Finance

Reminder to California: Doing the “Right Thing” When It Can’t Possibly Have a Positive Outcome Isn’t Ethical

/ Jack Marshall / 18 Comments


It’s amazing what a flat learning curve ideologues have.

Certain laws of economics are immutable: if someone’s skills and the value of their labor are not worth the amount they demand in compensation for it, then eventually no one will be willing to hire them. Way back in my foggy history, the U.S. Chamber of Commerce charged me with examining just this issue in my role as head of the National Chamber Foundation, the Chambers public policy research arm. I hired an independent economist to examine the issue, and he concluded that indeed, raising the minimum wage cost the most vulnerable American workers jobs every…single…time. He also explained that the political pressure for raising the minimum wage came from unions, which used a ride in the bottom wages as justification for demanding higher wages in their definitely un-minimum wage compensated fields. Unfortunately for me, my scholar, being independent, also disputed the Chamber’s position that minimum wage increases were automatically inflationary across the board. The President of the Chamber had my foundation’s study pulled out by a Democratic Party minimum wage hike advocate and used to refuse his position on a Sunday morning public affairs show. (My ultimate boss had neglected to read the document.) This, as you might imagine, did not help my status in the organization.

If anything, the advances in technology have made that old study at NCF more accurate than ever. Never mind, though: 21st Century progressives seem to care about virtue-signalling and fealty to socialist cant more than actual results or, to put it another way, reality. Naturally California, one of our extreme leftist kamikaze states, arguably the most reckless one, has adopted this attitude. And thus it came to pass that last fall, Governor Newsom signed into law a $20 an hour minimum wage hike on the fast food sector for the “benefit” of fast food workers, even as the segment of the public that most often consume fast food has been slammed by inflation and higher food prices particularly.

Everything we have learned about minimum wage hikes indicated that this would be a disaster, but advocates of the move in the Democratic party pooh-poohed the objections as more proof that conservatives are cruel and greedy. Do these people ever get tired of being embarrassingly, absurdly wrong? As a Washington Times headline put it, “Fast food chains find a way around $20 minimum wage: Get rid of the workers.”

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Comment of the Day: “The Deceitful January Jobs Report”

/ Jack Marshall / 8 Comments

This epic and must-read Comment of the Day by Chris Marschner—which he had to battle to get posted because of the WordPress glitches that have been plaguing EA commenters (and me, of course) for months, had me rejoicing in the wide range of expertise and experience the Ethics Alarms readers bring to the mission here. Then it caused me to become frustrated and depressed. The media makes no effort to explain these issues and enlighten the public with similar clear exposition, and if it did, I wonder how many Americans would take the time to read it. I also wonder how many Americans would understand such an explanation even if they tried.

Meanwhile, I despair of any politician or candidate for office having the clarity of thought and speech to bring what Chris is talking about into the political campaigns this year—-and there are no more crucial matters than these for voters to understand. In the 1992 presidential campaign, rogue candidate Ross Perot bought time on network TV to explain the national debt and why it was dangerous. He used humble tools: paper charts and a pointer. But Perot understood what he was describing, pulled no punches, and spoke clearly and simply. It was a national service: I voted for him as my gesture of gratitude.

If only Donald Trump could explain and debunk the lies being used to misrepresent the economy as clearly as Ross Perot explained the debt…but Trump couldn’t explain that the square of the hypotenuse in a right triangle is equal to the sum of the square of the other two sides without descending into stream-of-consciousness blather.

Isn’t there some way we could draft Chris Marschner to run for President?

Here is his Comment of the Day, supplemented by his subsequent comment expanding on his original post, on “The Deceitful January Jobs Report”…

***

I was hoping you would address this issue of misleading economic data. The jobs report is one that is always subject to deceit. Beyond the absolute numbers and hours worked we should mention that the growth sectors of jobs were health care, low wage hospitality and government. Many of these jobs are driven in large part by the massive numbers (about 7.5 million) of illegal “migrants” who have been given parole by the Biden administration and dispersed throughout the country.

When I taught first year Economics I would tell my students that numerical values do not tell the whole story and you must dig into the numbers to draw any real conclusions. For example, a higher investment value does not mean our capital stock is increasing which would lead to more output at lower costs. I see the Biden administration as the proverbial glazer who breaks windows to increase business. That activity will increase nominal GDP but we are wasting resources unnecessarily.

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The Deceitful January Jobs Report

/ Jack Marshall / 13 Comments

It seems increasingly apparent that the Democrats and Joe Biden’s election strategy, besides trying to convince the public that Donald Trump is the spawn of Hitler and Satan, is to lie, deceive and gaslight voters into believing that down is up, bad is good, and that Biden has done a wonderful job even though by all visible markers his administration has been a disastrous failure.

