Tag Archives: zEconomy

Chinese Pander Bear

In a stunning display of economic brilliance, the Obama Administration announced today:

WASHINGTON (AP) – The U.S. government is imposing new duties on imports of steel pipes from China…

The U.S. International Trade Commission voted Wednesday to impose duties between 10.36 percent and 15.78 percent on the pipes

Once again, our administration is trying to stifle and regulate trade when no such need is required.  If a product or service is introduced into the market at a price the seller is willing to sell, a buyer should be able to enter into contract with that seller if he wants.  Right now, the administration is needlessly preventing such an arrangement at the price being offered.  This will have the effect of punishing the purchasing party and raising the costs of that parties goods.  Further, the demand for that product will be artificially lowered causing an imbalance in the allocation of scare resources which have alternative uses.

On the other hand, we must never forget that the business of politics is inherently, ahh, political.  And if we read a little deeper we see:

The move is in response to a complaint filed in April by U.S. Steel and six other steel manufacturers, as well as the United Steelworkers’ union.

Ahh, I see.  One of the largest group of Obama supporters would like the United States government to intervene on its behalf in order to make their product more cost competitive in the market place.  Interesting.  But surely, there must be a group whose interests are HURT by the rising cost of Chinese steel?

The U.S. International Trade Commission voted Wednesday to impose duties between 10.36 percent and 15.78 percent on the pipes, which are mostly used in the oil and gas industries.

Masterful stroke.  With one stone, Obama gets two birds; assistance for his Union thugs and a penalty to the dirty nasty oil and gas industries.

Risk Gain

I’m not sure that Government understands risk:

State officials said they believe Dell also should give back about $6 million in tax breaks the company received between 2005 and 2007, but a Dell spokesman said the company is entitled to keep the money since it was operating at the time.

“Our belief and our understanding is that we met the performance thresholds required for those incentives during those years, and are not obliged to repay those,” spokesman Jess Blackburn said.

The state of North Carolina negotiated with Dell to open a plant here.  To incent the company to do so, we offered them tax breaks and grants, both locally and at the State level.  It was understood that if Dell left or closed, that money would have to be returned.

Well, Dell did leave, the plant did close and:

…the company agreed to repay more than $26 million in local grants and $1.5 million in state grants, acknowledging that it didn’t live up to its end of the deal by not keeping a specified number of jobs in Forsyth County.

So.  What is all the hullabaloo about?

Turns out that the State of North Carolina is in a bit of trouble financially.  And they could use any money they can wrangle out of the evil capitalists.  And why not, the Feds are doing the same thing with great success.  So our good Govna is going out, bad mouthing Dell and demanding that they pay money back:

“I will fight them if they want to fight about this,” Perdue said. “They made some agreements. We offered some incentives. The locals offered some incentives, and they need to live up to their side of the bargain. If that means going to court, I guess we will.”

Turns out, however, that the money she wants to get back is money that Dell “saved” while they were in business and operating.  This isn’t money that we paid to Dell, it was simply money that they didn’t pay to us while they employed our people.

House Minority Leader Paul Stam issued a statement Tuesday saying the dispute could have been resolved long ago. Lawmakers defeated an attempt to include language in the state incentives package that would have required Dell to forfeit all credits it received from the state if it didn’t have at least 1,200 employees at the computer plant within five years, said Stam, R-Wake.

So not only is Purdue going after money that Dell doesn’t really owe us, she is poisoning the well in doing so.   Who in the world is going to wanna open a business here when they get treated like this?

The World Compared to the States

Ben Hoffman is having another monster conversation describing Common Right-Wing Lies.  Ben’s post begins by talking about what he considers lies:

  1. right-wingers claim Obama promised that unemployment would not go above 8 percent if the stimulus was passed. Eric Cantor claimed: “We were promised. The president said we would keep unemployment under 8.5 percent (if the stimulus passed).”
  2. Lie: Reagan’s tax cuts resulted in increased revenues.
  3. Lie: Obama’s spending has resulted in a huge budget deficit.

