- While the wages of some low skilled workers would improve, it would reduce employment opportunities for teenagers and other lower skilled workers. They are pushed either into unemployment or the underground economy.
- A bigger minimum also raises prices of fast foods and other goods produced with large inputs of unskilled labor. Workers who receive on the job training must accept lower wages in return. A higher floor on wages prevents the wages of lower skilled workers from being reduced much, and hence discourages firms from providing much training to these employees.
- A rise in the minimum wage increases the demand for workers with greater skills because it reduces competition from low-skilled workers. This is an important reason why unions have always been strong supporters of high minimum wages because these reduce the competition faced by union members from the largely non-union workers who receive low wages.
- Poorer workers who are lucky enough to retain their jobs at a higher wage obviously do better, but the poorer workers who are priced out of the above ground economy are made worse off.
- Many of those who receive higher wages are not poor, but are teenagers and other secondary workers in middle class and rather rich families.
- Poor families are also disproportionately hurt by the rise in the cost of fast foods and other goods produced with the higher priced low-skilled labor since these families spend a relatively large fraction of their incomes on such goods.
Thursday, November 30
Wednesday, November 29
The favors granted to the sugar industry keep the price of domestic sugar so high that it’s not cost-effective to use it for ethanol. And the tariffs and quotas for imported sugar mean that no one can afford to import foreign sugar and turn it into ethanol, the way that oil refiners import crude from the Middle East to make gasoline. Americans now import eighty per cent less sugar than they did thirty years ago. So the prospects for a domestic-sugar ethanol industry are dim at best.
We could, of course, simply import sugar ethanol. But here, too, politics has intervened: Congress has imposed a tariff of fifty-four cents per gallon on sugar-based ethanol in order to protect corn producers from competition. A recent study by Amani Elobeid and Simla Tokgoz, scientists at Iowa State University, projected that if the tariffs were removed prices would fall by fourteen per cent and Americans would use almost three hundred million gallons more of ethanol.
But that isn’t likely to happen anytime soon: the Bush Administration proposed eliminating the ethanol tariff this past spring, but Congress quickly quashed the idea—Barack Obama was among several Midwestern senators who campaigned in support of the tariff—and the sugar quotas appear to be as sacrosanct as ever. Tariffs and quotas are extremely hard to get rid of, once established, because they create a vicious circle of back-scratching—government largesse means that sugar producers get wealthy, giving them lots of cash to toss at members of Congress, who then have an incentive to insure that the largesse continues to flow. More important, protectionist rules flourish because the benefits are concentrated among a small number of easy-to-identify winners, while the costs are spread out across the entire population. It may be annoying to pay a few more cents for sugar or ethanol, but most of us are unlikely to lobby Congress about it.
Just about every economist agrees that [instead of making college more affordable] federal student aid has the opposite effect: It enables colleges to raise tuition even faster and even higher than they otherwise would.In fairness to universities, the survey he mentions was devoted to questions on topics such as American history and government, political thought, international affairs, and the market economy. I'm not saying these aren't important, but it's not what a lot of people teach.
Now, the average price of U.S. college tuition is rising twice as fast as the overall rate of inflation, according to the College Board. Only the health care sector has raised its prices faster.
As with healthcare, more money does not translate into better results. College seniors on average scored only 1.5 percentage points higher than college freshmen in their knowledge of history, economics and international relations, according to a recent survey.
Worse, the survey showed that seniors at the most prestigious and expensive schools actually scored lower than freshmen. That suggests that the principal effect of $200,000 worth of Georgetown or Yale may encourage students to forget all the AP material they covered to get into those schools in the first place.
While student knowledge declines, academic pay rises. 112 of America's college presidents now earn more than $500,000 a year.
Most industries deliver constantly-improving products at steadily declining real prices. Healthcare and higher education, the two great exceptions to this rule, are also the two most government-subsidized sectors in the U.S. economy.
More subsidy is not the solution to the problem. The subsidy is the problem.
