Editore"s Note
Tilting at Windmills

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January 4, 2007
By: Kevin Drum

MINIMUM WAGE FOLLIES....I promised myself I wasn't going to read George Will's column today about abolishing the minimum wage, but unfortunately a reader sent me the link and I clicked on it before I knew what it was. Weak man that I am, I then went ahead and plowed through it.

It's mostly just a data dump of half facts and cherry picked numbers, and the only assertion of any importance comes at the end:

The minimum wage should be the same everywhere: $0. Labor is a commodity; governments make messes when they decree commodities' prices.

This, in a nutshell, is the core problem with conservative economics: it views workers as commodities. Naturally it follows from this that we should be free to treat workers like commodities, rather than as human beings. (See here for a recent example.)

Most conservatives are careful not to state this belief quite so baldly, but Will must have slipped up this morning. But don't blame him. He's just saying out loud what all the rest of them usually say only under their breaths.

POSTSCRIPT: It's worth noting that Will is mistaken in two different ways. First, as a matter of empirical economics, workers aren't commodities. Unlike pig iron ingots, they respond to incentives, they can be trained to operate more efficiently, they put their paychecks back into circulation, etc. As Will is undoubtedly aware, there's an entire branch of economics dedicated to exactly these issues, and it reaches conclusions considerably more complicated than those in the Micro 101 class he took half a century ago.

Second, he's mistaken in a moral sense. A rich society really has no excuse for not setting bare minimum levels of decency for all human interactions, including those between employer and employee. Virtually everyone in America accepts this today, which is why increasing the minimum wage garners support of 70-80% in most polls. But apparently it's still a controversial concept in some quarters.

Kevin Drum 12:24 PM Permalink | Trackbacks | Comments (347)

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Comments

It seems to me that America has travelled the libertarian/unfettered market/positivist/laissez-faire/... route before, and the results necessitated the Populist and Progressivist movements.

Posted by: Scott Martin on January 4, 2007 at 1:00 PM | PERMALINK

"The minimum wage should be the same everywhere."

This might actually make some sense, but it shouldn't to Will -- unless his support for the principle of federalism operates only when convenient.

Posted by: CJColucci on January 4, 2007 at 1:02 PM | PERMALINK

The goal of the economic conservative movement is to eliminate the dollar wage, and replace it with scrip, that we can use to rent certain types of housing and buy things in certain stores, and collect no interest or possibility for advancement at all.

Eliminating the minimum wage would result in the return of slavery. Sure, it wouldn't have the force of law, and you could leave it at any time, but you wouldn't have any resources to fall back on.

Posted by: Karmakin on January 4, 2007 at 1:04 PM | PERMALINK

And more thing. This stuff makes me really damn angry, and makes me want to start a movement to remove all legal protections for these people, so they can operate in a real "free market". If a band of homeless people decide to take over Mr. Will's mansion and live there, throwing him out on the street, it's obvious that's what the "free market" has decided. He should have spent more on home security.

His mistake, his loss.

Posted by: Karmakin on January 4, 2007 at 1:06 PM | PERMALINK

It's funny how most conservatives who are in favor of abolishing the minimum wage don't get as outraged over say the Fed setting interest rates. (I wonder how many articles Will has written advocating abolishing the Federal Reserve Board?) I mean, why is capital any different of a commodity than wages are?

One reason why we need a minimum wage is because wages are artificially constrained by the Fed. Every time it seems like working people start making more money, the Fed steps in to raise interest rates and cut those wages.

Posted by: Stuart on January 4, 2007 at 1:06 PM | PERMALINK

Third, why should the minimum wage be $0? I'm not sure why Will thinks it should be a non-negative pecuniary number.

Under strict market conditions, workers can be employed partly in exchange for housing and security guarantees. Or their work would only partly offset the value of the housing and security guarantees that they were granted by their employer.

It's slavery, to be sure, but it's a perfectly 'legitimate' market outcome.

Posted by: Saam Barrager on January 4, 2007 at 1:07 PM | PERMALINK

In the immortal words of Johnnie Rico, "Men are not potatoes!"

Posted by: anom on January 4, 2007 at 1:10 PM | PERMALINK

This, in a nutshell, is the core problem with conservative economics: it views workers as commodities.

This is why don't have personnel departments anymore -- and why they have been replaced by Human Resources.

If you treat workers as people, the CEO gets paid less. We can't have that.

Posted by: Erik V. Olson on January 4, 2007 at 1:12 PM | PERMALINK

Ok so let me get this straight: My labor, which I sell as a consultant, is a commodity. I sell it for what the market can bear (which in todays RE management market aint much). Just like the buying and selling of other commodities, like gold, sugar, stocks, frozen OJ, or real estate.

So why is it that my one singular commodity, the same single commodity available for sale by most Americans, is taxed at a far higher rate than any other sold commodity? Just because we call it wages and not capitol gains? Or because it is in the best interests of the folks who can afford the commodity sold by K-Street, access and influence?

Posted by: clyde on January 4, 2007 at 1:14 PM | PERMALINK

Remind me not to go to work for Mr. Will.
And to help him enjoy his free-market dreams, may his plumbing back up on holidays...

Posted by: Jim 7 on January 4, 2007 at 1:15 PM | PERMALINK

George Will is right. Slavery made this nation great.

Posted by: Al on January 4, 2007 at 1:17 PM | PERMALINK

Well, sure white conservatives that love Jesus and Blastocysts are human beings, but you loathsome baby-killing grave robbers are worse than pig iron!

Posted by: Al's Mommy on January 4, 2007 at 1:17 PM | PERMALINK

One takeaway from the American experience with slavery is that in 1865, productivity levels in the American South were roughly the same as those of Guatemala. The cheaper the labor, the lower the incentive for employers to adopt efficiency enhancing technologies or processes.

In other words, notwithstanding the moral implications, poorly compensated labor incentivizes an uncompetitive economy.

Posted by: Saam Barrager on January 4, 2007 at 1:18 PM | PERMALINK

George Will has been a commodity all of his working life.

He makes his living as a commodity getting paid for his opinions and has done well for himself personally if not for the nation.

Like Senator McCain, Will is a tired old man with tired old ideas. Like McCain, his time has come and gone. And, like McCain and many old men, as he ages he gets curiouser and curiouser.

Posted by: Robert Dare on January 4, 2007 at 1:18 PM | PERMALINK

Thanks Scott for making the first comment on this thread. The reality is that we had Laissez Faire at one point in this country and it led to The Jungle. The real economic expansion that lifted all boats in this country came in the heavily regulated, government supported, unionized era following World War II and the New Deal.

Posted by: Doug-E-Fresh on January 4, 2007 at 1:18 PM | PERMALINK

Yes, he slipped up, but it is sad that he feels he can do so boldly, without any compassion. I keep telling you they would love it if we all worked for Wal-Mart wages, and here he admits it.

Posted by: Hedley Lamarr on January 4, 2007 at 1:20 PM | PERMALINK

CJColucci: "The minimum wage should be the same everywhere." This might actually make some sense, but it shouldn't to Will -- unless his support for the principle of federalism operates only when convenient.

Quod erat demonstratum.

Posted by: anandine on January 4, 2007 at 1:23 PM | PERMALINK

Maybe it sounds noble to say workers aren't commodities, but it's still a fact that a "living wage" in California is one hell of a lot higher than a "living wage" in most of the rest of the world. Or in much of the rest of the U.S. for that matter. Industry will flow to the lowest labor costs.

Incidentally, less than 3 percent of U.S. hourly workers work for the Federal minimum wage or less, and most of them aren't supporting families. Minimum wage is a cheap way to buy votes from the economically ignorant.

Posted by: bobwire on January 4, 2007 at 1:24 PM | PERMALINK

Thanks, Kevin. Now why don't you take on today's David Brooks's mean spirited, assinine, completely inappropriate, poorly wrtten, smug screed on Nancy Pelosi?

Posted by: ESaund on January 4, 2007 at 1:25 PM | PERMALINK

Making American workers more financially insecure is a key goal of Republicans. You can see it in their efforts to end Social Security, to break unions, to undermine pension plans, to burden that federal government with debt so that funding for various programs assisting the middle class and workers is jeopardized, and to speed the emigration of jobs overseas. The more insecure workers are, the less they have to be provided in return for their labor and talents, and the more that can be retained for executive perks and pay.

You also see the war on workers at the cultural level, with numerous reality shows pitting various contestants (workers) against each other against an all-powerful, abitrary boss (employer) who sets them to humiliating and dangerous tasks.

These shows are a clear indication of the triumph of the values of the Republican baby-boomers/Southerners over the mainstream values of WWII-generation Americans. The WWII generation was about a decent society where workers were valued and could work together to get a fair deal out of their employers. Now the cultural and political model is workers kneecapping each other to satisfy their rich and capricious employers. The cultural model has reversed in the last generation, and is much closer to George Will's beloved "America circa 1900" model.

Posted by: Ellsworth on January 4, 2007 at 1:26 PM | PERMALINK

people are not fungible goods.

societies that treat people like fungible goods end up with the grandchildren of the disgustingly wealthy hanging from lampposts.

Coming to a neighborhood near you

Posted by: marblex on January 4, 2007 at 1:27 PM | PERMALINK

Give George Will credit. He is saying something that most Republicans sort of claim they believe.

I think the Democrats should do what Will suggests. Call a vote on abolishing the minimum wage and watch it lose 400-15. Then raise the minimum wage with overwhelming support.

Posted by: neil wilson on January 4, 2007 at 1:32 PM | PERMALINK

George Will has been a commodity all of his working life.

Especially if by "commodity" you mean "tool".

Posted by: Col Bat Guano on January 4, 2007 at 1:34 PM | PERMALINK

cant have a global economy without a global minumum wage. PERIOD.

Corporations and banks have used the global economy to impoverish 70% of the human population.

WHEN ARE PEOPLE GOING TO PUT A STOP TO THIS?

the entire banking system must go complete with a prohibition on interest on moneylending, just like it says in the fucking Bible these assholes pound so much.

Read the book of Acts for Go's perspective on how the human economy should be run.

Posted by: omfg on January 4, 2007 at 1:34 PM | PERMALINK

Slavery made this nation great.

That is an interesting statement, and I think true. The wealth the slaves generated prior to 1776 allowed their owners to rebel against England and achieve independence. Without the value added by slave labor, the wealthiest part of our nascent nation would never have existed. I think we truly owe our independence to the wealth produced by the slaves, which is why I think we need to pay reparations to their descendants.

Minium wages transfer a tiny bit of wealth from the rich to the poor, making us all richer with greater economic activity. That is why Mr. Will and those like him are against it. They like having people in thrall, not in prosperity.

Posted by: Brojo on January 4, 2007 at 1:35 PM | PERMALINK

Making American workers more financially insecure is a key goal of Republicans.

I call it the New Provincialism. Everyone will have a Gaulider they call Potter in the new world the Republicans want to build.

Posted by: Brojo on January 4, 2007 at 1:40 PM | PERMALINK

I like the new conservative openness about what they really believe. Keep this up and we'll get Democratic in power for the next generation.

Great post, Kevin. Well said.

I was about to question some of the numbers in Will's article, but it appears that echidne already has done it.

http://atrios.blogspot.com/2006_12_31_atrios_archive.html#116793453699997761

Posted by: JJF on January 4, 2007 at 1:40 PM | PERMALINK

At long last Schaife can give their trools a raise - But, will they really be worth it?

Posted by: thethirdPaul on January 4, 2007 at 1:41 PM | PERMALINK

Republicans and libertarians fuel the immigration problem they decry so loudly by paying foreign and undocumented workers significantly less than wages Americans know they need to get by in our higher-cost economy.

GOP business owners lure the illegals to the US with relatively lower wages (but no benefits) that they know the illegals desperately need and then complain about the minimum wage and the laziness of American workers.

Utter hypocrites.

Posted by: pj in jesusland on January 4, 2007 at 1:42 PM | PERMALINK

ESaund,
He doesn't need to, you have just covered it quite eloquently.
I am not even reading the news today, I want to keep my lunch down. Congress has become a kindergarten playground and the once proud Grand Old Party now a wizened self-serving bunch of power-junkies. Boot the old coots and see what a younger set of Republicans can bring to WA besides double standards and bush bootlicking.

Posted by: Zit on January 4, 2007 at 1:46 PM | PERMALINK

A rabid dog with a pedigree is just a rabid dog.

Posted by: Michael7843853 G-O in 08! on January 4, 2007 at 1:46 PM | PERMALINK

Hey don't blame old age for Will's idiocy.

Conservatives are born assholes. He has been once since he was conceived.

Posted by: gregor on January 4, 2007 at 1:47 PM | PERMALINK

The minimum wage has nothing to do with "bare minimum levels of decency" and everything to do with maintaining a health, capitalist economy.

As Henry Ford proved 100 years ago, you can't sell something if people can't afford it. By paying his workers the then princely sum of $5 per day, he ensured that he would always have a market for his cars, because the very workers who made them earned enough money to afford to buy them.

UAW leader Samuel Gompers made the same point from the opposite perspective more than 50 years later, when shown a car-building robot. The General Motors exec goaded Gompers with "Let's see you make that join a union!"

Gompers shot back: "Let's see you sell it a car."

Starve your workers and you destroy your own company. Abandon the minimum wage and watch the economy drop to third-world levels long before $200/barrel oil does it.

Every jurisdiction that has established a minimum wage above the federal minimum has seen an IMPROVED economy - higher pay leading to greater spending leading to MORE jobs, not fewer.

As Jim Hightower never tires of repeating:

Everybody does better when everybody does better.

Posted by: Yellow Dog on January 4, 2007 at 1:55 PM | PERMALINK

Having read the column I am now convinced that Will is correct. I am more than willing to replace him at the Post or for that matter on ABC. I will do the job for $1 a year. Please have George tell me when I start. Call me on my cell because I am going out to buy some bow ties!

Posted by: Stuart Shiffman on January 4, 2007 at 1:56 PM | PERMALINK

Kevin, you do know that 60% of minimum-wage earners belong to families whose income is double the poverty line and that 40% of them are in families which earn triple the poverty rate, don't you? That only 15% of them are "poor"?

That you're effectively proposing a transfer of wealth from largely poor services consumers to largely middle-class teenagers and second-income earners?

Does any of that actually matter? Or is your motivation mainly to feel good about yourself, regardless of the actual effects of what you propose?

Posted by: a on January 4, 2007 at 1:57 PM | PERMALINK

I will take you bozos seriously once you start advocacy for a truly helpful minimum. The minimum should be set to no less than $50/hour so that we can all enjoy our fair share of the upper middle class American lifestyle.

Posted by: angrylittledude on January 4, 2007 at 2:01 PM | PERMALINK

There day is comming,I read the other day lawers are being outsourced from India they work for around 30 dollars an hour compared to 150 dollars an hour plus expenses. What could be next, CEO's and soon after we will be a third world nation. Suck on that Mr.Will.

Posted by: Thomas3.6 1/2 on January 4, 2007 at 2:02 PM | PERMALINK

Making American workers more financially insecure is a key goal of Republicans.

And replacing hard work with helpless dependence upon the government is the goal of the Democrats. What's that? You take offense at that overly smug characterization?

The responsible debate over the minimum wage boils down to this issue: is there a monopsony/oligopsony in the market for labor, and if so, are employers using their superior market power to bargain down the wage for unskilled labor?

I would submit that you can be an informed person of goodwill and answer that question either way.


Posted by: Justin on January 4, 2007 at 2:05 PM | PERMALINK

This stuff makes me really damn angry, and makes me want to start a movement to remove all legal protections for these people, so they can operate in a real "free market". If a band of homeless people decide to take over Mr. Will's mansion and live there, throwing him out on the street, it's obvious that's what the "free market" has decided. He should have spent more on home security.

His mistake, his loss.
Posted by: Karmakin

So, if Mr. Will did spend more on security and hired some armed guards who shot the homeless gang to death that would be okay, too, right? Free market at work and all.

Posted by: Brian on January 4, 2007 at 2:10 PM | PERMALINK

"a' cough up support and authority for your ridiculous claims or STFU

Posted by: marblex on January 4, 2007 at 2:10 PM | PERMALINK

I will take you bozos seriously once you start advocacy for a truly helpful minimum. The minimum should be set to no less than $50/hour so that we can all enjoy our fair share of the upper middle class American lifestyle.

And here is where I jump in on the liberal side. The naive argument for raising the minimum wage is that workers deserve to be paid more than the market rate. That is clearly wrong on positive grounds. But the sophisticated argument is that the market for unskilled labor deviates significantly from the model under perfect competition. Employers have a monopsony/oligopsony and use their superior market power to bid down the cost of unskilled labor.

Posted by: Justin on January 4, 2007 at 2:11 PM | PERMALINK

These folks are trying to set the stage for New Deal II, FDR's Revenge.

Posted by: BY on January 4, 2007 at 2:11 PM | PERMALINK

I skipped over the Will $0 minwage link. Thanks for going there, so we don't have to.

Posted by: Lee on January 4, 2007 at 2:12 PM | PERMALINK

Karmakin FTW!!!

I've often thought the most vocal free market advocates are usually precisely the guys who would get trampled if we ditched the social contract and the market were truly free.

Posted by: BY on January 4, 2007 at 2:14 PM | PERMALINK

Whatever Will gets paid for his drivel, it is too much.

Posted by: asdfg on January 4, 2007 at 2:16 PM | PERMALINK

Justin that is a pretty big strawman you just knocked over.If only you had realized that corprate wefare dwarfs all other forms of welfare.Also no dems have said anything about living off the gov. Just a fair livlng wage.Don't you want to get paid fair money for what you do ?

Posted by: Thomas3.6 1/2 on January 4, 2007 at 2:18 PM | PERMALINK

Justin,

You and others can take your sophisticated arguments and burn them for heat. If we really care to raise people out of poverty and have a just society, then the minimum should be set to guarantee the lifestyle to all that is now enjoyed by the upper 30% of the population. Advocating raising the minimum by some amount that affects less than 5% of the working population is just moral masturbation, and a big FU to those of us who make more than $8/hr, but less than $50/hr.

Most of the adults writing here probably make more than $25/hr but stop well short of advocating a minimum wage anywhere close to what they themselves receive. I smell insincerity.

Posted by: angrylittledude on January 4, 2007 at 2:20 PM | PERMALINK

Thomas, the point of my comment is to show that both characterizations (Republicans are trying to increase insecurity, Democrats are trying to make people dependent upon the government) are overly smug and disrepectful.

It was not a strawman because as I made clear in my comment the debate over the minimum wage is over whether or not there is a monopsony.

Posted by: Justin on January 4, 2007 at 2:24 PM | PERMALINK

When is America going to wake up and recognize that every time we allow an employer to pay below minimum wage, we are in effect subsidizing them since we wind up paying the added costs of supporting those workers through higher health costs (they have no insurance so use emergency rooms and those costs are passed on to all of us in the form of higher insurance premiums), poor housing, poor education, food stamps and on and on.

When is America going to wake up and recognize that if EVERY worker is guaranteed a minimum wage which at least covers the basic costs of living...housing, health care, food, etc. -- we create a far more efficient distribution system.

The alternative is inefficient programs of welfare, housing subsidies, food stamps, etc., administered by bureacracies which add to the cost of the subsidy we now provide.

Giving the funds to workers as a fair minimum wage lets THEM make the economic decisions and eliminates the inefficient government middleman.

Posted by: dweb on January 4, 2007 at 2:24 PM | PERMALINK

I'll shy away from showing Will the examples of how higher minimum wages have helped local economies.

Will is just like the Climate change denialists like George Taylor. They cherry-pick data that fits their pre-concieved notions. It is too painfully easy to debunk their crap.

Posted by: Simp on January 4, 2007 at 2:26 PM | PERMALINK

Brian - ...So, if Mr. Will did spend more on security and hired some armed guards who shot the homeless gang to death that would be okay...

So long as he paid them a living wage.

Posted by: CapitalistImperialistPig on January 4, 2007 at 2:27 PM | PERMALINK

George Will treated his retarded son as a commodity when he dumped his first wife and left the son with her, so he could hook up with a trophy wife 20 years younger than him. But I'm sure he will tell you about his good "family values".

By saying the minimum wage should be $0, Will is implying slavery is acceptable, but isn't that what Wal-Mart relies on to produce those good that are made in China by prison labor, only to be marketed as "Made in the USA"? Conservatives are friggin' shameless...

Posted by: The Conservative Deflator on January 4, 2007 at 2:27 PM | PERMALINK

I for one welcome our new Democrat Overlords.

Posted by: R.L. on January 4, 2007 at 2:28 PM | PERMALINK

What Will and his ilk really want is a nation wide company town with the uberrich behind their gated walls and the vast working class begging for bones and work outside. So it will be McMansions and Labor Ready. Weak, sick, disabled, elderly (living outside the walls) need not apply - Sounds like Roma of old. Generals, not advocating withdrawal, will be provided with estates upon retirement.

Posted by: thethirdPaul on January 4, 2007 at 2:28 PM | PERMALINK

Republicans are trying to increase insecurity, Democrats are trying to make people dependent upon the government.

This is utterly confused thinking, the kind of pox on both houses thinking that gave us eight years of misrule by corrupt, incompetent, and immoral morons.

Republicans' explicit goal is to transfer the risk of business and corporate interests to the masses. Thus their immediate goal is to make the Americans more insecure, so that those whose interests they serve are better off.

Even if the effect of Democratic policies is to make some people dependent on the government, this effect is very indirect.

Posted by: gregor on January 4, 2007 at 2:31 PM | PERMALINK

Hi Kevin,

I think your post confuses *labor* with *laborers*. The market (or moral) value of labor is different from the value of a person, and if the price of labor is low it isn't a moral reflection on people who want to sell their labor.

You might still say that a minimum wage would be net beneficial for society, but it's incorrect and somewhat inflammatory to say that a minimum wage of $0 means that "workers are commodities... rather than human beings."

Posted by: aram on January 4, 2007 at 2:32 PM | PERMALINK

In the new libertarian dystopia, labor is nothing more than a cost on the balance sheet. Where once some attention was paid to making workers at least feel like partial beneficiaries of captitalism, now workers are no more than a necessary evil, parasites who feed on profits that belong to shareholders, or more realistically, to those in the executive suite. Quaint ideas like loyalty, responsibility, or even patriotism must bow to the bottom line, outsourcing to China, and a mailing address in the Caymans. It's the Wall Street sharks who are viewed as the "productive" members of the society, not those who toil for them. Hell, even using the word worker now in almost any context beyond the cost of labor smacks of communism.

When the CEO of Home Depot is lavished with a half-billion dollars for a few years of showing up, that money has to come from somewhere, and shareholders and workers get squeezed. (Shareholders have a little power and that's why Home Depot has a new CEO now, but not enough to prevent the board from laying an extra $20 million on him as a goodbye kiss just for walking out the door that was not even a part of his $200 million employment contract—I love these numbers, $20 million almost sounds measly compared to the total he got, but it's the equivalent of 3 or 4 avg. lifetime incomes for a surgeon, or winning 20 Lottos for the proles).

Next up. George Will calls for the repeal of child labor laws. Let the market set the price for labor of any age—there are mansions to be re-modeled!

Posted by: R. Porrofatto on January 4, 2007 at 2:33 PM | PERMALINK

Kevin says that Will's column is" mostly just a data dump of half facts and cherry picked numbers"

From Will's column:

"Most of the working poor earn more than the minimum wage, and most of the 0.6 percent (479,000 in 2005) of America's wage workers earning the minimum wage are not poor. Only one in five workers earning the federal minimum lives in families with earnings below the poverty line. Sixty percent work part time, and their average household income is well over $40,000. (The average and median household incomes are $63,344 and $46,326, respectively.)"

Are these number accurate? Only .6% of the working population is getting the minimum wage? So the Democrats first big policy initiative is directed at helping one half of one percent of the working population of the country? Talk about micro-policy making. I guess Clinton was right when he said the era of big government is over. lol

Of course, the real reason why the Dems want to raise the federal minimum wage is because all sorts of union contracts in both the public and private sectors use the minimum wage as a baseline for setting wages for their members. So if an union contract says that the lowest wage a member can get is twice or three times the minimum wage, then a $2 or 3-dollar increase in that wage translates into $4 or 6-dollar increase for the union member. This, in turn, will result in an increase in collectable dues for the union and their PACs, which in turn, will result in increased campaign contributions to the Dems.

And there you have it, the Democratic Circle of Life.

Posted by: Chicounsel on January 4, 2007 at 2:38 PM | PERMALINK

The naive argument for raising the minimum wage is that workers deserve to be paid more than the market rate.

The difference between what workers earn and the value of their labor is a surplus that our political economy has always acknowledged belongs to the employer. That is why employers are able to accumulate so much wealth. Market rates for anything, including labor, are not natural, nor perfectly ideal, and are subject to manipulation by those with accumulated weatlh or special knowledge unavailable to everyone.

Political economies are whatever we want to make them. Unfortunately, political economies are usually made to benefit those who have already accumulated weatlh, which is why the propaganda themes about free markets and earned wealth are so pervasive. The wealthy usually add no value to the products and services sold for revenue, yet they keep most of the surplus value added by labor. Transferring just a tiny bit of the rich's wealth to the poor helps to counter the gamed markets so many think are ideal.

Posted by: Brojo on January 4, 2007 at 2:40 PM | PERMALINK

Al wrote: Slavery made this nation great.

Don't forget genocide.

I suggest that the minimum wage be set at one percent of the maximum wage.

Posted by: SecularAnimist on January 4, 2007 at 2:50 PM | PERMALINK

Are these number accurate?

As was pointed out here, the stats came from the BLS. Will, being the sleazeball propagandist that he is omits a key sentence (a mendacious habit viz. his description of the Bush/Webb encounter).

Of those paid by the hour, 479,000 were reported as earning exactly $5.15, the prevailing Federal minimum wage. Another 1.4 million were reported as earning wages below the minimum.

Posted by: R. Porrofatto on January 4, 2007 at 2:51 PM | PERMALINK

"is there a monopsony/oligopsony in the market for labor, and if so, are employers using their superior market power to bargain down the wage for unskilled labor?"

Yes. But there isn't any bargaining involved. Since they have monopsony power, they are using their political influence to have the wages of Americans driven down as much as possible, so that more money can flow into the bottom lines, and therefore into their own pockets (since they are in a position ot dictate their own compensation).

We've been in this position before, in 1929. That's why the New Deal was struck, and it resulted in the most prosperity American has ever known. Why are we trying to pretend none of that history ever occurred? Why are we trying to pretend 1900 was paradise for America? Maybe it was for the richest few, but for most Americans it wasn't.

And if the country doesn't work for most Americans, it doesn't work, period. Ford know that, which is why he raised the wage for his workers in 1914. He know that by doing so, he created his own consumers. We seem to have forgotten that. If we destroy the purchasing power of the American consumer, we destroy a large part of the world economy. Driving wages down to poverty levels is the fastest way to accomplish this. Doing things to raise the purchasing power of the American consumer, by increasing his compensation, is the best way to avoid the problems history has shown us will be coming if we remain on our present path. Republicans seem able to forget this history, or, at worst, to concoct badly skewed economic justifications for draining the national wealth into the pockets of the few, as Milton Friedman was so famous for doing.

Most of those at the top, whom Republicans worship as wealth creators, are in fact only wealth inheritors. They have created nothing. True, there are a few who have made their own fortunes, as Sam Walton did. But most simply inherited the fortune someone else earned, as Sam's kids did.

Posted by: CN on January 4, 2007 at 2:51 PM | PERMALINK

The minimum wage is a price control placed on a strapped labor market! It MUST go!

Kevin Drum stated:

First, as a matter of empirical economics, workers aren't commodities. Unlike pig iron ingots, they respond to incentives, they can be trained to operate more efficiently, they put their paychecks back into circulation, etc. As Will is undoubtedly aware, there's an entire branch of economics dedicated to exactly these issues, and it reaches conclusions considerably more complicated than those in the Micro 101 class he took half a century ago.

The liberal thinking is that people are people and all that peace and love and human rights crap. Well, the fact of the matter is, SKILLED labor is not really a commodity but UNSKILLED labor is definitely a commodity, especially in the hog rendering and chicken processing world. One does not measure the number of employees; one measures the number of chickens or hogs rendered and calculates the minimum number of persons needed to accomplish that goal.

SKILLED labor is tougher to measure, but UNSKILLED labor is something you can measure with basic metrics. Therefore, Mr. Drum is wrong.

Second, he's mistaken in a moral sense. A rich society really has no excuse for not setting bare minimum levels of decency for all human interactions, including those between employer and employee. Virtually everyone in America accepts this today, which is why increasing the minimum wage garners support of 70-80% in most polls. But apparently it's still a controversial concept in some quarters.

Bare minimum settings? Oh, so the market be damned and we'll all sing Kumbayah and let all boats rise with the flood?

What INCENTIVE does anyone have to work hard, play by the rules, and inherit their money?

The only controversy is how badly liberals want to hand Joe Six Pack fifty grand so he can blow it on a Dodge Durango and drive drunk all over the place.

Did it occur to any of you liberals that, by raising the minimum wage, Joe Six Pack will get a taste of the good life and stop working? Whenever his boss starts giving him grief about a hair net or an open sore, Joe Six Pack just shrugs and walks out the back door and gets another high paying job, courtesy of the Democrat Party and their $17 dollar and hour "minimum" wage.

How long before the Democrat Party sets a "MAXIMUM" wage that stops talented Americans from going any further? What do you liberals have against excellence, anyway?

Posted by: Norman Rogers on January 4, 2007 at 2:52 PM | PERMALINK

When minimum wage was 25 cents, a burger and a beer cost 25 cents.

Now that minimum wage is up over $6, a burger and a beer cost over $6.

If we raise minimum wage to $50, a burger and a beer will cost $50.

There are other ways to mandate fair treatment of workers, but a minimum wage is useless.

Read the book Animal Farm and you will see where we are heading.

Posted by: Gman on January 4, 2007 at 2:53 PM | PERMALINK

When minimum wage was 25 cents, a burger and a beer cost 25 cents.

Now that minimum wage is up over $6, a burger and a beer cost over $6.

If we raise minimum wage to $50, a burger and a beer will cost $50.

There are other ways to mandate fair treatment of workers, but a minimum wage is useless.

Read the book Animal Farm and you will see where we are heading.

Posted by: Greg on January 4, 2007 at 2:54 PM | PERMALINK

Now that minimum wage is up over $6, a burger and a beer cost over $6.

No, I believe it's only $5.15 and Nancy Pelosi wants to make it $17 per hour.

Can't any of you get anything right? Do I have to do everything around here?

Posted by: Norman Rogers on January 4, 2007 at 2:55 PM | PERMALINK

Will has been the beneficiary of a very un-free market in punditry. It's not like there's a continuous competition for the slots on the WaPo and NY Times op-ed pages; once you're there, it's nearly impossible to fall off. (What other excuse is there for Robert J. Samuelson's byline to still exist?)

In this wonderful Internet world, the online op-ed pages of the great papers could easily host fifty or a hundred op-ed columnists, most of whom would be paid very little, but the papers could see who was really popular and who wasn't, and adjust their dead-trees op-ed sections accordingly.

Posted by: RT on January 4, 2007 at 2:59 PM | PERMALINK

This fellow "Greg" or "GMAN" is obviously just another Joe Six Pack, sloughing off from work, drunk and poor, trying to make a point and can't figure out that the posts take a moment to appear when actually made.

Sir--crazy, drunk, and poor is no way to go through the day.

Posted by: Norman Rogers on January 4, 2007 at 2:59 PM | PERMALINK

CN wrote: "We've been in this position before, in 1929. That's why the New Deal was struck, and it resulted in the most prosperity American has ever known. Why are we trying to pretend none of that history ever occurred? Why are we trying to pretend 1900 was paradise for America? Maybe it was for the richest few, but for most Americans it wasn't."

Why? For the obvious reason that we now have a government of, by and for "the richest few".

Posted by: SecularAnimist on January 4, 2007 at 3:05 PM | PERMALINK

Hey Gman,

The minimum wage has been flat for the last ten years, but inflation has not. Could you work a little harder on your strawmen arguements?

Posted by: cyntax on January 4, 2007 at 3:05 PM | PERMALINK

I see Havlicek went down on Frazier, the other sock-puppet for Kenneth.

Accord this idiot loser all the consideration a sock-puppeting loser merits.

Posted by: Global Citizen on January 4, 2007 at 3:08 PM | PERMALINK
Only .6% of the working population is getting the minimum wage?

Perhaps. Lets just assume its accurate for the sake of argument.

So the Democrats first big policy initiative is directed at helping one half of one percent of the working population of the country?

Nope. Changes to the minimum wage do not effect only people making the minimum wage. For a number of reasons.

Most obviously, when the minimum wage is increased from $X to $X+A, everyone making less than $X+A and subject to the regulation benefits quite directly, not just those making $X.

Also, most places of employment maintain wage differentials based on experience and other factors. While people making greater than the new minimum wage get no mandatory benefit, very often they get some benefit (if not immediately, over time) as general wage scales above the minimum wage are pushed upward by the minimum wage increase.

