President Obama and King George III

George Noga

President Obama’s actions eerily parallel many of those of King George III. Our founders judged the king’s actions tyrannical enough to start a revolution

Special Independence Day Posting

By: George Noga – July 4, 2016

    The Declaration of Independence catalogues a long train of abuses by King George III that Americans considered oppressive enough to revolt against and to fight a long, bloody war for independence. Now, 240 years later, an American president has committed many of those same abuses; the similarities are striking as itemized below.

1. “He (George III) has suspended laws in their operation” (from the Declaration). Obama suspended and changed several parts of the ACA (ObamaCare) law. He granted his political supporters exemptions and illegally gutted the welfare reform law.

2. “He has dissolved representative houses” (Declaration). Obama recess appointments while the Senate clearly was not in recess are tantamount to dissolving a representative house. Courts ruled his actions unconstitutional but his appointees remain in office.

3. “He has erected a multitude of new offices and sent hither swarms of officers to harass our people and to eat out their substance” (Declaration). Obama appointed a multitude of unaccountable czars, covered up IRS abuse of political opponents and unleashed his EPA, NLRB, et al. to wreak havoc with innumerable illegal regulations.

4. “He has combined with others to subject us to jurisdictions unacknowledged by our laws” (Declaration). Obama wants US courts to be subject to rulings of international and foreign courts. He supports treaties (UN Law of the Sea) that subjugate Americans to the UN, international organizations and foreign courts. He refused to submit the Iran Nuclear Treaty for Senate ratification – dishonestly calling it an executive agreement.

5. “He has forbidden his Governors to pass laws of immediate and pressing importance” (Declaration). Obama, through his Attorney General, prevented Arizona and other states from enforcing laws to protect their citizens from imminent harm.

6. “He has refused his assent to laws necessary for the public good” (Declaration). Obama refuses to agree to critically needed laws without quid pro quo or poison pills;  a good example is failing to reduce corporate tax rates to end job-killing inversions.

7. “He has obstructed laws for the naturalization of foreigners” (Declaration). Obama refuses to enforce immigration laws and takes actions directly contrary to such laws. The only difference between Obama and George III is the direction of the immigration.

8. “He has excited domestic insurrections against us” (Declaration). Obama has given succor and cover to violent groups and criminals; he fanned the flames for the current war against police and the violent crime wave sweeping our inner cities.

  There are far more homologies between Obama and George III, but you get the idea.

  King George III was a non compos mentis hereditary sovereign monarch of a despotic foreign occupying power bent on the utter destruction of our liberty and the subjugation of the American people. President Obama is an elected representative of the American people sworn to uphold the Constitution and faithfully enforce the laws of the United States. It shouldn’t be hard to distinguish Obama’s actions from those of George III; however, Obama has proven to be one heck of a caricature of George III.

The next post scheduled for mid July begins our summer series, Montana Moments.

MLLG Extra – Hurrah for Brexit!

George Noga

Brexit is an unalloyed blessing resulting in more liberty and less government

By: George Noga – June 28, 2016

    The Brexit vote truly was a seminal event of our time; as such, it compels timely comment from MLLG. The media, as usual caught up in argle-bargle and short-term fallout, missed the main story. Pure and simple – the Brexit vote was one for more liberty and less government! The people of the UK just eliminated an entire layer of government – and an oppressive and excrescent one at that. Only good things result whenever any people embrace the tree of liberty and prune back government.    

    Brexit was seminal because the Brits decisively took back their country from unelected and unresponsive Brussels bureaucrats. It was seminal because it demarks the beginning of the end of the European Union. It was seminal because it validates and energizes a powerful force sweeping the planet to end failed grand political experiments. It has direct repercussions for our own election in November.

    The EU is a failed experiment. It failed to deliver prosperity or even economic stability. Social and economic mobility are moribund. Economic growth is absent. Innovation is non-existent in electronics, software, drugs or even pop culture. Unemployment among the young is endemic; half in southern Europe are unemployed. They have created a generation without work skills or habits. Successful young people abandon continental Europe in droves for America and the UK.

    Many governments are effectively insolvent, kept afloat only by ECB financial repression, massive borrowing, quantitative easing, negative interest rates and a war on cash. Sales of safes are soaring throughout Europe. Europe is in entropy and Europeans are in a deep torpor from which they refuse to defend themselves; they think so little of their future, they even refuse to reproduce. They live lives of quiet desperation.

