Minimum wage links

Don Boudreaux has had several great posts about the minimum wage lately, but a couple are exceptional. In this one, he does a great job of giving illustrative analogies to make the economics easier to understand. In this one he writes a letter to the New York Times to dispute the left’s favorite Nobel-laureate, Paul Krugman.

In this one, Greg Mankiw, also responding to Krugman, points to research that found a link between jobs and the minimum wage. Mankiw also points to a great post from Steve Landsburg, that introduces some interesting and different points. Steve edits that post here.

Mankiw also disagrees with the President about research on minimum wage.

Of course, there’s one single point that most of these economist, except Don Boudreaux, misses: What business is it of your’s?

Two good ones from Greg Mankiw

I like it when well-respected Harvard economist, Greg Mankiw, gets snippy. In this post on his blog, he snips at Kathleen Sebelius’ lack of understanding of the the term insurance.

Also, I recommend reading Mankiw’s Sunday NY Times opinion column about what fiscal sustainability means.

Warren Buffett on Taxes?

I’m glad others are starting to call out Warren Buffett’s hypocrisy. See here from the Weekly Standard and here from Harvard economist Greg Mankiw.

I’ve been saying this stuff for years. These are from me:

Mankiwniversity

Harvard econ professor, econ textbook author and sometimes New York Times columnist, Greg Mankiw points out that his Intro to Econ course, or Econ 10, is the largest course at Harvard.  Story here.

I wonder if Mankiw has given any thought to following in the footsteps of Sebastian Thrun and Peter Norvig, who taught their Stanford intro to computer science course online to 165,000 worldwide students.  Given the demand, Thrun gave up his tenure to start his own online university, Udacity, with novel goal of teaching people who want to learn how to program.

There are a few people who could stand to learn basic economics.  Perhaps Thrun has a spot for Mankiw on his faculty.

Giving Thanks

With each passing year, Thanksgiving grows more important to me as I have come to better appreciate the things I should be thankful for.

In 2009 I posted a list of what I was thankful for.  Most of those still apply, but I might switch out the TV show LOST for Fringe and the Walking Dead.

Harvard economist Greg Mankiw suggests we be thankful for the principle of comparative advantage.  I agree and I am.

I’m also thankful for two observations and changes I’ve made in my own life in the last couple of years.

The first change is that I’m less concerned about failing.  It still takes some work, but it has allowed me to try new things.  Some of those things work.  Some don’t.  When one doesn’t work, I shrug my shoulders, try to learn something and move on.  When something does work, it can be amazing.

These things I try range from little things like blog posts here, to the way I say “hi” to others or make business presentations and other things I’ll mention later.

The second change is based on the old “it mattered to that starfish” story.  We’ve all heard this story many times.  A beach with thousands of starfish washed up from a storm.  A child throwing them back into the sea one at a time.  A perplexed adult asking the child why, there’s so many you aren’t possibly making a difference?  The child grabbing a starfish and throwing it back in and replying, I made a difference to that one.

Rather than trying to “change the world” I’ve been looking for ways to make a positive impact on the little world around me — in my family, with my friends and in my community.

A couple years ago a friend died.  He was involved in many charities and organizations.  I didn’t realize how many until I attended his funeral.  The list was impressive and documented.   I wondered if it was perhaps too much.  The thought occurred to me that maybe he should have spent more time taking care of his health than trying to build a legacy, so that he could have been around longer for his family and for (maybe fewer) of those organizations.

That led me to make some good changes and tough choices.  I find myself playing “pickup tag” with my kid and others at the playground. One group of kids dubbed me the “ninja dad” for my modest parkour ability.

I volunteered to coach my kid’s soccer team, which meant that he and nine others got a chance to play soccer, make new friends, learn how to win and lose and build some lasting memories.

I started a 5K run last year to benefit a charity that helps teach people to be self-sufficient and gives participants in the run an opportunity to run and be healthy.

Though I wanted to keep organizing it, I made a tough choice to pass off those duties to others so I could spend more time with my family and coach my kid’s soccer team.  I took a smaller role in the 5K, helping out however I could.  The first year had a good showing.  The number of participants tripled in the second year and looks like it’s on its way to becoming a solid annual fundraiser for the charity and a new tradition for participants.

