PeakTrader.com

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PeakTrader:

“The Real Change In The Cost Of A Big Mac If McDonald’s Workers Were Paid $15 An Hour: NONE.”

The article oversimplifies the impact of a higher minimum wage.

We don’t know how much of a substitution effect will take place. Replacing labor with capital equipment requires labor. Workers design, build, install, operate, maintain, improve, and replace capital equipment.

Also, comparing a Big Mac with an Apple iPhone is ridiculous. How many low wage workers in China can afford a $400 iPhone?

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Raising the minimum wage may reduce demand and employment at McDonalds (or for hamburgers) and raise demand and employment at the Sizzler (or for steaks).

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Here’s a source of studies:

http://www.raisetheminimumwage.com/pages/job-loss

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If a robot can make a better hamburger at the same price, I’m all for it

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Citizen Buddy, people like you is why we need government, including government standards.

I wouldn’t want to be a 1870s Chinese railroad worker or consumer of hot dogs.

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The funnel graph in the link represents 64 recent and rigorous studies, including the outliers, which shows increases in the minimum wage (e.g. nationally or between states) had little or no effect on employment. None of studies were done by NELP.

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The (positive) income effect (including the multiplier effect) may be stronger than the (negative) employment effect, perhaps up to $15 an hour.

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Morganovich, your assumptions are flawed.

One example is if minimum wage workers get a raise from $7.25 to $9.00, then non-minimum wage workers earning above $7.25 and below $9.00 also get a raise.

Moreover, I suspect, some workers earning above $9 will also get a raise.

You know, the real minimum wage use to be above $10, when per capita real income was half as much.

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Morganovich, actually, your statement is propaganda. The more precise and unbiased the model, the better it explains the real world. The trend has been increases in the minimum wage has a much smaller effect on employment than previously believed.

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Morganovich, you don’t know what you’re talking about. Other variables are controlled to isolate the effect of minimum wage increases on employment.

Moreover, the models explain why minimum wage increases have that effect on employment.

You either can’t understand anything beyond one dimension, or want to remain a “stick-in-the-mud.”

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PeakTrader:

“Libertarian movement’s signature causes, school choice and drug legalization.”

Students on drugs tend to have lower grades. So, they can choose poor schools. Fortunately, they don’t have to stay in poor schools, because they tend to drop-out more often.

Drug Abuse More Common Among Dropouts, Study Finds – Teenagers who quit school also report much higher rates of criminal activity
LA Times

“A new statewide survey shows that teen-age dropouts abuse drugs and alcohol and engage in criminal activities at dramatically higher rates than students who stay in school.

Dropouts were three times more likely to use methamphetamines, five times more likely to use cocaine or crack, and twice as likely to use LSD than their in-school counterparts.

Dropouts also ranked higher than students on a wide range of other problem behaviors, such as involvement in fights, selling or dealing drugs and committing a crime to obtain drugs.”

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http://www.aei-ideas.org/2013/08/sunday-morning-links-7/#comments

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PeakTrader:

A bubble is needed in a depression.

So, we can thank the Fed for creating a “wealth effect,” in asset markets, e.g. the stock market, bond market, housing market, and gold.

Also, we can thank the Fed for lower interest rates, for households and firms, including mortgage rates.

When economic growth accelerates, to close the output gap, a wealth effect and low interest rates won’t be necessary.

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The good news is per capita real GDP is almost back to the 2007 peak.

The bad news is per capita real GDP is about $6,000 a year below the long-run trend, since 1960.

Chart:

http://www.advisorperspectives.com/dshort/charts/indicators/GDP-per-capita-overview.html?Real-GDP-per-capita-since-1960-log.gif

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I think, we could’ve closed the output gap in 2011 and be in a strong expansion today.

The economy needed a bold $5,000 per worker tax cut (or $750 billion) in early 2009, initially.

Then, eliminating and reducing $1 trillion of the $2 trillion a year in federal regulations (rather than piling on more regulations), raising the minimum wage (slightly above the 1968 peak), and overhauling the tax system (to simplify with permanent tax cuts) would’ve generated much faster growth.

The Fed would’ve completed a tightening cycle in 2011, we’d have federal budget surpluses and stronger state budgets.

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Vangel, what you see as a conspiracy to “fudge data” by top economists and statisticians at the BLS, I see as more accurately measuring the data to better reflect reality.

For example, inflation may have been understated in the 1970s and overstated in the 1980s and beyond, even with the minor adjustments in the 1990s, which were too small and too slow.

You’re confusing the media with the BLS.

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Nominal GDP growth was 4.0% in 2012 (and 4.0% in 2011). There’s a difference between income = output and the general price level or the CPI.

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http://www.aei-ideas.org/2013/08/a-few-factoids-from-todays-employment-report/#comments

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PeakTrader:

Soros efforts are paying-off:

High Times in Montevideo: Uruguay Entering Brave New World of Pot Legalization
Time
Aug. 05, 2013

“A great deal of negotiation and a massive media campaign, with television ads funded partly by Soros’ Open Society Foundations group, were required to convince opponents of legalization.”

Here’s what Paul Krugman said of Soros:

“Nobody who has read a business magazine in the last few years can be unaware that these days there really are investors who not only move money in anticipation of a currency crisis, but actually do their best to trigger that crisis for fun and profit. These new actors on the scene do not yet have a standard name; my proposed term is ‘Soroi’.”

According to Forbes:

“Soros, whose motto is, “If I spend enough, I make it right,” uses his donations and philanthropy to change–or more accurately deconstruct–the moral values and attitudes of the Western world, and particularly of the American people. While others give to the arts and higher education or to better the quality of the lives of their fellow men, Soros has been funding campaigns for drug legalization, and “medical marijuana,” which is described as a “compassionate drug.””

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Vangel, somehow, I knew you’d agree with Soros.

Also, I heard, in the ’90s, Warren Buffett loved tobacco stocks, because it cost about one cent to produce a cigarette.

Marijuana may be even cheaper, since it grows like a weed.

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Vangel says: “Marijuana has been legal for much of history and did not present a problem for society or the individuals who used it. Its evils come from prohibition.”

In your world, people who profit off people’s misery, break laws, and use drugs are good, while law-abiding people who don’t use drugs are bad.

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http://www.aei-ideas.org/2013/08/tuesday-night-links-8/#comments

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