Category Archives: Economics

Should Americans Be Poorer?

Kevin Williamson takes on an idiot academic:

Labor is a resource, and American labor a particularly valuable one. Sensible people want Americans to work for the same reason that we want to make use of our natural gas and to irrigate California farmland: We want the country to be richer rather than poorer.

This sort of thing is utterly lost on Professor Hunnicutt, who produces from his pocket a particularly stale chestnut regarding Henry Ford, that he believed that paying higher wages was essential to “assuring adequate consumer demand.” I have often heard it said that Henry Ford was a genius for “paying his workers enough to afford his cars.” I very much doubt that Henry Ford believed any such thing, but perhaps he did; he believed a lot of crazy things. The actual history of Ford very strongly suggests that the firm paid market wages, higher than those paid by some similar firms largely because the company had difficulty keeping employees, who were quickly burnt out on its assembly lines. (Ford would sometimes see personnel turnover equivalent to the company’s entire work force in the course of a few months.) “Paid them enough to buy his cars” is a timeless, deathless myth, but it is economically illiterate on its face: Why doesn’t Ferrari pay its workers enough to buy Ferraris? Rolls-Royce? The belief that one can create a functioning consumer market for one’s own goods by overpaying for labor or any other input is magical thinking. But our academics have a weakness for magical thinking.

The newly organized anti-work faction for the most part is little more than the flashing of partisan gang signs: Obamacare apologists are abject, and there simply is no failing in the program that they will not attempt to defend. That is to be expected.

The real problem is that there are people who apparently actually believe this stuff. They have made an elementary conceptual error: National economies are not household economies. There are times in individuals’ lives when leisure becomes more valuable than the return from an additional hour’s work. We take vacations and retire for a reason. But you cannot put a national economy on vacation, much less retire it. To argue that Americans as a whole should work less is to argue that Americans should be poorer.

Yup. But it’s not like these people have even the most basic understanding of economics. They are stuck in the childishness of Marxism in their attitudes, even if they’ve never read a word of his works.

President Romney’s Lawlessness

The Democrats and the media bash him for it:

Schumer’s colleague, Senator Harry Reid of Nevada, described the Romney administration’s behavior as “the nuclear option.” “This abuse of executive discretion is beyond the pale,” Reid fumed. “I’m a lawyer, I know.” (For more information on the American system of government please take a look at Ezra Klein’s comprehensive explanatory primer, “Our Constitution in Exile: Why Everything President Romney Does Is Illegal,” over at VoxProg. Alternatively, consult Greg Sargent’s excellent Washington Post column, “Article I: A Love Story,” published January 20th, 2013.)

Others went further. “It’s. The. Law,” animated Democratic spokesman Debbie Wasserman-Schultz told reporters at a hastily assembled press conference in Miami, barking out each monosyllable and pounding her fist on her desk. “The terrorist, anarchist, hostage-taking neo-confederates in the Republican Party tried for years to delay this in the legislature and now, simply because they have a Senate they dislike, they are trying to do so with the executive branch. It’s a disgrace to the memory of our Founding Persons and it will not stand.”

Wasserman-Shultz’s claim of impropriety is a strong one, and it echoes Democratic complaints from last June, when President Romney delayed the income tax by two years to allow compliance deadlines to be met and to make sure that he was standing up for the middle class. George Washington University law professor and frequent critic of executive power, Jonathan Turley, broke through tears to tell National Review Online that the development was “merely the latest in an endless series of corruptions, and another devastating step on the road to monarchy.” “D’you know what?” Turley added, his voice cracking. “I’m thinking of moving to Cyprus.”

Despite the criticism, Republican strategists remained sanguine. “What you’re seeing here is the Democratic Party reaping the whirlwind,” a GOP operative explained on condition of anonymity. “This is the train that the last guy set in motion — and he was cheered on by politicians and journalists alike. Can they really complain now our guy has the reins? I think not.”

Those damned Republicans, who don’t give a damn about the law or the Constitution.

The Calorie-Labeling Mess

Another ObamaCare disaster:

The calorie label clause, buried deep within the ACA’s 10,000 pages, seems harmless enough at first glance. Each restaurant chain with over 20 locations is required to display the calorie content of each food and drink item it serves on signs and printed menus–with vending machine distributors subjected to the same rules. But the regulation also covers “similar retail food establishments,” a clause vague enough to give FDA regulators sweeping power to determine who does and doesn’t have to comply.

FDA Commissioner Margaret Hamburg admitted that she “actually thought [calorie labeling] would be one of the more straightforward tasks…but little did I know how complicated it would be.” Hamburg’s concerns are hardly unfounded, but it’s small business owners and franchisees—not FDA bureaucrats—that will feel the most pain under the new law.

What’s particularly stupid is that even if they could make it work without impacting businesses so much, it won’t even do any good, because calories are not what make people obese. All part of the Democrats’ war on science.

The Obama Democrats

Their troubling view on work:

The subsidies that enable some Americans to decide “if they will work” mean higher taxes from those who must or want to work.

Republicans immediately jumped on the finding as proof that the law is a jobs killer and cited earlier discoveries about its destructive impact. These include Obama’s lie that “you can keep your plan” and the fact that many new insurance plans come with higher premiums and ­deductibles and fewer doctors.

Pay more, get less will be the experience for tens of millions by the time the law is fully implemented. And don’t forget its ­assault on religious freedom.

All true and yet, as Carney’s defense showed, something much, much larger is at play. The impacts are symptoms. The disease is that leading Democrats view fewer workers and more dependency as a good thing. That attitude largely explains slow economic growth, record-low labor rates and the explosion of handouts over the last five years.

This anti-job, pro-dependency tilt is the crux of the nation’s polarization. In essence, it pits those who believe in the sanctity of work against those who believe in penalizing wealth and redistributing its fruits.

Not all Democrats agree with that approach, but the party is now controlled by those who do. It is the party that celebrates subsidies and rewards states for getting more people on food stamps. It opens the door wider for disability payments and fights for unemployment benefits like it once fought for jobs. It does these things not because of an emergency but because of a warped ideology.

It’s called Marxism.

Failing Well

…is the American way. Michael Barone reviews Megan McArdle’s new book, which I think has some similar themes to mine.

[Update a couple minutes later]

This bit is interesting:

Her advice is to avoid enterprises that are in long-term decline, such as General Motors starting in the 1970s. In business and public policy, try to learn from well-conducted experiments — but recognize that successful trials can’t always be replicated on a large scale.

I think that also applies to NASA human spaceflight as practiced for the past fifty years.