Monthly Archive for January, 2007

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Quote Of The Day

“Politicians like the minimum wage because the cost of financing it is paid by three groups—the workers (in the form of lower employment), employers (in the form of lower profits) and consumers (in the form of higher prices). Missing from that list is taxpayers—so for politicians, if the negative effects are hidden from most voters, the minimum wage is close to a free lunch. So it is preferred by politicians to the earned income tax credit (EITC) which costs tax dollars. Most (all?) economists argue that the EITC is a much better way to help the poor. The other benefit of the minimum wage for politicians is that it makes low-skilled labor more expensive and boosts the demand for close substitutes, often union workers.” —Russell Roberts, professor of economics at George Mason University

Quote Of The Day

“Civil rights used to be about treating everyone the same. But today some people are so used to special treatment that equal treatment is considered to be discrimination”. —Thomas Sowell

My Favorite Part Of Bush’s Speech

Was this:

The challenge playing out across the broader Middle East is more than a military conflict. It is the decisive ideological struggle of our time. On one side are those who believe in freedom and moderation. On the other side are extremists who kill the innocent, and have declared their intention to destroy our way of life. In the long run, the most realistic way to protect the American people is to provide a hopeful alternative to the hateful ideology of the enemy, by advancing liberty across a troubled region. It is in the interests of the United States to stand with the brave men and women who are risking their lives to claim their freedom, and to help them as they work to raise up just and hopeful societies across the Middle East.

From Afghanistan to Lebanon to the Palestinian Territories, millions of ordinary people are sick of the violence, and want a future of peace and opportunity for their children. And they are looking at Iraq. They want to know: Will America withdraw and yield the future of that country to the extremists, or will we stand with the Iraqis who have made the choice for freedom?

His full speech can be found here.

The US Economy In Perspective

Mark J. Perry, professor of finance and business economics at the University of Michigan, puts the US economy in perspective:

The unemployment rate in Canada just hit a 30-year low of 6.1% in December, the lowest rate since 1977 when Pierre Trudeau was Canada’s prime minister and Jimmy Carter was U.S. president. During the last U.S. recession from March – November 2001, the unemployment never got higher than 5.5%. When the unemployment rate continued to rise to rise and peaked at 6.3% in June of 2003, it was dismissed as a “jobless recovery.”

When the U.S. unemployment rate is around 6%, it’s called a “jobless recovery.” When the Canadian unemployment is about 6%, it’s celebrated as the lowest jobless rate in a generation. The fact is that the U.S. economy, even its worst years, is still better than most other economies during their best years.

These are no small potatoes, we can quibble all day about what welfare program to support or not, but (involuntary) unemployment is a large and permanent waste on the economy, with no benefactors at all. It is also an economic indicator that directly concerns the poor. One may want Canada’s healthcare system, or Europe’s worker protection ‘rights’, but if unemployment is high it falls most heavily on the poor.

This is why I am not persuaded by Canada’s, Europe’s or Scandinavia’s economic model, we can argue to the sun comes out about whether we need more or less welfare, but when you have 6%+, 10%+, and 15%+ unemployment, your economy is clearly inferior to one that has 4%+ (and if you add in the minority unemployment rate, which is usually double and sometimes triple the average unemployment rate, those countries become downright dreadful to brown people like myself).

The full article can be found here. More can be found here.

Time To Pray For The Citizens Of Venezuela

I don’t pray very often but there are times when events are so catastrophic, so desparate, and so predictable that prayer is in order and Venezuela has reached that point. While Hugo Chavez is big on socialist rhetoric, he has always been very short on actual implementation.

James Surowiecki, the financial columnist for the New Yorker, explained it this way:

To people on both the left and the right, Hugo Chávez is a kind of modern-day Castro, a virulently anti-American leader who has positioned himself as the spearhead of Latin America’s “Bolivarian revolution.” He calls for a “socialism of the twenty-first century,” and regularly floats radical economic ideas; during his recent campaign for reëlection, he suggested he might move Venezuela to a barter system. When he spoke in front of the United Nations General Assembly in September, a day after President Bush, he said, “The devil came here yesterday.” And, just last month, after he was overwhelmingly reëlected to the Presidency, he dedicated the victory to Castro and proclaimed it “another defeat for the devil who tries to dominate the world.”