    Many events are falsely hailed as seminal; Brexit truly was such an event. The political landscape of Europe was transformed, likely forever. There will be uncertainty and some tumult in the time ahead as the political and economic disintegration of Europe proceeds apace. Nevertheless, the Brexit vote was an unalloyed blessing resulting in more liberty and less government. Hurray for Brexit!

The next post July 4th, Independence Day, compares Obama to King George III

Guns in America – Liberty vs. Government – MLLG Update

George Noga

We address: (1) Guns in America redux; (2) MLLG status and website; and (3) the eternal struggle between personal freedom and government power.

By: George Noga – June 26, 2016

    This post touches briefly on three topics beginning with a followup to our February 2016 series: Guns in America, which enjoyed phenomenal distribution that propelled it to a high position on search engines including Google. Recently, we noticed a paper published in the Harvard Journal of Law & Public Policy. Although it was published years ago, it has just now begun gaining widespread traction in the gun control debate.

  The paper is entitled: Would Banning Firearms Reduce Murder and Suicide? To read, simply click the title. It documents that gun control has no correlation with criminal violence and, in fact, has a negative correlation, i.e. more guns, less crime. The authors concluded that gun control is ineffective because it does not affect the social, cultural and economic factors that are the real determinants of violent crime. Note: The main sources for the study include the CDC, US Academy of Sciences and United Nations.

Uncommon Wisdom about Liberty and Government

    It doesn’t get better than this; that’s why MLLG is publishing a lengthy quote. The case being discussed was before the Texas Supreme Court and involved eyebrow threading, a safe and traditional South Asian practice to remove unwanted hair. The State of Texas demanded threaders obtain cosmetology licenses requiring 750 hours of training (that did not include eyebrow threading), shut down of their businesses and fines of thousands of dollars. The threaders took Texas to court. Justice Don Willet wrote the following in his opinion supporting the threaders, who won the case 6-3.  

   “This case concerns the timeless struggle between personal freedom and government power. Do Texans live under a presumption of liberty or a presumption of restraint? The Texas Constitution confers power – but even more critically, it constrains power. What are the outer boundary limits of government actions that trample Texans’ constitutional right to earn an honest living? Must courts rubber-stamp even the most nonsensical encroachments on freedom? Are even the most patently farcical and protectionist restrictions unchangeable, or are there judicially enforceable limits?

    “This case raises constitutional eyebrows because it asks building-block questions about constitutional architecture – about how we as Texans govern ourselves and about the relationship of the citizen to the State. This case concerns far more than whether (Texans) can pluck unwanted hair with a strand of thread. This case is fundamentally about the American Dream and the unalienable human right to pursue happiness without curtsying to government on bended knee. It is about whether government can connive with rent-seeking factions to ration liberty unrestrained and whether judges must submissively uphold even the most risible encroachments.”

MLLG Preview and Website Update

    So far in 2016, MLLG has published two series, Guns in America and Inequality in America. We have blogged about, inter alia, the US election (3 times), climate change (3), government and socialism (3), school choice, tax inversions, Pope Francis, Islamic terrorism, Scandinavian economics and Jefferson-Jackson Day. Whew!

    For the second half of 2016, look for multi-part series on (1) climate change; (2) poverty, hunger and homelessness in America; and (3) financial repression, negative interest rates and the war on cash. Other pithy topics may include: China, political correctness, Greece and Puerto Rico, Uber and gay marriage (you’ll really like that one) and media bias. This summer, as customary, we lighten things up with posts about life in Montana – our summer home. We call these posts “Montana Moments“; enjoy!

Victory Over Radical Islamic Terrorism

George Noga

A  highly practical and potent 10-part plan to defeat radical Islamic terrorism

By: George Noga – June 19, 2016

     At MLLG we don’t just consternate about problems, we are into solutions. This post presents an effective and powerful 10-part plan to defeat radical Islamic terrorism.

1. Know the enemy; use its correct name: The enemy is radical Islamic terrorism. Jihad is a 1,400 year old religious mandate for those who take the Quran literally. There are over 100 exhortations to violence in the Quran; those who comply are not extremists perverting Islam. Our present policy is one of self deception and political correctness. We must understand the enemy and use its correct name to defeat it. If Obama were president in 1941, he would have said we were attacked by militant expansionism.