And then he refutes that by claiming the “Fact”:

  1. The Job Impact of the American Recovery and Reinvestment Plan report included a graph that projected unemployment rates without the stimulus would peak at 9% and with the stimulus at just under 8%. That is not a promise; it is a projection, an estimate, a prediction. Claiming it was a promise is crazy talk.
  2. Reagan’s tax cuts resulted in decreased revenues. His tax increases resulted in increased revenues.
  3. Obama is responsible for only a small sliver of the deficit.

Now, there is a whole board full of comments on the subject; stop over for the debate.

However, during that debate, we began to take on the role of Government and really what it means when the Government creates public programs; Libraries, Parks, Beaches, Zoos and Police/Fire Stations.  I contend that when the government uses public money to establish and run these organizations, it is the equivalent of robbing one neighbor at gun point only to take that money and give it to your other neighbor in the form of a library, museum or zoo.

Of course this is a Libertarian point of view.  And maybe taken to its extreme, is a bit untenable.  But I do maintain that if a government is going to set up public works programs, it should be as local to the people as possible.  There is very little argument that can be made that would support taking money from citizens in North Carolina to support a Federal program giving money to an Art District in California.

Anyway, during the debate, one of us, Arbourist, made a comment stating that Socialist States are alive and well in the world:

Of course not, libertarianism has not ever been implemented, nor will it ever be implemented. It is not a practical way to run a society, unlike socialism which has many practical applications, and is doing great in many locations:Cuba, Venezuela, Nigeria, Canada, Sweden, Norway, […].

This got me to thinking.  So, I went out and grabbed some data here and here.  Put it down and paper and came up with this:

GDP per Capita

This is a graph showing the GDP per Capita of the World’s richest 50-60-70 nations, some interesting nations not in that group and then the list of nations quoted by Arbourist.  Further, I have compared these nations to the States of the United States of America, just to see where they rank.

Check out some interesting notes:

  1. The top 4 nations all are financial destination countries.  Their rankings might be skewed as such.
  2. Of the nations mention by the Arbourist, only 1, Norway, ranks ahead of the United States.  The 5 remaining rank below the United States.
  3. Of the 5 that rank behind the USA, two rank ahead of the European Union.
  4. While Norway ranks ahead of the USA in total, if Norway became a State, it would only be the 5th richest in our Nation.
  5. If Canada and Sweden were to become States, they would be the 40th and 43rd richest States respectively.
  6. And finally, if Venezuela, Cuba and Nigeria were to become States, they would immediately be the poorest States in the Country; their combined GDP per Capita not even equaling that of Mississippi–currently the poorest State in the Nation.

No, the fact remains.  The United States of America is the single richest Nation ever in the history of the world.  And we are so rich because we try to maximize the free market and the flow of capital and the driving motivation of profits.  The freer the market, the better off her citizens.

Seriously Confused

This time, it’s me I am accusing.  Not Obama.

I have been reading the reports of the unemployment situation today and two things have stood out. The first, from the BLS:

The unemployment rate edged down to 10.0 percent in November, and nonfarm payroll employment was essentially unchanged (-11,000)

And the second from MarketWatch:

The report was much better than expected by economists surveyed by MarketWatch, who were looking for 100,000 fewer jobs…

Okay, let’s start with #2 first.  I have seen several reports that show November was expected to lose 100,000 to 130,000 jobs.  And we came in losing only 11,000.  No one, not ONE single person O have seen has stopped and said, “Huh”?  This is off by just a little bit folks.  These guys were off by a FACTOR OF TEN!  No one is THAT wrong and gets away with it.  Unless of course, you are Al Gore.

So, okay, experts were wrong.  And by a lot.  But that gets us to point #1.  We still lost jobs.

In October, unemployment stood at 10.2%.  We lost jobs.  Even if it was only 1, we lost net jobs.  The rate HAS to stay the same or get worse.  Right?  Wrong.  We lost job AND the unemployment rate got better.


Unrelated news.  Houston is expecting 2 inches of snow.  Silly polar bears need migrate!

California: Part III

Water water everywhere.  And not a drop to drink.

Sounds like California is thirsty:

Operators of the sprawling state system that supplies water to 25 million Californians from Butte County to San Diego issued their lowest-ever estimate on the amount of water they will be able to deliver.

Officials predicted Tuesday they will be able to offer only 5 percent of the total volume of water requested by California cities and farms next year. That’s the smallest water allocation the agency has released since its creation in 1967.