Milton Friedman presented another argument against subsidies:
What happens when the educational market is distorted? Look at state colleges and universities. Their fees are generally very low, paying for only a small part of the cost of schooling. They attract serious students just as interested in their education as the students at Dartmouth or other private schools, but they also attract a great many others. Students who come because fees are low, residential housing is good, food is good, and above all there are lots of their peers, it's a pleasant interlude for them.I can't see much interest in cutting subsidies, though. By the way, pay in our department is below average. Is that a good thing?
Tuesday, November 28
In his book Don't Believe Everything You Think (2006), Thomas Kida reports the research of two psychologists who secretly recorded a meeting held in Cambridge, England. Two weeks later, the participants were asked to write down everything they could remember. Among other gross inaccuracies in their memories, many participants 'remembered' hearing comments that were never actually made.
Monday, November 27
- The economic cost alone of motor vehicle crashes in 2000 was $230.6 billion.
- In 2005 over 2.5 million people were injured in automobile accidents, and 43,443 lost their lives.
- In 2005 the fatality rate per 100,000 population was 14.66.
- An average of 119 persons died each day in motor vehicle crashes in 2005--one every 12 minutes.
- Motor vehicle crashes are the leading cause of death for every age from 3 through 33.
Friday, November 24
"There are six billion people in the world," said Francisco J. Ayala, an evolutionary biologist at the University of California, Irvine, and a former Roman Catholic priest. "If we think that we are going to persuade them to live a rational life based on scientific knowledge, we are not only dreaming — it is like believing in the fairy godmother."
"People need to find meaning and purpose in life," he said. "I don't think we want to take that away from them."
Lawrence M. Krauss, a physicist at Case Western Reserve University known for his staunch opposition to teaching creationism, found himself in the unfamiliar role of playing the moderate. "I think we need to respect people's philosophical notions unless those notions are wrong," he said.
"The Earth isn't 6,000 years old," he said. "The Kennewick man was not a Umatilla Indian." But whether there really is some kind of supernatural being — Dr. Krauss said he was a nonbeliever — is a question unanswerable by theology, philosophy or even science. "Science does not make it impossible to believe in God," Dr. Krauss insisted. "We should recognize that fact and live with it and stop being so pompous about it."
Wednesday, November 22
First, we must work to free agriculture from a sterile and meaningless attachment to conventional notions of industrial efficiency, and place the consumer and the environment in which we live at the center of food policy. We can no longer tolerate food policies that are derivatives of bad farm policies—that reduce the role of the public to surplus consumers of last resort, while putting farmers on a production treadmill that makes it impossible for them to adequately consider quality and safety and condemning the world's hungry people to a hungry future.I'm a little skeptical of the demand for supposedly "environmentally-sound production methods" and "ways to get locally-grown fruits and vegetables", but at least they call for a consumer-driven change, instead of something imposed by the state.
Second, we must replace the myth of the family farm with the reality of farm businesses that are good for families. The large farms that produce most of our food should not be afforded special treatment through nostalgia for a "way of life," but rather should be expected to perform efficiently and reliably with far less government intervention than today. The interventions that government does undertake must be aimed at supporting farmers to run businesses that respond to market signals, stay in tune with the safety and health concerns of their customers, reduce damage to the environment, and produce a product people want to buy.
Third, we should fight the farm subsidy structure. No compromise. No buying off. We should work with members of Congress who are not beholden to the special interests of big agriculture. We should reach out to state officials, particularly governors, who can be persuaded that rural development block grants would be better overall for their states—and for their political future—than just supporting the status quo. Organizing at the state level will be critical. The Structure Project was correct: agriculture varies dramatically from place to place, and from crop to crop. The Washington lobby for commodity interests is far more single-minded in its defense of subsidies than are most farmers.
