Rooted in Reason: Nurturing the Seeds of Liberty


Rush Jobs by maliab
September 6, 2011, 7:26 pm
Filed under: Economy | Tags: , , , , , , ,

It’s the jobs, stupid.  At least, that’s what the new call of the politicians (and political advisers) seems to be of late.  Personally, I always find it a bit surreal watching politicians talk about their plans to increase jobs.  As though our economy was powered by hot air and political promises.  Granted, sometimes one of them will stumble upon an economic truth. (Like the fact that the best thing they can do for the job market is remove some of the federal barriers to economic growth–especially the banking regulations and monetary policy that prevent small to  mid-range businesses from growing in this struggling economy.)  But then, likely as not, they’ll just pick themselves up and hurry off as though nothing has happened.

And now, many of us are faced with a conundrum on Thursday night.  Do we tune in to see President Obama unveil his “Jobs Plan”?  Or do we make sure we are properly stocked up on buffalo wings and chips and watch the first game of the NFL season?  It’s true that we are facing a serious unemployment crisis in this country.  On the other hand, it seems unlikely that the President was visited in the night by the ghost of Milton Friedman and saw the error of his big government ways.  And the Saints are playing the Packers, which could not only be a glimpse of the NFC playoffs, but carries major implications for millions of fantasy football rosters.  And I’m not the only one feeling less than enthused about what I secretly fear is the unveiling of yet another giant spending program.   Consider what Dr. Merrill Matthews, Resident Scholar for the Institute for Policy Innovation has to say:

Perhaps the most underreported story last week was the announcement from the Office of Management and Budget that the unemployment rate would likely remain in the 9.0 percent range throughout 2012. And this a week before the president plans to deliver to Congress and the nation a jobs package that is supposed to help create jobs.

So what is OMB telling us? You would think that if the White House and its relevant advisors had been developing a drop-dead jobs-creation package, OMB would have waited until after the speech and then released an analysis saying that unemployment would likely remain in the 9 percent range, but that number could be significantly lower if Congress adopted the president’s jobs plan.

So did the White House not consult with OMB about its jobs proposals? Or, more likely, is it that everyone in the administration knows that there’s nothing new or innovative in the jobs package, and that it likely won’t pass anyway because it costs billions of federal dollars the government doesn’t have?

Either way, the “anticipation factor” for the president’s speech is very low, because no one expects that his proposals—mired as the White House is in Keynesian economics and big-spending notions—would do any good anyway. No one, including, apparently, the president’s own budget office.

Advertisements


Fact Check: Criticizing the “Texas Economic Miracle” by maliab
August 24, 2011, 5:58 pm
Filed under: Economy | Tags: , , , ,

There is an interesting game that goes on when the political conversation turns to unemployment.  Despite the rather depressing unemployment numbers, there are still plenty of arguments to be found about the kinds of jobs available.  Some of these criticisms are well-founded, as when it is pointed out that creating temporary government jobs via state-funded spending sprees is not a path to long-term economic recovery.  Others, such as the spats over the relative “quality” of new jobs available are a bit more complex.  As Dr. Steve Pejovich, a Professor Emeritus from Texas A&M University writing for the Institute for Policy Innovation, explains, there’s a lot more to economic recovery than the wage rate:

Challenging the supposed “Texas economic miracle” under Governor Rick Perry, CBS recently reported, “Critics also note that many of the jobs created on Perry’s watch are low-paying and lack benefits.” This statement is wrong at best and stupid at worst. Here is an economist’s explanation for non-economists.

The demand for labor, like the demand for all scarce goods, is a function of price. The lower the wage the more people are hired.

What’s known as the “market-clearing wage” (i.e., price) is the wage at which all people who want to work at that wage have jobs. At any wage above the market-clearing wage not all people who want to work at that wage have jobs.

Government can’t determine the market-clearing level, only markets can. But government can distort it by imposing regulations on business, minimum wage laws, and unions (think of the Boeing case), which force wage rates above the market–clearing level.

Perry’s critics are confusing the wage rate with income. The higher the wage rate (above the market-clearing level) the more who are unemployed. That is, high wage rates mean zero income for many. The market-clearing wage rate means positive income for all.

Governments can choose to make labor markets less or more competitive. Perry has chosen the latter for Texas. Yes, the average wage rate in Dallas might be lower than in Detroit, but more people are earning money from work in Dallas than in Detroit. This raises an important question upon which a free society depends: the freedom of choice.

Any person in a right–to-work environment can choose between zero income and the wage he or she could get in the labor market. No person in a union-controlled or government-regulated environment can choose between zero income and the wage at which he or she is willing to work.

No one has to work for a lower wage, but at least in Texas more people can choose that option over being unemployed.



Cheers to That! by grassroothawaii
March 24, 2011, 4:45 pm
Filed under: Economy, Limited Government | Tags: , ,

by Frances Nuar

Earlier this month Governor Abercrombie patted himself on the back for his first 100 days in office. Seems like he is extremely proud of his accomplishments thus far, claiming he has created a “Government that Works.” One of his alleged accomplishments was cooperating “with public sector unions to put thousands of federally funded workers back on the job.”

This claim is currently being investigated by Civil Beat, which is still trying to verify the statement with the Governor’s office, but has been unable to do so for almost a week now.

What we do know is there are plenty of bills still moving forward in the legislature which would raise taxes–and by raising taxes, put thousands of people out of jobs. Senate Bill 1289 and House Bill 840 would increase the tax on beer, wine and spirits by 50%.  Current rates are already high: state government already takes 17.3 cents of every dollar spend on beer; 21.5 cents of every dollar spent on wine; and 25.5 cents of every dollar spent on spirits. Opponents of the tax estimate the tax hike will kill nearly 1,136 jobs.

In Britain in 2008 they raised the beer tax 18%. Recent studies show that tax hike has cost them 20,000 jobs so far. Why? Because someone has to pay for the new taxes. The business can only pass so much of that cost on to consumers; they have to somehow absorb the rest of the increase themselves, leading to job losses.

Not to mention the summary of Senate Bill 1289 states the liquor tax increase is to “promote safety and health in Hawaii”–are none of us responsible enough to make our own health and wellness decisions? If this is the case, the state might as well mandate cycling and walking as the only acceptable means of transportation; this would not only serve to promote health and wellness and solve the obesity problem, but our traffic problems as well.

Increasing the liquor tax, whether justified as a “necessary funding source” or “in our own best interests”  is not the solution to the state’s budget crisis. Real solutions, not band-aid approaches are what Hawaii needs. Now that would be something we can cheers to!

Want to take action against SB 1289 and HB 840? Click here to find out more!




%d bloggers like this: