Voice For Liberty

Tag: Economics

  • Kansas minimum wage: wrong questions

    A recent letter in the Wichita Eagle asks these questions: “Who would work for $2.65 an hour? State legislators don’t get paid much, that is true. But would they work for $2.65 an hour? Would they send their sons or daughters to a job that paid that little?”

    These questions are intended to stir up sympathy for low-wage workers in Kansas. It is, indeed, not a good situation when someone has such low productivity that they can’t command a very high wage.

    But passing a law can’t fix that.

    A related comment left on this blog asks these questions that help answer those above: “What do business owners do when their costs go up? They pass the increase along to consumers.”

    This is not necessarily true, however. If business owners felt they could increase their prices, they would do so now, and earn greater profits. Generally, when prices are increased, sales go down. Demand for labor may decrease, too, and that’s a big problem for workers.

    The writer claims that the 20,000 Kansans presently working for the Kansas minimum wage will have their lot improved if Kansas raises its minimum wage. That will be true for those who keep their jobs. Undoubtedly some, perhaps many, will lose their jobs. It would be a miracle if that didn’t happen.

    The writer also asks “Why not let the poor have more money?”

    This is a wrong question again. I don’t think anyone is against “letting” people have money. But for sustainability, wages have to be earned.

    I’m sure this writer is genuine in his concern for law-wage workers in Kansas. Fixing this problem, however, requires steps that are harder to take than simply passing a law.

    One way to increase workers’ productivity is through education. Unfortunately, there is ample evidence that our public education system is failing badly. Even President Obama said so last week, although his prescriptions for fixing schools don’t go far enough.

    Capital may be a dirty word to some. But as the economist Walter E. Williams asks, what is the answer this question: who earns the higher wage: a man digging a ditch with a shovel, or a man digging a ditch using a power backhoe? The difference is that the man with the backhoe is more productive — and earns more, too. That productivity is provided by capital — the savings that someone accumulated and invested in a piece of equipment. That increases the output of workers and our economy. Workers can be paid more.

    Education and capital accumulation are the two best ways to increase the productivity and the wages of workers. Ironically, the people who are most vocal about raising wages through legislative action are also usually opposed to meaningful education reform and school choice. They usually insist that more resources be poured into the present system. They also usually support higher taxes on both individuals and business, which makes it harder to accumulate capital. These organizations should examine the effects of the policies they promote, as they are not in alignment with their stated goals.

  • Stimulus, the Audacity of Dopes

    Stimulus, the audacity of dopes, Wichita tea party protest

    This is one of my favorite signs from the Wichita Tea Party Protest held on February 27, 2009. Cheryl Green is the creator of the sign; I am merely the photographer.

  • We need to not only remember, but to understand the past

    Charles Koch, Chairman and CEO of Koch Industries, Inc., wrote an article in a recent company newsletter that explains the similarities between today and the early 1930s, and how our present government leaders aren’t following the lessons we should have learned. The article may be read by clicking on Perspective.

    One of the myths surrounding the Great Depression is that Hoover did nothing to intervene. It was Roosevelt who swept in, and through massive intervention, ended the depression. Koch dispels that myth: “Hoover launched the most interventionist economic program in U.S. history. Hoover supported record income tax hikes and devastating import tariffs. He also initiated an explosion in government power by creating massive new programs. Far from helping, these programs created a destructive uncertainty that discouraged investment and entrepreneurship and contributed to the decline.”

    Koch documents Roosevelt’s massive expansion of government power, regulation, executive orders, and intervention, which didn’t help.

    What about the responses our government is making today? It’s making the same mistakes, Koch says. Expansionist monetary policy, bailouts, takeovers, make-work programs, expanding government agencies and regulation — this reliance on government to fix things is not likely to work.

    Then, as now, free markets were blamed for our problems, which means that we may not rely on what can get us out of trouble: “It is markets, not government, that can provide the strongest engine for growth, lifting us out of these troubling times. If we are foolish enough to ignore some of the most painful lessons of history, then we will almost certainly make the same mistakes on a devastating scale.”

