The Economic Road to Perdition: Healthcare & Minimum Wage

Perhaps for policy reasons, and certainly for political reasons, it is impossible to unwind reliance on employer-provided insurance. But this fact, combined with the “preexisting conditions” consensus, means that henceforth the health-care debate will be about not whether there will be a thick fabric of government subsidies, mandates and regulations, but about which party will weave the fabric.

 --- George Will

This is the frustrating essence of the current debate about the GOP healthcare bill.  Once you concede that government should be involved in running healthcare, you are then reduced to arguing about which forms of intrusion are the least harmful. Clearly Obamacare has been horribly harmful. Arguably the GOP alternative is less harmful. But either way you are on the road to economic perdition and have abandoned the principle that systems work best when individuals are allowed to make free choices.

The same reasoning applies to the battles over Minimum Wage laws. Once you concede that government should be involved in setting prices for things, you are reduced to arguing about the amount of damage various forms of intrusion incur. In 1971, President Richard Nixon declared a "freeze" on all prices and wages in the United States. This was an attempt by government to control the inflation that it itself had created. Predictably, it ended disastrously. Minimum wage laws have been around in the US since 1938. The economic effect of any price floor is to create a supply surplus. If you set a minimum price for lemons you will have a surplus of unsold lemons. If you set a price floor for wages, you will have a surplus of labor, otherwise known as unemployment. The Law of Demand is not widely debated -- except when it conflicts with Utopian fantasies.

Until recently Minimum Wage laws have not been especial controversial, but only because the price floors have been set not too far above the market price for low skilled labor. Hence the unemployment surplus has not been terribly noticeable. Now comes along the Seattle City Clowncil to declare that the wage floor rise should increase by 60%. Suddenly the unemployment surplus becomes quite noticeable, making headlines all over the country.

It would be nice if we could recognize that a) government cannot control the price of anything whether it be wages or medical care and b) in trying to do so it will wreak economic damage, the amount of which will vary according to just how far from economic reality it has strayed. But we won't. The (rather spineless) GOP has given up on having that discussion. They are now engaged in the determination of just how much economic damage they are willing to impose on the country. Obamacare was too much. Their plan is just the right amount of damage  -- they contend. Seattle's Minimum Wage law was clearly too aggressive. Let's scale it back and have a smaller number of low-skilled workers be priced out of a job.

Are we left to arguing that the only thing problematic about heroin is if you inject a little too much of it?

Fantasy Baseball League

I've decided that baseball would be better off operating more like our public schools. Here are some of the changes I'd make:

1. Players could no longer be cut or sent to the minors for poor performance. As long as they show up for every game and practice they would be paid.
2. Player salaries would be determined by how many years they had played for the team, not based on any performance statistics.
3. Players who exhibited performance-oriented behaviors (like trying to steal a base or diving for a fly ball) would be ostracized by the other players on the team.
4. Every call by the umpires would be reviewed by The Commissioner the next day. Scores would be revised based on his ruling.
5. There would be lots of promotional nights and giveaways. Examples: Indigenous People's Night. Gay Pride Night. Free tofu hot dog night. Fan Appreciation Night where everybody in attendance gets a trophy for showing up.
6. Fans would not be allowed to boo or disparage the players or managers. Violators will be ejected and sent to reeducation classes.  

Now, just in case too few people would voluntarily pay to watch games, we would require everyone who lived in the market area to buy a season ticket -- whether they attended games or not. If you wanted to buy tickets to watch an out-of-town team, you could, but you would still have to pay for your season ticket. And in order to increase the salaries of the players and managers we would be raising ticket prices each year. Any sportswriter who questioned the team's record would be told it could be improved by raising ticket prices and expanding the roster. 

In the spirit of community cooperation, I ask all of you to support me in this effort. If you don't, I will have a couple representatives of the players union pay a visit to your home to explain.  

Black Privilege

Apparently there's Black Privilege, too. And think about this the next time you see a black doctor.

San Diego Restaurant Jobs and the Law of Demand

Does anyone (yes, even you Democrats) think this is just a coincidence? It's too bad that there isn't something that would have predicted this. Something, oh, like the Law of Demand.

The Law of Demand states that, all else being equal, as the price of something increases, quantity demanded falls. Could it get any simpler for the simple-minded?

Bee-pocalypse and Other Media-Made Disasters

Remember the media hysteria about bees? In 2006, beekeepers began reporting mysteriously large losses to their honeybee hives over the winter. The media swiftly declared a disaster. Time called it a “bee-pocalypse”. Government must DO SOMETHING to stop this or bees will become extinct! The only thing missing was an international meeting in Paris to establish a Bee-cord. If you guessed that the media attributed the imagined bee-pocalypse to global warming, you'd be correct. Right up there with the myth about polar bear populations dwindling).

 Data thanks to Mark Perry at AEI

The Cost of Federal Regulations

The Competitive Enterprise's annual report on Federal regulations puts the annual cost at just shy of $2 Trillion. That's 10% of the entire US gross domestic product. It also averages almost $15,000 per household. In calendar 2016 Congress enacted 214 laws and Federal agencies issued 3853 rules. That's 18 rules for every law enacted.

And you wonder why economic growth has slowed? And you wonder why people feel they're struggling to support a $15,000 hidden tax on them every year?