2. Declare war: This is needed for clarity, focus and unambiguous commitment. Most importantly, it transforms the legal landscape in numerous positive ways. In a declared war our enemies only rights are per the Geneva convention; we can impose economic sanctions, take POWs, confiscate assets and arrest domestic collaborators as traitors.

3. Ban jihadist websites; make accessing one a serious crime: There already exists a proven model for this strategy, the successful campaign against child pornography. Are not jihadists even worse than child pornographers? Knowingly visiting such a website would be a felony. Return to the US following visits to jihadist locations would be banned. These measures would go a long way to stop self-radicalization. As with Bosnia, jihadist leaders should be tried in the World Court for crimes against humanity.

4. Deny terrorists all territory, revenue sources and staging areas: This requires boots on the ground. Most forces should be provided by our Sunni allies with the US acting as quarterback and to provide air, logistic, intel, naval and limited ground troops for specialized roles. Continue and expand drone attacks to decapitate leadership. As terrorists lose battles, they become seen as the weak horse and support evaporates.

5. Demand assistance from Moslem communities: Mosques and Moslem communities should be expected to police their communities and identify possible jihadists. We also should expect these communities to publicly renounce jihad and all forms of violence. In a declared war, anyone advocating jihad could be arrested for supporting the enemy.

6. Impose repercussions on families of jihadists: As in Israel, there must be measures taken against families (immediate family, siblings and two generations back) of mass killers. Measures would include, inter alia, deportation and forfeiture of assets. Anything we can do to change the calculus of possible jihadists could save many lives.

7. Initiate a massive public relations campaign: A sustained blitz to highlight barbaric practices such as child marriage, honor killing, genital mutilation, miscegenation and homophobia is needed. This type of psychological warfare should exact a toll – much as Reagan’s calling the USSR an evil empire. Remember, they call us the Great Satan.

8.  Expand Guantanamo; build new facility in St. Helena: Guantanamo is a model prison and better than most in western Europe. It needs to be vastly expanded. If there isn’t sufficient space at Gitmo, then we should lease land from the UK in St. Helena.

9. Do all the above for as long as necessary: Implement the preceding eight measures ASAP and continue until complete victory is achieved. This must be done with the understanding that the war may be an intergenerational one and that final and total victory may not be achieved until the time of our children or grandchildren.

10. Live our lives as usual: No amount of measures or vigilance will stop every Islamic terrorist attack and there will be setbacks. The best way to confront terrorism is to continue to live our lives according to our values – that drives jihadists even crazier.

    The 10-step plan outlined herein is a real solution to a real problem. Obama and progressives ignore or refuse to correctly name real problems, preferring fake solutions to fake problems. War is a terrible thing that no American welcomes. But as Leon Trotsky once said: “You may not be in interested in war but war is interested in you“.

Next we address the timeless struggle between personal freedom and government power.

Orlando Deaths Not Due To Climate Change

George Noga

Those killed yesterday in Orlando were victims of a war that dare not speak its name.

Special Posting About the Orlando Terrorist Attack

By: George Noga – June 13, 2016

    As most readers know, MLLG is based in Orlando; accordingly, yesterday’s act of terrorism hit home. Firstoff, a few corrections to media reportage are needed. The US mass killing with the most fatalities is not Orlando; it was Waco, Texas with 84 killed. Instead of terrorists, the killing was perpetrated by Janet Reno. Second, it is inaccurate to describe the Orlando terrorist as a lone wolf; he had extensive ties to jihadists; he may have done the shooting but he was no lone wolf like say a Ted Kaczynski.

    Those slaughtered in Orlando were only the latest in a long train of similar atrocities. There have been over 30 separate fatal incidents. From the bombings in the Beirut embassy and marine barracks in the 1980s killing 241 soldiers, to the Berlin disco bombing, to Pan Am flight 103, to the 1993 attacks on CIA headquarters and the World Trade Center that killed many more – there was one common denominator.

   The Khobar Towers bombing in 1998 killed 19; this was followed by the embassy bombings in Kenya and Tanzania killing scores more. Seventeen sailors died in the USS Cole attack and another 2,997 Americans perished in the World Trade Center. These were followed by the Daniel Pearl beheading, Karachi Consulate attack, murder of marines in Kuwait, the Riyadh bombing and yet more beheadings in Iraq, Saudi Arabia and Khartoum – again, there was only one common denominator.

