Why Do Business Leaders Support a Minimum Wage Hike?

The Economist's Free Exchange blog answers the question as follows:

CEO's who support higher minimum wages are not, as the media often casts them, renegade heros speaking truth to power because their inner moral voice bids them be silent no more. They are by and large, like Mr Sinegal, the heads of companies that pay well above the minimum wage. Forcing up the labour costs of their competitors, while simultaneously collecting good PR for "daring" to support a higher minimum, is a terrific business move. But it is not altruistic, nor does it make him a "maverick". Costco's biggest competitor, Wal-Mart, also supports a higher minimum wage, and for the same reason. Wal-Mart's average wage is already above the new minimum; it will cost the company little, while possibly forcing mom-and-pop stores that compete with Wal-Mart out of business. This seems blindingly obvious to me. Though I don't expect we'll see "the minimum wage—it's great for Wal-Mart!" in any Democratic campaign commercials.

I think this is pretty clearly right. Most business leaders are cold and calculating about these things. If they can push for a policy that hurts their competitors and makes them look good in many people's eyes (and significant majorities support the minimum wage hike), they'll do it.

GOP 2008 Candidates Suck

Some conservatives are complaining about the current batch of GOP Presidential candidates. I agree the list looks weak right now compared to Obama and Hillary. Romney and Giuliani have potential, but I'm not very confident. So where's the winning candidate? In my view, he's down in Florida: Jeb Bush. He's the man. He can do it, if he wants, but it seems like he prefers to wait for 2012. Hard to say whether that's the right move. It may be tough to run in 2012 against a strong Democratic incumbent. On the other hand, being named Bush in the 2008 campaign is probably a bad thing.

Schilling for the Hall of Fame!

Curt Schilling just announced he'll stick around through 2008, which is a reminder that he won't be around forever. With that in mind, let me state right now that, in my view, Schilling should be in the Hall of Fame some day. His numbers won't necessarily support it, although they are close. But when it came time for a big playoff performance, this guy delivered three times: 1993 with Philly, 2001 with Arizona, and 2004 with Boston. To me, that puts him over the edge.

He may not get in on the first ballot (although it could be close). But by the second or third ballot, I think he should (and will) be in.

UPDATE: His wife wants him in, but he is skeptical:

Shonda Schilling said Wednesday she's pushing her husband to keep playing because she wants their children, particularly the youngest, who is 4, to have memories of seeing their father pitch. She also wanted him to have a chance to boost his bid for the Hall of Fame.

"He will tell you right away that he won't make the Hall of Fame, but I just felt in my heart, just give it a couple more years," she said.

Krugman Again

I don't set out to do so many posts on Paul Krugman, but he's so aggravating it's just hard not to. The latest:

American politics is ugly these days, and many people wish things were different. For example, Barack Obama recently lamented the fact that “politics has become so bitter and partisan” — which it certainly has.

But he then went on to say that partisanship is why “we can't tackle the big problems that demand solutions. And that's what we have to change first.” Um, no. If history is any guide, what we need are political leaders willing to tackle the big problems despite bitter partisan opposition. If all goes well, we'll eventually have a new era of bipartisanship — but that will be the end of the story, not the beginning.

In essence, he is criticizing Obama for trying to find consensus, and supports, instead, ignoring the other side and forcing your views through. Essentially, act like Bush and company, but from the left.

My only comment is this. By all means Paul, go for it. Push for state run, postal service-type health care insurance, and don't give an inch until you get it. And when you don't get it after the first ten years because of all the partisan (and popular) opposition, keep on trying.

Krugman on Friedman

Paul Krugman writes about Milton Friedman here. On the whole, it's not a bad piece. But there are a couple outrageous statements that undermined it a bit.

Right at the outset, Krugman says:

Until John Maynard Keynes published The General Theory of Employment, Interest, and Money in 1936, economics—at least in the English-speaking world—was completely dominated by free-market orthodoxy. Heresies would occasionally pop up, but they were always suppressed.

