Feb
Feb
Any attempt to correlate minimum wage increases with joblessness falls on its face. When Clinton raised the wage in the mid-90s, low income employment skyrocketed. Some catastrophe. And we can take this as far back as folks want. …The real value of the minimum wage (now at a historical low)…Its peak was 1968. The unemployment rate in 68? A brilliantly low 3.5 percent.
As Brad DeLong would say: Raise the minimum wage. Raise it now.
Feb
Economic research supports raising the minimum wage
The old Economics 101 textbook theory…that a higher minimum wage will necessarily reduce employment – was not supported by empirical research. As a 1995 paper in the Journal of Economics Literature put it, “There is a long history of empirical studies attempting to pin down the effects of minimum wages, with limited success.” No one found significant employment losses when President Truman raised the minimum wage by 87% in 1950. When Congress raised the minimum wage by 28% in two steps in 1967, businesses predicted large employment losses and price increases. As the Wall Street Journal reported six months later, “Employment and prices show little effect from $1.40-an-hour guarantee.” Empirical studies even before Card and Krueger’s landmark New Jersey study found no increase in the unemployment rate for teens and young adults from a 10% rise in the minimum wage, while it was clear that higher wages were bringing housewives into the workforce.
Feb
Hey so you might not feel like your own personal economic conditions have turned the corner quite yet - but don’t worry, someone out there is definitely doing really well right now. Developers can’t even keep up with the booming demand for Manhattan condos. Offerings include three-bedroom apartments from $9.25 million and 564 square foot studios from $750k, so act now while supplies last! (via jakke)
I’m reminded of this recent NYT article, which states that “the higher the price, the higher the concentration is likely to be of owners who spend only a few months, a few weeks or even just a few days each year in their apartments. This very costly form of desolation means that some of the city’s most expensive residential buildings stand mostly dark, lonesome and empty on the inside.”
I don’t claim expertise in economics but residential towers that are largely empty can’t be good for Manhattan neighborhoods.
(via jakke)
Jan
I have estimated statistically that the prohibition of drugs produces, on the average, ten thousand homicides a year. It’s a moral problem that the government is going around killing ten thousand people. It’s a moral problem that the government is making into criminals people, who may be doing something you and I don’t approve of, but who are doing something that hurts nobody else. Most of the arrests for drugs are for possession by casual users.
Now here’s somebody who wants to smoke a marijuana cigarette. If he’s caught, he goes to jail. Now is that moral? Is that proper? I think it’s absolutely disgraceful that our government, supposed to be our government, should be in the position of converting people who are not harming others into criminals, of destroying their lives, putting them in jail. That’s the issue to me.
Jul
Fed Leaning Closer to New Stimulus if No Growth Is Seen
There is considerable evidence that the Fed’s purchases of Treasuries and mortgage-backed securities have reduced interest rates and encouraged investors to buy riskier assets like equities. Stock markets rally whenever the central bank hints at another round of purchases. The Fed has made two large rounds of asset purchases, first in 2008 and again in 2010. But the broader benefits of lower rates have been tamped down because many consumers and businesses are unable to qualify for loans.
Several Fed officials have expressed public support for buying mortgage-backed securities because studies show that such purchases have a larger effect on mortgage rates, allowing the Fed to take aim at the troubled housing market.
May
Apr
Mar
Feb
Why I Will Never Believe in the Fallacy of ‘Limited Government’
Stockholm, Sweden. The dystopian capital of evil government coercion.
The Human Development Index (HDI) is a composite statistic created by the United Nations Development Programme that measures a country’s standard of living. It takes into account life expectancy, education, adult literacy, years of schooling, and income. Based on these figures, lists can be created that rank countries by their standard of living. The countries with the best HDI scores also tend to have the lowest crime rates and happiest citizens. In other words, the countries with the best HDI scores are, generally speaking, the best places to live on planet earth.
Although numbers can sometimes be inaccurate, the great thing about combining all these different statistics into one number is that even if a few figures are off, on the whole we can still make a fair assessment of which countries provide the highest quality of life for their citizens. The development index also allows us to cut through ideological arguments and examine the simple facts.
