Wednesday, August 21, 2013
The Greed of Moochers and Freeloaders
I had a thought recently about a person I know who constantly complains about corporate greed, how "we" (I use that term loosely) are all wage slaves, and how the rich aren't taxed enough etc., etc. I am sure most people know someone like this around them. However, this person is special as she (I use she in the politically correct way instead of the normal he, thus giving myself plausible deniability) has been sucking at the government tit for more then 20 years (SSDI) and in my opinion completely able to work in some manner. Yet there she is complaining about those corporations that provide the products she uses, then she denigrates those people who she has made her actual slaves, and complains about those who pay the majority of her support. All this while screaming that fracking is bad thus cutting off the ability of those supporting her from cheap energy, keeping their jobs in the US and keeping their energy cost down. Here is one thing that she doesn't understand their is a production tipping point at which the number of people supporting freeloaders like her will be outnumbered by the freeloaders and the production improvements will not be sufficient to keep pace. Now no one knows when this will happen but happen it will.
Monday, August 12, 2013
Rent Seeking (an essay by David Henderson)
“ Rent seeking” is one of the most important insights in the last fifty years of economics and, unfortunately, one of the most inappropriately labeled. Gordon Tullock originated the idea in 1967, and Anne Krueger introduced the label in 1974. The idea is simple but powerful. People are said to seek rents when they try to obtain benefits for themselves through the political arena. They typically do so by getting a subsidy for a good they produce or for being in a particular class of people, by getting a tariff on a good they produce, or by getting a special regulation that hampers their competitors. Elderly people, for example, often seek higher Social Security payments; steel producers often seek restrictions on imports of steel; and licensed electricians and doctors often lobby to keep regulations in place that restrict competition from unlicensed electricians or doctors.
But why do economists use the term “rent”? Unfortunately, there is no good reason. David Ricardo introduced the term “rent” in economics. It means the payment to a factor of production in excess of what is required to keep that factor in its present use. So, for example, if I am paid $150,000 in my current job but I would stay in that job for any salary over $130,000, I am making $20,000 in rent. What is wrong with rent seeking? Absolutely nothing. I would be rent seeking if I asked for a raise. My employer would then be free to decide if my services are worth it. Even though I am seeking rents by asking for a raise, this is not what economists mean by “rent seeking.” They use the term to describe people’s lobbying of government to give them special privileges. A much better term is “privilege seeking.”
It has been known for centuries that people lobby the government for privileges. Tullock’s insight was that expenditures on lobbying for privileges are costly and that these expenditures, therefore, dissipate some of the gains to the beneficiaries and cause inefficiency. If, for example, a steel firm spends one million dollars lobbying and advertising for restrictions on steel imports, whatever money it gains by succeeding, presumably more than one million, is not a net gain. From this gain must be subtracted the one-million-dollar cost of seeking the restrictions. Although such an expenditure is rational from the narrow viewpoint of the firm that spends it, it represents a use of real resources to get a transfer from others and is therefore a pure loss to the economy as a whole.
Krueger (1974) independently discovered the idea in her study of poor economies whose governments heavily regulated their people’s economic lives. She pointed out that the regulation was so extensive that the government had the power to create “rents” equal to a large percentage of national income. For India in 1964, for example, Krueger estimated that government regulation created rents equal to 7.3 percent of national income; for Turkey in 1968, she estimated that rents from import licenses alone were about 15 percent of Turkey’s gross national product. Krueger did not attempt to estimate what percentage of these rents were dissipated in the attempt to get them. Tullock (1993) tentatively maintained that expenditures on rent-seeking in democracies are not very large.
But why do economists use the term “rent”? Unfortunately, there is no good reason. David Ricardo introduced the term “rent” in economics. It means the payment to a factor of production in excess of what is required to keep that factor in its present use. So, for example, if I am paid $150,000 in my current job but I would stay in that job for any salary over $130,000, I am making $20,000 in rent. What is wrong with rent seeking? Absolutely nothing. I would be rent seeking if I asked for a raise. My employer would then be free to decide if my services are worth it. Even though I am seeking rents by asking for a raise, this is not what economists mean by “rent seeking.” They use the term to describe people’s lobbying of government to give them special privileges. A much better term is “privilege seeking.”
