Economics Archives

I’m shocked. Or not.

After promising unprecedented openness regarding Congress’ pork barrel practices, House Democrats are moving in the opposite direction as they draw up spending bills for the upcoming budget year.

Democrats are sidestepping rules approved their first day in power in January to clearly identify “earmarks”-lawmakers’ requests for specific projects and contracts for their states-in documents that accompany spending bills.

Rather than including specific pet projects, grants and contracts in legislation as it is being written, Democrats are following an order by the House Appropriations Committee chairman to keep the bills free of such earmarks until it is too late for critics to effectively challenge them.

Smaller government is the only way this kind of abuse can be reduced, not just a change in party power. The more Washington does — the more responsibility we hand over to them — the more money they get. The more money, the more abuse of it. Divide up some of that power into 50 pieces (commonly referred to at “states”), and you have more accountability and less abuse, mostly because when you centralize things in Washington, abusers have one-stop shopping for largesse.

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Serve Me, Or Else!

With a tip of the hat to Ron Coleman at Dean’s World comes word of a certain clientele that will take a company to court for not catering to them.

Now, would it make sense for used of Macintosh computers to sue software companies that only write for Windows, complaining that they should have equal access to that software as well? No, it would be silly, and certainly not allowed. I mean, after all, those Windows programmers know the PC, not the Mac. You’d want someone who knows the hardware you’re using to write for it. And besides, can’t a company choose it’s market?

Perhaps not. Depends on who you are.

The popular online dating service eHarmony was sued on Thursday for refusing to offer its services to gays, lesbians and bisexuals.

A lawsuit alleging discrimination based on sexual orientation was filed in Los Angeles Superior Court on behalf of Linda Carlson, who was denied access to eHarmony because she is gay.

Define “denied access” for me, will you?

Lawyers bringing the action said they believed it was the first lawsuit of its kind against eHarmony, which has long rankled the gay community with its failure to offer a “men seeking men” or “women seeking women” option.

They were seeking to make it a class action lawsuit on behalf of gays and lesbians denied access to the dating service.

So to “deny access” means to not offer the specific options in a service that you want. Mac users, your time is coming if this lawsuit makes it through the court system.

eHarmony was founded in 2000 by evangelical Christian Dr. Neil Clark Warren and had strong early ties with the influential religious conservative group Focus on the Family.

There might even be some anti-Christian bias going on here. But that doesn’t even really have to enter the picture to show how meritless this suit is, or should be. Using my previous example, would you want Windows programmers writing your Mac software? Dr. Warren has said that he doesn’t consider himself an expert in homosexual relationships, and eHarmony is essentially selling his knowledge.

eHarmony could not immediately be reached for comment. Commenting in the past on eHarmony’s gay and lesbian policy, Warren has said that he does not know the dynamics of same-sex relationships but he expects the principles to be different.

Let’s sue the butcher for not knowing how to prepare tofu.

And this is just silly…

“This lawsuit is about changing the landscape and making a statement out there that gay people, just like heterosexuals, have the right and desire to meet other people with whom they can fall in love,” said Carlson lawyer Todd Schneider.

How in the world does one business not catering to you somehow deny you the right to do…anything? The very first comment at the “Likelihood of Success” blog (second link above) puts the lie to this immediately.

I’m happily married now for 18 years, so I have zero experience with the on-line dating world. So it was news to me that eHarmony didn’t offer same-sex services.

But it wasn’t news I learned here. No, I learned it when one of their competitors’ ads came on: a somewhat clever ad where a guy looks at some listings of attractive women, and then says, “Nope. Still gay.” Point made: “Hey, if eHarmony won’t help you, we’ll be happy to.”

So the market has already solved this problem: eHarmony’s business choice created an opportunity, and a competitor is taking advantage of the opportunity. If this leads the competitor to get better known and better liked overall, then you can bet eHarmony will reconsider. If this remains a niche market and doesn’t have any carryover impact on brand loyalty, then eHarmony will continue to ignore the niche, and the competitor will find it a profitable niche to serve.

Problem solved. Leave the courts out of it.

(I’ve left off the last line of his comment, since it would become obvious where I got the Mac/Windows analogy from.)

If this lawsuit succeeds, it will cement homosexuality as a seriously privileged class, and be a giant step towards telling churches that consider homosexuality a sin that they don’t have the religious freedom they thought they did. If this lawsuit does not succeed, it will not be because society is homophobic. When Catholic adoption agencies decide not to give children to same-sex couples due to religious reasons, it’s the same situation. And in both cases, the market can, and has, dealt with it. A lawsuit over it is just narcissistic.

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Economy Slumps, Liberals Pounce

The economic growth in Q1 of this year was paltry.