Government in Action

That’s quite a gap.  Now, to be fair, you can see in the chart above that there are years in which the water allocations eventually meet 100% of the need, but more than often, they don’t.

Makes you wonder why this is, right?  I mean California should have plenty of water to supply their need.  Why are they so short so often?  What could possible cause a shortage in a specific commodity?

Well, I just finished a fantastic book:  Basic Economics by Thomas Sowell.  And it just so happens that Mr. Sowell does indeed talk about shortages and what causes them.  One word:  Regulation.  For example, have you ever noticed that it always seems the grocery store is out of Coke when you go to buy some?  Or that gas stations always seem to be empty when you need to fill up?  I know I know.  Every time you go to buy a pair of sunglasses, there are none available?  Huh?  Never happens?  Wanna know why?  Because no one is regulating the price of these products.  They are selling at a price the market can bare.  And so supply is nearly always available.

Now, if I told you that Wal-Mart was going to be selling Coke 6-paks for a dime starting at 6pm tomorrow night, what do you think the scene would be?  Packed initially and then finally, they would run out.  They would run out when under normal circumstances, they would have a predictable supply for anybody to come and buy as much as they need/want.  And why doesn’t someone come in and buy all of the supply of Coke now?  Because the marginal cost of Coke dictates that we won’t waste or hoard it.

So, again, what cause a shortage?  Regulation; specifically the imposition of a reduced price when supply remains fixed.  So, why do you think that California State Water Project has problems meeting 100% of need?  Because they are regulations in place that reduce the cost of water for significant portions of the population:

In 2002, the average price paid for irrigation water from the CVP (Central Valley Project-An agricultural district) was less than 2 percent of what residents of Los Angeles pay for drinking water, and less than 3 percent of what residents of San Francisco pay.

What does this mean?  It means that farmers can grow crops in regions where those crops wouldn’t normally grow because it’s too dry.  But because they are getting water at less than the market rate, these farming practices are continued and water is going where it wouldn’t otherwise go.

The lesson is simple, if you want there to be a 6-pak of Coke at the local Wal-Mart, you better hope that it’s expensive enough to be there.

A Reminder of the Meaning of Money

Atlas Shrugged is a very VERY long book, but worth it.  Basically it tells the story of how we let ourselves be enslaved by the people who claim to “help us”.  When we hand over responsibility for ourselves, we hand over ourselves.

Anyway, one the strongest speeches in the book is known as The Money Speech.  Franciso De’Anconia is at a party and overhears a guest exclaim that money is the root of all evil.  His response:

“So you think that money is the root of all evil?” said Francisco d’Anconia. “Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?

“When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others. It is not the moochers or the looters who give value to money. Not an ocean of tears not all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow. Those pieces of paper, which should have been gold, are a token of honor–your claim upon the energy of the men who produce. Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money, Is this what you consider evil?

“Have you ever looked for the root of production? Take a look at an electric generator and dare tell yourself that it was created by the muscular effort of unthinking brutes. Try to grow a seed of wheat without the knowledge left to you by men who had to discover it for the first time. Try to obtain your food by means of nothing but physical motions–and you’ll learn that man’s mind is the root of all the goods produced and of all the wealth that has ever existed on earth.

“But you say that money is made by the strong at the expense of the weak? What strength do you mean? It is not the strength of guns or muscles. Wealth is the product of man’s capacity to think. Then is money made by the man who invents a motor at the expense of those who did not invent it? Is money made by the intelligent at the expense of the fools? By the able at the expense of the incompetent? By the ambitious at the expense of the lazy? Money is made–before it can be looted or mooched–made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can’t consume more than he has produced.’

“To trade by means of money is the code of the men of good will. Money rests on the axiom that every man is the owner of his mind and his effort. Money allows no power to prescribe the value of your effort except the voluntary choice of the man who is willing to trade you his effort in return. Money permits you to obtain for your goods and your labor that which they are worth to the men who buy them, but no more. Money permits no deals except those to mutual benefit by the unforced judgment of the traders. Money demands of you the recognition that men must work for their own benefit, not for their own injury, for their gain, not their loss–the recognition that they are not beasts of burden, born to carry the weight of your misery–that you must offer them values, not wounds–that the common bond among men is not the exchange of suffering, but the exchange of goods. Money demands that you sell, not your weakness to men’s stupidity, but your talent to their reason; it demands that you buy, not the shoddiest they offer, but the best that your money can find. And when men live by trade–with reason, not force, as their final arbiter–it is the best product that wins, the best performance, the man of best judgment and highest ability–and the degree of a man’s productiveness is the degree of his reward. This is the code of existence whose tool and symbol is money. Is this what you consider evil?

