Holden Caulfield: Teenage Everyman

J.D. Salinger created a teenager that is thoroughly real when he created Holden Caulfield, and, for that very reason, teenagers have resonated with Holden from The Catcher in the Rye's first debut even till now. Holden is a real teenager because of the struggles that he faces and because Salinger helped to determine what it means to be a modern teenager through Holden. The youth of the late 1900's connected with Holden because of the prevalent “repression and conformity” of that time period, and the youth of today connect with Holden because of his experiences and emotions (Andrychuck). Holden's realness is what makes him relatable.
Holden is a thoroughly real teenager because of the struggles he faces and the characteristics he exhibits in the face of those struggles. First, Holden struggles with his family life. He pities his mother and fears his father, but he does not respect either of them. According to Ground Spark, the majority of American teenagers believe that their parents do not understand them (Groundspark.org). Therefore, Holden's family difficulties make him a realistic teenager. Second, Holden struggles with subordination to authority. This is made obvious by the fact that Holden is dismissed from three different private schools over the course of his high school years for bad grades and bad behavior. Both the bad grades and the bad behavior are evidence of his lack of respect for school authorities and parental authority. According to BBC, Holden's rebellious nature is a definite reason he should be considered a realistic teenager. BBC states that the majority of teenagers end up involved in “some kind of dangerous, unhealthy, or anti-social pursuit” as they seek to make their own identity and break away from their parents (“Teenage Emotions: Teenage Rebellion”). Third, Holden struggles with peer pressure. He worries that something is wrong with him because he does not have the strong sexual urge that all of the other guys he knows have.  Even after confessing to Sally Hayes that the infatuation most teenage guys have with sex disgusts him, he still instantly reverts to talking about sex when he speaks with Carl Luce because that is what is expected of him. Needless to say, teenagers still struggle with peer pressure today. In fact, fifty percent of adolescents (ages 12-18) feel pressured to have sex at some point in their relationships (Borkar). The fact that Holden faces peer pressure and, more specifically, that fact that he feels helpless in the face of it, makes Holden a realistic teenager. Finally, Holden struggles with his transition to adulthood, making him a real teenager. His inability to make clear decisions about his life course shows his immaturity and incompetency to be called and adult, while his physical maturity makes it impossible for him to be a child. According to Joseph Adelson, in order to create a personal identity – and thus become an independent adult –  “one must relinquish one's parents as psychosexual objects, relinquish childhood ideology based on one's position as a 'taker,' and relinquish the fantasized possibilities of multiple, glamorous lifestyles” (160). Holden still specifically struggles with relinquishing the “fantasized possibilities of multiple, glamorous lifestyles,” as seen with his first desire to run away with Sally Hayes and his later desire to stow away to the West where he would not be known by anyone. That childlike thinking – though it is not the only childlike characteristic that Holden has – makes it clear that, while Holden is not a child, he is finding it difficult to embrace adulthood and create his own identity. Everyone goes through an identity acquisition stage in their psychological development, and people typically come to that stage during their adolescent years (Adelson 167). Thus, Holden is a realistic teenager. He is struggling to find an identity so that he can become independent, just as thousands of other Americans struggle to do during their teenage years. Holden's family struggles, rebellion, susceptibility to peer pressure, and difficulties with transitioning to adulthood are all characteristics that make him a thoroughly real teenager.
It was inevitable, though, that Salinger would create a realistic teenager in his creation of Holden because Salinger was not simply creating a reflection of an already existing teenage mentality through Holden. Instead, he was playing a part in the shaping of teenage mentality through Holden. According to Finlo Rohrer, adolescents were just emerging as a social class when J.D. Salinger published The Catcher in the Rye in the 50's because only after WWII did most adolescents stop working to provide for their families and begin attending high school. At that point, teenagers began to have much more free time on their hands, and they found themselves in an environment that was largely separate from the rest of the world: high school. It was in this environment that the teenage mentality was born, and it was shaped through movies, music, and – yes – books. It was at this time that Salinger introduced Holden to the world, and Holden's characteristics became a part of teenage mentality as adolescents fed on Salinger's works alongside Elvis Presley's music and movies featuring Frank Sinatra . Jonathan Yardley states:

Indeed a case can be made that The Catcher in the Rye created adolescence as we now know it, a condition that barely existed until Salinger defined it. He established whining rebellion as essential to adolescence and it has remained such ever since (Yardley).

Salinger was a creator of the teenage mentality, and Holden was his tool. Salinger created a thoroughly real teenager when he created Holden Caulfield because, before Holden was, the teenage class did not truly exist.
Because Holden is a real teenager, it can clearly be seen why adolescents resonate with him. In the mid 1900's, The Catcher in the Rye was readily glorified by the adolescents of the time as the world crawled out of the wreckage of World War II. Sylvia Andrychuck says that “the book struck a powerful chord with the disenchanted yet idealistic youth of the 1950s... conscious of repression and conformity in the age of McCarthyism.” It was specifically the “repression and conformity” of that time that led youth to idolize Holden and desire to apply his philosophy of life to themselves. Louis Menand agrees with Andrychuck, saying that Holden's cynical outlook on life gave adolescents a reason to have the cynical view they wanted to have toward life. The youth of the 1900's resonated with Holden because he gave them an attitude to have toward life that fit with the way they felt about life at the time.
Today, youth still resonate with Holden, but not for all of the same reasons that the youth of the 20th century did. Today, teenagers resonate with Holden, first of all, because his story is a story of loss. He loses his delusions about the world around him. He loses his innocence. He loses his sister's trust. He loses his love. He loses his childhood. According to Menand, youth culture revolves around loss (largely because childhood is so transient); thus, The Catcher in the Rye became a symbol of youth culture. Beyond the loss of childhood, teenagers today experience losses among the everyday happenings of middle-class American life. Menand expounds this fact also and says:

In American life, where―especially if you are a sensitive and intelligent member of the middle class―the rewards are constantly being advertised as yours for the taking, the feeling of disappointment is a lot more common than the feeling of success, and if we didn’t learn how not to care our failures would destroy us. Giving The Catcher in the Rye to your children is like giving them a layer of psychic insulation (Menand). 