Since the rankings change a bit each year, I will not pay too much attention to which country is 4 or 5 or 6, etc. Instead, I’ll look at the countries in groups of ten. The top 10 countries in the UN development index for 2011 are:
1. Norway
2. Australia
3. Netherlands
4. United States
5. New Zealand
6. Canada
7. Ireland
8. Liechtenstein
9. Germany
10. Sweden
There is also a second HDI ranking, which takes economic inequality into account. Some would argue that this is a better evaluation of the overall standard of living for a country. When adjusted for inequality, the top 10 countries are:
1. Norway
2. Australia
3. Sweden
4. Netherlands
5. Iceland
6. Ireland
7. Germany
8. Denmark
9. Switzerland
10. Slovenia
Notice the United States does not appear on this second list. When adjusted for inequality, the U.S. ranks at number 23.
The countries that appear in the top 10 on both lists are:
Norway
Australia
Netherlands
Ireland
Germany
Sweden
These 6 countries will be called our “All Star” nations. So what is it about these All Stars that makes them so successful?
Let’s start by looking at health care, since the topic is hotly debated in America today.
Here’s a list of countries with universal health care systems. It specifies the start date and exact type of health care system (single payer, insurance mandate, or two tier). How many of our All Star nations have universal health care? All of them.
1. Norway (1912, single payer)
2. Australia (1975, two tier)
3. Netherlands (1966, two tier)
4. Ireland (1977, two tier)
5. Germany (1941, insurance mandate)
6. Sweden (1955, single payer)
Notice that universal health care was implemented in all of these countries decades ago. In Norway’s case, a single payer system has been around for 100 years. This shows, at the very least, that a country can prosper for generations despite a “big government” solution to health care.
Health care is certainly not the only indicator of a country’s political philosophy. So let’s now look (courtesy of Wikipedia) more broadly at the type of government policies and economic models that exist in some of our All Star nations.
Norway: The country maintains a Nordic welfare model with universal health care, subsidized higher education, and a comprehensive social security system.
Netherlands: Both trade unions and employers organisations are consulted beforehand in policymaking in the financial, economic and social areas. They meet regularly with government in the Social-Economic Council.
Germany: The country has developed a very high standard of living and a comprehensive system of social security. Germany has a social market economy with a highly qualified labour force, a large capital stock, a low level of corruption,[90] and a high level of innovation.[91]
Sweden: Sweden has the lowest Gini coefficient of all countries (0.23) which makes Sweden the most equal country on earth in terms of economic division. Sweden is an export-oriented mixed economy…Sweden is currently leading the EU in statistics measuring equality in the political system and equality in the education system.[85] Sweden has the second highest total tax revenue behind Denmark, as a share of the country’s income.
Please take note of some of the key terms and phrases in those descriptions, such as “Nordic welfare model,” “universal health care,” “subsidized higher education,” “comprehensive social security system,” “trade unions,” “social market economy,” “mixed economy,” and “highest total tax revenue.” None of these things, in theory or in practice, are consistent with the policies of small government conservatives and libertarians.
The two All Star nations not included above are Ireland and Australia. Both of these countries are much more similar to the United States in their political philosophy, but neither could be considered as being exemplars of limited government (again, both countries instituted universal health care decades ago). It should also be mentioned that Ireland is currently suffering from 14% unemployment and is dealing with the consequences of deregulated markets, just like America.
Having pointed out the correlation between liberal governments and high standards of living, I should add that correlation does not necessarily prove causation. Perhaps there are other factors at work here that are not obvious to outside examiners. And by no means am I suggesting that capitalism doesn’t work (it generates vast amounts of wealth) or that the market is never effective (Ireland grew substantially thanks to decreased protectionism) or that government should run everything (Cuba…need I say more?).
What I am suggesting is that all the world’s most developed and modern countries have found that government intervention and regulation, in a variety of areas, can work quite well, especially when combined with a competitive marketplace.
So while I will always be willing to debate the merits of specific taxes and regulations, I will never be able to find merit in the idea that government should sit on its hands and do nothing. The modern world is center-left on the political spectrum and it’s time that the enemies of active governments start admitting it.
Feb
S.E.C. Is Avoiding Tough Sanctions for Large Banks
Even as the Securities and Exchange Commissionhas stepped up its investigations of Wall Street in the last decade, the agency has repeatedly allowed the biggest firms to avoid punishments specifically meant to apply to fraud cases.
JPMorganChase, for example, has settled six fraud cases in the last 13 years, including one with a $228 million settlement last summer, but it has obtained at least 22 waivers, in part by arguing that it has “a strong record of compliance with securities laws.” Bank of America and Merrill Lynch, which merged in 2009, have settled 15 fraud cases and received at least 39 waivers.
By granting those waivers, the S.E.C. allowed Wall Street firms to have powerful advantages, securities experts and former regulators say.