  • Articles of Interest

    Us v. Them: The People and the Political Class (Jack McHugh, Mackinac Center for Public Policy). “The fundamental problem facing our nation is that true representative government has been supplanted by an inbred, self-serving, self-perpetuating political class that does not represent the people. As a result, the government has escaped the control of the people.” McHugh explains how resistance to term limits, campaign finance regulations, public employees and their unions, even the political parties, work against the interests of the people.

    When Change Is Really More Of The Same (Howie Rich of Americans For Limited Government). “No more lobbyists dictating terms. No more bitter partisanship. No more wasteful earmarks.” Can President Obama deliver on the promised change? “Not hardly” says the author.

    What Are the Odds of a Depression? International evidence suggests there is a 20% chance our stock-market crash will lead to much worse. (Robert J. Barro, Wall Street Journal) It’s a grim picture: “The bottom line is that there is ample reason to worry about slipping into a depression. There is a roughly one-in-five chance that U.S. GDP and consumption will fall by 10% or more, something not seen since the early 1930s.”

    Sweden’s Government Health Care (Walter E. Williams). What about health care in Sweden, a country often described as a place where socialism works? “Malmo, with its 280,000 residents, is Sweden’s third-largest city. To see a physician, a patient must go to one of two local clinics before they can see a specialist. The clinics have security guards to keep patients from getting unruly as they wait hours to see a doctor. The guards also prevents new patients from entering the clinic when the waiting room is considered full. Uppsala, a city with 200,000 people, has only one specialist in mammography. Sweden’s National Cancer Foundation reports that in a few years most Swedish women will not have access to mammography. … I wonder how many Americans would like a system that would, as in the case of Mr. D. of Gothenburg, prohibit private purchase of your own medicine if the government refused paying.” Further information is at Sweden’s Single-Payer Health System Provides a Warning to Other Nations and Mammography at risk in Sweden, says Cancerfonden.

  • Articles of Interest

    Budget woes linked to how justices are chosen (Kris W. Kobach in the Wichita Eagle). Explains how with a better method of selecting Kansas state Supreme Court justices, the Kansas budget might not be in such a mess. “The Montoy decision represented a court determined to advance judicial power and the liberal policy of limitless spending on education. Which brings us back to the current fiscal crisis. The reckless decision of the court in Montoy is taking its toll. Kansas’ current budget crisis is largely due to the extraordinary increases in spending ordered by the court.”

    Pitchfork Time (Human Events). “We are there” says Pat Buchanan about our journey down the road to socialism. The article explains.

    The Public Mischief Of Public Unions (Richard A. Epstein at Forbes). Explains the need for pension reform in the public sector. Tim Carpenter of the Topeka Capital-Journal explains the problems as they relate to KPERS, the Kansas Public Employees Retirement System in the article KPERS problems compound: Stock market, past decisions strain retirement system. “The economic recession and a legacy of costly mistakes leave KPERS with more than $6 billion in unfunded obligations to future retirees. Current contributions by employers and employees are insufficient to sustain the fund over the long haul.”

    Will Obama Stand Up for These Kids? (William McGurn, Wall Street Journal). Illinois Senator Dick Durbin has introduced legislation that will kill the Washington D.C. Opportunity Scholarship program. This piece highlights two children who attend the same exclusive private school that the Obama children do, thanks to this program. “And it points to perhaps the most odious of double standards in American life today: the way some of our loudest champions of public education vote to keep other people’s children — mostly inner-city blacks and Latinos — trapped in schools where they’d never let their own kids set foot. This double standard is largely unchallenged by either the teachers’ unions or the press corps. For the teachers’ unions, it’s a fairly cold-blooded calculation. They’re willing to look the other way at lawmakers who chose private or parochial schools for their own kids — so long as these lawmakers vote in ways that keep the union grip on the public schools intact and an escape hatch like vouchers bolted.”

  • Articles of Interest

    Obama’s budget, Citigroup rescue, Twitter, climate change, lobbying.