For similar reasons, people employed in such a way as to not be directly subject to the minimum wage regulation also are often benefitted, as the minimum wage increases what they could earn in alternative employment, and places pressure on pay even where the minimum wage regulation does not apply.

Posted by: cmdicely on January 4, 2007 at 3:09 PM | PERMALINK

Posted by: bobwire on January 4, 2007 at 1:24 PM

I think you are wrong. The minimum wage is a very important economic tool to be used by the government just like the Fed's ability to establish short term interest rates. Raising the minimum wage has a ripple effect throughout the economy. Over time it forces up wages all the way up the working class. Which forces money out of savings thereby increasing the amount of money flowing through the economy. To a point such stimulus is good for everybody. Of course, the trick is to make sure the increased wages aren't swamped by inflation.

Posted by: Ron Byers on January 4, 2007 at 3:10 PM | PERMALINK

Calling workers a commodity is the exact opposite of what a supposed uber-capitalist like George Will (per his corporate overlords) should be calling workers. Employees are perhaps the most differentiated of all factors. Usually right-wing talking points are against the commodity characterization since this would be a pro-union arguement. If workers were a commodity there of course would be no need to pay the recently departed CEO of Home Depot $450 million over 6 years.

Please George get your talking points straight.

Posted by: allan hughes on January 4, 2007 at 3:10 PM | PERMALINK

Mark Twain: "Let you secret sympathies and your compassion be always with the underdog in the fight--this is magnanamous; but bet on the other one, this is business."
Sure enough, the Republican controlled congress failed to raise the federal mimimum wage since 1997, when it went from $4.75 to $5.15 an hour.
It was said this was the longest stretch without an increase since 1938. The minimum wage, of course, was introduced at 25 cents an hour by Franklin Delano Roosevelt.
Recall, in the third televised debate with Kerry, Bush quickly changed the subject of the minimum wage and jumped to talking about his every child left behind program as a jobs act.
It is only fair the wage be increased, and good for the dems to make it happen.
As Senator Kennedy said years ago, "the 2 most recent increases in the minimum wage did not cause the sky to fall."

Posted by: consider wisely on January 4, 2007 at 3:14 PM | PERMALINK

It might be too late in the thread to matter, or the point might already be made, but Labor is a commodity, Workers are not. In other words labor does not equal worker. They’re linked because workers produce labor but they’re not equivalent. You can make policies that affect one but not the other. Minimum wage is intended to improve the life of a worker by putting a price floor on the commodity they produce. This may or may not help. It also may or may not increase social justice. I think the minimum wage hike will either be of little to no help.

An alternative, and I think better, proposal would be to increase the EITC.

Posted by: Joe on January 4, 2007 at 3:15 PM | PERMALINK

So the Democrats first big policy initiative is directed at helping one half of one percent of the working population of the country?

As has been pointed out - Will's numbers are bogus. However, you had no problem when EVERY Republican policy initiative was directed at helping the top one-half of one percent in this country.

Posted by: ckelly on January 4, 2007 at 3:17 PM | PERMALINK

It's interesting how the "low-wage" conservatives trot out these tired pseudo arguments on a regular basis. They've been used for justifying everything from slavery to child labor to unequal pay for women, and the horrors that would be unleashed if status quo was changed.

Hasn't happened yet. Never will. It's a country of the people - not the corporations.

What "leftist" made these observations:

* Vanity drives the struggle for wealth. The rich want "to possess those decisive marks of opulence which nobody can possess but themselves."

* Market society is profoundly inegalitarian. "For one very rich man, there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many."

* There's nothing fair or evenhanded about the role of government in any of this. The government, "so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all."

Every single passage is from Adam Smith, "The Wealth of Nations". I wonder how many of those bloviating blow-hards and energetic young right-wing lobbyists sporting Adam Smith neckties know what he actually says .
\

Posted by: Joshua Norton on January 4, 2007 at 3:19 PM | PERMALINK

True, there are a few who have made their own fortunes, as Sam Walton did. But most simply inherited the fortune someone else earned, as Sam's kids did.

And as even the most ardent Walmart cheerleaders will admit in an unguarded moment, WallieWorld Corp has gone all downhill since Sam's death. Yet another reason for a strong estate tax.

Posted by: Disputo on January 4, 2007 at 3:31 PM | PERMALINK

Kevin: Great piece as usual. One quibble: The headline. "MINIMUM WAGE FOLLIES"? Why not "GEORGE WILL FOLLIES"? After all, almost all of George Will's columns are insincere, dishonest, or undisclosing of his relevant interests. Will is corrupt and rotten to the core, and no respectable newspaper should pay him or print his words.

Posted by: Joel Rubinstein on January 4, 2007 at 3:35 PM | PERMALINK

Accord this idiot loser all the consideration a sock-puppeting loser merits.
Posted by: Global Citizen

So I estimate that value to be about equivalent to Mr. Will's proposed minimum wage.

:)

Posted by: cyntax on January 4, 2007 at 3:36 PM | PERMALINK

Raising minimum wages, in the long run, changes nothing for those earning it. Just mandating a higher minimum does not make the worker more valuable in relation to the other factors of production-and in the short-run, has the opposite effect. In time, the monetary values of all the other factors are adjusted to reflect the relative values that would have obtained in the absence of the price floor for one factor.

For example, one could try to raise the value of the minimum wage (and all other wages for that matter) by setting price ceilings, that are lower than the present prices, for the goods and services that the workers consume. How many of you would think that would work out well?

Posted by: Yancey Ward on January 4, 2007 at 3:38 PM | PERMALINK

All angry comments aside, I've been following and thinking about these things for a while. The biggest argument against raising the minimum wage is one of inflation.

This is actually a valid argument...in a different reality. There is a certain point where if you increase the cost of labor, that it'll make it impossible for business to operate.

We are NOWHERE NEAR THAT POINT. It's in another galaxy. So the inflation doesn't come from that side. The other side, is that if people have more money, they'll be willing to spend more, driving up prices. This is another cannard. This aspect of inflation is a social issue, with a consumer mindset where for one reason or another they'll refuse the best deal. I've actually seen this before, and it's a real concern. But I think after the rough time of the last few years, I think this will be much less apparent in the future.

So what will people do with that money? In the short term, pay more bills and stop falling behind. That's good enough for now. As those bills start getting paid off, instead of cutting their own hair, they might go to a hair stylist, something like that, actually increasing the amount of labor that needs to be done in our society, making more jobs and a more vibrant economy.

All this is a good thing.

If Greenspan decided to not fight inflation on the backs of those at the bottom of our society, and let the 90's boom, where money actually was leaving the investment markets and doing what investment is SUPPOSED To do, namely hire people, go towards improving fixtures and infrastructure, etc. continue, and we got close to a competitive market FOR labor, we probably wouldn't be having this debate right now.

Posted by: Karmakin on January 4, 2007 at 3:38 PM | PERMALINK

Let us assume that only a tiny minority of workers are affected by raising the minimum wage.

Then what possible reason is there to oppose raising the minimum wage? It will have a minimal effect, after all.

I don't understand how we can have 'Raising the minimum wage won't matter' and 'Raising the minimum wage is the devil' arguments in the same thread.

Posted by: Sandals on January 4, 2007 at 3:40 PM | PERMALINK

Read the book Animal Farm and you will see where we are heading.

At the end of Animal Farm, George Orwell makes it plain he thought capitalists and Stalinists were indistinguishable from each other and that he thought them both to be pigs.

Posted by: Brojo on January 4, 2007 at 3:42 PM | PERMALINK

Chicounsel,
Above, you carp on the Democrats for pushing legislation targeted at 0.6% of the working population, then you bitch about how all sorts of other people stand to see their wages increase with a minimum wage increase. That is hilarious.

So the beneficiaries are:
1) The 0.6% of people making exactly the minimum wage.
2) The about 2% of people making less than the minimum wage.
3) Anybody making a wage between the current minimum and the proposed level.
4) Anybody whose wage is dependent on the minimum wage by express contract.
5) Anybody whose wage is dependent on the minimum wage indirectly by market considerations.

The Democrats: helping their constituents! (The bastards!)

Posted by: dan on January 4, 2007 at 3:43 PM | PERMALINK

What INCENTIVE does anyone have to work hard, play by the rules, and inherit their money?
--Norman Rogers

So there's an incentive to have rich parents? I thought that was just part of winning the sperm lottery.
I'm hoping you're a paradoy, because no one could be that fucking stupid.

Posted by: Unholy Moses on January 4, 2007 at 3:54 PM | PERMALINK

uman beings may not be commodities but their labor (Labor) certainly is. Besides such protestations against regaridng human beings in terms of commodities are kind of in vain when arguing for Government to subsequently puts a price on them.

If we are to revamp our economic system to instead focus on the value of labor's "humanity" rather than the value of labor's "labor", then I have a number of issues to bring to the table. For one, are human beings only worth 5.15 an hour? If we triple that, are human beings only worth 15 dollars an hour? And why should some like Moviestars, superstar athletes & CEOs earn millions by comparison. Is their humanity worth more than a janitors? I should think not.

Posted by: DRR on January 4, 2007 at 4:07 PM | PERMALINK

Three comments on Will:

(1) Not a single one of his arguments applies against the alternative of raising the Earned Income Tax Credit -- indeed, this would avoid the problem he mentions of the fact that raising the minimum wage would include raising it for SOME people whose total families earn a lot more. (Unless, of course, you argue that the working poor ought not to receive any kind of economic assistance whatsoever because they're just "a commodity". It's unclear from his column whether Will goes that far into Scroogeland.)

(2) In his penultimate paragraph, he admits that there's an excellent chance that gradually raising the minimum wage will have a "negligible" effect in increasing unemployment.

(3) Brad DeLong and Daniel Gross had a field day with Will's not just wrong, but downright hilarious distortions of 1930s economic history in his first paragraph: http://delong.typepad.com/sdj/2007/01/daniel_gross_ha.html .

Posted by: Bruce Moomaw on January 4, 2007 at 4:07 PM | PERMALINK

An argument has been made that in the long run raising the minimum wage doesn't really matter because the system will adjust and the effects of the minimum wage will be taken into account. In the long run we are all going to be dead so whatever we do doesn't really matter.

The fact is our economy operates in the here and now. The short term effect of increasing the minimum wage is to move money out of the savings of the wealthy and into the hands of the working class. Money in the hands of the working class has a multiplier effect. While the money pulled out of savings will ultimately end up back in savings, during its time floating around in the economy the money will have a real and positive impact. Raising income taxes on the rich has the same impact. The same can be said for lowering the capital gains rates which encourages rich people to move money from one asset to another. Again the key is not to kill the goose laying the golden eggs.

All of this requires thought deeper than can be expressed on a bumper sticker. The intent is not to engage in class warfare. It is instead intended to headoff the kind of class warfare mentioned above where the grandchildren of the very rich find themselve hanging from lampposts.

Posted by: Ron Byers on January 4, 2007 at 4:08 PM | PERMALINK

I'm hoping you're a paradoy, because no one could be that fucking stupid.

Duke graduates, to the last, are too dumb to get into Harvard or Yale, but are filled with a tad bit too much self-entitlement to actually work for a degree at a real school. So for $35k a year their parents buy them interaction with other below-average rich kids.

Norman's posts are obviously either a parody or written by a Duke graduate. Norman claims to be a Duke grad, and judging by all my prior interactions with the shiftless upper-class derivatives known as Duke graduates, I am inclined to take his comments at face value.

Posted by: * on January 4, 2007 at 4:10 PM | PERMALINK

If, as I suggested above, the minimum wage were set by law at one percent of the maximum wage, then at the current minimum wage of $5.15 per hour, the maximum wage would be $515 per hour.

For a nominal 40-hour work week, for a nominal 52-week work year, the maximum wage would now be:

$515 x 40 x 52 = $1,071,200 per year

Over one million dollars per year.

Any income above that would be taxed at 100%. The proceeds could be used to fund universal single-payer nonprofit medical insurance, universal free public education including four years of college, and (as radical leftist Richard Nixon proposed) a universal, guaranteed minimum income equal to the minimum wage.

If the minimum wage were increased to $7.25 (as I believe the Democrats are proposing to do, in phases) then the annual maximum income would be correspondingly raised to $1,508,000 and the guaranteed minimum income would be $15,080.

Posted by: SecularAnimist on January 4, 2007 at 4:14 PM | PERMALINK

I'll all for a min wage hike just cuz, who fucking cares. I'm against it in principle for two reasons, 1) [I'm not sure about this, it's just something I've heard) some union job base thier pay on the minimum wage and a hike will result an underserved raise for already overpaid workers. 2) Price controls create black markets.

I suspect the largest (though still small) effect of a min wage hike will be a slight shift toward the use of more illegal (generally migrant) workers. Also an increase (or, more likely, further delay in the long overdue decrease) in the price of CDs as teenagers will have more disposable income.

Posted by: aaron on January 4, 2007 at 4:23 PM | PERMALINK

Back in college, both my Macro and Micro Econ Profs said labor was a commodity, and that fair market values were the basis of classical Keynesian economics.

I guess they didn't bother to consult any touchy-feely bleeding hearts while forming their course outline, or they would have censored it from the text books.

Posted by: sportsfan79 on January 4, 2007 at 4:30 PM | PERMALINK

Let's all have id,s that state how much money we make.I buy a burger it will cost me 6 bucks.G Will would have to pay 38 bucks for his burger.Market just took care of wage indiffrence.Then you guys can have the minimum wage set to 1.00 dollar if you want.

Posted by: Thomas3.6 1/2 on January 4, 2007 at 4:36 PM | PERMALINK

SA, sorry in advance for the ad hominem, but you're a fucking idiot. Reallocating $s from rich to poor people will not make poor richer. The supply of good avaible remains the same, all that would happen is that there would be no way to determine who should get the higher-demand (re: pricier) goods, likely resulting in goods that are only available through networking (political connections) and the destruction of some high-end markets. Giving people more money will not increase the supply of mac and cheese.

Posted by: aaron on January 4, 2007 at 4:36 PM | PERMALINK

I'm with Clyde. It really irks me that wages are taxed (twice!) at much higher rates that capital gains. With Congress now in the hands of the People's Party, maybe an early order of business should be to tie taxes on labor to taxes on capital. Since capital gains are the income of the rich, they should be taxed at the highest marginal rate for labor.

And capital gains should also carry tax for Medicare and Social Security.

Also, why is interest income taxed like wages and not like capital gains?

Posted by: Cal Gal on January 4, 2007 at 4:37 PM | PERMALINK

Destruction is an overstatement, Stunting would be more appropriate. It'll take longer for high end markets to develop. That means it will probably take longer for the better product to reach the average person.

Posted by: aaron on January 4, 2007 at 4:40 PM | PERMALINK
Raising minimum wages, in the long run, changes nothing for those earning it.

That's true: in the long run, the mean experienced utility over all time for any individual person will be close enough to zero as to make no difference, since most of that time they'll spend dead.

However, in the shorter run, where it was designed to operate, minimum wage increases have important effects.

Just mandating a higher minimum does not make the worker more valuable in relation to the other factors of production-and in the short-run, has the opposite effect.

This is nonsensical. Certainly, it might be argued (though it is not clearly the case) that raising the minimum wage itself may not increase the value of labor in the shortest term (but see below for longer term considerations), but certainly there is no rational basis for arguing that it decreases it, even in the short term. At best, such an assertion needs at least some support in the form of either argument or evidence before being taken even remotely seriously.

The usual, and somewhat less insane, right-wing argument is that raising the minimum wage has no effect on the value of labor, but by increasing the price over the market value, encourages unemployment. The only problem is that, despite quite a history of minimum wage increases, there is no empirical evidence for this otherwise at least plausible effect.

In time, the monetary values of all the other factors are adjusted to reflect the relative values that would have obtained in the absence of the price floor for one factor.

Unlikely. Increasing the cost of labor increases the incentive to invest in capital, etc., which increases labor productivity, since it makes more labor-intensive methods of production less profitable. This increased incentive to invest in purchasing these types of capital, etc., likewise stimulates investments in improving and developing labor-magnifying capital products, drives technological development, and thereby increases labor productive and the value of labor.

For example, one could try to raise the value of the minimum wage (and all other wages for that matter) by setting price ceilings

One could, but the effect would be entirely different than applying a minimum wage, since price ceilings would affect all workers (and nonworkers) equally, whereas a minimum wage increase has a short-term effect most pronounced at the lowest end of the scale, and while it has side effects that tend to trickle up the scale, its effects fade over time, limiting the scope of its impact, as you yourself point to when you mention that over time, the price of other goods and services reacts to the change in the minimum cost of labor. Price controls are not, unlike minimum wage hikes, focussed on improving conditions at one point on the economic scale.

Which is why the effects sought by increases in minimum wages require the increases to be regular and repeated, not one time and then stopped.

So, aside from making a horrid, ill-conceived analogy, what is your point?

Posted by: cmdicely on January 4, 2007 at 4:44 PM | PERMALINK

How about setting the minimum wage as a percent of the boss's income? (Not the bosses wage, but what the boss takes home in both wage, stock options, etc.) And if the boss gets a golden handshake, a percentage of that, too, has to go to each worker.

And this applies to workers in foreign countries, too.

Posted by: Cal Gal on January 4, 2007 at 4:49 PM | PERMALINK
SA, sorry in advance for the ad hominem, but you're a fucking idiot. Reallocating $s from rich to poor people will not make poor richer. The supply of good avaible remains the same, all that would happen is that there would be no way to determine who should get the higher-demand (re: pricier) goods, likely resulting in goods that are only available through networking (political connections) and the destruction of some high-end markets.

Er, no. You really shouldn't be calling anybody any kind of idiot.

Reallocating some money from the rich to the poor does, in fact, make the poor relatively richer. And presuming (as you do) constant availability of goods (itself unlikely, I would think, but that's another debate), it would also make them absolutely richer and the rich absolutely poorer.

Further, it would not make it any harder to figure out who gets high-demand goods: they would still be allocated on the basis of ability to pay, and relative access to wealth would still control who gets what. That the poor have more wealth and the rich less changes that not at all.

Further, many goods are available only through networking now (though the connections involved are only sometimes what is usually described as "political".)

Giving people more money will not increase the supply of mac and cheese.

Giving people who are likely to spend more of their available income on basic foodstuffs more money will, indeed, most likely increase, to some degree, the market clearing cost, and subsequently the quantity supplied, of such foodstuffs. Giving poor people more money those will, likely, increase the quantity supplied, if not actually the "supply", in technical economic terms, of basic foodstuffs (though a long-term increase in demand is likely to also stimulate changes that increase supply as well as quantity supplied, barring exhaustion of non-replaceable production capacity.)

Posted by: cmdicely on January 4, 2007 at 4:51 PM | PERMALINK

"Increasing the cost of labor increases the incentive to invest in capital, etc., which increases labor productivity, since it makes more labor-intensive methods of production less profitable. This increased incentive to invest in purchasing these types of capital, etc., likewise stimulates investments in improving and developing labor-magnifying capital products, drives technological development, and thereby increases labor productive and the value of labor."

This makes sense in an undeveloped manufacturing economy, now consider a service based economy.

Posted by: aaron on January 4, 2007 at 4:51 PM | PERMALINK
Norman claims to be a Duke grad ...

You could've stopped right there and I would have understood. :-)

Posted by: Unholy Moses on January 4, 2007 at 4:58 PM | PERMALINK

If you go back and look at the statistics from the BLS that have been quoted here, and look at previous years back to 2002, the number of people working for the Federal minimum wage or less has dropped from 3 percent to 2.5 percent.

Posted by: ein on January 4, 2007 at 4:59 PM | PERMALINK
I'm with Clyde. It really irks me that wages are taxed (twice!) at much higher rates that capital gains. With Congress now in the hands of the People's Party, maybe an early order of business should be to tie taxes on labor to taxes on capital. Since capital gains are the income of the rich, they should be taxed at the highest marginal rate for labor.

The problem is this:
Capital gains aren't only the "income of the rich". Taxing capital gains, without exception or limitation, at the highest marginal rate for labor would hurt moderate income self-employed people who need to cash out, middle-class homeowners, etc., more than the rich.

That being said, an effort should be made to tax capital gains equitably with labor income, so that a person with similar overall annual income will make out the same no matter what mix of labor and capital they derive their income from. In order to do this, some special treatment for long-term capital gains is necessary, though it may be enough to let such gains be anticipated for tax purposes.

Additionally, programs that are currently funded based on taxes on (and where benefit eligibility is only established by) labor income must be extended to treat capital gains equitably as well: while this would reduce the realized, after-tax gains from capital investments. That a person earns money by trading capital reduces neither the social desirability of providing them minimal retirement security through Social Security nor the justification for expecting them to contribute in common to social programs like that.

Posted by: cmdicely on January 4, 2007 at 5:03 PM | PERMALINK

The mac and cheese statement used to emphasize how stupid it would be to incentivize the increased production of low-end mass poduced goods that are already overly consumed.

Yeah that's what we need to do, encourage the poor to increase their already low-nutition high-calorie food consumption. That's what we'd be doing.

The point is that the poor consume, the rich customize.

Posted by: aaron on January 4, 2007 at 5:03 PM | PERMALINK
This makes sense in an undeveloped manufacturing economy, now consider a service based economy.

Already did. It works the same, though the particular labor-magnifying investments may be different. Even in a service based economy, there is considerable value to be realized by labor-magnifying capital (and related) investments. There is a reason that, for instance, financial and other "knowledge" services spend enormous amounts of money on, for instance, information technology. There is also a reason for business-process patents and investment in development of business methods. Not every labor-magnifying product is a manufacturing robot. Note, also, that workforce development expenditures are a capital-like investment here.

Posted by: cmdicely on January 4, 2007 at 5:09 PM | PERMALINK

You want to sell income redistribution, then prove that it will lead to better decisions (for example, choosing education, health, and less polluting alternatives).

You have way too much faith in the average american. You have to understand that average is our idea of dumb. You and I probably don't know anyone of average intelligence and probably don't even have to deal with one on an average day. Narrowing the income distrubution will lead to greater consumption and less focus on quallity.

Posted by: aaron on January 4, 2007 at 5:09 PM | PERMALINK
Also, why is interest income taxed like wages and not like capital gains?

IIRC, both short-term capital gains and interest income are taxed like regular income and don't get the special treatment of "long-term" (>1 year period) capital gains because the logic of the special treatment of capital gains in a progressive tax system is that they develop over a greater period and therefore it is unfair to treat them all as being at the top marginal rate for the period in which they are realized, which logic doesn't even superficially apply to short-term capital gains and interest income.

As I suggest above, a simple solution for long-term capital gains is just to allow them to be recognized in anticipation of realization and taxed as regular income, which is more equitable.

Posted by: cmdicely on January 4, 2007 at 5:12 PM | PERMALINK

You have to understand that average is our idea of dumb. You and I probably don't know anyone of average intelligence and probably don't even have to deal with one on an average day.

This is because you're all liberal elitists who want to tell people how much money they can have and how to live their lives. No comparisons to the former Soviet Union are necessary--none of you are smart enough or old enough to detail why Communism failed to take hold and make the glory of the state serve as the incentive to produce and consume appropriately.

Skilled labor is a commodity because you have to compete for it; unskilled labor is what you can go down to the corner and get from a job hiring site. I can find slackjawed paper hangers anywhere, but I cannot easily find a person capable enough to manage my investment portfolio.

Watching liberals debate economics is like watching old people fornicate--they once knew how to do it, but now they're slow and they miss the point and can't understand what happened.

Posted by: Norman Rogers on January 4, 2007 at 5:15 PM | PERMALINK

aaron wrote: "SA, sorry in advance for the ad hominem, but you're a fucking idiot."

That's not an ad hominem, it's just an insult.

Posted by: SecularAnimist on January 4, 2007 at 5:20 PM | PERMALINK

If labor is a commodity, certainly capital is also a commodity. Why don't we hear G. Will and other conservatives decry meddling in the free marketplace by the Federal Reserve when it sets interest rates?

Posted by: glenintexas on January 4, 2007 at 5:22 PM | PERMALINK

Secular Animist:

Good idea, the time has come to start talking about maximum incomes. Keep talking.

Check this out:
http://environment.newscientist.com/article/dn10884-collapse-of-civilisations-linked-to-monsoon-changes.html

Posted by: slanted tom on January 4, 2007 at 5:27 PM | PERMALINK
POSTSCRIPT: It's worth noting that Will is mistaken in two different ways.

Its worth noting that, while Will is mistaken in a veritable panoply of different ways, the first "mistake" you point to is a strawman, not a mistaken Will makes, and the second is a disagreement in your values with his, not an objective "mistake" of any kind.

First, as a matter of empirical economics, workers aren't commodities.

Will never said workers were commodities, he said labor is a commodity. The two are not equivalent.
Whether labor is validly a commodity probably depends on the context and type of labor, but is largely unrelated to whether workers are commodities.

Second, he's mistaken in a moral sense. A rich society really has no excuse for not setting bare minimum levels of decency for all human interactions, including those between employer and employee. Virtually everyone in America accepts this today, which is why increasing the minimum wage garners support of 70-80% in most polls.

While I frequently disagree with Will's moral "sense", the argument you make here does not support the claim that he is mistaken morally, only that his view might conflict in some way with what is popular.

Posted by: cmdicely on January 4, 2007 at 5:29 PM | PERMALINK

Watching liberals debate economics is like watching old people fornicate


Watching "cheap labor" conservatives debate economics is like watching of second graders yelling at each other over whose mom packed the best lunch.

Their smoke and mirrors boil down to one objective - When you're unemployed and desperate, corporations can pay you whatever they feel like – which is inevitably next to nothing. You see, they want you "over a barrel" and in a position to "work cheap or starve."

Cheap-labor conservatives support every coercive and oppressive function of government, but call it “tyranny” if government does something for you

Posted by: Joshua Norton on January 4, 2007 at 5:33 PM | PERMALINK

"This is because you're all liberal elitists who want to tell people how much money they can have and how to live their lives"

Norman, Aaron's (who you quote) arguing against the min wage hike. He's not taking the liberal side of the argument.

HTH.

Tom

Posted by: Urinated State of America on January 4, 2007 at 5:37 PM | PERMALINK

You want to sell income redistribution, then prove that it will lead to better decisions

Many do not recognize that the vast middle class that characterizes America did not exist prior to the Depression. There was a middle class before the New Deal, but it was not applicable to a very large portion of the population, who lived on the farm without electricity and plumbing or who worked six days a week in dirty, unsafe factories.

Wealth transfers may or may not have led to better decision making (a gamed question), but they did lead to higher living standards for just about everyone and the largest middle class in the history of the world.

Posted by: Brojo on January 4, 2007 at 5:38 PM | PERMALINK

The best conservative argument for eliminating or creating more exceptions to the minimum wage is to enhance opportunities for training and apprenticeship. Many liberal critics scoff at this, arguing that businesses can afford training at minimum wage levels.

But there is a policy step missing if we are truly uphold the values embodied by the minimum wage, and it *requires* that the liberal critics are correct on the economics:

We must ban "unpaid internships" as violations of the minimum wage law.

It is senseless, inequitable and contrary to public policy to allow private businesses to give preferable treatment (highly valuable training and preference in future hiring) to those able to afford to work "for free" over those willing to work for the minimum wage.

Posted by: Fletcher on January 4, 2007 at 5:43 PM | PERMALINK

SA, very true. Thanks for the correction.

Posted by: aaron on January 4, 2007 at 5:44 PM | PERMALINK

cmdicely,

Ah, another deliberate misinterpretation by the greatest master on the web. I probably shouldn't waste my time, but I have nothing better to do at the moment.

Raising the minimum wage decreases the value that accrues to the employer of the worker in the short term, thus making the worker's labor less valuable. Now, I realize that you and many others here believe that price floors, and rising price floors for labor don't have an adverse effect on employment, but the studies you and others always cite are not convincing enough to overturn the general law of economics that a rising price lowers demand for a good or service.

To the second point about where the readjustment stops, I will concede a little ground since I was simplifying for the sake of brevity. However, if you think this is a justification for a rising minimum wage, then you must also believe that a higher minimum is always better than a lower one since ever higher wages will give ever higher incentives for capital investment.

On the third point, I was attempting to illustrate what one has to do in order to change the relative wages of labor at the low end of the pay scale vs those at the higher end. In essence, one would have to cap wages and returns to capital to prevent the readjustment of relative costs of imputs. This is no different in effect than capping market prices for goods and services.

As for the argument that minimums should rise regularly to stay ahead of the readjustments, this really is naive, to say the least. Such a mechanism, being completely predictable, would cause the readjustments to happen much more quickly, thus necessitating more rapidly rising minimums, and so on.

To summarize, if you really want to improve the lot of minimum wage workers, you must improve their skill set. The appropriate mechanism for this is through better education while they are young.

Posted by: Yancey Ward on January 4, 2007 at 5:46 PM | PERMALINK

It's sad that Kevin makes George Will seem rational and intelligent. (is that ad hominem?)

Posted by: aaron on January 4, 2007 at 5:48 PM | PERMALINK

sggggsssssI am the giant rectum monster, Rectuma. I was born from a Preparation H experiment gone horribly awry near Three Mile Island.

An especially odiferous turd fell out of my gigantic asshole recnetly. and has taken on a life of it'4 s

Posted by: Rectuma on January 4, 2007 at 5:48 PM | PERMALINK

Shorter rightwingers:

Income redistribution from the rich to the poor and middle class is evil!!!

Income redistribution from the poor and middle class to the rich is great!!!

I only say that because the latter is EXACTLY what has happened over the past 20 years -- the middle class has stagnated while the rich have become super rich.

Now, I'm in no way in favor of putting in pay caps or taxing the upper class into oblivion -- it simply wouldn't work and could cause more harm than good.

But for anyone to deny that income redistribution is not already happening -- but in the reverse order that it's usually thought of -- is certifiably delusional (or should we call it "Rhenquistian"?)

Posted by: Unholy Moses on January 4, 2007 at 5:53 PM | PERMALINK

"We must ban "unpaid internships" as violations of the minimum wage law."

"But there is a policy step missing if we are truly uphold the values embodied by the minimum wage, and it *requires* that the liberal critics are correct on the economics:"

I agree with the first statement. Unpaid internships give people with enough money that they do not have to work to pay their way an unfair advantage in the labor market. Basically they can buy job experience. For profit companies, at least, should not be able to get labor from anyone without paying the minimum wage. I think these days most internships actually are paid at minimum wage or higher, minimum wage tends to be a trivial amount of money for any company that gives internships, but that is only mostly true.

I don't really get the second part though.

Posted by: jefff on January 4, 2007 at 5:54 PM | PERMALINK

Places like McDonald’s hire people at minimum wage, pay to train them, and then watch as the worker leaves his or her job after only a few months. Then they wonder why the turnover rate is so high.

If they’d pay their workers a decent wage, they’d save money by eliminating training costs while fostering a positive work environment where a employee is happy at his job, works harder and remains in the job for a longer period of time.

Such long range strategic thinking seems beyond the comprehension of the average corporation or business owner.

Posted by: Winda Warren Terra on January 4, 2007 at 5:57 PM | PERMALINK

Please, Mr Will, work just one week at Taco Bell.
Please, just one week.

Posted by: Berry Veto on January 4, 2007 at 6:05 PM | PERMALINK

How much capital will be invested due to an increase in the minimum wage? Will it lead to an increase in productivity? Are there studies available?

Posted by: tsilb on January 4, 2007 at 6:06 PM | PERMALINK

jefff wrote:

>>"But there is a policy step missing if we are truly uphold the values embodied by the minimum wage, and it *requires* that the liberal critics are correct on the economics:"I don't really get the second part though.

If liberal critics are wrong, and businesses cannot afford to pay the minimum wage to those who need training and apprenticeship, making "unpaid internships" illegal will only help eliminate inequities in a procrustean manner -- it will strip training and apprenticeship from those who can afford to work for free, without creating new opportunities for those who can't.

If that's the case, conservative proposals for sub-minimum apprenticeship wages ought to be given a second look. Problem is, these things are hard to assess without demonstration programs -- which Democrats and their labor allies would fight tooth and nail.

Posted by: Fletcher on January 4, 2007 at 6:10 PM | PERMALINK

I don't think Micky D's pays minimum wage and I think the model is that it's cheaper to train new worker than pay them a wage that they'd stay at.

I worked at UPs in highschool. The wage was good, until you'd been working their 3 months and realized the physical toll of heavy lifting for 3-4 hours a day after school, before homework, and after waking up at 5am every morning. I stayed to save money for books and beer, but turn-over was high. Intentionally.

Posted by: aaron on January 4, 2007 at 6:12 PM | PERMALINK

Labor is a commodity

This is what ideologues are good at: throwing various and sundry things into inane categories, then proceeding on to further inanities such as building inpregnable walls around thier categories.

Posted by: little ole jim from red country on January 4, 2007 at 6:13 PM | PERMALINK

aaron wrote: "It's sad that Kevin makes George Will seem rational and intelligent. (is that ad hominem?)"

