The minimum wage made unemployment worse during the Great Depression

Minimum wage laws also extended the Depression. That from Amity Shlaes, in The Minimum Wage Makes Depressions Worse. (cross post from Outrun Change.)

In a lousy economy, forcing wages above the value of the output makes employment worse. When there is currency deflation the effect is compounded. Adding another layer of minimums every couple of years and slowly gathering more employers into the minimum wage rules further compounds the effect.

If you can’t afford the staff you have, and you can’t reduce wages, what options are left? Lay off more employees. Shrink your company.

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Crony Capitalism is the reason we won’t find any incandescent bulbs on the shelves

As of the start of 2013, it is illegal to manufacture or import 40- and 60-watt incandescent light bulbs in the U.S.  Last year the 75-watt bulbs were gone and the 100-watt the year before. The last of the smaller bulbs will be off the shelf.

Then you will only be able to buy more expensive bulbs that may or may not last a lot longer.

Why?

It isn’t to improve efficiency or save consumers money. That’s the excuse.

Blame crony capitalism. The ban is courtesy of businesses seeking favors from the government and the government happily granting said favors.

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The Great Recession just sort of happened. The Fed had absolutely nothing to do with it.

A long article from the Federal Reserve on the housing bubble and recovery from the great recession doesn’t mention the fed’s role in anything other than generating the recovery. See:  Subprime Mortgage Crisis. Absolutely no mention of the massive role played by easy money and Congressional policy pumping up the housing market.

The first part of the article is called How and Why the Crisis Occurred.

The short paraphrase is the runup in housing prices, increased demand for homes, surge in subprime loans, collapse of prices, and mass of foreclosures kinda’ sorta’ just happened.

No cause mentioned, especially no role assigned to the federal government in general or the Fed in particular.

Let’s look at the article in more detail.

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Minimum wage laws hurt people with lower skills

Video of Milton Friedman explaining why there are no helpful features of minimum wage laws.

Who is hurt? People whose skill sets have economic value less than the arbitrary minimum wage. Those people will be unemployed.

Some key ideas from the video:

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200 years of economics history in one editorial, which explains how we got into our current mess

(Cross-post from my other blog, Outrun Change.)

World War I generated most of the horrible disasters we’ve seen in the last 100 years.

With the possible exception of the decline of the Roman Empire, World War I was the greatest disaster in human history.

It contributed mightily to the Great Depression, which fed the Nazi revolution. That in turn led to WWII.

The war unleashed the totalitarian ideologies of communism, fascism and Naziism, which very nearly destroyed Western civilization. Their poisonous legacy lives on in radical Islamic extremism.

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Lots of blame for the financial crisis of ’08 falls on the federal government

There is a huge amount of blame to be spread for the Great Recession that started in 2008. While the recession technically ended four years ago back in June of 2009, most people in California and lots of charities here are still feeling the effects.

I see exquisitely little discussion of how intentional federal policies created the distortions that led to the financial crisis. An op-ed in the Wall Street Journal by Phil Gramm and Mike Solon help explain why much of the blame belongs to the federal government:  The Clinton-Era Roots of the Financial Crisis.

To make this non-partisan, I’ll point out that the flawed policies from the Clinton administration were ratified, continued, and extended by the Bush administration. Not to worry, both parties have worked lots of overtime to earn their share of blame.

While you can argue on the proportionate blame between the two parties, I’ll point out that regardless of the allocation you determine, 100% of that particular allocation falls on deliberate federal policy.

Initial efforts to persuade private pension plans to fund low-income housing failed. The administration forced (more…)

It’s okay to kill California condors. As long as you are running a wind farm. Or building luxury homes. In the middle of condor habitat.

And as long as you didn’t really mean to off them.

(Cross-post from my other blog, Outrun Change.)

The Los Angeles Times reports Companies won’t face charges in condor deaths.

The federal Fish and Wildlife Service told the operators of Terra-Gen Power’s wind farm in the heart of condor habitat they

…will not be prosecuted if their turbines accidentally kill a condor during the expected 30-year life span of the project.

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Q: Did the New Deal end or extend the Great Depression?

A:  Extend.

That’s the conclusion of Dr. Lee Ohanian, Professor of Economics at UCLA, as explained in his video Did FRD End or Extend the Depression?

 

The primary reason cited by the Professor is artificial increases in prices and wages driven by federal policy, specifically the National Industrial Recovery Act. (more…)

How to avoid prosperity

Winston Churchill suggests two ways to drive down an economy:

“We contend that for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

and

“If you have ten thousand regulations you destroy all respect for the law.”

I found the above quotes at The 40 Greatest Quotes From Winston Churchill, an article by John Hawkins.

Economic destruction from the New Deal just keeps rolling on

Did you know that in the 1930s raisin producers had to give a portion of their harvest to the government with the feds deciding what portion of the crop every producer had to turn over and what price they would get?

Neither did I.

Did you know that program is still in place today, 80 some odd years later?

Neither did I.

Did you know that in the 2002-2003 season (more…)

Q: Can tax policy kill off a popular industry?

A: Yes.

How the Taxman Cleared the Dance Floor in the Wall Street Journal explains a 30% excise tax on any venue that served food and had dancing did in two-thirds of the very popular dance clubs. Passed in 1944, the so-called ‘cabaret tax’ was intended to hit those filthy rich people who dined and danced in fancy places.

Eric Felton explains shortly after the tax was passed, the Bureau of Internal Revenue provided a very broad definition of what places the tax applied. It covered anyplace that served food and dancing with live singing. Those were an extremely popular form of entertainment during and after WWII.

The entire industry of dining and dancing was devastated: (more…)

Role of regulatory failure in the sinking of the Titanic

The sinking of the Titanic is usually blamed on that careless, horrible Captain Smith and the greedy capitalist shipowner who didn’t want the expense or inconvenience or clutter of enough lifeboats.  Rarely discussed is the role of the regulators in the tragedy.

Chris Berg points out in his Wall Street Journal article a year ago, The Real Reason for the Tragedy of the Titanic, that the regulators, the British Board of Trade, required all boats over 10,000 metric tons to have 16 lifeboats. It didn’t matter how many passengers were on board. Just put 16 lifeboats on.

Was the Titanic in compliance? Yes. (more…)

Is getting online advice for healthy eating, motivational advice, or lifestyle issues the same as going to the doctor, thus requiring a license?

In North Carolina it is.

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Crony capitalism kills off eagles and other raptors

When a government picks one industry over another and gives the favored one special treatment, it is called Crony Capitalism.

That is the same description used when a government goes after one industry for breaking the law and turns a blind eye to another industry doing the same thing.

That is exactly what federal policy the California AG are doing about migratory birds and protected raptors that are killed by the so-called ‘clean energy’ industry.

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While pondering the wisdom of those who can prevent the next financial crisis…

…check out the wisdom of politicians and regulators evidenced before the last crisis.

(cross-posted from my other blog, Outrun Change.)

Read The Housing Bubble and the Limits of Human Knowledge , by Alex Pollock.

The fallacy in play today is that the regulators who didn’t see our current financial crisis coming (or helped facilitate it) are now wise & bright enough that they will be able to detect any future crisis far enough in advance to prevent them. It’s quite obvious that is the operating concept driving laws and regulations for several years now.

John Cochrane makes this point in his article Limited clairvoyance: (more…)