Fourth, we need to educate the broader public about the increasingly destructive role played by current farm policy and convince people that the commodity interests can be defeated. Surveys of public opinion—including the German Marshall Fund's annual Perspectives on Trade and Poverty Reduction2—show strong support for farmers. So we need to expose the emptiness of arguments that current farm programs function as a rural safety net, or help poor farmers, or preserve the family farm.
Fifth, consumers, the food industry, and advocates for the global poor have a strong common interest in shaping a food policy that responds to the needs of the 99 percent of Americans who are not farmers, and to the millions of people around the world who would eat more—or more nutritiously—if they were given a chance. The food industry must do its part, both as a group of powerful advocates for better public policy and as consumer-driven businesses, to help put good nutrition at the center of our farm policy and food system.
Finally, while too many people still cannot afford to buy healthy food, a lot of the people reading this article can. Until more consumers insist on environmentally-sound production methods, healthier and lower-fat products, and more ways to get locally-grown fruits and vegetables when in season, they will remain too expensive to be shared by all.
And Greg Mankiw cites a CBO report:
If all policies worldwide that distort agricultural trade were phased out in this decade, the likely total annual economic benefit to the world by 2015 would be roughly $50 billion to $185 billion, which is about 3 percent to 13 percent of the value added by world agriculture.
I'm skeptical about China's success, primarily because of corruption that I can only believe will be rooted out by democracy.Like Friedman, Hayek glimpsed in Pinochet the avatar of true freedom, who would rule as a dictator only for a "transitional period," only as long as needed to reverse decades of state regulation. "My personal preference," he told a Chilean interviewer, "leans toward a liberal dictatorship rather than toward a democratic government devoid of liberalism." In a letter to the London Times he defended the junta, reporting that he had "not been able to find a single person even in much maligned Chile who did not agree that personal freedom was much greater under Pinochet than it had been under Allende." Of course, the thousands executed and tens of thousands tortured by Pinochet's regime weren't talking.
Hayek's University of Chicago colleague Milton Friedman got the grief, but it was Hayek who served as the true inspiration for Chile's capitalist crusaders. It was Hayek who depicted Allende's regime as a way station between Chile's postwar welfare state and a hypothetical totalitarian future. Accordingly, the Junta justified its terror as needed not only to prevent Chile from turning into a Stalinist gulag but to sweep away fifty years of tariffs, subsidies, capital controls, labor legislation, and social welfare provisions -- a "half century of errors," according to finance minister Sergio De Castro, that was leading Chile down its own road to serfdom.
Now, the position of many mainstream intellectuals and economists in China, especially during the mid to late 1990's was summed up at the time as "liberty before participation", ie "capitalism now, democracy sometime, maybe." And there's still a powerful school of thought in China to the effect that the advantage of CPC rule is that it enables China to establish a full market economy without the kind of "historic mistakes" like the welfare state or the New Deal that you get when the public is allowed to vote itself the keys to the bank. People who call themselves libertarians in China are likely to be strong supporters of the Communist Party, at least on instrumental grounds.
On the other hand, I was thinking how similar my attitude towards DeMint is to Friedman's towards Pinochet.
Tuesday, November 21
|Favor a centrally-planned economy ||Tend to favor a market economy|
|Protect government ownership of enterprises||Privatization|
|Sometimes seen as supporters of a system of government under the leadership of the Chinese Communist Party.||Sometimes seen as opponents of a system of government under the leadership of the Chinese Communist Party.|
|Opposed to a large gap between rich & poor; militarily tend to be hawkish.||Support free competition, and may oppose totalitarianism.|
|Usually includes Marxists, nationalists, and Socialists.||Usually includes liberals and supporters of democracy.|
|Many support a system with several political parties, a balance of power, and democratic choice.|
|Some see them as leaning towards a system of government like Mao Zedong's or Kim Jong Il's.||Some see them as supporting a transitional government like Taiwan's or Singapore's "traditional Confucian government".|
Opium has been with us almost forever, and up until about a century ago it had been consistently seen as one of the great benefits given to us by God. The Romans, for example, used it in a huge variety of tinctures, tablets, poultices and lozenges.And yet the Chinese continue to excoriate the Brits for selling them opium.
