Each unemployed person has a “reservation wage”–the minimum wage he or she insists on getting before accepting a job. Unemployment insurance and other social assistance programs increase that reservation wage, causing an unemployed person to remain unemployed longer.
Consider, for example, an unemployed person who is accustomed to making $15.00 an hour. On unemployment insurance this […]
Archive for the 'Economics' Category
Mar11th2010
The Effects Of Unemployment Insurance
Published by in Economics, ModernPolitics and Poverty. 1 CommentMar10th2010
One of the strongest argument against single payer is that government rationing is the worst kind. The British healthcare system is an example:
DAMNING reports on the state of the National Health Service, suppressed by the government, reveal how patients’ needs have been neglected.
They diagnose a blind pursuit of political and managerial targets as […]
Mar9th2010
“Last week, I briefly discussed the geographic distribution of Recovery Act funds. The figure shows the relationship between per capita Recovery Act grants awarded and unemployment across states, which shows that stimulus aid was not particularly well matched with need…On average, for every extra percentage point of the labor force that is unemployed, a […]
Mar5th2010
“The news is now out that Government Motors is recalling 1.3 million compact cars in the US, Canada and Mexico to fix power steering motors that can fail. Does this sound familiar? Well the big difference with Toyota is that GM has not made the media headlines anywhere, and certainly is not attracting the attention […]
Mar4th2010
“I spent the morning writing about the Bush administration’s failure to anticipate the long-term costs of the Iraq occupation, which have reached $1 trillion and counting over the last eight years. With health care reform, there are no such illusions: We have good-faith estimates, sometimes downplayed but never hidden or dismissed, of how much this […]
Mar2nd2010
The strongest argument against universal and single-payer healthcare, IMO, is the argument that they inevitably lead to price controls. And as any student of economics knows, price controls are detrimental to many things we like about healthcare. Things like technological innovation, pharmaceutical innovation, and quick access are all harmed when price controls are implemented.
Advocates of […]
Feb24th2010
The Economist lists the Union payoff:
Mr Obama has revoked some Bush-era executive orders that unions hate and issued a few they adore. He has appointed union insiders to top jobs, allowed Congress to add “buy American” provisions to the stimulus bill, risked a trade war with China to please tyre-workers, let other trade deals wither […]
Feb23rd2010
When Obama proposed his credit card regulations, economic theory predicted what would happen: harm those with less than perfect credit scores (primarily the poor). Bryan Caplan, professor of economics at George Mason University, explained it best when he wrote:
” When you make lending to high-risk people less attractive, the result is not worse terms for […]
Feb22nd2010
“Scientists now think that King Tut may have died of malaria….this is a good excuse to meditate on just how rich we are. King Tut was probably the wealthiest man in the world during his time. He died of something that wouldn’t kill the most abjectly immiserated welfare mother in the United States today, because […]
Feb18th2010
Fiscal Stimulus And Hypocrisy
Published by in Economics, Fiscal Stimulus and ModernPolitics. 1 CommentMany Democrats, including Obama, have criticized Republicans for both opposing the Stimulus bill and helping to direct some of that stimulus money to their districts. They claim its hypocrisy. Greg Mankiw argues otherwise:
It seems perfectly reasonable to believe (1) that increasing government spending is not the best way to promote economic growth in a depressed […]
Feb17th2010
“If you did a simple cost-benefit comparison, the Obama plan vs. a simple extension of Medicaid, more R&D through the NIH, and some targeted public health expenditures, I believe the latter would win hands down. And the latter seems more politically feasible too. It avoids the mandate, the unworkable and ridiculously low penalties for those who don’t […]
Feb11th2010
Economist Arnold Kling gives what should be the Republican healthcare points in their upcoming healthcare summit with Obama:
1. All Medicare savings must be used to shore up Medicare. None of those savings can be used to fund new insurance subsidies or entitlements. Medicare is unsustainable, and it is going to need every dollar that we […]
Feb8th2010
“Apparently, the administration has issued rules requiring parity for mental health treatment with other illnesses. They’ll take effect July 1st. If you want to know why health insurance costs keep marching upward seemingly uncontrolled, this is why: mandating new benefits is always popular, and the government doesn’t have to pay for them.” — Megan McArdle
Jan28th2010
Origin Of The Minimum Wage In The United States
Published by in Economics, Hispanics (Minority Issues) and Minimum Wage. 0 CommentsEconomist David Henderson explains:
Proponents of the minimum wage, when it was legislated in 1938, were disproportionately from Northeastern high-wage states where a minimum wage would be binding only on a very small segment of the labor force. They used it to narrow the differential in wages between the Northeastern states and the Southeastern states, where […]
Jan22nd2010
“It’s really hard to get rid of bad legislation. Most people (almost everybody?) think ethanol subsidies are a loser except for the people who get rich from them directly, Archer Daniels Midland and maybe some others. But do we fix it? We don’t. That’s the way the system works. There’s a lot of inertia. It’s […]
Jan19th2010
Greg Mankiw explains:
One thing we have learned over the past couple years is that Washington is not going to let large financial institutions fail. The bailouts of the past will surely lead people to expect bailouts in the future. Bailouts are a specific type of subsidy–a contingent subsidy, but a subsidy nonetheless.
In the presence of a government subsidy, […]
