Once again, it's all about the marginals. Can Walmart absorb higher wages? Apparently they think they can. Yippee, great for their employees. Does that carry over throughout the entire economy? Nope. Nope. Nope.

Watching Robert Reich’s new video in which he endorses raising the minimum wage by $7.75 per hour – to $15 per hour – is painful.  It hurts to encounter such rapid-fire economic ignorance, even if the barrage lasts for only two minutes.

By completely ignoring elasticity, Reich assumes his conclusion.  That is, he simply assumes that raising the minimum wage raises the total pay of unskilled workers (and, thereby, raises the total spending of such workers).  Yet whether or not raising the minimum wage has this effect is among the core issues in the debate over the merits of minimum-wage legislation.  Even if (contrary to fact) increased spending by unskilled workers were sufficient to bootstrap up the employment of such workers, raising the minimum wage might well reduce the total amount of money paid to unskilled workers and, thus, lower their spending.

So is employers’ demand for unskilled workers more likely to be elastic or inelastic?  The answer depends on how much the minimum wage is raised.  If it were raised by, say, only five percent, it might be inelastic, causing only a relatively few worker to lose their jobs and, thus, the total take-home pay of unskilled workers as a group to rise.  But Reich calls for an increase in the minimum wage of 107 percent!  It’s impossible to believe that more than doubling the minimum wage would not cause a huge negative response by employers.  Such an assumption – if it described reality – would mean that unskilled workers are today so underpaid (relative to their productivity) that their employers are reaping gigantic windfall profits off of such workers.  But the fact that we see increasing automation of low-skilled tasks, as well as continuing high rates of unemployment of teenagers and other unskilled workers, is solid evidence that the typical low-wage worker is not such a bountiful source of profit for his or her employer.
I usually have pretty good success (at least temporarily) with my liberal friends when I attack their love of things like living wage laws by introducing the idea of the marginal. The marginals are 1) the companies waiting to be born and looking hard at whether the numbers add up. 2) The companies on the cusp of failure and closing who are looking at how to make the numbers add up. 3) The companies looking to expand or hire one more employee and are looking at whether their labor will be worth the cost. And 4) companies looking to contract or lay off one employee and are looking at whether their labor is worth the cost.

It is among these companies that growth and contraction happens. These are often small, single location family businesses that have great hopes and tight budgets.

When I put it that way, sometimes the scales fall away from the eyes of my friends, and they admit that maybe the price of the law is greater than its benefits.

The problem is, as soon as our conversation is over, they tend to revert right back to their old thinking. The knowledge never seems to stick.

Demon coal

Another silly post I got fed on face book:

Wow! 30%! Attributed to getting rid of old-style coal plants.

Of course, the US did it better:

However, the US is stupid about its coal plants. Our government wants any improvements to power plants to trigger massive overhauls of the generators. Instead of allowing power manufacturers to make their plants incrementally less polluting, Uncle Sam will only except perfection. As a result, our coal burning technology is outdated and stuck in the past. PowerLine had this up last week:

Showing how much Chinese plants have improved tremendously in the last decade, while US plants remain inefficient, polluting and stagnant.

Instructive week

It's been an instructive week on social media. Most of my friends are decided leftists--one of whom once literally posted "when will people realize that socialism is the answer!"

I'm never really surprised by the lack of knowledge, understanding, questioning of sources, or research my leftist friends show. I am often posting debunking links to some of their more egregious posts (for some reason a former teacher and parent of a friend of mine gets my goat the most). Usually, they link to some inane graphic someone made that shows all right-thinking people must think conservatives are crazy.

That's about the depth of their knowledge most of the time. I talk about marginal economic theory, throw around actual facts with links to original sources, and they post from inside their bubble and at the level of 9th graders. It can be disheartening.

This week, of course, RFRA laws blew up. I kept calmly posting links to what Indiana's law actually does and how it really is just like the national law and the laws in other states (and that Connecticut's law is actually worse, despite that state's governor blasting Indiana--CT's law bars placing "a burden" on people's religious practice, most other laws bars placing "a substantial burden" which is a very big difference,) and they kept whining.

Mostly I posted links to the very good National Review article by Josh Blackman which goes into detail and even looks at the legal history of lawsuits on a circuit-by-circuit basis. Every time someone would say that Indiana's law was different and sooooo much worse, I would point out that, no, it is really the same.

