Economics

So What If You Work Hard?

Hating those who are successful and blaming them for the lack of success of others, has become a disturbing trend, especially among young people. I think part of the problem is the fact that many have subscribed to the false notion that if you work hard you will succeed. This is a lie that has been repeated so much that most don’t even question it. Continue reading

Jobs Don’t Exist So That You Can Support Your Family

I hear this argument all the time when discussing Minimum Wage laws: “How is a person supposed to survive, making X dollars an hour?” The answer, of course is, you’re not. The idea that every single job should pay enough to support a person and his whole family, is ludicrous. Think about the last time you paid someone to do a job for you; a plumber, landscaper, painter, or whatever. Did you come to an agreement on the price based on how much money the worker needed in order to pay his bills, or did you pay him or her based on the job performed? Continue reading

Robots Need Jobs Too

Image by Mendhak

Image by Mendhak

The case against job automation never made any sense to me, and it’s always made by people who are afraid their skills will become irrelevant, as machines and software are built that can perform jobs better and faster than any human can.

I can’t think of a more selfish act than being against economic progress so that one can continue to get paid to do a job less efficiently than it could otherwise be performed by someone else–or something else. Somehow, those against job automation are never as eager to discuss progress made in the past that has undoubtedly had a positive impact on society, despite the same kind of fear-mongering they participate in today. Continue reading

The Easiest to Understand Argument Against the Minimum Wage

Old Car

Image by Pearly85 on Flickr

One of my favorite things about writing, is trying to come up with different ways to take a complex issue and simplify it for others to understand. I find the Minimum Wage to be one of the most frustrating topics in politics, because the most basic and important law of Economic Science–the law of Supply and Demand–already tells us exactly why setting a minimum price on labor is a bad idea.

But Economics isn’t as interesting to most as it is to me, so I wanted to come up with an example to illustrate the unintended consequences of minimum wage laws, without having to talk about supply and demand. I thought it’d be worthwhile to take a look at what the consequences would be if we were to apply minimum price laws to something we’re all familiar with. Continue reading

Be Thankful for Income Inequality

Luxury car

Image by Ffrade on Flickr

It’s one of the latest democratic talking points. Obama and the democrats are hoping to benefit in the 2014 elections, by bringing to the public’s awareness, the gap that exists between the income of the wealthy and that of the poor and middle class.

But why is “income inequality” even a problem? Is their ideal society one of income equality? I hope not. Income inequality is a feature of a free society, not a drawback. The fact that any man in the United States, even those born poor, have the opportunity to become richer than others, is what incentivizes them to take risks, and start businesses that provide the rest of us with the products and jobs that we need. It’s this promise that you can become rich if you can find a way to provide enough people with something that they need or want, that sparks innovation. It’s what provided the incentive for people like Steve Jobs, Bill Gates, and many others that have changed the world for the better. Continue reading

Minimum Wage Laws Hurt the Poor by Preventing Employment

Empty factory

Image by Ryan Remillard on Flickr

Minimum wage laws are one of the best examples of the negative unintended consequences that often result from good-intention laws that end up hurting the very people they are meant to help. For those who lack the most basic understanding of economics, it may seem like common sense. If there are people who don’t make enough money, why not just pass a law requiring that they be paid more?

Labor as a good

The problem with this approach becomes obvious once we start thinking of labor as just another good that is sold on the market. When we work for an employer we are essentially selling that employer a service. Economic laws apply to this good just as well as they apply to goods like milk, meat, etc, and yet many would agree that there is no need for government intervention when it comes to the price of these other goods. Continue reading

Why Student Loans Are a Bad Idea And Actually Hurt Students

Lecture Hall

Image by Winky on Flickr

College tuition costs have been skyrocketing and the more they go up, the more the government tries to help make college more affordable. Americans owe $1 trillion in student loans, even more than they owe in credit card debt. The federal government has been involved in student loans since 1958, either by guaranteeing loans made by private banks or by giving out loans themselves. Tuition rates have been increasing at about twice the rate of inflation, and still, proponents of federal student loans have yet to connect the dots.

Their intentions are good, but the government’s involvement is precisely what has resulted in the rise of tuition costs. Why do schools continue to increase their prices every year? Because they can. The government gives the schools whatever money they ask for, because “we must help everyone get a college degree.” If the government were to give everyone money to buy computers, the price of computers would also skyrocket.

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How to Get Back at Evil Corporations

Big Building

Image by Tim RT on Flickr

Many on the left defend their support for big government and high taxes by saying that as long as the government is helping society as a whole, they have no problem with it. This position is often used to imply that those that do not hold this belief are heartless, and just plain do not care about helping those who are less fortunate.

While pushing for more government programs and more laws, liberals speak of evil corporations and corrupt businessmen. There is no doubt there are evil people in this world, and that power does corrupt individuals. There certainly are a lot of people out there always trying to get ahead by stepping on others’ rights and by breaking the rules.

My question is this: If businessmen can be corrupt, can not a government official? I mean, we are all people after all. Businessmen are not a different type of species. People, in general, can be evil. Why are liberals not as concerned about the corruption that can erupt from giving those in government, more power? Powerful corporations are bad, but not powerful government officials? Continue reading

How ObamaCare is Already Costing Jobs

ObamaCare

Image by Will O’Neill on Flickr

Obama ran on a platform of higher taxes and got re-elected because he was able to convince voters that only ‘other’ people would be affected by his tax increases; that he was the candidate of the poor and middle class, and Romney, the out-of-touch candidate of the rich. The voters bought it. When the most basic economic concepts were presented, Obama called it “trickle down Economics,” convincing voters that the idea that raising taxes on businesses actually hurts the middle class, was some sort of myth.

It’s going to be interesting to see the voters actually feel the effect of their decision. Here is a short list of some of the companies that have announced their plans for layoffs as a result of the ObamaCare provisions that were conveniently set to take effect after the election:

  • Smith & Nephew – 770 layoffs
  • Abbott Labs – 700 layoffs
  • Covidien – 595 layoffs
  • Kinetic Concepts – 427 layoffs
  • St. Jude Medical – 300 layoffs
  • Hill Rom – 200 layoffs

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Why Anti Price-Gouging Laws Don’t Work

When prices go up as a result of inflation or an increase in demand, there is a tendency for economic ignorants to call for what they see as the most common sense solution: use government to prevent companies from charging over a certain amount for a product. It’s typical for those who lack an understanding of an issue to choose a solution that deals only with the symptoms and not the cause. Continue reading