You can’t make ends meet on 8 bucks an hour? I can see where that would be a problem. When did fast food jobs become jobs for family breadwinners? Fast-food jobs are for high-school kids. You want to make $15 an hour? Simple: get a job that pays $15 an hour. What’s stopping you? Other than your lack of skills, education, motivation and accomplishments? If no employer is willing to pay you $15 an hour, then guess what? You’re not worth $15 an hour. You need to do something about that. Why is $15 an hour the magic number? Why not $16? Or $17? Why not $50 an hour? At $50 an hour, everyone would make a nice 6-figure income and poverty would be a thing of the past, right? If you raise the price of a product or service, the demand for the product or service goes down —… Read more →
EppsNet Archive: Economics
More People I’m Sick Unto Death Of: Angela Davis
I still believe that capitalism is the most dangerous kind of future we can imagine. — Angela Davis Alternatives to capitalism have resulted in shortages, famine, mass murder and societal collapse (cf., Nazi Germany, Fascist Italy, the Soviet Union, Communist China, North Korea, Cuba, Libya, Venezuela … I could go on and on but I think we both get the point). Can anyone list a few capitalist countries where this has occurred? If not, what does the word “dangerous” mean in this context? Angela Davis is now 70 years old. Can anyone list a few well-known Angela Davis-style radicals who lived a long life in any of the aforementioned countries? Read more →
The War on Poverty is 50 Years Old
The New York Times has an update from McDowell County, West Virginia, on how the War on Poverty is going after 50 years . . . Of West Virginia’s 55 counties, McDowell has the lowest median household income, $22,000; the worst childhood obesity rate; and the highest teenage birthrate. It is also reeling from prescription drug abuse. The death rate from overdoses is more than eight times the national average. Of the 115 babies born in 2011 at Welch Community Hospital, over 40 had been exposed to drugs. . . . Many in McDowell County acknowledge that depending on government benefits has become a way of life, passed from generation to generation. Nearly 47 percent of personal income in the county is from Social Security, disability insurance, food stamps and other federal programs. . . . The poverty rate, 50 percent in 1960, declined – partly as a result of… Read more →
Get Rich Making Dumb Decisions
The people on the short side of the subprime mortgage market had gambled with the odds in their favor. The people on the other side — the entire financial system, essentially — had gambled with the odds against them. Up to this point, the story of the big short could not be simpler. What’s strange and complicated about it, however, is that pretty much all the important people on both sides of the gamble left the table rich. . . . The CEOs of every major Wall Street firm were also on the wrong end of the gamble. All of them, without exception, either ran their public corporations into bankruptcy or were saved from bankruptcy by the United States government. They all got rich, too. What are the odds that people will make smart decisions about money if they don’t need to make smart decisions — if they can get… Read more →
Childish Economics
I have a very difficult time imagining the economic ‘theory’ that motivates proposals such as this one by Pres. Obama [to “streamline” the Fair Labor Standards Act so that more white-collar employees would be eligible for overtime pay]. The best that I can do is to imagine how a two-year-old child would respond if asked to propose a way to raise workers incomes. — Don Boudreaux Read more →
Regulating Markets
The arguments for regulation of the market for goods and the regulation of the market for ideas are essentially the same, except that they’re perhaps stronger in the area of ideas if you assume consumer ignorance. It’s easier for people to discover that they have a bad can of peaches than it is for them to discover that they have a bad idea. — Ronald Coase Read more →
A $15 Minimum Wage is Not Going to Help You
Fast Food Workers Will Strike On Thursday In L.A. : LAist Fast food workers staged a one-day strike for “living wages.” More specifically, they want the federal minimum wage to be raised from $7.25 an hour to $15. You want to make a living wage? I’ll tell you how to make a living wage. I’ve had a lot of jobs and this method has never failed me. Here it is: Before accepting a job offer, you always ask yourself, “Does this job pay enough for me to live on?” And if the answer is no, then you don’t take that job. If you want to earn $15 an hour, do what I do: get a job that pays $15 an hour. Who’s stopping you? If no one’s willing to pay you $15 an hour, it’s because the skills, intelligence and motivation that you bring to the table don’t allow you… Read more →
EppsNet Book Reviews: The Big Short by Michael Lewis
I worked in the information technology department of a mortgage bank in the run-up to the 2007 implosion of the subprime mortgage market . . . Given that it was fairly evident at the time that complicated financial instruments were being dreamed up for the sole purpose of lending money to people who could never repay it, it’s remarkable that very few people foresaw the catastrophe and that even fewer actually had the nerve to bet on it to happen. Long story short, the major rating agencies — Standard and Poor’s and Moody’s — were incompetent in their rating of subprime mortgage bonds, giving investment-grade and, in some cases, triple-A ratings to high-risk instruments. A lot of people took the ratings — which implied that subprime mortgage derivatives were no riskier than U.S. Treasury bonds — at face value and acted accordingly. But there were also some interesting psychological factors in play, not… Read more →
Well, there are fewer limits on what you can promise than on what you can deliver. — Milton Friedman
Ronald Coase, 1910-2013
To ignore the government’s poor performance of its present duties when deciding on whether it should or should not take on new duties is obviously wrong. — Ronald Coase Read more →
A Tradeoff
