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Friday, January 20, 2006

Would You Settle For $11 Million?

For a little switch of topics:

Boston Red Sox pitcher Bronson Arroyo potentially gave up $4 million dollars had he signed with another team and decided to stay in Boston. He will not be bringing in bagged lunches from home though as he just signed a three-year contract worth about $11.2 million.

Arroyo employed some economic consideration to the decision:

I could be in a car wreck tomorrow. So, at this point in my career, it's obviously benefiting me with a little bit of security."

He also just wanted to stay in Boston where he has lived and obviously enjoyed himself. And that is another economic condsideration. In Boston he will be a 6th pitcher, lower in the pecking order of expectations. Had he signed for more money in another city, the boo birds may have made life miserable for him.

Study: College Kids Need Remedial Thinking

Following the recent blockbuster 20-20 television show by John Stossel called "Stupid In America", a study of college students finds:

More than 50 percent of students at four-year schools and more than 75 percent at two-year colleges lacked the skills to perform complex literacy tasks. That means they could not interpret a table about exercise and blood pressure, understand the arguments of newspaper editorials, compare credit card offers with different interest rates and annual fees or summarize results of a survey about parental involvement in school.

The Stossel show explored the failing performance of public schools- what we call government monopolies. One telling interview during the piece was with an educator who, in response to Stossel's suggestion that school vouchers would introduce competition to education, said "it has never been done before and it won't be done now". This educator's open mind speaks volumes.

Per Baldi and Finney, the survey analysts:

The survey showed a strong relationship between analytic coursework and literacy. Students in two-year and four-year schools scored higher when they took classes that challenged them to apply theories to practical problems or weigh competing arguments.

The math and science courses are noted for this approach. The liberal arts studies do very little of this in our colleges due to the dominance by liberal ideologues in those classrooms (see Frontpage.com for their continual studies of this phenomenon).

Thursday, January 19, 2006

France Issues Nuke Threat

Per Reuters, Jacques Chiraq is apparently ready to use nuclear weapons against any country that carries our terrorist acts against his country. The story says:

"The leaders of states who would use terrorist means against us, as well as those who would consider using in one way or another weapons of mass destruction, must understand that they would lay themselves open to a firm and adapted response on our part," Chirac said during a visit to a nuclear submarine base in northwestern France.

"This response could be a conventional one. It could also be of a different kind."

He also said he would nuke anyone who said: "I see London, I see France, I see _________ underpants". I will have to warn my kids and their classmates.

Who Will Take Osama's Bait?

Mike Taylor wonders who will take Osama's bait? Probably someone eyeing the Nobel Prize. Watch them all run to the cameras. Here is Mike's take:


Today's news brings us a new audiotape, purported to be Osama bin Laden, offering a "truce" between al Quaeda and the United States. Al Jazeera (whom else?) aired excerpts of the tape. If you click this link (above) you can read Fox News' summary of the story.

"We do not mind offering you a truce that is fair and long-term. ... So we can build Iraq and Afghanistan ... there is no shame in this solution because it prevents wasting of billions of dollars ... to merchants of war."

"Based on what I have said, it is better not to fight the Muslims on their land," said the voice.

The voice promises more attacks on the United States and that the absence of any new attack since 2001 is simply "because there are operations that need preparations, and you will see them".

I am curious to see the forthcoming reaction to this tape among the political types here in the United States and in Europe.

Who is going to secure a truce with al Quaeda and stand before the news cameras, papers in hand, to declare "peace in our time"? Who is going to advocate that we stand down now that our terrorist foes have "seen the light and wish to come to the bargaining table"? Who will claim that this is America's chance to extract ourselves from the "quagmire that is Iraq"?

Who will be Neville Chamberlain and make a deal with the devil and then expect the devil to stand by his agreement?

Those with no stomach for the fight, those who think that political advantage can be gained by advocating that we "not sacrifice one more American soldier now that peace can achieved" will be among those pushing for this false peace. Someone will tell us we should "declare victory and go home".

Who will rise to Osama's bait?