No.

From Wikipedia: "An ad hominem fallacy consists of asserting that someone's argument is wrong and/or he is wrong to argue at all purely because of something discreditable/not-authoritative about the person or those persons cited by him rather than addressing the soundness of the argument itself."

Now, in your previous comment which began by calling me a "fucking idiot", you did not say that my argument was wrong because I was a "fucking idiot", which would have been an ad hominem fallacy, for example if you had said "He is a fucking idiot, therefore his argument has no merit".

On the contrary, following your insult you actually gave a substantive reason why you believed that my suggestion (of a minimum wage set at one percent of a maximum wage, with any income above the maximum wage taxed at 100% and redistributed) was "idiotic", thus justifying your characterization of me as a "fucking idiot".

So your statement had the form of: "This argument is substantively, on its merits, idiotic, for these reasons; therefore I characterize the person who made the argument as an idiot" even though your characterization preceded your substantive argument.

That is not an ad hominem. It is a substantive argument combined with a gratuitous insult.

Note also that an ad hominem fallacy need not be insulting. Any time someone attempts to discredit any argument by mentioning some attribute of the person making the argument, rather than by addressing the merits of the argument itself, that is an ad hominem.

To say for example, "So and so is an employer of minimum wage workers, therefore his arguments against raising the minimum wage have no validity" is an ad hominem. There is nothing necessarily inherently derogatory or insulting about pointing out that the arguer is an employer of minimum wage workers, but to offer that as a reason that his arguments are invalid, rather than addressing the substance of the arguments themselves, is an ad hominem fallacy.

Posted by: SecularAnimist on January 4, 2007 at 6:16 PM | PERMALINK

Look at the effect it had on my spelling!

Posted by: aaron on January 4, 2007 at 6:18 PM | PERMALINK
Raising the minimum wage decreases the value that accrues to the employer of the worker in the short term, thus making the worker's labor less valuable.

I'm not sure what you are trying to say with this. If you are simply saying that it decrease the share of the value created by the employees work that the employer retains, this is true in the immediate term, but this is not a decrease in the value of the employee. It is an increase in the cost with no change in the value.

If you mean something else, then perhaps you could work to better articulate it. Whatever it is, it is an abuse of the language to call it a decrease in the value of the employees work.

Now, I realize that you and many others here believe that price floors, and rising price floors for labor don't have an adverse effect on employment

Quite...

but the studies you and others always cite are not convincing enough to overturn the general law of economics that a rising price lowers demand for a good or service.

No such "general law of economics" exists. You seem to not understand what "demand" refers to in economics; the "general law" you are most probably thinking of suggests that if demand and supply (which are realtionships between price levels and quantities, not simple quantities) are constant, an artificial increase in price above the market clearing price will generally reduce the quantity exchanged and produce an artificial shortage.

But, of course, this very general relationship is of short-run behavior, assumes certain factors are unaffected, assumes that there aren't factors constraining reactions, and a number of other factors that may or may not hold in important real-world cases. Theory is valuable insofar as it predicts and explains observed phenomena, where empirical observations do not bear out the theory, as is the case with minimum wage increases and their effects on unemployment under the "general law" to which you seem to, with some confusion as to what it says, be appealing, it is the theory, not the facts, that need re-examination.

To the second point about where the readjustment stops, I will concede a little ground since I was simplifying for the sake of brevity. However, if you think this is a justification for a rising minimum wage, then you must also believe that a higher minimum is always better than a lower one since ever higher wages will give ever higher incentives for capital investment.

Hardly. That such effect can be imagined for any increase in the minimum wage does not mean that it necessarily dwarfs potential deleterious effects at all magnitudes of change. Observationally, real minimum wage increases do not, in net, produce the deleterious effects people like you say they must, so we know that this or some other countervailing positive effect must be working at some level, if the "general law" of economics you are appealing to is merely too simple (as I would suspect, and its utility in other areas would suggest) rather than completely wrong. But, clearly, there is no reason to suspect that the relationship between various positive and negative effects and their balance must be constant for all magnitudes of minimum wage changes.

On the third point, I was attempting to illustrate what one has to do in order to change the relative wages of labor at the low end of the pay scale vs those at the higher end.

So? Other than showing the folly of replacing regularly-updated minimum wage policy with an attempt to acheive similar ends through a static rather than dynamic policy, what did you hope to acheive by that?


As for the argument that minimums should rise regularly to stay ahead of the readjustments, this really is naive, to say the least. Such a mechanism, being completely predictable, would cause the readjustments to happen much more quickly, thus necessitating more rapidly rising minimums, and so on.

I disagree. While, certainly, many economically important effects in the world are driven by anticipatory effects, the main ones driving "readjustment" in response to minimum wage increases, I believe, are reactive responses to experienced tensions with market equilibria produced by the change, such that the magnitude of the effect of an increase will tend to fade until the next increase, irrespective of whether another increase is expected.

To summarize, if you really want to improve the lot of minimum wage workers, you must improve their skill set. The appropriate mechanism for this is through better education while they are young.

Certainly, that's a good long term approach. And, perhaps, someday a suitably successful policy of sustained increase there will obviate the need for repeated minimum wage increases as a dynamic short-term stopgap. However, as I don't think we've even begun implementing the right policy there, and it will take several decades between the time even an ideal educational policy is implemented and when it might ideally be hoped to displace the need for minimum wage increases by its own labor-value increases, I don't anticipate that that really is an argument against minimum wage increases continuing for several decades at least.

Posted by: cmdicely on January 4, 2007 at 6:19 PM | PERMALINK

"Places like McDonald’s hire people at minimum wage, pay to train them, and then watch as the worker leaves his or her job after only a few months. Then they wonder why the turnover rate is so high."

A couple years ago I learned about an ingeniously evil corporate tax credit heavily used by low wage short term employers like McDonalds.

It is called the "Targeted jobs tax credit" (easily googled). Basically it gives a tax credit of 40% of a workers wages up to $2400 in thier first year of employment if they meet various conditions such as having been on welfare, being 18-22yo, being from poor families. Now an interesting quirk of this is that the company only gets the tax credit for the first year of each employee's employment. So if, after a year an employee quits and they hire a new one hey its a new tax credit! Turns out that the average duration of employment at places like mcdonalds is fairly optimal to take advantage of this credit. They tend to keep people just a bit longer than they need to qualify for it and work them just enough hours per week to qualify. It doesn't appear to be that they explicitly fire them, they just set thier working conditions and pay rate such that people don't stay longer.

They don't wonder why thier turnover rate is so high, they either adjust turnover to maximize thier tax credits, or they had the tax law written to pay for thier high turnover (the law is from 1978). Either way they don't mind training people over and over, corporate welfare is more than paying for it.

Posted by: jefff on January 4, 2007 at 6:24 PM | PERMALINK

Thanks again SA. I used to know this. I don't know why I forget these things so easily. I think partially it's because they are mis-used so frequently. And language has also been weakness of mine (punctuation especially). Public School.

Posted by: aaron on January 4, 2007 at 6:27 PM | PERMALINK

Such long range strategic thinking seems beyond the comprehension of the average corporation or business owner.

Posted by: Winda Warren Terra on January 4, 2007 at 5:57 PM

No, long term thinking is not beyond the average business owner. Most of us pay more than minimum wage because we rely on the expertise of the "slack jawed paper hangers" working for us. In fact I couldn't run my business with the level of effort I routinely encounter among people of George Will's ilk. I'd go broke over paying old media darlings for repeating things they learned in some Republican workshop or other 40 years ago.

The people lacking the ability to think long term or stategically are the folks like Norman Rogers or Aaron who forget that the first rule of sales is you have to have a customer. If your potential customer doesn't have any money to buy your product it doesn't matter how low you price it or how little you pay for it.

There is a reason America is so much richer than Mexico. We have a lot of customers who can afford to buy a lot of stuff. The Mexicans have a lot of resources, and some really rich people, but the bulk of their population is too poor to afford to buy much in the way of goods and services.

The Chinese are routinely astonished by the ability of our society to absorb all the hot tubs, big screen tvs and pool tables they sell us.

If George Will, Norman Rogers and Aaron had their way our economy would mirror Mexico. That would lead to the collapse not only of our economy but also of the economies of most of Asia.

We really ought to be in the business of exporting the American consumer society to Mexico. That starts with a minimum wage that would allow more Mexicans to purchase goods and services.

Never forget your customer has got to be able to afford whatever it is you want to sell. If he can't it doesn't matter how little it costs to produce or how low you set the price. Second thing never to forget, 100 average middle class people buying big screen tvs spend 100 times the amount on big screen tvs as of one really rich person.

Posted by: Ron Byers on January 4, 2007 at 6:28 PM | PERMALINK

Will never said workers were commodities, he said labor is a commodity. The two are not equivalent.

You need to explain. This sounds like straining at gnats. One summer I was paid to dig ditches for plumbers. They were willing to pay for the ditch. The best way they could figure out to get the ditch for to pay me to dig it. They even called me "labor". I don't see how George Will calling my labor a commodity the plumbers were willing to pay for is any different that calling "me" a commodity the plumbers were willing to pay for. I got the money. They got the ditch. "Me" or "labor" that was the commodity, mas o menos.

Posted by: little ole jim from red country on January 4, 2007 at 6:33 PM | PERMALINK
Will never said workers were commodities, he said labor is a commodity. The two are not equivalent.

You need to explain.

Gladly. The difference is pretty similar to (though more extreme than) the difference between saying that, say, ears of corn of a particular variety are a commodity and saying, on the other hand, that plots of lands on which one might, among other things, grow such corn are a commodity. That former is clearly true, while the latter is, at best, less true; in the case of labor and workers, the difference is more extreme, while labor is generally less commodity-like than ears of corn of a particular variety (though narrowly described types of labor, such as that performed by the sign-holders you might see on the side of the road advertising a new residential development, are very commodity-like), workers are clearly not at all commodity-like.

Posted by: cmdicely on January 4, 2007 at 6:44 PM | PERMALINK

Back in college, both my Macro and Micro Econ Profs said labor was a commodity, and that fair market values were the basis of classical Keynesian economics. I guess they didn't bother to consult any touchy-feely bleeding hearts while forming their course outline, or they would have censored it from the text books.

sportiespice is too dumb to understand that intro classes are intro classes.

I expect that after completing physics 101, sportiespice would argue that there is nothing preventing FTL travel.

Posted by: Disputo on January 4, 2007 at 6:51 PM | PERMALINK

The right has so many prominent people out there dedicated to making the unthinkable possible. A permanent war for permanent peace, abolishing the minimum wage, Social Security, etc.

I don't see any similar well-connected group on the left.

Maybe you could argue Soros' drug legalization stuff, but that draws support from the liberttarian right; or health care reform, maybe. But boy, have we been on our heels for a long, long time.

Posted by: nbhgyt on January 4, 2007 at 6:52 PM | PERMALINK

"Problem is, these things are hard to assess without demonstration programs"

But sub minimum wage apprenticeships do exist, as do apprenticeships that pay the minimum wage or more. Seems like we have a natural experiment to look at.

It would be interesting to analyse where internships are paid and where they are not paid.

It is my suspicion that there is little correlation between unpaid internships and corporate profitability in for profit companies. Most companies interested in interns are in high skilled high labor cost industries and the minimum wage for an intern is an insignificant cost. The real reason they want interns is to try to find employees without risking a full salary and hiring process and the real reason they don't want interns is that real employees at the company have to spend time on the intern rather than doing thier job.

Posted by: jefff on January 4, 2007 at 7:01 PM | PERMALINK

cmdicely:

Labor is a commodity but workers are not? I dunno, Chris, that smells awfully like a category mistake.

If "labor" is the aggregate of "workers," isn't that the equivalent of saying that "gold" as a commodity is the aggregate of all the gold bars, ingots, jewelery, ore, etc. in precisely the same fashion?

I understand that the price of labor, plugged into economic equations (and observed empirically), behaves in equivalent ways to the price of any given commodity -- so in that sense, economists aren't wrong to call "labor" a commodity.

But in the most important sense, I think Kevin is precisely correct that they are profoundly different. You can stock gold bullion in a vault somewhere for 50 years until it accrues value before selling it; a worker has an inelastic demand to sell his/her labor power continually to avoid starving to death. I suppose a quibbler would say "okay, human labor is more like corn or tomatoes, then" -- a perishable commodity whose value exists within an inelastic time frame, dependent on good decisions (not to mention acts of God) to maximize its value to its owners.

And therein likes the disjunction. Commodities, commonly understood, are owned, and their value is thought to be elastically subjective -- whatever the market will bear. I could (and my neighbor does) raise a crop of tomatoes and give 'em away. A worker owns his labor (slavery being abolished) and must sell it in order to live. My neighbor doesn't make her livelihood on her tomato crop. A worker's labor (assuming no other assets) is not merely part of a suite of commodities that may or may not produce added value in their exchange. Like insurance or healthcare, in an important sense, a worker's labor value exists in a captive market. College grads don't clerk in Borders bookstore out of a "free choice" in a "free market" -- they take the job they're vastly overqualified for in order to keep the wolf away from the door. No choice in the matter. And this is dehumanizing.

A crop of tomatoes fails. Oh well, sez the commodity trader, there's always next year, and takes the loss he bet on incorrectly. A human life, OTOH, is supposed to have an incommensurate value. And here's where economics jumps (some would say the shark) into the realm of human values -- where it has always been from the beginning, only economists want us to conveniently forget that fact and objectify all inputs. Only the *buyers* (the Sovereign Consumer of the marginalist revolution) are allowed to have an elastic subjectivity as they work to maximize and define their utility in whatever ways they see fit.

For a worker, forced to sell his/her labor in a captive market, the concept of "subjective utility" flies out the window with his/her own sovereign *human* subjectivity. S/he confronts the hard, "objective" realities of the labor market -- all for the benefit of what the buyers decide (the reified objective consequence of millions of subjective decisions) is valuable this year. Overqualified? Tough.

If labor is a commodity, then the worker has become commodified.

And with that blast of jargon, I'll get off the neomarxist soapbox :)

Bob

Posted by: rmck1 on January 4, 2007 at 7:03 PM | PERMALINK

Well said, Bob.

Posted by: Disputo on January 4, 2007 at 7:24 PM | PERMALINK

Ron Byers understands Ad Homenim.

Posted by: aaron on January 4, 2007 at 7:30 PM | PERMALINK
Labor is a commodity but workers are not? I dunno, Chris, that smells awfully like a category mistake.

Er, okay. I'll try to spray some other scent on my arguments in the future.

If "labor" is the aggregate of "workers," isn't that the equivalent of saying that "gold" as a commodity is the aggregate of all the gold bars, ingots, jewelery, ore, etc. in precisely the same fashion?

If labor were the aggregate of workers then this would be correct. Labor is, however, most emphatically not the aggregate of workers. Labor bears a relationship to workers very roughly analogous to that that gold bars have to gold mines, or ears of corn have to fields (the distinction is even greater than in either of these analogous relationships, though.)

I understand that the price of labor, plugged into economic equations (and observed empirically), behaves in equivalent ways to the price of any given commodity -- so in that sense, economists aren't wrong to call "labor" a commodity.

Some labor does, some doesn't.

But in the most important sense, I think Kevin is precisely correct that they are profoundly different.

I think neither labor nor workers are generally commodities, for different reasons (though some kinds of labor are rather commodity-like in some important economic ways), but I think Kevin is misguided in recasting Will's argument which states that labor is a commodity into the claim that workers are a commodity.

I could (and my neighbor does) raise a crop of tomatoes and give 'em away.

Likewise, you could give away a "crop" of labor: many people, in fact, do.

A worker owns his labor (slavery being abolished) and must sell it in order to live.

A worker is defined as someone who sells labor, though certainly not all people who do so must in order to live; some who do so could make do by either drawing down capital resources, taking public assistance, or other means besides selling labor.

My neighbor doesn't make her livelihood on her tomato crop.

Yes, and some people do. And others don't make their livelihood with their labor. You seem to be creating a false distinction with selective presentation of examples.

A worker's labor (assuming no other assets) is not merely part of a suite of commodities that may or may not produce added value in their exchange. Like insurance or healthcare, in an important sense, a worker's labor value exists in a captive market.

Certainly.

College grads don't clerk in Borders bookstore out of a "free choice" in a "free market" -- they take the job they're vastly overqualified for in order to keep the wolf away from the door. No choice in the matter. And this is dehumanizing.

I think you overstate the claim to say "no choice", though certainly there is often a limited range of less-than-stellar choices available.

A crop of tomatoes fails. Oh well, sez the commodity trader, there's always next year, and takes the loss he bet on incorrectly.

Well, sure, and there are "traders" with similar insulated roles gambling on the labor market, and there are others whose livelihood is more directly at stake. This isn't a difference between "labor" and "tomatoes", but between distant "traders" who are gambling surplus assets to magnify them, and people with their livelihood directly exposed.

A human life, OTOH, is supposed to have an incommensurate value.

Supposed by whom?

And here's where economics jumps (some would say the shark) into the realm of human values -- where it has always been from the beginning, only economists want us to conveniently forget that fact and objectify all inputs.

Er, no. Economics is an objective, empirical science. Economists (as a class) don't "want" people to objectify all inputs and ignore values, they just separate that (if they are doing good science) from the empirical work. Now, often some economists, and even more non-economists who confuse the descriptive results of economics for prescription through misunderstanding, and some (both economists and not) have a quasi-religious faith that certain measures of aggregate economic performance are essentially a priori goods, but that's different than the charge you make.

Only the *buyers* (the Sovereign Consumer of the marginalist revolution) are allowed to have an elastic subjectivity as they work to maximize and define their utility in whatever ways they see fit.

I don't know what you mean by "allowed to", but I think its pretty clear and borne out by experience that if you continue to pay labor worse, you will see more people abandoning the formal economy, so certainly sellers of labor, even at the lowest end, do have and demonstrate the kind of elastic response that is assumed in economics to be derived from subjective utility in the marketplace.

Posted by: cmdicely on January 4, 2007 at 7:43 PM | PERMALINK

There's another important reason why labor isn't a commodity: It's not made for sale in the market. Neoclassical models of the labor market assume that workers are like widgets: More demand, you make mor widgets, less demand, fewer widgets. But labor is embedded in people, and people have to eat. The labor market is not like a commodity market for that reason: Workers can't opt out of it.

Posted by: slothrop on January 4, 2007 at 7:44 PM | PERMALINK

I'm only beginning to delve into the mysteries of economics, so I may be way off on this, but it seems to me that the natural course of a free-market economy is for the rich and powerful to become more rich and powerful, and to use their wealth and power to shift towards a system in which they are insulated from having to compete to survive, while those at the bottom find it harder and harder to survive at all, much less to develop their potential and find an opportunity to market their non-fungible talents. In other words, we end up with something like the corrupt crony capitalism that we have now. So it seems that when the invisible hand of the marketplace turns to masturbation, we DO need the intervention of the government to return us to a more truly competitive and productive state. Am I wrong in this? Or does this make some sense?

Posted by: Jess on January 4, 2007 at 7:47 PM | PERMALINK

Clyde-

So why is it that my one singular commodity, the same single commodity available for sale by most Americans, is taxed at a far higher rate than any other sold commodity?

Because the Dems think your 'commodity' makes you "rich"...

Besides, if you are really "poor"(single under $10k/yr- married w/ 1 child under $25k/yr), you don't pay a penny in federal income tax.

So, which describes you?

1)Poor(AKA-uneducated moron who doesn't even pay taxes for himself, let alone all the freebies he advocates for others)

2)Not poor(AKA-whiny bitch who doesn't want to contribute his 'fair share' to the freebies he advocates for others)

Posted by: fletch on January 4, 2007 at 7:58 PM | PERMALINK

"...the natural course of a free-market economy is for the rich and powerful to become more rich and powerful..."

Some interesting computer modeling work supports that. Now these are toy economies, so not completely descriptive of the real world, but the results are very thought provoking.

No point in my sumarizing it when other people have been paid to do it better than I would:
http://www.americanscientist.org/template/AssetDetail/assetid/14769/page/3;jsessionid=aaa5LVF0

Posted by: jefff on January 4, 2007 at 8:00 PM | PERMALINK

Note that link puts you on page 3 :)

Posted by: jefff on January 4, 2007 at 8:02 PM | PERMALINK

slothrop (who is the central character of my all-time favorite novel):

Thank you for saying in one succinct paragraph what I tried to say in several screens.

Perhaps your post will be more difficult for the redoubtable Chris Dicely to quibble with at the margins (of utility for the argument, on which I think the three of us agree :)

Bob

Posted by: rmck1 on January 4, 2007 at 8:04 PM | PERMALINK

Thanks, jefff--I'll check it out.

Oliver Willis makes a good point that seems to support my speculations:

"The whole reason we've got minimum wage law and other labor laws is that left to their own designs businesses colluded with each other, fixed their prices, and paid their workers next to nothing in horrible life-threatening conditions (and some of those laborers were children).

Capitalism is great and it works, but without policing, rules, and enforcement it is the playground of devils - devoid of morality and a pariah on our society. We learned that lesson collectively already, we won't repeat it. America's past that."

http://www.oliverwillis.com/2007/01/one_market_unde.html

Posted by: Jess on January 4, 2007 at 8:04 PM | PERMALINK

"I promised myself I wasn't going to read George Will's column today about abolishing the minimum wage, but unfortunately a reader sent me the link and I clicked on it before I knew what it was."

It sounds to me like you're describing getting linked to Goatse for the first time.

Posted by: Steve Simitzis on January 4, 2007 at 8:05 PM | PERMALINK

"slothrop (who is the central character of my all-time favorite novel)"

I know I read the novel with the character Slothrop and enjoyed it, but now I'm racking my overtaxed brain trying to remember which one it was--please remind me, or I'll be obsessing all night!

Posted by: Jess on January 4, 2007 at 8:07 PM | PERMALINK

Jess: Gravity's Rainbow!!!

Slothrop is the he-whore.

Posted by: Global Citizen on January 4, 2007 at 8:11 PM | PERMALINK

I should point out that I'm no Pynchon authority. (I've read it, but I haven't analyzed it, in fact I haven't even thought deeply about it.)

Posted by: Global Citizen on January 4, 2007 at 8:13 PM | PERMALINK
I'm only beginning to delve into the mysteries of economics, so I may be way off on this, but it seems to me that the natural course of a free-market economy is for the rich and powerful to become more rich and powerful, and to use their wealth and power to shift towards a system in which they are insulated from having to compete to survive, while those at the bottom find it harder and harder to survive at all, much less to develop their potential and find an opportunity to market their non-fungible talents.

That depends what you mean by "free market".

If you mean by "free market" what the right-wing laissez-faire fundamentalists use it to mean, then yes, that's the natural course.

If you mean rather a market in which government regulation is avoided except to correct market failure and internalize externalities, I'm not sure at all that that is the natural course.

Posted by: cmdicely on January 4, 2007 at 8:17 PM | PERMALINK

"Gravity's Rainbow!!!

Slothrop is the he-whore."


OF COURSE! How could I forget that! At least I had the author in my sights--I was thinking maybe it was "The Crying of Lot 49."

I've been planning to return to Pynchon's books for years now--maybe this was my sign to finally do so.

Posted by: Jess on January 4, 2007 at 8:25 PM | PERMALINK

Liberals are going to expound on the "free market" now?

The same liberal thinking that proposes to place a MAXIMUM wage?

Are you all insane?

The free markets rule the world right now; every other ideology or belief has fallen before the onslaught of the free market ideology.

While I sometimes wish George Will were more well spoken, the sad fact is the creation of the welfare state some forty years ago guaranteed that there would always be a non-free market oriented safety net called the minimum wage to prop up the low end of society; what strikes me is that no one criticized the idea that setting a MAXIMUM wage eliminates incentive.

The MINIMUM wage gives people some incentive to get above it; a MAXIMUM wage is the killer.

And labor IS a commodity; have you never heard of a temp firm?

This has been a friendly reminder as to how the world really works from your uncle Norman; please feel free to go back to being wrong about everything else.

Posted by: Norman Rogers on January 4, 2007 at 8:28 PM | PERMALINK

"If you mean rather a market in which government regulation is avoided except to correct market failure and internalize externalities, I'm not sure at all that that is the natural course."

I haven't read Adam Smith yet--is this from his model?

Posted by: Jess on January 4, 2007 at 8:28 PM | PERMALINK

Jess:

In The Crying of Lot 49, the central character was the delightfully-named Oedipa Mass ...

"He-whore" -- nice one, Globe. Fits perfectly. Did you know that Tyrone Slothrop (a critic called it the very best WASP name in all of literature -- even better than "Norman Rogers" :) is an anagram for Sloth or Entropy?

I'm a repository of Pynchonalia -- I've read GR straight through at least 8 times (and have some sections virtually memorized), all of his fiction and non-fiction and absolutely tons of critical studies (the stuff in the mid-80s started to get pretty rank when the Deconstructionists tried to claim Pynchon as their postmodern patron saint). I agree completely with Edward Mendelson who called him the greatest living writer in the English language.

Although Mason & Dixon is a tremendous book -- a postmodern magic realist historical novel, mind-bogglingly well-researched and also very very funny if you're well-versed in Colonial history and literature -- it appears that Gravity's Rainbow will probably remain his masterpiece. I got his new one (just released in November), Against the Day -- and while I love parts of it dearly, some of the critics are right that it's quite a sprawl (and over 1000 pages, to boot). Prolly take me awhile to revisit it.

I'd recommend re-cracking GR, if you want to re-visit. There's so much stuff crammed in there that it's easy to miss on the first reading. Steven Wiesenburger's and Douglas Fowler's GR companions are still available on Amazon (or should be in any well-stocked university library), and I'd recommend reading either one alongside, just to flesh out all that amazing historical detail.

But mainly though, as always with Pynchon -- you can just sit back and enjoy the wild ride, and then look up the arcana later ...

With the Iraq war replacing Vietnam as the background when the book was released, it still packs a mighty blow against the Empire.

Bob

Posted by: rmck1 on January 4, 2007 at 8:50 PM | PERMALINK

Actually, I'm open to Will's proposal. If the laissez-faire freaks consider it an insult to the purity of the market for the government to regulate the price of the "commodity" of human beings, then we could accomplish the goal of insuring our citizens achieve a basic decent standard of living by simply giving everyone $20,000, plus $8,000 per dependent child. That way we wouldn't be introducing artificial distortions into the market.

Posted by: brooksfoe on January 4, 2007 at 8:53 PM | PERMALINK

Oedipa Mass = Oedipa Maas

Posted by: rmck1 on January 4, 2007 at 8:54 PM | PERMALINK

Jess:

I haven't read Adam Smith yet--is this from his model?

I will now tell you something for nothing, and share, at length, this excerpt from an excellent lecture you may peruse here; it is a pity that I am neither appreciated nor paid for sharing such brilliance with you, but there it is.

What is missing is an appreciation of the theory; the loonybin leftys are all screeching about justice for the poor. Well, abandoning free market ideology consigns the poor to a hell you cannot imagine.

Learn something, liberals.

by Professor RJ Kilcullen--

'Upon all occasions his [another person's] own sentiments are the standards and measures by which he judges of mine. To approve of another man's opinions is to adopt their opinions, and to adopt them is to approve of them. If the same arguments which convince you convince me likewise, I necessarily approve of your conviction; and if they do not, I necessarily disapprove of it... To approve or disapprove, therefore, of the opinions of others is acknowledged by everybody, to mean no more than to observe their agreement or disagreement with our own. But this is equally the case with regard to our approbation or disapprobation of the sentiments or passions of others' (Raphael p.207). If some sceptic suggests that perhaps what seems blue to us, or what seems an appropriate emotional response to a situation, would not seem so to some other being with a different sensibility - different sense organs, different emotional reactions - Smith would not, I think, try to argue that what seems so to us must be so. If after careful consideration it seems so to us, then we must think and act accordingly, however it might be supposed to seem to some non-human being. As Protagoras said, 'Man is the measure', for man. 'Every faculty in one man is the measure by which he judges of the like faculty in another. I judge of your sight by my sight, of your ear by my ear, of your reason by my reason, of your resentment by my resentment, of your love by my love. I neither have, nor can have, any other way of judging about them' (p.209). There are indeed some cases in which we seem to approve without any sympathy or correspondence of sentiments. But in those cases we base our approval or disapproval on previous attempts to sympathise in similar cases. 'We know that if we took time to consider his situation, fully in all its parts, we should, without doubt, most sincerely sympathise with him [in a case where we approve]. It is upon the consciousness of this conditional sympathy ['if we took time...'], that our approbation of his sorrow is founded, even in those cases in which that sympathy does not actually take place: and the general rules derived from our preceding experience of what our sentiments would commonly correspond with' are the basis of judgement in such cases (Raphael p.208). This is the status of general rules in Smith's theory: they are generalisations based upon our attempts to sympathise with particular actions: 'They are ultimately founded upon experience of what, in particular instances, our moral faculties, our natural sense of merit and propriety, approve or disapprove of. We do not originally approve or condemn particular actions because upon examination they appear to be agreeable or inconsistent with a certain general rule. The general rule, on the contrary, is formed by finding from experience, that all actions of a certain kind, or circumstanced in a certain manner, are approved or disapproved of' (p.236) - i.e. that the impartial spectator can or cannot sympathise with their motivation. Some 'very eminent authors' have been misled, supposing 'that the original judgements of mankind with regard to right and wrong, were formed like the decisions of a court of judicatory, by considering first the general rule, and then, secondly, whether the particular action under consideration fell properly within its comprehension' (p.236).

So there is no need for a special faculty of moral intuition for apprehending the general principles of natural law: general principles are generalisations for our own reaction to particular cases. And our reaction to the particular case does not require a special moral faculty: our reaction is an ordinary emotional one - anger, love, etc - and the moral judgement of approval or disapproval is simply the perception of an agreement or disagreement between this reaction and the imagined reaction of an impartial spectator. There is thus no special moral faculty, either for general principles or for particular judgements. Smith makes this explicit in his criticisms of Hutchison - see Raphael pp.248-253. (There is a problem here: what distinguishes moral approbation from say aesthetic approval? Is it simply that moral judgement is concerned with the motives of action, whereas aesthetic judgement is simply contemplative p.210).

As I have mentioned, Adam Smith and David Hume were friends, and Smith's moral theory (with his economic theory) shows Hume's influence. But Smith disagrees with Hume at a number of points. Perhaps the most important is this. According to Hume, the reason why we approve of the various good moral qualities is because we see their usefulness, either to the person who has them or to mankind generally. Smith rejects this. He does not deny that the moral qualities are useful, but he maintains that it is not the perception of their usefulness that makes us approve them. Those who consider some virtue in the abstract see its usefulness, and do not form a concrete image of any one particular action that comes under that general category. But 'it is only when particular examples are given that we perceive distinctly either the concord or disagreement between our affections and those of the agent... When we consider virtue and vice in an abstract and general manner, the qualities by which they excite the general sentiments seem in a great measure to disappear, and the sentiments themselves become less obvious and discernable'. The effects of virtue and vice 'seem then to rise up to the view, and as it were to start out...' (p.246). The idea that we value virtue because it is useful is a philosopher's illusion, due to his abstract consideration of the matter. Ordinary people approve or disapprove by their immediate emotional reaction to the situation from which the action arises - the object of their judgment is the action in relation to its causes and circumstances, not to its useful or harmful effects. 'The usefulness of any disposition... is seldom the first ground of our approbation'; 'the sentiment of approbation always involves in it a sense of propriety quite distinct from the perception of utility'. (p.246-7)

Similarly, in a passage in TMS pp.85-90 not in Raphael, and too long to quote here, Smith rejects in particular Hume's theory that we value the virtue of justice because of its usefulness to society. The sense of justice is a matter of sympathising with individuals when they are hurt by some action we cannot sympathise with. The rules of justice are based on our reaction to particular cases. Justice is certainly useful to society, but it is not true that the rules of justice have been designed to benefit society. The designer is God, not man. (Smith believed in 'natural religion', and often refers to God.) Our reaction to acts of injustice is natural and spontaneous; that this reaction helps preserve society is not due to any concern for that effect on the part of the person thus reacting. 'When by natural principles we are led to advance those ends, which a refined and enlightened reason would recommend to us, we are very apt to impute to that reason, as to their efficient cause, the sentiments and actions by which we advance those ends, and to imagine that to be the wisdom of man, which in reality is the wisdom of God' (TMS p.87). The protection of society is a good unintended consequence of individuals' disapproval of acts of injustice - a consequence unintended by those individuals, though intended by God or nature. Similarly, in Smith's economic theory, various results beneficial to human society are the unintended consequences of individual actions done with other ends in view. See Haakonssen, pp.77-9.

Posted by: Norman Rogers on January 4, 2007 at 9:00 PM | PERMALINK

I don't think what is being presently argued about regarding an increase in minimum wage is substantial enough to care much about, one way or another, much as I don't think having a top marginal income tax rate of 39%, as opposed to 33% is something to devote a lot of energy arguing over. Unfortunately, many of the same people who believe fervently that the U.S. would be much better with a 39% top marginal rate also thought things were much better when the top marginal rate was 70% or higher, and at least one person in this thread has seriously proposed a minimum wage of $50/hour.