If female employment rates matched male rates in the U.S., the GDP would rise by 5%. This stat & more: http://t.co/XsBVJW1xtE — Harvard Biz Review (@HarvardBiz) August 25, 2013 Okay . . . but who would be raising our kids? Or is that not important? Read more →
Academically Speaking, I’ve Still Got the Geedus
I took a Computational Finance midterm over the weekend on Coursera. I’ve taken a few Coursera classes before — they had quizzes, problem sets, programming assignments, essays — but none of them had a midterm or final exam. It’s the first academic exam I’ve taken in at least a couple of decades, and the first exam ever in which — because it was online — I was able to participate in the company of my life partner, Wild Turkey. Here’s my result: I lost the one point on this question right here: If you understand the question, it’s obvious which one of the four I missed, but it may not be obvious what the right answer is. It wasn’t to me, anyway. My wife asks, “Did you see the grading curve?” “No, but when you score 149 out of 150, you leave it to others to worry about the curve.” Read more →
Screw Economics
One of the classes I’m taking on Coursera is Principles of Economics for Scientists, taught by Prof. Antonio Rangel at Cal Tech. First of all, it’s a great class. Rangel has a real passion for the material and he’s provided extra resources to accomodate online students, many of whom probably don’t have the math background of the average Cal Tech student. He’s from Madrid, so his pronunciations and mannerisms are different, like the gesture below, which I captured from one of the video lectures. He was explaining how something or other would increase our understanding of economics and he punctuated the word “understanding” by pointing at his head with two fingers. I don’t know what this gesture means in Spain, or if it means anything at all. Probably he knows what it means in America, but as I said, he’s passionate about the material and I think he loses himself… Read more →
Thomas Jefferson on Why Your Health Insurance Premium is Going Up
Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers. — Despite New Health Law, Some See Sharp Rise in Premiums – NYTimes.com That headline should not read “DESPITE new health law,” it should read “BECAUSE OF new health law.” But we were going to get things for free! We were promised better things at a lower cost! In my day, most of the citizens were farmers or merchants or tradesmen. They lived by their hands and their wits. They had horse sense and they knew when they were being sold a bill of goods. Of course, that was before television. Americans today are unfortunately rather stupid. Most of them don’t know anything about economics, science, history, government… Read more →
eEconomics – Gas Taxes
I Don’t Understand What Warren Buffett is Talking About
In an op-ed for the New York Times, Warren Buffett argues that higher taxes won’t keep the super-rich from trying to make money: Suppose that an investor you admire and trust comes to you with an investment idea. “This is a good one,” he says enthusiastically. “I’m in it, and I think you should be, too.” Would your reply possibly be this? “Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.” Only in Grover Norquist’s imagination does such a response exist. — A Minimum Tax for the Wealthy – NYTimes.com Really, Warren? It’s an investment, right? It’s not a sure thing. It’s not a giveaway. I’m being asked to put money at risk. That’s the difference between… Read more →
Thomas Jefferson on “You Didn’t Build That”
Almost everything appertaining to the circumstances of a nation, has been absorbed and confounded under the general and mysterious word government. Though it avoids taking to its account the errors it commits, and the mischiefs it occasions, it fails not to arrogate to itself whatever has the appearance of prosperity. It robs industry of its honours, by pedantically making itself the cause of its effects; and purloins from the general character of man, the merits that appertain to him as a social being. — Thomas Paine, Rights of Man (1792) My fellow Americans — You see how my friend Tom Paine, 220 years ago, perfectly anticipated — and rejected — your President Obama’s “You didn’t build that” quote. Oh yes, we were aware of the “progressive” philosophy — that everything good comes from government — even then and we wanted no part of it. By the way, I notice that… Read more →
Milton Friedman Would Be 100 Years Old Today
What the market does is to reduce greatly the range of issues that must be decided through political means, and thereby to minimize the extent to which government need participate directly in the game. The characteristic feature of action through political channels is that it tends to require or enforce substantial conformity. The great advantage of the market, on the other hand, is that it permits wide diversity. It is, in political terms, a system of proportional representation. Each man can vote, as it were, for the color of tie he wants and get it; he does not have to see what color-the majority wants and then, if he is in the minority, submit. It is this feature of the market that we refer to when we say that the market provides economic freedom. But this characteristic also has implications that go far beyond the narrowly economic. Political freedom means… Read more →
Open Letter to a Politician
Via Cafe Hayek: Read more →
The Person Who Says It Can’t Be Done Is Interrupted By The Person Doing It
In his latest book, The Price of Inequality, Columbia Professor and Nobel laureate Joseph Stiglitz examines the causes of income inequality and offers some remedies. In between, he reaches some startling conclusions, including that America is “no longer the land of opportunity” and “the ‘American dream’ is a myth.” — The ‘American Dream’ Is a Myth: Joseph Stiglitz on ‘The Price of Inequality’ “If there is anybody at all who has a dream, then they can definitely make it happen,” she told WBTV. “There are no excuses. It depends on you and no one else.” — Dawn Loggins: Homeless, Abandoned Teen Heads to Harvard – Yahoo! Shine The second link above goes to a story about Dawn Loggins, an 18-year-old girl from Lawndale, NC, who, after her mother and stepfather left the state without her and she was dropped by her grandmother at a local homeless shelter, “just made a… Read more →