Category Archives: Economy

‘Minimum Wage, Maximum Folly’ In The Ivy League

Economy, Labor

“Economic malpractice” in the Ivy League is nothing new. In promoting minimum wage laws, hundreds of so-called top economists have defied the “law known as the first fundamental law of demand.”

The law states that the higher the price of something the less people will take of it and vice versa.

Alas, members of “the brie, tofu, and champagne circuit” regularly pretend that this natural law, “to which there are no known real-world exceptions,” is unaffected by minimum wage legislation.

Now comes news that a California city is to raise its minimum wage to $16.00. This unemployment-causing folly is a good opportunity to revisit WALTER E. WILLIAMS’ magnificent, ongoing efforts to “embarrass the economists” who lie about the costs of raising the price of unskilled labor:

… Some people suggest that if the price of something is raised, buyers will take more or the same amount. That’s silly because there’d be no limit to the price that sellers would charge. For example, if a grocer knew he would sell more — or the same amount of — milk at $8 a gallon than at $4 a gallon, why in the world would he sell it at $4? Then the question becomes: Why would he sell it at $8 if people would buy the same amount at a higher price?

There are economists, most notably Nobel Prize-winning economist Paul Krugman, who suggest that the law of demand applies to everything except labor prices (wages) of low-skilled workers.

Krugman says that paying fast-food workers $15 an hour wouldn’t cause big companies such as McDonald’s to cut jobs. In other words, Krugman argues that raising the minimum wage doesn’t change employer behavior.

Before we address Krugman’s fallacious argument, think about this: One of Galileo’s laws says the influence of gravity on a falling body in a vacuum is to cause it to accelerate at a rate of 32 feet per second per second. That applies to a falling rock, steel ball or feather. What would you think of the reasoning capacity of a Nobel Prize-winning physicist who’d argue that because human beings are not rocks, steel balls or feathers, Galileo’s law of falling bodies doesn’t apply to them? …

MORE.


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Spain And Portugal Pumped With Funny Money

Debt, Economy, EU, Europe

“The ingenuity, industry and activity of the ancient Greeks have nothing in common with the stupidity and indolence of the present inhabitants of those regions.” So said philosopher David Hume about modern-day Creeks.

The “land of moussaka, moochers and looters” and their Marxist leaders refuse to cease living on money borrowed from the more productive EU countries (Germany) .

“Greece,” marvels the Wall Street Journal, “has largely based its brinkmanship on an assumption that the eurozone will ultimately capitulate to its demands to prevent chaos spreading across the currency bloc.”

“Both Spain and Portugal are at risk from a Greek eurozone exit, but they have confidence their economies can withstand the shock.”

Yes, pumping funny money into the money markets has a way of inflating confidences.


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Hillary’s Trust Issue

Economy, Ethics, Hillary Clinton, Politics, Taxation

Not content with acquiring wealth through the dishonest, predatory process of politics (to contrast with the honest, productive, economic means of earning a living)—Hillary Clinton and husband have protected their ill-gotten gains from the taxman through trusts. These are “common among multimillionaires, and help shield some of their estate from the [inheritance] tax that now tops out at 40 percent of assets upon death.” BloombergBusiness:

Among the tax advantages of such trusts is that any appreciation in the [asset’s] value can happen outside their taxable estate. The move could save the Clintons hundreds of thousands of dollars in estate taxes …

The height of Hillary’s hypocrisy, however, is that, while she “shields her own wealth from it,” she recommended, during her last campaign, that estate taxes be further raised on Americans who’ve managed to amass more than $3.5 million.

… Clinton supported making wealthier people pay more estate tax by capping the per-person exemption at $3.5 million and setting the top rate at 45 percent, a policy Obama still supports. Congress decided to go in the other direction and Obama went along as part of a broader compromise. The per-person exemption is now $5.34 million..

Clinton has referred to estate tax as a “wealth tax.”