The everyday losses that teenagers experience as they leave their childhoods behind and grow more and more acquainted with the adult world lead them to find the many losses that Holden experiences comforting. Looking at Holden's life, they can feel that they are not alone in their feelings of loss.
The second reason that modern teenagers resonate with Holden is that he experiences the same emotions that they go through. Roher points out that “fans of [The Catcher in the Rye] regard it as the defining work on what it is like to be a teenager. Holden is at various times disaffected, disgruntled, alienated, isolated, directionless, and sarcastic.” In Holden, all of the unpleasant emotions of adolescence can be found as he moves throughout his days alone in New York. Adolescence is not only made up of unpleasant emotions, however, and teenagers can find a like-minded friend in the joys that Holden has as well as in his struggles. The incredible medley of emotions that Holden experiences makes him very relatable for most teenagers. Bruce Brooks comments on Holden's incredible capacity for  emotion saying:

The Catcher in the Rye is windy and stony and hot and cool, brilliantly subtle and disarmingly overt, straightforward, manipulative, sentimental, pragmatic, crazy, controlled, always precise. But perhaps most important, to adult readers in ignorance, and to young readers in wisdom, The Catcher in the Rye is ineffably young (Brooks). 

Holden's amazing capacity for emotion not only makes him realistic, but it is also a part of what makes teenagers today resonate with him.
The final reason that teenagers of today readily resonate with Holden is that Holden, like them, is being forced to come out of childhood and join the adult world against his will. There are two specific aspects of adulthood that Holden is forced to come to grips with that he does not want to accept. First, “...Holden fears the biological imperatives of adulthood – sex, senescence, and death...” (Bryan 32). These are fears that all teenagers face at some point as they grow into adulthood. These biological imperatives, as well as the social imperatives that are associated with adulthood, are what will become the main influences on all of their decisions as they move into adulthood, and the unknown places those imperatives will lead them bring fear to all teenagers as they enter adulthood. The second aspect of adulthood that Holden is forced to come to grips with is the necessity of seeing the world as it is and not as he wants it to be. As he comes to recognize the world for what it really is, he struggles to find a place to bestow his love. Arthur Heiserman and James E. Miller, Jr., highlighted Holden's struggle in this area, saying:

Adultism is precisely ''the suffering of being unable to love,'' and it is that which produces neurosis. Everyone able to love in Salinger's stories is either a child or a man influenced by a child. All the adults not informed by love and innocence are by definition phonies and prostitutes (Heiserman and Miller 7). 

And that is why, at the end of The Catcher, Holden recognizes that he is becoming the thing that he most detests: a phony. He is forgetting how to love, and it is happening largely because he is starting to see the world for what it really is and himself for who he really is, all of which is a part of growing into adulthood.  Many teenagers fall into a cynical outlook on life just as Holden did for that very reason – as they grow to see the world and themselves in a true light, they have difficulty finding a place to bestow their love.
In the end, Holden is real, and that is why teenagers resonate with him. Salinger gave Holden all of the right characteristics to make him real, but they can only be called the right characteristics because Salinger used Holden to make them the right characteristics. Youth of the 20th century clung to Holden's cynical attitude toward life as they became disillusioned about the world, and youth of today cling to Holden's like-mindedness as they become disillusioned about their world. Holden's process of growth resonates with teenage readers as they go through the same emotions and thoughts that he went through – the emotions and thoughts being ineffably more important than the situations that invoke them. Holden is real, and that is why teenagers resonate with him.

Works Cited

Adelson, Joseph, ed. Handbook of Adolescent Psychology. Hoboken, NJ: John Wiley and Sons Inc., 1980. 160-69. Print.

Andrychuck, Sylvia. "A History of J.D. Salinger's The Catcher in the Rye." Wayback Machine Internet Archive. University of British Columbia, 17 Feb. 2004. Web. 19 Sept. 2012. <http://web.archive.org/web/20070928072611/http://www.slais.ubc.ca/courses/
libr559f/03-04-wt2/projects/S_Andrychuk/Content/history_book_catcher.pdf>.

Borkar, Rujuta. "Peer Pressure Statistics." Buzzle. Buzzle, 31 Aug. 2011. Web. 11 Oct. 2012. <http://www.buzzle.com/articles/peer-pressure-statistics.html>.

Brooks, Bruce. "Holden at Sixteen." The Horn Book. The Horn Book Magazine, May 2004. Web. 24 Sept. 2012. <http://archive.hbook.com/magazine/articles/2004/may04_brooks.asp>.

Bryan, James. "The Psychological Structure of The Catcher in the Rye." Modern Critical Interpretations: The Catcher in the Rye. Ed. Harold Bloom. New York City: Infobase Publishing, 2000. 32-33. Print.

Groundspark.org. Ground Spark, n.d. Web. 10 Oct. 2012.
< http://groundspark.org/our-films-and-campaigns/thatfamily/taf_statistics>.