It has been known for centuries that people lobby the government for privileges. Tullock’s insight was that expenditures on lobbying for privileges are costly and that these expenditures, therefore, dissipate some of the gains to the beneficiaries and cause inefficiency. If, for example, a steel firm spends one million dollars lobbying and advertising for restrictions on steel imports, whatever money it gains by succeeding, presumably more than one million, is not a net gain. From this gain must be subtracted the one-million-dollar cost of seeking the restrictions. Although such an expenditure is rational from the narrow viewpoint of the firm that spends it, it represents a use of real resources to get a transfer from others and is therefore a pure loss to the economy as a whole.
Krueger (1974) independently discovered the idea in her study of poor economies whose governments heavily regulated their people’s economic lives. She pointed out that the regulation was so extensive that the government had the power to create “rents” equal to a large percentage of national income. For India in 1964, for example, Krueger estimated that government regulation created rents equal to 7.3 percent of national income; for Turkey in 1968, she estimated that rents from import licenses alone were about 15 percent of Turkey’s gross national product. Krueger did not attempt to estimate what percentage of these rents were dissipated in the attempt to get them. Tullock (1993) tentatively maintained that expenditures on rent-seeking in democracies are not very large.
Friday, August 2, 2013
Long term unemployment.
This is from Keith Hall's testimony before the Joint Economic Committee, Mr. Hall is a senior research fellow at the Mercatus Center at George Mason University. From 2008 until 2012 he served as the thirteenth Commissioner of the Bureau of Labor Statistics. In this role, he headed the principal fact-finding agency in the Federal Government in the broad field of labor economics and statistics. The BLS is an independent national statistical agency that collects, processes, analyzes, and disseminates essential statistical data to the American public, the U.S. Congress, other Federal agencies, State and local governments, business, and labor.
We can make a simple calculation to get some idea of the actual number of long-term jobless. Every two years the Bureau of Labor Statistics (BLS) projects the size of the US labor force. BLS first examines the future size and composition of the population as affected by the trends in births, deaths, and immigration. Then it analyzes the trends in labor force participation rates of different age, gender, race, and ethnic groups in a total of 136 separate categories and makes its projections.
In 2007, just prior to the Great Recession, BLS estimated that labor force participation would decline slowly (about 0.1 percent per year), due mainly to the aging of the US population. Using this as an estimate of what would have happened in the US labor market if the recession had not occurred,we can calculate the number of people that unex- pectedly dropped out of the labor force, presumably due to the recession [see graph 1 below]. If these people had not stopped actively looking for work and dropped out of the labor force, they would be counted as unemployed. It is impossible to know how many have been jobless for over six months, but considering that the average time spent searching before becoming inactive is about 22 weeks, this number could be as high as 5 million. Since there were 5.1 million people counted as long-term unemployed in 2012, the long-term jobless rate could be as much as twice as high as its current 3.0 percent [see graph 2 below].
Over time, the incidence of long-term unemployment has likely been increased because of the aging population in the United States and because of the higher level of labor force participation by women. The former creates higher levels of long-term unemployment because older, longer-tenured workers who are less likely to move in and out of employment are declining as a share of the labor force. Also, during the current recession and its aftermath, the extension of unemployment insurance benefits has likely contributed to the number of long-term jobless. Designed to ameliorate the negative financial impact of unemployment, unemployment insurance makes work- ers more willing to reject job offers in the hope of receiving a better offer in the future. This delays the movement from unemployment back to employment and raises the number of long-term unemployed. Although the size of the estimated effect varies, virtually every study on the effects of unemployment insurance finds that it has a negative influence on reemployment.
Despite these other influences, the main reason for the current, unprecedented level of long-term joblessness is weak economic growth. Since the end of the recession over three years ago, we have not had sufficiently strong economic growth to strengthen the labor market and trigger the rehiring of the long-term unemployed.