In the latest example, the January jobs report was hailed by Joe and his minions as more proof that the economy was not just good, but spectacular. Naturally, the news media carried the message. “January Jobs Report Was a Blowout. Disregard the Seasonal Noise” proclaimed Barrons. NPR, our Democratic Party mouthpiece, crowed, “The U.S. created an extraordinary number of jobs in January. Here’s a deeper look.” “U.S. employment soars by 353,000, stunning Wall Street,” said an obviously stunned MarketWatch. “Another shockingly good jobs report shows America’s economy is booming” said CNN. The New York Times joined the parade, as expected: “Blockbuster Jobs Report Backs Up Fed’s Patience as It Waits to Cut Rates.” NBC News was positively giddy: “The great American jobs machine keeps revving in an election year.”

My son, an auto mechanic who is, as far as I can tell, completely apolitical, had just recently conveyed a completely different picture. He says that everyone he knows is struggling financially, and that he personally had a disastrous month because he is largely paid by the hour. Few Northern Virginians were bringing their cars in to be serviced. “Nobody has any money,” he told me. He worked the fewest hours last month than any time since the pandemic lockdown. Apparently he wasn’t the only one.

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Ethics And The 700 Million Dollar Baseball Player

/ Jack Marshall / 7 Comments

In Mike Flanagan’s latest horror epic, the Poe mash-up in which “The Fall of the House of Usher” is repurposed into a nightmare scenario for the Sackler family of Oxycontin infamy, the avenging demon named Verna, who sometimes appears as a raven, lectures a soon-to-be victim on the evils of greed:

So much money. One of my favorite things about human beings. Starvation, poverty, disease, you could fix all that, just with money. And you don’t. I mean, if you took just a little bit of time off the vanity voyages, pleasure cruising, billionaire space race, hell, you stopped making movies and TV for one year and you spent that money on what you really need, you could solve it all. With some to spare.

Yes, Verna is a communist and deluded, but it was impossible to read about the $700 million ten-year contract the Los Angeles Dodgers just gave baseball free agent Shohei Ohtani without that speech creeping into my thoughts. $700 million dollars?

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Oh NO! A Powerful Member Of Congress Who Hasn’t Become Rich Somehow! What’s Wrong With This Guy?

/ Jack Marshall / 14 Comments

CNN’s not-so-subtle partisan innuendo is displayed in the title: “He’s second in line to the presidency. Financially, he’s just getting by.” Obviously, Speaker Mike Johnson must be incompetent or profligate, or have a drug or gambling problem, or something. After all, as CNN vaguely tells us, his Democratic predecessor as Speaker, Nancy Pelosi, has “done very well.” I’ll say: her wealth is estimated at about 180 million dollars. CNN doesn’t try to explain how she has done so well, but it is widely believed that it involves insider trading.

Since becoming Speaker, Mike Johnson has been attacked by Democrats for his vile habit of believing in the Bible and its teachings. Add to that the fact that he apparently isn’t smart enough to turn what is supposed to be selfless public service into a personal fortune like his colleagues have, and it’s easy to see why the Axis of Unethical Conduct is telling the pubic that he can’t be trusted.

I have a clarification for them: a member of Congress who isn’t getting rich from the job is more trustworthy, not less.

Now THIS Is Gaslighting…Or Outright Lying…Or Senility…

/ Jack Marshall / 3 Comments

President Biden said yesterday, as he boasted about a misleading jobs report, “The American people are smart as hell and know what their interests are. I think they know they’re better off financially than they were before. It’s a fact.”

It’s not a fact. There were a number of counter factual assertions there. First, the American people are NOT “smart as hell” or they would not have elected a dementia victim who was never too sharp to begin with as President of the United States, Second, Biden and his party routinely act as if the public does not know “what their interests are,” presuming that Big Brother knows best. Moreover, even the substantially dim-witted members of the pubic are smart enough to know they are not “better off financially than they were before,” before meaning, as it should, before the pandemic and the progressive-led lockdown created an artificial crater which any administration would be able to crawl out of and show a relative improvement. The only question is whether Joe Biden believes that “Bidenomics” is working.

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An Ethics Puzzle From “The Affair”…

/ Jack Marshall / 11 Comments

This would normally be an item in a Warm-Up or the equivalent, but I haven’t had time for them lately, so I’m going to let the issue fly solo.

In “The Affair,” the protagonist’s best friend assesses the problems that have befallen him as the result of said affair, and offers him $50,000. The adulterous husband (his wife and the friend has been an inseparable threesome in college) protests, but the friend, who is rich and just became richer (he’s a hedge fund whiz), insists. He has the money, and he won’t miss it, and what are friends for?