Heiserman, Arthur, and James E. Miller, Jr. "J.D. Salinger: Some Crazy Cliff." Modern Critical Interpretations: The Catcher in the Rye. Ed. Harold Bloom. New York City: Infobase Publishing, 2000. 6-10. Print.

Menand, Louis. "Holden at Fifty." Newyorker.com. The New Yorker, 1 Oct. 2001. Web. 28 Sept. 2012. <http://www.newyorker.com/archive/2001/10/01/
011001fa_FACT3?currentPage=all>.

Rohrer, Finlo. "Why Does Salinger's Catcher in the Rye Still Resonate." BBC News. BBC News, 5 June 2009. Web. 20 Sept. 2012. <http://news.bbc.co.uk/2/hi/uk_news/magazine/
8084931.stm>.

"Teenage Emotions: Teenage Rebellion." BBC. BBC News, n.d. Web. 11 Oct. 2012. <http://www.bbc.co.uk/science/humanbody/mind/articles/emotions/teenagers/
rebellion.shtml>.

Yardley, Jonathan. "J.D. Salinger's Holden Caulfield, Aging Gracelessly." Washingtonpost.com. The Washington Post, 19 Oct. 2004. Web. 24 Sept. 2012. <http://www.washingtonpost.com/wp-dyn/articles/A43680-2004Oct18.html>.

The Externalities of Italy's Immigration Policies

Italy has a large immigrant population that is rapidly growing. Currently, there are believed to be 4.3 million immigrants in Italy, totaling 7.1% of the Italian population (Kington). In Turin itself, 3-4% of the city's residents are non-natives (Rubo). The huge influx of immigrants into Italy and, more specifically, Turin in the last couple of decades has not come without its side-effects. Most of the side-effects, however, are not necessarily the result of the immigrants coming into Italy but, instead, a result of the way that the Italian government deals with the immigrants. The externalities that result from the Italian government's policies toward immigrants affect not only the immigrants but also the Italians and the country of Italy as a whole. It is up to the Italian people to convince their government to reform their policies in regard to Italy's immigrant population.
Current Italian immigration policies give many immigrants a refugee status when they are not necessarily refugees, which means that the government is responsible to provide for them. Also, the government allows illegal immigrants to stay in the country as long as they do not work. Moreover, the government's bureaucracy makes it difficult for any immigrants to become true residents and citizens of Italy. These governmental policies toward immigrants have harsh side-effects.
The direct result of these policies is that immigrants who end up frozen in refugee status or who have arrived in Italy illegally are not able to work legally, yet they end up benefiting from Italy's many welfare programs (as free-riders) without paying taxes to support those welfare programs. The externalities that come about because of those governmental policies have a much larger impact than it might appear when looking at this one direct result of the governmental policies. First of all, those governmental policies result in higher taxes on those who have legal jobs and pay taxes to support the country's welfare programs because there is a greater demand for government healthcare that is not being accommodated by a greater number of tax-paying workers. Second, racism grows among Italians because the immigrants are living off of the Italian welfare system without contributing to it, causing a strong dislike for all immigrants among the general Italian population. Third, because many of the immigrants cannot work legally, beggars cover the large cities of Italy, reducing the attractiveness of the cities to tourists who are a large source of income to many of Italy's cities (“The World Factbook: Italy”). Finally, immigrants who get distressed because of their inability to provide for themselves end up in illegal activities such as gangs, riots, work in the black market, and stealing. This externality has two other side-effects: crime rates rise in Italy and Italy's growing black market causes greater and greater economic failure in the country. As crime rates rise in Italy, families and individuals feel less safe in their homes and neighborhoods – an externality of the government's policies that affects virtually all Italians (Schillaci). Also, as the black market grows in Italy (it is currently estimated to account for 20% of the Italian economy), the Italian Treasury is deprived of more and more money (some say 100 billion euro per year), which could have been used to provide for the large refugee population and to accommodate the greater number of citizens currently reliant on welfare in Italy (Alderman). In the end, immigrants who are unable to get legal work find themselves in poverty, and Italians – who are forced to pay higher taxes because of the immigrant population who is living off of welfare programs they do not contribute to – may find themselves in poverty or closer to it also. All of the externalities of the government's current policies toward immigrants lead up to an overall higher poverty rate in Italy and a weaker Italian economy.
What needs to be done about it? Italians need to encourage their government to be more decisive in regard to immigrants. Most of the immigrants want a stable, legal job, but they are simply unable to get one (Schillaci). If they were made legal residents, they would find legal jobs, contribute to the welfare system instead of only benefiting from it, and become productive citizens who would contribute to the overall growth of the Italian economy. If the government is not willing to allow immigrants access to Italian jobs, then the immigrants need to be sent back to their countries. Legal workers' taxes cannot support the entire immigrant population single-handed. The Italian people need to find their voice and recognize the plight of the immigrants as well as the effect that plight has on their own everyday lives. They need to encourage their government to change its policies toward immigrants so that either the immigrants will be fully integrated into Italian society, or they will be sent home. Leaving them frozen in refugee status or allowing them to live in Italy illegally as long as they do not get a legal job is inhumane. It is time for Italians to speak up on behalf of the immigrants, themselves, and their country. The government's policies toward immigrants must change.

References

Alderman, Liz. "A Daunting Path to Prosperity." The New York Times. Accessed December 7, 2012.
http://www.nytimes.com/2011/07/29/business/economy/
italy-faces-a-long-list-of-barriers-to-growth.html?pagewanted=all&_r=0.

