(Don Boudreaux) Tweet Here’s a letter to a high-school senior in Wisconsin who (I boast) reads Café Hayek: Mr. S___: Thanks for your e-mail. I share your negative opinion of Pres. Biden’s proposal to more than double the national minimum wage to $15 per hour.

Source: Thought Experiments About the Minimum Wage

*** begin quote ***

I’m sure that many of your classmates earn income by doing odd-jobs such as babysitting, mowing lawns, and shoveling snow. So ask them what they think would happen if government forced them to double the amounts that they charge to do these jobs. Do your classmates think that parents with young children will continue to hire as many hours of babysitting at (say) $30 per hour as they hire at $15 per hour? Will homeowners’ willingness to hire neighborhood kids to mow lawns be unchanged if the price of getting a lawn mown is forced up from (say) $25 to $50? Will neighbors be just as willing to pay (say) $40 to have snow shoveled off of their driveways as they are when they must pay only $20?

*** end quote ***

Here’s another thought experiment.

We know that few heads of households (I believe less that 1%) earn on the minimum wage.

Soooooo.

Cui bono.

It’s a well known fact that when you increase the bottom of the pay scale all the level on top of that pay grade have to go up too.

So it’s union workers, politicians, and bureaucrats that make out the best.  Obviously, the taxpayers are much worse off, as well as a consumers, as price increases ripple thru the economy.

Argh!

—30—

First don’t let the government do it.

Second, let Walmart do it.

Third, use prices to ensure supply and demand are equal.

No such thing as “free lunch”. Something the socialists never learn.

—30—

Department stores are also facing the reality that they are no longer the main way most shoppers discover or access new brands — which was once perhaps their main appeal as onetime innovators. Consumer brands have increasingly become focused on building connections with customers through their own stores, websites, social media platforms, and other online-only marketplaces. 

The death of the department store and the American middle class – Impact Lab

# – # – # – # – #

Clearly, the handwriting is on the proverbial wall.

EVERYONE needs to reassess what this means in their own life.

My past advice seems to apply even more so now.

Success for your generation is: (1) ruthless financial discipline — no bad debt; (2) a life long interest in learning — education — a degree — they can’t take it away from you; (3) a NON-OFFSHORABLE white collar job in order to save big bux; (4) a blue collar skill for hard times — never saw a poor plumber; (5) one or more internet based businesses — your store is always open; (6) a free time hobby that generates income; and (7) a large will-maintained network of people who can “help” you.

—30—

Guns are a big part of my life… they make me money, they keep me safe, they encourage a particular set of values and lifestyle….but sometimes it gets difficult to remember that there are other aspects of preparedness that may actually be more paramount.

Source: Focus

# – # – # – # – #

If someone asked me what to do to increase resilience for 2021 I’d say “Wargame a scenario where you lose your job and can’t find another one at all or at the same wage and prepare for that”. That means clear debts as quick as you can, and start holding cash. Sure, you’ll lose some to inflation but I don’t see a Wewimar-esque hyperinflation coming yet. If you want to hedge your bets, split it among cash and metals. Here’s what I wold not do: I would not buy big ticket items just because I can, I would not buy anything on credit, I would not plan any expensive vacations, and I would not plan on having kids (because do you really want to take the hit of three months without a paycheck  and have the added medical expenses and the additional stresses all at a time when things are so uncertain?)

# – # – # – # – #

Yeah, it’s easy to be an optimist, and if you’re lucky, it’ll always work out for you.

But when planning for contingencies, assume the worst, and all surprises will be to the up side.

When as the Big Fat Old Turkey couselling Fat Old White Men, who were laid off or fearing for “their” job — even though “your job” is really NOT yours — I would urge them to figure out their “burn rate” of mandatory monthly expenses and depending upon their situation of age, education, savings, debts, and skills — hot in great demand or not — then realistically plan for how long they would be out of work.

Sometimes the answer was that they’d never get another job like their last one. It’s a brutal honest truth that comes to all of us sooner or later. (In my case, it was later; I’ve see some who just turned 50 and were stunned to be unable to find work at all.)

