Great quotes on the minimum wage debate

The minimum wage is proven to hurt the Left’s voters, but they advance the argument anyway to demonize their opponents and buy votes. Here are some great responses. Note the racist beginnings. Thanks to Glenn for the list!

Intervention by politicians, judges, or others, in order to impose terms more favorable to one side – minimum wage laws or rent control laws, or example – reduces the overlapping set of mutually agreeable terms and, almost invariably, reduces the number of mutually acceptable transactions, as the party disfavored by the intervention makes fewer transactions subsequently.  Countries with generous minimum wage laws, for example, often have higher unemployment rates and longer periods of unemployment than other countries, as employers offer fewer jobs to inexperienced and low-skilled workers, who are typically the least valued and lowest paid – and who are most often priced out of a job by minimum wage laws.

It is not uncommon in European countries with generous minimum wage laws, as well as other worker benefits that employers are mandated to pay for, to have inexperienced younger workers with unemployment rates of 20 percent or more.  Employers are made slightly worse off by having to rearrange their businesses and perhaps pay for more machinery to replace the low-skilled workers whom it is no longer economic to hire.  But those low-skilled, usually younger, workers may be made much worse off by not being able to get jobs as readily, losing both the wages they could earn otherwise and sustaining the perhaps greater loss of not acquiring the work experience that would lead to better jobs and higher pay.

Thomas Sowell, Intellectuals and Society, p.70

If someone has a right, someone else has an obligation.  But the proposed right to a “living wage,” for example, is not based on any obligation agreed to by an employer.  On the contrary, this “right” is cited as a reason why government should force the employer to pay what third parties would like to be paid.

Thomas Sowell, Intellectuals and Society, p.157

Crusaders for a “living wage” or to end “sweatshop labor” in the Third World, for example, may invest great amounts of time and energy promoting those goals but virtually none in scrutinizing the many studies done in countries around the world to discover the actual consequences of minimum wage laws in general or of “living wage” laws in particular.  These consequences have included periods of unemployment, especially for the least skilled and least experienced segments of the population.  Whether one agrees with or disputes these studies, the crucial question here is whether one bothers to read them at all.

Thomas Sowell, Intellectuals and Society, p.181

The last year in which black unemployment was lower than white unemployment – 1930 – was also the last year in which there was no federal minimum wage law.  The Davis-Bacon Act of 1931 was openly advocated by some members of Congress on grounds that it would stop black construction workers from taking jobs from white construction workers by working for less than the union wages of white workers.  Nor was the use of minimum wage laws to deliberately price competing workers out of labor market unique to the Davis-Bacon Act or to the United States.  Similar arguments were made in Canada in the 1920s, where the object was to price Japanese immigrants out of the labor market, and in South Africa in the era of apartheid, to price non-whites out of the labor market.

Any group whose labor is less in demand, whether for lack of skills or for other reasons, is disproportionately priced out of labor markets when there are minimum wage laws, which are usually established in disregard of differences in skills or experience.  It has not been uncommon in Western Europe, for example, for young people to have unemployment rates above 20 percent.

Thomas Sowell, Intellectuals and Society, pp.450-451

Intellectuals give people who have the handicap of poverty the further handicap of a sense of victimhood. They have encouraged the poor to believe that their poverty is caused by the rich — a message which may be a passing annoyance to the rich but a lasting handicap to the poor, who may see less need to make fundamental changes in their own lives that could lift themselves up, instead of focusing their efforts on dragging others down.

Thomas Sowell, Intellectuals and Society, p.544

Supply and demand ===> lower energy prices

This is one of the feel-good stories of the decade.  Increasing domestic energy production by over 50% the last few years has saved hundreds of billions on energy costs, provided countless jobs and increased tax revenues, increased our independence as a country and stuck it to our enemies.  Enjoy the benefits of supply and demand!  Via The True Reason Gas Prices are Falling (Hint: It’s Not Because of Green Energy).

