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Economics

March 23, 2015

Two views on wage stagnation

The Liberal story: Lawrence Mishel, president of the Economic Policy Institute and co-chairman of Americans for Tax Fairness, "Even Better Than a Tax Cut".

The much more accurate story: Benjamin Domenech, publisher of the Federalist, "The Truth About ‘Wage Stagnation’".

For conservatives, this should suggest an opening. But it is also an indication that the pro-growth policy path is not necessarily the old-school supply-side path of individual tax-rate cuts. Instead, the real path toward the kind of growth that will benefit American workers ought to focus more on regulatory and general government reform. The economic problem the nation faces today is an economy increasingly warped by government.

"The Economics of the California Water Shortage"

Alex Tabarrok explains the problem in a single sentence: "California has plenty of water…just not enough to satisfy every possible use of water that people can imagine when the price is close to zero."

See also Victor Davis Hanson's cri de coeur, "The Scorching of California: How Green extremists made a bad drought worse". (Link courtesy of Jorod.)

Related: "19 Reasons California’s Drought Isn’t A Big Deal". (Irony alert.)

Also related: "No, California won't run out of water in a year". (Non-ironic.)

"The Main Challenge Facing the Middle Class"

Robert Samuelson:

What this history teaches is that we have less control over our economic destiny than is often assumed. At every juncture in the chronology, people - including "experts" - did not foresee the next major change. In the early 1960s, they didn't anticipate high inflation; in the late 1970s, they didn't expect its demise. In this respect, the surprise 2008-2009 financial crisis was typical.

The same ignorance inhibits what we can do for the middle class. Government - a.k.a., politicians - can address some middle-class wants by redistributing income from the rich through tax breaks and subsidies. But this approach has limits and not merely because the rich will resist.

"A federal agency’s laundromat worker belongs to the 1 percent"

The title seems to be wrong. But some of the substance of the article remains.

Laundry operations services worker Joseph Bryant topped the list for 2010 through 2013 (the data’s available from 2010 to 2014), pulling in $115,443 from the Veterans Health Administration in Los Angeles in 2013.  But Bryant isn’t alone as a federal employee laundering his way into the upper middle class.   Across a variety of agencies and locations, and multiple job titles, cleaning fabrics can produce above-average income across the country.

March 18, 2015

"Have Americans Officially Given Up on Washington?"

"Poll results reveal an overwhelming preference for stronger local leadership, and less federal input."

See also "Poll: Americans understand federal government is worthless, prefer local and state."

A small amusement: the next time a Liberal asserts that we absolutely must have the federal government do X, Y, or Z, reply that suppose, for the sake of argument, the government does need to do X, Y, or Z, but why must it be the federal government? The answer is almost guaranteed to be good for laughs.

 

March 17, 2015

"Detroit Is Dying Because GM Stuck Around, New York City Booms Because Nabisco Did Not"

John Tammy:

When depressed U.S. cities are talked about in the media, the explanation for their decrepitude is nearly always described through the prism of a departed industry, a natural disaster, or overseas competition.  Pittsburgh is allegedly a shadow of its former self because the steel industry is no longer vibrant,  Galveston, TX supposedly never recovered from a hurricane back in 1900, Flint, MI and Detroit are depopulated because the U.S. car industry has been eclipsed by more efficient global producers, and then Selma, Alabama’s limp economy was recently reported in the New York Times as a function of still-healing scars from the 1960s Civil Rights struggles.

The problem with the diagnoses offered up is that they don’t measure up to the most basic of logical and observable realities.  Particularly the industry explanations for a city’s demise.  Indeed, the departure or decline of already established forms of work would far more likely signal an economic renaissance whereby the economy of a city evolves with the times, with abundant wealth the result.

Mr. Tammy's forthcoming book get a nice review here.

Finally, an elegantly rendered book that makes the dismal science engaging, with real-world examples from Hollywood, rock ‘n roll, and sports, including actor Ben Affleck,  the Rolling Stones’ Keith Richards, and the Dallas Cowboys. Real life stories of people struggling with the real life consequences of government officials who too often view the economy in the abstract.

"'Everybody is reading' a paper about how the world is now at the mercy of the US Federal Reserve"

By Ambrose Evans-Pritchard who, if memory serves, is too excitable and pessimistic. People who are more versed than I am in the intricacies of international finance are especially welcome to comment. 

March 16, 2015

"Explaining the 1990s economic boom — before Hillary does"

Lord, don't let the Clintons take credit for that.

March 15, 2015

"Seattle’s new minimum wage law takes effect April 1 but is already leading to restaurant closings and job losses"

Surprise, surprise. With this great line I hadn't heard before:

. . . liberals have hearts that bleed so profusely that it often prevents oxygen from getting to their brains and results in extreme lightheadedness, and cloudy and defective decision-making.

March 09, 2015

Five on the Federal budget

It is way past time for this crap to stop.

. . . President Obama will unveil his proposed federal budget for 2016. Voters should be warned that virtually all the numbers reported in news coverage of the federal budget will be misleading at best.

That’s because the budget reporting will be written primarily in the language of official Washington rather than the language of everyday Americans. In Washington, if government spending goes up less than expected, the politicians have declared it to be a “cut.” Normal people don’t consider something a spending cut unless spending actually goes down. 

Congress even passed a law in 1974 to make this abuse of the English language official. 

And this:

The president’s budget envisions a $253 billion spending increase in 2015 and another $240 billion hike next year. In fact, federal spending is poised to grow more than $200 billion annually every single year for the next decade.

Most Americans, however, would probably be surprised to learn that these hikes have little to do with the president’s expensive new dreams or the recklessness of Congress.

In fact, just about all the spending increases comes from a handful of established programs: a $53 billion increase in Medicare, $47 billion more spending for Social Security, a $37 billion hike for National Defense and $18 billion more for Medicaid.

Oh, and then there’s interest on the federal debt. That’s projected to go up $54 billion next year.

Add it all up and that accounts for $209 billion of the $240 billion in spending hikes for 2016.

Some ideas for fixes: "106 Radical Ways to Slash and Burn the Federal Budget".

But be real darn careful with cutting the defense budget: "The Navy’s Hidden Crisis: It’s too small—and getting smaller".

And don't think you can get the revenue to make a big dent in our problem from the "upper middle class": "Upper-Middle-Class Americans Are the New Kulaks"

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