Maxi-Minimum Wage: Jobless in Seattle

Angus and I agree on many things.

One thing we agree on is the minimum wage. Angus has made the case.  We just don't know much about the effects of minimum wages, in the neighborhood of the existing wage.  I was a bit more intemperate, but that's not surprising.

And we agree that the usual retort, "Well, if raising the minimum wage a little is good, why don't you want to raise it a LOT?"  That's idiotic.  It just doesn't follow.  If I have a headache and take two Tylenol, it doesn't mean that I think that taking the whole bottle would be better.  No one is advocating that.

Unless they are.  Then we also agree that it is clearly possible to raise the minimum wage too high.  And Seattle may have done that. "Mysterious."  Good one, JS.

Willfully Annoying (corrected)

Oh, man.  Grand Rapids, MI, adopted hometown of one Angus Okieman, has a ban on being "willfully annoying."

That's a terrible law.  No wonder Angus moved away.

Think of it:  If that law were enforced, Angus and I would always be in court.  Scott de Marchi would have a life sentence, until the jailers found him so annoying they just sprung him loose. And P-Kroog would be prohibited from writing op-eds.

Strike it.  Strike it down.

Seeking Arrnngement Dot Com: Obamacare Edition

Not exactly safe for work.  But pretty funny.

ACA: A Jobs Bill for Wealthy Democrats

So, this should surprise exactly no one. The point of ACA was never to take care of sick people, or poor people.  It was to line the pockets of rich campaign contributors to the Democrat Party.  And it's working out very well, for them.

The amazing thing is that our President seems genuinely to be confused between insurance, and health care.  I found this remarkable.  Is he proposing a new program, actual provision of health care?  Surely he recognizes that ACA is an insurance program, right?  As more and more units drop out of the system, health care is going to be sharply rationed.  Maybe that's a good thing.  But you can't possibly believe that ACA is going to increase health CARE options.  It will provide a way to pay for now sharply rationed* health care after all the private options disappear.  Will that be good for poor people? 

Why would it be? As usual, Frederic Bastiat had the model we need to understand what is going on.  From Angry Alex:

"When under the pretext of fraternity, the legal code imposes mutual sacrifices on the citizens, human nature is not thereby abrogated. Everyone will then direct his efforts toward contributing little to, and taking much from, the common fund of sacrifices. Now, is it the most unfortunate who gains from this struggle? Certainly not, but rather the most influential and calculating." (Source)

*Yes, health care is rationed now, and has to be.  But now it is rationed by price.  Soon it will be rationed by queueing.  If that were intentional, and had been explained, okay.  It isn't, and it wasn't.

Holy Negative Spread, Batman!

Golly, this is remarkable.  Click through for commentary...

As Woj puts it:  This chart, more than almost any other, may highlight the potential harm induced by the Federal Reserve’s attempts to push private investors further out on the risk spectrum. Unless junk bond companies have truly become significantly less risky, when the next round of increasing defaults begins, investors will find that current yields fail to even remotely compensate for future losses. Stocks may currently be slightly overvalued from a historical perspective, but certainly not compared with junk bonds.

John-O:  waddya thank, m'brother?

Entrepreneurship Summer Camp

So, I got myself into something difficult.  Being a professor, I do what many of us do, and assume that if students don't "get it," it's their fault for not being smart enough.  (I'm not as bad about this as Ricardo G, "El Certificador!"  He actually believes he stands between idiots and their diplomas, which would be meaningless without El Cert's watchful eye.  But I know I do sometimes blame the consumers when in fact the product is bad.)

But, in this case, I have agreed to give two four-hour* "classes" to a summer church camp.  The kids are 11-17 years old, and they come from (as the director described it) "urban backgrounds."  The time I have is 8:30 to noon, on Monday July 9 and Monday July 16.

My job?  To teach about (1) the American Constitution, (2) the importance of property and exchange, and (3) entrepreneurship.

You see the problem?  This is what people like me always whine about.  "No one is teaching our kids today about (1) TAC, (2) TIOP&E, or (3) Entrepreneurship.  THAT's the problem."  So, here's my chance. 

What you do?  I need advice.  Activities.  This obviously CANNOT be a lecture, or anything like a lecture.  11-17, summer, in a church basement, 8:30 am to noon.  What can I do that will help the kids think about the Constitution, property rights, and entrepreneurship?

I have gotten some ideas on some activities from http://www.econteachinglab.org/ .  And I can use some of those excellent videos from http://www.learnliberty.org/ (I think they will enjoy this one. http://youtu.be/oiZIsP7Ttqw  And of course this one by the Great Zwolinski** is wonderful http://youtu.be/NxBzKkWo0mo )

So, that will take up about...an hour.  Out of seven hours.  This needs to work, folks. I need advice.  Please comment, or send an email to mcmunger at gmail dot com

__________________________________

*Look at that.  "Four" "hour".  How can two almost identical words be pronounced so differently, with different numbers of syllables, in fact?  Bizarre.

