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.