To say that she has a trust issue is to minimize how repulsive these people truly are.


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Rereading An Article In The Age Of The Idiot

Economy, Intelligence, Political Philosophy, Race, Racism, Reason

The concept of “racism” has been treated, over these pixelated pages, as a political construct in the postmodern tradition—a tradition that uses semantics, often unmoored from objective reality, to create a politically desired reality and achieve political ends. A mouthful, I know. But what has just been said is nothing compared to “Against ‘Racisms’: An Invidious Concept Under Fire” by my pal Jack Kerwick.

Jack uses the formal methods of (analytical and ethical?) philosophy to deconstruct the bogus construct that is racism. I will have to read the piece at least twice to better assimilate the argument and see how it sits with me. So far I like its impetus a LOT.

A word about rereading material, which I do a great deal. Readers complained about having to reread my “Libertarian Anarchism’s ‘Justice’ Problem,” to better understand it. Jack Kerwick joked with me, at the time, about the indignity and hostility expressed by today’s “readers” when required to grapple with challenging material by reading and rereading it.

I’ve always become apologetic when so accused, having never given thought to the point Jack was making: Don’t he and I reread things all the time? Don’t we look up words we don’t know in the (online) dictionary, as well? Don’t we enjoy learning new things; like a challenge? Are we threatened by a writer or a piece of writing that requires extra-concentration? Yes, yes, yes, and of course not.

So why should we expect anything else from our readers?

Go to it.


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UPDATED: By Mistake, Maureen Dowd Said Something True

Business, Economy, Hillary Clinton, Left-Liberalism, Media, Taxation

To borrow from Camille Paglia (who was once interesting, but no longer), Maureen Dowd is a “catty, third-rate, wannabe sorority queen; empty vessel. One pleasure of reading online is that one never has to see anything written by people like Maureen Dowd [Kathleen Parker, Eugene Robinson, Thomas Friedman, Cynthia Tucker, on and on]. I ignore their hypertext like spam for penis extenders.”

Ditto.

However, I heard another sorority queen, the likeable, lovely but celebrity courting Megyn Kelly, mention that Dowd had penned an unfavorable piece on Hillary. So off I trundled to suffer through the tedium of “Grandmama Mia!” which is without one original or insightful idea.

By mistake, Dowd does say something true when commenting about “the ostensible and obscene $2.5 billion that [Hillary] is planning to spend to persuade us to make her grandmother of our country.”

She should give the kids some of the money, suggests Dowd. If Dowd liked Hillary she would, however, want Mrs. Clinton to keep the cash so that she could do all those “wonderful” things once elected.

Dowd is a dumb-dumb. She doesn’t understand that any politician makes the world a better place by giving money allotted for buying votes to privately run charities, instead of spending these billions on buying votes so as to get into office and pass programs, ostensibly for the poor, that ensconce bureaucracies that consume the lion’s share of the revenue stream coerced from taxpayers, in perpetuity.

UPDATE (4/15): Even better: Start a real business—as opposed to a foundation—with all those billions of dollars. Disinvest from politics. As Maimonides, I believe, instructed, it is better to give a poor person a job than a donation.


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Carly Fiorina Kills It

Business, Economy, Elections, Hillary Clinton, Politics

Former Hewlett-Packard chief Carly Fiorina, soon to be a presidential candidate, comes across as a genius compared to the low IQ Hillary Clinton (as Ann Coulter diagnosed The Hildebeest).

As libertarian economist Murray Rothbard reminded, there “are two mutually exclusive ways of acquiring wealth”—the economic means is honest and productive, the political means is dishonest and predatory. … but oh so very effective. Democrats, who respect only the predatory political way of making a living—will hammer Fiorina for her business career.

Fiorina is eloquent in this candid interview with Fox News’ Chris Wallace.

