So, my day job hasn’t changed, but after six months of working for Nick Hanauer I finally have something official to print on a business card: I am a Senior Fellow at Civic Ventures, a public policy incubator. (And if you’re wondering what makes me “senior,” it’s that I’m the only fellow old enough to qualify for AARP.)
Anyway, in addition to the new name, we also have a new blog—Civic Skunkworks—to which I proudly posted today the blog’s first fisking:
Tim Worstall not only has a byline at Forbes and a fellowship at the impressive-sounding Adam Smith Institute, he also spells “labour” with that fancy extra “u,” so he must be a smart guy who knows an awful lot about economics, right? But then you read his actual words and, well, not so much…
Watch Worstall plot a demand curve from a single data point, and then watch me tear him a new one. Enjoy!
Yeah, I checked out the blog when you emailed me about it a week or so ago, but I couldn’t figure out how the hell you register so you can log in. I’m only a rodent, so I’m a little slow at this stuff.
If you click through to Worstall’s biography, you get a list of publications he’s written for, and that’s all. Nothing about his education, which makes you wonder if he has any. Same with his Wikipedia bio, which looks like he wrote it himself. I’ve never heard of him before, so he can’t be very important. He may be an expert on rare earth metals, but I’m an expert on dirt. As a rabbit, I dig in it and shit in it every day of my life. Who could know more about dirt than rabbits? Earthworms, maybe.
He spells it “labour” because he lives and writes in London, which makes him an expert on America’s economy and American politics. And, like all Cheap Labor Conservatives, he believes the solution to every economic problem is making someone else work for lower wages. You don’t need a Ph.D. for that, merely a willingness to swallow rightwing propaganda whole.
He spells it “labour” because he lives and writes in London, which makes him an expert on American politics and America’s economy. And, like all Cheap Labor Conservatives, he believes the solution to every economic problem is making someone else work for lower wages. You don’t need a Ph.D. for that, merely a willingness to swallow rightwing propaganda whole, and a callous disregard for the welfare of your fellow man (or woman). At least he didn’t attack low-wage workers as “lazy” and “stupid” like most of them do.
Anyone who knows anything about the U.S. economy is aware we have slow growth because of weak aggregate demand. And why is demand weak? Because of declining incomes.
Supply-side economics (cutting taxes for the rich, on the theory they’ll invest more) doesn’t work in this situation. Without demand, what is there to invest in?
Anyone who invests knows corporations are bingeing on acquisitions, stock buybacks, and dividend payouts. Why? Because they have trillions in cash they can’t invest in their businesses because of slack demand. In short, there’s a surplus, not a shortage, of investable capital.
So what happens when you cut taxes for the rich to encourage them to invest more? They have two choices: Either put the money in bonds paying less interest than inflation, or use it to bid a shrinking pool of inflated equity shares even higher.
Anyone with half a brain, no Ph.D. in economics needed, will realize that what the economy needs is an infusion of spending power from higher wages, tax cuts targeted at the working and middle classes, government spending on infrastructure, or some combination of all three.
The economy got a little bit of this from the so-called “Obama stimulus” that is much derided by conservatives but which materially helped bring the unemployment rate down from 10.5% to 5.5%. But it still needs more push, and that has to come from higher wages.
Meanwhile, tax increases on the rich to help pay for Obamacare haven’t hurt the economy a bit; GDP growth remains positive, hiring is picking up, wages are beginning to rise, consumer confidence keeps getting better. So much for wingnut economics.
Raising the minimum wage is primarily about fulfilling government’s social obligation of protecting and caring for its citizens. Where editorialists like Worstall miss the boat is they fail to recognize the case for insisting that employers pay workers enough so that a full-time worker can at least subsist doesn’t rest entirely, or necessarily at all, on economic arguments.
A decent minimum wage represents society’s ethical obligation to its economically weaker members. Back when tiny hominid populations clung to survival and every member of the band was important to the band’s long-term viability, did our precursors let their less successful hunters starve? No, they shared the meat, or we wouldn’t be here. Does the fact there are more of us now make starvation more acceptable? We didn’t think so in the last century, when we called it Stalinism, and were against it.
Minimum wage does have economic effects, both positive and negative, but that’s not the main point. We have minimum wage laws because they uphold our values, centered on Americans’ strong work ethic, that people who show up at a job and do the work assigned to them should make enough to live on. When a legislated minimum wage no longer does that, it’s time to raise it. That’s the argument that matters. The economic arguments are secondary.
Worstall shows up on the Crooked Timber site every once in a while, says something stupid and gets soundly thrashed. One of his favorite hobbyhorses is arguing that “corporations don’t pay taxes” making issues of corporate taxation irrelevant. His views apparently aren’t regarded much by Microsoft and every other major corporation that employs elaborate tax avoidance structures.
@6 Worstall is well-trained in what a conservative propagandist is supposed to say. He’s not required to comprehend it; he just has to faithfully spout it. He’s in a similar position to the people who waved Mao’s “Little Red Book,” i.e., if he screws up and deviates from the party line, he’ll get sent to a re-education camp or kicked out of the tribe.
Single data points don’t mean much at all.
• Change in price of a McDouble, for instance.
• Sale of a commercial building in Seattle would be another example.
civic ventures?
very high minded. how’s this going to capture the attention of the guy working at arco in centralia, who votes against the income tax?
the mom struggling to hold the two jobs and keep her 20 year old kid in community college?
must progressivism, always sound and talk so elite?
@8…
‘Boob’ the sloppy solipsist is too busy pulling irrelevant solipsisms out of his posterior to read something smart about the economy…
…like @5 for example.
@5
good, but mainstream eco theory 100% supports jacking up the min wage substantially.
it says in free market, the price is right. but free market means no compulsion each side not under distress. but….low wage workers are under distress and are in a forced sale position, i.e., they can’t take a month off to find a better job, or move 20 miles away, and large numbers of them being undocumented, this also makes them very poor shoppers for the better job, ERGO conservative free market theory says their produce is UNDERPRICED ergo regulation needed to they are not ripped off.
just like we need antifraud laws for used car salespeople…..so they don’t set the odometer back.
while other arguments like morality are fine, they really only reach the 40% who’re with us already, let’s learn to talk both morality AND pragmatic economics to reach 60% solidly. all but the nuts.
see a better eco poli theory.
So you are all Toublemakers? Just what is a Toublemaker?
And when you mention Skunkworks I can’t help but think of the Blackbird which would have been cooler with the rear gun. So you all in on the Aurora?
Policy incubator. Cute name. I can’t help but think what Voltaire would have said with his wry smile. Not that he was a troublemaker.