Modern use started with the famous sixteenth-century physician Paracelsus, who prescribed it to his patients mixed with alcohol and spices. He called this medicine 'laudanum' after the Latin word laudandum, something worthy of praise. Over the next 400 years it was a favourite medicine throughout Europe. In the eighteenth century, an English physician claimed thatit causes promptitude, serenity, alacrity and expediteness in dispatching and managing business, assurance, ovation of the spirits, contempt of danger and magnanimity … it prevents and takes away grief, fear, anxieties, peevishness, fretfulness … it lulls, soothes and (as it were) charms the mind with satisfaction, acquiescence, contentation and equanimity.
Clearly a very useful medicine!
It became particularly popular in Britain in the nineteenth century, where yearly opium consumption increased from one pound per thousand people at the beginning of the century to over ten pounds at the end. Until the Pharmacy Act of 1868 it could be sold or purchased by anybody. In 1850 twenty-five drops of laudanum could be purchased for a penny from the corner shop, the pub, the market stall or even from the enterprising lady next door. Opium was the aspirin of the day, and was the everyday treatment for every type of ill, be it headache, rheumatism or a touch of the nerves.
It had an important part to play in child-care. Mothers used it to keep their children quiet, particularly when they went out to work all day in the mills, but also at night so as not to aggravate their neighbours in the crowded tenements. One respectable Manchester pharmacist regularly supplied 700 households with a 'quietener' containing 100 drops of laudanum to the ounce, and was able to do nicely by selling five gallons a week. Other similar medicines rejoiced in names such as Mrs Winslow's Soothing Syrup and a Pennyworth of Peace. Laudanum was also good at treating diarrhoea, which was endemic in unsanitary living quarters and would have been life-threatening to young children. Apart from use in medicine and child-care, laudanum was a popular tipple, particularly in the Fens. Opium also formed a popular ingredient of sweet-cakes and lozenges enjoyed by children.
Twenty years after Congress created harsh mandatory penalties for low-level crack cocaine offenses, and at a time of bipartisan support for sentencing reform, the United States Sentencing Commission revisited the controversy associated with crack and powder cocaine sentencing policy at a public hearing held November 14 in Washington, D.C...OK, it's from The Sentencing Project, and it's clear where their sympathies are, but still, I'm inclined to accept the demonization of crack as another moral panic. And wonder how wrong the authorities are about other recreational drugs. Not that I advocate taking any.
Dr. Nora Volkow, Director of the National Institute on Drug Abuse and Dr. Harolyn Belcher, professor at Johns Hopkins University, confirmed Briggs assertions that redirecting the focus of the drug war to treatment would reduce current levels of incarceration. Moreover, the differences in penalties for crack and powder were unwarranted because, according to Volkow, the two drugs have the same pharmacological effects.
Belcher also surprised Commissioners with data indicating that the long and short term health effects of alcohol or cigarettes on a fetus are more damaging than use of crack cocaine during pregnancy. The revelation is particularly striking given that much of the political will to enact the harsh crack sentencing law developed because of premature fears during the 1980s that babies born to crack addicted mothers would be disproportionately harmed. Belcher told Commissioners that these children are not at increased risk for learning disabilities. Commissioner Beryl Howell told Belcher she was "blown away" by this new information.
The biggest difference between crack and powder are the ways it is administered into the body. Most users prefer to smoke crack because it is the easiest way to intake and it produces an immediate high, much faster than injecting the substance. In response to questions, the medical panel stated that there is no evidence that crack, more than powder, promotes violent behavior. Cocaine can be associated with paranoid behavior which may lead to violent acts, but the likelihood of violent behavior is no greater with crack than powder.