    At Fort Hood 13 more died; Benghazi saw the slaughter of our ambassador and 3 others; and the Boston Marathon massacre saw 3 killed and 183 injured. Just within the past year there were 4 marines killed in Chattanooga, the 14 deaths in San Bernardino and now, Orlando. Yes – all this terror and slaughter had a single common denominator.

    What is the common denominator responsible for this horror that has been with us for 33 years? Is it climate change, corporate tax inversions, workplace violence, wage inequality or fossil fuels? Is it Citizens United, the TPP, gender specific restrooms, gluten, campus rape culture, too big to fail, white racism, lack of free community college, war on women, low minimum wages or state right to work laws? Or could it be the accumulation of microagressions or lack of trigger warnings or safe rooms?

    Could the common thread possibly be GMOs, fracking or even religious opposition to birth control and gay marriage by bakers, florists and nuns? Could the common denominator be lack of sustainability, broken window policing, the vast right wing conspiracy, Chick-fil-A or even the legacy of George W. Bush?  Or, were all of these horrific incidents merely isolated crimes best handled by the criminal justice system?

    To paraphrase Oscar Wilde, we are in the midst of a war against an enemy that dare not speak its name. The over 100 dead and wounded in Orlando yesterday were not killed by climate change, fracking or GMOs; they were killed by radical Islam.

Note to readers: In the time ahead we will have much more about terrorism.

The next post on June 19th explains why business succeeds while government fails.

Hurricane Warning!

George Noga

Hurricane season began on June 1 and provides the common thread for this post. It addresses hurricanes, climate change, price gouging and economics of storms

By: George Noga – June 5, 2016

    To observe the beginning of hurricane season, we address a trio of hurricane related topics: (1) climate change; (2) storm economics; and (3) price gouging. As you have come to expect, our analysis of these issues is not the usual pap you find elsewhere.

Hurricanes and Climate Change

    The last hurricane to hit Florida was Wilma in 2005. This 10-year hurricane-free streak dwarfs the prior record of 5 years that stood for 165 years. This is especially remarkable considering 40% of all hurricanes impact Florida. This decade of  clement weather follows dire predictions by global warmists that hurricanes would be more frequent, last longer, have stronger and more intense winds and cause more damage.

    Warmists also warned of  many more severe weather events worldwide. Munich Re, one of the world’s leading reinsurance companies, performed the first ever analysis of global weather-related losses incorporating normalization adjustments for inflation, population growth, wealth increases and other variables. Its study concluded there was “no statistically significant trend for total weather-related events in the past 20 years“.

    Let’s suppose a hurricane hits Florida. Global warmists and their media sycophants instantly will cite it as incontrovertible evidence of climate change. I hope we avoid hurricanes again in 2016; but if one should hit, brace yourself for the inevitable onslaught of self righteous prattle – but remember, it has been 165 years since there have been fewer hurricanes and weather losses are trending downward worldwide.

Hurricanes and Putative Economic Benefits

    It is a testament to economic illiteracy that this question persists in the 21st century. Yet, in the aftermath of any disaster, the media trot out this fusty canard. A reductio ad absurdum is all that is needed to give it the lie. If a mega-disaster struck destroying everything, we clearly are worse off despite any increased economic activity it may spawn in the short run. Following is an example of the relevant economic analysis.

    Postulate there is a small island with aggregate wealth of $1 million in homes and property. Economic growth is slow and some on the island are unemployed. A storm destroys the entire wealth of the island. The whole population works for one year and succeeds in rebuilding everything. Looking at statistics, GDP was $1 million, much higher than normal, and unemployment was zero. Yet the overall wealth of the island is unchanged and, in fact, is much less than it would have been without the storm.

Hurricanes and Price Gouging

    Americans accept that prices for the same product vary under different conditions. They understand why hotel rooms in small college towns cost more the weekend of a big game and why tickets for the big game cost more than a regular game. We readily accept all these things; why should it be any different following hurricanes?

    Take the case of generators. Entrepreneurs, at some peril, drive to other cities to buy generators to sell for what buyers willingly pay. Some may pay a lot if they stand to lose thousands of dollars of food stored in freezers; some just may want the convenience of electricity. Every decision and price is voluntary and non-coercive. Soon, the price of generators returns to equilibrium. With anti-gouging laws, everyone does without generators; any intrepid souls who supplied them are subject to arrest, public scorn and to pandering by economically illiterate politicians and media.