WALLACE: Amid a crowded 2016 Republican field, the challenge now becomes finding a way to stand out. If she runs, former Hewlett-Packard chief Carly Fiorina would have no trouble doing that as the only woman in the GOP field. In recent weeks, she has also become a leading critic of Democratic front-runner, Hillary Clinton.

Ms. Fiorina, welcome back to “Fox News Sunday.”

CARLY FIORNIA, FORMER HEWLETT PACKARD CHIEF: Great to be with you. Happy Palm Sunday.

WALLACE: Well, thank you.

What are the chances that you’re going to run for president?

FIORINA: Very high.

WALLACE: You’re a former businesswoman. Give me a number.

FIORINA: Higher than 90 percent.

WALLACE: Really?

FIORINA: Yes, sir.

WALLACE: So what would prevent you? Why aren’t you willing to announce right here today, I’m a candidate for president?

FIORINA: Well, because, you know, we need — as other potential candidates are doing, we need to make sure we have the right team in place, that we have the right support, that we have the right financial resources lined up, just as all the other potential candidates are doing.

WALLACE: And when would you announce?

FIORINA: Probably late April, early May.

WALLACE: If you run, and it would be in a field of current and former governors, several current senators, why should Republican voters pick you?

FIORINA: Because I have a deep understanding of how the economy actually works, having started as a secretary and become the chief executive of the largest technology company in the world because I understand how the world works and know many of the world leaders on the stage today because I understand technology, a transformational tool, because I understand bureaucracies — how they work and how you need to change them and our government is a huge bureaucracy, and because I understand executive decision-making, which is making tough calls in tough times with high stakes for which you’re prepared to be held accountable.

WALLACE: OK. Let’s talk specifically about your experience as a business executive. Beyond the typical Republican talking points, not to say that they’re wrong, but what are your ideas that are different about the economy and about dealing with our national debt?

FIORINA: Well, I think we have two fundamental structural problems in our economy. One is that we have tangled people up in a web of dependence from which they can’t escape. We’re leaving lots of talent on the field. Secondly, we’re crushing small businesses now.

Elizabeth Warren is right, crony capitalism is alive and well. Big business and big government go hand in hand. But for the first time in U.S. history now, we are destroying more businesses than we are creating. And so, while we have 10 banks, too big to fail, now have become five big banks too big to fail, 3,000 community banks have gone out of business, and that’s where family-owned and small businesses get their chance. That’s important because small businesses create two thirds of the new jobs and employ half the people.

So, if we want mainstream and the middle class going and growing again, we’ve got to get small and family-owned businesses going and growing again. Washington, D.C. has become a vast unaccountable bureaucracy. It’s been growing for 40 years. We have no idea how our money is spent.

I think there are two things that would help tremendously. One, zero base budgeting, so we know where the money is spent. We’re talking about the whole budget and not just the rate of increase.

And two, pay for performance in our civil service. We have — how many inspector general reports do we need to read that say, you know, you can watch porn all day and get paid exactly the same way as somebody who is trying to do their job?

WALLACE: But, Ms. Fiorina, and you know this is coming, your record at head of Hewlett Packard, and you were the CEO for five and a half years, and you were the first woman to lead a Fortune 100 company, is going to be controversial. Let’s put up some of the things on the screen.

During your five and a half years, you laid off — the company laid off more than 30,000 American workers, many of those jobs went to India and China, and Hewlett-Packard stock fell 49 percent and the board of directors fired you.

Isn’t that a record that you’re going to get hammered with?

FIORINA: Well, I’m very proud of our record. We took Hewlett-Packard from about $44 billion to $88 billion in six years. We took the growth rate from 2 percent to 9 percent. We tripled the rate of innovation to 11 patents a day. We quadrupled cash flow.

We went from a market laggard to a market leader in every product category and every market segment. And we grew jobs.

It is true that I managed through the worst technology recession in 25 years. You will remember the NASDAQ has only now recovered to its dotcom boom highs after 15 years. So, virtually, every technology stock was down over that same period.