...Tom Coburn and Jim DeMint, campaigning in 2004 in Oklahoma and South Carolina, promised not to fall in line with GOP leaders. Fulfilling that pledge allied them with the long-termer John McCain. They have been backed by Jeff Sessions of Alabama and another freshman, John E. Sununu of New Hampshire. In the lame-duck session's first week, they played Horatio at the Bridge by combining to block a pork-filled omnibus spending bill.There's a lot for me to like in DeMint, even if he's a social conservative.
That would place responsibility for spending excesses on the new Democratic majority taking office next year. It is highly unlikely that Sen. Robert C. Byrd, a legendary king of pork returning as Appropriations Committee chairman, will reverse the habits of a lifetime and listen to ordinary voters' revulsion over excessive federal spending. "Voters want the earmark favor factory shut down, not turned over to new management," said Coburn. He estimates that Congress can save the taxpayers a cool $17.1 billion by passing a resolution that would continue spending at present levels rather than enacting an omnibus bill laden with earmarks.
The bipartisan dismay the dissenters have caused cannot be exaggerated. Hard-working staffers are beside themselves that their lame-duck feast of pork is being thwarted. K Street lobbyists are frustrated that they are being deprived of a vehicle for their special-interest amendments.
Senate Appropriations Committee Chairman Thad Cochran wanted President Bush, in Asia on a trade mission, to phone DeMint and ask him to stop blocking the agriculture appropriations bill. It did not happen, and the Republican leaders mournfully agreed to the cost-cutting resolution. An irate House Appropriations Chairman Jerry Lewis, who has taken pride in passing his committee's bills on schedule and filled with earmarks, called the outcome an "absolute disaster and catastrophe."
Among senators wailing that their pet projects are being derailed, none has been louder than Democrat Kent Conrad, who will be Budget Committee chairman in the new Congress. A self-described fiscal conservative (because he wants tax increases), Conrad submitted 41 proposals busting the Bush budget in 2005 alone. He was so distraught last week that the agriculture money bill blocked by DeMint contained $4.9 billion in additional emergency relief that he threatened to stop any money bills from passing in the lame-duck session. He did not follow through with this program of actually closing the government.
Stern's headlined conclusions are intellectual fictions. They're essentially fabrications to justify an aggressive anti-global-warming agenda. The danger of that is we'd end up with the worst of both worlds: a program that harms the economy without doing much to cut greenhouse gases...
In the debate over global warming, there's a big gap between public rhetoric (which verges on hysteria) and public behavior (which indicates indifference).
Why is this? Here are three reasons.
- First: With today's technologies, we don't know how to cut greenhouse gases in politically and economically acceptable ways. The world's 1,700 or so coal-fired power plants -- big emitters of carbon dioxide, the main greenhouse gas -- are a cheap source of electricity. The wholesale cost is 4 to 5 cents a kilowatt hour, says the World Resources Institute. By contrast, solar power costs five to six times that. Although wind is roughly competitive, it can be used only in selective spots and supplies less than 1 percent of global electricity. Nuclear energy is cost-competitive but is stymied by other concerns (safety, proliferation hazards, spent fuel).
- Second: In rich democracies, policies that might curb greenhouse gases require politicians and the public to act in exceptionally "enlightened" (read: "unrealistic") ways. They have to accept "pain" now for benefits that won't materialize for decades, probably after they're dead. For example, we could adopt a steep gasoline tax and much tougher fuel economy standards for vehicles. In time, that might limit emissions (personally, I favor this on national security grounds). Absent some crisis, politicians usually won't impose -- and the public won't accept -- burdens without corresponding benefits.
- Third: Even if rich countries cut emissions, it won't make much difference unless poor countries do likewise -- and so far, they've refused because that might jeopardize their economic growth and poverty-reduction efforts. Poorer countries are the fastest growing source of greenhouse gas emissions, because rapid economic growth requires energy, and present forms of energy produce gases. In 2003 China's carbon dioxide emissions were 78 percent of the U.S. level. Developing countries, in total, accounted for 37 percent of greenhouse gas emissions in 2003. By 2050 their share could be 55 percent, projects the International Energy Agency (IEA).