I’ve been happy with these changes.  Many of these efforts will go undocumented.  It may not appear to others that I will have a substantial legacy.  That’s okay, because some kids on the playground may remember their game of tag with the “ninja dad”.

Happy Thanksgiving!

Pushing to Other Margins

This Dilbert strip (which I stole from Greg Mankiw’s blog), is a nice illustration of what Russ Roberts and Mike Munger discuss in this EconTalk podcast.

Especially how interventions into the market with price controls just winds up pushing differentiation to another margin.

One example they give is minimum wage.  By setting a floor on the price of labor above the value that some labor is worth, that results in fewer job opportunities for folks with productivity that is worth near or below that floor.  So, now employees put up with their bosses poinking paper wads off their heads because the employees have fewer job options.

A good way to start a productive discussion

Well respected Harvard econ professor and sometimes political economic adviser, Greg Mankiw, was surprised with the attention his latest New York column attracted.  On his blog he wrote:

I did not expect such as reaction, as the point of the column–an explanation of Republican economic philosophy–did not strike me as particularly novel or controversial.

I’m not surprised.  But I am glad that Professor Mankiw wrote his column.  We need more plain language explanations of what all sides fundamentally believe.  We need to dispel with the straw men (e.g. “tax cuts for the rich”) and ad hominems (e.g. “they’re soulless creeps, so of course they’re wrong) and get to why we think our way is better so more people can make reasoned judgments rather than be confused by sound bites designed to tug on emotion.

I urge anyone who scratches their head about conservative or Republican economic philosophy to read Mankiw’s column.  And here’s some great advice from Mankiw’s column (second emphasis added):

DON’T MAKE THE OPPOSITION YOUR ENEMY Last month, when you struck your tax deal with Republican leaders, you said you were negotiating with “hostage takers.” In the future, please choose your metaphors more carefully.

Republicans are not terrorists. They are not the enemy. Like you, they love their country, and they want what is best for the American people. They just have a different judgment about what that is.

One of the great disappointments of my adult life has been our nation’s childlike inability to have productive discussions.  It reminds me of my brother and I when we were kids.  “Yes you did!”  “No I didn’t!”

Both sides are guilty.  We’re busy and have little time to think about everything deeply.  But, Mankiw’s advice is a good place to start.  Don’t assume your opposition has bad intentions.  Assume they have good intentions.

Better yet, assume that you both have nearly the same end goal in mind.  Then ask your opposition to explain why they think their way is better to achieve that goal.

Don’t expect they’ll be able to articulate why very well.  It’s likely nobody has asked them to explain it before, so they haven’t had much practice.  They may even be surprised, just like Professor Mankiw about the interest his column generated. They are use to be called names.  When they stumble, resist going in for the kill.  Instead, ask questions and give feedback about whether you understand or not.

Of Course Not

Here’s a crystal clear observation from Megan McArdle and I love crystal clear observations.

In this blog post of her’s, Megan writes about Harvard Econ professor Greg Mankiw’s New York Times column about his tax rates that, to use Professor Mankiw’s words, inflamed “the left-wing blogosphere.”

Megan writes about those inflamed left-wing bloggers:

Interestingly, no one thought it was odd that they should have opinions on Greg Mankiw’s taxes; apparently, it is only opinions on your own taxes that are in bad taste.

Nice work Megan.

It Took This Long?

Greg Mankiw, a well-respected Harvard economics professor wonders if all of the smart economists working for Obama have explained to him that price controls are a bad idea.

I’m certainly no Harvard econ professor, but did it really take Mankiw this long to question Obama’s economics team?

They lost me a year ago with the word “multiplier”.

If they believe their multipliers on the economic impact that results from government spending (i.e. $1 of government spending results in more than $1 of economic activity), that are derived from multiple regressions on imperfectly aggregated and lagging historical economic data from times that might be different than these times and future times, then I think they’re crazy.

True measure: If their models were really that good at predicting the future, they should have been able to prove it by using their models to grow wealthy.

I’m not sure it can be said any better than F.A. Hayek’s character in the Keynes vs. Hayek rap video of such economic models:

I’ll begin in broad strokes, just like my friend Keynes
His theory conceals the mechanics of change,
That simple equation, too much aggregation
Ignores human action and motivation

And yet it continues as a justification
For bailouts and payoffs by pols with machinations
You provide them with cover to sell us a free lunch

Then all that we’re left with is debt, and a bunch