Kington, Tom. "Italy Wakes Up to the Realities of Immigration." The Guardian . Accessed December 7, 2012. http://www.guardian.co.uk/world/2010/feb/21/italy-milan-race-riots.

Rubo, Viviana. "Urban Regeneration and Integration in Turin (Italy): the Example of Porta Palazzo / The Gate Project." Forum -- Institute for Multicultural Affairs. Accessed December 7, 2012. http://www.forum.nl/Portals/Woonateliers/
Urban%20regeneration%20and%20integration%20in%20Turin%20(Italy).pdf.

Schillaci, Rossella. Altra Europa. DVD. Directed by Rossella Schillaci. Italy: Azul Film.

"The World Factbook: Italy." Central Intelligence Agency. Accessed December 7, 2012. https://www.cia.gov/library/publications/the-world-factbook/geos/it.html.

The Dirt on Social Security

Mr. Bolin

Economics 04_05H Program Evaluation

Social Security

1. What is the history of the Social Security program?
   1. The Social Security program in the United States ultimately grew out of people's need for economic security. Early sources of economic security included assets, labor, family, and charity. However, as economies grew to become city-based instead of farm-based, guilds, then friendly societies, then fraternal organizations emerged, all of which later grew into labor unions. Guilds, friendly societies, and even fraternal organizations were originally organized around a certain field of work with workers of the same trade joining together to help each other. According to “Historical Background and Development of Social Security,” “the English Poor Law of 1601 was the first systematic codification of English ideas about the responsibility of the state to provide for the welfare of its citizens.” (2012) These ideas were then carried to the United States by English colonists and formed the foundation for American policies toward the state's role in providing economic security to its citizens. This foundation was based on the idea that people needed to be discouraged from being poor and becoming dependent on aid as much as possible, so the poor were catered to accordingly in the almshouses/poorhouses and in all the aid they received. “Revolutionary war figure Thomas Paine” was the first to “propose a scheme for retirement security” that involved individuals paying parts of their inheritances in taxes toward a fund that would later provide for them in old age. (“Historical Background” 2012) In 1862, Civil War pensions became the first form of government managed social security for veterans (of the North) and their families. By 1935, as a result of the Great Depression, thirty different states had set in place some type of old-age pension. However, these programs were largely unsuccessful because of poor management and enforcement. Social Security as we know it was finally begun in August of 1935 when President Roosevelt signed the Social Security Act. According to Social Security Online, “in addition to several provisions for general welfare, the new Act created a social insurance program designed to pay retired workers age 65 or older a continuing income after retirement.” (“Historical Background” 2012) Since its creation, the Social Security program has grown and expanded to provide improved living conditions for millions of elderly and disabled across America.
      
2. Who benefits from the Social Security program and how?
   1. According to the Legal Information Institute of the Cornell University Law School, Social Security's main function is the provision of income to individuals who's “normal flow of income shrinks because of retirement, disability, or death.” (“Social Security Law” 2010) Gary Sidor of CRS Web describes Social Security beneficiaries saying:
      
      Retired workers and their eligible dependent family members, as well as the dependent family members of deceased workers, receive benefits from the Old-Age and Survivors Insurance trust fund. Disabled workers and their eligible dependent family members receive benefits from the Disability Insurance trust fund. (2005)
      
      A worker must have invested in the Social Security system by paying a payroll tax for at least 40 calendar quarters in order to qualify for Social Security benefits. Qualified workers become fully eligible to receive those benefits when they reach the full retirement age, currently set at 67 years; however, exceptions may be made for those who become disabled at a younger age.
      Social Security beneficiaries receive a specific amount of benefits determined by the “benefits formula.” This formula “calculates a worker’s average, indexed monthly earnings (AIME), which is based on the highest 35 years’ earnings on which they paid Social Security taxes” and then “adjusts these lifetime earnings, or indexes them to changes in average wages, to account for the fact that earnings across all workers grow over time.” (“Social Security Reform” 2005, 8) After that, the formula is used to determine a said person's benefit entitlements. So as to provide adequate incomes for all beneficiaries, “Social Security’s benefit formula is designed to be progressive, that is, to provide disproportionately larger benefits, as a percentage of earnings, to lower earners than to higher earners.” (8) According to the Government Accountability Office, almost two-thirds of the elderly in the United States get more than half of their income from Social Security, and one-fifth of elderly Americans receive no income other than Social Security. (“Social Security Reform” 2005, 4 ) Social Security provides for all workers who have adequately contributed to the program over their working life when they reach the full retirement age.
      
3. What is the yearly cost of Social Security to the American taxpayer? What is the historical cost data for the program?
   1. The American taxpayer who is covered by Social Security pays 7.65% of their earnings toward the Social Security fund each year, with their employer paying another 7.65% of the company revenue toward the fund also. Self-employed workers, on the other hand, pay around 15.30% of their earnings toward Social Security each year, but they receive two different tax breaks that are not available to workers and employers.
      The historical cost data for the program can be seen in Figure 1, taken from Social Security Online.
      Figure 1
      
      

