Economics & Finance

My home state of Minnesota has raised the minimum wage, from $5.15 an hour to $6.15/hr. While chief sponsor of the bill Sen. Ellen Anderson, D-St. Paul said “$6.15 is still a barebones pay rate.“, she feels it shows that “[w]e support you. We believe everyone who works hard in our state should have the opportunity to succeed.”

The article notes criticism by Republicans that this is merely a “feel-good” vote. A local business man complained, “it’s going to make a substantial impact to our cost of doing business. What we’ll have to do is pass that along to our customers. People can only afford to pay so much for your product. You’re going to price yourself out of business.”

On May 2nd, Florida similarly increased the minimum wage to $6.15 per hour. Florida’s new minimum wage is indexed to inflation, so the state will readjust the minimum every fall. A a spokesman for the Florida Chamber of Commerce said that “such increases will result in higher prices for Floridians, which will hurt elderly people living on fixed incomes.” Apparently, the socialist group ACORN had pushed for the state’s minimum-wage law, which was enacted last year as a constitutional amendment.

That’s the background.

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I was just reading this news item, which discusses the provisions that various emergency agencies have set up in order to take care of animals during disasters.

This is certainly nothing new, and it’s eminently practical since livestock are a major form of agricultural assets. Protecting farm animals against needless death is a way for the state governments to protect their tax base.

But people are taking steps beyond moving cows or horses out of harms way. Emergency shelters for people are now preparing to meet the needs of pets as well as their owners.

Megan McArdle says that it’s very difficult to declare yourself wealthy because the goalposts keep retreating as you move up the income ladder. That’s certainly true, but I think that I’ve found an indicator of the relative wealth of the nation as a whole.

Glenn Reynolds speculates about declining political support for the death tax:

I think that one difference may be that society does less to “make it possible” for people to get wealthy now. A hundred years ago, or even fifty, the politics of inheritance taxes were different. But then the government mostly defended the country and engaged in various public-good activities, like building roads or supporting research. There was pork, and income transfer, of course, but it was a much smaller part of the picture. So the notion that one was “giving back” to a system that made wealth possible made some sense.

He’s right, but it’s worse than that. Modern government not only transfers wealth on a grand scale from one group to another, it seeks to make the accumulation of wealth much more difficult in the first place. A quick calculation of how many marginal dollars one has to earn in 2005 vs. 1900 to accumulate an additional dollar of after-tax estate value makes clear how much harder it is now. (And that calculation considers only explicit taxes, not the many regulatory and legal costs — licensing, zoning, environmental regulations, safety regulations, EEOC regulations, lawsuits, etc. — that didn’t exist in the past.) From the perspective of many people who are actually trying to create wealth, government is the enemy. The way to make things better for everyone is to reduce disincentives to wealth creation, not to punish further those who are successful enough to run the government’s gantlet.

Leftists who write things like “fuck the small businessman” would do well to ask themselves where our society’s wealth comes from. It comes largely from productivity gains based on capital investment. Inheritance is traditionally an important source of such capital. Taxing inheritance reduces the capital stock, because government won’t invest it as effectively as family will, and because productive people have less reason to work hard, save and invest when they can’t share their wealth with their heirs. It’s also wrong to confiscate people’s property.

Blog goddess Natalie Solent has written two posts that I’d like to bring to your attention, but I’m only going to discuss them in one. (What a bargain! And we pass the savings on to you!)

The first post is a fisking of a British textbook used in a Religious Studies course. Natalie tears into the material with gusto, since the author of the textbook blames the inequality of living standards between developing nations and industrialized countries on world trade and a lack of foreign aid. NATO also adds to the problem by acting as the world’s police force.

Got that? World trade creates poverty. Mean nations who happen to be rich won’t give their wealth away to those who deserve it. And NATO screws everyone over by trying to keep genocide and regional conflicts from flaring up.

If this is what they’re teaching the youth in the UK then I weep for the Commonwealth. I’m also wondering why some Socialists are writing a textbook on religion, since I thought they hated that sort of thing.

Click on the link and read the post. It’s very good, and Natalie does a very good job of pointing out the absurdity of it all. But that’s not what’s really puzzling me.

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Friedman discusses Social Security, deficits, trade, monetary policy, immigration, education and more. Very much worth reading, as always.

(via Don Luskin)