The economy nearly stalled in the first quarter with growth slowing to a pace of just 0.6 percent. That was the worst three-month showing in over four years.

Chris at AMERICABlog quickly blames it on “GOP policies”. Fair enough, only if you credited GOP policies for this:

The economy’s 0.6 percent growth rate in the opening quarter of this year marked a big loss of momentum from the 2.5 percent pace logged in the final quarter of last year.

If not, blaming Republicans now is just disingenuous.

Chris, still cherry-picking, notes, “As a side note to the GOP, France was twice this number.” But let’s not forget that the 2.5% growth in Q4 beat France’s annual growth of 2%. And if you prefer France’s unemployment rate of 8.7%, feel free to move there. Or vote Democrat.

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The Rising Tide Works as Documented

It raises all boats, including, and especially, the poorest. (Via Captain Ed, because I don’t have a WSJ subscription.)

It’s been a rough week for John Edwards, and now comes more bad news for his “two Americas” campaign theme. A new study by the Congressional Budget Office says the poor have been getting less poor. On average, CBO found that low-wage households with children had incomes after inflation that were more than one-third higher in 2005 than in 1991.

The CBO results don’t fit the prevailing media stereotype of the U.S. economy as a richer take all affair — which may explain why you haven’t read about them. Among all families with children, the poorest fifth had the fastest overall earnings growth over the 15 years measured. (See the nearby chart.) The poorest even had higher earnings growth than the richest 20%. The earnings of these poor households are about 80% higher today than in the early 1990s.

A vibrant economy for all is a better long-term solution. Government taking a smaller percentage of peoples’ earnings give the poor more to spend and encourages investment by the rich which creates jobs. When government doesn’t encourage welfare, the poor, indeed, work, which is inherently better.

What happened? CBO says the main causes of this low-income earnings surge have been a combination of welfare reform, expansion of the earned income tax credit and wage gains from a tight labor market, especially in the late stages of the 1990s expansion. Though cash welfare fell as a share of overall income (which includes government benefits), earnings from work climbed sharply as the 1996 welfare reform pushed at least one family breadwinner into the job market.

Earnings growth tapered off as the economy slowed in the early part of this decade, but earnings for low-income families have still nearly doubled in the years since welfare reform became law. Some two million welfare mothers have left the dole for jobs since the mid-1990s. Far from being a disaster for the poor, as most on the left claimed when it was debated, welfare reform has proven to be a boon.

Far from throwing families out on the streets, welfare reform encouraged work. The work was there because the richer folks had money to start businesses or invest in them. The moral advantage of work over hand-outs should be self-evident. That doesn’t mean there should be no hand-outs, but policies that give families little incentive to work do not help them in the long run, no matter how it makes the policy makers feel in the short run.

More stats are discussed by the Captain.

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Shire Network News #88

Shire Network News #88 has been released. Click here for the show notes, links, and ways to listen to the show; directly from the web site, by downloading the mp3 file, or by subscribing with your podcatcher of choice.

Below is the text of my commentary segment. Actually, this is the full text of what I was going to say, until I timed it and it came to over 6-1/2 minutes. SNN commentaries are generally kept to something under 3 minutes, so this one was way too long. As it is, the version I wound up using was still over 4 minutes. Apologies for the lack of humor in what is normally a satire show, but this subject is rather seasonal, and I wanted to make some points during the time of year where folks would be more inclined to really listen to it. Hopefully, the next segment will be less dour.


Hi, I’m Doug Payton, and this is “Consider This” for Shire Network News.

This past week in the US, the deadline came for settling up our income tax bill with the government. Normally, people either fill out their own tax forms, sometimes with the help of computer software, or they take it to a tax preparer. But Jim Geraghty, writing in the New York Sun, reports that John Edwards, Democratic candidate for US President, thinks that the Internal Revenue Service itself ought to be able to fill out your tax forms. Now, in addition to the huge conflict of interest issue this brings up, there are some practical considerations. Here’s how it’s described:

For Americans whose employers and financial institutions send all of their relevant tax data to the government, the IRS would calculate their bills and mail them completed returns, which he called “Form 1.” Filers could sign the form and return it, or reject it and file their own return if they disagreed with anything in the IRS’s calculations. Form 1 would not be an option for taxpayers with more complicated returns.

First of all, the IRS would only be relieving the burden of those with the absolutely simplest returns, and generally those with lower incomes. Sure, no pandering there, right? Secondly, who would pay for this new governmental feature? We would, likely in higher taxes. Even if this was all or mostly computerized, the government is notorious for winding up paying more for stuff than it costs in the private sector.