At their core, these kinds of beliefs stem from Faith, in this case, Faith that 535 politicians in Washington D.C. can issue edicts regarding the optimal limit on what a citizen earns, or the optimal minimum on what a citizen earns, without producing unintended negative consequences which dwarf the intended benefits of such edicts. The irony is that anybody who thinks it very dubious that 535 people of any caliber, to say nothing of the caliber of people elected to Congress, can optimally issue such detailed edicts regarding the economic life of 300 million people is accused of having Blind Faith is the workings of markets.

As someone who does have extreme reservations regarding the ability of any 535 people to perform such a task, to say nothing of a group that has Nancy Pelosi, Dennis Hastert, John McCain, or Ted Kennedy as members, let me say once and for all that, no, I don't unregulated markets produce perfect outcomes, nor am I necessarily opposed to any and all regulation. I am fairly convinced, however, that attempts by 535 people to engage in price-setting in something as complex as the U.S. economy is trivial, and the moment the people we elect to Congress attempt to make it non-trivial, it becomes very harmful, in terms of making the widest spectrum of our vast population better off.

Also, I must note the richness of Delong's defense of central planning as a means of ending the Great Depression, without mention of the greatest centrally planned event in human history, WWII, without also mentioning the role of central planners in creating the Great Depression.

One of the great propaganda victories by modern advocates of central planning is how well-spread the notion is that unregulated markets are what produced 25% unemployment rates by 1933. Even if one were to accept the viewpoint of Delong that Roosevelt's pre 1938 legislation had largely ended the economic cataclysm that was The Depression, it would be nice if the heirs to central planning advocacy would at leact barely acknowledge the central role that central planners played in bringing that cataclysm about.

People like Kevin actually believe that it is the Congress of the United States which ensures that people treat each other with a modicum of what he describes as economic decency. No, Kevin, it is the extreme wealth of this society which allows even the most unskilled workers to quite often labor for wages above the floor that Congress sets forth, and, no, the Congress of the United States did not create that wealth via it's edicts.

Posted by: Will Allen on January 4, 2007 at 9:04 PM | PERMALINK

If you mean by "free market" what the right-wing laissez-faire fundamentalists use it to mean, then yes, that's the natural course.

CM, Like most old libs your brain is mush when it coms to economics. You've got that old lefty marxism on the brain.

I can't believe this old religion is still around. Everything about it was wrong. Not just wrong but stupid.

Wealth is not scarce. There's not a finite amount of it. Just because I have more doesn't mean you have less. Just because Oprah winfrey has more money it doesn't mean the poor are poorer.

Rich people don't hate poor people. Poor people can't buy their products. Rich people like large markets. If more people have more money they get to sell more product and make even more money. It's really not all that hard.

This is the entire 'secret' of supply-side economics and low marginal tax rates. Give people the incentive and the means to get rich and get govt as far out of the way as possible.

It's why the age of Reagan is so enlightening. Look at the comparisons between the USSR and the USA. Liberal twits like John Kenneth Galbraith and the entire faculties at Harvard and Yale believed in socialism but Reagen knew better and proved it.

Want to puke. Get ahold of a logrithmic chart of the stock market averages since 1900 until today as well as global GDP. You'll see a distinct and unmistakeable inflection point in 1981. Reagan devastated marxism, socialism and every other lefty religion.

BTW: Get a chance to read America Alone? Like that's gonna happen. You have no idea how the move toward socialism in Western Europe has devastated their economices and their societies. Western Europe is toast.

They despise our brand of capitalism as well they should. They know their standing on the Titanic waving goodbye. They get the sophistication. We get the wealth. They fade away. We flourish. In the time we add 100M in population they'll lose 100M. See what that does for their welfare state.

Posted by: rdw on January 4, 2007 at 9:07 PM | PERMALINK

I'd recommend re-cracking GR, if you want to re-visit. There's so much stuff crammed in there that it's easy to miss on the first reading. Steven Wiesenburger's and Douglas Fowler's GR companions are still available on Amazon (or should be in any well-stocked university library), and I'd recommend reading either one alongside, just to flesh out all that amazing historical detail.

Gravity's Rainbow? That plodding, lost, inferior work that cannot hold a candle to Slaughterhouse Five?

I apologize for throwing a monkey wrench into the fragile china store that is your psyche, but Gravity's Rainbow is just another foolish attempt to capture a long nervous breakdown within the covers of a vastly overrrated book.

J. Peder Zane.
The best books are not always our favorites — it's hard not to admire "Ulysses" though it's even harder to love it (let the hate mail commence!). But there's something cold and dry about picking books you admire rather than love. Asking why you love one book more than another, that's when things get interesting. That said, the Times would have made things plenty easy if it had included books from the last 30 years — the hands down winner being, natch, Gravity's Rainbow.

And Richard Locke, original reviewer of the book in 1973 for the New York Times Book Review:

The risk that Pynchon's fiction runs is boredom, repetition without significant development, elaboration that is no more than compulsiveness. For all its richness and exuberance, "V." is more a wonderful, concatenated jigsaw puzzle than an esthetically coherent literary structure. "The Crying of Lot 49" is smaller but better built. In "Gravity's Rainbow" the structure is strained beyond the breaking point. Reading it is often profoundly exasperating; the book is too long and dense; despite the cornucopia of brilliant details and grand themes, one's dominant feelings in the last one to two hundred pages are a mounting restlessness, fatigue and frustration. The book doesn't feel "together."

Posted by: Norman Rogers on January 4, 2007 at 9:18 PM | PERMALINK

Will Allen, rdw--

Please re-read my comments. All that you have done is restate my central point to the liberals. Please add something BEYOND what I have already put out for them to read and to learn.

Posted by: Norman Rogers on January 4, 2007 at 9:21 PM | PERMALINK

Of course, cmdicely, what is commonly labeled "market failure" by those most of those who advocate state regualtion of economic behavior is really a codeword for "I don't like the outcome", or "I want what someone else has", or "I wish to keep barriers to entry high in my market, in order to avoid competiton". Regulation thus quite frequently makes more people worse-off, as opposed to better-off, given the negative effects are less concentrated than the positive effects of regulation, thus meaning the smaller group of people benefitting from the regulation are much more energetic in petitioning the state than the larger group of people being harmed by the regulation. Thus, avery few sugar barons in Florida and Minnesota live in luxury, while a few hundred million sugar consumers pay higher prices. Sure glad that market failure got corrected!

Posted by: Will Allen on January 4, 2007 at 9:22 PM | PERMALINK

"What is missing is an appreciation of the theory; the loonybin leftys are all screeching about justice for the poor. Well, abandoning free market ideology consigns the poor to a hell you cannot imagine."

Thank you for the lecture, but in return I'd like to point out to you that while there are a good number of utopian socialists on the left, in my experience most people who call themselves liberal do not disagree with the basic principles of a free-market system, but see that it needs some tweaking in spots to function in a civilized rather than barbaric fashion, and to continue to function in an uncorrupted manner (you don't really think that our current system is still a free-market economy, do you?). This position is responding to practical reality rather than utopian fantasy in most cases, and the economists and historians that I've read so far support this. It is the utopian theorists on the right that strike me as too much in love with their fantasies of the self-regulating perfection of market forces (kind of like the New Age fantasies about Nature). In short, if your rhetoric is not as tongue-in-cheek as it sounds, you're very out of date in your assumptions about the liberal mentality. Any good military leader will tell you that you must know your enemy if you wish to overcome them--I suggest you pay attention to the full range of attitudes on the left rather than just cherry picking the ones you want to set up as straw men, as entertaining as that may be.

Posted by: Jess on January 4, 2007 at 9:25 PM | PERMALINK
I don't think what is being presently argued about regarding an increase in minimum wage is substantial enough to care much about, one way or another, much as I don't think having a top marginal income tax rate of 39%, as opposed to 33% is something to devote a lot of energy arguing over.

What is "being presently argued about" regarding an increase in the minimum wage, in this thread is, in the main, between increasing it as the Democrats in Congress have stated an intent to do or eliminating it entirely everywhere in the US, as Will's piece that this thread concerns recommends.

I submit that that is rather substantially different than a

Unfortunately, many of the same people who believe fervently that the U.S. would be much better with a 39% top marginal rate also thought things were much better when the top marginal rate was 70% or higher, and at least one person in this thread has seriously proposed a minimum wage of $50/hour.

And...so, what?

At their core, these kinds of beliefs stem from Faith

You unsubstantiated characterization of the secret root of these beliefs (only one of which has, even by your note, even been raised by anyone else here) is important to us...why, exactly?


One of the great propaganda victories by modern advocates of central planning is how well-spread the notion is that unregulated markets are what produced 25% unemployment rates by 1933.

I don't recall anyone raising this, but since you are going to assert that it is a "propaganda victory" and thereby insinuate that it is contrary to the facts, don't you think you ought to present some reason to believe that it isn't, you know, true?

Posted by: cmdicely on January 4, 2007 at 9:26 PM | PERMALINK

After looking up the definition of commodity in the Merriam's dictionary, I have to note that only definition number 5 can be equated as some are using it here.

But it occurs to me that "labor" itself is not tightly defined. I would define labor, as it relates a minimum wage, as work that must be performed by a human. Otherwise, they would not be paying humans to do it.

The workers are required, necessary, and indispensable. A minimum wage seems perfectly reasonable to me. We don’t allow child labor. We don’t allow many things. We require many things of employers related to safety.

I would agree with Kevin that workers are not commodities, but I can understand that they can be defined as such. Regardless, a minimum wage certainly seems like a good idea to me.

Posted by: little ole jim from red country on January 4, 2007 at 9:28 PM | PERMALINK

At their core, these kinds of beliefs stem from Faith, in this case, Faith that 535 politicians in Washington D.C. can issue edicts regarding the optimal limit on what a citizen earns, or the optimal minimum on what a citizen earns, without producing unintended negative consequences which dwarf the intended benefits of such edicts.

Why is it that lately every single thing every wingnut writes is an unintentional projection of their own repressed anxieties? As we all know, the only actual empirical research out there indicates that the "unintended negative consequences" of minimum wage laws are negligible or nonexistent; it is the belief in such negative consequences, in brute defiance of evidence and of reality, that is an article of Faith.

Posted by: brooksfoe on January 4, 2007 at 9:32 PM | PERMALINK

Jess:

in my experience most people who call themselves liberal do not disagree with the basic principles of a free-market system, but see that it needs some tweaking in spots to function in a civilized rather than barbaric fashion, and to continue to function in an uncorrupted manner (you don't really think that our current system is still a free-market economy, do you?).

First of all, I have my problems with our current system--taxes are still too high, entrepreneurialism is under attack, there is too much regulation--but let me revisit this insanity to prove to you that "liberals" abhor the free market:

If, as I suggested above, the minimum wage were set by law at one percent of the maximum wage, then at the current minimum wage of $5.15 per hour, the maximum wage would be $515 per hour.

For a nominal 40-hour work week, for a nominal 52-week work year, the maximum wage would now be:

$515 x 40 x 52 = $1,071,200 per year

Over one million dollars per year.

And what do you have to add to that? Clearly, we see that there will someday be a MAXIMUM wage that will eliminate all incentive and turn America into the worker's paradise that will allow liberals to do drugs all day and live in a perpetual state of percolation and give out their stoned little laughter and never have to lift a finger again.

Posted by: Norman Rogers on January 4, 2007 at 9:34 PM | PERMALINK

If you ask me, Will manages to contradict himself in this one article. One paragraph tries to minimize how few people actually work for minimum wage: “Most of the working poor earn more than the minimum wage…” Blah blah blah. Then he turns around and admits that, according to “the AFL-CIO's chief economist… state minimum-wage differences entice companies to shift jobs to lower-wage states.”

So which is it - very few people are making below minimum wage and therefore it isn’t worth fooling with? Or it is so important that businesses go where the minimum wage is cheapest?

Welcome back Kevin!

Posted by: Psyberian on January 4, 2007 at 9:35 PM | PERMALINK
Of course, cmdicely, what is commonly labeled "market failure" by those most of those who advocate state regualtion of economic behavior is really a codeword for "I don't like the outcome", or "I want what someone else has", or "I wish to keep barriers to entry high in my market, in order to avoid competiton".

Market failure is a fairly well-defined concept. Sure, some people abuse the term in arguing for specific regulations, but that's irrelevant to the comment I made. Sure, again, real economic analysis is complex and reasonable people can disagree whether a particular area is, in fact, one where there is a market failure and, even agreeing on that, may disagree on whether there is practical action that can correct that failure at all. That is also irrelevant to the general point I made.

Regulation thus quite frequently makes more people worse-off, as opposed to better-off, given the negative effects are less concentrated than the positive effects of regulation, thus meaning the smaller group of people benefitting from the regulation are much more energetic in petitioning the state than the larger group of people being harmed by the regulation.


Sure, the fact that concentrated interests are often involved and more effective in pressuring the government both to regulate and not to regulate (and how specifically to regulate and precisely when to abstain from doing so) in specific areas means areas where either decision is in the strong interest of a narrow, motivated group with current power, it is often made in the direction of the narrow interest.

The exact degree of bias Congress has toward or against regulation in general has relatively little effect on the strength of this effect.

Thus, avery few sugar barons in Florida and Minnesota live in luxury, while a few hundred million sugar consumers pay higher prices. Sure glad that market failure got corrected!

I don't recall characterizing either the general pattern of regulation in the US currently nor that particular regulation in particular as an example of correction of market failure. You seem to be willfully conflating prescription with description in order to erect strawmen to knock down.

But then, erecting strawmen around which to pontificate on tired, repetitive Libertarian talking points rather than engaging in the substance of the discussions you jump into is what you do best here.

Posted by: cmdicely on January 4, 2007 at 9:35 PM | PERMALINK

rdw:

You sound like you read the introductory chapter of an econ textbook, but forgot to read the more complicated stuff about the limits of the free-market system. Like communism, capitalism sounds good in theory, but doesn't inevitably pave the way to paradise. As I said earlier, I'm just starting to educate myself in this stuff, but already I can see how simplistic your understanding of the subject is.

By the way, check out the link jefff provided for some interesting experiments with economic models.

Posted by: Jess on January 4, 2007 at 9:37 PM | PERMALINK

Increasing the minimum wage is an example of the stereotypical Liberal Quick Fix. There are many, but not all liberals, that believe that all of Americans' problems can be solved with a quick fix. Why, all we have to do is raise the minimum wage, pass universal healthcare, increase education funding by tens of billions of dollars, force hardcore environmental regulations on businesses, and soak the rich to pay for it all. Then everything will work out just fine for Americans.

Things, however, are not that simple. If the minimum wage is increased, inflation will increase, as business will be forced to pass the price of more expensive worker pay onto consumers. And inflation hurts the poor more than anyone. That extra two dollars an hour won't mean much if prices of goods and services go up.

Same with everything else. If we keep running a deficit, or run a larger one, to provide socialist healthcare, the dollar will decline in value, and the poor will be made poorer. Furthermore, less taxpayer money will spent in America, and more will be sent to Bejing to pay for higher yearly interest payments on the debt. Same with increased education spending. And environmental regulations may sound nice, but they will also destroy many middle class jobs the Democrats claim to stand for.

The truth is that we are at the apex of our free lunch spree. All those nice-sounding government programs and regulations come with a price: a weaker dollar, higher interest payments, and more inflation. If the Democrats really want to help the poor and the middle class, they need to stop promising them instant gratification and start telling them what they don't want to hear: that we need to balance our budgets, and if we don't, the middle class and working poor will see their wealth stolen from them by inflation and a declining dollar.

Short term sacrifice must be made for long term prosperity. A Quick Fix, whether it be raising the minimum wage or establishing a government program that sounds wonderful on paper, will not increase the quality of living for middle and lower income Americans. There is a saying, that government that can give you everything you want can also take away everything you have. That saying is becoming more and more true every day, as Big Government spending is sapping wealth away from hard working Americans. What America needs is not a free lunch, but leaders that tell Americans the truth. Both Parties are largely devoid of such leaders, but perhaps some will arise in time.

Posted by: brian on January 4, 2007 at 9:41 PM | PERMALINK

Me: "you're very out of date in your assumptions about the liberal mentality."

Norman: "Clearly, we see that there will someday be a MAXIMUM wage that will eliminate all incentive and turn America into the worker's paradise that will allow liberals to do drugs all day and live in a perpetual state of percolation and give out their stoned little laughter and never have to lift a finger again."

Q.E.D.

Posted by: Jess on January 4, 2007 at 9:43 PM | PERMALINK

Labor is a commodity!

Too bad Will never served in a Gulag, prisoners are commondities too. People like George Will are so anti-US citizen that we really outa be deported George to third world, where he be right at home.

Posted by: Cheryl on January 4, 2007 at 9:44 PM | PERMALINK

"Increasing the minimum wage is an example of the stereotypical Liberal Quick Fix. There are many, but not all liberals, that believe that all of Americans' problems can be solved with a quick fix."

Like tax cuts?

Posted by: Jess on January 4, 2007 at 9:45 PM | PERMALINK
Wealth is not scarce. There's not a finite amount of it.

Yes, it is. Yes, there is. OTOH, there is not a constant amount of it, but that's a different issue.

Just because I have more doesn't mean you have less.

At any given point in time, yes, it does. Just because you get more over time doesn't necessarily mean that anyone else gets less, because there is not a constant quantity of wealth.

Just because Oprah winfrey has more money it doesn't mean the poor are poorer.

"More money" compared to what? "Poorer" than what?

Rich people don't hate poor people. Poor people can't buy their products. Rich people like large markets. If more people have more money they get to sell more product and make even more money. It's really not all that hard.

Rich people have varying attitudes toward poor people, but I don't really care about that. Yes, the poor doing better is better for the ability of the rich to sell things, which is why supply side economics, which mostly enables some of the rich get richer and the poor get squat, doesn't produce the "trickle-down" effects it promises, whereas "demand-side" economics that primes the pump by putting money in the hands of the people most likely to spend it, and thereby grows consumer markets, is more broadly expansionary and beneficial.

This is the entire 'secret' of supply-side economics and low marginal tax rates. Give people the incentive and the means to get rich and get govt as far out of the way as possible.

Except that's exactly what supply-side economics — manifested through Reagan's combination of low marginal income tax rates, particularly lowered at the top, combined with higher payroll tax rates, which affect particularly those at the bottom — does not do: it does not get government out of the way of people getting rich, it instead gets government out of the way of the already-rich getting much richer while putting government directly in the way of the poor and middle-class moving upward.

Posted by: cmdicely on January 4, 2007 at 9:46 PM | PERMALINK

Will didn't say WORKERS are a commodity. He said LABOR is a commodity. He's not mistaken; he's just disgusting. He separates the work from the worker, which gives him and his conservative sociopathic brethren like the clowns above in this thread free rein to treat humans the same way you'd treat bales of cotton thrown on the back of a truck.

Posted by: secularhuman on January 4, 2007 at 9:47 PM | PERMALINK

The truth is that we are at the apex of our free lunch spree. All those nice-sounding government programs and regulations come with a price: a weaker dollar, higher interest payments, and more inflation. If the Democrats really want to help the poor and the middle class, they need to stop promising them instant gratification and start telling them what they don't want to hear: that we need to balance our budgets, and if we don't, the middle class and working poor will see their wealth stolen from them by inflation and a declining dollar.

To be truthful, government spending for the poor amounts to naught; reform of entitlement spending is the only viable way to correct the path we are on.

That was a good try for a beginner. Please step it up and try to bring your "a" game next time. I encourage the newbies to dribble off the ball and try to score; pity, few of them can take a step without having the ball shoot off the side of their foot into the bleachers.

Posted by: Norman Rogers on January 4, 2007 at 9:47 PM | PERMALINK

"Norman":

Bad reviews of GR? My goodness ... you'd think it was a ... complex, alienating 20th century work of modern art or something :)

Hey "Norman": I have a shelf full of music by Bartok, Messiaen, Frank Zappa, Captain Beeheart, Henry Cow and Eric Dolphy that you prolly couldn't sit through, either. You'd doubtless call most of it "cold, disjointed and snickeringly pretentious."

I happen to love it.

Guess there's no accounting for taste, huh :)

Bob

Posted by: rmck1 on January 4, 2007 at 9:47 PM | PERMALINK

what is commonly labeled "market failure" by those most of those who advocate state regualtion of economic behavior is really a codeword for "I don't like the outcome"

See, what you lefties have to get your heads around is that if environmental devastation, declining median wages, skyrocketing inflation in housing costs, deluges of spam and direct-marketing phone calls, rising child poverty, rising obesity, skyrocketing health insurance costs and increasing numbers of uninsured are what the workings of the free market result in, then we as mere human beings have no right to object. Whatever the Market engenders is that which has the Mandate of Heaven. We, as humans, may dislike the outcomes, but it is not our place to dispute that which our Lord God the Almighty Market decrees.

Sieg Heil! Sieg Heil! Sieg!

Posted by: brooksfoe on January 4, 2007 at 9:48 PM | PERMALINK

cmdicely, if you read this thread, you'll see comments regarding how the Great Depression was a natural outcome of insufficient regulation of the economy. As to an argument to the contrary, I won't presume to offer a better case than Friedman's history of the era. I know how any mention of his name in this forum usually results in all manner of silliness, but he was an economist of some repute, which, of course, does not prove the argument correct. He is a good place to start, however, if you are interested in how central planning played a key role is creating the Great Depression.

I mentioned the core beliefs of many of those who support minimum wage legislation because people who succeed in having parts of their agenda put into law quite frequently redouble their advocacy for other parts of their agenda. Thus, it is entirely sensible to note that people who advocate outlawing very late term abortions, or outlawing the killing a fetus after it has partially left the womb, quite frequently favor banning abortions much earlier in a pregnancy. People who favor a higher minimum wage, or a 39% top marginal rate, quite frequently favor much, much, higher marginal rates, and were quite vociferous in opposing the drastic lowering of such rates 25 years ago. They also tend to favor much higher minimum wages. For instance, Kevin Drum has called the current proposed increases paltry in comparison to what he favors. He actually thinks 535 people in the U.S. Congress can set an optimal price floor for something as complex as the U.S. labor market. Might as well give him some beads to carry around.

Finally, given the vast history of the deficiencies produced by central planning in the past hundred years or so, it is fair to say that those who advocate for it strenuously are possessed of a Faith.

Posted by: Will Allen on January 4, 2007 at 9:51 PM | PERMALINK
Increasing the minimum wage is an example of the stereotypical Liberal Quick Fix. There are many, but not all liberals, that believe that all of Americans' problems can be solved with a quick fix.

Name 12, since there are "many".

Things, however, are not that simple. If the minimum wage is increased, inflation will increase, as business will be forced to pass the price of more expensive worker pay onto consumers.

Minimum wage increases have been passed many times in the past. Please present the studies showing that such increases drive inflation.

Same with everything else. If we keep running a deficit, or run a larger one, to provide socialist healthcare, the dollar will decline in value, and the poor will be made poorer.

A decline in the value of the dollar mostly harms those with substantial dollar denominated assets. Unless accompanied by a decline in real wages (which is a different effect entirely), it doesn't particularly effect the poor, and actually benefits those with substantial dollar-denominated liabilities.

That said, advocating, as you claim liberals do, taxing the rich to pay for programs is not the same as maintaining a large deficit, anyway, which is what conservatives do when they "pay for" a war with large tax cuts.

Posted by: cmdicely on January 4, 2007 at 9:53 PM | PERMALINK

Upthread, the astute Greg points out:

When minimum wage was 25 cents, a burger and a beer cost 25 cents.

Now that minimum wage is up over $6, a burger and a beer cost over $6.

So, according to Greg, if we implement Mr. Will's proposal and drop the minimum wage to $0.00 the cost of a burger and a beer will also drop to $0.00??

Posted by: pj in jesusland on January 4, 2007 at 9:54 PM | PERMALINK

rmck1:

Who cares? You're pathetic and sad.

pj in Hay-zoos land:

The post above was pretty pathetic, if you ask me. I will not use strawmen to attack liberals. I will use robust and hearty facts and logic.

I don't know what Joe Six Pack is paying for a bottle of beer and a jar of mayonnaise, but I doubt whether the price of those items has ever been linked to the minimum wage. Set a MAXIMUM wage and I wonder what would happen to prices!

secularhuman:

Do you disapprove of temporary agencies? Because they treat labor as a commodity.

Posted by: Norman Rogers on January 4, 2007 at 10:00 PM | PERMALINK

I won't presume to offer a better case than Friedman's history of the era.

And it seems you won't presume to offer Friedman's history of the era, either. Have you actually read it? Do you even *have* a claim here, much less any evidence to support it? This is really pathetic.

given the vast history of the deficiencies produced by central planning in the past hundred years or so

This sentence does not meet the formal requirements for what intelligent people consider "evidence". What's that Latin phrase for "assuming what is to be proved"?

Posted by: brooksfoe on January 4, 2007 at 10:08 PM | PERMALINK

fletch

"Because the Dems think your 'commodity' makes you "rich"..." This makes no sense. Dems want to take steps to aid the middle-class by adding tax incentives for education, closing tax loopholes and finding a way to pay for raising the minimum income before the Alternative Minimum Tax kicks in. Republicans on the other hand want to eliminate the capitol gains tax, further transferring the total tax burden from the richest 1% to the working and middle class in this country.

“So, which describes you?

1)Poor(AKA-uneducated moron who doesn't even pay taxes for himself, let alone all the freebies he advocates for others)

2)Not poor(AKA-whiny bitch who doesn't want to contribute his 'fair share' to the freebies he advocates for others)”

Wow, this is just …wow. Where in my post do I advocate “freebies” or indicate that I don’t want to pay my “fair share”? Please try to read my post again (should not be all that hard for you, I did not use that many big words. Ask for help if you need it.) I will make it even easier on you: I was referring to the radically different treatment that Will himself has often given to 2 things himself calls commodities.

This leaves us with a very interesting question. Are you:

1) A typical “ditto head” (AKA- an organism with one barely working brain-cell who would have a difficult (sorry), VERY HARD TIME passing a 3rd grade reading comprehension test.
2) A typical troll (AKA- a delusional, crack smoking troglodytic fucknut.

So, which describes you?

Posted by: clyde on January 4, 2007 at 10:09 PM | PERMALINK

brooksfoe, among your many idiocies in your post above, I'll simply note the fatuity of remarking upon the prices in the U.S. housing or health care markets as being reflective of a paucity of state regulation. Sheesh.

cmdicely, you just go ahead and speak about what "market failure" is in your theory, like when you wrote...

"If you mean rather a market in which government regulation is avoided except to correct market failure and internalize externalities, I'm not sure at all that that is the natural course."

...thus describing a regulatory state which has never existed, and which never will. I prefer to describe how the term is most often employed in the political culture we actually inhabit, and the political behavior which results. Yes, yes, I know... describing how the world actually works is a tired talking point, and a sure sign of the idealogue. How unfortunate.

Posted by: Will Allen on January 4, 2007 at 10:10 PM | PERMALINK

cmdicely wrote:

"If you mean rather a market in which government regulation is avoided except to correct market failure and internalize externalities, I'm not sure at all that that is the natural course."

and newbie Will Allen wrote in reply:

...thus describing a regulatory state which has never existed, and which never will.

Ho ho, my boy. You have obviously never attempted to invest in the commodities market, a place where the intervention of the Federal Government is an everyday occurrence. Let us take one thing that is on the minds of people in my neck of the woods--the dairy market. No sane person could ever conclude that the Federal Government's regulation of the price of milk is not proof positive that there is, in fact, an attempt by the USDA to correct "market failure" and "internalize externalities" each and every time the commodity known as milk is traded and speculated upon in this country.

Better give up the ghost and abandon that line of thought; I feel as if I am dealing with people who have never had a dime of their own to invest and suddenly they know more about making money in this country than I do.

How sad.

Posted by: Norman Rogers on January 4, 2007 at 10:16 PM | PERMALINK

When minimum wage was 25 cents, a burger and a beer cost 25 cents. Now that minimum wage is up over $6, a burger and a beer cost over $6.

Wow. This is truly amazing. Translation to normal human reasoning: "The minimum wage has failed to keep pace with inflation." Greg's reasoning: "If the minimum wage had stayed at 25 cents, a burger and a beer would still cost 25 cents"?

How about: "When minimum wage was 50 cents, a computer cost a million dollars. Now that minimum wage is over $6, a computer costs just $500?" Or: "When minimum wage was 25 cents, the Dodgers were in Brooklyn where they belonged. Now that minimum wage is over $6, the youngsters are listening to all this damn gangsta rap, and you can't even get a decent corned beef sandwich anymore! Ngaaah! I'm cold!"

Posted by: brooksfoe on January 4, 2007 at 10:20 PM | PERMALINK

brooksfoe, if you wish to dispute the monetarist view of the Grest Depression, simply do so. If you wish to castigate me for not reprinting it in this forum, whatever.

Posted by: Will Allen on January 4, 2007 at 10:21 PM | PERMALINK

"Norman":

Maybe so in your everso humble estimation -- but at least I'm not, you know, *fake* :)

Not to take anything away from Slaughterhouse-Five, which is a great book (Pynchon just writes on a whole 'nother level) -- but there's no way a Kennedy-loving (check some of the stories in Welcome to the Monkey House) died-in-the-patchy-jacket liberal Democrat like Kurt Vonnegut Jr. could be a fave author of a "personage" such as yourself.

BTW, his later books are even better. More fully realized, better characterizations, less sentimental, less cute. Bluebeard, about the Jackson Pollack artist milieu on Long Island, is especially good.

Bob

Posted by: rmck1 on January 4, 2007 at 10:24 PM | PERMALINK

If you wish to castigate me for not reprinting it in this forum, whatever.

Castigate, castigate, castigate. You are a lazy oaf. The minimum standard is a one-sentence summary and a URL. As for "I have on this piece of a paper a devastating argument, signed by none other than the great Milton Friedman": "whatever" is right.

Posted by: brooksfoe on January 4, 2007 at 10:29 PM | PERMALINK

Okay, make of this what you will - but my favorite Vonnegut is the non-VonnegutVenus on the Half-Shell written under the pseudonym Kilgore Trout.

Posted by: Global Citizen on January 4, 2007 at 10:29 PM | PERMALINK

Actually, Norman, I have. What I was asserting was that the term "market failure" in our political culture is useless, unless one simply endeavors to deceive, since it is most commonly merely a fig leaf for people endeavoring to use state power to further their interests, at someone else's expense.

Posted by: Will Allen on January 4, 2007 at 10:29 PM | PERMALINK

What the hell is going on in here? Did Bob just announce that he's pathetic, but at least he's not a parody? Is this his life's defense? Did Will Allen call anyone illiterate yet? Did rdw make any hilarious malapropisms yet? I have waaaay too much work to do tonight.

GC, you're supposed to be out buying Murphy's for the miles of hardwood floors.

Man, that sucks about Jasmine. Poor Kevin and Marian.

Posted by: shortstop on January 4, 2007 at 10:33 PM | PERMALINK

shortstop:

Sorry about the Tourette's Syndrome.

The Jasmine thread is on aisle 1.

Bob

Posted by: rmck1 on January 4, 2007 at 10:35 PM | PERMALINK

Actually, Norman, I have. What I was asserting was that the term "market failure" in our political culture is useless, unless one simply endeavors to deceive, since it is most commonly merely a fig leaf for people endeavoring to use state power to further their interests, at someone else's expense.

Sir, please don't trifle with me this evening. Were the Federal Government to allow the dairy market to go unregulated, it would collapse and thousands of dairy farmers would be homeless and wander the landscape of this nation. Several hundred thousand cows would be slaughtered or abandoned and thousands of milk trucks, dairy cooperatives and the like would turn to dust.

You've been refuted, please accept it.

Posted by: Norman Rogers on January 4, 2007 at 10:37 PM | PERMALINK

Yes, brooksfoe, you haven't taken the time to educate yourself about the matter, thus meaning that a reference to the work, absent an url, which is as nearly as well known as theories regarding the movement of the planets, to anybody who has spent any time thinking about it, is evidence of being a lazy oaf. It is more reasonable to state that you are a dunce. Tell me some more about the unregulated nature of housing and health care markets in the U.S., and how it relates to rising prices. What an idiot.

Posted by: Will Allen on January 4, 2007 at 10:40 PM | PERMALINK

Costco is a block and a half the opposite direction from Campus - no rush to load up on Murphy's.

One last move...I started looking around this place after I got the call, and good Ford we've accumulated a lot of crap since getting out of service. It's probably wouldn't seem like much stuff to anyone else, but it's a ton of junk to me...