It's hard to know what to make of this. Does Krugman really believe it? Does he mean something other than what he appears to say? In one of the most important fields of economic policy-making, regulation of imports, the free market was non-existent up to 1936. Tariffs in the U.S. generally ranged from between 2o to 50% from 1800 to 1936, in contrast to the less than 5% on average today. So how can Krugman possibly say that free market orthodoxy dominated? Now, it is true that there was a general absence of the kind of social policy regulation we see today (e.g. minimum wage, workplace conditions, etc.) But this wasn't the result of free market economists running things. Rather, this was due to the general dominance of business interests over others in politics, and a view of the law that held freedom of contract as more important than most everything else. So, it's just not right to say that Keynes offered a response to classical economics. He didn't. He just offered more government intervention than we already had.

Second, near the end of the piece, Krugman says:

As I pointed out earlier, he made great contributions to economic theory by emphasizing the role of individual rationality—but unlike some of his colleagues, he knew where to stop. Why didn't he exhibit the same restraint in his role as a public intellectual?

The answer, I suspect, is that he got caught up in an essentially political role.

Wow. How did Krugman write that with a straight face? Is there any pundit out there right now who is more purely political than Krugman? I can't tell you how many times I read a Krugman op-ed and think, but he's an economist, how can he believe that? The answer, in my view, is that he is a Democrat first, and an economist second.

Obama: Too black? Not black enough? Just right?

This Washington Post article is one of a number of recent articles discussing whether Obama is "black" enough. The question, they say, is whether the black community will see him as one of them. In my view, this type of commentary is just plain silly. I hope Obama ignores all of it. The right approach, I think, is the one stated by Harold Ford:

"As long as he works hard, is honest ... and is not afraid to take his message anywhere in the country, he'll do fine," Ford said. "He can't try to predict what other people may think or may do. All he can do is run the campaign that he's capable of running."

In essence, put together a coherent message that you believe in, and take it to anyone who will listen. If you've got the right message, you'll win.

As for Obama's message, not surprisingly he has recently called for universal health care coverage. But what exactly does he mean by this? Is it closer to Schwarzenegger's plan, or to Paul Krugman's postal service health care plan? The answer to this question is going to play a big role in whether I support him.

Obama and Religion

As part of a ridiculous smear job regarding Obama's schooling at a Muslim school, I came across the following passages quoted from his book:

In both of his autobiographies, Mr. Obama characterizes himself as a Christian—although he describes his upbringing as mostly secular.

In “The Audacity of Hope,” Mr. Obama says, "I was not raised in a religious household." He describes his mother as secular, but says she had copies of the Bible, the Koran and the Bhagavad Gita in their home.

Mr. Obama says his father was "raised a Muslim, but by the time he met my mother he was a confirmed atheist...." Mr. Obama also describes his father as largely absent from his life. He says his Indonesian stepfather was "skeptical" about religion and "saw religion as not particularly useful in the practical business of making one's way in the world ...."

In the book, Mr. Obama briefly addresses his education in Indonesia. "During the five years that we would live with my stepfather in Indonesia, I was sent first to a neighborhood Catholic school and then to a predominantly Muslim school; in both cases, my mother was less concerned with me learning the catechism or puzzling out the meaning of the muezzin's call to evening prayer than she was with whether I was properly learning my multiplication tables."

I'm definitely curious to hear more about his religion. Just how did he come to his current religious views?

Thank You For Not Spanking

A very extreme left wing California politician has proposed banning spanking. She says:

"I think it's pretty hard to argue you need to beat a child 3 years old or younger,'' ... . "Is it OK to whip a 1-year-old or a six-month-old or a newborn?''

Well, I suppose it is true that it's hard to argue you need to "beat" or "whip" a young child. But no one's arguing for that. They're arguing for spanking. And yes, spanking a child 1 year or old or younger seems pointless and cruel. But 2 and 3 year olds are a very different story.

I'm not sure I understand Virginia Postrel's comment, though:

Spanking, like gun ownership, is one of the characteristics of southern culture that non-southerners find barbaric. It persists in diaspora, especially among those who don't assimilate into the dominant culture of, say, California.

It's a "southern" thing? I have virtually no connection with the South, and I've always thought of spanking as the norm, assorted hippies excluded.

George Will on Barney Frank

No, not literally.