My guess is Nancy Pelosi or Jaques Chirac, because those two never learned enough history not to repeat its mistakes.

What is the underlying message in this audiotape? What about this offer of a "fair and long term" truce from someone who has been as bloodthirsty, savage and indiscriminate in his killing of innocents as any tyrant in world history? Could it be that Osama has experienced an epiphany? That he is tired of the fight? That he now wishes to be a builder not a destroyer?

Don't you believe it.

Just as it was a mistake not to stop Hitler, a mistake to leave Saddam in power, it is a mistake to believe that Osama is giving up his jihad now.

Rather, we must finish the job that President Bush set out to do. What Osama is really telling us in this latest tape is that he is almost finished, that our response to 9/11 was more robust, more sustained, more effective than he first estimated. As my (more liberal) twin sister said shortly after September 11th: "They picked on the wrong cowboy". Yes, W is no Bill Clinton. And thank all that is good on this earth that W isn't Al Gore either.

The message on this tape tells me that Osama is on the run, disoriented, powerless and hopeless to regain his former strength. No doubt he finds it difficult to wage jihad from wherever he is hiding, without funding, without reliable communication, without deputies as they have been blown away at the dinner table in the dead of night, courtesy of US military drones.

What is needed at this point is a Winston Churchill. Someone who realizes that a job left unfinished will only come back to haunt civilized society. Terror must be torn out root and branch. We must not stop now that we have the advantage. Only sustained effort will ensure that global terrorism can be stopped. Osama's offer of a truce is only an attempt to persuade us to let him catch his breath.

Osama thinks we're stupid.

No doubt there are some who would label me a bloodthirsty, vengeful, paranoid neo-conservative whose only aim is to keep the populace scared and voting Republican. I would say to them that I am only interested in winning the war against Islamofascism... and we haven't won it yet.

Mr. President, finish the job. The world will thank you for it.-- Mike

Min Wage: NYT Econ Analysis Fails For More Reasons

An interesting point made by economist Alan Reynolds on the NYT Magazine article on minimum wage (see below) is that more workers will be forced to take below min wage jobs due to the increase. Why?

The NYT article focused on Santa Fe, New Mexico. Santa Fe's min wage is much higher than the national level, recently raised from $8 per hour to $8.50 and going to $9.50 next year. However, there are numerous businesses that are exempt from the law such as employers with less than $500,000 annual income, businesses with fewer than 25 employees and certain other specific jobs. The employer will certainly avoid growing his full-time staff beyond the 25-employee limit. He will find ways to maintain staffing levels by for instance using automatic cashiers or relocating outside of the city limits.

More important, the number of larger firms in Santa Fe will remain static in both number and size which will reduce the number of opportunities for workers to earn higher wages at larger businesses. Reduced opportunities at larger firms will mean that jobs will only be available at the smaller firms. This increase in the number of below min-wage jobs will mean greater labor competition for them. With the supply of such workers higher, employers cab keep those wages down. As well, consumers will pay more at the smaller stores than they would at larger stores and businesses since larger businesses have the "law of large numbers" that allows them to charge lower prices because of relatively lower costs.

These exemptions to the min wage law are common throughout the nation. Reynolds advises that per Section 12, Table 636: "Workers Paid Hourly Rates.":

[R]eveals that only 520,000 were paid the $5.15 federal minimum wage in 2004. That was merely four-tenths of one percent (0.4 percent) of total non-farm civilian employment -- far short of Gertner's 3 percent adventure in probability. Nearly three times as many U.S. workers (1,483,000) were paid less than the minimum wage. Among full-time workers, only 177,000 earned the $5.15 minimum wage in 2004, while 3.3 times as many (583,000) earned less than $5.15. As I mentioned, the words "or less" after $5.15 are there for a reason.

Whenever the minimum wage has been increased, the most obvious result was an increase in the number earning less than the minimum.