Calendar year	Tax rates as a percent of taxable earnings
	Rate for employees and employers, each			Rate for self-employed workers
	OASDI	HI	Total	OASDI	HI	Total
1937-49	1.000	--	1.000	--	--	--
1950	1.500	--	1.500	--	--	--
1951-53	1.500	--	1.500	2.250	--	2.250
1954-56	2.000	--	2.000	3.000	--	3.000
1957-58	2.250	--	2.250	3.375	--	3.375
1959	2.500	--	2.500	3.750	--	3.750
1960-61	3.000	--	3.000	4.500	--	4.500
1962	3.125	--	3.125	4.700	--	4.700
1963-65	3.625	--	3.625	5.400	--	5.400
1966	3.850	0.350	4.200	5.800	0.350	6.150
1967	3.900	0.500	4.400	5.900	0.500	6.400
1968	3.800	0.600	4.400	5.800	0.600	6.400
1969-70	4.200	0.600	4.800	6.300	0.600	6.900
1971-72	4.600	0.600	5.200	6.900	0.600	7.500
1973	4.850	1.000	5.850	7.000	1.000	8.000
1974-77	4.950	0.900	5.850	7.000	0.900	7.900
1978	5.050	1.000	6.050	7.100	1.000	8.100
1979-80	5.080	1.050	6.130	7.050	1.050	8.100
1981	5.350	1.300	6.650	8.000	1.300	9.300
1982-83	5.400	1.300	6.700	8.050	1.300	9.350
1984 a	5.700	1.300	7.000	11.400	2.600	14.000
1985 a	5.700	1.350	7.050	11.400	2.700	14.100
1986-87 a	5.700	1.450	7.150	11.400	2.900	14.300
1988-89 a	6.060	1.450	7.510	12.120	2.900	15.020
1990 and laterb,c	6.2	1.450	7.650	12.400	2.900	15.300

(“Social Security...Tax Rates” 2012)

In the table, OASDI refers to Social Security's Old-Age, Survivors, and Disability Insurance program, while HI refers to Medicare's Hospital Insurance program. It can be seen that Social Security payment rates have been rising steadily to keep up with inflation and the changing cost of living.

4. What percent of the total Federal budget is spent on Social Security relative to other programs?
   1. Gary Sidor of CRS Web says that Social Security made up an estimated 21.4% of all yearly Federal outlays in 2004. (2005) However, the percent of the Federal budget that is spent on Social Security has been growing. According to D. Austin (Analyst in Economic Policy) and Mindy Levit (Analyst in Public Finance), in Fiscal Year 2011, “Social Security [sic] accounted for a fifth of federal spending. (2012)
5. What is the impact of this program on price stability, full employment, and economic growth?
   1. Social Security is affected more by price stability than it is able to affect price stability. According to Jonathan Aldrich, speaking of the late 20^th century, “Social security expenditures in many countries were linked to increases in consumer prices,” and “inflation followed a generally increasing trend in most industrialized countries,” which led to a generally increasing Social Security rate to provide for the elderly who were facing higher prices as the inflation increased. (1982, 6) Social Security has little affect on price stability, but price stability strongly affects Social Security rates.
      Likewise, Social Security can be affected by full employment, but cannot directly affect full employment in the economy. If the economy isn't at full employment, the government is probably going to make full employment and stable prices their main goal instead of savings and capital formation. (Hambor 1987, 3) Therefore, the lack of full (or near full) employment in the economy can effect how much Social Security is able to affect economic growth.
      If the economy is operating at or near full employment, Federal fiscal policy will probably be focused on savings and capital formation. In that case, the increase in government savings, that is, the surplus in the Social Security trust fund, would show up in the capital market “as an increase in the supply of investment funds, either directly through increased Federal debt retirement in the case of higher budget surpluses or indirectly through reduced Federal borrowing in the case of lower deficits.” (Hambor 1987, 3) The additional funds cause interest rate reductions which encourage “interest-sensitive” endeavors, such as investments in the upstart of a new businesses or investments in large purchases that require loans – like vehicles or homes. (3) The increases in “interest-sensitive” spending caused by the lowered interest rates will urge on overall economic growth, making the Social Security trust fund a tool for the furtherance of economic growth when the economy is operating at or near full employment.
      
      
6. What is the potential impact of Social Security beyond the direct payment recipient?
   1. Beyond the obvious impacts of Social Security – the provision of income for those who have lost their ability to earn income – Social Security has other indirect impacts. First, it helps to reduce poverty rates among the elderly and disabled, bettering the lives of many. Second, it stimulates the economy by providing the elderly and disabled with more purchasing power than they might otherwise have. Third, it increases the life expectancy of individuals who are covered by Social Security by providing them with the finances they need to receive proper medical and health care and to live healthy lifestyles after retirement.
      