At present levels, these lower oil and gas prices are the equivalent of a $200 billion cost saving to American consumers and businesses. That’s $200 billion a year we don’t have to send to Saudi Arabia, Kuwait and other foreign nations. Now that’s an economic stimulus par excellence.

There are many global reasons why gas prices are falling, but the major one isn’t being widely reported. America has become in the last several years an energy-producing powerhouse.  And sorry, Mr. President, I’m not talking about the niche “green energy” sources you are so weirdly fixated with.

Oil prices are falling because of changes in world supply and world demand. Demand has slowed because Europe is an economic wreck. But since 2008 the U.S. has increased our domestic supply by a gigantic 50 percent. This is a result of the astounding shale oil and gas revolution made possible by made-in-America technologies like hydraulic fracturing and horizontal drilling.  Already thanks to these inventions, the U.S. has become the number one producer of natural gas. But oil production in states like Oklahoma, Texas and North Dakota has doubled in just six years.

Without this energy blitz, the U.S. economy would barely have recovered from the recession of 2008-09. From the beginning of 2008 through the end of 2013 the oil and gas extraction industry created more than 100,000 jobs while the overall job market shrank by 970,000.

When the radical greens carry around signs saying “No to Fracking,” they couldn’t be promoting a more anti-America message. It would be like Nebraska not growing corn.

We are just skimming the surface of our super-abundant oil and gas resources.  New fields have been discovered in Texas and North Dakota that could contain hundreds of years of shale oil and gas supplies.

Here’s another reason to love the oil and gas bonanza in America. It’s breaking the back of OPEC.  Saudi Arabia is deluging the world with oil right now, which is driving the world price relentlessly lower. The Arabs understand–as too few in Washington do–that shale energy boom is no short term fad. It could make energy cheaper for decades to come.  As American drillers get better at perfecting the technologies of cracking through shale rock to get to the near infinite treasure chest supplies of energy locked inside, we will soon overtake Saudi Arabia as the dominant player in world energy markets.

 

Leftist “Christian” logic: If people give less, it is OK to take it from them by force

From the “I am not making this up category,” a Leftist false teacher insists that if people give less than before then the Christian thing to do is to take it from them at a point of a gun.  Via The Richest Cut Giving:

During the Great Recession the poorest Americans increased their charitable giving 17%.  Much of that money went to relgious group providing faith based social services.  The wealthiest Americans?  They cut their giving by 4.6%.  Unlike their wealthy fellow citizens, middle income Americans joined those with lower incomes in giving away more.

He forgot to mention that the top 17 states who gave more voted for Romney.

. . . Many wealthy Americans clearly understand that great economic disparity is not good morally or economically.

Keep in mind that the guy preaching about morality is a pro-abortion extremist.

Yet the majority of the wealthiest Americans are forgetting that it is better to give then to receive.

Jesus said it was better to give than receive, and of course He was right.  But did Jesus say it counted as giving your part if you beg Caesar to confiscate the wealth of others?

Billionaires like the Koch brothers give hundreds of millions to candidates who promise to further cut taxes on the rich.

Like other wolves in sheep’s clothing, he has the Democrat talking points down.  That’s a good little tool!  No mention of George Soros et al.

For people of faith, called to create just systems, it is imperative that we continue the work of building up the common good of this nation and the world.

Again, this is a pro-abortion extremist talking about the “just systems” and “the common good.”

That work must include raising taxes on the weathiest 1% so that we can create living wage jobs, improve public education, further improve health care, and do everything possible to make sure that every child born today has opportunities to thrive well into the future.

That is, for those who aren’t crushed and dismembered in the womb with this wolf’s blessing.  Those children would thrive farther into the future if you didn’t do this.

And on what planet does raising taxes create any jobs, let alone “living wage” jobs?  Capitalism would do that if you would reverse 99% of what the Left has done.

And what does “improve public education” mean?  Spending tax dollars on things like this won’t help — Educrats Attempt to Impose Polysexual Androgyny on Innocent Schoolchildren.