Vaccine researcher Tom Jefferson [from the Cochrane Library, which analyses medical findings] reviewed all the studies of flu shot effectiveness and found the evidence isn't at all clear-cut.Jefferson's paper is Influenza vaccination: policy versus evidence.
TOM JEFFERSON: In some cases they are effective, at a lot lower threshold than what is claimed, and in some cases the evidence is just not there or is contradictory.
For instance, Jefferson says there's no evidence the shots prevent hospitalization or deaths in the elderly or the very young. They do cut flu transmission among healthy adults. But he says that barely affects the estimated $9.5 billion that flu absenteeism costs American companies.
…Experts say the cost of flu vaccination in the U.S. this year could reach $2 billion.
Monday, November 20
The mystery is how my neighbors could have hung the libertarian "Don't Tread on Me" flag but also support Obama.Sen. Barak Obama, D-Ill., praised a union-led campaign to change working conditions at Wal-Mart (WMT), telling activists Wednesday that their efforts are part of a broader debate that is needed about jobs and economic opportunity in America.
The senator, weighing in on the increasingly politicized debate over Wal-Mart, told a conference call with the union-backed group WakeUpWalMart.com there is a "moral responsibility to stand up and fight" for a better economic future with adequate wages, health care and retirement benefits.
Obama was one of two potential Democratic presidential contenders to court WakeUpWalMart in the same day. Former Sen. John Edwards was due to speak on a similar national conference call with the group's supporters later Wednesday.
Wal-Mart, based at Bentonville, Ark., said it was disappointed that the two took part in what it called a "politically motivated event that is clearly attacking the wrong company."
"Americans know that Wal-Mart creates jobs, reduces the cost of health care through $4 generics, and is a leader on the environment," spokesman David Tovar said.
"We continue to offer real solution to challenges facing working families, including the skyrocketing costs of health care," Tovar said. As an example, he said, Wal-Mart this year introduced low-premium employee health plans for as little as $11 a month in some areas.
Obama said the fact that manufacturing jobs are increasingly being lost overseas left Americans with jobs that do not provide adequate wages, career opportunities, health care or retirement security.
Monday, November 13
Conservative Democrats used to be boxed in because the Republican leadership would schedule votes on conservative issues, peeling them away from their party. Even after Newt Gingrich left for the loftier terrain of Newt.org, the party stuck to his playbook of "70 percent issues" - issues like parental notification on abortion, traditional marriage, and anti-flag burning laws that are supported by more than 70 percent of the country. When they were in trouble, as they were this year, the GOP majority would schedule votes on odious measures like the Flag Protection Amendment and Marriage Definition Amendment and giggle as Democrats scattered.It's all fine and good by me that restrictions on flag burning, on homosexual marriage and on abortion are off the table. Too bad about the minimum wage hike, though.
The new Democratic majority is tired of feeling the pointy side of these wedge issues. It will not schedule votes on this stuff. Congressmen Heath Schuler and Chris Carney, for example, won't ever have to weigh in on a new Marriage Definition Amendment unless there's a legitimate surge of public anger and petitioning on the issue, which there wasn't in the last Congress. The Flag Protection Amendment, which failed by one vote this year, is probably dead forever. Instead, the Democrats will be scheduling votes on their wedge issues, like stem cell research and minimum wage hikes. As Tom Schaller has pointed out, for the first time in 54 years the party that represents the socially conservative South holds the minority of seats, and has no presence in the leadership (apart from black liberal Rep. Jim Clyburn, the new Majority Whip). Social conservatism is a spent force, for now.
Partly because I found out the cast-iron pot I was planning to use was quite small (less than 4 quarts), I made some changes.
¼ teaspoon regular yeast (instead of rapid rise), mixed into
1 cup water; I added
2½ cups flour and
1 teaspoon salt
I turned on the heat in the oven and then shut it off, and put in the dough, then a few hours later turned it on and off again.