Will has a column in which he explores Frank's policy views, ultimately concluding that Frank is distinguished by his "coherent" "argument for more government-engineered equality." For example, he supports "fair trade"; more Congressional involvement in Federal Reserve policy-making; and a greater government role in health care.

What I don't get is how these policy views distinguish Frank from other liberals. Aren't most liberals saying very similar things? Are they any less "coherent"? I'm not quite sure what Will's point was in writing this piece.

Brownback Is In

Sam Brownback has announced he is running for President. This article about his entrance made him a mixture of appalling and appealing for me.

Starting with appalling, he is quoted as saying:

"Search the record of history. To walk away from the Almighty is to embrace decline for a nation," Brownback said. "To embrace Him leads to renewal, for individuals and for nations."

Does he really believe what he says? I get the sense he does. What a dumb thing to say, though. Searching the "record of history" will surely find many dominant cultures and societies who did not "embrace Him."

But then later:

He pledged never to sign a tax increase if elected president and proposed scrapping the current income tax law.

Well, this part I like. Sign me up!

It's very frustrating to have this social conservative-libertarian alliance. It's uncomfortable sometimes to have to ally yourself for certain issues with people you disagree with so strongly on other issues. (I'm sure they feel the same way). But I suppose that's the price each side pays for not having majority support for their view. They have to form coalitions if they want to achieve anything.

The Gaps in Global Warming Science

Part of the reason I'm skeptical about many global warming claims is the gaps in the evidence and the failure of global warming campaigners to address them. Here's an example. In an article about how warmer ocean water have led to more fish and other sea creatures being found found up north, the following is noted:

The world's oceans are already in a warming trend that could alter fish stocks, perhaps damaging coral reefs that are vital nurseries for tropical species while boosting northern stocks of cod or herring.

The concluding sentence then states:

In a sign of how higher temperatures might help some fish stocks, a period of warmer waters in the 1920s allowed cod to spawn off Greenland and let a new stock break away from Icelandic waters.

Wait, what? Cod being found up north, which was a concern stated early in the article, happened before when there was a period of warmer waters in the 1920s? Well, why did that period of warming occur? How much warmer was it? Can it tell us anything about the increases in temperature seen today? Isn't this worth elaborating on ?

When I read pieces like this, it seems to me that a lot of the "science" behind global warming is intentionally skewed to reach a certain result, in part by ignoring evidence that counters the accepted view. That doesn't mean global warming is not real. It just means that many of the people pushing for action to deal with it are not all that credible.

Krugman Makes the Case for Single Payer ...

... and leaves me unconvinced.

In a recent column, Paul Krugman argues that Gov. Schwarzenegger's health care plan is flawed, and says that a government-run single payer system is the only solution to current problems. He describes the Governator's plan as follows:

The Schwarzenegger plan, by contrast, is a series of patches. It forces everyone to buy health insurance, whether they think they need it or not; it provides financial aid to low-income families, to help them bear the cost; and it imposes "community rating" on insurance companies, basically requiring them to sell insurance to everyone at the same price.

As much as I dislike regulation instinctively, this strikes me as a somewhat reasonable approach to today's health care mess. I especially like the last part about requiring insurance companies to sell to everyone at the same price. The current system discriminates against small businesses in a manner that is completely unfair.

But Krugman doesn't like the plan, for the following reasons. First, he says: "in the end health care should be a federal responsibility. State-level plans should be seen as pilot projects, not substitutes for a national system. Otherwise, some states just won't do the right thing." Hmm, because some states might make bad policy, we should make sure the federal government sets up one national policy. Because the federal government would never make bad policy that applied to the whole country, would it? No, of course not.

Then, he explains that he prefers a "single-payer health insurance system," which he describes as "similar to Medicare, under which residents would have paid fees into a state fund, which would then have provided insurance to everyone." He then explains that this would be less "intrusive" than Schwarzenegger's plan.

OK, first off, a government monopoly on health care insurance is less "intrusive" than a private system with government regulation? I don't think so. If I don't like the government plan, I have no other options! Second, let's think about some other areas where there is a government monopoly. How about, say, the postal system. How has that worked out for you Mr. Krugman? For me, it has been nothing but long lines and bad service. Is any industry really better off when competition is eliminated?