There is a predictable business cycle pattern to long-term unemployment. The number of long-term unemployed rises well after a recession begins and continues to rise well after the official end of a recession. The latter is simply because the process of full labor market recovery requires that GDP grow faster than its long-term trend. After the 2001 recession, this did not happen until mid-year 2003. The economic expansion between the 2001 and 2007 recessions was too mild and too short to result in a full rehiring of the long-term unemployed from the previous recession. As a result, when the Great Recession began, we already had a historically high long-term unemploy- ment rate for a recession onset. But the primary reason is that the current economic recovery appears to be the weakest in 60 years. The recession officially ended in 2009; economic growth has been weak since then, though consistently positive, and the trend is not encouraging. The recovery began in 2010 with GDP growth of 2.4 per- cent, but rather than strengthening, it has steadily slowed—with growth falling to 2.0 percent in 2011 and to just 1.7 percent last year. This is too slow to support strong job growth. In fact, this level of slow growth has histori- cally resulted in much slower job growth than we’ve actually seen. Economic growth alone would have predicted just 134,000 jobs per month in 2011 and 120,000 jobs per month in 2012 [see chart 3 below]. This effect can also be seen in the very weak labor productivity growth that we’ve experienced over the past two years.
The challenges for the long-term unemployed and jobless are daunting. Joblessness is costly, particularly for high- tenure workers who have invested time and resources in job-specific knowledge and skills. Studies consistently show that the longer someone is unemployed, the less likely they are to find new work. They may have lost job skills over time, have less connection with informal job networks, or face potential employers more reluctant to hire the long-term jobless. And because those with job skills in shortest supply will be reemployed first, the ranks of the long-term jobless may accumulate those that worked in permanently declining industries and those that have job skills that don’t translate well to new employers or industries.
Even after being reemployed, the permanent lost earnings for the jobless will likely be significant. Studies have shown that it can take as long as 20 years for reemployed workers to catch up on lost earnings, largely due to skill mismatches between the jobs lost and the new jobs created in the economy. These losses occur for workers with different lengths of previous job tenure, in all major industries, and for workers of any age. Recent estimates of the permanent earning losses range from 1.4 years of earnings in good times to 2.8 years during times of high unemployment (above 8 percent). After such an unprecedentedly deep recession and extended period of weak job growth, the job mismatch both now and in the future is likely to be the cause of even larger permanent earn- ings losses.
While the rate of economic growth affects the labor market, the high level of long-term unemployment also affects economic growth. For example, the Congressional Budget Office routinely estimates “potential” GDP as a measure of what level of national income could be generated if the economy were at full employment. The CBO’s most recent estimate suggests we are still losing about a trillion dollars a year from the effects of the Great Recession, five years after it ended. There is also concern that we will have a permanently higher level of unemployment going forward. Although it is, in my opinion, far too early to have a good idea if this will happen, a permanently higher level of joblessness will result in lower income growth.
Finally, the number of long-term unemployed also has significant impact on the level of government spending. Estimates place the annual expenditure on means-tested government programs at a trillion dollars a year. More broadly, spending on the whole range of government programs designed to provide for assistance under circum- stances of unemployment, poverty, sickness, and retirement has surged in recent years. This spending, called Government Social Benefits to Persons, is estimated every quarter by the Bureau of Economic Analysis. Their data shows that American households now have an unprecedented dependence on these government programs. A remarkable 17.2% of total household income now comes from government social benefits, and such spending tracks pretty closely to the jobless rate (the share of the working age population without employment) [see Graph 4 below].
In closing, the recovery from the effects of the Great Recession on the labor market has been very slow. One of the results of this slow progress has been the unprecedented growth in the number of long-term unemployed and, as bad as this official data appears, it underestimates the problem. There are almost certainly millions of people that are long-term jobless that are not considered unemployed. Although other factors may have contributed to this, the main cause is slow economic growth. The only real solution to this problem is a significant and sustained increase in economic growth. Unfortunately, just as slow economic growth has created long-term joblessness, long-term joblessness is helping to hold back economic growth and has had a significant impact on government spending.