“But money is only a tool. It will take you wherever you wish, but it will not replace you as the driver. It will give you the means for the satisfaction of your desires, but it will not provide you with desires. Money is the scourge of the men who attempt to reverse the law of causality–the men who seek to replace the mind by seizing the products of the mind.

“Money will not purchase happiness for the man who has no concept of what he wants: money will not give him a code of values, if he’s evaded the knowledge of what to value, and it will not provide him with a purpose, if he’s evaded the choice of what to seek. Money will not buy intelligence for the fool, or admiration for the coward, or respect for the incompetent. The man who attempts to purchase the brains of his superiors to serve him, with his money replacing his judgment, ends up by becoming the victim of his inferiors. The men of intelligence desert him, but the cheats and the frauds come flocking to him, drawn by a law which he has not discovered: that no man may be smaller than his money. Is this the reason why you call it evil?

“Only the man who does not need it, is fit to inherit wealth–the man who would make his own fortune no matter where he started. If an heir is equal to his money, it serves him; if not, it destroys him. But you look on and you cry that money corrupted him. Did it? Or did he corrupt his money? Do not envy a worthless heir; his wealth is not yours and you would have done no better with it. Do not think that it should have been distributed among you; loading the world with fifty parasites instead of one, would not bring back the dead virtue which was the fortune. Money is a living power that dies without its root. Money will not serve the mind that cannot match it. Is this the reason why you call it evil?

“Money is your means of survival. The verdict you pronounce upon the source of your livelihood is the verdict you pronounce upon your life. If the source is corrupt, you have damned your own existence. Did you get your money by fraud? By pandering to men’s vices or men’s stupidity? By catering to fools, in the hope of getting more than your ability deserves? By lowering your standards? By doing work you despise for purchasers you scorn? If so, then your money will not give you a moment’s or a penny’s worth of joy. Then all the things you buy will become, not a tribute to you, but a reproach; not an achievement, but a reminder of shame. Then you’ll scream that money is evil. Evil, because it would not pinch-hit for your self-respect? Evil, because it would not let you enjoy your depravity? Is this the root of your hatred of money?

“Money will always remain an effect and refuse to replace you as the cause. Money is the product of virtue, but it will not give you virtue and it will not redeem your vices. Money will not give you the unearned, neither in matter nor in spirit. Is this the root of your hatred of money?

“Or did you say it’s the love of money that’s the root of all evil? To love a thing is to know and love its nature. To love money is to know and love the fact that money is the creation of the best power within you, and your passkey to trade your effort for the effort of the best among men. It’s the person who would sell his soul for a nickel, who is loudest in proclaiming his hatred of money–and he has good reason to hate it. The lovers of money are willing to work for it. They know they are able to deserve it.

“Let me give you a tip on a clue to men’s characters: the man who damns money has obtained it dishonorably; the man who respects it has earned it.

“Run for your life from any man who tells you that money is evil. That sentence is the leper’s bell of an approaching looter. So long as men live together on earth and need means to deal with one another–their only substitute, if they abandon money, is the muzzle of a gun.

“But money demands of you the highest virtues, if you wish to make it or to keep it. Men who have no courage, pride or self-esteem, men who have no moral sense of their right to their money and are not willing to defend it as they defend their life, men who apologize for being rich–will not remain rich for long. They are the natural bait for the swarms of looters that stay under rocks for centuries, but come crawling out at the first smell of a man who begs to be forgiven for the guilt of owning wealth. They will hasten to relieve him of the guilt–and of his life, as he deserves.

“Then you will see the rise of the men of the double standard–the men who live by force, yet count on those who live by trade to create the value of their looted money–the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law–men who use force to seize the wealth of disarmed victims–then money becomes its creators’ avenger. Such looters believe it safe to rob defenseless men, once they’ve passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.

“Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favors–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed. Money is so noble a medium that is does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.

“Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked, ‘Account overdrawn.’

“When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and lose their lives for the purpose of becoming the fodder of the immoral. Do not expect them to produce, when production is punished and looting rewarded. Do not ask, ‘Who is destroying the world? You are.

“You stand in the midst of the greatest achievements of the greatest productive civilization and you wonder why it’s crumbling around you, while you’re damning its life-blood–money. You look upon money as the savages did before you, and you wonder why the jungle is creeping back to the edge of your cities. Throughout men’s history, money was always seized by looters of one brand or another, whose names changed, but whose method remained the same: to seize wealth by force and to keep the producers bound, demeaned, defamed, deprived of honor. That phrase about the evil of money, which you mouth with such righteous recklessness, comes from a time when wealth was produced by the labor of slaves–slaves who repeated the motions once discovered by somebody’s mind and left unimproved for centuries. So long as production was ruled by force, and wealth was obtained by conquest, there was little to conquer, Yet through all the centuries of stagnation and starvation, men exalted the looters, as aristocrats of the sword, as aristocrats of birth, as aristocrats of the bureau, and despised the producers, as slaves, as traders, as shopkeepers–as industrialists.

“To the glory of mankind, there was, for the first and only time in history, a country of money–and I have no higher, more reverent tribute to pay to America, for this means: a country of reason, justice, freedom, production, achievement. For the first time, man’s mind and money were set free, and there were no fortunes-by-conquest, but only fortunes-by-work, and instead of swordsmen and slaves, there appeared the real maker of wealth, the greatest worker, the highest type of human being–the self-made man–the American industrialist.

“If you ask me to name the proudest distinction of Americans, I would choose–because it contains all the others–the fact that they were the people who created the phrase ‘to make money.’ No other language or nation had ever used these words before; men had always thought of wealth as a static quantity–to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were the first to understand that wealth has to be created. The words ‘to make money’ hold the essence of human morality.

“Yet these were the words for which Americans were denounced by the rotted cultures of the looters’ continents. Now the looters’ credo has brought you to regard your proudest achievements as a hallmark of shame, your prosperity as guilt, your greatest men, the industrialists, as blackguards, and your magnificent factories as the product and property of muscular labor, the labor of whip-driven slaves, like the pyramids of Egypt. The rotter who simpers that he sees no difference between the power of the dollar and the power of the whip, ought to learn the difference on his own hide– as, I think, he will.

“Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips and guns–or dollars. Take your choice–there is no other–and your time is running out.”

Dad Talk to Jeff Latta

Okay, so yesterday I posted on the plight of the 53 year old retired man that can’t afford his $1,000 mortgage.

The story reads that his mortgage is 93% of his pension.  I managed to do the math and calculate how much this guy would have left over.  What I didn’t do was calculate what he made per year; $20,640.  And his mortgage?  Well, assuming he has a 7% rate and given a $1,600 payment, that means he borrowed $240,000.  That, ladies and gentlegerms, is a QUARTER OF A MILLION DOLLARS!  And brother is making a cool 20k a year.

I hereby make this covenant with you, gentle reader.  I will not, I swear to you, I will NOT raise my son to think that it’s okay to borrow $240,000 and then retire at 53 knowing your fixed income will be $20,000.  And more than that, he will not ever, EVER, consider it someone else’s burden to pay for or bail him out of that dumb ass decision.

I swear to you.

Now, son…about that whole pumpkin farm thing you got goin’ on…..

Two Parallels in One Article

I’ve admitted before that I am no economist.  Fact is, I haven’t even ever taken a class in economics.  However, I did major in mathematics and work significantly with statistics at my current job.  As I tell my boss, “I’m nifty with numbers”.

So, as I wax poetic on all of these economic issues I do so with a bit of trepidation.  See, really, from an “expert’s” point of view, I don’t know what I’m talking about.

Which makes seeing two of my most often repeated mantras in text at one time very exciting.  This article from Mises.org just made my morning:

Mandating benefits for employees imposes costs on employment. The would-be worker bears the cost. It makes the worker more expensive to hire. The employer has to pay not only a salary but also a benefit. If you make it more expensive to hire people, fewer people will be hired.