**The Great Zwolinski should either be a magician, or a porn star, in my opinion.  A shame to waste that name on a philosopher.

The more we prosecute drug crimes, the less successful we can be in prosecuting other crimes. Judge Jim Gray:



Nod to Angry Alex

A travesty of justice

Austerity & Growth

There is a lot of discussion on the question of whether austerity is growth enhancing or not. While it's an entertaining debate, I get the feeling that the subtext is that European austerity only makes sense if it's growth enhancing, and I don't think that's true.

To my mind, Greece has two choices, default and devalue or continue on a path of ever greater austerity. Why they seem to be choosing option "b" is beyond my comprehension, but given they don't exit the system, what other option do they really have? Obviously they have no monetary levers. Obviously, they cannot borrow to finance further spending "stimulus". Obviously they cannot compel Germany to just pay up or the ECB to apply the monetary level system wide.  Obviously, they are not going to export their way to prosperity in the near term. So it's pretty much austerity uber alles for them.

Italy is in largely the same boat, except their borrowing rates have not hit Grecian heights due to ECB interventions. Their only options are austerity or exit.

As for the US of A, the idea that we are practicing fiscal austerity is risible. You can't even see austerity from where we are currently standing.

Hashtag of the day

OccupyNigeria

it might take half the country

North Korea (i.e. Kim Jong Un) has called for its citizens to form a human shield around its leader (i.e. Kim Jong Un)!

Given that many North Koreans eat dirt and sticks, and that KJU looks like this:

I am wondering, how many North Koreans does it take to make a human shield for "The Great Consumer"?

I am waiting for KJU's catchphrase to come out. I loved his dad's: "Let's eat two meals a day"

The Real Reason the State Opposes Charters

In North Carolina, we have many places with overcrowded schools and the need to build more. The cost per student is on the order of $8k or more.

But charter schools can quickly gear up, in places that are overcrowded, and use rental space (as opposed to purchasing land, required by state law). Charters can go without sports facilities (as opposed to having a full set of sports and recreation facilities, as required by state law). Charters can contract out for janitorial services, can do without a full service cafeteria, can go without hallway lockers, and can make do without full service school buses. Regular schools have to have all those things, as required by....well, you know.

So, charters can operate about 1/2 to 2/3 the cost per student of regular schools in NC. And they can be up and running in a year, where it takes five years or more for a new state school.

Why would anyone be against charters?

Because the job of schools is NOT to provide education to children. That's a myth. The job of state schools is to provide JOBS to people who will vote Democrat. It's not clear that charter school faculty will have the correct ideology, since they are hired by the parents who pay the bills, not the bureaucrats who depend on the state for their livelihood.

In New York, the authorities went so far as to send the money BACK, rather than allow flexibility and choice in school provision.

Here is what the state of NY had to say about it:

An audit of the public pre-K system by the city comptroller’s office places the blame for the lack of seats squarely on the city’s Department of Education, saying that in 2010, it got enough money from the state — $29 million — to finance an additional 8,000 seats. When those funds went unspent, they had to be returned to the state. But the department said those funds would have paid for only 2.5 hours of teaching daily, making the programs impractical for working families. What city families need is full-day programs, according to the department, and the state money will not pay for those.

In other words, parents are paying taxes into the system. Since it is unable to provide the educational services it promised when it took the money, at gunpoint, the state could rebate that money, either as vouchers or as part of a charter agreement. Either would solve the overcrowding problem.

But, instead, the state insists that only a full day would serve "working families." This concern for "working families" means that they get....nothing.

A Charter'd Libertine

School Choice, School Quality and Postsecondary Attainment, David Deming et al., NBER Working Paper, September 2011

Abstract: We study the impact of a public school choice lottery in Charlotte- Mecklenburg (CMS) on postsecondary attainment. We match CMS administrative records to the National Student Clearinghouse (NSC), a nationwide database of college enrollment. Among applicants with low-quality neighborhood schools, lottery winners are more likely than lottery losers to graduate from high school, attend a four-year college, and earn a bachelor's degree. They are twice as likely to earn a degree from an elite university. The results suggest that school choice can improve students' longer-term life chances when they gain access to schools that are better on observed dimensions of quality.

----------------------

Measuring the Effect of Charter Schools on Public School Student Achievement in an Urban Environment: Evidence from New York City, Marcus Winters, Economics of Education Review, forthcoming

Abstract: This paper uses student level data from New York City to study the relationship between a public school losing enrollment to charter school competitors and the academic achievement of students who remain enrolled in it. Geographic measures most often used to study the effect of school choice policies on public school student achievement are not well suited for densely populated urban environments. I adopt a direct approach and measure charter school exposure as the percentage of a public school's students who exited for a charter school at the end of the previous year. Depending on model specification, I find evidence that students in schools losing more students to charter schools either are unaffected by the competitive pressures of the choice option or benefit mildly in both math and English.