I thank you again for inviting me here today and I would be happy to take any questions."
"Chairman Brady, Vice Chairwoman Klobuchar, and Members of the Committee: thank you for the chance to discuss the current employment situation and how long-term unemployment has affected and will continue to affect economic growth. I appreciate the opportunity to testify today.
We are now a full three years from the labor market trough of the Great Recession. Job creation has been relatively steady but modest since 2011. We averaged about 175,000 new jobs per month in 2011; 183,000 per month in 2012; and 168,000 jobs per month so far this year. While this job growth is welcome, it is far short of what we need to achieve a full labor market recovery. Two significant problems have become evident through this lengthy period of slow job growth. First, there has been an unprecedented disengagement from the labor force with current participation at its lowest level in almost 35 years. This means there are currently 102 million jobless people in the United States, but less than 12 million are still actively looking for work and therefore counted as unemployed. Second, the number of long-term unemployed is at a record high. They currently represent over 4.6 million people, and the long-term unemployment rate (the share of the labor force unemployed for over six months) remains well above historical levels at 3.0 percent.
Comparing the current situation with that of October 2009 helps put the effects of the disengagement from the labor market into perspective.. In that October, the unemployment rate was at the recession high of 10.0 percent, and 41.5 percent of the working age population were without jobs. Today, the unemployment rate has fallen to 7.6 percent, but labor force participation has declined so much that the jobless rate remains the same 41.5 percent. By this latter measure, we’ve made little progress towards a full labor market recovery. I estimate that there are over 5 million people missing from the unemployment rate because of the disengagement from the labor force caused by the Great Recession and slow recovery.
The other significant problem is that we currently have 4.6 million long-term unemployed. Although the long- term unemployment rate of 3.0 percent is down from the record high of 4.3 percent from early 2010, it remains well above the previous record high. Furthermore, two-thirds of these people have been jobless for over a year and might be classified as very long-termed unemployed. Large as these numbers are, they dramatically underestimate the long-term jobless problem. The same disengagement from the labor force that has driven down the unemployment rate without reducing joblessness has led to a serious underestimation of the problem. To be counted as long-term unemployed (as opposed to long-term jobless), an individual needs to:
- Have no work whatsoever for at least six months
- Want to work and be nearly instantly available if offered work
- Be actively looking for work. By “actively” looking, I mean that every month this individual must send out a resume, contact an employer directly, engage an employment agency, or engage in some other sort of activity that, by itself, could result in employment. Checking for new job openings on the internet or in the newspaper alone does not qualify as active job search.
We can make a simple calculation to get some idea of the actual number of long-term jobless. Every two years the Bureau of Labor Statistics (BLS) projects the size of the US labor force. BLS first examines the future size and composition of the population as affected by the trends in births, deaths, and immigration. Then it analyzes the trends in labor force participation rates of different age, gender, race, and ethnic groups in a total of 136 separate categories and makes its projections.
In 2007, just prior to the Great Recession, BLS estimated that labor force participation would decline slowly (about 0.1 percent per year), due mainly to the aging of the US population. Using this as an estimate of what would have happened in the US labor market if the recession had not occurred,we can calculate the number of people that unex- pectedly dropped out of the labor force, presumably due to the recession [see graph 1 below]. If these people had not stopped actively looking for work and dropped out of the labor force, they would be counted as unemployed. It is impossible to know how many have been jobless for over six months, but considering that the average time spent searching before becoming inactive is about 22 weeks, this number could be as high as 5 million. Since there were 5.1 million people counted as long-term unemployed in 2012, the long-term jobless rate could be as much as twice as high as its current 3.0 percent [see graph 2 below].