If we ignore the 45 percent of full-time U.S. employees who earn salaries rather than wages, it might almost be true that "around 3 percent" of those paid by the hour are actually paid $5.15 an hour or less. But that is only because 2 percent of those paid by the hour earn less than $5.15 an hour. And that raises an obvious question: How on earth is an increase in the minimum wage supposed to help the nearly 1.5 million people who are not earning that much in the first place?

Helping people is the least of the concerns of the NYT-elite do-gooders when they pursue policies without doing the necessary homework to ensure that the results will be as expected. However, their goal is really to feel good about themselves. Because if they were concerned with the results, they would take the time to analyze the consequences of their policies and the empirical data regarding the hardships caused by their policies. This rarely gets in the way.

Wednesday, January 18, 2006

Ohio's Kelo Decision

So government needs more power to govern more effectively? I agree, if your goal is to trample on individual liberties while taking private property from one citizen and awarding it to another.

In Norwood, Ohio (near Cincinnati), the town is condemning a neighborhood that was in fine, typical middle-class shape. That description changed when a developer offered the town his plan for "renovation"--- new condos, chain stores and parking garages. The developer's "urban renewal study" gave the town its rationale to begin "buying" up properties. The builder will reimburse the town.

Jacob Sullum describes how the Ohio Supreme Court has its own Kelo-type eminent domain decision to make. He writes:

[T]he Norwood City Code allows condemnations for private development only if they're necessary to eliminate "slum, blighted, or deteriorated" conditions or to fix areas deemed to be "deteriorating." No one can seriously maintain that the Edwards Road area falls into the first category (although the city initially tried), but both the trial court and the state appeals court agreed that calling the neighborhood "deteriorating" was not an "abuse of discretion."

It was only an abuse of English and common sense. The area, which the city called "generally ... in good shape" only five years before calling it "deteriorating," did not include a single dilapidated, vacant, or tax-delinquent property. It was not blighted by any stretch of the imagination, but the city claimed to be worried that it might become blighted someday.

As the Institute for Justice points out in its brief for the Gambles, "the requirements of the 'deteriorating' designation are so minimal, and the conditions so ordinary, that ... it can apply to virtually any neighborhood." Like the Gambles, you could be living in a "deteriorating" neighborhood, subject to condemnation, without knowing it.

And as in Kelo, the "insult added to injury" is the money offered as just compensation will be well below what the developer would pay in a free market transaction. Where is it a voluntary transaction between willing parties when one side has the weight of the police, courts and administrators on its side? What is condemned land worth? Do the "sellers" have a market they can bargain with?

The Institute For Justice that is defending the rights of these homeowners and unsuccessfully defended the Kelos in Conecticut writes from its website:

The Norwood “blight study” itself admitted that not one of the 99 homes or businesses in the area was dilapidated or delinquent on taxes.

The problem is that when the government possesses this kind of power, it is the party that can grease those public officials (either through direct bribes, legal lobbying or suggestions of an increased tax base) that gets results. Is this not the true moral of the Abramoff scandal (read Walter Williams for more)?

Tuesday, January 17, 2006

Quit Interrupting And Listen For Once!

Economist Arnold Kling is writing a series of essays that he wishes his mostly liberal friends (that is, most of his friends are liberal) would read and think about. When he converses with them they rarely allow him to complete his train of thought before interrupting him. They tend to attempt to bury him in rhetorical put-downs rather than follow his arguments. Sound familiar to anyone?

He begins with the issue of the likely failure of the Wal-Mart law in Maryland to help the employees. The law forces the retail giant to pay up to 8% for employee health-care (foisted on the company from non-employees of Wal-Mart) to help the workers at all. Either Wal-Mart will leave the state, reduce pay accordingly or reduce its low-end workforce. And this helps those workers and Marylanders in what way?

Kling concludes by stating:

Liberals see the market as an arena in which evil corporations inflict their greed on innocent victims. I wish you would see that motives matter less than consequences. I wish you could see that greed is at work when laws are passed that regulate markets, because regulations always produce winners and losers. I wish you could see that those winners and losers are often not who you think they are. I wish you could see that competitive behavior and free choice are forces that operate in the market as a check against greed. Finally, I wish you could see that greed is most difficult to restrain when it is exercised through the medium of government.

