Gas Lines v. Cancelled Insurance Policies

From Diana Furchtgott-Roth, Real Clear Markets, November 12, 2013, “Gas Lines and Cancelled Health Insurance Policies”

The real story is that the Administration estimated that nearly 100 million Americans would lose their health insurance, and yet the president feigns surprise today.

There is no end in sight to health insurance problems until the Administration lifts the restrictions and allows insurance companies to issue a variety of plans from which people can choose, subject to state approval.

Those who cannot afford health insurance should be offered refundable tax credits to purchase it themselves, so they can have the same choice of doctors and services as other Americans.  This has precedent…food stamps…

Back in the 1970s, the gas lines showed us that something was terribly wrong with government energy policy.  Now, the health insurance policy cancellations show us that something is terribly wrong with the Affordable Care Act. The solution is the same: lift the restrictions and let insurance companies sell health insurance.  Americans could have their health insurance back as soon as companies can get new policies approved.

 

 

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Minimum Wage, Maximum Nonsense, Dominick Armentano

Recently published in Washington Times, and currently at the Independent Institute, Wednesday, October 9, 2013, “Minimum Wage, Maximum Nonsense”

Excerpts:

…Question: What likely happens when we increase the price of beer, vacation rentals, books, newspapers or almost anything, while holding other variables constant?  Answer:  Fewer units of beer, vacation rentals, books or newspapers are sold in the marketplace.  In economic theory, that’s called the ‘law of demand’ in operation ; at higher prices fewer units of some particular good or service are purchased.

The law of demand operates in all market, including and especially labor markets.

Minimum-wage laws always decrease employment opportunities and always interfere with free choice and the freedom of contract.  They are supported by politicians seeking votes and by labor unions anxious to cripple nonunion competitors.  They are also inherently discriminatory since they hurt only workers on the lowest rung of the employment ladder.

 

 

 

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Tamny Admonition: Keep your class warrior hands off small business!

John Tamny article, Oct 6, 2013, “Sorry Class Warriors, Small Businesses Are Not The Backbone Of The U.S. Economy.”

Key Points:

Taking nothing away from small businesses, in most instances they’re merely an effect of the big businesses around which they cluster.

As economist Enrico Moretti pointed out in his masterful 2012 book, The New Geography of Jobs, big businesses are the principal drivers of small business job creation.

Considering Facebook, Moretti notes that its economic impact can’t be limited to its 1,500+ employees; instead we must consider the 53,000 jobs created for Facebook apps, not to mention “at least 130,000 more jobs in related business services.”

It’s also worth remembering the essential comment from warren Brookes about how “We’re blessed by the genius of the relatively few.”  Brookes’s point was that it’s an exceedingly rare kind of person…Bezos, Gates, Jobs, Fred Smith…that moves the economy forward with commercial innovations that change our lives and that often employ us. These unique individuals, people economist Reuven Brenner refers to as the “vital few,”  don’t profoundly transform commerce for being small or small business owners; rather their commercial achievements that make the U.S. a magnet for growth capital are an effect of them overseeing large businesses.

Small businesses are, as opposed to the locomotive that powers us forward, the result of the big businesses around which they cluster.  Let’s celebrate the entrepreneurialism that has led to their creation, but let’s also recognize and be reverential toward the often demonized big businesses whose success makes them possible.

 

 

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Tamny to GOP: Own it with Pride!

John Tamny in Real Clear Markets, October 1, 2013, “The GOP Should Aggressively Seek Credit For the Shutdown.”

Highlights:

…what’s the point of the Republican Party if it’s not regularly shutting down the federal government?  As the ‘responsible stewards of the people’s money,’ shutdown should be part of the GOP’s readily unsheathed arsenal of weapons meant to always be shrinking the size  and scope of our economy-asphyxiating federal government…negotiations over what the federal government should and should not do will always tilt in favor of the Party of Small given its willingness to pull the plug altogether.

Considering Obamacare’s defending, Republicans need to remind themselves that the promise of lower prices for a service in concert with a promise for more of that same service is a contradiction in terms.

They should remind voters that a government shutdown is not remotely a sacrifice for taxpayers who will tautologically benefit if the government they pay for is smaller, rather it’s a necessary sacrifice for a political class that has grown rich on the backs of hardworking Americans.

In short, the Republicans should aggressively own the shutdown for what it would say about them as a Party that gets both politics and economics.  If not, as in if the Republicans cave, what’s the point of electing Republicans?

Also interesting to hear that in the language of the government, the 800,00o workers that aren’t showing up for work today are deemed ‘non-essential,’ roughly 20% of the Federal workforce.  Seems making this permanent is a good place to start in moving toward smaller government.

 

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Obamacare

 

Andrew Johnson, National Review Online, October 1, 2013, “100 Unintended Consequences of Obamacare.”