A couple years later, the protagonist, who has a best selling second novel and is suddenly rolling in money, fame and opportunities, has an argument with his old friend and benefactor at a party. The freind, insulted at his treatment, says, “You seem to forget you that I gave you $50,000!” He adds, “And you never paid me back!” The author protests, “That was a gift!” His friend responds, “Yeah, well you have the money to pay me back now!”

Thoughts:

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A “Bias Makes You Stupid” Classic: Duke’s Economically Ignorant Economics Prof.

/ Jack Marshall / 14 Comments

Duke University professor of economics William Darity wants $14 trillion in reparations to be paid to African Americans. That would roughly break down to $350,000 per recipient. True, he was blathering on the “Dr. Phil” show, and perhaps thought nobody with more than a GED would be watching. Nonetheless he said, for public consumption, that trillions in financial reparations should be handed out to “reduce the wealth gap” between white and black Americans. Where will all that money come from, the phony TV doctor asked? Oh, from the Federal government, which will apparently make it magically appear, replied the evidently phony economist. Will a $350,000 windfall be enough to do any lasting good for the vast majority of blacks who would receive it? Oh, probably not, but it will feel good.

Or something. California’s task force on imaginary reparations things they should be at least $5 million per eligible resident. Sure, why not? Why not $10 million?

In the past, the professor has estimated that reparations would cost between $10 and $12 trillion. Of course, those figures are also impossible and ridiculous, so we need not make too big a thing out of his latest demand.

The National Debt, even the most woke and irresponsible economists will admit if you back them against a wall, is getting, indeed is, dangerously large already at about $32 trillion. Increasing it by 40% in a short period of time is a recipe for economic disaster that would adversely affect all races and creeds.

One doesn’t even need to get into the absurd practical, social, political and legal impediments to such a mass transfer of wealth, which would be enough to make such Darity’s reparations plan madness even if it were affordable, which it is not now and never will be. The ethics question is: How can Duke responsibly employ a professor who advocates such reckless economic policy? What can students learn from this man, who places his race and political biases ahead of his scholarship?

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Ethics Hero: Rep. James Clyburn (D-S.C.)

/ Jack Marshall / 23 Comments

We have come to quite a disturbing point in our political culture when an elected official can be designated an Ethics Alarms Ethics Hero for doing nothing more than telling the truth. Yet here we are.

The House Majority Whip wasn’t revealing any great secret, just telling the truth about what Joe Biden and so many other Democrats have been lying about—well, one of the the matters they have been lying about. Asked on MSNBC about the inflation affecting typical citizens that they feel might be caused by Democrats spending like there is no tomorrow, Rep. Clyburn answered, “Well, let me make it very clear. All of us are concerned about these rising costs, and all of us knew this would be the case when we put in place this recovery program. Any time you put more money into the economy, prices tend to rise.”

Oh. So it wasn’t the pandemic, or Trump, or Putin as the President and his paid liar, Karine Jean-Pierre, have been saying for months, or “unanticipated and large shocks to the economy” as Treasury Secretary Janet Yellen claimed in June. It was all the spending by Democrats, like the $1.9 trillion American Rescue Plan Biden signed in March, that sent prices soaring, and Democratic leadership knew it would do exactly that. And I guess they weren’t too concerned, since they went ahead with the huge spending bill anyway, even though the Administration was already exploding the National Debt.

Well, thanks for the candor, Congressman. We knew this anyway, but its refreshing to hear one of those most responsible admit it.

The Unethical Student Loan Debt Cancellation Ploy

/ Jack Marshall / 37 Comments

The push to cancel student loan debt is another example of the Left embracing a terrible, foolish, indefensibly unethical policy for no better reason than hope that it will allow them it to gain political power. Word around Washington is that President Biden is “seriously considering” canceling up to $50,000 in student debt for all. Translation: Biden’s puppeteers/handlers/advisers are probably trying to get him to do it, insane and irresponsible as it may be, but Joe may be inclined to do it on his own, because 1) he’s just not very bright; 2) he’s not very bright and his cognitive functions have been deteriorating in front of the whole nation; and 3) he never had any integrity anyway.

The late Rush Limbaugh, commenting on Mitt Romney’s loss to Barack Obama in 2012, lamented that “You can’t beat free stuff!” He said that Democrats were always willing to buy votes by promising to pay for more or making “the rich” or private business do so, from living wages for jobs not worth them, to national health, to free college degrees and more. Tilting the U.S. to socialism and a “nanny state”? If that’s what it takes to win, sure! Turning the national debt into a ticking time bomb that future generations will have to suffer for? Why not? Student loan forgiveness is as good an example of Rush’s point as I can imagine.

It is unethical in so many ways…

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