Finally, I caught a lucky break. I have a very liberal friend (actually the guy I went to senior prom with in high school) who is now a con-law professor; when I posted one of my rebuttals, he came along and concurred that I was correct on the reading of law. Basically saying that in fact, I was right that the Indiana law was the same...but that the motivation of the politicians was different this time and meant to be anti-gay. That wasn't a point I wanted to deal with; I was just trying to get people to accept that the law as written was not worse than any of the other ones.

Most of my friends shut up after that.

I am sometimes reluctant to post links to conservative sources, in part because my liberal friends will dismiss them without a second thought. I think it was helpful here that my liberal friend concurred that the NR article was accurate.

Maybe people will have their eyes slightly opened to the fact that conservatives actually know what they are talking about and that their sources are often far superior to liberal ones.


Tony Villar

This one's easy:

Democrats Always Talk About Latino Voters, So Why Are They Snubbing Their Most Prominent Latino Leader? 

They are talking about Antonio Villariagosa, the former mayor of L.A.

The answer is very easy to provide: they know he's a blithering idiot, a glad-hander, a womanizer, in it for the perks, lazy, and incompetent.

Parking - CO2 emissions

I just want to park this article somewhere for future reference. As a background: NASA sent up a satellite which can map CO2 emissions. I'm sure everyone on the team and in the science community expected a result showing North America, Europe and China as BAD!!! and places like Africa and the Amazon rain forest as GOOD!!!

However, the satellite showed pretty much the exact opposite: the Amazon and other verdant areas, it turns out, send out massive amounts of atmospheric CO2, much more than do the developed world.

NASA/JPL image from CO2 Satellite

A post on Watts Up With That asks the question: what's next? and posits that there are three options:

1) The satellite will continue to operate well, with clean, reliable data being transmitted to the world.

2) NASA will try to fudge the data by averaging and massaging it to oblivion.

3) The satellite will suffer a catastrophic failure and be decommissioned.

As the author, Ronald D Voisin, says, if the data is taken seriously then certain facts have to be faced. such as:
Insect and microbial emissions, each at 10X all anthropogenic emission, dominate in these lush forested areas while the historically mildly warming oceans are also net CO2 contributors. And, anthropogenic emission is essentially irrelevant to atmospheric CO2 concentration at an approximately 2% contribution to the natural flux.

Organic manic

Gee, I'm so surprised:

The organic movement touts the sustainability of their methods, but its claims do not withstand scrutiny. For example, a study published earlier this year in the journal Hydrology and Earth System Sciences found that the potential for groundwater contamination can be dramatically reduced if fertilizers are distributed through the irrigation system according to plant demand during the growing season. But organic farming depends on compost, the release of which is not matched with plant demand.
The study found that “intensive organic agriculture relying on solid organic matter, such as composted manure that is implemented in the soil prior to planting as the sole fertilizer, resulted in significant down-leaching of nitrate” into groundwater. Especially with many of the world’s most fertile farming regions in the throes of drought and aquifer depletion–which was the subject of a 60 Minutes segment on November 16–increased nitrate in groundwater is hardly a mark of sustainability.
Moreover, although composting gets good PR as a “green” activity, at large scale it generates a significant amount of greenhouse gases (and is also often a source of pathogenic bacteria applied to crops).

 From "Why Organic Isn't 'Sustainable" on Forbes.

Reagan and AIDS

I've seen this image posted on my Facebook feed from two very-different friends:

To which I have twice replied:

1981: # of AIDS deaths in US = 121, HHS funding per death = $1,600

1982: # of AIDS deaths in US = 447, HHS funding per death = $12,427

1983: # of AIDS deaths in US = 1476, HHS funding per death = $19,469

1984: # of AIDS deaths in US = 3454, HHS funding per death = $17,794

1985: # of AIDS deaths in US = 6854, HHS funding per death = $15,847

1986: # of AIDS deaths in US = 11932, HHS funding per death = $19,594

1987: # of AIDS deaths in US = 16908, HHS funding per death = $29,717

So, in 1983, the US federal government was already funding anti-AIDS programs to the tune of nearly $20,000 per death. The disease grew very quickly, from a trickle in the first few years, to almost 17,000 in 1987. It's hard to know in the early days of a new disease if it is going to have a wide effect. Very little was known in early days of how it was transmitted, what the death rate would be, or how many people were at risk. Would you have triggered a massive effort to eradicate a disease because fewer than 500 died in a year? What about fewer than 5,000?

As a point of comparison, probably somewhere around 75,000 people will die in the US this year of hospital-acquired infections.