    There is no such thing as price gouging. Prices in free markets convey accurate, truthful and valuable information about the value of a good or service at a point in time. In contrast, government prices (think: rent control, rationing) always are lies. In which kind of society would you rather live – one based on voluntary cooperation of people in free markets or one based on government lies, force and coercion?

The next post on June 12th revisits the 2016 US national election.

Inequality in America V – Putting it All Together

George Noga

Surprising answers to questions about inequality in America

By: George Noga – May 29, 2016

   Even socialists agree inequality from newly created wealth (even massive wealth a la Gates and Jobs) is an unalloyed benefit to society because it is the best metric for how well an economy is innovating, becoming more productive and responding to the needs of all people. Inherited wealth is mostly dissipated in a few generations, heavily taxed and often used charitably. Last, if Social Security and Medicare benefits were capitalized and included in wealth measurements, inequality would plunge markedly.   At the outset of this series, I promised to explore and to answer many questions about inequality in America based on facts and logic. Following are the answers.

    It is nigh impossible to get an accurate picture of inequality of income due to deeply flawed statistics based on AGI and household income, inconsistencies between income cohorts and flawed comparisons that don’t track the same people over time. One conclusion is certain. Accurate data would show much less inequality of income. Progressives oppose disparity in pay between CEOs and workers but are okay with similar clefts for athletes and movie stars. Steve Jobs took a nearly bankrupt Apple and created $750 billion of value; he made $2 billion, or 0.27%; was he overpaid?

    Data based on spending shows sharply less inequality; the lowest income cohort spends $2 for each $1 of income. There is no inequality based on taxation (including payroll taxes) as America has one of the most progressive tax systems in the world. Nor would a $15 minimum wage reduce inequality; less than 1% earn the minimum and their average household income is $50,000. Young, poor, minorities and the unskilled are harmed by minimum wage laws. The truly poor need jobs not a higher minimum wage. Progressives claim a moral imperative to increase the minimum wage knowing aforehand it creates unemployment. Where is the morality in that?

    The chasm between reality and rhetoric is wide. All measures of inequality, Gini, Theil and MLD, are markedly worse under Clinton compared to Reagan and under Obama versus Bush 43. Inequality is fueled by progressive policies including: (1) tepid economic growth; (2) higher taxation; (3) opposition to school choice; (4) energy policies; (5) ObamaCare; (6) opposition to trade; and (7) spending, debt and deficits. It is progressive dogma that creates inequality despite its self righteous rhetoric.

    All metrics show less inequality in Europe; however, we must ask if that is a good thing or a bad thing. Many Europeans lead lives of quiet desperation with no economic mobility and a permanently moribund economy; they even refuse to reproduce or to defend themselves. Europe produces no innovations in electronics, software, drugs or even pop culture. The former USSR would have scored favorably on measures of inequality as does Botswana; where everyone is poor, there is no inequality. The Gini coefficient for happiness in America is the highest in the world; that says it all!

    There are some things we should do to reduce inequality. Foremost is to stop corporate welfare as wealth created by government is illegitimate. Too big to fail needs to be eliminated as this is but another form of government largess. Capitalism must be based on both the carrot and the stick. Most Americans understand and accept inequality created by the marketplace; their beef is with government playing favorites.

    At its beating heart, inequality is mostly an imaginary problem. The vapid dogma of progressivism is incapable of solving real problems; therefore, it creates a series of phony problems for political maskirovka. As demonstrated in this series, progressives have created the very inequality they now hypocritically rail against. In sum, inequality in America is not a serious problem except when created by government.

The next post June 5th entitled “Hurricane Warning” is particularly pithy.

Inequality in America IV – Reality versus Rhetoric

George Noga

There is an abyss between what progressives say and do. They vehemently condemn inequality while advocating policies that create and exacerbate it.

By: George Noga – May 22, 2016

    There is a staccato drumbeat from progressives asserting there is a grave and metastasizing crisis of inequality in America. In this fourth part of our series, we reveal the specific policies of Obama and progressivism that result in greater inequality.

1. Tepid economic growth is the 900-pound gorilla. Under Obama, coming off a bad recession, there has never been a year with 3% growth. It is the worst economy ever under these circumstances. The lack of growth is due to Obama’s policies for taxes, regulation and health care amidst great uncertainty. A languishing economy coupled with tiny wage gains is radioactive for poor and minorities and exacerbates inequality.