About eight hours later, the dough was risen (so rapid rise yeast would've been slower??), so I "refrigerated" it (actually I put it in the cold garage) overnight.
The next morning, I took it out and folded it over and left it on the floured cutting board about an hour to warm back up. Then I shaped it into baguettes, and placed them on the baguette mold (which I coated with bran) and covered them with a floured cloth to rise. After 1½ hours, they were obviously nearly ready, so I turned on the oven (where I had placed my quarry tiles) and dumped some water in pans in the bottom, then popped the filled mold in.
They puffed up in the oven and turned a nice golden brown, and although the crust was hard at first, it softened as soon as they cooled.
Still, the texture was the best I've ever made, including that time.
Next time, I'm going to try just using a chef as I did a few years ago.
Friday, November 10
A future society will very likely have the technological ability and the motivation to create large numbers of completely realistic historical simulations and be able to overcome any ethical and legal obstacles to doing so. It is thus highly probable that we are a form of artificial intelligence inhabiting one of these simulations. To avoid stacking (i.e. simulations within simulations), the termination of these simulations is likely to be the point in history when the technology to create them first became widely available, (estimated to be 2050). Long range planning beyond this date would therefore be futile.If it's "only a simulation", we can still die, right? That's assuming we're alive, of course.
…most economists agree is that the higher minimum wage does not do much to relieve poverty. That is partly because many poor people would not gain (since they do not work); partly because some of the costs of higher minimum wages are shifted onto poor consumers; but mainly because many minimum-wage workers are not poor. 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.From Slate:
…Ordinarily, when we decide to transfer income to some group or another—whether it be the working poor, the unemployed, the victims of a flood, or the stockholders of American Airlines—we pay for the transfer out of general tax revenue. That has two advantages: It spreads the burden across all taxpayers, and it makes politicians accountable for their actions. It's easy to look up exactly how much the government gave American, and it's easy to look up exactly which senators voted for it.And yet both nationally and locally under Blagoyevich, the Democrats are serious about this bad policy.
By contrast, the minimum wage places the entire burden on one small group: the employers of low-wage workers and, to some extent, their customers. Suppose you're a small entrepreneur with, say, 10 full-time minimum-wage workers. Then a 50 cent increase in the minimum wage is going to cost you about $10,000 a year. That's no different from a $10,000 tax increase. But the politicians who imposed the burden get to claim they never raised anybody's taxes.
If you want to transfer income to the working poor, there are fairer and more honest ways to do it. The Earned Income Tax Credit, for example, accomplishes pretty much the same goals as the minimum wage but without concentrating the burden on a tiny minority. For that matter, the EITC also does a better job of helping the people you'd really want to help, as opposed to, say, middle-class teenagers working summer jobs. It's pretty hard to argue that a minimum-wage increase beats an EITC increase by any criterion.
The minimum wage is nothing but a huge off-the-books tax paid by a small group of people, with all the proceeds paid out as the equivalent of welfare to a different small group of people.
Friday, November 3
Marxists and libertarians agree that as long as government is allowed to impose wide-ranging restraints on business and as long as business retains substantial independence and ability to gather and spend profits, regulatory capture will happen.How it happens:
Regulators may start off hostile to their subjects, and in some cases this is very much deserved.... Over time...the major players in the regulated field find that they can use regulation to keep down competition. The more elaborate the regulations that participants must follow, the more advantage big and established firms gain over their smaller and newer rivals. Regulations are easier to enact than to remove, so regulated firms can back rules that enshrine current procedure and put innovators in the awkward position of having to fight the regulators for change to happen - and because popular memory recalls that a lot of anti-regulation rhetoric is and has been cover for claims that businesses ought not be responsible for their actions, the innovators can readily be made to look bad to the general public.