So now we’d have another income redistribution program of sorts. We’d all be paying an inflated cost for those who can’t seem to figure out what John Edwards admits are the simplest tax situations. This says more about the complexity of the tax system than anything else I can remember. The problem with the tax system isn’t that people who have the simplest situations have to pay others to figure it out for them. The root cause, if you will, is the complexity itself. But Edwards would rather make this onerous tax code easier for you to bear than deal with tax reform. Say, how about we go back to the old Roman empire days when tax collectors just came by and told you how much to pay? Simple, convenient, and certainly free from graft, right? Right?

And then just a few years down the road, of course, we’d hear liberals defending this program as a basic human right. If the government pays for it, we simply can’t do without it.

Matt Stoller, of the left-wing blog MyDD, is quite proud to pay his taxes, whatever the amount. Now in fairness, he, too, doesn’t like having less money to spend and is upset at the complexity. But he’s simply overjoyed to send in that check and calls it “the price of democracy”. Well, nobody’s denying that taxes are the price we have to pay, but let’s not forget that you can be overcharged for things, and that you can be force to buy things you don’t think are helpful to our democracy. Of course, in saying that, I’m proclaiming my hatred of democracy. Matt said so.

The right-wing likes to pretend as if taxes are a burden instead of the price of democracy. And I suppose, if you hate democracy, as the right-wing does, then taxes are the price for paying for something you really don’t want. Personally, I find banking fees, high cable and internet charges, health care costs, and credit card hidden charges much more abrasive than taxes, because with those I’m just being ripped off to pay for someone’s summer home.

What Matt conveniently fails to point out is that costs for those items, even to some extent, health care costs, are all voluntary, whereas taxes are not. You’re not required by law to purchase them. If you decided you don’t want to pay your taxes, however, you’ll likely find your wages getting garnished at best, or find yourself behind bars at worst.

And your taxes can be just as busy paying the mortgage for some bureaucrat’s summer home.

He’s also got a problem with understanding how we ever managed without an income tax.

Patriotism is about recognizing that we are all connected in a fundamental moral and physical sense, that the war in Iraq is our war, that poverty in New Orleans is our poverty, that public funding to cure cancer comes from each of us and not just the scientists who have made it theirs. The tax burden we face is a very small price to pay for the privilege of taking responsibility for our own freedom and our own society. And the hatred of taxes on the right comes from a hatred for this responsibility. It’s childish and immoral and unAmerican.

Yes, we do own all these things about our country, but then how did we pay for the War of 1812, and the Great Chicago Fire, and any of those medical breakthroughs that were discovered before the 16th Amendment in 1913? Truly amazing.

Tariffs were the general means for the government to raise money, and what’s interesting is that the tariff increases for the War of 1812 are credited with the strengthening of US industry. Has the income tax ever really done that? The city of Chicago was rebuilt mostly by private donations from around the nation, as well as business leaders, not government, going around the country getting other businesses to invest in Chicago. Hopefully, it’s obvious to Mr. Stoller that Chicago has indeed come back from that in a big way, and before the federal income tax.

Were these folks unAmerican for working it out for themselves rather than begging from Washington, DC for money? Or is it just right-wing, anti-democratic, unpatriotic and unAmerican to speak ill of taxes, to consider them burdensome? Then we need to consider the folks who said these things and what we should think of them.

“It would be thought a hard government that should tax its people one tenth part.”

“To compel a man to furnish funds for the propagation of ideas he disbelieves and abhors is sinful and tyrannical.”

“If we run into such debt, as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our calling and our creeds… [we will] have no time to think, no means of calling our miss-managers to account”

“I think we have more machinery of government than is necessary, too many parasites living on the labor of the industrious.”

“I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending,
on the objects of benevolence, the money of their constituents.”

“The power to tax involves the power to destroy.”

“No matter what anyone may say about making the rich and the corporations pay taxes, in the end they come out of the people who toil.”

I think I’d like to be counted with “unpatriotic”, “unAmerican” “childish” “right-wingers” like Benjamin Franklin, Thomas Jefferson, James Madison, Supreme Court Chief Justice John Marshall, or Calvin Coolidge, among many others. Yes, democracy-haters all, right Matt? More likely, they had a healthy skepticism of government–any government–and its power to destroy.

Back to you, Brian.

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“The Other Iraq”

Recently on the Public Radio program Open Source, Christopher Lydon did a show on Iraqi Kurdistan, or, as it’s PR campaign calls it, “the other Iraq”. You can listen to the show and read the show notes here on Radio Open Source. He interviewed Qubad Talabani, Kurdish Regional Government (KRG) Representative to the United States and son of Iraqi President Jalal Talabani, Bayan Sami Abdul Rahman, KRG Representative to the United Kingdom, and Peter Galbraith, former (and first) Ambassador to Croatia under Clinton, Senior Diplomatic Fellow at the Center for Arms Control, and Non-Proliferation Advisor to the KRG.

