The Federal Budget

This is a cool graph that shows where money is spent in the federal budget. Click on the link not the picture.

Raise the minimum wage

As the Senate considers legislation to raise the minimum wage we can expect to hear business groups moaning and complaining that any increase in the minimum wage will shutter businesses and destroy our economy.

The New York Times, however, took an interesting look at what is happening between Washington state and Idaho. Washington not only has the highest minimum wage in the nation at $7.93 per hour but they indexed that wage to inflation so that the minimum wage in that state goes up every year. Idaho, meanwhile, has one of the lowest minimum wages in the country at $5.15 per hour.

So what has happened? The Times reports,

"Business owners say they have had to increase prices somewhat to keep up. But both states are among the nation’s leaders in the growth of jobs and personal income, suggesting that an increase in the minimum wage has not hurt the overall economy.

“We’re paying the highest wage we’ve ever had to pay, and our business is still up more than 11 percent over last year,” said Tom Singleton, who manages a Papa Murphy’s takeout pizza store here, with 13 employees.

His store is flooded with job applicants from Idaho, Mr. Singleton said. Like other business managers in Washington, he said he had less turnover because the jobs paid more.

By contrast, an Idaho restaurant owner, Rob Elder, said he paid more than the minimum wage because he could not find anyone to work for the Idaho minimum at his Post Falls restaurant, the Hot Rod Cafe.

“At $5.15 an hour, I get zero applicants — or maybe a guy with one leg who wouldn’t pass a drug test and wouldn’t show up on Saturday night because he wants to get drunk with his buddies,” Mr. Elder said."

Businesses have not fled from Washington to Idaho. As a matter of fact, Washington business groups that opposed the increase in the minimum wage years ago now say that the Federal government ought to raise the wage nationally.

For all the bravado one hears from the business lobby about capitalism and competition, I've found that frequently business groups base their policy positions on fear of change -- even when there is solid evidence that their fear is unfounded. That's too bad. Imagine how strong our country would be if the business community embraced comptetition and change instead of trying to hide from it.

A surge in Iraq

President Bush says he wants to send more troops to Iraq. He says it is the only way we will win.

I wonder why we should trust him.

This President has consistently short-changed our troops, the American people and the Iraqi people. He sold us all a bill of goods. He told us it is possible to win a war in which sacrifice was only required if you or a family member are in the military. There is no requirement for anyone else to sacrifice. He told us we could throw out the Powell doctrine of overwhelming force and instead place all of the burden on a relatively small number of troops. As a result, his Presidency is and forever will be a failure.

The legacy of George Bush is ineptitude in wartime leadership and ineptitude in managing our federal budget. As a result of his leadership thousands of kids will grow up without their parent. Millions of their friends will be saddled with trying to pay of the massive federal debt left to them by George W. Bush.

But the President asks for our trust and our faith. After four years of failure, somehow, he finally has figured it all out. I don't believe him. Because once again there is no call for common sacrifice. If the President had it figured out he would understand that the way to beat the terrorists is to take away their money and their money comes from oil. So what should the President do?

1. Set a floor for the price of oil. How's $60 a barrel sound? Why is this important? Because we need to make the price of oil stable at a high enough price that the private sector will be willing to invest in alternative energy development. Right now, the private sector fears losing a ton of money in alternative energy because OPEC can simply drop the price of oil and undercut the pricing on alternatives.

2. Raise taxes on all Americans making more than $100,000 (individually) per year. Divide that money between paying off the debt and alternative energy development.

3. Set a date to get out of Iraq. My vote? January 12, 2008. One year seems like fair warning for the Iraqi people.

I originally supported the Iraq invasion because I think we have an obligation to get rid of those leaders who commit genocide. But the effort has been bumbled and pathetic. Mistakes were made and those mistakes have cost thousands of lives.

Immigration in America (Read the Strib Story)

This week, Federal agents raided multiple Swift meatpacking plants across the country. One of them happened to be near my hometown. 230 individuals were detained in the raid, almost two percent of the town's total population.

Imagine what happens to a community when 2% of your population is put in jail in one night. Each of those 230 individuals were folks living financially week-to-week if not day-to-day.