    The Era of Even Bigger Government: There is very little to be happy about in Obama’s first budget (Veronique de Rugy at Reason) Does the Obama budget work? According to this author, some of the accounting tricks used in the past are gone, but dissembling remains: “To cut the size of the federal government, one actually has to, you know, cut programs. While Obama’s overall numbers do show a spending decrease between 2009 and 2010, he actually increases many categories of spending, which remains far above 2008 levels in any case. In fact, his ‘cuts’ are basically the results of 2009 bailout payments not being extended into 2010. The bottom line is that there is very little to be happy about in Obama’s first budget. It simply expands the Bush policies of bigger government and increased centralization, which threatens to permanently transform America’s culture and economic outlook by making more and more Americans dependent on government.”

    Latest Citigroup Rescue May Not Be Its Last (New York Times) “The big question, of course, is this: Will this plan, the third since October, be the one that finally works? Will it shore up this $2 trillion behemoth? Or is the outcome that the banks and the government are so desperately trying to avoid — nationalization, under whatever guise — only a matter of time? Wall Street’s judgment was swift and brutal. Citigroup’s share price, which a little over two years ago was flying high at $55, plunged 96 cents to a mere $1.50.”

    What Are You Doing? Media Twitterers Can’t Stop Typing (New York Times) A look at the popular service Twitter and how some news media personalities use it.

    The Doomsday Bias. American Spectator article describing testimony of Dr. John P. Holdren, nominated for chief White House Science Advisor. “Holdren’s particular brand of science is infected by what we can only call a doomsday bias.”

    Liberal Groups Are Flexing New Muscle in Lobby Wars (New York Times) Just a short few years ago, Democrats were railing against the lobbying efforts of Republicans. But now: “When Newt Gingrich’s Congress was moving full-speed in its efforts to shrink the government more than a dozen years ago, Ralph G. Neas, an indefatigable champion of liberal causes, threw up his hands and declared that his side had been outmaneuvered. … Recent days have found Mr. Neas in a new perch … this time, he is supported by his own phalanx of big business backers, including the Exelon power company and Giant food stores.” It’s a mistake to assume that business is against bigger government and in favor of free markets. As Milton Friedman said: “Naturally, existing businesses generally prefer to keep out competitors in other ways. That is why the business community, despite its rhetoric, has so often been a major enemy of truly free enterprise.”

    What is Seen and What is Unseen: Government “Job Creation” (Foundation for Economic Education). A nice explanation of unseen consequences of government action and how this concept applied during the New Deal. “Barack Obama and his advisers should take a lesson from history: the New Deal and its public-works projects were a disaster, and it would be remiss to think they should be given another try. As Bastiat explained, government doesn’t create wealth; it only diverts it. When wealth is in the hands of the government it inevitably tends to serve political ends rather than consumers. FDR’s New Deal policies are a testament to that, and if they are repeated in response to our current economic crisis, it will only hinder the recovery.”

  • Articles of Interest

    Subsidizing Bad Ideas What are some of the things wrong with the president’s plan to solve the mortgage crisis? Howie Rich of Americans For Limited Government explains: “First, the plan is emblematic of America’s new “dependence mentality,” which is advanced by politicians like Obama who rhetorically extol the virtues that once made this country great while they systematically remove brick-by-brick the incentives needed to make it great once again. Second, it’s more of the same smoke-and-mirrors Washington politicians employ to hide the true coming-and-goings of your tax dollars in our nation’s capital. Third, it rewards many of the same financial institutions whose mistakes have helped bring this nation to the brink of fiscal ruin – and incentivizes them to make those same mistakes all over again.”

    Judging Obama John Stossel explains some of the problems in judging the success of failure of President Obama’s economic interventions, and who should get the credit or blame.

    Obama Gives Failing Schools a Pass: The day of reckoning has arrived — except for teachers’ unions (Chester E. Finn Jr. & Michael J. Petrilli in National Review). “This is classic Obama, straddling the Democratic divide on education, just as he did so deftly during the campaign, striving to placate both the reformers within the party and the union bosses. … It’s no accident that our schools aren’t producing enough well-educated graduates; that’s because the system has been designed to place the needs of adults over the needs of kids. But saying any of that would put him at odds with the education establishment, which he doesn’t appear to want to cross.” More indication that President Obama will not implement any meaningful education reform.

    Zoomdweebie’s builds success on Twitter (Wichita Eagle). A Wichita business uses social media like Twitter to boost business.

    The Government’s War on Recession. Lew Rockwell explains some of the problems and dangers with the way the Obama administration is attacking the problems with the economy: “The economics of stimulus are not as complicated. They amount to taking from some and giving to others. There is no wealth creation at all. There is no magic ‘multiplier’ to turn stones into bread. The economics of stimulus is value-destroying, because property is pried loose from owners who are putting it to socially useful purposes, and given to government so it can pass it out to friends. This process is costly to overall wealth production — and most of those costs are unseen. We will never know what kind of real stimulus could have taken place had the property been left in private hands. What jobs might have been created, what investments might have been made, what kind of business expansions might have taken place? We will never know.”

  • Wichita Tea Party, from AFP

    Here’s a message from Americans For Prosperity’s Kansas state director Derrick Sontag about the Wichita Tea Party this Friday.

    It started with people like you, logging on and signing our petition at NoStimulus.com, and now we have a full-blown grassroots movement on our hands.

    One such activist, Nancy Armstrong, supported Hillary Clinton in the 2008 primary and even went on the road, campaigning for the former New York Senator. But while on the campaign trail, Nancy learned more than she anticipated about the Obama campaign. Now she’s joining the fight against the massive deficit spending bill by organizing the Wichita Tea Party, part of the nationwide grassroots movement that’s spreading like wildfire from coast to coast.

    Join Nancy at a rally this Friday outside Senator Sam Brownback’s Wichita office:

    Wichita Tea Party
    11:30 a.m., Friday, Feb. 27
    Senator Sam Brownback’s Office ( Farm Credit Bank Building, 245 N. Waco, Wichita)

    Let’s help support this cause tomorrow — bring your homemade signs and show your appreciation to Sen. Brownback for opposing this federal bailout bill, and your frustration for this bloated spending bill.

    This stimulus package is not only detrimental to our national economy, but it has immediate implications right here in Kansas. Our state faces a $1 billion budget shortfall, and we need budget reform — now. This federal bailout bill for the states will be too much of a temptation for our legislators, who may see this as a way to avoid making those tough budget decisions that come with real and meaningful budget reform.

  • Area Residents Plan Wichita Tea Party

    Grassroots movement sweeps into Wichita with anti-stimulus rally

    WICHITA — Grassroots activists in Wichita will rally outside Sen. Sam Brownback’s office on Friday, to show their appreciation to the senator for opposing the federal stimulus bill, and to demonstrate their frustration with big government spending.

    Nancy Armstrong, Garden Plain, organized the rally at 11:30 a.m. Friday, Feb. 27 outside Sen. Sam Brownback’s office (245 N. Waco, Wichita).

    Sen. Brownback voted against the federal bailout bill. Armstrong said Friday’s rally is intended to thank the Senator for standing in opposition to this bill, but also to let everyday Kansans vent their frustration with the current spending in Congress.

    Armstrong previously worked for the 2008 presidential campaign for Hillary Clinton, but has since devoted her efforts to opposing the big-government, liberal schemes put forth by Congress and the Obama Administration.

    “The powers in Washington are out of touch with the American people,” said Armstrong. “But Americans taxpayers are not going to take all of this spending lying down.

    “We’ll keep reminding our elected officials that we’re not happy with this ‘porkulus’ bill, and we’ll certainly remember this in the 2010 elections.”

    The Wichita Tea Party will be held simultaneously with local tea parties nationwide as part of a growing nationwide movement allowing everyday citizens to voice their opposition to the federal stimulus package.

    For more information, contact Nancy Armstrong at 316-990-6009 or renaissancelady46@yahoo.com.