In addition, regulatees who gain the sympathy of regulators as "team players", "responsible, cooperative enterprises", and the like get favors. There's nothing innately sinister about this - we pretty much all give extra consideration to the people we deal with who don't screw us over, help us out, and the like.... Regulated firms end up supplying not just data to regulators, but personnel. After all, who understands the field better than folks who are retiring or resigning from the field's major participants?... At this point the regulatory agency has been captured, and once it happens, it's proved nearly impossible to fix. Any effort to abolish the agency and start over will be met with cries that someone wants to do away with any government oversight of the issue. Even mild efforts at changing the agency's composition or mission will get the same treatment, because popular and (more importantly) media mythology says that to curtail a present government activity is to wish for all related activities to cease, and anything else is just smokescreen rhetoric.
Wednesday, November 1
...through the vast landscape [around Uralsk, north of the Caspian Sea] runs the Zhaiyk river, which meanders down from the Urals, Europe's traditional eastern boundary. As you cross westward, the sign on the bridge says simply "Europe"; as you return, "Asia".Then a good chunk of Iran is west of that line, too.
Nursultan Nazarbayev, the president of Kazakhstan, says that, if his country ever applied to join the European Union, it would have a better claim than Turkey. That is because more of its territory lies west of the river Zhaiyk than there is Turkish land west of the Bosporus.
Much of the $2.6 million the Agriculture Department gave to victims of hurricanes Katrina and Rita was unnecessary, a federal audit said.
The department won praise for quickly placing victims through its Rural Housing Service, the department's inspector general said in an audit.
But officials overlooked some basic controls to make sure that the right amount of rental assistance went to disaster victims, and that only victims got the assistance, the report said.
"Based on discussions with disaster victims, we concluded that much of the $2.6 million in emergency rental assistance that RHS provided to disaster victims was unnecessary," auditors said.
Most housing costs were already covered by the Federal Emergency Management Agency, auditors said, and several people obtained the aid fraudulently, the report said.
Not all Americans can be classified as liberal or conservative. In particular, polls find that some 10 to 20 percent of voting-age Americans are libertarian, tending to agree with conservatives on economic issues and with liberals on personal freedom. The Gallup Governance Survey consistently finds about 20 percent of respondents giving libertarian answers to a two-question screen.(The pdf paper notes many who hold libertarian views would say they are "fiscally coservative and socially liberal".) I thought I was part of a much smaller minority.
Our own data analysis is stricter. We find 9 to 13 percent libertarians in the Gallup surveys, 14 percent in the Pew Research Center Typology Survey, and 13 percent in the American National Election Studies, generally regarded as the best source of public opinion data.
After six years of reckless statism under Bush--the consequences of which have been documented in National Review articles and AEI studies, among other places--it is now almost routine to see conservatives draw unfavorable comparisons between him and his predecessor.
Bush and the Republican Congress turned Clinton's budget surpluses into deficits that peaked at $413 billion in fiscal year 2004. Federal spending as a share of GDP, which fell under Clinton to 18.5 percent, is again above 20 percent. Discretionary spending has increased faster under Bush than it did under Lyndon Johnson, no slouch in doling out taxpayer dollars. Earmarks have reached record levels, and the abuse of emergency spending bills is rampant.
Far from reforming entitlement programs, the Republicans compassionately created an exorbitant Medicare drug benefit that will add trillions of dollars to the program's long-term shortfall--the gift that keeps on taking. Far from reducing the federal government's scope, they have extended its reach into state and local matters such as education, abortion, marriage law, and end-of-life medical decisions.
Bush has either actively sought bigger government, as with the Medicare bill and the No Child Left Behind Act, or acquiesced in it, as with transportation spending and farm subsidies. Returning the favor, the Republicans who control Congress have acquiesced in the expansion of executive power, behaving as if they expect their party to control the White House forever...As the Cato Institute's William Niskanen points out, the only extended periods of fiscal restraint since World War II occurred during the Eisenhower and Clinton administrations, when different parties controlled the executive and legislative branches. "Government spending has increased an average of only 1.73 percent annually during periods of divided government," he writes in the October Washington Monthly. "This number more than triples, to 5.26 percent, for periods of unified government."