This Week in Common Sense for the final full week of July 2019. Paul focuses his review of the week on the Sanders/Tlaib minimum wage stories:
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Minimum Wage, Maximum Politics
Author: Redactor
July 27 births include that of Samuel Smith (1752), an American who served as a captain, major, and lieutenant colonel in the Continental Army, and later as a politician in several capacities in the state of Maryland; Hilaire Belloc (1870), author of a classic analysis of modern political governance, The Servile State; and American singer and songwriter Bobbie Gentry (1944).
On July 27, 1694, the Bank of England received a royal charter, beginning a long history of central banking in England. Subsequent inflationary booms and deflationary busts are usually considered “mysterious” by people connected with the bank.
It’s over — our long national nightmare is over.
Or is it?
Congress’s “movie” version of Robert Mueller’s book-length report on Trump-Russia collusion flopped. That is, Wednesday’s hearings were an “optics . . . disaster.”
The Democrats and their media cheerleaders had put so much stock in the event, hoping it would be a Triumph of the Will spurring the much-longed-for Trump impeachment, an inspiration to move the masses on to victory.
It turned out to be more an industrial film on early stage dementia, with Robert Mueller the befuddled protagonist, demonstrating that he was either slipping, or had not really been in charge of the report bearing his name.
Now, we sympathize with dementia patients.
But should we sympathize with congressional Democrats? And the Republicans, too?
They are as pathetic and evil and foolish and craven as they seem for reasons. We live in a time of crisis. They have politicked themselves into their respective corners; they now feel trapped.
Their desperation has given us Trump — The Antichrist to most Democrats and The Savior to most Republicans. I am pretty sure neither is true.
Trump is a sign of the times.
Maybe, in the smoldering ruins of the Mueller hearing conflagration, the case for impeachment — and for Trump as Russian Agent — will completely disappear. Democrats can regain their senses, and Republicans can go back to their theme of responsibility (as epitomized in their long-lost cause of balanced budgets and limited government).
But I won’t hold my breath.
The nightmare may be over, but Washington’s dementia is harder to recover from.
This is Common Sense. I’m Paul Jacob.
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On July 26, 1533, Francisco Pizarro’s Spanish conquistadors strangled to death Atahualpa, the 13th and last emperor of the Incas, thereby ending 300 years of Inca civilization. The conquistadors were greedy and murderous, but the Inca civilization, arguably, was worse: totalitarian and radically inegalitarian. But they made great high-mountain roads. (Arguments about infrastructure promoted by Big Government continue to this very day. And it is quite possible that an earlier civilization made the roadways, which the Inca merely renovated.)
On this day in 1948, U.S. President Harry S. Truman signed Executive Order 9981 desegregating the U.S. military.
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Louis Baudin
Louis Baudin, A Socialist Empire: The Incas of Peru.
It is incumbent upon us to take action if we do not wish to become the subjects of a new Inca empire.
Yesterday I addressed Senator Bernie Sanders’ minimum wage problem. Today it is member of Congress and “The Squad” Rashida Tlaib’s turn. She is unsatisfied with the just-passed national $15/hour minimum wage.
She wants to make it $20.
Now a bidding war begins?
But not where laborers bid for jobs. Instead, a war in which restaurateurs bid for robots.
The point being that when you force up the costs of employing one factor in a production process, those who are trying to make a living as producers do not just fold and give their wealth away to rent/purchase the newly exorbitant factor. They economize.
They make substitutions.
If I am not mistaken, basic economics has a term for the core
Why folks enamored of government regulation and prohibition (for the minimum wage law prohibits hiring help below a certain rate of pay) seem to think this elementary aspect of human behavior can safely be ignored is hard to figure.
At Reason, Billy Binion explains just how devastating Tlaib’s “one size fits all approach” would be for restaurants, “particularly those of the mom and pop variety.” What Tlaib demands, for these wage contracts, “amounts to an increase of almost 940 percent.”
Binion cites one study predicting “that a median-rated restaurant on Yelp (3.5 stars) was 14 percent more likely to close with each additional dollar added to the tipped wage.”
If restaurants go out of business, new businesses would emerge, admittedly. Say, a return of the Automat!
While young folks look up that term, we oldsters wonder if these automation-minded entrepreneurs will fund Tlaib’s re-election campaign.
This is Common Sense. I’m Paul Jacob.
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A Fine Point of the War
On July 25, 1861, the U.S. Congress passed the Crittenden-Johnson Resolution, stating that the war with the seceded states of the Confederacy was being fought to preserve the Union, not to end slavery.
Götz Aly, Hitler’s Beneficiaries: Plunder, Racial War, and the Nazi Welfare State (2005), Jefferson Chase, trans., p. 41.
Another major source of stop-gap revenues to fund Hitler’s popular tax and rearmament policies was Germany’s — and later much of Europe’s — Jewish population. By late 1937, civil servants in the Finance Ministry had pushed the state’s credit limit as far as it would go. Forced to come up with ever more creative ways of refinancing the national debt, they urged their attention to property owned by German Jews, which was soon confiscated and added to the so-called Volksvermögen, or the collective assets of the German people.
One of the things Vermont Senator Bernie Sanders is known for is his push for a $15 per hour “living wage.” But this is politics — a policy position is never complete until its advocates demonstrate just how idiotic the policy actually is.
As Bernie just did.
His presidential campaign has been embroiled in labor union negotiations and a mini-scandal.
Some staffers have been paid a flat salary, not according to a per-hour contract, making Bernie’s “living wage” commitment a bit murky. You see, these salaried employees worked longer hours than a typical 40-hour work week (as is common in political campaigns), dipping their wage breakdown below the $15/hour “minimum.”
Now, no one is more deserving of this bit of policy blowback than resplendent millionaire Bernie Sanders.
Yet, it’s his campaign’s response that is especially droll: reduced hours!
So, while in one sense staffers got a pay raise, they did not get more money. Which is, as Matthew Yglesias acknowledged at Vox, “exactly the point that opponents of minimum wage increases are always making — if you force employers to pay more, they’re going to respond by cutting back elsewhere.”
Ryan McMaken, at mises.org, dug deeper, noting that there are a number of ways that the new union deal could amount to cuts in real wages. By “cutting worker hours, the Sanders campaign elected to provide fewer ‘services’ in the form of campaign activities. In practice, this will likely mean fewer rallies, less travel, or fewer television ads.” Less chance for growth. And decreased likelihood for increased employment of other workers.
Not exactly shocking. But a lesson. A terrible way to run a business.
Or a campaign.
Perhaps we should say, “Thanks, Bernie!”
This is Common Sense. I’m Paul Jacob.
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Splashdown!
On July 24, 1487, citizens in Leeuwarden, Netherlands, went on strike against a ban on foreign beer.
On the same day of 1823’s calendar, slavery was abolished in Chile.
Today marks the 50th anniversary of the splashdown of the Apollo 11 capsule into the Pacific Ocean. Astronauts Michael Collins, Buzz Aldrin, and Neil Armstrong spent more than eight days in space. The mission included 30 orbits of Earth’s satellite and a landing upon the lunar surface, an important milestone, so to speak, in humanity’s history of exploration. The astronauts brought back with them over 47 pounds of lunar rock, gravel, and dust.
On this day in 1974, the U.S. Supreme Court told President Richard Nixon that he lacked constitutional authority to withhold the infamous “Nixon Tapes” from Congress.
July 24 serves as Pioneer Day in Utah and as Simón Bolívar Day in Bolivia, Ecuador, Colombia, and Venezuela.