Know-nuttin’ economics

MEXICO’S PRESIDENT-ELECT, a leftist who’s best known by his initials AMLO, takes office in December, but he’s been talking a lot since winning the presidency by a landslide in July.

Leftists are known for their big talk. Just within the last week, he’s promised “free” healthcare like the Canucks and much of Europe have, he says. We have our own Latino Bernie Sanders.

AMLO also has promised to greatly reduce or eliminate federal inspections; for instance, checking to see if gas stations are stiffing  the customers. It’s better to just “trust the people” to do the right thing, i.e. gas station owners.

Instead of making presidential decisions, which was what he was elected to do, he talks a lot about “letting the people decide,” i.e. plebiscites on all manner of issues, a very costly method of decision-making, of course.

It’s also an easy out if things go sour. Wasn’t my doing. The people decided!

He’s also vowed to clamp down on a federal consumer protection agency known as PROFECO. It’s hard to grasp his thought processes on that one.

He’s real big on “trusting the people.” He’s promising to raise the minimum wage too, of course. A couple of our relatives here on the mountaintop run a humble hotel, and they were big AMLO supporters. However, their enthusiasm has waned on learning they may have to pay their few employees higher salaries.

Oh, dear.

Is a high minimum wage a good thing? Everyone likes a fatter paycheck.

In the United States, the Democrat Party pushes a higher minimum wage, and the Republicans usually oppose it, making them look like the black hats. But who are really the black hats? Who is right, Democrats or Republicans?

For an excellent, easy-to-read take on raising the minimum wage, its unforeseen consequences, and lots of other economic issues, I highly recommend Economics in One Lesson by Henry Hazlitt.

One of Hazlitt’s primary points is that when government mandates something, downstream effects should be investigated, not just the immediate result. This isn’t done as often as it should be, certainly not with minimum-wage hikes.

Now let’s turn to the video, which was made in the seething leftist hotbed of Seattle. How are “liberal” business owners reacting to the idea of a $15 minimum wage? Not too well, it seems, and that pastes a grin on my face.

The Social Justice Warriors in front of them walked around to their rears, morphed into Poetic Justice and bit ’em in their arses!

Cool rain and the dismal science

IT’S BEEN RAINING a lot recently, and that’s cooled things down nicely. Even though it’s raining, I still head downtown most afternoons to sit at a sidewalk table with a nice café americano negro and my trusty Kindle.

It’s a good way to live.

My current book, and I’m just about finished with it, is Henry Hazlitt’s Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics. It came recommended by young Ben Shapiro, a brilliant, conservative guy in spite of his not being a fan of President Trump.

Ain’t nobody perfect in this troubled world.

They don’t call economics the dismal science for no reason. Trying to get a good grip on the subject is a dismal undertaking, especially for someone like me who grapples with simple arithmetic.  But Hazlitt makes it pretty easy.

The book was first published in the late 1940s and updated in the late 1970s, but it’s quite relevant today because some things don’t change.

Hazlitt simplified things for me, and I’m going to make it even simpler for you:

A free market, unfettered by government meddling, works best 98 percent of the time. That’s the core message. But there’s more.

If government meddles in the free market, it should do this: 1. Look not at the immediate, desired effect of a policy, but at its long-term effects. 2. Look not just at the people a policy is designed to benefit, but at everyone it affects.

It’s quite common that a policy will help one group of people while doing harm to other, larger groups of people. And it’s common for a policy to right a perceived wrong today while creating greater wrongs over the long haul.

Hazlitt points out that most laymen do not take this into consideration when favoring something, and even professional economists can fail to take into account the long-term effects.

Speaking of professional economists, I cannot resist mentioning Paul Krugman’s prediction the stock market would tank if Trump became president. Of course, it did quite the opposite. One must chuckle.

On to the Irony Department, Starbucks, about as vocally leftist an outfit as you’ll find, is closing 150 stores in the United States due to minimum-wage increases and government regulations, putting scads of SJW employees out of work.

Nailed by their beloved socialism.

Minimum-wage increases is one of the things Hazlitt touches on at length as being an example of short-term vision. Government steps in to help “poor people,” but fails to realize the broader effects of a high minimum wage.

The higher salaries is money that comes from somewhere else. It is not pulled out of thin air. Starbucks sees that now. One must chuckle even more.

Hazlitt’s book is just 220 pages. I recommend it to you.

Obviously, it was not raining in the above video, which was taken a year ago, but it was raining in the video below, which was taken four years ago. Rain looks the same from one year to the next.

 

Sowell’s wisdom

Sowell

(Today, we hand The Moon over to a guest columnist, one of the world’s most intelligent men, Thomas Sowell. Since Sowell is black, if you take issue with anything that follows, you are a racist and not fit for civilized company.)

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Random thoughts on the passing scene:

One of the problems with being a pessimist is that you can never celebrate when you are proven right.

If what you want from politicians are quick and easy answers, someone is sure to supply them, regardless of which party you follow. History can tell you where quick and easy answers lead. But, if you don’t want to bother reading history, you can just wait and relive its catastrophes.

What is “economic power”? What can Bill Gates stop you from doing?

I don’t understand how people who cannot predict the weather five days in advance can predict the climate decades from now.

One of history’s painful ironies is how often people on the brink of disaster have been preoccupied with trivialities. With a nuclear Iran with intercontinental missiles looming on the horizon, our intelligentsia are preoccupied with calling achievements “privilege” and playing other word games.

Of life’s many surprises, encountering an old flame, years later, is in a class by itself.

