Monthly Archives: July 2019

Progressive-Democrats’ Minimum Wage Push

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Progressive-Democrats want to raise the national minimum wage to $15/hr.  Here are some back of the envelope numbers that could result.

The CBO says that the new minimum would cost 1.3 million Americans their jobs (in the optimistic scenario; their more pessimistic scenario had 3.7 million Americans put out of work): their current wage would go from $10.10/hr (CBO’s 2014 minimum wage which formed the core of their that-year outcome analysis) to $0.00/hr. The CBO also says that the $15/hr minimum wage would lift 1.3 million American workers out of poverty.

So, 1.3 million, or many more, Americans would lose their jobs so 1.3 million, at best, could get above poverty.

There’s more to it than that, though.

Based on that same $10.10/hr prior minimum that the Progressive-Democrats tried for just five years ago, the currently proposed job losses would result in a bit over $26.25 billion dollars lost to our economy per year through lost wages.  That’s based on only 1.3 million American workers being fired, mind you.  Balancing that would be that $4.9/hr raise (because, by CBO assumption, $15/hr is a non-poverty wage) for the lucky 1.3 million, or a skosh under $12.75 billion inserted into our economy each year.  That’s a net loss to our economy of some $13.5 billion per year.

If we adjust all of that for the actually extant minimum wage of $7.25/hr, the numbers shift to $19.5 billion per year lost to our economy in lost wages from those 1.3 million being fired, and a gain for the lucky ones of $20.2 billion per year.

That makes the Progressive-Democrats’ latest proposal a wash on wages in our economy.  Tell that wash business to the fired workers, though, and hear what they think of break-even.  Oh, and what was that, again, about “livable wages?”

Forced Busing

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Lance Morrow wrote about forced busing in a “back to the future” piece in The Wall Street Journal. Here’s the larger, more important thing about that early forced busing, of which Senator and Progressive-Democratic Party Presidential candidate was so proud and about which Progressive-Democratic Party Presidential candidate Joe Biden was so helpless to comment on.

Forced busing, as bandied about today, is all about using children as tools to achieve a political goal. As in other milieus, we see an example of the Left not seeing people, here children, as human beings, but only as machines for achieving the Left’s goal.

Beyond that, this dehumanization of children masks the true purpose, however clumsily done, of forced busing. It was not that black children could learn only by being next to white children. It was to end the travesty of “separate but equal,” which actually led to unequal—lesser—allocation of teaching resources and teachers to black schools, which deprived black children of the opportunity to learn at all.

Economic Misunderstanding

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The broad Keynesian misunderstanding regarding government spending is continuing.

Spending by consumers and businesses are the most important drivers of economic growth, but in recent years, government outlays have played a bigger role in supporting the economy.
The level of the federal component of GDP in the first quarter of 2019 was $78 billion, or 0.4%, lower than what forecasters expected it would be following the February 2018 budget deal….
The government is spending much less on disaster relief than it did in fiscal 2017, and a partial shutdown temporarily stalled outlays in January. Those factors explain about one-third of the missing stimulus, Mr [Ernie, an Evercore ISI economist] Tedeschi said.

No, that lack explains nothing at all about any “missing stimulus” except in the narrowest, purely statistical sense of a correlation having been found between two factors.  Correlations don’t even prove a relationship, only seeming relationships: all, or nearly all, nickels have two sides—a head and a tails.  All, or nearly all, pennies have two sides—oddly enough, also a head and a tails.  That correlation shows nothing at all substantive about a relationship between nickels and pennies.

Beyond that bit of statistical trivium, it’s necessary to recall the real-world nature of government spending: every dollar that government spends must first be taken from someone else, and then carrying costs—middle man costs—must be deducted before passing it on. There is nothing at all stimulative about government spending, as even John Maynard Keynes understood: in his government-spending-as-stimulus theory, it was the sharp rise in government spending that he held to be stimulative, not its steady state.  And beyond that, his “stimulus” was a purely price-inflationary stimulus, his spike being intended to come inside the ability of production to answer that spike in demand.

Indeed, if only because of those government middleman costs, steady state government spending is a net drag on the economy.  An additional contribution to the drag is associated government borrowing, which competition for lendable dollars drives up the cost of money for private enterprises and private citizens.  A third drag is the simple existence of Government spending: this crowds out private enterprises and private citizens by consuming resources that those citizens and enterprises would otherwise have consumed—while driving up the costs in the private economy of the remaining resources.

Gone Quiet

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Last February, I challenged Howard Schultz to run or be known for what he is, and to be shown to be vindicating the Progressive-Democrats’ political tactics of smear and personal destruction.

He’s gone quiet.

He won’t even say what his intention is.  He’s made plain who he is.

Related to that, Tom Steyer has resumed nattering on about making his own presidential run–after promising that last winter and then chickening out.

Update: Steyer says he’s in. His purpose is to use the primaries to be louder on his impeachment push and with his climate hysteria.

Starbucks Fail

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A Starbucks in Tempe, AZ, had one of its baristas ask five police officers who were having a pre-shift coffee either go sit somewhere else or leave altogether because one customer felt “threatened” over their being where the customer could see them.

In the hoo-raw ensuing, Starbucks spokesman Reggie Borges said

We have a deep respect for the Tempe Police and their service to the community.

That’s plainly not true. If Starbucks really cared, if it had any actual respect for the police—much less a shred of self-respect—it would have had a better-trained crew of baristas who wouldn’t knee-jerk insult cops over a snowflake’s made-up beef.

A day after the story broke, Rossann Williams, Executive Vice President and President, US Retail for Starbucks said this:

On behalf of Starbucks, I want to sincerely apologize to you all for the experience that six of your officers had in our store on July 4. When those officers entered the store and a customer raised a concern over their presence, they should have been welcomed and treated with dignity and the utmost respect by our partners (employees). Instead they were made to feel unwelcome and disrespected, which is completely unacceptable.

These are empty words, whether sincerely offered or just marketing damage control. What’s necessary is actual, visible changed behavior over a sustained period of time.

It’s also sad that no one else spoke up and told this barista to seat the cops with him.

Aside from the simple courtesy of such a gesture, it might also be the case that other patrons wouldn’t feel safe without the cops around. Especially with someone possessed of so little respect for law and order so close by.