I would add that they do not see that there are limits to what a business can pay its employees or, for that matter, all other costs if they do not allow for a profit after sales. Unlike the government that can deficit spend, businesses must profit or they will be denied credit (from banks, investors or shareholders) and will go bankrupt. It is the simple economic lessons that are lost on the do-gooders.

But let's look again at the salient comment in the quoted paragraph above: motives matter less than consequences. If this were considered by liberals, most of the social programs from the New Deal through the Great Society would be discontinued.

"Never Again" from Appeasers

Niall Ferguson offers his rendition of how a future historian will write about the 3rd World War (the coming war with Iran and ______):

As in the 1930s, an anti-Semitic demagogue broke his country's treaty obligations and armed for war. Having first tried appeasement, offering the Iranians economic incentives to desist, the West appealed to international agencies — the International Atomic Energy Agency and the United Nations Security Council. Thanks to China's veto, however, the U.N. produced nothing but empty resolutions and ineffectual sanctions.

Only one man might have stiffened President Bush's resolve in the crisis. But Ariel Sharon had been struck down by a stroke just as the Iranian crisis came to a head. With Israel leaderless, Ahmadinejad had a free hand.

As in the 1930s, too, the West fell back on wishful thinking.

Yes, appeasement and wishful thinking. And they always say "Never Again".

Teddy's State Is Losing Voters

Jeff Jacoby discusses the loss of population in Massachusetts. He writes:

Not counting foreign immigrants, Massachusetts has been losing more people than it attracts every year since 1990, according to MassINC, a Boston-based research institute. The net outflow during the 12 years from 1990 to 2002 -- the excess of people leaving Massachusetts over those entering -- was 213,000, and the hemorrhaging has only gotten worse since then. MassINC reported in 2003 that one-fourth of Bay State residents would leave if they had the opportunity to do so. Among those who have lived in Massachusetts for less than 10 years, the proportion is even higher.

Per MassInc.com immigration into Massachusetts has increased since 2000:

In the year 2000, immigrants made up 12.2% of the Massachusetts population, up from 9.5% in 1990. The immigrant population in the Bay State grew by 35% over the course of the decade, reaching 773,000 in 2000.

While Jacoby believes the reason for the exodus of its citizens has to do with the social climate, and, for some, the actual climate (though New Hampshire has increased its population over the same time), the overall anti-business climate of Massachusetts politicians is likely playing its part. However, since immigrants have trended Democrat, the loss of more wealthy citizens should not hurt their political future.

On The Alito Hearings

Skip March on the Alito hearings:

A question resulting from recent senate confirmation hearings for the Supreme Court has been, "are these hearings necessary?" Britt Hume's thoughtful response was the answer is "yes and "no". Yes, because when thoughtful, serious questions are asked, revealing and useful answers are given. These hearings actually provided useful information regarding the nominee's judicial philosophy, temperament and his overall high integrity as an individual. The answer of no arises because of the character assassination, self serving speeches, pandering to special interest groups and fishing expeditions.

After watching much of the hearings I have firmly concluded that Ted Kennedy is in fact the Joseph McCarthy of our time (followed closely by Howard Dean, Barbara Boxer and Chuck Schumer, Al Gore....not in any order). Teddy gets the nod because he has been doing it for so long. The only difference between Kennedy and McCarthy is that McCarthy was not a hypocrite about his anti-communism, while Kennedy's hypocrisy was evident throughout his questioning regarding club affiliations, etc. Ted Kennedy questioning anyone's personal integrity is the height of hypocrisy. Both are horrid individuals.

Because the hearings were so revealing on so many levels, including the temperament and tactics of individual Senators and a political party as a whole, I would conclude that these hearings are very useful and necessary. They not only allow us insight into the nominee but also insight into the inquisitors. Spanish Inquisition anyone????


