Re: CJE 2001 critical review of trade theory and policy

["John O'Donnell" <jackodonnell@xxxxxxx>]

"Henry C.K. Liu" wrote:
>
> Central banks, by adopting the "natural" rate of unemployment (NAIRU) as a
> component of monetary policy, is condamning 4% of the labor force to perpetual
> involuntary unemployment.  It seems self evident that the population has a
> natural right not to be forced to be part of this 4% of unfortunate souls.

How long will it take for economists to accept that monetary
policy is not a determinant of employment? All they need do
to solve this seemingly perplexing problem is to accept
their own dictum concerning marginal cost of production.
Reduce the marginal cost of production and prices fall
accompanied by rising production and employment. And what is
the most significant marginal cost of production? Wages!

There are several ways to reduce wages that either have no
effect on the standard of living or can actually increase
the standard of living. To reduce wages without reducing the
standard of living simply remove the taxes on wages
employers now collect before labor ever sees them as wages
and collect them instead as property taxes on the employers
facilities. This will reduce the variable [i.e. -- marginal]
cost of production while the fixed cost of production is
increased. To reduce the marginal cost of production even
further while actually increasing the standard of living
return some of the taxes collected to the citizens as
citizenship stipend so their wage demands are further
reduced thereby also reducing the marginal cost of
production with its ...

<<SNIP>>
--
			-- jbod

		Tax Privilege, Not People
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