As usual, Leftists fail at basic economics. And Leftist false teachers fail the worst of all.

My dog did better on Economics tests than those on the Left

Note: The message here is more important than the title indicates.

I am not making this up: My dog once submitted a college test in Economics and passed.

OK, there is a little more to the story.

When my youngest daughter home-schooled her last two years of high school, the dogs would hang out with her all day.  Once when she was in the middle of an online Economics test he jumped on the bed, landed on the keyboard and submitted the partially completed test.  And he passed!  Fortunately, the folks at the school were good sports about the high-tech version of “the dog really ate my homework” story and re-opened the system so the that real student could complete the test (she got her usual 99 or so, as I recall).

But I offer that as a segue to remind people of an extremely important fact about basic economic principles, namely that those on the Left literally fail at them.  They aren’t just a little worse than Conservatives, they fail horribly and it drives their ideology.  The details are here, but note the results of a simple eight question Economics test given to those across the political spectrum:

Letter grade
Very Conservative 84% B
Libertarian 83% B
Conservative 79% C+
My dog 72% C
Moderate 54% F
Liberal 41% F
Progressive/very Liberal 34% F

Got that?  Progressives / very Liberal people only get a third of the questions right.  They could double their scores and still only get a D.  But the more conservative people are the better they do, with very Conservative people achieving a solid B.

Here’s an example of one of the questions:

Consider one of the economic propositions in the December 2008 poll: “Restrictions on housing development make housing less affordable.” People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure.

Basic economics acknowledges that whatever redeeming features a restriction may have, it increases the cost of production and exchange, making goods and services less affordable. There may be exceptions to the general case, but they would be atypical.

In this case, percentage of conservatives answering incorrectly was 22.3%, very conservatives 17.6% and libertarians 15.7%. But the percentage of progressive/very liberals answering incorrectly was 67.6% and liberals 60.1%. The pattern was not an anomaly.

Do not let the handsome canine below cause you to miss the key takeaways:

  • Understanding these basic economics concepts is crucial to leading properly. Therefore, Leftists should not be in charge of government.  Or economics.  Or much of anything else.  If you can’t get the basic building blocks of society right then all you will do is create more problems.
  • As the good folks at Freaknomics will tell you, Economics isn’t just about seemingly arcane financial metrics.  It is about behavior and incentives.  If you don’t understand how the basics of human nature work then your worldview is doomed to poor decision making.
  • The Law of Unintended Consequences will bite you far worse than my dog ever would (Italian Greyhounds are amazingly friendly) but the truth is that most consequences of Leftist policies are easy to anticipate.  The “War on Poverty” is a perfect example.  It wasn’t just a colossal flop, it was a completely predictable colossal flop.  It has deeply harmed tens of millions of people. We need to undo it as quickly as possible.
  • This issue carries over to religion as well.  It is no surprise that Leftist Christian groups do much more harm than good.  False teachers don’t understand economics any better than they do the Bible.
  • All schools should host Junior Achievement classes.  These are proven to increase graduation rates and they teach critical life skills about budgeting, economics and more.  I taught them for 12 years and was continually impressed with their program.  You don’t need a PhD in Economics to understand the most important concepts.  Give me 30 minutes with a bunch of 7th graders and I will have them more fluent in basic economic principles like supply and demand than Congressional Democrats are.  And that isn’t an exaggeration.

The way people understand basic economic principles has an enormous influence on how well they will govern.  You should vote accordingly.  And if you love God and neighbor you won’t ignore how He wired the world.

——–

Economist Dog (TM), the hero of this story, could not be reached for comment.  He was on a conference call discussing how the demand for dog food is completely inelastic.   Also, he died last year.  We miss this special little guy!  He and his mate (pictured below) brought us countless blessings and good times and we thank God for that.

bluetooth dog

He also understood intellectual property rights and helped us earn a few $$ when this picture was used on a t-shirt sold by a large retailer.  But mostly he just chased squirrels and then sat on my lap and slept.  Backup Dog (TM) was equally loved but not quite as active.dogs

She was as cerebral as she looks here.

