That’s Not Fair

Daniel Henninger has a good op-ed in the Wall Street Journal about President Obama’s recent stumping for the middle class, called Obama’s Peter Pan Economics.

I agree with this:

Mr. Obama is forcing Republicans to defend themselves against the undefinable progressive murk of “fairness”…

Yes. That’s what I’ve been telling friends since the State of the Union. It’s easy to say that you want to do all these great-sounding things to help the middle class when you have a Republican-controlled Congress that won’t let any of it happen. So, you and political kind can say, in upcoming elections, look at those Scrooges who are keeping you from benefiting from our good ideas and few will ask, why wasn’t this a priority when you had more support in Congress?

Henninger saves the best for last:

If in our elections the subject is America, then Republican candidates need to search for their agenda inside the American experience. Forget fair. Start with work. The rest will come.


False Villians

Here are two good posts about where the true power lies in capitalism.

First, Don Boudreaux’s Quotation of the Day, quoting Gordon Tullock on cooperation:

Where the market is broad and there are many alternatives, you had better cooperate.  If you choose the noncooperative solution, you may find you have no one to noncooperate with.

Second, Mark Perry, quoting Ludwig Von Mises and himself on the power of the consumer (this one from Mises, pronounced meezes):

The real bosses, in the capitalist system of market economy, are the consumers. They, by their buying and by their abstention from buying, decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality. Their attitudes result either in profit or in loss for the enterpriser. They make poor men rich and rich men poor.

The consumers are merciless. They never buy in order to benefit a less efficient producer and to protect him against the consequences of his failure to manage better. They want to be served as well as possible. And the working of the capitalist system forces the entrepreneur to obey the orders issued by the consumers.

Here’s Perry summing it up:

Bottom Line: Consumers ultimately run the market economy, and for that we should be thankful. Because what’s the alternative? The alternative is allow producers to run the economy, inevitably with the assistance of their government enablers who help erect barriers to entry and restrict competition for producers in the form of occupational licensing, protectionist trade barriers, artificial limits on the number of firms allowed to operate (e.g. taxi cartels), etc. In other words, the alternative to consumers running a capitalist market economy, is to have producers running an economy based on the corrupt, anti-consumer principles of “crony capitalism.”

When have you heard this? Too often, corporations are cast as the villain. We are told they “control” such and such percentage of the “market” and we are warned about their “powers”.

But what control or power do they really have? Is the corporation that ‘controls’ 50% of the market controlling consumers to accept its products, or are 50% of consumers choosing to buy the products because they find value in them.

Vague statements

As annoying as the Colts whining and the term ‘deflategate’ is, what’s even more annoying is the vague statements made by Tom Brady and Bill Belichick that sounds more like carefully parsed words of someone who’s been caught rather than definitive statements of innocence. I heard a quote on the news that Tom Brady said:

I tested the balls before the game and they felt perfect.

What does that tell us? The Colts are accusing you of preferring to use deflated balls, so wouldn’t deflated balls be perfect? Why didn’t he say, and they felt properly inflated? And Belichick said:

I don’t touch any of the balls before the game, so I don’t know where these allegations are coming from.

What? That doesn’t even make sense. Why not say, I don’t touch any of the balls before the game, so I couldn’t tell you if they were properly inflated? Or, The balls were properly inflated, I don’t know why the Colts are being babies.

Voter Conundrum

Some people have a hard time finding a mate because they operate under the principle that they aren’t interested in someone who would be interested in them. Many voters face the same conundrum. I don’t want to vote for someone who actually wants the job.

Good advice on how to treat those who disagree with you

From Greg Mankiw:

I have found that to convince other people, it is usually best not to assume your own moral superiority but rather to talk with them as equals who just happen to have a different point of view.

He also addresses a logical fallacy.

After the first session was over, one of the hecklers came up to me and asked, “How much money have the Koch brothers paid you?”

If I am wrong, it is sincere wrong-headedness, not the result of being on some plutocrat’s payroll, as some on the left want to believe.

I agree.  Address the argument, not the motives. But I’m not so sure about this:

The hecklers probably limit their own effectiveness by questioning the motives of those who disagree with them.

I think they have found that tactic works extremely well to gain acceptance with those who hold similar views. It may also work well to convert those who are on the fence and searching for an easy excuse to decide one way or the other.

And, unfortunately, it’s an effective defense mechanism that prevents the hecklers themselves from evaluating the issue.

Good reading on the minimum wage

Here’s the best thing I’ve read about the minimum wage in a long time, from Don Boudreaux at Cafe Hayek.

Don has been working this lump of clay to articulate his case against the minimum wage for a long-time and I think it’s finally taken shape into something that is compelling. I especially like:

Flaws galore infect Steven Pearlstein’s case for raising the minimum wage (“Big strides could come from a small bump in pay,” Jan. 5) – that is, his case for government intervention to strip low-skilled workers of the most valuable of the few bargaining chips they have when competing for employment, namely, their ability to offer to work for hourly pay below that of other, more qualified workers who are paid the government-stipulated minimum.

I also like his explanation for why the minimum wage studies that folks like Pearlstein use to support their opinions are flawed.

It would be like empirically studying today the effects of a recent rise in the minimum-allowed price of strawberries if strawberries had long ago been made unnecessarily pricey by minimum-strawberry-price legislation.  Consumers would long ago have switched their diets away from strawberries; chefs would long ago have begun concocting fewer desserts and recipes with strawberries and more with other fruits and berries.  Other ingredients would have become staple substitutes for strawberries in consumers’ diets and in chefs’ dishes and recipes.  Farmers, in turn, would have – despite the formal, legislated higher list price for strawberries – either totally abandoned or significantly abandoned strawberry production.

Read the whole thing.