      
7. What are the professional opinions in support of and against the Social Security program.
   1. The majority of the American public supports Social Security. More specifically, eighty percent of individuals over age 65 agree that Social Security is “one of the very most important government programs,” and “ninety percent of those ages 18 to 29 deemed Social Security important.” However, only one-third of all of the individuals who took part in the survey referred to above had any sort of confidence in the Social Security program's future. (Span 2010) Those who do not support the Social Security program do not support it because they think it is unstable or because they distrust the government's hand in personal affairs in general. LZ Granderson, a CNN contributor, is one of the few individuals who speaks out against Social Security directly, saying, “Call me crazy, but the idea of trusting the government to take care of me, to provide me with "security" when I'm old and frail is far more frightening than the thought of me trying to make it on my own.” (2011) Again, Granderson is in the minority as the majority of the American public supports Social Security; however, there are many who believe that the program needs reformed in order to survive. Robert Pear of the New York Times states that the Social Security fund is “unsustainable without structural changes that have so far eluded Congress and the administration.” (2012) The three most popular suggestions for the reorganization of the Social Security program include the trust fund being invested in stocks to earn interest, subjecting individuals to means tests so that only those who need aid most will receive it, or privatizing the program so that individuals have more control over their own assets. (Escamilla 1999) Obviously, all of these solutions have pros and cons, and it is not clear which solution is best, if any. It is clear, however, that the program must be reorganized if it is to last.Supporters of Social Security claim that it is a stable program and that no one should have fear that it will not pay individuals what it has promised. Lawrence Mishel, Monique Morissey, and Harry C. Ballantyne of the Economic Policy Institute claim that “Social Security is on sound financial footing for years to come despite the Baby Boomer retirement and the worst economic downturn since the Great Depression.” (2010) However, they do admit to a need for “[fiscal] policies that would expand the covered workforce, reduce health care cost inflation, and promote broadly shared economic growth.” Likewise, Paul Starr claims that Social Security is “the single biggest source of income, the financial bedrock” for the elderly and that the Social Security program is completely stable. He is confident in the fact that the government, through Social Security, “must fulfill [its] obligations to the elderly no less than its debts to bondholders in Japan.” (2005) Then again, this fact is not so reassuring since the United States government has yet to pay off the bulk of its foreign debts. With the majority of Americans believing that Social Security is necessary and yet lacking trust in the program's future, it is clear that some sort of action needs to be taken to assure the future success of the Social Security program.
      
8. If Congress were trying to balance the Federal budget and cut spending, should they continue to fund the Social Security program?
1. If Congress were to attempt to balance the Federal budget and were seeking to cut spending, they should end funding of the Social Security program. Unless the program is completely reorganized, it will not last anyway. Any efforts to reconstruct the program would cost a lot, thus making any other spending cuts Congress made null. Therefore, the best thing Congress could do would be to leave Social Security to itself. The trust fund that the program has now would be sufficient to last for several more years, and by then, maybe Congress would have a cheaper or more stable form of economic security to offer Americans. If not, then people might have to return to the good old-fashioned forms of economic security -- assets, labor, family, and charity. Maybe people would have to get to know their neighbors again. Regardless, of what may happen when Social Security's trust fund runs out, continued Federal spending on the program is pointless unless Congress is willing to make the effort to revamp the whole program. That option, though, would contradict the whole purpose of budget balancing and cost cutting. In the end, the only option is for Congress to leave Social Security to itself for now and seek to come up with a cheaper and more stable form of economic security for the American public. 

Labor Market Stabilization, Poverty, and the Minimum Wage

Sarah Powell
Mr. Bolin
Economics 04_02 Political Editorial Option A
October 26, 2012