Back Camera

A great send-up of crony capitalism

This is a big part of what is wrong with politics.  The sad part is that those on the Left will think it only applies to those on the right.  But crony capitalists gladly pay off both sides to get what they want. The politicians and crony capitalists take our money and share it.  That’s it.

Fact: More government = more crony capitalism.  If you look to the government for all your solutions and want to give it more power, you are part of the problem.

pearls

 

 

We cut the cable! Woo-hoo!

We finally did it:  We dropped cable TV and our land line phone, saving lots of money and not really giving anything up.  The only people who ever called the land line were solicitors and our parents, so we switched to mobile only.

We added HD antennas, so we still get the channels we want (we watch very, very little TV).  And we got a pleasant surprise: Our TIVO will record off the antenna.

We also bought Rokus.  Mrs. Eternity Matters found a few things she likes on the Roku, such as a Pilates channel, music channels, access to the Sirius account, and more.  And Netflix and Amazon streaming are way faster on the Roku than on TIVO.

I must say it was a lot of fun to return the TV hardware to Comcast.  We are keeping our Internet service with them.  I got a good deal for this year at least — a little less than U-verse for theoretically higher speeds, plus we don’t have to change email addresses.

Unlike Rat, I don’t care if I don’t have ESPN.
pearls cable

 

 

 

Timeless retirement investing advice: Use index funds and don’t get greedy

This is so simple but so important.  Trying to out-guess the stock market experts is for suckers.  I learned early in my career that even with loads of internal information that you still can’t predict what the market will do.  I never traded on it, of course, but there times when Compaq would release record earnings but the stock would go down because of some comments about future performance.

Just invest in broad index funds (mutual funds that mimic the overall market).  There is no need to chase stock tips or highly managed mutual funds.  The only exception would be if your employer sold you stock at a discount, which would mitigate the risk.  Just don’t be foolish like a lot of Enron employees were and put most or all of your retirement money in one company.  I knew way too many people at Compaq and HP who tried to time peaks and missed out.

As noted below, keep in mind the simple math: Index funds with minimal fees will yield 7%.  Managed funds will be more like 5%.  So you are 2 points behind, right?  No, it is much worse.  If inflation is 3%, then your net gain with index funds is 4%.  That’s double what you’d get with managed funds.

Via AAII: The American Association of Individual Investors.

Charles Rotblut CR: Since you founded Vanguard, would you explain why you think investors should use index funds?

John Bogle JB: Let’s start off with the obvious. Imagine a circle representing 100% of the U.S. stock market, with each stock in there by its market weight. Then take out 30% of that circle. Those stocks are owned by people who index directly through index funds. The remaining 70% are owned by people who index collectively. By definition, they own the exact same portfolio as the indexers do in aggregate, so they will capture the same gross return as the direct indexers. But by trading back and forth, trying to beat one another, they will inevitably lose by the amount of their transaction costs, the amount of the advisory fees they pay, and the amount of all those mutual fund management costs they incur: marketing costs, processing, technology investments, everything. When we look at the big picture of the costs of investing, including sales loads as well as expense ratios and cash drag, it is a foregone conclusion that active investors, in aggregate, will underperform index investors. It’s the mathematics.Borrowing a phrase from Louis Brandeis: It’s the relentless rules of humble arithmetic. The 30% of investors who own index funds capture almost all of the market’s return. In a 7% return market, indexing should deliver approximately 6.95% to investors. A typical Vanguard all-market index fund charges 0.05%. The remainder—those who are trading back and forth, hiring managers, and all that kind of thing—will incur costs, in round numbers, of about 2% per year. So, the indexers are going to capture pretty close to a 7% return in a 7% market, while the active investors, who also collectively own the index, are getting the same 7% gross return minus about 2% for all those fees and costs, a net return of 5%. It is definitional tautology that the indexers win and the traders lose.

I highly recommend Vanguard for their mutual funds.  They are very easy to do business with and have extremely low fees.