Week 15 Reflection -- the Utopian Idea of Dystopian Regulations

One of the first things I noticed when watching Dr. Davies presentation was the bold statement that coercion never works. Because of the extremity of using the word "never", I started racking my brain for examples of when coercion, specifically by government entities, has worked. Upon research, I couldn't find anything that contradicted Dr. Davies' claim. The most common form of government force is through laws and amendments, and institutions such as jail have had to be created because of the failed effectiveness of these laws and amendments. An interesting point Dr. Davies' brought up is "regulatory capture" by the government in regard to poverty in the United States. He mentioned that since 1967, we have maintained a flat 13% poverty rate, but have spent $23 trillion trying to fix it. He added that the United States could have used this money to supply each poor person with $10,000 to wipe out poverty completely. This reminds me of Dr. Folsom's talk from last week when talking about government intervention. Not only were the government-funded steamships more expensive, but they were less efficient than the privately created steamships. A recurring theme not just in these past two weeks but throughout the semester has been the detriment government intervention has had on its economy, its power, and its citizens. One of the most powerful takeaways I had from Dr. Davies' talk was the comparison of tax given and received by the poor, middle class, and top 1%. After all of the calculations, the poor and middle class ended up receiving more than they paid and the top 1% were they only ones who received less. This confused me because of the constantly chanted rally cry of "Tax the rich." I found that the top 0.1%, "... a mere 50,000 individuals, pay at least 10 percent of all income tax, so each pays at least 100 times more than the average." (Johnson) This startling statistic paired with Davies' data shows that economic inequality is more equal than some citizens wish to believe. Additionally, if the government taxes the rich more to try and achieve economic equality, they will unintentionally create more economic inequality which will put the country in a worse state as demonstrated by Dr. Davies. Lastly, Dr. Davies' points about minimum wage requirements were insightful, particularly the concern with Americans and the low-skilled workers. It is an interesting point that American citizens rally to raise the minimum wage for the low-skilled workers but they eventually end up getting laid off because the employers cannot afford to pay all of their employees. To add onto this, I think that the workforce is full of incentive; if the minimum wage is raised and employers are able to pay all of their employees that much, then there becomes less of a margin between the pay the low-skilled workers receive and the pay the higher-skilled workers receive. This in turn will cause people to have less incentive to try and gain more education and experience to be higher-skilled because the income increase will not be as dramatic. In conclusion, Dr. Davies skillfully invites pondering on government regulations, and demonstrates its negative effect on the economy.

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