Over time, the incidence of long-term unemployment has likely been increased because of the aging population in the United States and because of the higher level of labor force participation by women. The former creates higher levels of long-term unemployment because older, longer-tenured workers who are less likely to move in and out of employment are declining as a share of the labor force. Also, during the current recession and its aftermath, the extension of unemployment insurance benefits has likely contributed to the number of long-term jobless. Designed to ameliorate the negative financial impact of unemployment, unemployment insurance makes work- ers more willing to reject job offers in the hope of receiving a better offer in the future. This delays the movement from unemployment back to employment and raises the number of long-term unemployed. Although the size of the estimated effect varies, virtually every study on the effects of unemployment insurance finds that it has a negative influence on reemployment.
Despite these other influences, the main reason for the current, unprecedented level of long-term joblessness is weak economic growth. Since the end of the recession over three years ago, we have not had sufficiently strong economic growth to strengthen the labor market and trigger the rehiring of the long-term unemployed.
There is a predictable business cycle pattern to long-term unemployment. The number of long-term unemployed rises well after a recession begins and continues to rise well after the official end of a recession. The latter is simply because the process of full labor market recovery requires that GDP grow faster than its long-term trend. After the 2001 recession, this did not happen until mid-year 2003. The economic expansion between the 2001 and 2007 recessions was too mild and too short to result in a full rehiring of the long-term unemployed from the previous recession. As a result, when the Great Recession began, we already had a historically high long-term unemploy- ment rate for a recession onset. But the primary reason is that the current economic recovery appears to be the weakest in 60 years. The recession officially ended in 2009; economic growth has been weak since then, though consistently positive, and the trend is not encouraging. The recovery began in 2010 with GDP growth of 2.4 per- cent, but rather than strengthening, it has steadily slowed—with growth falling to 2.0 percent in 2011 and to just 1.7 percent last year. This is too slow to support strong job growth. In fact, this level of slow growth has histori- cally resulted in much slower job growth than we’ve actually seen. Economic growth alone would have predicted just 134,000 jobs per month in 2011 and 120,000 jobs per month in 2012 [see chart 3 below]. This effect can also be seen in the very weak labor productivity growth that we’ve experienced over the past two years.
The challenges for the long-term unemployed and jobless are daunting. Joblessness is costly, particularly for high- tenure workers who have invested time and resources in job-specific knowledge and skills. Studies consistently show that the longer someone is unemployed, the less likely they are to find new work. They may have lost job skills over time, have less connection with informal job networks, or face potential employers more reluctant to hire the long-term jobless. And because those with job skills in shortest supply will be reemployed first, the ranks of the long-term jobless may accumulate those that worked in permanently declining industries and those that have job skills that don’t translate well to new employers or industries.
Even after being reemployed, the permanent lost earnings for the jobless will likely be significant. Studies have shown that it can take as long as 20 years for reemployed workers to catch up on lost earnings, largely due to skill mismatches between the jobs lost and the new jobs created in the economy. These losses occur for workers with different lengths of previous job tenure, in all major industries, and for workers of any age. Recent estimates of the permanent earning losses range from 1.4 years of earnings in good times to 2.8 years during times of high unemployment (above 8 percent). After such an unprecedentedly deep recession and extended period of weak job growth, the job mismatch both now and in the future is likely to be the cause of even larger permanent earn- ings losses.
While the rate of economic growth affects the labor market, the high level of long-term unemployment also affects economic growth. For example, the Congressional Budget Office routinely estimates “potential” GDP as a measure of what level of national income could be generated if the economy were at full employment. The CBO’s most recent estimate suggests we are still losing about a trillion dollars a year from the effects of the Great Recession, five years after it ended. There is also concern that we will have a permanently higher level of unemployment going forward. Although it is, in my opinion, far too early to have a good idea if this will happen, a permanently higher level of joblessness will result in lower income growth.
Finally, the number of long-term unemployed also has significant impact on the level of government spending. Estimates place the annual expenditure on means-tested government programs at a trillion dollars a year. More broadly, spending on the whole range of government programs designed to provide for assistance under circum- stances of unemployment, poverty, sickness, and retirement has surged in recent years. This spending, called Government Social Benefits to Persons, is estimated every quarter by the Bureau of Economic Analysis. Their data shows that American households now have an unprecedented dependence on these government programs. A remarkable 17.2% of total household income now comes from government social benefits, and such spending tracks pretty closely to the jobless rate (the share of the working age population without employment) [see Graph 4 below].