Posted by: Global Citizen on January 4, 2007 at 10:40 PM | PERMALINK

Bob, aren't you always telling us you'll say whatever you want at whatever length you want in whatever forum you want? And then you do, especially the middle part? Assuming this isn't a special exemption you, as Dance Floor Hostess, reserve for yourself, I'll make one more off-topic comment for GC (psssst, Costco is a den of unrestrained progressive values) and Normie:

mr. shortstop just called me to watch the CSPAN replay of the House swearing in. I must say it was fun to see the lugubrious look on Denny Hastert's face, and those of the endless rows of white men surrounding him, as Madam Speaker led the festivities. Meanwhile, across the aisle, a diverse crowd of filthy liberals were rocking out.

Mmmm. A good day.

Posted by: shortstop on January 4, 2007 at 10:43 PM | PERMALINK

(psssst, Costco is a den of unrestrained progressive values

Didn't you just love it when the CEO told the stockholders if they didn't like paying a living wage to the employees they could sell their stock and the price went up as working folks snapped up a few shares here and there of a socially responsible company?

Posted by: Global Citizen on January 4, 2007 at 10:47 PM | PERMALINK

The sheer amount of misinformation on this thread
is staggering!

My favorite has to be Samuel Gompers confronting
an Industrial Robot at GM. Mr. Gompers passed
away in 1924.

If GM had industrial robots in 1924, the wealthiest,
most powerful country in the world would be
the USA, people all over the the globe would
risk death to migrate here and the world's
current lingua franca would be English.

hey ... wait a second ... :-}

Posted by: anon on January 4, 2007 at 10:49 PM | PERMALINK

among your many idiocies in your post above, I'll simply note the fatuity of remarking upon the prices in the U.S. housing or health care markets as being reflective of a paucity of state regulation.

You have this rhetorical habit, see, of waving your hand towards "many" things which you assert will prove you right and your opponents wrong, and then only actually producing a couple, at best -- or sometimes (as with the Friedman Depression analysis) not actually producing anything at all. You think this makes your case sound stronger. Actually, it makes it sound very weak. It's sort of like the Bush case for Saddam's WMDs: "We have enormous reams of evidence for his WMD program, including, just to cite two pieces, these aluminum tubes, and this Nigerois uranium -- well, okay, strike the uranium. And we're not so sure about the tubes. ...What evidence, you say? Well, the aluminum tubes, and the Nigerois uranium, just to name two..."

On high and rising housing and health care costs: you appear to be contending that these are due to state regulation, not to market forces. I await your explanation of which recent increases in state regulation in the past 15 years have produced double-digit inflation in housing prices and health insurance prices, and of how the fact that American health insurance costs twice as much as the same care in Europe, Japan and Canada is due to the fact that the American health care system is government-run and centrally planned, while theirs are models of market freedom.

Posted by: brooksfoe on January 4, 2007 at 10:50 PM | PERMALINK

Uh huh, Globe. Meanwhile, Wal*Mart looks for ways to ensure that their minimum-wage workers can't rely on a regular schedule. "On call" workers at Wal*Mart. That is freaking obscene.

Posted by: shortstop on January 4, 2007 at 10:52 PM | PERMALINK

Citizen, I thought it was great, in that it lent evidence to the notion that markets generally work pretty well. Who needs mininmum wage legislation when Costco can experience great market success while paying well above minimuim wage?

Posted by: Will Allen on January 4, 2007 at 10:54 PM | PERMALINK

shortstop:

I guess reading in context really *is* becoming a lost art.

Think of your first paragraph. Think of your last sentence. Ponder the dissonance between the two.

And that's all the help I'll offer you to suss out that mysterious directional aid.

Bob

Posted by: rmck1 on January 4, 2007 at 10:55 PM | PERMALINK

mr. shortstop just called me to watch the CSPAN replay of the House swearing in. I must say it was fun to see the lugubrious look on Denny Hastert's face, and those of the endless rows of white men surrounding him, as Madam Speaker led the festivities. Meanwhile, across the aisle, a diverse crowd of filthy liberals were rocking out.

You cannot see me, but I am frowning at you, young lady.

Posted by: Norman Rogers on January 4, 2007 at 10:56 PM | PERMALINK

Norman Rogers: "Did it occur to any of you liberals that, by raising the minimum wage, Joe Six Pack will get a taste of the good life and stop working?"

With twisted, sick logic like that, it's truly a wonder that anyone would agree to pay you four figures.

C'mon, 'fess up -- you're a trust fund baby, right? Because if you're talking like this and you're not, then you're a goddamn fool.

Posted by: Ron Jeremy, Adult Film Legend on January 4, 2007 at 10:59 PM | PERMALINK

Bob, you're still not in on the joke. Globe, you're still a redheaded force to be reckoned with. Normie, I'm still a little bit in love with you. It's the sock suspenders, I think.

Back to my labors. Good work to do and someone to love are all we need, I've been told. Something in that. Keep flogging Will! Night!

Posted by: shortstop on January 4, 2007 at 11:03 PM | PERMALINK

Mr. Jeremy:

With twisted, sick logic like that, it's truly a wonder that anyone would agree to pay you four figures.

4 figures? Sir, what is your major malfunction? Do you have a clue as to what you're saying?

C'mon, 'fess up -- you're a trust fund baby, right? Because if you're talking like this and you're not, then you're a goddamn fool.

Much of the wealth I was supposed to inherit from my father collapsed when the Vietnam War ended; the value of the defense firm owned by my family declined when the Department of Defense cut back on what it had been purchasing from us.

My life's work has been investment banking and creating wealth. I realize that that is anathema to liberals, but too bad.

I don't expect any of you to deal with the fact that you have nothing to show for a lifetime of sitting on your rear ends, waiting for a handout.

Posted by: Norman Rogers on January 4, 2007 at 11:05 PM | PERMALINK

Shortstop - Do you have access to Times Select?

As to econ questions - I am obviously silent for the most part on issues of economics because I realize that 6 hours of econ is just enough to make me dangerous, and allow me to totally and completely misunderstand. Now if you want the stoichiometry of CO2 emissions from your cars exhaust, I'm your girl...

Posted by: Global Citizen on January 4, 2007 at 11:06 PM | PERMALINK

brooksfoe, if you haven't taken the time to educate yourslef regarding the bare minimum of knowledge of the topic at hand, as appears to be the case regarding the monetarist theory of the Great Depression, don't call others lazy because they won't provide you an URL. I'm not being paid to assist you in overcoming your abject ignorance. Stop being lazy.

Similarly , the fact that you have allowed yourself to be too lazy to educate yourself regarding the role of rent control, zoning laws, and the public school systems, in driving housing costs is not my responsibility. As to health insurance costs, if you weren't so damned lazy, you'd be aware of how regulation regarding what all policies must cover in New York, for intstance, has driven health insurance premiums upward.

Lazy and ignorant is no way to go through life, brooksfoe.

Posted by: Will Allen on January 4, 2007 at 11:07 PM | PERMALINK

I was actually referring to one of your recent other shows of force, Globe. Really really night now...

Posted by: shortstop on January 4, 2007 at 11:08 PM | PERMALINK

There was a very good reason why it took Republicans over 30 years to regain political parity with their Democratic counterparts after the onset of the Great Depression. They were completely clue-free how to rescue capitalism following the stock market crash at the end of the "Roaring '20s".

History does have a nasty tendency to repeat itself when one doesn't learn from it.

Posted by: Donald from Hawaii on January 4, 2007 at 11:10 PM | PERMALINK

Donald on the Islands:

They were completely clue-free how to rescue capitalism following the stock market crash at the end of the "Roaring '20s".

So was FDR. What ended the depression was the Second World War.

Unless you know something about the economy of the late 1930s that I don't know...

Posted by: Norman Rogers on January 4, 2007 at 11:12 PM | PERMALINK

shortstop:

I guess what I told "Norman" regarding books and music applies to humor as well.

Ah well. And now here's *me* puzzling out a bit of knotty avant-garde that's supposed to be inherently enjoyable. How the worm turns ...

Goodnight.

Bob

Posted by: rmck1 on January 4, 2007 at 11:13 PM | PERMALINK

"Much of the wealth I was supposed to inherit from my father collapsed when the Vietnam War ended ..."

What a total bummer, Normie. I should really count my blessings that my father was only killed in that war.

Posted by: Donald from Hawaii on January 4, 2007 at 11:13 PM | PERMALINK

Keep flogging Will!

Your wish is my command. Swish! Crack! "Uh! That is merely one of many intellectual errors you have committed -- " Swish! Crack! "Uh! With regard to that last stroke, I simply refer you to the relevant passage in Hayek. Consider yourself -- " Swish! Crack! "Uh!...government...bad...market...good...whatever..."

Posted by: brooksfoe on January 4, 2007 at 11:13 PM | PERMALINK

Norman Rogers: "Unless you know something about the economy of the late 1930s that I don't know."

My grandfather, Herbert Margerum, was senior vice president of First Western Bank in Los Angeles during the Hoover administration, and a co-founder of the ABA (American Bankers Association). He later left accepted a position with FDR's administration as head of the WPA - Western Region.

I daresay he knew one hell of a lot more about the Depression than you, who are all meringue and no filling.

Posted by: Donald from Hawaii on January 4, 2007 at 11:19 PM | PERMALINK

Moderator:

Thank you for deleting the spoof posts this evening. I truly appreciate it.

Does someone know if this blog is being properly archived and stored for later retrieval? I have plans for the work that I do here. While there is a personal archive of much of what I have posted, sometimes I miss the inane little silly posts that people throw at me because I just can't be bothered to deal with intellectual midgets.

Moderator, please archive my comments in a database that has a proper indexing and search function for future reference; not only am I about six months from completing my autobiography (tentatively titled An American Lion: The Life of Norman Rogers, Investment Banker) but there are plenty of things that I have written that the kids could use either to exchange "snaps" with their "homies" but also as basic life advise to help them get through tough times.

I thank you.

Posted by: Norman Rogers on January 4, 2007 at 11:22 PM | PERMALINK

Trolls win. I'm outa here.

Aloha.

Posted by: Donald from Hawaii on January 4, 2007 at 11:24 PM | PERMALINK

Oh, do tell, Donald. Did dear old grand-dad really support the notion that FDR's legilsation played a larger role than WWII in ending the Depression?

Posted by: Will Allen on January 4, 2007 at 11:28 PM | PERMALINK

Moderator!

11:25PM! 11:25PM!

Dastardly little fools...you know, come up with something more apropo, little twit.

Posted by: Norman Rogers on January 4, 2007 at 11:31 PM | PERMALINK

Moderator!

He or she is back at 11:34PM!

Swiftly now! Swiftly now!

Posted by: Norman Rogers on January 4, 2007 at 11:35 PM | PERMALINK

Similarly , the fact that you have allowed yourself to be too lazy to educate yourself regarding the role of rent control, zoning laws, and the public school systems, in driving housing costs is not my responsibility. As to health insurance costs, if you weren't so damned lazy, you'd be aware of how regulation regarding what all policies must cover in New York, for intstance, has driven health insurance premiums upward.

The fact that I am not "aware" of any of this is due less to any laziness on my part than to the fact that none of it is - how shall I put it? - true? Coherent? Relevant?

Rent control, zoning laws, and the public school system all existed in 1969, when my parents bought a 3-bedroom house in Washington DC for what would in constant dollars be somewhat over $200,000 today. The fact that that house's value has increased at least 3 times as fast as inflation is not due to rent control, which DC has not suddenly instituted in the intervening years, or to changes in zoning laws or public schools (???? your point here is thoroughly incomprehensible). It is due to market forces. In general, if you told any real estate investor or developer that rising real estate values in the US are due to government regulations, not to market forces, they'd laugh you out of the room.

Your explanation of rising health insurance premiums as resulting from regulations mandating coverage of certain procedures in NY is novel. Insurance premiums are rising at 12% per year. How much do the new procedures mandated in NY cost? Do they amount to 8% of the entire health expenditures of the US in 2005? Gosh, those must be some expensive and common procedures. But now that they're covered, I guess insurance premiums will just keep pace with general inflation in 2007, right? Yeah.

Here's the general picture. The two advanced economies with the most private-sector-oriented health insurance systems are 1. the US and 2. Switzerland. And which countries have the world's most expensive health insurance? 1. The US. 2. Switzerland. About twice and 1.5 times as expensive as the rest of Europe, respectively.

Posted by: brooksfoe on January 4, 2007 at 11:45 PM | PERMALINK

book foe:

The two advanced economies with the most private-sector-oriented health insurance systems are 1. the US and 2. Switzerland. And which countries have the world's most expensive health insurance? 1. The US. 2. Switzerland. About twice and 1.5 times as expensive as the rest of Europe, respectively.

I have learned from a friend of mine, named rdw, that "old Europe" is in decline, doesn't matter anymore, is overrun with Islamicists and they're not having babies anymore.

I believe his useful information refutes you as you attempt to refute Will Allen, whom I refuted much earlier and who is now cowering in fear of me.

Posted by: Norman Rogers on January 4, 2007 at 11:50 PM | PERMALINK

George F. Will: Besides, there would be something disproportionate about the president vetoing this feel-good bit of legislative fluff after not vetoing the absurdly expensive 2002 farm bill, or the 2005 highway bill larded with 6,371 earmarks or the anti-constitutional McCain-Feingold speech-rationing bill. ...Democrats consider the minimum-wage increase a signature issue. So, consider what it says about them...

Yes, Will, consider what it says... that proposed Democratic "feel-good" legislation vs. the 2002 and 2005 legislation passed by Bush and the Repulican-controlled Congress.

Posted by: has407 on January 4, 2007 at 11:52 PM | PERMALINK

"The higher a monkey climbs, the easier it is to see its ass" it has been said. Norman Rogers claims to have climbed pretty high, and the evidence seems to back him up.

I agree, however, with Norman Rogers that entitlement spending needs to be reformed. But one of the many things of what the Democrats are offering, and what I clearly included in my criticism, is a massive expansion of the healthcare entitlements in the place of a balanced budget. The declining dollar that will result from this will make health care all the more costly for the taxpayers...they will be robbed.

To be fair, Bush is not much better than the Democrats on government spending. He passed Medicare Part D, which charges the taxpayers $40 billion a year so the government can give more money to people to buy drugs...which will result in the drug companies, knowing that people have more money, raising prices.

Bush also increased funding for the Department of Education by nearly eighty percent; that most high school seniors can't even find Iraq on a map shows how effectively more money translates into better education.

Bush is just as big on pork and programs as the Democrats, and it is this increase in domestic spending, along with the Iraq War (that Hillary, Kerry, Edwards, Biden, Bayh, and many other Democrats voted for) that have led to the deficits, not Bush's tax cuts.

And tax cuts are not a quick fix; they are a long term necessity. As we remember, we didn't get out of the recession over night; it took awhile for those tax cuts to work, but they worked.

Posted by: brian on January 4, 2007 at 11:54 PM | PERMALINK

my bad about the first paragraph. My drunk roomate added the monkey-ass shit

Posted by: brian on January 4, 2007 at 11:57 PM | PERMALINK

"The higher a monkey climbs, the easier it is to see its ass" it has been said. Norman Rogers claims to have climbed pretty high, and the evidence seems to back him up.

Pathetic. This is how you treat a man who has used wealth to create wealth in this country? This is how you treat me--an advocate of free markets and Republican economic policies?

Moderator, just delete everything this fellow "brian" is saying. He annoys me to no end and is obviously a crank or a drunk with Internet access or something.

Posted by: Norman Rogers on January 4, 2007 at 11:59 PM | PERMALINK

Goodness, there is no moderation.

I shall retire for the evening and allow the "free market" to catch up and correct itself.

To you spoofers--I shall get you. I shall find you, locate you, identify you, and use the law to make you uncomfortable and anxious.

Posted by: Norman Rogers on January 5, 2007 at 12:02 AM | PERMALINK

"Bush is not much better than the Democrats on government spending. He passed Medicare Part D, which charges the taxpayers $40 billion a year..."

Wow, thats like... almost a third of annual short term costs of the war he is loosing.

And what does he want to do now? Expand the military of course. Poor incompetent bush can't win a war against a medium sized developing nation with 60% of the worlds defense spending, so he wants to up it.

Posted by: jefff on January 5, 2007 at 12:27 AM | PERMALINK

I didn't know robots could poop. Seriously, are we sure George Will is human?

Posted by: Apollo 13 on January 5, 2007 at 12:31 AM | PERMALINK

While the evidence for the effects of minimum wage hikes on unemployment is not 100% clear (in spite of the massive propaganda campaign by those who oppose the minimum wage), the evidence of the effects of lowered taxation levels on government income is clear - lower taxes mean lower government revenues. There is no trickle down effect and anyone who claims otherwise is lying. They may be, like certain elements here, too stupid to realize they are lying, but most of them start by looking at Reagan's record and lump the revenue from his tax hikes in - but then fail to mention those massive tax hikes. It isn't so much smoke and mirrors as it is pure bullshit.

As to the nonsense that the "free market" is some kind of mystical force that provides the best possible outcome, go back and read what that commie Adam Smith had to say about it. Go ahead, some of it is referenced upthread. Left to its own devices capitalism is a method for enriching those with capital at the expense of those who merely contribute labor.

Posted by: not saying on January 5, 2007 at 12:35 AM | PERMALINK

Okay, make of this what you will - but my favorite Vonnegut is the non-VonnegutVenus on the Half-Shell written under the pseudonym Kilgore Trout.

That makes some sense. Not only was the book not written under his name. It wasn't written by him. The confusion apparently pissed off Vonnegut.

If you liked it you might try some books by Philip José Farmer (and his other pseudonyms).

Posted by: B on January 5, 2007 at 12:49 AM | PERMALINK

brooksfoe, apparently you live in a world in which logic operates thus: Condition A exists in year x. Condition B exists in year x + y. Therefore, A cannot have played a role in the existence of B. What color is the sky in your world?

Do "market forces" play a role in housing prices? Of course. That it needs to be explained to you how zoning laws in almost every densely populated area suppresses creation of new housing stock, thus affecting those market forces, is indicative of your abject laziness and ignorance. That rent control in some places restricts supply creation even more tightly, and that you are also apparently ignorant of this fact, is I suppose unsurprising. That you are ignorant of the fact that the uneven nature public schools greatly drives demand in some school districts is also an indicator of your laziness, as well as being a likely indicator that you haven't bought too many homes.

Posted by: Will Allen on January 5, 2007 at 1:02 AM | PERMALINK

For all their faults, No unions, no middle class... Check your history books or look around the modern world.

Posted by: DK2 on January 5, 2007 at 1:16 AM | PERMALINK

cmdicely:

> Labor is a commodity but workers are not? I dunno, Chris, that
> smells awfully like a category mistake.

> Er, okay. I'll try to spray some other scent on
> my arguments in the future.

Aww Chris, lighten up (and no, I don't mean
start phosphoresing in your computer chair :)

> If "labor" is the aggregate of "workers," isn't that the equivalent
> of saying that "gold" as a commodity is the aggregate of all the
> gold bars, ingots, jewelery, ore, etc. in precisely the same
> fashion?

> If labor were the aggregate of workers then this would be correct.
> Labor is, however, most emphatically not the aggregate of workers.

Okay. I was thinking this post out as I was writing it, and saw the
flaws in this equation lower down. But to the extent that a person
is a worker is the extent to which they sell their labor power, no?
A worker is, in fact, defined in the economic sphere (leave aside
labors of love and all of that) as someone who does precisely that.

Since labor can't exist without workers, and "workers"
is a meaningless concept without the labor they produce,
it seems like there's a functional equivalence here,
if not a precise definitional equivalence.

> Labor bears a relationship to workers very roughly analogous
> to that that gold bars have to gold mines, or ears of corn have
> to fields (the distinction is even greater than in either of
> these analogous relationships, though.)

But what about the gold that you could just pick off the side of a
mountain, or the corn that grows wild in the fields? There's nothing
about the definition of a commodity that says that it has to come
from somewhere, or that its supply has to be limited or specific.
Anything, in fact, can be constructed as a commodity -- even the
thoughtless argot of street thugs, which nowadays sells hip-hop CDs.

Labor, however, comes from nowhere else but workers -- who are also
consumers and potential utilizers of other people's labor. This is
what Kevin means by saying that ingots of iron don't spend paychecks
back into the economy. If labor is a commodity, it's of a very
specialized sort, because it cannot be abstracted from human agency.

>> I understand that the price of labor, plugged into economic
>> equations (and observed empirically), behaves in equivalent
>> ways to the price of any given commodity -- so in that sense,
>> economists aren't wrong to call "labor" a commodity.

> Some labor does, some doesn't.

You've said this above, and I'd like to see examples of each sense.

>> But in the most important sense, I think Kevin is precisely
>> correct that they are profoundly different.

> I think neither labor nor workers are generally commodities,
> for different reasons (though some kinds of labor are rather
> commodity-like in some important economic ways),

All commercial labor is a "commodity" in the sense that all commercial
labor obeys some basic economic laws, like supply and demand. Labor
gluts will lower wages and labor shortages with increase them, etc.

> but I think Kevin is misguided in recasting Will's argument
> which states that labor is a commodity into the claim that
> workers are a commodity.

Except that as I said above, I don't see how it's possible to
separate the two. It isn't to equate "worker" with "full human
being," of course; "worker" is merely one facet of what someone is.
And a factory is blind to what sort of "worker" is producing the
labor; if automation can increase productivity and lower costs, so be
it. In that case, the value of the displaced factory workers takes
a deep plunge, because it's being compared directly to the machines.

So a worker always carries his/her commodity value with him/her
(aren't these non-sexist constructions terribly awkward sometimes?).
The "maintanence costs" of a human being are directly compared to
the much lower and more consistent maintanence costs of the machines.

But the machines, of course, don't have paychecks to spend back
into the local economy, which is why you can have sharply increasing
productivity growth in the midst of low or stagnant economic growth.

Again, this is a big part of Kevin's point.

>> I could (and my neighbor does) raise a crop
>> of tomatoes and give 'em away.

> Likewise, you could give away a "crop"
> of labor: many people, in fact, do.

Precisely. Labor value, like commodity value, is socially constructed.
I decide, fundamentally, how valuable my time/efforts are and measure
them by a whole host of yardsticks aside from merely monetary value.

>> A worker owns his labor (slavery being
>> abolished) and must sell it in order to live.

> A worker is defined as someone who sells labor, though certainly
> not all people who do so must in order to live; some who do so
> could make do by either drawing down capital resources, taking
> public assistance, or other means besides selling labor.

Well sure, Chris, but this is quibbling. A worker, commonly
understood, is a person who needs to work to live. Hence "working
class" -- which doesn't imply that upper class people don't work.

>> My neighbor doesn't make her livelihood on her tomato crop.

> Yes, and some people do. And others don't make their
> livelihood with their labor. You seem to be creating a
> false distinction with selective presentation of examples.

No, merely illustrating that my neighbor can afford to give her
tomatoes away because she's a hobbyist gardener -- which directly
supports my point above, if a tad disjointedly in syntax.

>> A worker's labor (assuming no other assets) is not merely part of
>> a suite of commodities that may or may not produce added value in
>> their exchange. Like insurance or healthcare, in an important
>> sense, a worker's labor value exists in a captive market.

> Certainly.

>> College grads don't clerk in Borders bookstore out of a "free
>> choice" in a "free market" -- they take the job they're vastly
>> overqualified for in order to keep the wolf away from the
>> door. No choice in the matter. And this is dehumanizing.

> I think you overstate the claim to say "no choice",
> though certainly there is often a limited range
> of less-than-stellar choices available.

I didn't mean "no choice" regarding the bookstore job (hey, there's
always Taco Bell), I meant no choice regarding having to work, period.
Unlike a commodity trader, a worker can't sit on one's assets (or
ass, for that matter) until the market increases their (its) value.

While there are inelastic input costs associated with certain
commodities (cold storage of fresh vegetables and fish,
etc.), a worker's input costs are the most inelastic of all.

>> A crop of tomatoes fails. Oh well, sez the commodity trader,
>> there's always next year, and takes the loss he bet on incorrectly.

> Well, sure, and there are "traders" with similar insulated
> roles gambling on the labor market, and there are others whose
> livelihood is more directly at stake. This isn't a difference
> between "labor" and "tomatoes", but between distant "traders"
> who are gambling surplus assets to magnify them, and people
> with their livelihood directly exposed.

That there isn't a difference between "labor" and "tomatoes" to the
trader is precisely the point. Whether speculating on pork bellies
or speculating on job placement as a headhunter, in each case the
quantity is objectified from the trader's POV. But if a bunch of
tomatoes die on the vine -- well tough noogies for the trader. If
the headhunter passes over job candidates because the demand in
that particular field dries up -- same thing. Difference is, the
dead tomatoes don't have families to feed and a mortgage to pay.

What I'd like to point out is the process of objectification that
goes on in the labor market, and how job seekers are taught to view
themselves precisely as commodities, regardless what that does
or does not say about their existential worth as human beings.

>> A human life, OTOH, is supposed to have an incommensurate value.

> Supposed by whom?

Oh sheesh, Chris, aren't *you* supposed to be the practicing Catholic
in this picture? :) Pick one: Religion, tradition, socialization,
beliefs norms 'n' values, the Declaration of Independence, natural
law, the Categorical Imperative, the Enlightenment in general. Hey,
I'm easy; I don't care which one you pick. Pick several if you like :)

>> And here's where economics jumps (some would say the shark)
>> into the realm of human values -- where it has always been
>> from the beginning, only economists want us to conveniently
>> forget that fact and objectify all inputs.

> Er, no. Economics is an objective, empirical science.

Well honestly, Chris, though I admire your noble Popperian advocacy,
I'd still call this scientism. I don't think there's a branch of
economics extant that can extricate itself from evaluative choices
and provide a completely objective picture of "economic behavior."

Obviously behavioral economics (which is a branch of microsociology)
does a better job of providing a real picture of how humans behave
than the equations of Walrusian equilibrium or Pareto optimality.

> Economists (as a class) don't "want" people to objectify all
> inputs and ignore values, they just separate that (if they
> are doing good science) from the empirical work.

Econmix joke:

Two neoclassical economists are strolling together down
the block and they pass a Porche dealership. One goes
"Damn, I really wanted to buy that Carerra last year."

The other one -- with the utter confidence of an insufferably
pompous academic who is never wrong -- goes: "No you didn't."

There is an inevitable Panglossianism in any economist's bloodless
picture of behavior behind which lurk all the darker human passions.

> Now, often some economists, and even more non-economists who
> confuse the descriptive results of economics for prescription
> through misunderstanding, and some (both economists and not)
> have a quasi-religious faith that certain measures of aggregate
> economic performance are essentially a priori goods, but that's
> different than the charge you make.

No, it really isn't. Your position actually accentuates my charge,
because you seem to believe (please correct me if I'm wrong; I don't
want to strawman you) that we could make economics "purer" by making
it "more scientific." I think the history of the mathematization of
economics in the late 19th and throughout the 20th century shows how
problematic this is. We wind up elevating economists -- whose subject
is the humble and perpetually fought-over allocation of resources --
into a high priesthood of pseudo-scientists. Cf. Philip Mirowski's two
excellent and engaging books: More Heat Than Light (about how
neoclassical economics ripped off Clausius' thermodynamic equations)
and Machine Dreams: Economics Becomes a Cyborg Science (about John
von Neumman and the students of Kenneth Arrow at the RAND foundation).

>> Only the *buyers* (the Sovereign Consumer of the
>> marginalist revolution) are allowed to have an
>> elastic subjectivity as they work to maximize and
>> define their utility in whatever ways they see fit.

> I don't know what you mean by "allowed to",

In practical terms, that's how it works out.

> but I think its pretty clear and borne out by experience
> that if you continue to pay labor worse, you will see more
> people abandoning the formal economy, so certainly sellers
> of labor, even at the lowest end, do have and demonstrate
> the kind of elastic response that is assumed in economics
> to be derived from subjective utility in the marketplace.

Abandoning the formal economy -- precisely according to economic
theory! Isn't that just ... ducky. What a lovely, effective model
of human behavior. Why look, when Joe at the bookstore becomes
resentful enough taking orders from officious highschool students
with more seniority than he at Borders -- he can *freely choose* to
grow pot in his closet -- and sell it for *ten times* his salary!

What an innovative, elastic response. Why it even dovetails
perfectly with Robert Merton's scientifically non-judgmental (honor
that fact/value distinction, social scientists!) theory of deviance.

I'm sorry, Chris; I'm not really snarking at you.

I'm snarking at scientism. The net effect is merely to hand those
who oppress us a nice, shiny and completely sterilized stainless
steel club with which to further beat us about the heads.

Economics cannot be divorced from the
*practice* of allocating resources.

Every economic decision is irreducibly a political decision.

Bob

Posted by: rmck1 on January 5, 2007 at 1:27 AM | PERMALINK

Dear Wingnuts:

Unfortunately for you, we already tried the libertarian paradise-It was called the Gilded Age. It predictably produced a handful of ultra wealthy individuals such as Rockerfeller, J. P. Morgan, etc., and a vast number of desperately poor workers. But if that is what you want to sell to the American public, I say go for it!

Posted by: CDWard on January 5, 2007 at 2:07 AM | PERMALINK

cmdicely:

I wanted to respond to this graf more
seriously, because it's the nub of the issue:

> but I think its pretty clear and borne out by experience
> that if you continue to pay labor worse, you will see more
> people abandoning the formal economy, so certainly sellers
> of labor, even at the lowest end, do have and demonstrate
> the kind of elastic response that is assumed in economics
> to be derived from subjective utility in the marketplace.

Sure the response is elastic -- as most human responses
tend to be. But the *needs* which drive low-rung workers
to "abandoning the formal economy" (read enter the illegal
black market) are not elastic at all. We're at the very bottom
of Maslow's hierarchy here: people have to eat, clothe themselves
and pay rent. This is why the minimum wage has become such a
rallying cry, and even Republicans are assenting to raising it.

It might be perfectly "natural" behavior that economists are
describing, but the human costs of low-wage workers "voting
with their backs" by working under the table without any sort
of health, unemployment or accident insurance or taking large
legal risks by selling drugs or other contraband are high.

Despite my snark at economics, I'm not really disputing
that an objective science of economic behavior is possible;
if that were true, then any other form of sociology (and
economics is a form of sociology) would be similarly impossible.
I'm saying that economists' paradigms of the above situations,
by attempting to strip out the human, evaluative elements,
inevitably create unstated a-priori assumptions of their own.

It's terribly ironic, Chris, but the more social science attempts
to be non-evaluative, the more it opens the doors to nihilism.
Max Weber's fact/value distinction had nothing to say about the
rise of Hitler. (More ironic still is that the father of this
insight is also the father of neoconservatism, Leo Strauss.)

By attempting to describe human behavior without evaluating it,
economists ratify a Panglossian best of all possible worlds. The
economist in the joke really didn't want that Porche, because he
didn't buy it. The young struggling family guy is now selling pot
because he wants to -- if he didn't want to, he wouldn't sell it.

This is why genuinely scientific economics (as opposed to
Marxian evaluative economics or political economy -- which is,
of course, banished to the purdah of an academic cubbyhole)
tends as a general rule to serve as the handmaiden of conservative
worldviews. Conservative ideologues naturally use the "scientific,"
"value-neutral" nature of economics to trumpet their notion that
this best of all possible worlds is in fact the only possible world.

And this is why I distrust economics the more it
claims the mantle of a pure, descriptive science.
This may not be the fault of economists -- but we
don't read about their insights in academic journals.

We read about them in the Wall Street Journal.

Bob

Posted by: rmck1 on January 5, 2007 at 3:33 AM | PERMALINK

That it needs to be explained to you how zoning laws in almost every densely populated area suppresses creation of new housing stock, thus affecting those market forces, is indicative of your abject laziness and ignorance.

Zoning laws are a static condition. The immense increase in real estate value over the past 40, and especially over the past 15, years is a dynamic event. One of the basic rules of logic is that you cannot explain a change with a constant. Housing is worth more now because a. people in the homebuying class are richer on average and b. access to credit is easier. Incidentally, if you think that middle-class housing construction in the US has been going too SLOWLY in the past 10 years, during a period of near-unprecedented construction boom, then you are a very weird observer indeed.

That rent control in some places restricts supply creation even more tightly

Since rent control does not generally apply to newly created housing, this is nonsense. It's just a myth frequently advanced by owners of rent-controlled buildings, who would like to get rid of rent control on already existing housing so they can make more money on it.

that the uneven nature public schools greatly drives demand in some school districts

Again, you are trying to explain a dynamic universal event - the huge increases in home values nationwide - with reference to a largely static factor that can only affect the differential in home values between different districts. You could explain an increase in home prices in Brookline relative to Allston by referencing better public schools in Brookline. But there would have to be a corresponding drop in relative home prices in Allston. The underlying factor driving a faster-than-inflation rise in the overall average housing price across Brookline AND Allston cannot be a differential in public school quality between the two.

What you're doing is just taking the fact that the government exists and does some things which affect housing prices, and throwing that in wherever you can to make it seem like any complaints about market-driven effects are illegitimate because the real culprit is the government. Might as well say rising housing prices are all the fault of the weather.


Posted by: brooksfoe on January 5, 2007 at 4:20 AM | PERMALINK

The New Norman is pretty funny on this thread, even funnier than Will Allen. The difference is that the former is intentionally funny, the latter unintentionally.