Think about what happens to those families when that income is wiped out.

Think about what happens to the economy in that town when that income is wiped out.

Immigration reform is needed but it is a tricky issue and not one that can be solved by blathering button pushers on Fox News. To get an excellent sense of how complicated this thing is, click here to read the Minneapolis Star-Tribune's story on this raid.

Free Trade

New York Times Columnist Tom Friedman told an interesting story in his Friday column.

Last week, I was in Nebraska, where I met Doug Palmer. He and his partner, Pat Boeshart, make insulated concrete forms for buildings. The traditional way to insulate concrete with foam is to make the foam and then truck it around the country to building sites to be attached to concrete. Mr. Palmer's company, Lite-Form, found a Korean machine that, when combined with devices added by his firm, can make the foam and concrete together on site, saving big dollars in trucking. Today, Mr. Palmer's South Sioux City company imports these machines from Korea, attaches its devices and exports them to Kuwait. His company has an Arabic brochure that tells Kuwaitis how to use the device. The brochure was produced by a local ad agency owned by the Winnebago Indian tribe of Nebraska. The agency was started by the tribe's economic development corporation. Midwest Indians publishing Arabic brochures for Nebraskans importing from Koreans for customers in Kuwait ...

"Protectionism scares me," said Mr. Palmer, who has 28 employees. "If we put up a moat and keep doing what we're doing, thinking we're the smartest in the world, we're going to die. We have to have that flexibility to barter and trade."

I come from a Labor family. Both of my parents have been strong and active union members. My Mother currently sits on the board of the Minnesota AFL-CIO and is a negotiator for her local union. I say that because, well, I'm feeling a bit defensive making the argument I'm about to make.

Free trade is a good thing. We need more of it. Protectionism will only hurt us in the long run. But the way we've done free trade up til now is wrong.

There are two problems with our current free trade agreements.

1. Our current free trade agreements, including NAFTA, have set up top secret courts to resolve any disputes that arrive under the treaty. The treaty language is horrible. It says that if a business believes it will be harmed by a law in one of the countries that has signed the treaty, that business can sue in super-secret treaty courts and those courts have the power to invalidate the law.

So, for example, California has passed stronger vehicle emission standards than most of the rest of the places covered under NAFTA. A Canadian or Mexican car manufacturer could sue California alleging that the emissions law will cause it financial harm. That suit would be brought in NAFTA treaty court and the court could order the state of California to stop enforcing their emissions law.

But it gets worse, here's the kicker, the only way anyone will ever find out if a lawsuit has been brought or decision made is if the court announces the decision. Prior to the court's announcement of the decision, all proceedings are confidential.

That's just nuts. Those courts shouldn't be secret and they shouldn't have the power to unilaterally overturn laws.

2. We absolutely must include labor, health and environmental standards in our treaties. Now, we don't need to demand that companies in other countries pay American level wages but we should demand that they pay a wage that will keep their employees out of poverty -- a "prevailing wage" if you will -- and that these companies meet strict health and environmental standards.

Free trade is a good thing. It can become a tool to improve the lives of Americans and citizens of the world. Think about Doug Palmer. 25 years ago, very few people in South Souix City, Nebraska, were thinking about Kuwait as a potential market. Today, instead of limiting most entreaupeneurs to starting businesses that serve just their state or community, we now have the ability to think, work and trade globally. And you don't have to be living in Houston, New York or Los Angeles to get it done. You simply need to have a vision that stretches beyond the boundaries of your community.

Growing up, my parents (and my old high school computer teacher, Charlie Weinman) constantly encouraged me to think beyond the boundaries of my small, rural hometown in Minnesota. But the vision presented wasn't global, it was national -- unless I wanted to become a diplomat and work for the State Department. When they said I could be "anything in the world" I wanted to be what that really meant to me was that I could be anything in America I wanted to be. And believe me, it was hard enough for me as a high school student to really see anything beyond Minnesota.

But for my kids, the world really will be open. They really will have a chance to compete, live and think on a global stage. I think that is a very exciting prospect. And it will only happen if we continue to pursue free trade.