In closing, the recovery from the effects of the Great Recession on the labor market has been very slow. One of the results of this slow progress has been the unprecedented growth in the number of long-term unemployed and, as bad as this official data appears, it underestimates the problem. There are almost certainly millions of people that are long-term jobless that are not considered unemployed. Although other factors may have contributed to this, the main cause is slow economic growth. The only real solution to this problem is a significant and sustained increase in economic growth. Unfortunately, just as slow economic growth has created long-term joblessness, long-term joblessness is helping to hold back economic growth and has had a significant impact on government spending.
I thank you again for inviting me here today and I would be happy to take any questions."
Wednesday, July 24, 2013
Oh What a Tangled Web He Weaves as He Continues to Deceive.
Last Friday President Obama made a surprise visit to the White House Briefing and commented on the verdict in the George Zimmerman case in Florida. Instead of taking the opportunity to unite he continued on his path of division and balkanization, but worse then that he was deceptive in his comments and continued to advance a story that was untrue. A complete transcript can be found here.
Here is a breakdown of what he said:
" You know, when Trayvon Martin was first shot, I said that this could have been my son. Another way of saying that is Trayvon Martin could have been me 35 years ago. And when you think about why, in the African- American community at least, there’s a lot of pain around what happened here, I think it’s important to recognize that the African- American community is looking at this issue through a set of experiences and a history that -- that doesn’t go away."
First of all what happened to Trayvon Martin happened to Trayvon Martin and has nothing to do with the historical experiences of African- Americans. The pain created in the African- American community is a pain created by the false narrative explicit in this statement by the President. What is the false narrative: 1. That George Zimmerman is white (he is not) 2. That this was the result of racism, which was never brought up by either the judge or the prosecution. Further, no one has any evidence to support this claim, which is why Attorney General Eric Holder is setting up his email account so if anyone has any evidence of George Zimmerman being a racist they can submit it to the Justice Department. 3. That the verdict was somehow improper. 4. The law (self defense) is unjust when used against someone who "looks like the president".
"There are very few African-American men in this country who haven’t had the experience of being followed when they were shopping in a department store. That includes me. And there are very few African-American men who haven’t had the experience of walking across the street and hearing the locks click on the doors of cars. That happens to me, at least before I was a senator. There are very few African-Americans who haven’t had the experience of getting on an elevator and a woman clutching her purse nervously and holding her breath until she had a chance to get off. That happens often."
There are very few young men (white or black or Mexican like George Zimmerman) who haven't been followed in the department store (I know I was as a teenager, I found it rather amusing). The fact that older women are cautious around young men was not at all offensive to me then and it sure isn't now. Might they have a legitimate reason for this concern? Even Jesse Jackson said he was relieved when the person coming up behind him on the street was white and not black. Why did he say that? He must have had a reason. That said I do believe that this probably happens to young black men more often, but what does that have to do with this, nothing unless you accept the original false premise that George Zimmerman was white and his altercation with Trayvon Martin was racial in nature.
"And you know, I don’t want to exaggerate this, but those sets of experiences inform how the African-American community interprets what happened one night in Florida. And it’s inescapable for people to bring those experiences to bear."
Again we continue with the false premise. Should we interpret what happened one night in Florida to those sets of experience that make up our lives. If this is the case then allow me to talk like President Obama. In 1982 my brother was stabbed to death by a 17 or 21 year old black man in Arizona (each claimed the other did the actual stabbing) during a robbery. So based on my past history I should ignore all the facts and proceed on emotion and bring that experience to bear on every incident that involves people who look like the President or his son that he imagines. As a mater of fact either of them could have been the President 35 or 31 years ago.
"The African-American community is also knowledgeable that there is a history of racial disparities in the application of our criminal laws, everything from the death penalty to enforcement of our drug laws. And that ends up having an impact in terms of how people interpret the case."