 

 

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Links to Articles on Minimum Wage

Mark Skousen, Eagle Daily Investor, Sept. 26, 2013, “Minimum Wage Minimizes Job Growth”,  http://www.eagledailyinvestor.com/2013/09/26/minimum-wage-minimizes-job-growth

Skousen links to a July 2013 study done by Jonathan Meer and Jeremy West of Texas A&M University, which concludes “that job growth declines significantly in response to increases in the minimum wage.”   Full text: http://econweb.tamu.edu/jmeer/Meer_West_Minimum_Wage.pdf

John Cochrane Blog, The Grumpy Economist, Sept. 19, 2013 http://johnhcochrane.blogspot.com/2013/09/mcdonalds-and-minimum-wage.html

Thomas Sowell, The New York Post, September 17, 2013, http://nypost.com/2013/09/17/why-racists-love-the-minimum-wage-laws/

 

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Art Carden on Minimum Wage and McDonald’s Workers

From Art Carden in Forbes, July 30, 2013, “Would a Higher Minimum Wage Help McDonald’s Workers?”

 

 

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Matt Ridley, More Wealth Taxes Are Coming?

From his New York Times article, July 20, 2013, “Wealth Taxes: A Future Battleground”

Key points,

  • Wealth has accumulated faster than income in recent decades
  • While a review of ‘debt to GDP’ can reveal scary numbers, looking alternatively at ‘debt to wealth’ is less forbidding.

Higher wealth in a nation means that there is more to take, and growing inequality means there are more problems that its government might seek to remedy.

Historically, economists…have generally favored taxes on consumption, on the grounds that they would do the least damage to long-term savings, investment and economic growth.

…in some eyes, rising wealth will become a tempting target for short-term political gain.

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The Unions and Detroit–Not the Problem?

John Tamny’s piece in Forbes, July 21, 2013, entitled “The Unions Didn’t Bankrupt Detroit, But Great American Cars Did,” provides an interesting take on the issue, using Silicon Valley as a contrast.

Tamny spends time recounting the damage done to Detroit by a free floating currency and the recent auto bailouts,

The weak dollar made the Big Three uncompetitive, and the bailouts simply added gasoline to the fire.

…having been saved by a federal government that never hands out billions for free, they’re now a creature of a meddling Washington, D.C. …and a dying union movement.

Tamny then discusses how easy it has become to make good cars, in his words ‘yesterday’s innovation.’

…because they’re yesterday’s innovation the profits in the space aren’t sufficient to attract talent or investment.

…why produce what anyone can?  If anyone can produce something , the margins are naturally going to be small.  Cars today fall into the ‘anyone can produce them’ category, and the fact that they do explains Detroit’s demise more than anything else.

He then draws a contrast to Silicon Valley,

When Apple Inc. puts out ads about how its goods are ‘designed’ in California,’ the tech giant is speaking volumes about Detroit’s problems.

…Silicon Valley would be destitute too if its companies used limited U.S. labor to manufacture computers that anyone can make.

Finally,

…Detroit is bankrupt because its biggest employers still manufacture–as opposed to simply design–cars that anyone can make.

 

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John Tamny on Education–It’s Not About Knowledge!

From Forbes, June 9, 2013, “Online Education Will Be the Next ‘Bubble’ to Pop.”

…college is not about learning much as we might wish it were. Online education would erase traditional schooling if learning were truly the purpose of attending Princeton, or if employers cared what was learned at Princeton.

But when parents spend a fortune on their children’s schooling they’re not buying education; rather they’re buying the ‘right’ friends for them, the right contacts for the future, access to the right husbands and wives, not to mention buying their own (“Our son goes to Williams College”) status.  The same is true for students taking out loans.

…Going to college is a status thing, not a learning thing.

Online education would bring with it real economic value if employers actually cared about the knowledge gained on campus.  The problem is that they don’t.  Education has little value no matter the school.

And from Tamny’s Forbes piece of Feb 20, 2013, “Sorry Left AND Right, No Job Requires A College Degree.”

Whether the ambition is to become an investment banker or a Starbucks barista, the dirty little secret is that nothing learned during the four (or five) fun-filled years on idyllic campuses has anything to do with either form of employment.

To believe otherwise is to believe that someone (the college professor) who for the most part lacks any background in the real-world application of finance could transfer skills to those who desire that real-world knowledge.  Lots of luck there.  If Wall Street is your goal, major in whatever interests you.  Ultimately the top financial firms are looking for ‘good athletes’, as in people who are smart and who work hard.  Anything you need to know you’ll learn on the job.

Indeed, college doesn’t make you smart or hard working as much as smart and hard working people often go to college.  Being smart is a function of curiosity that decidedly cannot be taught.  Hard work similarly lends itself to achievement in the working world, but there are no classes that teach it.  If they do exist, they’re a waste of time.

 

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