Thanks For Nothing, Brother Obama

“It’s full of fecal matter” [Darleen Click] | protein wisdom

The absurdity of arbitrarily raising the minimum wage aside, Obama lies about its effect on unemployment based on “studies” just as he does about the benefits of Head Start.

University of California at Irvine economist David Neumark has looked at more than 100 major academic studies on the minimum wage, and he says the White House claim of de minimis job losses “grossly misstates the weight of the evidence.” About 85% of the studies “find a negative employment effect on low-skilled workers.”

Uh huh.

And guess which “low-skilled workers” are most adversely affected?

That’s right.

Coming Hikes In Minimum Wage Hurts, Not Helps, Low-Income Workers –

Hiking the minimum wage hurts — not helps — the lowest-paid workers, especially young black men. A 10% hike in the minimum wage causes a 2.5% drop in employment among young white men without a high school diploma and a staggering 6.5% drop among young black men without that degree.

Young black males get clobbered three times as hard because they tend to work in the fast-food and restaurant industries, where any increase in labor costs produces layoffs.

So apparently Obama thinks that unemployment is a “ladder of opportunity” into the middle class, especially for young black people.

About Bill Quick

I am a small-l libertarian. My primary concern is to increase individual liberty as much as possible in the face of statist efforts to restrict it from both the right and the left. If I had to sum up my beliefs as concisely as possible, I would say, "Stay out of my wallet and my bedroom," "your liberty stops at my nose," and "don't tread on me." I will believe that things are taking a turn for the better in America when married gays are able to, and do, maintain large arsenals of automatic weapons, and tax collectors are, and do, not.


Thanks For Nothing, Brother Obama — 6 Comments

  1. Every classical economist will agree that price controls do not work. Whether that involves holding prices down to control inflation or raising wages to maintain a minimum wage, the supply-demand curve sets price and any artificial intervention merely creates imbalances that build up over time and eventually force prices to find the clearing price. Like how FDR’s various price controls didn’t work. Or Nixon’s.

    Of course 12 mandarins and their advisors/analysts can set interest rates. In the new Fed world no only can they find they find the best rate for overnight but now they can intuit the rates across the yield spectrum from overnight to 30 years. Plus, not only can they determine the “right” UST rates, they now can control mortgage rates.

    Anyone think maybe these 12 or so people are not up to the task they have taken on please raise their hands.

  2. Kennycan, how can you say that? Ben Bernanke is a college perfessor whose area of expertise is the 1930s Great Depression. Of course, there were no mortgage backed securities, credit default swaps, negative amortization mortgages, hedge funds, no Euro or Euroland central bank, many countries were still on the gold standard, Congress hasn’t passed anything like Glass-Steagall to separate speculation from banking, and there wasn’t a rapacious Wall Street insider like Joe Kennedy who knew all the sleazy practices and shut them down after making his fortune with them, so he could get an ambassador appointment, and the debt wasn’t $16 trillion with an annual deficit of 8% of GDP, but still. If we ever have a 1930s Great Depression again, we’ve got the right guy in charge.

  3. It shouldn’t be that damned hard to figure out that a raise in pay for the collective HAS to translate into a raise in the cost of living for the collective as well.

    So, if you’re a minimum wage worker who is lucky enough to still have a job after it all shakes out, there’s a damned good chance the increased cost for the goods or services you need will offset any raise you may have received.

  4. I mentioned FDR and Nixon together for a reason. Both were trying to fight deflation by creating offsetting inflationary forces. Neither were successful. FDR because the gold standard had him running in place while the Fed continued to use classical economic tools to try to clear the market. Taken altogether they ended up delaying the recovery and making a depression the Great Depression. Nixon thought he had he answer to that. He severed the last ties to the Gold Standard and politicized the Fed so that they were now mandated for full employment as well as a stable currency. For the same reason that didn’t work either.

    Murray Rothbard reasoned that it is the prior inflation that eventually creates the forces of deflation in an attempt to get back to equilibrium. The more inflation, the greater is the subsequent deflationary tide is that is needed to reverse it. So FDR’s and Nixon’s attempts to create Aggregate Demand by way of creating more inflation backfires. It only adds fuel to the deflationary fire.

    Volcker then applied classic economic policies forcing rates higher, ending inflation and encouraging Saving.

    What this country needs now is Aggregate Savings, not Aggregate Demand.

Leave a Reply