By Jim Bowman
Ask a tax-and-spender, usually a Democrat, how much tax is too much, and he will hem and haw. Ask how high a minimum wage should be, and he will react the same way. The answer he is groping for, of course, is whatever the traffic will bear. The market, that is. He will put his finger to the wind and decide what will sell. He's in the business of getting elected, after all.
Congr. Danny Davis said he did not care how much ObamaCare would cost. That was when it was still in the legislative hopper. He still doesn't care.
Rep. LaShawn Ford just the other day said in an e-blast that it's better to meet the (immediate) needs of his constituents than pay down the state's debts. The debts to vendors are past $4 billion by now, and climbing. No wonder they can't see an end to taxing.
It's always two things with tax-and-spenders: meet the immediate pressing need and put off the big problems.
Take the minimum wage, which satisfies for the moment a certain quantity of low-income earners — those with jobs — but penalizes many others who can't find jobs.
"Raising the minimum wage is a formula for causing unemployment among the least-skilled members of society," says Pepperdine U. economist George Reisman.
It works this way:
The higher wages are, the higher costs of production are. The higher costs of production are, the higher prices are. The higher prices are, the smaller are the quantities of goods and services demanded and the number of workers employed in producing them.
These are all "propositions of elementary economics" that government officials should know, says Reisman, author of Capitalism: A Treatise on Economics (Jameson Books, 1996; Kindle Edition, 2012).
Those who keep their jobs profit from the "government-created monopoly" that eliminates competition from those who can and will work for less. They are propped up by government.
Whence comes the money for this propping up? From "reduced expenditures . . . elsewhere in the economic system, which must result in more unemployment," says Reisman.
It's a mug's game, he's saying. You muck about with the competitive system without considering consequences baked into the situation, indeed into human nature.
The market price is the fair price, argued the Salamanca Dominicans and Jesuits of late 16th– and early 17th-century Spain, when the free market was taking off as a wealth-producer theretofore unheard of.
All that rises will converge, as the better skilled displace the lesser skilled, with the result of "still more unemployment among the least-skilled."
Not to mention the spiral effect, as this minimum-wage paves the way to very bad uninentional consequences:
The unemployment directly and indirectly caused by raising the minimum wage will require additional government welfare spending and thus higher taxes and/or greater budget deficits to finance it.
That sounds familiar, doesn't it? Moreover, it's terribly unfair, being "fundamentally anti-labor and anti-poor people" and benefiting those on whom are bestowed "the status of government-protected monopolists," even as it "impoverishes the rest of the economic system."
More more more here from this fellow, who as you see trashes the Social Democrat position on the matter — when will the Democratic party come up with a new name for itself? — not to mention that of Democratic Socialists. Read it.
Answer Book 2017
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