For some, it may be an eye-opening program. From the discussion of how Americans were indeed greeted as liberators, to the economic prosperity, to the lack of sectarian violence among the Sunni, Shia and Christian Kurds, this program should give pause to those saying we should get out of Iraq ASAP. In fact, both the Kurdish guests warned against a withdrawal too early. (Ambassador Galbraith, predictably, disagreed. More on that in a moment.)

The program was quite a departure from Lydon’s show’s usual fare. As is typical for public radio, the slate of guests is often slanted liberal, and many time 100% so. Lydon calls his show a “conversation”, but it usually is a monologue from the Left. To have a program extolling the good things that have come from the war (even if the host can’t bring himself to agree, insinuating that some of the responses sounded like “fantasy”) is equal time that has been sorely missing from the media at large. Kudos to Lydon and the PRI folks for finally, if really belatedly, bringing the news.

The cognitive dissonance was deafening when Peter Galbraith did disagree at the end of the show with the idea of staying in Iraq. Here were the very people he’s working to help asking for our continued help, and all he can do is shill for Hillary Clinton’s presidential bid (by name) and say that, as she does, we need to get out of there because the Iraqi experiment has failed.

I’d ask him, and anyone else who said that the war in Iraq was and is a failure; what do you say to the Kurds? Were they and all other Iraqis not worth the effort to get rid of Hussein and his terror supporting and practicing regime? Just because some may not be handling freedom as well as we’d hoped, should we have left them all to the designs of the Ba’athists? If you blame the US for the violence in the south, are you prepared to credit the US for the peace and prosperity in the north?

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Conservative Conservationists

Governor Mark Sanford of South Carolina had an article in the Washington Post last week (just pointed out to me) regarding conservative conservationists. No, nowhere near an oxymoron. His point is how the right should deal with the global warming issue, because if we don’t deal with it, the Left will, and you know what sort of big-government, economic takeover solutions they’ll come up with. (Think Kyoto Protocol.) Gov. Sanford make 3 points:

First, conservatives must reframe the environmental discussion by replacing the political left’s scare tactics with conservative principles such as responsibility and stewardship. Stewardship — the idea that we need to take care of what we’ve been given — simply makes sense. It makes dollars as well, for the simple reason that our economy is founded on natural resources, from tourism and manufacturing to real estate and agriculture. Here in South Carolina, conservation easements are springing up across the state as landowners see the dual benefit of preserving the environment and protecting their pocketbooks.

Second, conservatives must reclaim lost ground from far-left interest groups by showing how environmental conservation is as much about expanding economic opportunity as it is about saving whales or replanting rain forests. When corporations such as BP and Shell America pursue alternative energy sources, they not only cut carbon emissions but help cut our petroleum dependency on OPEC nations. When South Carolina restaurants recycle their oyster shells, they not only restore shellfish habitat but take a job off local governments’ plates and ensure continuing revenue streams for local fishermen.

Third, conservatives must respond to climate change with innovation, not regulation. This means encouraging private research and implementation of more eco-friendly construction, more energy-efficient workplaces and more sustainable ways of going about life — all of which cuts costs and protects God’s creation. It means looking past the question of whether your car’s exhaust melts polar ice caps and instead treating our environment as an investment our future depends on.

Read the whole thing. That last point is the key, but is predicated on the first two.

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That’s Why It’s Called a “Law”

Of supply and demand, that is. McQ at Q&O discovers that–surprise, surprise–the rise in the minimum wage is, in fact, putting people out of work.

The law which is supposed to help the “working poor” does precisely the opposite.

But it’s the intentions that matter, don’tcha know?

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Punishing Big Oil

Rev. Sensing has a must-read post on how punishing oil companies winds up punishing those consumers of oil.

Which is basically all of us.

The Minimum Wage

Clayton Cramer looks at two arguments against raising the minimum wage; one that doesn’t work, and one that does.

UPDATE: Scott at ScrappleFace nails it once again

(2007-01-10) — Republicans in Congress, in a last ditch effort to provide economic justice to America’s working poor, today introduced a bill that would raise the national minimum hourly wage from $5.15 to $84.25.

The bill, offered just hours before the Democrat-led House attempted to raise the rate to $7.25, is roughly based on the what Congressmen earn for working 40 hours per week for 50 weeks per year, although the actual working part is optional in Congress.

Under the terms of the GOP-sponsored measure, the minimum wage would also track Congressional pay, which typically includes an annual cost-of-living-it-up increase.

“Hiking it to $7.25 won’t make a dent,” said one unnamed Republican House member, “But at $84.25, we’ll eliminate poverty.”

Read the whole thing for a good laugh.

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