2.  Black youth unemployment is over 50%. Obama refuses to consider a temporary entry level wage. Instead, he wants to increase the federal minimum wage by 40%.

3.  Higher taxes are like steroids for inequality. Obama’s tax increases on dividends, capital gains and small business constrain capital investment and are a death-knell for job creation. His refusal to lower the corporate tax rate keeps trillions locked up abroad instead of financing jobs at home. Tobacco taxes have skyrocketed, disproportionately harming the poor; one pack a day costs $1,000 a year more in taxes – more inequality.

4.  Opposition to free trade is harmful. Obama deserves credit for the TPP; however, progressives led by Clinton and Sanders are demagoguing it to death and want to kill it. The underclass benefits more than any other group from free trade. For liberals however, obeisance to labor unions trumps the welfare of the underclass.

5.  Opposition to school choice keeps poor kids in failing schools. School choice is not only the civil rights issue of our time, it is a potent economic issue. Liberals choose to pander to teachers unions while throwing poor kids under the school bus. Lack of school choice could very well be the number one contributor to increased inequality.

6. Higher prices for food and energy wreak havoc on the poor. Food prices have surged due to Obama and progressive support for ethanol subsidies. Energy takes 25% of the income of poor families but only 10% for a high income household. The average price of a kilowatt hour was up nearly 40% under Obama – until the recent drop in oil and gas prices – which occurred despite, not because of, Obama’s policies.

7.  ObamaCare is a disaster and poor Americans bear its brunt. Health care costs are rising along with taxes to fund it while access and quality of care plummets. Doctor shortages, rationing and death panels will have more impact on the poor. Meanwhile, the legions of 29ers and 49ers are growing due to perverse incentives in the ACA.

8.  Obama’s spending, debt and deficits savage savings. Poor elderly Americans have seen incredibly low interest rates damage their lives. For every $25,000 a retired couple has in savings, monetary policy under Obama costs them $100 per month.

9.  Increasing the minimum wage fuels inequality. Progressives claim a moral imperative to raise the minimum wage knowing it costs poor and minority jobs. The real minimum wage always is zero, and that is exactly what the wage will be for many.

10.  Obama has created a poverty trap. If a low-middle income family with children has a second worker enter the labor force, the effective tax rate on the extra earnings is up to 80% due to phaseout of benefits. Under Obama, the number of single earner households has increased 2.6 million and households with no earners by 5 million.

    Every one of the above factors increases inequality and every one is a creature of progressive dogma. The difference between progressives’ rhetoric and reality is indeed a bottomless abyss. Progressives created the inequality in America they now demonize.

Part V, the final post in this series, is scheduled for May 29th.

Inequality in America III – The $15 Minimum Wage

George Noga

Advocates of the $15 minimum wage agree it is bad economics but justify their support on moral grounds. What is moral about putting poor people out of work?

By: George Noga – May 15, 2016

   The reference in the preheader is to California Governor Jerry Brown. His actual quote is: “Economically, minimum wages may not make sense but morally, socially and politically it makes sense. . . .” The previous year Brown stated raising the minimum wage would “put a lot of poor people out of work“. It seems that for progressives, creating more unemployment among the poor now has become a moral imperative.

    Governor Brown has company. As with all progressive causes, there are two groups of supporters. At the core there always are special interests, in this case labor unions. Many union contracts contain automatic built-in differentials over minimum wage. Unions also support it because it prices the poor and minorities out of the labor market, reducing competition for lower paying jobs. The second group consists of do-gooders who are both soft-hearted and soft-headed; they are, in-effect, shilling for the unions.

    Minimum wage has been a leitmotif in America since 1938 when it began at $.25 per hour. In nearly eight decades since, it has been thoroughly studied by economists and there is virtual unanimity among them that the economic effects are harmful. Economics doesn’t get more basic than when the price of anything (labor) is increased, there will be less of it. Children with lemonade stands understand this. Following are some other things you may not know about minimum wages in America.

1. Minimum wage affects less than one percent of all workers and most who earn the minimum wage do so for six months or less before receiving raises. Virtually no heads of households or full time workers earn the minimum wage.

2. The average household income for a family with someone earning the minimum wage is $50,000. Most receiving the minimum wage aren’t poor; they are spouses or teenagers living at home, like the kid who delivers pizza to buy gas for his BMW.