I haven't read either of these papers. But I wonder if selection isn't driving both. In the first case, parents who care enough to get their kids to switch are the sort of parents who are more likely to encourage college. And in the second case, the parents of kids who are doing poorly in math and English are the ones who switch to charters, perhaps because (again) they want to ensure their kids succeed. That may well be wrong in one or both cases, of course. But selection is so tough in studies where you are measuring consequences of choices that are endogenous.

(Nod to Kevin Lewis)

Sentiments entirely appropriate to these troubled times

Hat tip to David C.

Dr. Doom does China

Uber-bear Nouriel Roubini has turned his sights to China, and he doesn't like what he sees. This is required reading, people.

Here's an excerpt:

When net exports collapsed in 2008-2009 from 11% of GDP to 5%, China’s leader reacted by further increasing the fixed-investment share of GDP from 42% to 47%.

Thus, China did not suffer a severe recession – as occurred in Japan, Germany, and elsewhere in emerging Asia in 2009 – only because fixed investment exploded. And the fixed-investment share of GDP has increased further in 2010-2011, to almost 50%.

The problem, of course, is that no country can be productive enough to reinvest 50% of GDP in new capital stock without eventually facing immense overcapacity and a staggering non-performing loan problem.

Yikes!!

Our S.0.B.?

So Hillary says what happened in Libya won't happen in Syria because our government believes Bashar Assad to be a "reformer".

Jeebus help us!

Nice to just rule out intervention or support for the opposition ex-ante. Nice to let Bashar know we've got his thuggish, brutal, back.

Look, I don't care anymore about our perceived "strategic interests" in the region, I want to see all the dictators there fall including the House of Saud!

Yes, things may get worse in the short run, but it's the only way things can ever get better in the long run.

A mob of his own

As protests continue, Hosni Fubarak invests in his own shock troops by announcing a 15% pay raise for all government employees.

That should help keep them out on the streets punching Anderson Cooper!

All Hail Robert Kagan

This to me, really nails it:

"There’s no way for us to go through the long evolution of history without allowing Islamists to participate in democratic society."

“What are we going to do — support dictators for the rest of eternity because we don’t want Islamists taking their share of some political system in the Middle East? We’ve got to put our money where our mouth is."

“Obviously, Islam needs to make its peace with modernity and democracy. But the only way this is going to happen is when people speaking for Islam take part in the system."

178 things you probably don't want to do

But now, in Cuba, you can now apply for a license to be allowed to do them. Here are a few of my favorites, indicating that maybe there is not a lot of production of new goods in Cuba:

6. Door-to-door knife and scissors sharpener
21. Operator of Children's Fun Wagon Pulled by Pony or Goat
22. Buyer and Seller of Records (LPs, 45's, CDs)
23. Used Book Seller
24. Builder/Seller/Installer of Radio and TV Antennas
25. Craftsman/Seller/Repairman of Wicker Furniture
36. Door-to-Door Non-Alcoholic Beverage Seller
37. Home or Street Based Seller/Preparer of Non-Alcoholic Beverages
39. Charcoal Preparer/Seller
46. Electric Motor Rewiring (wraps new wire around bobbin on burned motors)
49. Button Coverer (Wraps buttons in cloth for upholstery and cocktail dresses popular in the 50's
and 60's)
62. Spark Plug Cleaner and Tester
107. Watch Repair
108. Leather Repair
109. Jewelry Repair
110. Bedframe Repair
111. Automobile Battery Repair
112. Bicycle Repair
113. Costume Jewelry Repair
114. Fence and Walkway Repair
115. Stove/Range Repair
116. Mattress Repair
117. Small Household Goods Repair
118. Office Equipment Repair
119. Electronic Equipment Repair
120. Mechanical and Combustion Equipment Repair
121. Eyeglass Repair
122. Sewing Machine Repair
123. Saddle and Harness Repair
124. Umbrella and Parasol Repair
125. Disposable Lighter Repair and Refill
127. Doll and Toy Repair

The most amazing to me is #125: Disposable lighter repair & refill? That is no way to win the future, Fidel.

"Pharaoh out of Egypt"

This is my favorite bit out of Egypt so far:

In surreal scenes, soldiers from Mubarak's army stood by tanks covered in anti-Mubarak graffiti: "Down with Mubarak. Down with the despot. Down with the traitor. Pharaoh out of Egypt."

Asked how they could let protesters scrawl anti-Mubarak slogans on their vehicles, one soldier said: "These are written by the people, it's the views of the people."

Egypt is a military dictatorship, propped up by the United States and has been for over 50 years. The key here is not whether Mubarak stays or goes (pero, que se vaya ya!) but whether or not Egypt will cease being a military dictatorship, and I guess what that would mean for its relations with us.

I am not a scholar of the Middle East, but the people out on the streets don't seem to be Islamicists to me. They seem like they want what most people want; jobs, opportunity, a less corrupt government. I don't see reporting that they are chanting "death to Israel" or asking to have a theocracy.

In other words, while I regret the looting and loss of life, the events in Egypt seem unmitigatedly good. Perhaps the military will actually relinquish a chunk of it's power over everyday life. It happened in Brazil, Chile, & Uruguay; maybe it can happen in North Africa too.