Labor Market Stabilization, Poverty, and the Minimum Wage 

The government should not raise the minimum wage because setting a minimum wage is an ineffective method of labor market stabilization and poverty reduction.  The labor market cannot be left to itself because it is imperfectly competitive, and while a minimum wage can help to stabilize the labor market, many of the other benefits that supporters of the minimum wage claim it has either only exist in theory or are not really benefits at all.  Therefore, there are other ways to address the issues of labor market stabilization and poverty, which the minimum wage seeks to correct, that will be more effective and have fewer bad side effects than raising the minimum wage has.
There are some who believe that there is no need for labor market stabilization, and that is why they do not support the minimum wage. (“Minimum Wage”)  If the labor market were perfectly competitive and the suppliers of labor and those who demanded labor had equal advantages, that would be true.  There would be no need for labor market stabilization.  However, the labor market is not perfectly competitive.  Employers have the advantage over workers because they have a fallback if they do not hire a certain worker – all of the other workers looking for a job – but workers do not necessarily have a fallback if they do not get hired by a certain employer. (Kaufman)  Also, employers can team-up and set labor prices making the the equilibrium price lower and the demand for labor lower than they would be in a perfectly competitive market. (“Minimum Wage”)  Therefore, there is a need for some form of stabilization in the labor market.
Because the labor market is imperfectly competitive, the minimum wage can present a couple of stabilizing factors that are beneficial to workers.  First, it can protect employees from receiving unfair wages in the imperfect labor market. (Kaufman)  It protects both from employers teaming-up to lower wages for workers and from employees selling their labor for less than it is worth if they feel they have no other choice.  Second, the minimum wage is one device that can help “ensure that some of the income gains and economic rents from productivity growth” get distributed fairly instead of just going to the guys at the top, such as the managers and owners of businesses. (Kaufman)  Otherwise, growing profits from company growth could end up in the hands of owners and managers with the employees getting no part of the company's growth in the form of more benefits or increased wages.  In those two respects, minimum wage can be a good thing.
However, many of the other things that supporters of the minimum wage claim it does for workers and the economy are either accomplishments that only exist in theory or are side effects that are not truly beneficial to workers or the economy.  First of all, supporters of the minimum wage claim that it “increases the standard of living for the poorest and most vulnerable class in society.” (“Minimum Wage”)  In reality, however, “only 5% of the workforce—some 6.6m people—will gain directly from a rise in the minimum wage, and 30% of those are teenagers, many from families that are not poor.” (“A Blunt Instrument”)  Therefore, a minimum wage is not truly an effect means of reducing poverty.
Secondly, supporters of the minimum wage claim that a raise in the minimum wage would increase job opportunities, increase the amount of money consumers put back into the economy through spending, and increase the country's Gross Domestic Product.  For example, supporters of the minimum wage claimed that a 2012 minimum-wage increase “would add $40 billion to the economy through higher wages, while adding 100,000 net jobs and increasing the Gross Domestic Product by roughly $25 billion.” (Maclay)  In actuality, though, most workers are employed in companies that pay a considerable amount above the minimum wage, and if they were to vote in favor of a minimum-wage increase, it would reduce their “real income (via higher prices) without any compensating gain in wages.” (Kaufman)  Therefore, any economic growth that might occur as a result of a minimum-wage increase would not actually benefit the majority of workers at all.
Also, in regard to the supposed growth of job opportunities that a minimum-wage raise creates, the truth is that a minimum wage reduces “employment of teenagers, high school dropouts, and other groups with low earnings.” (Becker)  More than that, it discriminates against these low-wage workers, “through pricing out,” because it keeps them from “accumulating work experience and qualifications, hence potentially graduating to higher wages later.” (“Minimum Wage”)  Gary S. Becker also agrees with this fact saying, “Higher minimums discourage on-the-job training of workers with few skills since they spend their time learning rather than producing.” (“It's Simple”)  In view of that, a minimum wage actually has the potential to damage the labor market instead of help it.  Both the job losses of younger, inexperienced workers and the employers' unwillingness to spend time training those workers because of the minimum wage restraints have the potential to eventually lead to a scarcity of skilled workers in all areas of the business world.
In regard to the increase in the Gross Domestic Product that a minimum wage is supposed to create, even if the growth did take place, that increase would come through the growth of already existing big businesses, not in the form of newer businesses opening or smaller businesses expanding.  For example, in 2005, Walmart's CEO lobbied for a raise in the minimum wage, but Walmart already boasted that it paid its employees nearly 50% more than the minimum wage at that time.  The CEO lobbied for the minimum wage to be raised because then Walmart's smaller competitors, who could not afford to pay their employees the way Walmart paid its employees, would be knocked out so that Walmart would have less competition. (Rockwell)  An increase in the Gross Domestic Product because of a raise in minimum wage is not worth the damage that a minimum wage raise causes to small businesses.
The third benefit that supporters of the minimum wage claim it has is that it “increases technological development” because “costly technology that increases business efficiency is more appealing as the price of labor increases.” (“Minimum Wage”)  This effect of the minimum wage, however, will not actually be beneficial to any workers much less unskilled workers who would typically earn the minimum wage.  This effect of the minimum wage will do the exact opposite of creating more employment.  As more employers look to technology for production, they will have less need for human workers, resulting in a lowered demand for workers and higher unemployment rates.
In view of the many less-than-wonderful side effects that a minimum wage presents, it is safe to conclude that there must be better ways to stabilize the labor market and help those in poverty than raising the minimum wage.  One such solution would be to establish a guaranteed minimum income for workers.  With a guaranteed minimum income, a sum equal to the cost of living would be provided by the government to those who passed a means test and are willing to participate in the labor market or perform community service. (“Minimum Wage”)  Another superior solution to the labor market problems and poverty is the Earned Income Tax Credit (EITC) already present in the United States.  As a “'negative income tax' that tops up the earnings of the low-paid,” its main focus is on families with children. (“A Blunt Instrument”)  Both of these solutions, however, are more difficult to implement or expand than a minimum wage raise because they require the spending of taxpayer dollars. (“A Blunt Instrument”)  Other possible solutions include creating a Collective Bargaining System or having the government set what percentage of company profits must go to employees. (Kaufman)  A Collective Bargaining System is a system in which employees, often members of a trade union, would bargain with the employer for “wage scales, working hours, training, health and safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs.” (“Collective Bargaining”)  This system is used effectively in Germany, Italy, Sweden, and Denmark. (“Minimum Wage”)  In the other solution mentioned, the government would determine what certain percentage of company profits must go to employees – not including managers.  The owner or manager could decide for themselves which employees deserved higher pay out of that percentage than others, but that would keep managers and owners from keeping the growing profits of a company to themselves instead of dividing it among all the workers.  Also, it would encourage the workers to work harder because they would get increased pay as the company's profits increased.  All of these solutions would more effectively stabilize the labor market and help reduce poverty than raising the minimum wage would.
All in all, the minimum wage does effectively help level the playing field in the imperfectly competitive labor market; however, the side effects that minimum-wage increases present make the minimum wage a less-than-worthwhile solution to labor market and poverty problems.  Superior solutions include having a guaranteed minimum income, the EITC, the forming of a Collective Bargaining System, or having the government establish a set percentage of company income that must go to employees.  The government should not raise the minimum wage, it should focus its efforts on other solutions that will more effectively stabilize the labor market and decrease poverty.

Illustration:

Because the labor market is subject to the same laws of supply and demand that all scarce resources are, the graph illustrates the dangers that can come when the equilibrium price is not paid (or charged) for labor. Deviation from the equilibrium price will result in either a surplus of workers or a shortage of workers. 

References

Becker, Gary S. "It's Simple: Hike the Minimum Wage and You Put People Out of Work." Bloomberg Business Week. Last modified March 5, 1995. http://www.businessweek.com/stories/1995-03-05/its-simple-hike-the-minimum-wage-and-you-put-people-out-of-work.

“A Blunt Instrument.” The Economist. Last modified October 26, 2006. http://www.economist.com/node/8090466?story_id=8090466.

"Collective Bargaining." Wikimedia Foundation, Inc. Last modified October 16, 2012. http://en.wikipedia.org/wiki/Collective_bargaining.

Kaufman, Bruce E. "Institutional Economics and the Minimum Wage: Broadening the Theoretical and Policy Debate." Cornell University. Last modified April 2010. http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgiarticle=1458&context=ilrreview.