Posted by: mcdruid on January 5, 2007 at 4:49 AM | PERMALINK

One of the arguments on a recent California proposition was that government meddling is responsible for 50% of the high cost of homes in California. I sniggered at that, then realized it is true: without things like clean air, open spaces, good schools, and roads, nobody would be living here.

Posted by: mcdruid on January 5, 2007 at 4:52 AM | PERMALINK

Actually, now I'm thinking about it, I realize what I wrote above about schooling disparities' possible effects on house prices is not necessarily the case. It is possible that in a world where public school quality was very even across districts, there would be no "schooling" component to the housing decision, and thus some of the money which parents currently devote to house purchases would instead be spent in other ways -- saved for college tuition, say. That might mean fewer aggregate dollars chasing the commodity of housing, resulting in lower overall average house prices.

However, I find it hard to imagine an America without sharp disparities in quality across school districts. That certainly has not been the case within my lifetime. So it seems like a theoretical issue, not a real one.

Posted by: brooksfoe on January 5, 2007 at 4:55 AM | PERMALINK

Looks to me like cmdicely is being stalked by this rmck1 fellow. Careful, cmdicely--this fellow is likely to show up at your house looking like the charming young actress Jennifer Jason Leigh from the movie Single White Female.

I thank the Creator he's leaving me alone.

Posted by: Norman Rogers on January 5, 2007 at 8:09 AM | PERMALINK

Off thread, but, what's good for the Woot, is good for the Gadfly.

To the often deranged, but, occasionally lucid Norman.

The AP has announced, and there is an article in the Seattle P/I, that a Iraqi Ministry offical has stated that there is, indeed, a real Captain Jamal Hussein of the Khadra police station.

Poor, poor MM and ilk.

Posted by: thethirdPaul on January 5, 2007 at 9:26 AM | PERMALINK

The AP has announced, and there is an article in the Seattle P/I, that a Iraqi Ministry offical has stated that there is, indeed, a real Captain Jamal Hussein of the Khadra police station.

Poor, poor MM and ilk.

I'm against cute little things giving their opinions; it leads to disaster.

Posted by: Norman Rogers on January 5, 2007 at 9:32 AM | PERMALINK

Well, see that Uncle Paul was too lazy to tell you the link is at Informed Comment this morning.

Posted by: stupid git on January 5, 2007 at 9:39 AM | PERMALINK

Workers aren't commodities because their action makes the business exist; their activity in effect constitutes part of its being. The public, through a democratic government, has the perfect *right* to insist on adequate legal wage levels. It is more a matter of rights negotiations per the social contract of what we ask for the privilege of claiming title to the commons, than a purchase. The business owners are being shown the conditions for their resource claims and corporation status, etc, not being buyers of a service.

Posted by: Neil B. on January 5, 2007 at 9:59 AM | PERMALINK
Sure the response is elastic -- as most human responses tend to be. But the *needs* which drive low-rung workers to "abandoning the formal economy" (read enter the illegal black market) are not elastic at all.

I'm not even sure what it say a need is or is not elastic as distinguished from a response being or not being elastic; elasticity is, in the relevant sense, as best I can tell purely a trait applicable to responses, not needs, wants, desires, etc.

It might be perfectly "natural" behavior that economists are describing, but the human costs of low-wage workers "voting with their backs" by working under the table without any sort of health, unemployment or accident insurance or taking large legal risks by selling drugs or other contraband are high.

Of course they are. Which is why it is best to avoid that.

Despite my snark at economics, I'm not really disputing that an objective science of economic behavior is possible; if that were true, then any other form of sociology (and economics is a form of sociology) would be similarly impossible. I'm saying that economists' paradigms of the above situations, by attempting to strip out the human, evaluative elements, inevitably create unstated a-priori assumptions of their own.

I know that is what you are saying. I'm agreeing in part (in that there are some people who will inevitably confuse description with prescription), while disagreeing in part (in that much of what you seem to attribute as a consequence of descriptive economics is really a consequence of people who will abuse whatever tool is most convenient to sell self-serving policy, who would seize on some other framework if descriptive economics were not available, and are the same type of people who, in other societies, distorted ideological economic theories, like Marxism, to justify policies with similar narrow self-serving ends despite the inherent conflict between those ends and the ideological basis of the theory.)

It's terribly ironic, Chris, but the more social science attempts to be non-evaluative, the more it opens the doors to nihilism.

I don't think there is anything terribly "ironic" about the idea that description analytically separated from prescription is more compatible with the idea that description is all there is and there is no room for prescription than is description which presupposes some a priori prescriptive framework.

Max Weber's fact/value distinction had nothing to say about the rise of Hitler.

I'd agree that that is narrowly true, since explaining such social dynamics is outside the purview of the fact/value distinction itself. OTOH, I don't think that statement says anything meaningful.

By attempting to describe human behavior without evaluating it, economists ratify a Panglossian best of all possible worlds.

Er, no, they don't. In fact, developments from the fields of descriptive social science like game theory explain exactly why the outcome of the best possible individual decisions in the circumstances that in fact exist do not, often, produce even arguably the best of all possible worlds.

This is why genuinely scientific economics (as opposed to Marxian evaluative economics or political economy -- which is, of course, banished to the purdah of an academic cubbyhole) tends as a general rule to serve as the handmaiden of conservative worldviews.

I don't think the effect you are trying to explain is true, nor (as explained above) to I think that the cause you present for it actually is present, much less causes the effect you describe.

Conservative ideologues naturally use the "scientific," "value-neutral" nature of economics to trumpet their notion that this best of all possible worlds is in fact the only possible world.

Only by selectively ignoring many results of that scientific, value-neutral research. Of course, people with preconceived value notions of the same type (often the very same people) also wilfully distorted value-based modes of analysis, including religious ones, to defend their status quo power of elites, too, so I don't see any justification in blaming the value-neutral nature of economics for their actions. People who lie and distort to sell their idea will lie about and distort anything to sell their ideas, plain and simple.

And this is why I distrust economics the more it claims the mantle of a pure, descriptive science. This may not be the fault of economists -- but we don't read about their insights in academic journals.

We read about them in the Wall Street Journal.

We who? I certainly am more likely to read about the insights of economists in academic works (either journals or texts) than in the Wall Street Journal. Of course, I'd have a distorted view of more than just the use of economics if I preferred the WSJ as a source of information.

Blaming economists for your choice of information sources is pretty lame.

Posted by: cmdicely on January 5, 2007 at 10:26 AM | PERMALINK

Brooksfoe, if you think zoning laws are a static event, that is, they are roughly the same force they were forty years ago, you simply have once again demomnstrated abject ignorance and laziness. To pick a couple of examples, no, Boulder and Portland land use regulation has not been static for the past forty years. Yes, of course, the demand component of housing prices is in part driven by an increased middle class with access to credit (funny how the stagnant middle class wealth meme never seems to account for how that stagnant class is living in ever larger homes, in ever larger numbers), but the supply component is much more restricted in it's ability to respond to that demand, and ever more restrictive land use regulation plays a significant role. Go examine how housing prices in Houston, with it's minimal land use regulation, have risen over the past thirty years, compared to Portland, with it's heavily regulated land use.

You are also wrong in regard to demand differential for school districts being a constant factor for the past forty years. There are many factors, like having fewer children, and the increasing ubiquity of college education, which drives parents to be ever more demanding regarding which school district their child or children are enrolled in. I also highly suspect, although i certainly can't prove it, from speaking with long time teachers, that the disparity between a good publich school and a poor public school is much more pronounced than forty years ago. Check out the difference in residential housing price increases for the past thirty years between districts with terrible reputations, and those with excellent reputations.

Does government regulation account for all housing price increases? No, and I never said it did. However, it is simply ignorant to claim that a paucity of real estate regulation by government has led to housing price increases above that of the general rate of inflation. Regulation and state action has played a key role in driving housing prices as high as they are today.

Posted by: Will Allen on January 5, 2007 at 10:31 AM | PERMALINK
A worker, commonly understood, is a person who needs to work to live. Hence "working class" -- which doesn't imply that upper class people don't work.

The distinction is not quibbling. In fact, the conflation of the "worker" with the "working class" is, I would argue, one of the most fundamental flaw sand ultimate downfalls of Marxism as an effective basis for correcting the manifest flaws of capitalism, which Marxism was very good at identifying.

No, it really isn't. Your position actually accentuates my charge, because you seem to believe (please correct me if I'm wrong; I don't
want to strawman you) that we could make economics "purer" by making it "more scientific."

Er, no.

It can be made more scientific by making it more scientific, I suppose. And I suppose you could call that more "purely scientific". Or less "purely ideological".

But no, not more "pure" in some idealized moral sen sense, indeed more distant from any idealized moral concept of purity.

I think the history of the mathematization of economics in the late 19th and throughout the 20th century shows how
problematic this is. We wind up elevating economists -- whose subject
is the humble and perpetually fought-over allocation of resources --
into a high priesthood of pseudo-scientists.

No, that's a result of ideology masquerading as science, see, for instance, the history of "scientific" Marxist-Leninism.

If economics is in fact more scientific and less ideological, economists are by definition not "pseudo-scientists" of any type.

Posted by: cmdicely on January 5, 2007 at 10:35 AM | PERMALINK
cmdicely, if you read this thread, you'll see comments regarding how the Great Depression was a natural outcome of insufficient regulation of the economy.

The only mention of the Depression I find in the thread prior to your condemning that supposed argument was a claim that the vast American middle class did not exist before the Depression and was largely a consequence of the New Deal. I see no one making the point you refer to either before or after you attempted to refute it, though I do see others, afterwards, claiming that you did not provide adequate support for the argument you made.


I mentioned the core beliefs of many of those who support minimum wage legislation because people who succeed in having parts of their agenda put into law quite frequently redouble their advocacy for other parts of their agenda.

You asserted, without substantiation, a motivation for people who support minimum wage legislation (which is, after all, the vast majority of the American public.)

People who favor a higher minimum wage, or a 39% top marginal rate, quite frequently favor much, much, higher marginal rates, and were quite vociferous in opposing the drastic lowering of such rates 25 years ago. They also tend to favor much higher minimum wages.

So? Even if this were generally true of supporters of higher minimum wages or slightly higher marginal rates (a point you have, I will note, failed to establish), you have yet to establish that those other things are bad, or that those past events were good.

Finally, given the vast history of the deficiencies produced by central planning in the past hundred years or so, it is fair to say that those who advocate for it strenuously are possessed of a Faith.

This presumes a false equivalence between all government action ("central planning").

Posted by: cmdicely on January 5, 2007 at 11:13 AM | PERMALINK

Job growth in the U.S. unexpectedly accelerated in December, with nonfarm payrolls rising by 167,000 and the jobless rate remaining at a very low 4.5%, the Labor Department reported Friday.

Job growth was strong in professional services, which added 50,000 workers in December and 420,000 in all of 2006.

Health care added 31,000 jobs in December and 324,000 in the year.

*******************************************

It's all supply-side now. This is the post-Reagan world. You are debating how many angels can dance on the head of a pin. The post-81 American economy remains the 8th wonder of the world.

Posted by: rdw on January 5, 2007 at 11:37 AM | PERMALINK

The jobs report was absolutely stellar. Large gains in new jobs with over half in high paying professional services and healthcare. This economy is just amazing. There is NO WAY the US economy could grow like this without substantial outsourcing as well. And this is only the front end of a dramatic labor shortage.

Markets set the mnimum wage not pencilnecks. The govt mandates rate merely determines how many people will have jobs at the minimum. We are headed toward an era with a huge affluent class (already there) and a smaller middle class because so many have moved into the affluent class. Those working at the minimum wage will be high school kids and drug addicts.

This liberal/marxist woe are the workers is cartoonishly absurd. Check out how many community colleges have rapidly expanded their nursing and health care programs to meet surging demand yet STILL cannot meet demand.

This is America. If you can speak english and read and pass a drug test you will never be at the minimum wage and you will have a 401k.

Posted by: rdw on January 5, 2007 at 11:50 AM | PERMALINK

We are certainly in a post-Reagan world. With the passing of "The Great Taxer" we are reminded that the entire "success" of trickle-down economics was that of propaganda over reality. Those who look at the record see the massive taxation engendered by Reagan's policies and see the loons on the right still trying to ignore the decline in general fund receipts that were the real result of his devotion to class warfare.

Posted by: not saying on January 5, 2007 at 11:57 AM | PERMALINK

see the massive taxation engendered by Reagan's policies

Huh?

Jimmy the disaster left 70% tax rates, 12% unemployment, 13% inflation and 17% interest rates. French per capita income was within 90% of US per capita income.

We have wealth beyond our dreams.

We will never, ever see tax rates above 40% again.

Everyone can look at France and see the disaster.

Posted by: rdw on January 5, 2007 at 12:15 PM | PERMALINK

Cmdicely does his usual excellent job of stuffing inane conservative's arguments back down their throats until they ooze out their ears.

I do, however, have some disagreements with his typing labor as a commodity, and his arguments are unusually weak here, relying on analogies rather than his usual more rigorous reasoning.

First, I don't see how we can discuss this without a definition. To my understanding, incomplete as it may be, a one-sentence definition of commodity is: A product that is undistinguishable from other units of the same product and is purchased mainly on price.

Obviously, not all labor is a commodity - high priced lawyers and all that. Strawman aside, is the low end of the labor pool described by this definition?

I don't think so. Even in the low end, there is substantial differences in ability and efficiency. The most like a commodity labor market I can think of is the guys standing outside of Home Depot: go out, buy a six-pack of them, and let them build your deck.

But that isn't so. There is a substantial disparity even in that labor pool. Manuel, for example, works faster and does better work than Julio. Obviously, if I know this, I'll pick Manuel, even if I have to pay more for him. Thus it is not true that every unit of labor is the same as the next, nor that they will, necessarily, cost the same.

Posted by: mcdruid on January 5, 2007 at 12:18 PM | PERMALINK

Will Allen would have us believe that housing prices, which closely tracked inflation for nearly a hundred years, suddenly started climbing (nationwide) in the late 90's because of some unspecified government market intervention.

That must come as a surprise to current economic wisdom, which claims that the run-up was a bubble caused by speculation. Of course, there is actual evidence to support this theory.

Posted by: mcdruid on January 5, 2007 at 12:23 PM | PERMALINK

One quote...

"It seems to me that America has travelled the libertarian/unfettered market/positivist/laissez-faire/... route before, and the results necessitated the Populist and Progressivist movements."

....this certainly implies that unfettered markets were the cause of the event, the Great Depression, which gave rise to much of the signature regulation proposed by populists and progressives.

Another quote...

"The reality is that we had Laissez Faire at one point in this country and it led to The Jungle. The real economic expansion that lifted all boats in this country came in the heavily regulated, government supported, unionized era following World War II and the New Deal."

...true, this pasage uses the euphemism of "The Jungle", but if one thinks this refers to bad conditions for the average citizen, then the worst conditions certainly were those which existed in the 30s, and it is simply erroneous to think that those worst conditons were due to unregulated markets, which was Friedman's argument. I'll ignore for now the error in thinking that the post WWII U.S. economy was more a result of regulation, as opposed to the rest of the world's manufacturing base having been destroyed.

This passage...

"We've been in this position before, in 1929. That's why the New Deal was struck, and it resulted in the most prosperity American has ever known. Why are we trying to pretend none of that history ever occurred? Why are we trying to pretend 1900 was paradise for America? Maybe it was for the richest few, but for most Americans it wasn't."

...certainly seems to imply that legislation was passed due to insufficient regulation in 1929, resulting in poor economic conditions when, in fact, the New Deal was struck largely in response to how badly central planning had fouled the economy by 1933. I'll ignore for now the nonsense about New Deal legislation creating prosperity.

As to my assertions regarding MANY of those (please stop lying about what I have written) who favor higher minimum wages also favoring higher marginal tax rates, well, are you of the opinion that the millions and millions of people who opposed the drastic reduction high marginal rates 25 years ago, and thus influnced a substantial minority of elected representatives to oppose the measure, have all changed their minds or died? Do you think reinstituting a 70% (or higher) top marginal rate would be wise?

Finally, if you wish to Believe that the existing political culture can be seperated from the theoretical, and thus allow strenuous regulation of a huge, complex, economy without very substantial unintended negative effects which very frequently outweigh the intended positive effects, it is you who have engaged in a false dichotomy. Are you sure you don't harbor some affection for Marxist policy? You seem to operate under many of the same delusions.

Posted by: Will Allen on January 5, 2007 at 12:23 PM | PERMALINK
I do, however, have some disagreements with his typing labor as a commodity

I think I've been unclear on this: What I mean to say is that (1) workers are clearly not commodities, (2) labor is also not a commodity, though some categories of labor are to an extent commodity-like in that they are largely, though not completely, fungible and compete mainly on price (one example being the labor of people who do nothing but stand on a sidewalk holding a sign advertising a business.)

Note that I don't think "commodity" is really a sharp category, but a theoretical construct that models real categories of goods and services to a varying extent.

Posted by: cmdicely on January 5, 2007 at 12:27 PM | PERMALINK

There are many situations where the minimum wage no longer exists: the on-line international marketplace in free-lance work.

If you have ever tried to find work at on-line auctions (I am not naming the sites, but they are easy to find), you will witness the "race to the bottom" yourself, as you are underbid by someone willing to write a 200-page ghostwritten book for $150, a job taking several weeks.

The person is probably living in India or somewhere else where that kind of money goes much further. All you need is a reasonable command of English and a netlink.

I refrain from discussing Amazon's Mechanical Turk here, but I don't think that 5 cents per action is attracting Americans, either.

I have made more money selling junk on Ebay than frequenting these sites.

Posted by: sara on January 5, 2007 at 12:34 PM | PERMALINK
One quote...

"It seems to me that America has travelled the libertarian/unfettered market/positivist/laissez-faire/... route before, and the results necessitated the Populist and Progressivist movements."

....this certainly implies that unfettered markets were the cause of the event, the Great Depression, which gave rise to much of the signature regulation proposed by populists and progressives.

Both the Populist and Progressive movements in the US were movements beginning in the 19th Century. Neither was a reaction to the great Depression, indeed, both predate it both in origin and their generally accepted ends. (Indeed, the Progressive Movement tailed off in the post-WWI euphoria immediately preceding the Great Depression.)

Another quote...

"The reality is that we had Laissez Faire at one point in this country and it led to The Jungle. The real economic expansion that lifted all boats in this country came in the heavily regulated, government supported, unionized era following World War II and the New Deal."

...true, this pasage uses the euphemism of "The Jungle", but if one thinks this refers to bad conditions for the average citizen, then the worst conditions certainly were those which existed in the 30s, and it is simply erroneous to think that those worst conditons were due to unregulated markets, which was Friedman's argument.

The quote here does not clearly blame the Depression on lack of regulation. It certainly blames lack of regulation for "the Jungle" that existed at some point prior to the New Deal (but not necessarily the Depression), and certainly suggests that until the right mix of regulation was made, there was no broadly shared, sustained economic advance. It is not inconsistent with the suggestion that the Depression was caused by lack of regulation, it is also not inconsistent with the suggestion that the Depression was caused by misregulation in a search for the right regulation. A number of unnecessary, not strongly suggested though certainly not implausible additional conjectures need to be made, as you do, to make it into the claim you'd like to rebut. As is even more clearly seen with the other quotes you cite, you are simply inserting the argument you want to see into the claims people are making.

This passage...

"We've been in this position before, in 1929. That's why the New Deal was struck, and it resulted in the most prosperity American has ever known. Why are we trying to pretend none of that history ever occurred? Why are we trying to pretend 1900 was paradise for America? Maybe it was for the richest few, but for most Americans it wasn't."

...certainly seems to imply that legislation was passed due to insufficient regulation in 1929, resulting in poor economic conditions when, in fact, the New Deal was struck largely in response to how badly central planning had fouled the economy by 1933. I'll ignore for now the nonsense about New Deal legislation creating prosperity.


No, the quote doesn't support that. The immediately preceding sentence to the portion you quote, that illustrates what is meant by "this position", is this:

Since they have monopsony power, they are using their political influence to have the wages of Americans driven down as much as possible, so that more money can flow into the bottom lines, and therefore into their own pockets (since they are in a position ot dictate their own compensation).

That is, the problem is not attributed to insufficient regulation, or government indifference, but to active use of government power to serve the interests of capital at the expense of labor. The problem complained of is misregulation, not absence of regulation. So, again, not an example of the claim you purported to rebut, but one which you need to ignore pieces of in order to see the position you'd like to argue against in it.

As to my assertions regarding MANY of those (please stop lying about what I have written) who favor higher minimum wages also favoring higher marginal tax rates, well, are you of the opinion that the millions and millions of people who opposed the drastic reduction high marginal rates 25 years ago, and thus influnced a substantial minority of elected representatives to oppose the measure, have all changed their minds or died?

Many have died, certainly. Many have changed their mind, certainly.

Do you think reinstituting a 70% (or higher) top marginal rate would be wise?

Certainly. I think marginal rates, ideally, should asymptotically approach unity.

Of course, consideration of what the top marginal rate should be is generally pointless without further consideration of what income is subject to it, where it takes effect, etc.

Finally, if you wish to Believe that the existing political culture can be seperated from the theoretical

I'm not even sure what this means. I'm pretty sure its nothing I've ever asserted that I believe, much less "Believe".

...and thus allow strenuous regulation of a huge, complex, economy without very substantial unintended negative effects which very frequently outweigh the intended positive effects, it is you who have engaged in a false dichotomy.

Regardless of whether the idea that it is possible to have "strenuous regulation of a huge, complex, economy without very substantial unintended negative effects which very frequently outweigh the intended positive effects", once that is operationalized into something that would be a fact claim without a whole pile of subjective modifiers, I fail to see how believing in it would, in any case, be a "false dichotomy". I don't think you understand what that term means.

Are you sure you don't harbor some affection for Marxist policy? You seem to operate under many of the same delusions.

I don't think your understanding of Marxism is any better than the understanding of the Progressive and Populist movements you've shown.


Posted by: cmdicely on January 5, 2007 at 12:56 PM | PERMALINK

Sara,

Fret not. Check out any market website and read the analysis of the US Unemployment report. It was stellar in all aspects including wage increases and jobadds. It's one of the worlds great wonders.

If you want to be a better feel for how poorly the economic theories espoused by liberals have done since 1981 (Reagans tax cuts) check out any Int'l analysis comparing European and US job markets.

Europe is screwed. They can't grow and create jobs and they can't reform to change things. The dramatic wealth gaps that have opened up between the US and Old Europe is only going to compound.

If I am not mistaken the 167,000 jobs the US added in December are more than France created in 2004, 2005 and 2006.

Posted by: rdw on January 5, 2007 at 1:07 PM | PERMALINK

"Don't Fix It" [Larry Kudlow]

The Goldilocks economy scored big this morning, with new jobs from corporate payrolls rising 167,000, while unemployment held steady at 4.5 percent. Meanwhile, inflation indicators like gold, oil, and copper continue to fall. It's a near perfect combination.

In the jobs report, service sector employment led the way by creating 178,000 jobs in December, including a 50,000 gain from professional and business services. Manufacturing and construction firms shed jobs, but by a much smaller amount than in recent months. Meanwhile, average wages are up 4.2 percent over the past 12 months, more than twice the current 2 percent inflation rate.

In the more important household employment report, which includes entrepreneurs and small businesses, jobs rose by an incredible 303,000 and have averaged a 340,000 monthly gain over the past three months. For 2006, corporate payrolls rose 1.8 million, while household jobs rose 3.1 million.

Since the Bush tax-cuts of mid-2003, corporate payrolls have grown 7.2 million, while household employment increased 8.4 million.

The stock market roared ahead in 2006 despite early-year headwinds from rising energy prices and Fed tightening. As an accurate barometer of the future health of America's businesses and economy, stocks shrugged off bad news from Iraq, Iran, and North Korea, as well as the domestic housing slump.

Low-tax, free market capitalism is a wonderful thing.

The new Pelosi-led Congress is all abuzz with talk about a "new direction".

But, shouldn't calmer heads be asking: "if it ain't broke, don't fix it".

Posted by: rdw on January 5, 2007 at 1:11 PM | PERMALINK

I don't think your understanding of Marxism


Why would anyone want to understand Marxism today? I mean except as a History of civilizations worst failures? There is no practical use for Marxism except to define what doesn't work. It's entire theoretical framework is cartoonishly stupid.

Posted by: rdw on January 5, 2007 at 1:33 PM | PERMALINK

Why would anyone want to understand Marxism today?

People not understanding Marxism doesn't bother me much.

People not understanding Marxism and comparing things to it or commenting on it out of their ignorance does.

If you (or Will) don't want to understand Marxism, that's fine. Just don't feel like you have anything of value to say about it, then.

Posted by: cmdicely on January 5, 2007 at 1:48 PM | PERMALINK


a bit off thread but related: From NRO


They should read the Telegraph today for details of the latest fiasco:

Royal Navy commanders were in uproar yesterday after it was revealed that almost half of the Fleet's 44 warships are to be mothballed as part of a Ministry of Defence cost-cutting measure. Senior officers have said the plans will turn Britain's once-proud Navy into nothing more than a coastal defence force.

*********************************************

While fools debate discredited lefty economic minitua the USA screams away from Old Europe economically and militarily. They simply don't have the will nor the means to invest in their military. Old Europe is simply not capable of participating in Europe. They could not deal with the low rent Milosovich a decade ago and are much weaker now.

Elections matter. Economic decisions matter. Say goodbye to Old Europe.

Posted by: rdw on January 5, 2007 at 1:48 PM | PERMALINK

Just don't feel like you have anything of value to say about it, then.

I never said I didn't understand Marxism. I said it was a horrible tradegy. I said every tenet, every aspect, was cartoonishly wrong to the point it's silly to take seriously as remotely credible economic theory. It has value as history just as Hitler has value as history just as train wrecks have value in history.

We have an absolutely screaming economy and pundits are wondering why no one cares about the minimum wage. It's meaningless in the USA in 2007.

The fact it has some meaning in Old Europe tells you everything you need to know about our huge wealth gap.

Posted by: rdw on January 5, 2007 at 1:56 PM | PERMALINK

rdw is a prime example of the magical thinking of the Reagan apologists. Mention Reagan's tax hikes and his reaction is "huh?"

Reagan raised taxes in nearly every year of his presidency. That rdw claims not to know this is all you need to know about taking economic advice from him.

Posted by: Not Saying on January 5, 2007 at 2:13 PM | PERMALINK

Yes, the progressive and populist movements pre-date the Depression. However, the populist movement in particular, with it's call for state- mandated wealth redistribution, reached it's peak with the rise of Huey Long against the backdrop of the Depression, without regard to the fact that regulation by the state was largely the cause of the suffering that the populists were in opposition to.

If heavy regulation is asserted to be the mechanism by which a "Jungle" was ended, then it is perfectly reasonable to conclude that an honest or informed observer needs to examine the role heavy regulation played in creating the worst conditons of said "Jungle", and that failure to make mention of it is an indicator of ignorance or disingenuous approach. If a surgeon needs to perfrom emergency surgery to save the life of a patient whose life only became threatened after the surgeon botched a previous surgery for a non-life threatening conditon, it would ignorant or disingenuous, while perhaps technically accurate in the narrow sense, to simply state that the surgeon saved the patient's life.

In this case of course, we don't even have strong evidence that the surgeon did so technically, except in the sense that conditon B followed policy A, which is, by itself, rather weak, of course. It would be nice if those so hell-bent on compelling behavor under force of law would at least make an effort to credibly demonstrate that the previous regulatory actions they speak well of had the effect claimed. Instead, we get nonsense along the lines of "The minimum wage was passed in 1938, and median wages were much higher in the post WWII economy, so this means minimum wage legislation significantly contributed to that state of affairs."

Tell ya' what; when you provide much stronger evidence that the regulation you favor actually accomplishes something significant, or that much higher rates of taxation really provide a better economy for the vast majority of people, then your advocacy for compelling behavior via state edict will have more merit. Until then, it can be safely concluded that your advocacy, like so much regulatory advocacy, bases it's appeal largely on assumptions about voters' high degree of ignorance, or very energetic minorities seeking advantage. That you prefer to speak about a theoretical construct regarding how regulation might work, instead of how it mostly does, is rather consistent with those who advocate Marxist policies.

Posted by: Will Allen on January 5, 2007 at 2:34 PM | PERMALINK

Reagan raised taxes in nearly every year of his presidency. That rdw claims not to know this is all you need to know about taking economic advice from him.

Supply-side is about marginal tax rates. It's not about social security taxes or federal exercise taxes.

Fact 1: Jimmy Carter left tax rates at 70%

Fact 2: Ronald Reagan left tax rates at 28%

Fact 3: Since 1981 the USA has pulled away from Old Europe in a stunninf display of innovation and wealth creation. We are the economic marvel of the modern world.

Fact 4: Mr. National Malaise was a total putz.

Posted by: rdw on January 5, 2007 at 2:38 PM | PERMALINK

To speak of Reagan raising taxes in nearly every year of his Presidency, while failing to mention that these increase occurred after an initial drop in top marginal rate from above 70% to below 30%, is yet another example of ignorance or dishonesty. Mind you, the strong supply side case was always bogus, and I vehemently opposed the increase in FICA taxes, but to portray Reagan as someone who increased the percentage of GDP taken by federal taxes, relative to where it stood at the beginning of his Presidency, is in error.

Posted by: Will Allen on January 5, 2007 at 2:44 PM | PERMALINK

Yes, the progressive and populist movements pre-date the Depression.

The issue in the post you cited was not progressive and populist movements, of which there are many, but the Progressive and Populist movements, which are two very specific political movements that occurred in well-defined time periods.

However, the populist movement in particular, with it's call for state- mandated wealth redistribution, reached it's peak with the rise of Huey Long against the backdrop of the Depression, without regard to the fact that regulation by the state was largely the cause of the suffering that the populists were in opposition to.

The problem with this (other than the false conflation of the specific capital-P Populist movement with small-p populism more generally), and its a recurrent problem of yours, is that you assume, that because a group campaigned for some particular form of government regulation, the thing they were advocating against was government nonregulation rather than a preexisting alternative, unwelcome form of regulation. Long, of course, campaigned against what he saw as harmful "conservative" regulation, including the New Deal, proposing alternative populist regulation. The critique of his populism was not of absence of regulation producing problem, but active interference in the favor of a narrow class causing the problem.

The reference of the poster to the Populism and Progressivism movements does not, even if you distort it into a reference to Huey Long's populism rather than the specific movements denoted by those capitalized labels in the US, support your claim that they were blaming the Great Depression on the absence of regulation.

If heavy regulation is asserted to be the mechanism by which a "Jungle" was ended, then it is perfectly reasonable to conclude that an honest or informed observer needs to examine the role heavy regulation played in creating the worst conditons of said "Jungle", and that failure to make mention of it is an indicator of ignorance or disingenuous approach.

You are free to attempt to get the poster that originally posted the Jungle claim to clarify their remarks, and to argue against them that heavy regulation actually caused the Jungle.

Asserting that that argument must refer specifically to the Depression as the proximate result of inadequate regulation is, however, an unwarranted effort to, again, cast everything into the point you'd like to argue against, rather than dealing with the claims people actually made.

Tell ya' what; when you provide much stronger evidence that the regulation you favor actually accomplishes something significant, or that much higher rates of taxation really provide a better economy for the vast majority of people, then your advocacy for compelling behavior via state edict will have more merit.

I think you mistake me for someone who cares about what a willfully ignorant, dishonest ideologue like you thinks, or claims to, about the merits of my positions.

Posted by: cmdicely on January 5, 2007 at 2:53 PM | PERMALINK

"Fact 3: Since 1981 the USA has pulled away from Old Europe..."

Funny how the rate of increase in per capita GDP is higher for Denmark, the Netherlands, the UK and others, despite much higher taxes.

Looking at per capita GDP increase in, say, the 90's, there is essentially no correlation between that and the real tax rate in 2002 for Western Economies.

Posted by: mcdruid on January 5, 2007 at 2:53 PM | PERMALINK

cmdicely,

In that case, we'll just have to agree to agree then.

Posted by: mcdruid on January 5, 2007 at 2:54 PM | PERMALINK
That you prefer to speak about a theoretical construct regarding how regulation might work, instead of how it mostly does, is rather consistent with those who advocate Marxist policies.

That you invent fictions about other people's preferences and internal motivations rather than addressing their claims directly is rather consistent with those who are lying trolls rather than productive contributors to a public policy discussion.

Posted by: cmdicely on January 5, 2007 at 2:55 PM | PERMALINK

mcdruid,

Works for me. :)

Posted by: cmdicely on January 5, 2007 at 2:56 PM | PERMALINK

"The free markets rule the world right now; every other ideology or belief has fallen before the onslaught of the free market ideology."

So how come the only thing NOT affected by the world market is CEO salaries in 'Merica? Let's outsource our CEO's and we'll see much better return for the shareholders.