Chávez’s rhetoric might not be out of place in “The Little Red Book,” yet everyday life for many Venezuelans today looks more like the Neiman-Marcus catalogue. Thanks to the boom in the price of oil, many Venezuelans have been indulging in rampant consumerism that might give even an American pause. In the past year, auto sales have doubled, property prices have soared (mortgage loans are up three hundred per cent), and, thanks to this buying frenzy, credit-card loans have nearly doubled. And while Chávez has done a good job of redistributing oil revenue to the Venezuelan poor, via so-called misiones, designed to improve education, health care, and housing, and has forced oil companies to renegotiate contracts, there has been no nationalization of industry, relatively little interference with markets, and only small gestures toward land reform. If this is socialism, it’s the most business-friendly socialism ever devised.

In other words, most people thought Hugo Chavez was all bark and no bite when it came to actually implementing socialism. Then Chavez had this to say:

As Venezuela embarked on another six years under Hugo Chavez, the president announced plans to nationalize power and telecommunications companies and make other bold changes to increase state control as he promised a more radical push toward socialism.

Chavez, who will be sworn in Wednesday to a third term that runs until 2013, also said he wanted a constitutional amendment to strip the Central Bank of its autonomy and would soon ask the National Assembly, solidly controlled by his allies, to approve ”a set of revolutionary laws” by presidential decree.

”We’re moving toward a socialist republic of Venezuela, and that requires a deep reform of our national constitution,” Chavez said in a televised address after swearing in his new Cabinet on Monday. ”We’re heading toward socialism, and nothing and no one can prevent it.’

In other words, Chavez is serious and is now planning on doing the real work that socialism requires, that of heavy nationalizing of industry, changing constitutions, and possibly (sic) reducing property rights. History has repeatedly, universally, and clearly shown what results those policies lead to – political censorship (already begun, see here), large poverty, and finally the mass killing of innocent people, espeically farmers, and the poor.

The economist writes:

This is terrible news for Venezuela, which has already disastrously underinvested in its main source of revenue; if oil prices keep tumbling, Mr Chavez and his constituents will both be in serious trouble. It is one thing to demand better terms on favourable oil leases, and another thing to nationalise wide swathes of your economy; I find it hard to imagine that this won’t chase out much of the foreign investment that Venezuela will desperately need. The bishops of Caracas should be praying hard that oil prices stay high.

P.J. O’Rourke has a term for stories that are invalidated by later developments: OTBE, or OverTaken By Events. For journalists, this is annoying, but since universal, not too much so. But when events in the oil market finally overtake Venezuelans, it may be disastrous.

It is time to start praying for the citizens of Venezuela.

Quote Of The Day

“I became so frustrated with visiting inner-city schools [in the U.S.] that I just stopped going. The sense that you need to learn just isn’t there. If you ask the kids what they want or need, they will say an iPod or some sneakers. In South Africa, they don’t ask for money or toys. They ask for uniforms, so they can go to school” — Oprah Winfrey, on the opening this week of her new leadership academy for girls in South Africa.

Minorities Through The Eyes Of Liberals

Warning: Rant to follow.

I think that he has been an embarrassment to the Supreme Court. I think that his opinions are poorly written”. —Senate Democrat Minority Leader Harry Reid, referring to the only black US Supreme Court Justice

White liberal democrats are strong supporters of affirmative action. Not income based affirmative action, but race based affirmative action. Meaning that if you grew up in a rich neighborhood, with one parent who is a doctor and another a lawyer, but still the right race or ethnicity, you would be aided by affirmative action – not because of financial hardships, but simply because of your race or ethnicity.

In addition, affirmative action aids in a unique way. It is not like letting a friend sleep over when s/he doesn’t have a place to sleep, or giving a friend food, or tutoring, or paying for their tuition, no, affirmative action is more analogous to doing their homework for them, to letting them copy from a test – in other words, by giving certain races higher point scales than others, you take away some of their hard earned merit.

This might, and I stress might here, have been necessary in an age of heavy racism and jim crow laws, where affirmative action did represent a counterbalance to the many challenges minorities faced in entering universities. However, times have changed and today universities do far more to attract minorities, especially ‘underrepresented minorities’, than they do to repel them. This is evident to anybody who has spent more than a few months on any university campus. This radical change in times makes affirmative action become, where it once used to be seen as a counterbalance to the prevalent racism, nothing but handicap points, a few feet head start in the university race.