Maclay, Kathleen. "Food Day Report Examines How Minimum Wage Hike Would Impact Both Consumers, Workers." Last modified October 24, 2012. http://phys.org/news/2012-10-food-day-minimum-wage-hike.html.

“Minimum Wage.” Wikimedia Foundation Inc. Last modified October 22, 2012. http://en.wikipedia.org/wiki/Minimum_wage.

Rockwell, Llewellyn H., Jr. "Walmart Warms the State." Ludwig von Mises Institute. Last modified October 28, 2005. http://www.mises.org/daily/1950.

P.T. Barnum -- Swindler, Showman, and Entrepreneur

Sarah Powell
Mr. Bolin
Economics
03_01 American Entrepreneur Research

Phineas Taylor Barnum, better known as P.T. Barnum, was born on July 10, 1810 in Bethel, Connecticut to Philo Barnum by his second wife, Irene Taylor. He was the oldest of five children and early on learned the business of haggling and deception while he worked as a store-keeper in his father's store. Even when he was only twelve years old, he showed a knack for sales as he sold lottery tickets. He met early success in life and ran a general store, book auctioning trade, real estate speculation, and state-wide lottery network, along with being involved in liberal politics, all before he was thirty. After speaking against certain Calvinist church leaders in a newspaper that he produced himself, he met his first setback and spent two months in prison; however, when he was released he was heralded as a champion of the liberal movement. Barnum entered the show business after the lottery was banned in Connecticut in 1834 because the lottery had been his main source of income. With his purchase of the services of Joice Heth, he began his journey toward fame.
Joice Heth was just one of many of Barnum's hoaxes that he used to entertain the American public throughout his show business career. She claimed to be 161 years old and the former caretaker of George Washington. Barnum showed her to curious crowds all over the United States until her death when he conducted a public autopsy. At that point it was discovered that she could not have been more than 80 years old; however, Barnum claimed that it was he who had been deceived and that he had never sought to deceive his audiences. From there he went on to add to his repertoire such people as “General Tom Thumb” – a five-year-old midget who Barnum claimed was really eleven years old – and William Henry Johnson – a slightly retarded African-American microcephalic dwarf who Barnum paraded as Darwin's missing link (just after Darwin's release of The Origin of Species). Some of Barnum's non-human hoaxes included the Feejee Mermaid – a mummified creature with the body of a fish and the head of a monkey – and the Cardiff Giant – supposedly a fossilized giant from the biblical Old Testament times (but really a giant carved statue made by Barnum's hires). Barnum believed that it was okay to use hoaxes as long as the public got valuable entertainment for their money. He once said, “I don't believe in duping the public, but I believe in first attracting and then pleasing them.”
And that he did. However, it was not until Barnum was sixty years old that he started his first circus. He called it “P.T. Barnum's Grand Traveling Museum, Menagerie, Caravan, and Circus.” By 1872, “P.T. Barnum's Traveling World's Fair, Great Roman Hippodrome, and Greatest show on Earth” covered five acres and began traveling by train across the United States to reach more people. In 1881, Barnum joined James A. Bailey and James L. Hutchinson for promotional purposes, causing his circus to eventually be known as “Barnum and London Circus.” In 1885, Barnum and Bailey ended their business connections, but only three years later, they were united again. That year, the “Barnum and Bailey Greatest Show on Earth” toured America. Only after Barnum's death did his circus join with the Ringling Bros. Circus to begin the relationships that led to the “Ringling Bros. And Barnum & Bailey Circus” of today.
P.T. Barnum died on April 17, 1891; however, he was able to read his obituary in The New York Sun newspaper weeks before his death. The newspaper made his obituary front page news in response to a comment from Barnum about the press always writing nice things about people after they are dead. He went down in history as one of the most innovative men in the advertising world – because he could get the public to believe (and buy) anything – and the father of the modern circus as we know it. He was the man that made circus entertainment a respectable and loved form of entertainment for millions of Americans.
Barnum followed the entrepreneurial “HUNT” as he climbed the ladder of success in the entertainment world. He “harnessed his vision” when he decided to create a full circus instead of only displaying whatever oddities he had on hand at the time. He “underestimated the roadblocks” in his way when he pursued his dream of creating a circus even at a time when that type of entertainment was not considered respectable for typical middle-class American families. He “networked” by acquiring the services of such people as “General Tom Thumb” and William Henry Johnson for his shows and by partnering with people such as James A. Bailey early on in his circus career. Finally, Barnum “took the first step” when he purchased the five-acre property for his first circus. Barnum's diligence in pursuing his vision is something to be admired, and I am inspired by that diligence. He is the perfect example of what people can accomplish if they choose to commit their lives to a single vision.

Phineas Taylor Barnum

Works Cited

Feld Entertainment Inc. Accessed October 5, 2012. http://www.ringling.com/ContentPage.aspx?id=45831§ion=45825.

Brown, R. J. "P.T. Barnum Never Did Say "There's A Sucker Born Every Minute"." HistoryBuff.com. Accessed October 5, 2012. http://www.historybuff.com/library/refbarnum.html.

Wikimedia Foundation Inc. "P.T. Barnum." Accessed October 5, 2012. http://en.wikipedia.org/wiki/P._T._Barnum.

Benton, Joel. "A Unique Story of a Marvelous Career. Life of Hon. Phineas T. Barnum." Project Gutenberg. Accessed October 5, 2012. http://www.gutenberg.org/cache/epub/1576/pg1576.html.

PTBarnum.org. Accessed October 5, 2012. http://www.ptbarnum.org/humbugs.html.