So a word to the wise, be prepared.  In this economy, an emergency fund of two years burn rate is NOT out of the question.

AND, YOU MIGHT NEED MORE.

YMMV.

—30—

Bonuses before bankruptcy: Companies doled out millions to executives before filing for Chapter 11

Abha Bhattarai, Daniela Santamarina 5 hrs ago

Bonuses before bankruptcy: Companies doled out millions to executives before filing for Chapter 11The coronavirus recession tipped dozens of troubled companies into bankruptcy, setting off a rush of store closures, furloughs and layoffs. But several major brands, including Hertz Global, J.C. Penney and Neiman Marcus, doled out millions in executive bonuses just before filing for Chapter 11 protection, according to a Washington Post analysis of regulatory filings and court documents.

Source: Bonuses before bankruptcy: Companies doled out millions to executives before filing for Chapter 11

# – # – # – # – #

I’ve addressed this “problem” before.

https://reinkefaceslife.com/2010/03/22/political-reigning-in-corporate-salaries-a-modest-proposal/

Since “corporations” are a Gooferment “creation”, the Gooferment can make the ROE (rules of engagement) for them.

Soooooo, turn the IRS loose on the “corporations”.

No corporation can pay an annual salary more than the President. (It’s unseemly and crude!)

And, corporations should be able to pay ANYTHING in the form of “tiered” of equal amounts over 25 years.

My reasoning is that we want to “encourage” long term thinking.

Having seen the GM “bankruptcy” where everyone made out well EXCEPT the taxpayers and the bondholders, we need to “fix” this.

By making the Board of Directors and “executives” compensated in 25 year bonds, the entire set of incentives and motivations will be changed radically!

Sigh!

… … so it will never happen … …

—30—

https://www.zerohedge.com/personal-finance/say-goodbye-millions-jobs-events-unfold

Say Goodbye To Millions Of Jobs As Events Unfold
by Tyler Durden
Sun, 10/04/2020 – 13:30
Authored by Bruce Wilds via Advancing Time blog

*** begin quote ***

Many jobs will not be coming back after the covid-19 crisis ends. We can say goodbye to millions of jobs as events unfold and markets evolve. Millions of small businesses being decimated by Fed policies that favor huge companies coupled with a surge in automation bodes poorly for those looking for work. Over the last three decades, robots have become far more common in factories. In many manufacturing facilities, robots do most of the work. A typical factory may contain hundreds of robots working on fully automated production lines, as it rolls by on a conveyor, a product can be welded, glued, painted, and finally assembled at a sequence of robot stations.

*** end quote ***

Unfortunately, the current and next generation are not prepared to move up the “value chain”.

That doesn’t necessarily mean more college degrees will save you.

The world will always value “poor plumbers”, good doctors and car mechanics, and entrepreneurial people who satisfy the needs of their fellow human beings.

The essential skill to have is to recognize that “the rules” are always changing and one has to be ready to ride the “wave”.

—30—

https://www.economicpolicyjournal.com/2020/08/th-war-on-landlords-is-accelerating-how.html

TUESDAY, AUGUST 18, 2020
The War on Landlords is Accelerating: How Bad Will It Get?

*** begin quote ***

The idea of abolishing rent is not new, but until now it has never really been considered anything but a nutty pipe dream. But with the economic carnage wreaked by the virus and ensuing government lockdown still ongoing it has disturbingly come to be viewed as a conceivable policy option. With tens of millions out of work, the ability to pay for basic necessities like housing is obviously a valid concern, but the callousness of the idea of simply expropriating housing from property owners is disturbing and indicative of darker trends coursing through the body politic in these turbulent times.

*** end quote ***

Why would anyone be a landlord?

The Gooferment politicians and bureaucrats pandering to the mob to solve a “problem” that they created with their “stupid” or at least ill-considered policies.