Joseph Kenner adds:

They are absolutely necessary for all the reasons that you gave below. I see no purpose in the open remarks by all of the senators. Are the hearing about them or are they about the nominee? I found them very self-serving and irrelevant. It was a way to throw red meat to the campaign contributors and lobbyists, particularly since Alito just sat there and listened.

I would add:

As Mark Steyn and Thomas Sowell explained it was about performing for their contributors. The Left is now dominating the Democrat Party but the country was able to view attacks of a very poised and accomplished man. When the Democrats alleged he was a base racist for his associations 30 years ago, they did more to hurt their standing with the 40% of the independent voters. yes, they played well for their 30%. Elections are won in the middle.

As Steyn wrote:

When you damn someone as a big scary mega-troubling racist misogynist homophobe and he seems to any rational observer perfectly non-scary and non-troubling, eventually you make yourself ridiculous. The boy who cried "Wolf!" at least took the precaution of doing so when there was no alleged predator in view. If he'd stood there crying "Wolf!" while pointing at a hamster, he'd have been led away for counseling. That's the stage the Senate Democrats are at.

Fairness Means Consistent Application To All

On judging, Dennis Prager placed this in his column "The Left Hates inequality, Not Injustice":

Democratic Sen. Herb Kohl: "The neutral approach, that of the judge just applying the law, is very often inadequate to ensure social progress . . . "

For those on the Left, law, and everything else, is subservient to equality.

Prager then discussed how news reporters also have replaced their obligation for objectively reporting the news with slanting stories and facts to achieve social justice.

True justice is advancing fair rules applied to all without skewing matters in favor of any "side". Prager quotes the Bible:

Exodus 23:3...: "Do not favor the poor man in his grievance."

One should not unduly benefit the rich over the poor. the rich are obligated to help the poor. But the law must be consistently applied to all.

Florida's No-Voucher Ruling

The Florida Supreme Court recently ruled that its voucher system was unconsitutional as it breached their law that states that Florida will provide:

"a uniform, efficient, safe, secure and high quality system of free public schools that allows students to obtain a high quality education."

Explains Andrew Coulson of the Cato Institute writng in the WSJ:

Florida's Supreme Court was not, after all, the first to consider this issue. In Jackson v. Benson, the Wisconsin Supreme Court upheld Milwaukee's voucher program for private schools, even though Wisconsin is one of the 14 other states with a uniformity clause. The court in Jackson, like Justices Bell and Cantero, concluded that only public schools were required to be uniform. One state's rulings are not binding in another, but the Wisconsin case demonstrates a reasonable interpretation of a uniformity clause that is compatible with school vouchers.

Coulson states that Florida's rules of legislative oversight:

In a dissenting opinion joined by Justice Raoul Cantero, Justice Kenneth Bell argued that there was no "textual or historical" basis for that inference. In fact, it should not have mattered who was right, because lorida case law admonishes the courts to adopt any reasonable interpretation of a statute that supports its constitutionality. Instead, the majority in Bush v. Holmes appears to have looked for an excuse to do the opposite.

My question in the consitutional interpretation is whether the words could have more easily stated what was meant. By this I mean, could the Florida Consitution have stated that only public schools will provide education? This wording about uniformity tends to seek a base of quality. It is more strained reading of guiding language that was used to reach a political end. This is not unusual of the Florida Supreme Court.

The Court tipped its hand during oral argument:

At one point, an unnamed justice asked the attorney for voucher opponents: "You would agree, would you not, that whether [voucher schools] have been an overwhelming success or an utter failure, is, really, irrelevant to whether the program is constitutional." The answer was a resounding "yes." In other words, legislators may not consider alternative educational arrangements, no matter how effective they might be.

Anyone who saw John Stossel's groundbreaking report on 20-20 Friday night knows that the quality of public education has been on a downward spiral since the 1970's.

Monday, January 16, 2006

The NYT Immoral (and Misleading) Case For Minimum Wages

The NYT cover story of its Sunday Magazine is entitled “What Is A Living Wage” by Jon Gertner.

