Ben Bernanke presided over the Federal Reserve for two terms, from 2006 through 2014. A year and half into his first term, he began driving the Federal Funds Rate down. By the end of his frantic interest episode, this key overnight lending benchmark had been crushed. It hit bottom, and it hasn’t sprung back in […]
Have you ever been in an argument about whether we should raise taxes and then someone tosses out a real whopper? “The top tax rate for decades after World War II was over 90% and look how the economy boomed!” Or perhaps you read a Paul Krugman column where he said that, “there’s a big […]
The battle over minimum wage is raging. Emotions are running hot. Some cities are setting the bar very high. For example, Seattle is mandating a $15/hour wage. Economically, the issue is very simple. Minimum wage laws do not raise anyone’s wage. This is because it’s not sustainable to overpay. Suppose you run a small tailor […]
The politics of the minimum wage are simple. No congressman or president owes his office to the poorly educated black and Latino youth vote.
Justice demands that people are compensated on the basis of performance, not on the basis of their need or of the egalitarian ideal dominant in today’s culture.
Labor unions have been supporters of minimum wage laws in countries around the world, since these laws price non-union workers out of jobs.
Countries with minimum wage laws almost invariably have higher rates of unemployment than countries without minimum wage laws.
The fundamental issue is not wage rates, but productivity. If a worker desires a higher wage, he must produce more in a given period of time.
Those who benefit from government coercion seldom like it when the gun is turned around and pointed at them. They have no hesitation to demand that government use compulsion for their benefit, but complain when compulsion is directed at them. As an example, mobile-home owners in Chula Vista, California, have long benefited from a city […]
The first fundamental law of demand postulates that the lower the price of something, the more will be demanded, and the higher the price, the less will be demanded. To my knowledge, there are no known exceptions to the law of demand. That was until last fall when 650 economists, including several Nobel Laureates, signed […]
The Democrats who now control Congress want to change President Bush’s Medicare drug benefit to require government officials to negotiate drug prices with the pharmaceutical companies. Under the current program, competing insurance companies cut the deals and offer coverage to the retired and disabled. Yet another lesson in the well-established principle: Government intervention begets more […]
To the extent that the government simply “caps” premiums it will result in no insurance at all as it makes for an unprofitable bet for any insurance company.
There are decent people, without a selfish hidden agenda, who support increases in minimum wages as a means to help low-skilled workers, and there are other decent people, with the identical goal, who strongly oppose increases in the minimum wage. So the question is: How can people who share the same goals, helping low-skilled workers, […]
It was a common political move when Chicago’s city council voted recently to impose a $10 an hour minimum wage on big-box retailers. There is nothing that politicians like better than handing out benefits to be paid for by someone else. What was uncommon was the reaction. Chicago’s Mayor Richard M. Daley denounced the bill […]
About a fortnight ago, Mrs. Williams alerted me to an episode of Oprah Winfrey’s show titled “Inside the Lives of People Living on Minimum Wage.” After a few minutes of watching, I turned it off, not because of the heartrending tales but because most of what was being said was dead wrong. Let’s look at […]
With all the recent hype and demagoguery about gasoline price-gouging, maybe it’s time to talk about the basics of exchange. First, what is exchange? Exchange occurs when an owner transfers property rights or title to that which is his. Here’s the essence of what transpires when I purchase a gallon of gasoline. In effect, I […]
I first became aware of the law of gravity as a small child when I pedalled by tricycle off the porch and crashed into the yard. Gravity was of course operating all along, whether I was aware of it or not. Economics is a lot like that. Many people who are completely unaware of economics […]
Senators Edward Kennedy, D-Mass., and Rick Santorum, R-Pa., both introduced proposals to increase the minimum wage from its current $5.15 an hour. Sen. Kennedy’s proposal would have raised the minimum wage to $7.25 in three steps over 26 months, while Sen. Santorum’s would have raised it to $6.25 in two steps over 18 months. Two […]