Monday, January 28, 2013

Illegals Take American Jobs

Illegal workers can work for less than the regulated minimum wage and benefit level.

The value of their work then exceeds its cost, so they have a job.

Americans would take those jobs if they weren't forbidden to work for that wage until their experience and skills increase.

What would happen if the illegals were made legal? Those jobs would disappear.

Thursday, January 17, 2013

Guns

People disagree about what sufficient self-protection is.

They make their own choice.

That maximizes wealth, like every other disagreement settled voluntarily.

Your neighbor with an assault rifle is an asset to you, in addition. You might choose to let him protect you, and free-ride on his preferences.

Why not stinger missles? Because that makes no sense as self-protection. An assault rifle does.

The US is built on people themselves being worth trusting, with minimal disincentives applied. For instance that privately agreed to contracts will be enforced as agreed, in short rule of law, without the President reversing private agreements. Otherwise no agreement is possible, and gains from trade aren't possible.

It works out in economics, and it works out here too.

An entertainment choice on TV, namely grief porn, is an entertainment choice, and should not be promoted to a public policy choice. The personal risk statistics of mass killers are zero for a nation of 300 million, and have always been zero.

The message to send is that the government is ruled by the Constitution regardless of hysterics and hand-wringers and busybodies.

What is a very bad message to send is that the government is no longer ruled by the constitution.

That's the end of civil society.

Tuesday, January 15, 2013

"Can't Afford"

In the late 70s, there was a killing coffee frost in Brazil.

The price of coffee skyrocketed.

Yet you could buy all the coffee you wanted. The shelves were full, just shorter shelves.

People were buying less coffee, in just the right amount to meet the coffee available.

Obviously the poor could no longer afford coffee.

Suppose the government started a coffee aid program for the poor.

If you hand out free coffee, very fast you run out of coffee.

Suppose, instead, at the door of the supermarket, the poor are handed $10 for a pound of coffee.

Will the poor buy coffee?

No. They have a better use for $10 than coffee at $10 a pound. They prefer something else to coffee at $10.

That is the meaning of "can't afford." The price is such that they have a better use for the money, not that they don't have the money.

It's the same in health care. There's a better use for the money, at some price.

That's what holds the price down. Or, if you go the free health care route, that's what makes the price skyrocket.

Thursday, January 3, 2013

Investment Income

Corporate profits are taxed at a corporate rate of 35%.

Then the profits are distributed one of two ways.

1. As dividends to stockholders.

2. As reinvestment in the company, which eventually shows up as a capital gain when the shareholder sells the stock.

Taxing it again as income to the stockholder leads to a disastrously high total tax rate, so it's taxed at a "lower" rate than ordinary income.

This "lower" rate plus the corporate rate is still too high, but it's now being sold as a loophole.

It wasn't a loophole. There was a reason for it.