It is about the morality of minimum wage statutes. Or more accurately, the overwhelming case of the immorality of anyone who is against minimum wage statutes. Count me in as an immoral person for being against wage increases mandated by government for untried and/or unskilled workers.

This feature story provides pictures of 18 minimum wage earners and advises us what they will do with the extra pay. Each person appears to be a lovely person deserving of a good life. They all have minimum wage jobs. Guess what they will do with the extra money? They are going to buy things, pay down bills and one young man was going to get his own apartment. None stated they were going to play the slot machines in a nearby casino. These are good people.

The article is replete with quotes from “living wage” proponents (and not one quote from an opponent).

Gertner writes:

“It is a common sentiment that economic fairness-or economic justice, as living-wage advocates phrase it-should, or must, come in a sweeping and righteous gesture from the top. From Washington, that is.”

Minimum wage is commonly considered as “Fairness”? “Or justice” to its advocates? That is different? Talk about loading the dice.

Then besides amply quoting such advocates, he finds the eminent Robert Reich, the Labor Secretary under Bill Clinton, who finds such legislation what “demarcates our concept of decency with regard to work.” So, besides being unfair and unjust if you disagree with minimum wage laws, you are indecent as well.

Gertner then discusses the historical background of minimum wage laws. He writes:

“In the years before the enactment of the federal minimum wage in the late 1930’s, the country’s post-Depression economy was so weak that the notion that government should leave private business to its own devices was effectively marginalized.”

Here I have a few questions:

1. The Depression was over by the late 1930’s? I would say it is considered to have ended in the early 1940’s when the country prepared for war and businesses were needed for the supply and armaments. In the late 1930’s unemployment was 20%. The Great Depression was over?

2. Didn’t the US pull itself out of the Depression when business was released by the government in the face of WWII?

Gertner then uses the empirical study by Card and Kreuger to validate minimum wage’s benefit to the economy. Gertner writes:

“[T]he two academics effectively shredded the conventional wisdom [that a rise of wages would destroy jobs].”

Gertner then contends that this study along with The Economic Policy Institute “which endorses wage regulations, has succeeded recently in getting hundreds of respected economists…to support raising the minimum wage to $7 an hour.”

However, for the sake of fairness, Gertner could have mentioned the critical analysis done by economists Neumark and Wascher who double checked the Card and Kreuger study. Their conclusions differed significantly:

1. The minimum wage increase led to a decrease in employment;
2. Likely finding of Card and Kreuger ignoring the likely deviations in their telephone surveys.

While there may those hundreds in agreement, Gertner names and quotes none. One would think that a NYT cover story would be able to find a Nobel Prize winning economist of two to bolster the argument.

Unfortunately, after the above hard economics discussion, Gertner goes back to providing us anecdotes of low-income workers. He does state that “Most of the minimum-wage campaigns in the U.S. have been modest increases of a dollar or a dollar and a half.”

Modest? In my math that is about a 25% increase! 5% maybe 10% could be called modest. But 25%?

Gertner then considers the effect of minimum-wage increases for restaurant workers in Santa Fe. Patronage decreased after price increases on the menus. He states that this may indicate the higher price drove away customers. “Or it could merely mean that high gas and housing prices are hitting hard”. He really wrote that!

But since his article is bereft of economic argument, Gertner finally admits “ultimately…[it] is less about broad economic outcomes than about values.”

Again, I am dead against minimum wages completely. And I am so on moral grounds. History shows that whenever minimum wages increase, teens and white teenage males have increased unemployment.

Quoting economist Bruce Bartlett:

“Advocates of a minimum wage hike ignore the evidence that it increases unemployment among the least productive workers: unskilled teenagers whose employment opportunities are limited. This is unfortunate, because low wage jobs are the first rung on the economic ladder of success for workers entering the labor force. When we cut off the bottom rung by increasing the minimum wage, we keep youngsters from making the transition to work”.

That the NYT can publish this frivolous and unstudied article as its position paper for increasing the minimum wage shows there are no standards left at the Grey Lady.

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