It is no different from eggs at the supermarket. If they are $2 each, you will purchase fewer of them — you will economize. This is nothing but the law of demand: consumers will demand less of a good at a higher price than of a good at a lower price. A salary plus benefits amounts to a price that the employer must pay to purchase the work of a laborer. At a higher price, less work will be purchased by the employer.

You should read the whole article; it’s fantastically simple.  And for once, I see in print, what I seem to intuit.  And furthermore, it is verbalized with economic expertize that I simply can’t claim:

There is no real reason to prove these assertions empirically since they flow from the logic of economics.

The article is entitled  “The Jobs Program” and deals with health care:

Sadly, there is no way that free health care can be granted to all living things with the stroke of a pen. Broadening availability will require that the entire sector be turned over to the private sector, so that it can be controlled through the price system like everything else.

But while Mr. Rockwell is speaking about the current health care bill, his article could easily be speaking about the new minimum wage increase slated this month.

How to Raise Unemployment

Raise the cost of labor.

See, labor, like copper or plastic, oil or stamps, is a commodity.  Businesses need commodities to operate.  Businesses see how much a thing costs, calculates value analysis and then buys some.  How much depends on that analysis.  For example, if copper becomes too expensive, business will try to find a way to use less of it.  Perhaps substituting for something else; a batter value.  Stamps too high?  Go to bulk mailing, or e-mail services.  So it goes with labor.

Why people don’t see this is beyond me.  For example, if we are interested in reducing unemployment, why don’t we mandate that all McDonalds have twice the current number of workers on each shift?  If one McDdude is good, certainly two McDudes is better?  Yes?


See, at some point, more labor doesn’t mean more revenue or profits.  Now, at some point it does.  If I have to wait 20 McMinutes for my McBurger, I am going to walk out the McDoor.  Here, more labor would be worth it to the store.  However, once McDonalds has reached the point that it is servicing the clientele adding more labor doesn’t add up.  The cost doesn’t justify the return.  The simple truth is that the amount of labor someone buys is limited to the business model.  Raising the unit cost of labor reduces the units.  Or, increases the price of the widget.?

So, does raising the minimum wage increase or decrease employment?  In an article from the Wall Street Journal, it seems that studies show jobs will be lost:

There’s been a long and spirited debate among economists about who gets hurt and who benefits when the minimum wage rises. But in a 2006 National Bureau of Economic Research paper, economists David Neumark of the University of California, Irvine, and William Wascher of the Federal Reserve Bank reviewed the voluminous literature over the past 30 years and came to two almost universally acknowledged conclusions.

First, “a sizable majority of the studies give a relatively consistent (though not always statistically significant) indication of negative employment effects.” Second, “studies that focus on the least-skilled groups [i.e., teens, and welfare moms] provide relatively overwhelming evidence of stronger disemployment effects.”

Now, let’s continue to pretend that we don’t know, for sure, that raising the minimum wage will result in job loss.  Let’s instead use the Global Warming argument.  What if it’s just possible that it does?  Why raise it?  What is the upside?  And there, gentle reader, is the rub.  As far as I can see, there is no upside.  Very very few people actually make the minimum wage or less.  Almost none of them will be making the minimum wage in a year.  Most of them are from families with annual family incomes well well above poverty.  The fact is, there just aren’t that many people making the minimum wage.  And for those that do, they would rather make that amount than make the true minimum wage: $0.00.

Obama’s Advice: Don’t Do What I Do

President Obama recently returned from his overseas trip.  A trip in which he paid a visit to Ghana to deliver a speech to the Ghanian Parliment.  Now, don’t get me wrong, I think that it’s perfectly acceptable, recommended in fact, that Presidents travel the world and deliver speeches like this.  Further, I actually enjoyed the message that he gave early:

We must start from the simple premise that Africa’s future is up to Africans.

I love it.  In fact, it’s what is at my Libertarian heart.  Personal Liberty-Personal Responsibility.

Most of the speech was as you would expect, but I did have to laugh at Obama’s advice on creating wealth:

No business wants to invest in a place where the government skims 20 percent off the top … or the head of the port authority is corrupt. No person wants to live in a society where the rule of law gives way to the rule of brutality and bribery.

So, lemme get this straight.  Obama’s advice to Ghana is for the government NOT to take a cool 20% off the top.  But his advice to America is to increase the skim we are already taking off the top?