Posted by: Cal Gal on January 5, 2007 at 3:20 PM | PERMALINK

Typically dishonest, cmdicely, you now neglect to mention that the poster who raised the Populist and Progressive movments stated that they were in direct response to unfettered markets. Now you state that the poster was referring to Populist objection to malregulation, which he in fact made no mention of, and you now try to make the case that Long was a populist, but not a part of the Populist movement. Whatever. I usally try to be charitable and attribute such misreading of previous posts to inadequte reading comprehension. In you case such charity would be obviously misplaced, and thus we are once again left with the only alternative, that you are a willful liar.

Similarly, if you wish to state that an assertion that heavy regulation was required to end the worst aspects of bad economic or social conditions can be made without reference to the heavy regulation which caused those worst aspects, and still remain an assertion which is viewed as a fair recounting of events, fine. It is perfectly consistent with your views of how regulation need not be examined with regard to how it actually operates, while proposing still more regulation.

Posted by: Will Allen on January 5, 2007 at 3:39 PM | PERMALINK

McDruid, the discussion I has having with brroksfoe regarding housing prices was not limited to the period of the late '90s. Nice distortion, though.

Posted by: Will Allen on January 5, 2007 at 3:43 PM | PERMALINK

Mind you, the strong supply side case was always bogus

I didn't know there was a strong supply-side case. I take it that's in comparison to a weak supply-side case. Just out of curiosity, what's the difference?

Posted by: rdw on January 5, 2007 at 3:49 PM | PERMALINK

Funny how the rate of increase in per capita GDP is higher for Denmark, the Netherlands, the UK and others, despite much higher taxes.

You are entitled to your own opinion not your own facts.

Per capatia GDP is substantiallu higher in the USA than all three of those nations and much higher than in 1981. Worse, the gap is widening at an accelerated pace.

There's a concept called the tyranny of the math. With US per capital GDP 37% larger than the UK they have to grow 37% faster than the US just to maintain the dollar gap. But of course the reverse has been happening. That's why the USA is 37% larger. Now it compounds.

It's going to be cruel for Western Europe to watch the monsterous wealth creation across the pond.

You think they don't like us now. Wait until 2020 when that 37% advantage is 100%.

Posted by: rdw on January 5, 2007 at 4:04 PM | PERMALINK

So how come the only thing NOT affected by the world market is CEO salaries in 'Merica

How about Oprah, George Clooney, Michael Moore, Bill & Hill and Prince Albert. That goggle stock was quite the gift wasn't it?

Posted by: rdw on January 5, 2007 at 4:11 PM | PERMALINK

rdw, what I would term the strong supply side argument is that any reduction in top marginal rates results in enough economic growth to result in increased tax revenues. I would contrast this with an argument that a reduction in rates often does not result in an equal reduction in tax revenues, given increased economic activity, and this effect is more pronounced when rates are dropped from 70% to 28% as ooposed to 39% to 33%.

Posted by: Will Allen on January 5, 2007 at 4:14 PM | PERMALINK

There was no dishonesty in pointing out that Reagan's legacy was one of massive tax increases. The fact that he cut the marginal tax rate on the wealthy was already put forth by rdw - who has yet to demonstrate the benefits of trickle down economics. Were he to make the attempt it would be impossible for him to show increases in the general fund after Reagan's gutting of its income streams. He would be forced, as all apologists for Reagan's class warfare are, to point to the unified budget so that the massive tax increases he disparages above covered for the declining revenues. It is also unlikely that he would reduce the general fund's value by removing the income owing to all of the other "adjustments," "user fees," and the rest of the taxes that Reagan raised without calling them taxes. In fact, the "closing of loopholes" meant that the much touted reduction in marginal rates wasn't nearly as big a deal as the fiscally ignorant would have us believe.

Finally, to talk of Reagan as "The Great Taxer" is entirely honest because, for the bulk of Americans - in fact on every person with a job - he raised taxes.

Posted by: Not Saying on January 5, 2007 at 4:31 PM | PERMALINK

While trickle down effect might be more pronounced when reducing from 70% to 30%, the fact that the government's revenues declined after that cut demonstrate that we were still on the right hand side of the Laffer's curve.

Posted by: Not Saying on January 5, 2007 at 4:34 PM | PERMALINK
Typically dishonest, cmdicely, you now neglect to mention that the poster who raised the Populist and Progressive movments stated that they were in direct response to unfettered markets.

How is it dishonest to not mention that is entirely irrelevant to the reason we're discussing that poster: to wit, your idiotic, historically untenable argument that that poster claiming that the Progressive and Populist movements (19th Century movements) were responses to unfettered markets somehow implied the further claim that the Great Depression (which occurred after those movements) was caused by unfettered markets.

Now you state that the poster was referring to Populist objection to malregulation, which he in fact made no mention of

No, I didn't.

You tried to shift the original posters comments about the Populist movement to small-p populist Huey Long. I pointed out that even Long's criticism of the government before the Great Depression, the Great Depression itself, and the response to the Great Depression in the form of the New Deal was not a criticism of government inaction, but active "conservative" government intervention in favor of elites.

and you now try to make the case that Long was a populist, but not a part of the Populist movement.

And...what?

Whatever. I usally try to be charitable and attribute such misreading of previous posts to inadequte reading comprehension.

You haven't pointed out any place where I "misread" anything, so seeking explanations for that supposed "misreading" seems premature.


Similarly, if you wish to state that an assertion that heavy regulation was required to end the worst aspects of bad economic or social conditions can be made without reference to the heavy regulation which caused those worst aspects

I've never stated anything like that, so I don't see what you think the purpose of this "if..." is, except to engage in idle speculation on your fantasies of what you'd like other people to argue to justify your prewritten counterarguments. When you get done putting words in other people's mouths to endlessly repeat the same canned arguments against things no one here is even arguing, perhaps you can grow up and actually engage in a discussion.

It is perfectly consistent with your views of how regulation need not be examined with regard to how it actually operates

Your persistent recitation of your fantasies about views other people supposedly hold that are completely unrelated to what they have said illustrate, again, my point in the previous paragraph.


Posted by: cmdicely on January 5, 2007 at 4:37 PM | PERMALINK

There was no dishonesty in pointing out that Reagan's legacy was one of massive tax increases.

Dishonesty is not the correct term. Insanity is better.

Reagan cut ALL marginal rates dramatically and those in the lower brackets received the higher percentage decreases. He also took those in the lower bands OFF completely.

One doesn't need economic statistics to recognize American exceptionalism everywhere we look. It's isn't just the great wealth but the innovation which created so much we can use the wealth to buy.

Everything in American is better and cheaper and gets better at a faster rate every year. You of course saw Best Buys announcement of better than expected sales in December led by Large screen TVs because of massive price cuts. They lowered prices and still increased sales. Capitalism is a beautiful thing. That big screen that was $3K in 2004 is now $1K. In 2 months it will be $800.

It's got to be crappy living in your 'woe is me' world. The differences between low tax America and high tax Old Europe could hardly be more dramatic. And it's going to get worse every year.

Here's an example of how bad it's going to get. From Mark Steyn's America Alone: There were 4.7M Italians in their 20's in 1971. There are 2.6M today. For the last 30 years we've seen Europeans have far fewer babies. Now it's compounding. Now we have many fewer mommies having many fewer babies.

There is absolutely no way the current welfare state survives this generation.

Posted by: rdw on January 5, 2007 at 5:26 PM | PERMALINK

the fact that the government's revenues declined after that cut demonstrate that we were still on the right hand side of the Laffer's curve.

Under virtually all scenarios tax receipts will decline immediately after the tax cut. It's a matter of how long they take to recover.

The point of cutting marginal rates isn't just about tax revenues. It's about restoring incentives to jump start investment and innovation.

It's rather stunning to consider how the average household, and our daily lives, have changed since 1981

PC,s Microwaves, printers, Cellphones, digital cameras, large screen TVs, flat screen TVs, GPS systems, the internet, satellite radio, etc. Everything is cheaper and much better. Home ownership is at all time highs. The homes are much larger and more energy efficient. Cars are safer and cheaper. Most of the drugs we use did not exist in 1981. Most of the medical tests are done on machines that did not exist in 1981 while many common operations and procedures were not available in 1981.

Europe had little or nothing to do with any of it. They have been and will remain the slowest growing continent economically while the advancements and innocations form outside America will increasingly come from Asia.

Posted by: rdw on January 5, 2007 at 5:42 PM | PERMALINK

No, you invented a distinction between populist Huey Long, and Populist Huey Long, and now you write as if the poster's reference to unfettered markets giving rise to populism or Populism is not pertinent to what was discussed. You are dishonest.

When you stop pretending that an assertion of heavy regulation comprised in the New Deal laying the groundwork for future propsperity, thus ending Jungle-like conditons, does not implicitly make reference to the existing conditions concurrent with the New Deal legislation, the Great Depression, and thus beg the question as to what role heavy regulation played in creating those conditions, then we can have an honest discussion. When you admit that failure to examine the negative role such regulation played, when making assertions that only tout heavy regulation's ALLEGED benefits, constitutes either an ignorant or deliberate attempt to, by implication, cast lack of regulation as leading to undesired conditions, then we can have an honest discussion. The surgeon analogy is apt; the poster was like the surgeon's attorney who extols his client's lifesaving measures (while also failing to prove that the surgeon did any such thing), without mention of the client's malpractice, and not another factor commonly though responsible, which rendered the patient in critical condition. You are simply the dishonest co-counsel.

Posted by: Will Allen on January 5, 2007 at 5:59 PM | PERMALINK

Reagan increased taxes on every person who worked. There is simply no denying that. No list of consumer goods changes this fact, no carping about foreign nations changes this fact, nothing you've posted refutes this.

Federal receipts did not recover under Reagan. That gave you eight years - and still includes all of the "loophole closings" and sundry tax increases that "The Great Taxer" implemented. In other words, it was just in the immediate term, but also in the long term (unless you are somehow giving Reagan the credit for Clinton's boom more than a decade later and ignore George H. W. Bush's contribution to increasing the tax burden (and helping to offset the deficits - Reagan's silent tax).

The supply side crowd, as exemplified by Richard Armey, predicted disaster from Clinton's 1993 tax cut. Disaster did not occur. The deficit was eliminated by the end of Clinton's term. Granting the Republicans credit for this is simply not reasonable given that the Republicans exploded the debt once they controlled all the branches of government.

Reagan proved that Trickle-Down doesn't work.

Posted by: Not Saying on January 5, 2007 at 6:00 PM | PERMALINK
No, you invented a distinction between populist Huey Long, and Populist Huey Long

I didn't invent the distinction between the regular noun "populist" and the proper noun "Populist".

You claimed that a claim another poster made about the Populist and Progressive movements, 19th Century movements, being reactions to unfettered markets was a claim that the Great Depression, much later than either of those movements, was caused by unfettered markets. This is, quite simply, a lie. The fact that you keep misrepresenting the history of this very thread to obfuscate the simple fact of this lie is, well, tiring.

and now you write as if the poster's reference to unfettered markets giving rise to populism or Populism is not pertinent to what was discussed.

No, the posters remarks about unfettered markets giving rise to the Progressive and Populist movements, both of which arose in the 19th Century, was quite pertinent to what was being discussed before. It is not, however, as you later claimed it was, an example of someone claiming the Great Depression was caused by the absence of regulation.

Its really very simple. "The Great Depression" is not the Progressive movement. Its not the Populist movement. Nor is it something that could even possibly be claimed to be an step on the route from unfettered markets to either of those movements, both of which predate the Great Depression. So there is no way that the statement that the Populist and Progressive movements were reactions to unfettered markets can be interpreted as a claim that the Great Depression was caused by inadequate regulation. Your claim that the one claim implies the other is dishonest. Your further attempts at obfuscation and circumlocution to try to make your claim seem anything but a naked lie are to no avail.

When you stop pretending that an assertion of heavy regulation comprised in the New Deal laying the groundwork for future propsperity, thus ending Jungle-like conditons, does not implicitly make reference to the existing conditions concurrent with the New Deal legislation, the Great Depression, and thus beg the question as to what role heavy regulation played in creating those conditions, then we can have an honest discussion.

This is demonstrably not true, because I've never pretended any such thing and yet, due to your repeated lies, we are still not having an honest discussion.

I've never even implicitly suggested that the question of the conditions that produced the Great Depression was not one which could be reasonably held to be "raised" by such an argument.

I have denied your claim that that argument was another example of a poster in this thread claiming the Depression was caused by the absence of regulation.

You claimed there were arguments, plural, for the Great Depression being produced by inadequate regulation. None of the three arguments you pointed to as examples when challenged on this point did, in fact, make this argument. You then proceeded to, instead of admitting your error, try to change the subject and discuss other tangentially related ideas to the arguments you had pointed to as examples.

Its just too bad that no one has made the argument you are so keen to argue against.

When you admit that failure to examine the negative role such regulation played

What failure? The actual criticism by most real liberals, both now and of the time, is precisely that bad regulation, not no regulation caused the Great Depression (and is behind the structural features now that liberals complain of). The role of undesirable kinds and degrees of regulation is not ignored. Now, the conclusions liberals reach about it may not be the conclusion you would prefer, but as long as you are lieing about the basis of the criticism in the first place, you aren't going to sway anyone to your viewpoint.

Posted by: cmdicely on January 5, 2007 at 6:22 PM | PERMALINK


rdw: Fact 4: ...a total putz.


you are the acknowledged expert on that subject..

Posted by: mr. irony on January 5, 2007 at 7:02 PM | PERMALINK

More dishonesty. You wrote...

"The quote here does not clearly blame the Depression on lack of regulation. It certainly blames lack of regulation for "the Jungle" that existed at some point prior to the New Deal (but not necessarily the Depression), and certainly suggests that until the right mix of regulation was made, there was no broadly shared, sustained economic advance. It is not inconsistent with the suggestion that the Depression was caused by lack of regulation, it is also not inconsistent with the suggestion that the Depression was caused by misregulation in a search for the right regulation."

...which dishonestly neglects that the poster only touted the alleged benefits of regulation, without even giving a hint of the regulation which caused the conditons (the Depression) that gave impetus to the regulation the poster touts. In other words, the poster portrayed heavy regulation as a purely positive action, which neglects the truth, thus implicitly making the argument that lack of regulation gave rise to the conditons which are decried. Whether out of ignorance or dishonesty, the argument implies lack or regulation as creating conditons which required New Deal regulation to correct, just as a surgeon's counsel is dishonest when he does not accurately portray the nature and results of his clients' actions, and thus seeks to leave a false impression.

Along a similar vein, trying to divorce the high point of the Populist movement, the ascension of Huey Long, from the Great Depression, and thus also the assertion that unfettered markets led to the Populist movement, is pedantic. In the initial exchange with me, you also asked for evidence that it was regulation which played the key role in causing the Depression. I can only suspect that had you actually had been familiar with the evidence, you would not have posed the question to me, unless typing pointlessly is something you favor for some reason. Thus, it is reasonable to think that you yourself have operating under the misinformed assumption that is so unfortunately widespread.

Posted by: Will Allen on January 5, 2007 at 7:13 PM | PERMALINK

Finally, cmdicely, it was Friedman who first coegently put forth the argument that malregulation was the largest factor in causing the Depression. It most assuredly was not made by "real liberals" unless that refers to the classical variety like Friedman, and it was assuredly not made by them at the time, given that Roosevelt continued with Hoover's malregulation for a good period of time.

Posted by: Will Allen on January 5, 2007 at 7:19 PM | PERMALINK
...which dishonestly neglects that the poster only touted the alleged benefits of regulation, without even giving a hint of the regulation which caused the conditons (the Depression) that gave impetus to the regulation the poster touts.

There is nothing "dishonest" about neglecting to mention that has nothing to do with the reason the post was being discussed, to wit, your claim that the post said (as it did not) that the Great Depression itself was caused by lax regulation.

While, certainly, you might want to discuss with the original poster your views about the role of regulation in causing the Great Depression, I'm sure that if that occurred you would argue that the level of regulation was at fault without regard to the content of the regulation, and the original poster would counter that the kind and content of the regulation, not its mere degree, was the problem. And you would have a merry debate. But we weren't discussing the merit of the original posters claims, but rather your characterization of them, to which the point you claim I "dishonestly" neglected is completely irrelevant.

In other words, the poster portrayed heavy regulation as a purely positive action

No, the poster portrayed the particular regulation that they credited with ending the Depression as positive. They did not portray "heavy regulation" generally in any manner at all, that's your false and unwarranted generalization of their portrayal.

Along a similar vein, trying to divorce the high point of the Populist movement, the ascension of Huey Long, from the Great Depression, and thus also the assertion that unfettered markets led to the Populist movement, is pedantic.

Since when is Huey Long the high point of the Populist Movement? The height of the political power of the movement was before its cooption by the Democratic Party around the turn of the century, well before that, though perhaps its most important policy success was somewhat later with the ratification of the 17th Amendment, still long before the rise of Huey Long.

Huey Long was a "populist" with a platform somewhat linked to (but very distinct from) the particular policies embraced by the Populist movement of 1890 to about 1920, he is not the height of the Populist movement, though I suppose his rise might, generously, be looked as a final, abortive resurgence of that movement to something less than its past height (though even that is probably be overstating the connection of Long's populism to the earlier Populist movement.)

Further, I never tried to divorce the rise of Long from the Great Depression. I did note that your attempt to invoke Long, for a number of reasons, didn't justify your claim that an earlier poster attributing the emergence of the Progessive and Populist movements to unfettered markets was, in fact, a claim that the Great Depression was caused by unfettered markets.

The only thing I said about the assertion that unfettered markets led to the rise of the Progressive and Populist movements was, again, that your assertion that it was equivalent to a claim that the Great Depression was caused by unfettered markets was false. That these two statements are not equivalent is patently obvious. That you continue to attempt to color my pointing that out as something other than just that is, well, typical of you.

In the initial exchange with me, you also asked for evidence that it was regulation which played the key role in causing the Depression.

Yes, I believe I suggested that if you were going to claim that that particular strawman (in the context of the present thread when you raised it) was a "propaganda victory", you ought really to show that it was, in fact, a propaganda victory, including showing that it was counterfactual. I was pointing to a deficiency in your argument, which (given the time you've spent on this blog) you should realized does not mean that I don't agree with some of the points I've suggested you have failed to support.

Finally, cmdicely, it was Friedman who first coegently put forth the argument that malregulation was the largest factor in causing the Depression.

Cogently is, of course, subjective. Its a matter of historical fact that Huey Long, who certainly was to the left of even FDR, blamed conservativemalregulation both for the Depression itself and for the limited success of the New Deal in its early years in correcting the Depression. Its also a matter of historical fact that, while many on the left were kinder to the New Deal than Long, his criticism of conservative malregulation in producing the Depression was not at all unique on the left.

It most assuredly was not made by "real liberals" unless that refers to the classical variety like Friedman, ...

Well, since both the modern left and the modern right, except for their extreme fringes, are generally, in economic terms, strains of classical liberalism, sure, it refers to, or rather includes, classical liberals including, but not limited to, those on the modern right like Friedman.

It also includes Huey Long and lots of other people nowhere near the modern right.

and it was assuredly not made by them at the time,...

It most assuredly was.

given that Roosevelt continued with Hoover's malregulation for a good period of time.

This premise does not support the conclusion it is offered to prove: whether or not Roosevelt continued what you consider to be in fact Hoover's malregulation has no bearing on whether or not people on the left, both at the time and since, have blamed malregulation (either the same as you consider to be at fault or different malregulation) for the Depression.

Posted by: cmdicely on January 5, 2007 at 7:56 PM | PERMALINK

Kevin, thank you for pointing out the moral blindness of this B.S., as well as hooking this up with core conservative economic principles in general. This sort of policy, as well as its advocates, have been discredited often by real-world events in our country, but this sickness persists with Will and other acolytes.

George Will has a nationally syndicated column and a prominent weekly news show with which he gets to disseminate such radical and economically unsound views.

Articulate and knowledgeable experts putting forth much less radical positions from a pro-worker POV have no such bullhorn, and in fact are ridiculed as hopeless leftists by Will from his bullhorn.

SCLM.

Particularly galling is the GOP talking point (eagerly regurgitated by the MSM) that the message the public intended in the November elections was a demand of bipartisanship on this and all other issues. Like hell!

As an example from this topic: The Democratic leadership campaigned on the "First 100 Hours" agenda, and creating a fair minimum wage was one of the chief planks of the platform, a plank approved by a supermajority of the public. The electorate throws hard Democratic on 11/7, and Will espouses crap like this as a response.

Dangerous idiocy, this is.

Posted by: centerfielddj on January 5, 2007 at 8:06 PM | PERMALINK

Reagan increased taxes on every person who worked.

Reagan gave a boatload of federal income tax cuts to EVERYONE who worked. In many cases they stopped paying any federal income taxes.

The increases to the SS tax were needed because FDR approved a badly designed ponzi scheme. SS Tax are not part of the federal tax system used to support govt functions but a social insurance program. This of course bothered libs wanting to turn social security into a welfare program but that's not going to happen.

The more interesting view at this point after 25 years is the relative performance of low-tax USA versus high tax Old Europe. Their hate is deriviative of their envy of the fantastic wealth creating machine that is the US economy. The awful news for Old Europe is wealth compounds. The next 25 years will be far worse than the last 25.

Consider this: in the 3rd Qtr the USA grew GDP only 2%. The weakest Qtr by far since the 2003 supply side tax cuts. It was 4x's FASTER than Old Europe.

I just finished reading Mark Steyn's America Alone. GWB has had no choice but to cut ties as dramatically as possible. Old Europe is toast.

Posted by: rdw on January 5, 2007 at 8:09 PM | PERMALINK

centerfielddj,

If you are thinking Will should not have such a platform because of his conservative views I've got bad news for you.

Will isn't near as influencial as you think he is and he's not influencial at all on economic issues. Nor is he especially conservative. Being a conservative voice in the Washington Post is like being the best player on the Phila 76ers. It's not much. The WSJ and the rest of the conservative network is far more powerful.

The good news for conservatives is Will is just as influencial as he was in 1990. The bad news for liberals is there are 10 conservative voices now more conservative and more influencial.

BTW: The minimum wage is a non-event. 8 people care. We've got a booming economy and a labor shortage.

Posted by: rdw on January 5, 2007 at 8:20 PM | PERMALINK

centerfielddj,

A small sample of a top conservative far more influencial than George Will. This is a clip from a review of Mark Steyn's best seller, America Alone.

Today, three-sevenths of the G-7 major economies are nations of British descent. Of the twenty economies with the highest GDP per capita, no fewer than eleven are current or former realms of Her Britannic Majesty. ... Eliminate all territories with less than twenty million and the top four is an Anglosphere sweep: the United States, United Kingdom, Canada, and Australia. The key regional players in almost every corner of the globe are British-derived - South Africa, India - and, even among the lesser players, as a general rule you're better off for having been exposed to British rule than not: try doing business in Indonesia rather than Malaysia, or Haiti rather than St. Lucia. And of course the pre-eminent power of the age derives its political character from eighteenth-century British subjects who took English ideas a little further than the mother country was willing to go.[p.167]


You can't help noticing that since abandoning its faith in the unseen world Europe seems also to have lost faith in the seen one. Consider this poll taken in 2002 for the first anniversary of September 11: 61 percent of Americans said they were optimistic about the future, as opposed to 43 percent of Canadians, 42 percent of Britons, 29 percent of the French, 23 percent of Russians, and 15 percent of Germans. I wouldn't reckon those numbers will get any cheerier over the years.[p.110]

In the course of the twenty-first century, Germany's population will fall by over 50 percent to some thirty-eight million or lower -- killed not by disease or war but by the Eutopia to which the German people are wedded. And every time they're asked to vote on the issue they decide that, like that Frenchman [who kept his mother's corpse for her pension cheques], they can live with the stench of death as long as the state benefits keep coming. The trouble with the social-democratic state is that, when government does too much, nobody else does much of anything.[p.126]

Posted by: rdw on January 5, 2007 at 9:02 PM | PERMALINK

No, cmdicely, I would argue that it is both the kind and egree of regulation which are critical. Kind because it is what is done which causes harm, and degree because the more regulation that is engaged in by central planners, the more likely they will do something exceedingly harmful, much like a reckless mountain guide will be able to perform some useful acts, but it is only a matter of time before he gets somebody killed. Heavy regulation is inherently reckless, because nobody really is expert enough to do it well. The failure to note the conditions of the '30s that were caused by regulation, while extolling the heavy regulation enacted at that time as a key to future prosperity, is either a willing or inadverdant implicit statement that lax regulation was cause of the conditions decried. Telling half of a story is a common technique used to offer an argument by implication.

Your attempts to describe Long as not being part of the Populist movement is simply dishonest, as part of an attempt to deny that the Depression help fuel the Populist movement. True enough, the Populist movement pre-dated the Depression, but the statement that unfettered markets gave rise to the Populist movement is not accurate, and the assertion that is was, when viewed in light of Long's rise to power, implicates the Depression, the key event during his rise, with unfettered markets.

Finally, your description of the common liberal theory of the Depression's cause as being due to malregulation is inaccurate. Keyenes' theory, which was certainly the most commonly accepted until the 1970s, certainly did not describe the Depression's cause as being an instance of active mismanagement by the state.

Posted by: Will Allen on January 5, 2007 at 9:44 PM | PERMALINK

To listen to rdw one would believe that money taken out of your check by the federal government isn't taxation.

It's very simple. Every person who works pays higher taxes because Ronald Wilson Reagan raised their taxes (with the exception of a segment of those covered by the EITC - a Ford era program, though Reagan did expand it). All the persiflage, verbiage, and distractions of rdw are intended simply to cover up this fact. And notice how he avoids talking about all the ways in which the federal tax burden was raised. Loophole closings may be a good or bad thing, but the end result is simply that the federal tax burden goes up. User fees may be good or bad things, but at the end of the day it means more money for the federal coffers. All the excuse making in the world doesn't change the boatload of tax increases signed into law by "The Great Taxer." Nor do the excuses cover up the fact that General Fund Receipts did not recover even with all of Reagan's new taxes (once you take inflation into account).

Posted by: not saying on January 5, 2007 at 11:40 PM | PERMALINK

True enough, the Populist movement pre-dated the Depression, but the statement that unfettered markets gave rise to the Populist movement is not accurate, and the assertion that is was, when viewed in light of Long's rise to power, implicates the Depression, the key event during his rise, with unfettered markets.

The fact that the Populist movement predates the Depression means that the Depression could not have given rise to the Populist movement. Long's tenure as governor started in 1932, thereby removing him from the origins of the Populist movement. Finally, whether the Depression resulted from malformed regulatory systems, rouge capitalism, or the declining rate of frog procreation, it is idiocy to claim that it gave rise to a movement that started decades before it did (in fact, the Populist Party's last Presidental candidate appears to be before 1920).

In other words, the fact that the failures of the free market gave rise to the Progressive movement in the 1890s says nothing about the Depression of the 1930s. And given your ability to imagine reverse causation (before this therefore because of this is even more spectacularly wrong than post hoc ergo propter hoc) it is hard to take you at all seriously.

Posted by: not saying on January 6, 2007 at 12:16 AM | PERMALINK

a paucity of real estate regulation by government has led to housing price increases above that of the general rate of inflation.

For Christ's sake, Will Allen. In one final attempt to explain why your point on this tangential issue is so worthless: the logical government reaction to the unavailability of affordable housing is not to regulate housing prices. It is to BUILD AFFORDABLE HOUSING.

I am not saying that the increase in the value of real estate could have been avoided with more government regulation. What I am saying is that increase is overwhelmingly due to natural market forces; that it is something which causes hardship to substantial numbers of poor people (while greatly benefiting rich people); and that the government can and should do something about it. And that so-called "conservatives" who oppose doing anything about the problem are people who worship before the purity of a mythical beast called undistorted markets, and value it more highly than the welfare of actual human beings.

OK? Clear?

Posted by: brooksfoe on January 6, 2007 at 3:04 AM | PERMALINK

Willy-boy,
As I stated in my post, housing tracked inflation very closely until the late 1990s. It did not, as you claim, outpace inflation.

Posted by: mcdruid on January 6, 2007 at 4:25 AM | PERMALINK

rdw,
"You are entitled to your own opinion not your own facts."

Facts? What do you know of facts, child? You have been polluting this thread with a spewing of mentally addled pablum, nary a real idea, logical argument or actual number bouncing around your empty skull.

Here, for your edification and disbelief, are the facts:

per-cap GDP.1981...2001...%increase..02 tax burden
US..........18856..27948....48.2.......28.5%GDP
Norway......15222..24577....61.5.......43.1
Neth........14525..21721....49.5.......39.3
UK..........12747..20127....57.9.......35.9

(constant dollars, blah blah...)

Higher taxes, faster growing economies.

Now get back on your toy train and choo-choo out of here.

Posted by: mcdruid on January 6, 2007 at 4:54 AM | PERMALINK

The preceeding post is not meant to imply that higher taxes lead to faster growing economies. Looking at the overall data, these seem to be uncorrelated with each other. But it is completely false to claim that the US has a faster growing economy or that higher taxes lead to slower growth.

Posted by: mcdruid on January 6, 2007 at 4:59 AM | PERMALINK

rdw: Consider this: in the 3rd Qtr the USA grew GDP only 2%. The weakest Qtr by far since the 2003 supply side tax cuts.


odd...

in a discussion on growth..

you didn't mention the republican led government's roughly 1.2-trillion dollars in deficit spending..


its the elephant in the room..


2003 $378 billion

2004 $413 billion

2005 $318 billion

2006 $256 billion

since 2001...the federal debt has risen by almost 3-trillion...

that's more than 50-percent...


Posted by: mr. irony on January 6, 2007 at 8:14 AM | PERMALINK

mr. irony,

It's not even a little bit odd. GDP growth is GDP growth. How the Govt finances itself is a different issue entirely.

US GDP is, has been and will forever remain the envy of Old Europe.

It's rather odd you didn't point out the deficits for Old Europe. Perhaps because they are much higher? Almost double.

That's a neat trick isn't it? Deficit spend without growth. Then raise taxes so you can choke off even the appearance of growth or possibility of innovation (Germany and Italy are raising taxes in 2007 in one of the dumbest moves of all time)

France and Germany have much higher deficits (almost double) higher debt, less than half the growth, double the unemployment and a welfare stater ponzi scheme than can't possible survive their demographic disaster.

Sorry my friend, your friends in Europe are toast.

Sorry my friend, we just released a spectatular unemployment report with 167,000 jobs created in December and wages up 4.2% in the last year. Over 50,000 of those jobs were in the high paying groups of professional services and health care.

The report shocked economists and markets by it's strength.

The USA greated 167,000 jobs in ONE month when housing and auto's remain in a recession. France hasn't created 167,000 private sector jobs in the last 5 years. Actually, the Govt shed 5,000 jobs. The private sector added 172,000 jobs.

We have a stunningly efficient economy and wealth creating machine. It is the 8th wonder of the world.

Posted by: rdw on January 6, 2007 at 9:21 AM | PERMALINK

money taken out of your check by the federal government isn't taxation.

Only if you are a moron.

and even a moron can understand the difference between Federal Income taxes and social security taxes.

Hate to tell you my friend but Reagan is already a God.

Following Carter that wasn't the biggest challenge in the world but still we went from the 444 day hostage crises to Morning in America rather quickly didn't we?

I cherish the opportuity to look back and see some of the things the loyal opposition was coming up with during the 80s and reflecting. They got everything wrong. The more 'intellectual' the more pathetically wrong.

It's comical how quickly John Kenneth Galbraith went from the wisest man in the world and one of the deans of liberal academia to lefty buffoon. Every thing he said in the 80's about the USSR, socialism and Reagan turned out to be exactly WRONG. He reads like a cartoon character. Videotape and search engines are a bitch. We have a clear, unmistakeable record.

In the 80's EVERY liberal was proven wrong about socialism. I understand your problem with Reagan. He made you into bufoons. It's so cool that in the 60's that great president JFK was so famous for creating Camelot by drafting the best and the brightest from the ranks of Harvard and Yale. Today we know JFK was nothing more than a pill-popping, lyng slut and the last groups of people we can trust are self-described 'intellectuals'.

We honor soldiers and cops and firemen today. The public is also in agreement regarding the Harvard faculty. Insufferable, pompous fools with their heads stuck up their collective asses.

George Orwell described it perfectly about socialism. "Only an intellectual could be so stupid as to believe in socialism".

Ronnie Rules. Read uestrdays employment report and know, "It's Morning in America.

Posted by: rdw on January 6, 2007 at 9:39 AM | PERMALINK

http://www.washingtonpost.com/wp-dyn/content/article/2007/01/05/AR2007010501801.html

A Heckuva Claim
Mr. Bush is oblivious to the consequences of his tax cuts.
Saturday, January 6, 2007; A16

[snip]

'He [ N. Gregory Mankiw]looked at the extent to which tax cuts stimulate extra growth and the extent to which that growth generates extra tax revenue that offsets the initial loss of revenue from the tax cut. Mr. Mankiw's conclusion: Even over the long term, once you've allowed all of the extra growth to feed through into extra revenue, cuts in capital taxes juice the economy enough to recoup half of the lost revenue, and cuts in income taxes deliver a boost that recoups 17 percent of the lost revenue. So a $100 billion cut in taxes on capital widens the budget deficit by $50 billion, and a $100 billion cut in income taxes widens the budget deficit by $83 billion.'