It is the (unconscious?) logical deduction of many years of supporting affirmative action and other race based policies that has led many white liberal democrats evolve to view minorities not as equally qualified, but as inferior, academically and intellectually. It is this view, for example, that leads many white liberal democrats to view Clarence Thomas as a ‘poorly written’ ’embarrassment to the Supreme Court’, despite the fact that those who have studied his opinions, claim the very opposite.

This is what Walter Williams, a Black professor at George Mason University, meant when he wrote, in an article titled Conservatives, Liberals, and Blacks, that:

During the first Reagan administration, I participated in a number of press conferences on either a book or article I’d written or as a panelist in a discussion of White House public policy. On occasion, when the question-and-answer session began, I’d tell the press, “You can treat me like a white person. Ask hard, penetrating questions.” The remark often brought uncomfortable laughter, but I was dead serious. If there is one general characteristic of white liberals, it’s their condescending and demeaning attitude toward blacks.

According to a Washington Times story (July 14, 2004), Democratic hopeful Sen. John Kerry, in a speech about education to a predominantly black audience, said that there are more blacks in prison than in college.

“That’s unacceptable, but it’s not their fault,” he said. Do you think Kerry would also say that white inmates are faultless? Aside from Kerry being factually wrong about the black prison population vs. the black college population, his vision differs little from one that holds that blacks are a rudderless, victimized people who cannot control their destiny and whose best hope depends upon the benevolence of white people.

This is why news like this doesn’t suprise me:

Despite the Democratic Party’s historical ties to minorities, Capitol Hill Republicans are said to have a better reputation for hiring minorities.
According to a running joke one House staffer shared with The Times, “the only people who hire blacks and Hispanics around here are blacks, Hispanics and Republicans.”
Rep. Gregory W. Meeks, New York Democrat and a member of the Congressional Black Caucus, did not dispute the charge.
“I’ve heard it, and I’ve looked around and found myself scratching my head,” he said. “That has been said and it is a challenge for us to make sure our numbers are better.”

It doesn’t surprise me when the Democrat party does it, and it didn’t surprise me when Howard Dean or Michael Moore did it either. After all, minorities are useful when it is votes one is after, but serious business like running a campaign, making a movie, or doing real work, can’t be risked on those who are academically and intellectually challenged.

I’ve previously blogged more on this view of minorities by liberals here, here and here.

The Contradictions Of The Minimum Wage

Greg Mankiw, professor of economics at Harvard University, writes on the contradictions of the minimum wage:

Consider this policy aimed to help workers at the bottom of the income distribution:

1. A wage subsidy for unskilled workers, paid for by
2. A tax on employers who hire unskilled workers.

Now, if you think like an economist, you might wonder about the logic of part 2 of this proposal. You might say, “A tax on the hiring of unskilled workers would discourage their employment, offsetting some of the benefits they would get from the wage subsidy. It would be better to finance the wage subsidy with a more general tax, rather than with a tax targeted specifically on employers of unskilled workers.”

I agree. So why did I bring up this proposal? Because a policy essentially the same looks likely to become law, having been advocated by Congressional leaders and, recently at his news conference, President Bush. Haven’t heard of it? It is called an increase in the minimum wage.

The full post can be found here.

Quote Of The Day

“If you think health care is expensive now, just wait till you see what it costs when it’s free”. —P.J. O’Rourke

Quote Of The Day

“The reason I am a Republican is that, compared to Democrats, the Republicans tend to favor smaller government, lower taxes, and greater reliance on free markets. On many social issues, I find myself agreeing with the Democrats more than the Republicans, and I know that the Republicans are far from perfect on economic issues. (Don’t get me started.) But as a classical liberal in the spirit of Milton Friedman, I find myself rooting for the Republican team more often. The recent debate over the minimum wage is a case in point”. — Greg Mankiw, professor of economics at Harvard University writing in his blog about party affiliation

Quote Of The Day

“Although intended as a bridge to full English comprehension, bilingual education has become in practice a substitute for it. Because bilingualism has actually become monolingualism, it has hindered not only Hispanic progress in education, but more broadly Hispanic assimilation into American life” — former Democratic Congressman Herman Badillo, author of the original federal law mandating bilingual education, in his new book “One Nation, One Standard.”