The good news is a single-payer system is not likely to happen any time soon. Americans understand socialism and they don't like it. But the bad news is that well-respected people like Paul Krugman are out there trying to convince people that this is a good idea, and at the margins he may actually garner support for it.

The Minimum Wage Debate

I was looking forward to a good debate about the merits of a minium wage increase, but unfortunately some of its proponents do not seem up for the challenge. From a Palm Beach Post writer:

The House passed a bill raising the minimum wage last week. If the Senate also approves, trade association lobbyists have told us what they think will happen.

Nobody actually is paid the minimum wage, they told us. Only high school students in their first jobs get the minimum wage. And most of them, according to the lobbyists, are from suburban families with BMWs. If the wage is raised, employers won't hire as many people for minimum-wage jobs, so the working poor will lose opportunities. If employers pay minimum wage, they will raise prices, so the poor people in the minimum-wage jobs will be worse off.

That can't all be true. The spiel is inconsistent from one sentence to another. If high school students are the only people with minimum-wage jobs, killing the jobs can't affect the working poor. Adding a weak argument to a weak argument doesn't strengthen a weak case. It puts a spotlight on the weakness in the first argument.

If what they are saying is true, raising the minimum wage should lead to more unemployment and more inflation. In fact, we have been raising the minimum wage, off and on, since Congress set it at 25 cents an hour in 1938. The same trade association lobbyists made the same dire predictions they make today in 1938. They repeat them every time the subject comes up. Not only has no one been able to show the ominous predictions coming true, there is some evidence that raising the minimum wage actually creates a few jobs through its (mildly) stimulating effect on the bottom of the economy.

The last time Congress raised the minimum wage, in two steps, was 1996 and 1997. What happened? The economy grew and created jobs faster than it has created them lately. That is not to say one caused the other. The minimum wage is too inconsequential to have that much effect. But if events had gone the other way, the lobbyists still would be shouting, "Told you so."

Rather than address the core issues, the writer obsures them in a number of ways. First, he mis-characterizes the other side's statements. For example, he has opponents saying "[o]nly high school students in their first jobs get the minimum wage," and he then notes in response, "[i]f high school students are the only people with minimum-wage jobs, killing the jobs can't affect the working poor." Certainly it has been argued that many minimum wage earners are high school students, but nobody is arguing that they all are.

He also states: "The last time Congress raised the minimum wage, in two steps, was 1996 and 1997. What happened? The economy grew and created jobs faster than it has created them lately. " But the argument is not that a minimum wage increase will have a significant impact on the overall economy. Rather, it is that employers of low-wage earners, and the low-wage earners themselves, will be hurt.

And he says, "[e]very time Congress raises the minimum wage, business lobbyists say the sky will fall." In reality, nobody is saying the sky will fall. What they are saying is that some small businesses and many poor people will be adversely affected.

Somewhat predictably, this kind of article indicates that we're not going to have a real debate about the issue. Many of the proponents will simply avoid any type of logical thinking, preferring to cover their ears and ignore the other side's arguments.

Criminal Fines

New Mass. Governor Deval Patrick proposes "fees" for criminal behavior:

Governor Deval Patrick said yesterday that he had come up with a way to pay for more police officers in Massachusetts: charge convicted criminals a fee.

Unveiling his most detailed account yet of his plans for next year's state budget, Patrick said he would propose a "safety fee," which every person convicted of a crime would have to pay.

The program is modeled on a similar fee the state now levies against people who violate the law, a program that generate s about $6 million annually to pay for services for witnesses and victims of crime. Those fees range from $90 for anyone over age 17 convicted of a felony to $50 for those convicted of a misdemeanor and $45 for anyone who commits a civil motor vehicle infraction, such as speeding.

This is sure to be controversial, and the article quotes "prisoners' rights" advocates as saying it is unfair because criminals are usually quite poor, but I like the idea. It helps raise revenue and is an added deterrent. I wonder if it's worth tying these "fees" to income and wealth, though. Why not charge super-rich folks millions for serious crimes like murder?