[snip]

'Prodded by the White House, Treasury economists have calculated how much extra growth would result from making the Bush tax cuts permanent. They have concluded that economic output would rise by about 0.5 percent in the first six years and by an additional 0.2 percent in the "long term." Since the federal government collects around 18 percent of gross domestic product in taxes, enlarging GDP by 0.7 percent would result in extra tax revenue equivalent to 0.13 percent of GDP. That would offset less than a tenth of the revenue that would be lost because of the tax cuts.

Mr. Bush's op-ed included nice statements about bipartisan cooperation. But the Democrats would be more likely to cooperate with the president if he stopped making things up.'


Posted by: MsNThrope on January 6, 2007 at 9:52 AM | PERMALINK

Only an intellectual could be so stupid as to believe in socialism

Don't forget the fans of the Green Bay Packers. That's a socialist organization.

Posted by: Geology Rocks on January 6, 2007 at 11:06 AM | PERMALINK

brooksfoe, has it ever, just once, occurred to you that if one desires more affordable housing,
one must have more housing stock, in places people wish to live, and thus removing government
impediments to building more housing stock may be a good idea, especially in regards to helping poor people? Do you really, really, think the answer is to have the central planners attempt to manage the correct supply of housing, at prices "experts" deem appropriate? Maybe we could have a Central Committee handing down edicts! After all, attempts to "help" poor people via welfare worked so, so, well, didn't it? Golly gee, places like the South Bronx, or Chicago's south side improved oh so very much when the central planners arrived in the post war period and began "helping" people, didn't they? I know! Let's do it again!!

One last thing, though. If there is such a problem with the supply of affordable housing, how is it that a higher percentage of the population is able to own their home that at any other time in the nation's history?

mcdruid, to speak of the real estate market in the U.S. as a single entity is the first step to stupidity, and yes, there have been real estate markets in the U.S. prior to the 1990s in which housing price increases out paced the general rate of inflation. True enough, the latest spike in housing prices affected a wider array of real estate markets than spikes in the past. So what?

Posted by: Will Allen on January 6, 2007 at 12:08 PM | PERMALINK

rdw, up there: "If it ain't broke, don't fix it" - from keeoky Kudlow. Well, the 90s Rubinomics and lowering the deficit worked, so why did the Buishites break that? Do you care? Your meaningless quoting of per capita averages is not a good sign ...

Posted by: Neil B. on January 6, 2007 at 12:51 PM | PERMALINK

OH, another irony for you, rdw. You tout the current economy as being proof I suppose that "conservative" economic policies are great. But since Bush/Republicongress was a big spender, even if taxes were lowered, doesn't that ironically show that *historically* "liberal" economic policy helps the economy.

Posted by: Neil B. on January 6, 2007 at 12:55 PM | PERMALINK

Poor guy, since the facts show "The Great Taxer" for what he was, rdw is forced to keep trying to distract - and even goes so far as to truncate my quote to attribute to me what he has obviously been saying. It's fine, rdw, that you want to pretend Social Security isn't a tax, but that just means that the rest of us can recognize you for what you are - fiscally illiterate.

Once again, Reagan proved that Trickle Down doesn't work.

Posted by: not saying on January 6, 2007 at 1:38 PM | PERMALINK

rdw, you still around and still lying? We are still waiting for "Facts" rather than "opinions" from you.

Let's see, France's GDP/Cap increase lags the US, but only by one-third, not one-half. Of course since they still stubbornly continue to produce a higher value per hour, maybe they know something we don't.

In any event, repetitive trumpeting of a single, UNREVISED, job number after so many years of below-maintainence job growth is indicative that you really don't understnd these things. Although I am sure that our readers, if any are left, have already realized this.

Posted by: mcdruid on January 6, 2007 at 3:58 PM | PERMALINK

"mcdruid, to speak of the real estate market in the U.S. as a single entity is the first step to stupidity,"

So I suppose this: "Regulation and state action has played a key role in driving housing prices as high as they are today.
Posted by: Will Allen on January 5, 2007 at 10:31 AM

is an example of the stupidity you are talking about? Finally, we agree on something.

Of course, on a nationwide scale, the two biggest government influences on housing prices were the GI bill and the mortgage deduction, both of which had the effect of lowering the effective cost.

As for regional markets, the only one that springs to mind is Boulder, where controls have reputedly raised the cost of housing there to California levels. Of course, prices wouldn't increase there unless people wanted to live there - which is due, at least in part, to their government's making it an attractive place to live.

Posted by: mcdruid on January 6, 2007 at 4:21 PM | PERMALINK

Literacy isn't your strong suit, is it, McDruid? The statement your quoted does not logically include every market in the U.S.; it only refers to "housing prices", which certainly does refer necessarily to every market, but only a key role generally. In fact, earlier in the thread, I noted a place, Houston, which has been an exception. Your statement regarding Boulder as the only region which springs to your smallish mind as having had prices affected by regulation is simply an indicator of you ignorance of the topic. Land use regulation is rampant in many, many, markets, Boulder and Portland being among the more extreme examples. If you doubt otherwise, just go ahead and try to build an apartment building, or higher density housing wherever you want, in the vast majority of metropolitan areas, in an effort to satisfy demand. You have absolutely no idea of what you are talking about, which means I will avoid instructing you on the irony of your reference to two government acts designed to promote home ownership which, in turn, had the effect of driving demand, thus eventually accelerating price increases beyond what they would have otherwise been. Sheesh, the thought processess of the central planner so often resemble that of a three year old, they may as well be given tricycles to ride to work.

Posted by: Will Allen on January 6, 2007 at 4:49 PM | PERMALINK

Having a life, I will refrain from taking the time to match Will's infantile insults and just do a drive-by take down on his inanities.


I chose Boulder because it is a more interesting situation than comparing Houston to Portland:

Essentially, the entire Front Range is an undifferentiated market. There is no climatic or geographic reason to chose between Boulder or Golden, for example. Furthermore they have equivalent access to major airports, jobs and state government offices.


From that perspective, it doesn’t make sense that there would be higher prices in Boulder: people would simply choose another suburb. However, Boulder has certain advantages, such as green space – on of the results of planned growth. Other things, such as a STATE supported university, don't hurt, either.

Secondly, at least here in Cal, thanks to Prop 13, high density housing is more attractive to cities because it has a better cost to expense ratio. Further, I should note that the San Jose master plan concentrates mostly on infill housing.


Your final point is pure nonsense. The government programs I mentioned had the effect of making houses cheaper for the housing consumer. Of course demand went up, that is elementary economics. The nominal price may have increased, but the real price decreased.

Posted by: mcdruid on January 6, 2007 at 9:20 PM | PERMALINK

It's the same reason that Corvallis, Oregon is the jewel of the Willamette Valley and preferred over other towns up and down the I-5 corridor. Planning, green space and a state U are big advantages.

Side note to RDW: You magnificent bastard! Keep posting! Please! I print out your stuff and give it to freshman econ students and let them tear your theses apart. Many are convinced I am actually writing parody, and I have to send them to this website to see for themselves that such economic illiterates who still believe in the Ponzi scheme you call supply-side economics not only exist, but take themselves seriously! What a hoot! You provide economists the world over with belly-laughs on a regular basis. Thank you for the laughter, sir. I salute you!

Posted by: Declined on January 6, 2007 at 9:38 PM | PERMALINK
we went from the 444 day hostage crises to Morning in America rather quickly didn't we? …. rightist dim wit at 9:39 AM
Actually we went into the biggest recession since the Great Depression

…Reagan's people shoved his program through the Congress during the early Reagan years. James A. Baker, David Stockman and other Reaganites ran roughshod over Tip O'Neill and the divided Democrats in the House and Senate, and won every critical vote. This is because of the GOP majority in the Senate and the GOP-"Boll Weevil" (or "Dixiecrat") coalition in the House.
Phil Gramm was a House Democrat at the time, and he even sponsored the most important Reagan budgets. Only after the huge Reagan recession -- made worse by utterly failed Reagan "Voodoo Economics" - did Democrats regain some control in Congress. They halted some Reagan initiatives, but couldn't do much on their own. That was a time of gridlock.
Six years into Reagan's presidency, Democrats retook the Senate, and began to reverse some of Reagan's horrendous policies. By that time, Reaganomics had "accomplished" quite a bit: doubled the national debt, caused the S&L crisis, and nearly wrecked the financial system….

You have to be really ignorant to tout the likes of Ronald Reagan. Here is a tome that should help you on economics

Posted by: Mike on January 7, 2007 at 12:32 AM | PERMALINK
…Sorry my friend, we just released a spectatular unemployment report with 167,000 jobs …rightist dim wit at 9:21 AM
Here is a comparison between Clinton's economic growth and Bush's As even Ray Charles could have seen, Bush's record is anemic and Clinton's was one of the most robust since the post WWII period. Here are charts showing how Bush's increase of the national debt

…The percentage of debt to GDP continued to grow until 1996, when Mr. Clinton began to get government spending under control. The US debt peaked at 67.3% of GDP under that administration. By the end of the Clinton administration this percentage had dropped to 57.6%. Debt as a percent of GDP dropped almost 10% in four years under a Democratic President with a hostile Congress. Mr. Clinton showed steadfast fiscal leadership against all odds, stereotypes and in spite of right-wing miss-information.
Mr. Bush Jr. inherited a shrinking government and debt in 2001. With his first budget he managed to increase the debt ratio to 60.0%, by cutting taxes but not spending. By 2004 this ratio had risen to 63.7%, as a result of additional tax cuts, but no significant corresponding cuts in spending. Using government estimations (which are notoriously low) they predict that the debt to GDP ratio will grow to 69.3% by 2008, two percent higher than the previous peak in 1996. Mr. Bush will completely wipe out the gains we made under a fiscally responsible Democratic President….

Here are Bush's stats showing annual increases to the National Debt:
9/29/2006 $574,264,237,491.73

9/30/2005 $553,656,965,393.18

9/30/2004 $595,821,633,586.70

9/30/2003 $554,995,097,146.46

9/30/2002 $420,772,553,397.10

9/30/2001 $133,285,202,313.20

9/30/2000 $17,907,308,271.43
This is the worst record in history.
Here is a tome that should help you on economics

Posted by: Mike on January 7, 2007 at 12:35 AM | PERMALINK

cmdicely:

FYI, I fleshed out the comparisons between Shia/Sunni to Catholic/
Protestant in the Casy thread (in archive), if you're interested.

>> Sure the response is elastic -- as most human responses tend
>> to be. But the *needs* which drive low-rung workers to
>> "abandoning the formal economy" (read enter the illegal
>> black market) are not elastic at all.

> I'm not even sure what it say a need is or is not elastic as
> distinguished from a response being or not being elastic;

A response is elastic to the extent that one has genuine choices.

> elasticity is, in the relevant sense, as best I can tell purely
> a trait applicable to responses, not needs, wants, desires, etc.

Well by running off a range, you illustrate a gradient of
elacticity. I may desire a new car, because I just saw a
great writeup in the NYT. That's very elastic; I could choose
to get that car if can afford it, but it's not essential. I may
also want one in a rationally grounded way, too, because my old
one's problems keep getting worse. That's less elastic, because I
know it's going to come down to that sooner or later, so it behooves
me to prepare for the time. Becuase I will *need* a new car --
inelastically --- when my clunker breaks down for the last time
and I have no other way to get to work. Obviously we have certain
requirements that are more pressing than others. Air before water,
water before food, food before clothing, clothing before shelter,
etc. The best way to visualize this remains the concentric
circles of psychologist Abraham Maslow's hierarchy of needs.

When I first saw the term elasticity discussed in an economic
context, it referred to needs and not responses to meeting them.

>> It might be perfectly "natural" behavior that economists are
>> describing, but the human costs of low-wage workers "voting
>> with their backs" by working under the table without any sort
>> of health, unemployment or accident insurance or taking large
>> legal risks by selling drugs or other contraband are high.

> Of course they are. Which is why it is best to avoid that.

And here we are, smack dab into the realm of normativity.

>> Despite my snark at economics, I'm not really disputing that an
>> objective science of economic behavior is possible; if that were
>> true, then any other form of sociology (and economics is a form
>> of sociology) would be similarly impossible. I'm saying that
>> economists' paradigms of the above situations, by attempting
>> to strip out the human, evaluative elements, inevitably
>> create unstated a-priori assumptions of their own.

> I know that is what you are saying. I'm agreeing in part (in that
> there are some people who will inevitably confuse description with
> prescription), while disagreeing in part (in that much of what you
> seem to attribute as a consequence of descriptive economics is
> really a consequence of people who will abuse whatever tool is most
> convenient to sell self-serving policy, who would seize on some
> other framework if descriptive economics were not available, and
> are the same type of people who, in other societies, distorted
> ideological economic theories, like Marxism, to justify policies
> with similar narrow self-serving ends despite the inherent conflict
> between those ends and the ideological basis of the theory.)

Actually, the argument I'm trying (and so far, failing miserably) to
make is a deeper and more philosophical one. Neither scientists nor
the methodology of science are to blame for scientism, on this we can
agree. And today's cultural problems with science are coming from the
opposite direction -- a distrust of science by the powers currently
in charge for allegedly carrying the ideology of secular humanism and
thus the seeds of nihilism. I don't want my argument to resemble this.

>> It's terribly ironic, Chris, but the more social science attempts
>> to be non-evaluative, the more it opens the doors to nihilism.

> I don't think there is anything terribly "ironic" about the idea
> that description analytically separated from prescription is more
> compatible with the idea that description is all there is and
> there is no room for prescription than is description which
> presupposes some a priori prescriptive framework.

And here we've run straight into the problem. Is it possible to
imagine economics at all without a prescriptive component? These
aren't, you know, ethologists studying an ant colony, who have no
wisdom to impart to the ants to help them, I dunno, tunnel through
sand more efficiently. Economists are wise men (mostly men) who
are assumed to have tools to help us poor mortals in the real
world allocate resources more efficiently/fairly/humanely -- the
stringing together of adverbs makes it apparent the number of
agendas up for grabs that these wise men are supposed to enable.

And economics has more status than any other social science, because
it brings back facts from the ivory tower -- backed with numbers and
hard data -- that we can use to manipulate the world. Economics has a
Nobel Prize -- sociology, even psychology (the second most successful
social science) doesn't. Its status derives from being the most purely
scientific and allegedly least subjective and ideological of them.

But that's absurd on its face. One of these decades, either the string
theorists or the Standard Model folks are going to have to give it up,
and a physics paradigm will solidify. Ultimately, the other camp will
shake hands, because despite all the kicking and screaming while a
paradigm shift is going on, that's what scientists do. At the end of
the day, they swallow their pride and bow to the pursuit of truth.
Will this happen among the behavioral economists, the game theorists,
the macroecon computer modellers, the rat choicers, the political
economists? There have always been liberal economists and conservative
economists. Will one paradigm have a universally-acknowledged Eureka
moment and win out, driving the other camps from the field? Nopers.

So while I don't disagree with you that a descriptive science is not
the problem -- I do dispute that economics can claim that mantle in
anything near the universal way that that the hard sciences can.

>> Max Weber's fact/value distinction had
>> nothing to say about the rise of Hitler.

> I'd agree that that is narrowly true, since explaining such social
> dynamics is outside the purview of the fact/value distinction
> itself. OTOH, I don't think that statement says anything meaningful.

Not meaningful? Really? That the pinnacle of classical sociology
couldn't predict the radical evil of Hitler, or even the banality of
evil of his functionaries? Max Weber was one of the architects of the
Weimar constitution, Chris. His descriptive insights were supposed
to lend sagacity to that quintessentially prescriptive endeavor.

"When the rockets go up
who knows where they come down?

It's not my department," sez Werhner von Braun

--Tom Leherer

And that's the tunnel vision of scientism in a nutshell.

>> By attempting to describe human behavior without evaluating it,
>> economists ratify a Panglossian best of all possible worlds.

> Er, no, they don't. In fact, developments from the fields of
> descriptive social science like game theory explain exactly
> why the outcome of the best possible individual decisions in
> the circumstances that in fact exist do not, often, produce
> even arguably the best of all possible worlds.

Best example: Arrow's Theorem, which states (as you doubtless
know, being our resident expert on voting systems) that a rank-
ordered preference of three or more choices inevitably leads to
a less-than-optimal outcome. One of my housemates, a poli sci
PhD candidate, is writing his dissertation on how this idea, in
vernacular pre-mathematicized form, was embedded in John Calhoun's
ideology of minority veto in the antebellum South. Arrow's idea
was famously taken to mean that democracy is a less efficient way
of making social choices than, umm, the marketplace. Noooo ...
really? :) Nothing's a better example of how these descriptive
ideas become instantly co-opted into ratifying a wingnut ideology.

>> This is why genuinely scientific economics (as opposed to Marxian
>> evaluative economics or political economy -- which is, of course,
>> banished to the purdah of an academic cubbyhole) tends as a general
>> rule to serve as the handmaiden of conservative worldviews.

> I don't think the effect you are trying to explain is true, nor
> (as explained above) to I think that the cause you present for it
> actually is present, much less causes the effect you describe.

"This is why" was a sloppy syntactic connector, mea culpa. The
cause for is that economics, unlike say, entomology or particle
physics, deals with the most fought-over thing in our entire culture:
material resources. Any economic idea out of the box becomes co-opted
by various ideologies that have the strongest possible desire to see
resources allocated in one way or the other. This is unavoidable.

>> Conservative ideologues naturally use the "scientific," "value-
>> neutral" nature of economics to trumpet their notion that this
>> best of all possible worlds is in fact the only possible world.

> Only by selectively ignoring many results of that scientific,
> value-neutral research. Of course, people with preconceived
> value notions of the same type (often the very same people)
> also wilfully distorted value-based modes of analysis,
> including religious ones, to defend their status quo power
> of elites, too, so I don't see any justification in blaming
> the value-neutral nature of economics for their actions.
> People who lie and distort to sell their idea will lie about
> and distort anything to sell their ideas, plain and simple.

Okay, here's the point in this overly long thread where it's time
for me to stop beating around the bush and make the case against
scientism directly. Damn, is this a difficult argument to make,
because of course you're correct; it's never a scientist's fault
for the way science is used. Plus, I don't want to sound like
another freakin' po-mo ideologue and come out with some warmed-over
pseudo-Foucauldian palaver about "discourses of power" yada yada.

Okay, there are two cases here. I'll save the bigger one against
scientism and start with economics. You say that this is a universal
human problem, but I'd argue that economics is a special case, not
only because the subject matter of economics (as opposed to the hard
sciences) is inherently about how people make choices about what they
value (that's true of sociology in general), but because economic
theory inevitably rests on core assumptions about human behavior.

Another economix joke:

Two starving economists are stranded on a desert island with no
vegetation and a crate of tuna fish. One sez "Assume a can opener."

The marginalist revolutionaries attempted to deal with this by
sticking all human motivation into a black box they called subjective
utility. Cigarette smoking as a negative externality? We can't talk
about that; it's not scientific. We just throw that in the box with
greed, vanity, anal-retention, suicide, socialization and everything
else. We only deal with observable behavior which can be quantified.

While this yields powerful and generalizable theories (just as
behaviorism cut through the unexamined cultural biases in Freudian
psychoanalysis to yield a more generalizable theory), it left a huge
hole (as did behaviorism) in what it means to be human -- while also
presenting a MOL accurate picture of how people behave. People in
economic theory *are* their behavior -- and this is why so many people
on this thread have had strong gut reactions against calling labor --
made up of full human beings -- a commodity, which is generalizable.

There's nothing morally wrong with this, and scientifically it's the
way to go. But Economic Man is a soulless, interchangable thing. By
stripping out subjectivity, by objectifying behavior, it becomes easy
to treat people as, quite literally, cogs in an economic machine. It
becomes easier to judge people by how well they make the machine run.

This isn't inherently ideological, I suppose, anymore than behaviorism
is inherently ideological. But you can see how easily it lends itself
to making that machine run better -- just as studying thermodynamics
lends itself to devising more efficient heat engines. Terms like
"efficiency," "maximizing utility" are evaluative. The idea is to
increase these things. Western Europe takes six weeks off to smell
the roses. It'd be a pretty bloodless economist indeed who didn't
find that extra month's vacation time less than economically sensible.

>> And this is why I distrust economics the more it
>> claims the mantle of a pure, descriptive science.
>> This may not be the fault of economists -- but we
>> don't read about their insights in academic journals.

>> We read about them in the Wall Street Journal.

> We who?

The general public.

> I certainly am more likely to read about the insights of economists
> in academic works (either journals or texts) than in the Wall Street
> Journal. Of course, I'd have a distorted view of more than just the
> use of economics if I preferred the WSJ as a source of information.

You're not the general public, Chris :)

> Blaming economists for your choice of
> information sources is pretty lame.

Well, that's not what I meant by my admittedly rhetorical point.

And now it's time to make the case against scientism. First, note
your reaction. You get your info from specialized, academic sources,
and count on the peer review process to keep things honest. And
that's fine for many sciences, where the payoff is human knowledge.
But other sciences are closer to techne and have a much bigger and
more immediate payoff: chemistry, nuclear physics, biology. The
halo has been taken off some of these applied sciences since the 70s,
so I needn't refresh your memory, I'm sure, about too cheap to meter
and better living through chemistry. (Or, for that matter, "objective
journalism.") You, as an extremely well-educated person conversant
in the sciences, have faith in your judgment to tell pseudo from real.

But you ain't the guy on the street, Chris. It's not so much that
scientists themselves foster this, but there's a popular mythology
about the selfless, singleminded pursuit of truth (and that readers
of Thomas Kuhn know differently) that hasn't quite died away after
Superfund, Three Mile Island and Jeremy Rifkin. There's a tendency
to leave it to the experts because they're, well, scientific. Have
you seen the recent late-nite infomercial on cable about the penis
enlarging pill? And there's this dork of an MD entrepreneur wearing
-- what else? -- a white lab coat, telling us about his career
studying the intracacies of male sexual enhancement. People would be
inclined to scoff, but damn, you know, the guy's wearing a lab coat.

So when I read in the papers "leading economists say" or "Nobel
Prizewinning economists have concluded," I'm inclined to wince --
but I'm not the average Joe, either. Notice how every presidential
election, you get about an even number of economists to endorse the
Democrats and the Republicans? Unless it's a quality science piece,
whatever these leading economists are saying in the mass media will
brought to you by some vested interest. People say "oh, economists,
they're the experts" and are inclined to do the white lab coat
thing with their critical thinking. And that's what I mean about
distrusting the whiff of "scientific authority" that's supposed
to hang around reputed economists. Not that genuine scientific
work in economics isn't happening or isn't interesting. Just that
it's prudent to squint at all incarnations of the cult of the expert.

And I hope I did at least a marginally better job
here than in my previous message, although I certainly
won't be surprised if you pick it apart, anyway :)

Bob

Posted by: rmck1 on January 7, 2007 at 9:47 AM | PERMALINK

No, McDruid, you stated that Boulder was the only one that "sprung to mind", perhaps because your mind doesn't work very well. As to your having a life, and thereby avoiding insulting rhetoric, what is commonly thought of the use of "-boy" after a name? Sheesh, you are unable to even read your own posts, aren't you?

Yes, the GI Bill and mortgage deduction initially made real prices lower, especially if the term "real prices" is meant to include after-tax prices. They also drove demand, to the point where the mortgage deduction in particular comprises a substantial of the price of the typical home, and if that deduction were to be ended, prices would likely stagnate for a very long time, or perhaps fall substantially, in many, many, markets. If a particular tax policy eventually a non-trivial percentage of a typical home's value in many markets, it doesn't tell the whole story to simply say that the tax policy reduced real prices.

Again, yes, the housing cost spike that began in the late '90s in many markets was more widespread than previous spikes. So what? What does that have to do with the undeniable fact that land use regulation in many, many, markets retards the growth of housing stock in areas in which people have a strong desire to live, and thus driving prices higher than they would be without said regulation?

Posted by: Will Allen on January 7, 2007 at 2:33 PM | PERMALINK
...land use regulation in many, many, markets retards the growth of housing stock in areas in which people have a strong desire to live, and thus driving prices higher...Will Allen at 2:33 PM
What is your complaint? It is the citizens and property owners working through their government who demand those regulations. Ever heard of Slow Growth and/or No Growth Initiatives? Don't you believe the people can make choices that affect their lives and property or is it your contention that corporations rule the government, society, and the citizenry? Posted by: Mike on January 7, 2007 at 6:10 PM | PERMALINK

As long as individual property owners are compensated when regulation causes a substantial decline in value, I have little complaint. No, I don't think majorities have the morally legitimate power to do whatever they wish with an individualy citizen's real estate. My comment on land regulation was more in response to comments about government need to ensure adequate affordable housing for poor or lower income people. My point was that government regulation of land use in many markets greatly retards the addition of housing stock where people have great desire to live, thus resulting in prices rising out of reach for poor or low income people.

Posted by: Will Allen on January 7, 2007 at 8:04 PM | PERMALINK

rdw,
Economics has its own Nobel prize? Uh, right.

Posted by: mcdruid on January 7, 2007 at 9:17 PM | PERMALINK

Willy-boy, a cutting insult? Yep, you do need to get a life.

Now, I may be an idiot, but I'm not such an idiot that I think the most salient difference between Houston and Portland (OR) is the amount of government regulation. Let's see, Portland is a liberal, cool and green medium-sized city. Houston is a conservative, hot and brown large city. Portland has rain, Houston has smog. Portland is one of the countries most livable cities, Houston has football.

But, the Great Will Allen (-boy), struck by his inability to actually address my reasoning, reverts to (perhaps because your mind doesn't work very well) as-hominem attacks. (To be fair, I suspect that you just don't understand my argument.)

My second point (real-life in California) you simply ignore, so you obviously don't have a response there either.

As for my third point, you seem to be using an unrealistic hypothetical (the elimination of the mortgage deduction) To make a simple point: that the nominal price of houses would fall to the real price. But then, you don't seem to understand the difference between nominal and real prices.

Your last point doesn't specifically address my points, but I'll merely point out that yes, regulation of pollution, green space and schools do have a tremendous positive effect on prices.

Posted by: mcdruid on January 7, 2007 at 10:06 PM | PERMALINK

Bush's record is anemic and Clinton's was one of the most robust since the post WWII period.

2002 - 2006 is far from anemic but thanks for making my point. That the US Economy is the 8th wonder of the world.

Posted by: rdw on January 7, 2007 at 10:07 PM | PERMALINK

You have to be really ignorant to tout the likes of Ronald Reagan.

Not at all. All you need is a logrithmic chart of the various stock indexes going back 100 years and see how 1981 stands out as the most significant inflection point in front of the greatest period of wealth creation in human history that still hasn't ended.

It's really quite devastating when you look at Old Europe in 1981 and 2007 versus the USA. There's a reason Europeans are the most depressed people on the planet. It isn't just that they're choking on the exhaust of our economy but they're literally breeding themselves out of existance.

Consider this fact. IN 1971 there were 4.6M Italians 5 or under. Today are 2.6M. The lack of births is starting to compound. They'v been producing many fewer baboes for 40 years. Now they've got fewer mommies having fewer babies.

Meanwhile the USA creates so many jobs they have to export a ton of them. Of course none of them are to high tax high regulation Old Europe where unemployment runs at 10%.

I don't need to tout RR. He was right about everything. The left was wrong about everything. We have the vidoetape.

Posted by: rdw on January 7, 2007 at 10:16 PM | PERMALINK

repetitive trumpeting of a single, UNREVISED, job number after so many years of below-maintainence job growth is indicative that you really don't understnd these things.

I have a very good understanding. It never ceases to amaze me how speaking optimistically of the USA economy pisses off lefties.

This is something you should enjoy and celebrate. We are incredibly wealthy. It's great news. The Europeans are bitching about the environment while we're cleaning ours at a tremendous rate. That's because we can afford to. Because our wealth is in private hands the investments in cleaning the environment are made wisely. Because our citizens never rely on the govt we do things on our own. Many Europeans can wipe their asses without govt support.

Posted by: rdw on January 7, 2007 at 10:27 PM | PERMALINK

Once again, Reagan proved that Trickle Down doesn't work.

Au contraire.

It works better than anything else in human history as the stats prove. America in the only country with a huge affluent class. America is the only country where the #1 health issue among the poor is obesity.

The number of things we have in our homes and offices and hospitals today is astonishing versus 1981. Our growth and wealth creation has been stunning. Today we invest dramatically more in R&D and because much of that R&D is now being done globally we get a lot more bang for the buck.

I know the concept of American exceptionalism is very upsetting to lefties but it is a fact of life. Moreover, it's only going to get worse. Get over yourself.

Posted by: rdw on January 7, 2007 at 10:37 PM | PERMALINK

Well, the 90s Rubinomics and lowering the deficit worked, so why did the Buishites break that?

Except there's no such thing as Rubinomics. It's a political term. Rubin never espoused any economic theories nor broke any new ground. Democrats raising taxes was hardly a new path. Nor did they cut spending much outside the defense budget which was the result of Reagans peace dividend.

What Reagan did was truly historic. He cut marginal rates across the board and at the top from 70% to 28%. That's a stunning drop of 42%. By contrast GHWB and WJC and GWB have been playing at the margins. This is still Reagans economy.

Posted by: rdw on January 7, 2007 at 10:52 PM | PERMALINK

rdw,
Economics has its own Nobel prize? Uh, right.

Yes,

Why do you ask?

Posted by: rdw on January 7, 2007 at 10:54 PM | PERMALINK

Six years into Reagan's presidency, Democrats retook the Senate, and began to reverse some of Reagan's horrendous policies

Not quite. Reagans last marginal rate tax cuts were passed in 1986. It was an remains the most dramatic rewriting of the tax code in our history.

Reagan is already a top-ten President and his stature growns every year. He's the greatest manager of the economy we've ever had and his work in defeating the USSR as a political entity and socialism as an economic entity create a permanent legacy few men can match.

It was most interesting when one of the high priests of lefty economics from the 40's, 50's throught to the 80's, John Kenneth Galbraith, one of the best and the brightest of the Kennedy administration died. One would have thought as a leading light of the Democrat parties golden age would have received a state funeral. Except the MSM was more than a little sheepish.

You see conservatives had a boatload of quotes and comments from this genius duting the 80's when he lectured Reagan on respecting the USSR and Socialism as perfectly legitimate and viable systems. John Kenneth has a lot of company. After all how could an amiable dunce like Reagan possibly match wits with the great John Kenneth Galbraith?

Well as it turned our Reagan was right about everything. John Kenneth was wrong about everything. We have the videotape and a scorecard. RR also had the much better sense of humor.

Here's one of my favorites from the Carter campaign. "I a recession is when your neighbor loses his job. A depression is when you lose yours. A recovery is when Jimmy Carter loses his."

Posted by: rdw on January 7, 2007 at 11:07 PM | PERMALINK

No, McDruid, it is a witless insult, but an insult nonetheless, rendering your remarks about other's hostile invective pointless.

You didn't make any points, other than to wrongly imply that Boulder was unique, and to say that there was a widespread spike in housing prices starting in the '90s, to which I'll ask again, so what?

Posted by: Will Allen on January 7, 2007 at 11:31 PM | PERMALINK

There is a Nobel in fiction.

Posted by: mcdruid on January 7, 2007 at 11:43 PM | PERMALINK

Tsk, tsk Willy, you accused me of "distortion" for having stated two undeniable truths, housing has historically tracked inflation, and that the housing bubble was speculation. You, for some reason, claimed that you hadn't been talking about recent history, even though brooksfoe specifically referenced the last 15 years.

As I suspected, you do not understand what I wrote. I am amazed that your reading skills are so bad that you think exactly the opposite of what I wrote. Boulder is not unique, that is the problem. Houston is unique. Portland is unique (I lived there for five years, so I am somewhat familiar with it.) But there is no readily apparent reason why Boulder is any different from any other Front Range city. I will refrain from explaining this any more as my statements are readily comprehensible to every past-grade level reader on this thread.

My specific, factual counterexamples are to challenge your and rdw's trumpeting of government regulations as completely evil. I note that your arguments are essentially contentless appeals to authority, with gusts of ad hominem and a propensity to address counter arguments by simply ignoring them.

Brooksfoe owned your ass on your exchange about healthcare insurance, and instead of admitting it, you simply changed the subject. On housing costs, you cited three examples. I've whacked your hand on two and reamed you on the third. As an aside I also smacked you down on saying that city govs don't prefer high density...

sorry, got to go. Be back soon.

Posted by: mcdruid on January 8, 2007 at 12:58 AM | PERMALINK

Not that I have anything to say.

Posted by: mcdruid on January 8, 2007 at 3:49 AM | PERMALINK




 

 

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