what liberals and socialists always seem to misunderstand about the free market.  There's no escaping it.  You either work with it or fight against it.  Fighting against it carries a terrible economic history.

Blumner's column follows that misstep off into the mire.  She can't understand why Republican free-market policies favor increased freedom for businesses.  She thinks businesses should give (like charity) jobs to people regardless of profit.  In her mind, salaries given for jobs that do not profit the employer serve as the magic bullet that permits people to "earn a decent living."  These useless jobs pump money into the economy, just like unemployment benefits.  And liberals know that paying unemployment benefits is one of the very best ways to stimulate the economy.

But even liberals, if pressed, seem to realize that paying everyone unemployment benefits would not result in a terrific economy.  The missing component?  Wealth creation.  No, printing more money does not create wealth.  It dilutes wealth and creates yet another market condition that will help some and harm others.

Who creates wealth?  Those who direct businesses into ventures that people find valuable.  The Chevy Volt will serve a great test case.  If people (paying customers) value the Volt enough to buy many of them, then the Volt will create wealth.  If the customers don't show then the investors lose money.

There's a good chance the Volt will fail, because it represents the vision of what some people want the market to be while ignoring what the market is in real life.

They never seem to learn.


Correction 7/21/2012:  Fixed dyslexic take ("IVX") on the Roman numeral representation of 14 in the title and text.