The Real Impact of the Minimum Wage

This Christian Science Monitor article offers "[a] glimpse into the lives of people who live at bottom-rung pay rates illustrates why, to supporters of the change, the minimum wage is long overdue for a raise." It examines how much money people need in order to live, and examines whether $7.25 an hour is enough. But what about the people who lose their jobs as a result of the increase? They don't seem to rate a mention.

Relatedly, Greg Mankiw links to a CBO study indicating that a better way to help poor people would be through an increase in the Earned Income Tax Credit. But that would require the government to actually do something, of course, rather than just require private businesses to do something.

Heinlein's Starship Troopers

Some idiot writes the following in the NY Times about Heinlein's Starship Troopers:

First published in 1959, when America's misadventure in Korea was over and its intervention in Vietnam was hardly a twinkle in John F. Kennedy's eye, ''Starship Troopers'' tells of the education of a naïve young man who enlists in a futuristic infantry unit. Raised by his father to believe that the practice of war is obsolete, the immature soldier -- and, by extension, the reader -- is instructed through a series of deep space combat missions that war is not only unavoidable, it is vital and even noble. While peace, Heinlein writes, is merely ''a condition in which no civilian pays any attention to military casualties,'' war is what wins man his so-called unalienable rights and secures his liberty. The practice of war is as natural as voting; both are fundamental applications of force, ''naked and raw, the Power of the Rods and the Ax.''

From here the book starts to get a little scary. Frame it as a cautionary tale if it helps you sleep better, but to a contemporary reader it is almost impossible to interpret the novel as anything other than an endorsement of fascism, from an era when the f-word wasn't just a pejorative suffix to be attached to any philosophy you disagreed with. Taken literally -- and there is no indication that Heinlein meant otherwise -- ''Starship Troopers'' might be the least enticing recruitment tool since ''Billy Budd.''

Now, it's entirely possible he only saw the movie, and never read the book. But you would think a NY Times writer would be better than that. Regardless, in the book, Earth is attacked by war-mongering aliens, and fights back. The book documents the fighting experience of a junior soldier. What would the writer prefer to have happened instead of war? That we surrender and all die? Ridiculous.

And calling Heinlein a fascist shows so much ignorance. Heinlein was as anti-auhoritarian as you can get.

McGwire in the Hall?

From the AP:

While the door to Cooperstown swung open for Cal Ripken Jr. and Tony Gwynn on uesday, McGwire was denied baseball's highest honor, picked by less than a quarter of voters. ... The result that raises doubts about whether Barry Bonds, Sammy Sosa or other sluggers from baseball's Steroids Era will ever gain entry.

I think feelings will soften over time for most of these guys, and they'll eventually get in. But I think it would help them a lot to admit it and apologize. Right now, we know (with reasonable certainty) they did it and that they are lying about it. It would be better for them to get rid of the lying part.

George Will on the Minimum Wage

George Will has this to say about the minimum wage:

"But the minimum wage should be the same everywhere: $0. Labor is a commodity; governments make messes when they decree commodities' prices. Washington, which has its hands full delivering the mail and defending the shores, should let the market do well what Washington does poorly."

Well said, I think, on the minimum wage. But I wonder why George seems to accept delivering the mail as a government task? It seems to me that this is also something Washington does poorly.

Wes Clark on Jews

Wesley Clark is sure the U.S. is going to bomb Iran soon. How does he know? According to Arianna Huffington:

When we asked him what made him so sure the Bush administration was headed in this direction, he replied: "You just have to read what's in the Israeli press. The Jewish community is divided but there is so much pressure being channeled from the New York money people to the office seekers."

I confess to being a little confused. It sounds like he is saying "the Jews are behind all this." But Arianna's blog post does not offer any commentary in this regard. Is this somehow not as Mel Gibson-like as it seems?

A Question for Those Supporting a Minimum Wage Increase:

Why not set maximum prices on vital commodities? Say, no more than $2.50 per gallon for milk?

Obama's Book

The Washington Post reports on Obama's book written before he entered politics. In it, he admits to past drug use (including cocaine) and struggles with questions of racial identity. I don't think the drug use will hurt him too much as long as he stays up front and honest about it. For me, it's a small negative, but not even close to a disqualifier.