3. A majority of those in poverty don’t work; they need jobs, not a higher minimum wage. Raising the minimum wage makes it much harder for them to find jobs.

4. The young, poor, minorities and unskilled are disproportionately harmed by raising the minimum wage. Raising the minimum reduces the EITC (earned income tax credit) thereby negating much or all of the benefit of a higher minimum wage.

5. There is consistent and copious empirical evidence that raising the minimum is a death-knell for the poor and minorities; every time it goes up, they lose hundreds of thousands of jobs. With each increase, business has more incentive to automate or to relocate (if it is a state increase) and to put even more people out of work.

    It seems clear enough that raising the minimum wage does not reduce inequality in America; it does the opposite. Even though only one percent of workers earn the minimum, that still amounts to 1.25 million people. The last increase resulted in over 300,000 jobs lost – nearly all poor and minority. That is a recipe for more inequality.

    Progressives claim a moral imperative to raise the minimum wage, even knowing it puts poor people out of work. They do this for their own self esteem. However, the real minimum wage always is zero, zilch, nada and not what progressive kool-aid drinkers deign to make it. And zero, zilch, nada is exactly the wage many more poor people will receive with a $15 minimum wage. I have one word to describe this: immoral!

Part IV of Inequality in America – Reality versus Rhetoric – will be posted May 22.

Inequality in America III – The $15 Minimum Wage

George Noga

 Advocates of the $15 minimum wage agree it is bad economics but justify their

support on moral grounds. What is moral about putting poor people out of work?
By: George Noga – May 15, 2016

    Governor Brown has company. As with all progressive causes, there are two groups of supporters. At the core there always are special interests, in this case labor unions. Many union contracts contain automatic built-in differentials over minimum wage. Unions also support it because it prices the poor and minorities out of the labor market, reducing competition for lower paying jobs. The second group consists of do-gooders who are both soft-hearted and soft-headed; they are, in-effect, shilling for the unions.    The reference in the preheader is to California Governor Jerry Brown. His actual quote is: “Economically, minimum wages may not make sense but morally, socially and politically it makes sense. . . .” The previous year Brown stated raising the minimum wage would “put a lot of poor people out of work“. It seems that for progressives, creating more unemployment among the poor now has become a moral imperative.

Minimum wage has been a leitmotif in America since 1938 when it began at $.25 per hour. In nearly eight decades since, it has been thoroughly studied by economists and there is virtual unanimity among them that the economic effects are harmful. Economics doesn’t get more basic than when the price of anything (labor) is increased, there will be less of it. Children with lemonade stands understand this. Following are some other things you may not know about minimum wages in America.

  1.    Minimum wage affects less than one percent of all workers and most who earn the minimum wage do so for six months or less before receiving raises. Virtually no heads of households or full time workers earn the minimum wage.
  2.    The average household income for a family with someone earning the minimum wage is $50,000. Most receiving the minimum wage aren’t poor; they are spouses or teenagers living at home, like the kid who delivers pizza to buy gas for his BMW.
  3.    A majority of those in poverty don’t work; they need jobs, not a higher minimum wage. Raising the minimum wage makes it much harder for them to find jobs.
  4.    The young, poor, minorities and unskilled are disproportionately harmed by raising the minimum wage. Raising the minimum reduces the EITC (earned income tax credit) thereby negating much or all of the benefit of a higher minimum wage.
  5.    There is consistent and copious empirical evidence that raising the minimum is a death-knell for the poor and minorities; every time it goes up, they lose hundreds of thousands of jobs. With each increase, business has more incentive to automate or to relocate (if it is a state increase) and to put even more people out of work.

It seems clear enough that raising the minimum wage does not reduce inequality in America; it does the opposite. Even though only one percent of workers earn the minimum, that still amounts to 1.25 million people. The last increase resulted in over 300,000 jobs lost – nearly all poor and minority. That is a recipe for more inequality.

Progressives claim a moral imperative to raise the minimum wage, even knowing it puts poor people out of work. They do this for their own self esteem. However, the real minimum wage always is zero, zilch, nada and not what progressive kool-aid drinkers deign to make it. And zero, zilch, nada is exactly the wage many more poor people will receive with a $15 minimum wage. I have one word to describe this: immoral!

Part IV of Inequality in America – Reality versus Rhetoric – will be posted May 22.