Yet another example of — “The government is good at one thing. It knows how to break your legs, and then hand you a crutch and say, ‘See if it weren’t for the government, you wouldn’t be able to walk.” ― Harry Browne

—30—

https://www.economicpolicyjournal.com/2020/08/economics-professor-isnt-allowed-to.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+economicpolicyjournal/YZSb+(EconomicPolicyJournal.com)

Economics Professor Isn’t Allowed to Open to All Students His Class Critical of Marxism

*** begin quote ***

A longtime economics professor at Wright State University, Professor Evan Osborne, who has repeatedly requested permission to teach a class critical of Marxism has been turned down by the university administration. Meanwhile, the university frequently offers courses that praise Marxism, Osborne told The College Fix.

*** end quote ***

Interesting that Nazism isn’t treated the same way.

No wonder the “yutes” have heads full of much.

Capitalism, would be better without the Gooferment, but it’s still the best of all the other choices.

—30—

https://mailchi.mp/tomwoods/high-taxes?e=39307912ab

Tom Woods · PO Box 701447 · Saint Cloud, FL 34770 · USA 

FROM HIS EMAIL BLAST OF 2019-Jan-16 10:26PM

*** begin quote ***

Here’s my unfashionable opinion: I believe in tax cuts for the rich. (I believe in tax cuts for everyone.) I believe the rich are human beings with rights, and not cash cows to be milked by people who had nothing to do with the creation of their wealth.

Now what follows is just for you, and not for your social-democratic friends, who will listen to what I say and respond with, “That’s trickle down, which doesn’t work!”

Those people are anti-intellectual and can’t be reached. What I’m telling you here is for the sake of your own understanding, not theirs.

Here is how wealth is created, and why confiscating the incomes of high earners is so destructive.

When firms increase and improve the equipment and machinery at the disposal of workers, those workers’ labor becomes more productive. Imagine someone using a forklift (as my father did), as opposed to stacking pallets with his bare hands, or producing books with modern equipment as opposed to a 16th-century printing press. The amount of production the economy is capable of is thereby increased, often dramatically, and this increase in production puts corresponding downward pressure on consumer prices (relative to wage rates).

There is nothing natural or inevitable about the availability of this productivity-enhancing capital equipment. It does not fall out of the sky. It comes from the wicked capitalists’ saving, and the allocation of the unconsumed resources in capital investment.

This process is the only way the general standard of living can rise. Only in this way can the average laborer produce the tiniest fraction of what today he is accustomed to producing. It follows that only under these conditions can he expect to be able to consume the tiniest fraction of what today he is accustomed to consuming.

The increases in the productivity of labor that additional capital brings about push prices down relative to wage rates. By increasing the overall amount of output, such increases raise the ratio of consumers’ goods to the supply of labor. Put more simply, improvements in the production process that lead to an increased supply of consumer goods make those consumer goods cheaper and easier for people to acquire.

That’s why, in order to earn the money necessary to acquire a wide range of necessities, far fewer labor hours are necessary today than in the past. Thanks to capital investment, which is what businesses engage in when their profits aren’t seized from them and when savings are available to them to invest, our economy is far more physically productive than it used to be, and therefore consumer goods exist in far greater abundance and are correspondingly less dear than before.

*** end quote ***

And, he has a list of how productive has cut the “cost” of certain items in terms of the work hours needed to acquire them.  Very impressive.

“Tax the rich” is code for make everyone poorer by preventing “capital formation”.  Zero interest rates have wiped out savings by what’s left of the middle class.  If there is no “capital investment” because the “rich” are tax and unable to invest, then where does “capital investment” come from?  

I know “the money tree” that grows in everyone’s backyard!

Argh!

Today’s politicians and bureaucrats need to go to the figurative guillotine before the USA has its own version of the French Revolution.  Can these people possible be this stupid about economics?

I wonder.

TANSTAAFL (“There Ain’t No Such Thing As A Free Lunch” From Robert Heinlein’s classic) 

Or are they just blinded by their “power”?

Argh!

# – # – # – # – #