Some people seem to think that Donald Trump has great abilities because he is a billionaire. But being born rich and getter richer is not exactly a Horatio Alger miracle.

Of all the disheartening signs of the utter ignorance of so many American college students, nothing so completely disheartened me as seeing on television a black college student who did not know what the Civil War was about. Fifty years ago, it would have been virtually impossible to find a black adult, with even an elementary school education, who did not know what the Civil War was about.

Global warming, due to greenhouse gasses, is the latest in a long series of one-factor theories about a multi-factor world. Such theories have often enjoyed great popularity, despite how often they have turned out to be wrong.

One of the most richly rewarded skills in politics is the ability to make self-interest sound like idealism. Nowhere is this tactic more successful than in so-called “campaign finance reform” laws — spending restrictions that prevent challenger candidates from buying enough publicity to offset the free publicity that incumbents get from the media.

At one time, it seemed as if the free world had defeated the world of totalitarian dictatorships twice — first the Nazis and then the Communists. But, with the slow but steady expansion of government control over our lives and the spread of the idea that people who deny “climate change” (are) criminals, it seems as if totalitarianism may be winning, after all.

People who want to redistribute wealth often misunderstand the nature and causes of wealth. Tangible wealth can be confiscated, but you cannot confiscate the knowledge which produced that wealth. Countries that confiscated the wealth of some groups and expelled them, destitute, have often seen the economy collapse, while the expelled people became prosperous again elsewhere.

Some people think that Ted Cruz would not have as good a chance against Hillary Clinton as would Donald Trump. They say that Cruz does not have a sparkling style of speaking. But, after months of hearing childish insults from Trump, the public may be ready for some serious adult talk by someone with substance, who can cut right through Hillary’s shallow evasions.

To me, beautiful music is whatever music makes you glad to be a human being, whether it is “Musetta’s Waltz” from “La Boheme” or “Muskrat Ramble” from New Orleans. Much of what passes for music today makes me wish that, if there is such a thing as reincarnation, I can come back as a dolphin.

Republican leaders seem to be worried that Donald Trump will get the nomination and lose the election. Those of us who are not Republicans should worry that Trump will get the nomination and win the election. After all, the fate of the country is a lot more important than the fate of a political party — and in far greater danger.

As this country continues to degenerate, we hope that it never reaches the desperate stage where only a military coup can rescue it from catastrophes created by feckless politicians. But, if that day ever arrives, we can only hope that the military will do their duty and step in. It is one of the few institutions dedicated to something besides individual self-interest.

Transfer of wealth

TRANSFER OF WEALTH is the new hot term, popularized by the Left to explain why everyone is not prospering.

New ImageI am curious. Who is doing this “transfer”? Is it some individual, some cabal, who?

But it’s a great-sounding phrase that purports to explain why some people are more successful — sometimes flagrantly so — than others.

Wealthy people are rich because they stole money from the poor, or some pals “transferred” it to them.

First off, this notion is based on the false premise that a set amount of wealth exists, the “zero-sum” concept. If A gets richer, then B obviously grows poorer in the process.

This can be true. If Joe, with a NRA-approved Glock G21, pulls Moe into a dark alley and steals his wallet, then Joe has grown richer by transferring money from Moe.

But this is not how successful people get wealthy most of the time. Usually they do it because they are ambitious, intelligent, shrewd, patient, focused — and often lucky.

Poor people are usually poor because they lack one or more or all of those characteristics. Sometimes they are drunks and drug fiends too, none of which creates a good life.

Plus, do not discount just plain laziness.

(Note: I am referring to the Developed World, the traditional Land of Opportunity and Liberty. Other factors come into play in the Underdeveloped World.)

Okay, so you cannot name an individual or cabal that is doing this “transferring of wealth.” But that leaves one alternative, and it is the biggest wealth redistributor on the planet:

Government.

Democratic governments generally transfer wealth from the rich to the poor because there are more poor people, and they can vote. It is self-serving. Think Obama.

Non-democratic governments transfer wealth from the poor to the rich, which is to say the ne’er-do-wells grasping the reins of government. Think Somoza, Duvalier, Stroessner, etc.

People who decry “wealth transfer” these days ironically favor more government. They support guys like the old, wild-haired, irrational, openly socialist Bernie Sanders who wants up to a 90 percent tax rate on successful people.

Taxation is wealth transfer.

Since successful people are major job creators, taxing them into the soil is counterproductive. It slows economies and makes poor people even more poor. It is egregiously stupid.

People who support more government “transfer” of money are usually good-hearted folks. They mean well but are Utopians, out of touch with the reality of our flawed world.

If Americans are struggling financially these days — and many are — it’s due to bad government policies. It is no mysterious individual or group that’s “transferring” wealth.

So the Left actually supports “wealth transfer.” It just wants the transfer done according to its own rules. It wants to rob the successful to prop up the less-successful. It’s just “nice.”

The hard left of communism always fails (see Cuba, the Soviet Union, etc.) and the more moderate left of socialism, a softer touch, (see much of Europe) results in slogging economies.

Government can be good, but it must also be smart.

Wealth transfer belongs in the open marketplace where it’s a positive force. It’s called Capitalism.

Liberty and free markets make the best world, the best life for the most people. Sure, some will remain poor.

There’s no cure for that.

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(Note: The Left uses the term “transfer” because, to them, it is better than voicing the bald truth. Some people are far more successful at earning money than others. But this inequality of outcome doesn’t seem nice or “fair” to them.)

(Tip of the sombrero to Laurie La Gringa , who embraces “the Bern,” inspired this post.)