And while it’s true that in a technology recession, we had to lay people off, many of those people were in Europe and elsewhere, and the truth is we outsourced more California jobs to Texas than we did to India or China, demonstrating we have to compete for every job.

WALLACE: But you know what’s going to happen. If you were the nominee, exactly what happened to Mitt Romney. There were 30,000 American jobs that were lost and they can get two or three or 200 people to go on and say, well, Carly Fiorina got a $20 million severance package, I lost my job. I mean, they’ll make you look like an unfeeling multimillionaire.

FIORINA: Well, first, I think you’re reading the Democratic talking points because it was not all American jobs. But of course, laying people off is the last resort. It’s a terrible thing to have to do.

But when you are managing through the worst technology recession in 25 years, sometimes there are tough calls that need to be made for the overall health of the enterprise. And in the end, we took a company that was really struggling and turned it into an exceedingly successful company where overall jobs grew.

WALLACE: You seem to take special delight in going after Hillary Clinton. And here is one of your greatest hits.

(BEGIN VIDEO CLIP)

FIORINA: Unlike Mrs. Clinton, I know that flying is an activity, not an accomplishment. I have met — I have met Vladimir Putin, and I know that his ambition will not be deterred by a gimmicky red reset button.

Mrs. Clinton, please name an accomplishment.

(END VIDEO CLIP)

WALLACE: That’s pretty good stuff. What is your basic case against Hillary Clinton?

FIORINA: Hillary Clinton lacks a track record of accomplishment. She is not candid, which suggests her character is flawed. And I think now in e-mail gate, we not only have a situation where she is clearly not being candid. I mean, her saying all those e-mails she erased were just her and Bill chatting is a little bit like Richard Nixon saying those erased moments on the tape were he and Pat talking. That’s ridiculous. There’s more than that.

But I also think there’s a confidence issue now. Anyone in 2015 to say you can’t have two e-mail accounts on a single device obviously doesn’t understand technology. When she talks about we had Secret Service agents guarding our server, for heaven’s sakes we’re not concerned about the server being stolen. We’re concerned about the server being hacked.

WALLACE: All right. Let me pick up on that, because Clinton’s lawyers, the latest development is late Friday, they told the House Benghazi committee, there’s no point going after the server because we have wiped clean all of the e-mails and so all of those 30,000 private e-mails, so-called private e-mails are gone. One, what do you make of it? Two, what do Republican investigators do now?

FIORINA: Well, I think it was part of the plan all along that the Clintons had. Look, I think it was very deliberate that they had a private server. I think it was very deliberate that she used a personal e-mail account. I think this clearly was a deliberate effort to shield her communications.

I don’t quite know what the investigators can do at this point, but I know this, we need a nominee who will bring this up in the general election. The reason Benghazi was not enough of an issue in the 2012 election is because, unfortunately, our nominee pulled his punches when he had an opportunity to remind the American people of the Benghazi tragedy and scandal.

WALLACE: So, what are you saying, you won’t pull your punches on Hillary?

FIORINA: Oh, I will not pull my punches — not now and not in a general election.

WALLACE: Some people have suggested, even as I ask it, it sounds sexist, you’re really running to be the running mate, that you would the person to lead the attack against Hillary Clinton. It would be easier for you as a woman attacking another woman and that you would in a sense neutralize the vulnerabilities the Republican Party has with women?

FIORINA: You know, I come from a world outside of politics where track record and accomplishments count, words don’t. If I run for president, it’s because I can win the job and it’s because I can do the job.

WALLACE: Would you even consider being the running mate?

FIORINA: Well, when you start asking all the other candidates that question, then maybe we’ll have that conversation.

WALLACE: Fair enough. Carly Fiorina, thank you for coming in. Always good to talk with you. And we will be following your big decision.

FIORINA: Thank you so much, Chris, for having me.

WALLACE: Please come back here, and let us know.

FIORINA: All right.


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