This is where he might have a point. I do think it is probably time we took a look at the racial application of our laws. This however is the action of the state, and not just the state of Florida but the state as represented by the President. That said this also continues from the false premises, George Zimmerman does not represent the state, nor has there been on shred of evidence presented that this attack was racially motivated.
"We understand that some of the violence that takes place in poor black neighborhoods around the country is born out of a very violent past in this country, and that the poverty and dysfunction that we see in those communities can be traced to a very difficult history."
If this is true, maybe he can explain why that community wasn't like this 60 or 70 years ago. Why does he always blame this country for problems largely created by his philosophy of government and those who advanced it before his arrival. Further, are Africans who live in Africa better off or worse off then people who live hear of African decent?
"So -- so folks understand the challenges that exist for African- American boys, but they get frustrated, I think, if they feel that there’s no context for it or -- and that context is being denied. And -- and that all contributes, I think, to a sense that if a white male teen was involved in the same kind of scenario, that, from top to bottom, both the outcome and the aftermath might have been different."
Seriously, it might have different if Trayvon Martins attitude had been different. It might have been different if he just went home if he was being followed, after all he was out of the sight of Zimmerman for at least 1 and 1/2 minutes and he was less then 500 feet from his door the last time Zimmerman seen him, plenty of time to just go on home. Now I will commit the sin that all the liberals have done from the beginning and assume something that I don't know for a fact. Maybe if he would have stopped by the car and said to Zimmerman (while they were both on the phone) Why are you following me? Then Zimmerman would possibly have said "you where acting suspicious and I am part of the neighborhood watch" and Martin being an understanding person could have said "well I am not from this area and normally I live in (wherever) but I got in some trouble today at school and my mom sent me to stay with my dad, and he went out so I went to the store to get this ice tea (holds up ice tea) and this (holds up skittles) and the reason I was walking so close to the houses was I was trying to keep out of the rain. I am staying at (whatever the address is) and I am on my way there now" Zimmerman to the police dispatcher "never mind I just talked to the young man he is new to the neighborhood and was near the houses trying to stay out of the rain. Sorry for the bother." Zimmerman to Martin "Hop in I'll give your a ride". That might have been the way it turned out except for society and Martin's culture, reinforced here by the President (virtually guaranteeing that this will happen again) made Martin react just as the Presidents friend Henry Gates did when the police arrived after he broke into his own apartment. Both of these incidents would probably have ended different if the person were white because the person would have reacted to the situation differently and thus instead of escalating the situation would have defused it instead.
"Number one, precisely because law enforcement is often determined at the state and local level, I think it’d be productive for the Justice Department -- governors, mayors to work with law enforcement about training at the state and local levels in order to reduce the kind of mistrust in the system that sometimes currently exists."
I think the training needs to start in the homes of African Americans. Its time that African Americans examine their racism. Buying the false premise that all this hogwash the President spewed came from (that it is a white/black thing) white people have been examining their attitudes about race for 60+ years I think its time that African Americans do a little introspection of their own. After all Trayvon Martin acted just like Henry Gates the only difference is that Martin was a little less educated and a little less mature and attacked physically instead of verbally. Why is crime so much greater in some communities then in others? Attitude of the people who live there has a great impact. I was taught to do as the police told you and cooperate, even if they are arresting you wrongly, that can be sorted out later (that's why there are lawyers). I don't think that's the message the President is presenting here. He has however diverted our attention from things that might help to things that don't make a difference. Suggesting that training the police would prevent a private citizen (Zimmerman) from doing anything, further demonstrating the false narrative that the President is advancing all through this statement.
"You know, when I was in Illinois I passed racial profiling legislation. And it actually did just two simple things. One, it collected data on traffic stops and the race of the person who was stopped. But the other thing was it resourced us training police departments across the state on how to think about potential racial bias and ways to further professionalize what they were doing."
"Along the same lines, I think it would be useful for us to examine some state and local laws to see if it -- if they are designed in such a way that they may encourage the kinds of altercations and confrontations and tragedies that we saw in the Florida case, rather than defuse potential altercations.
I know that there’s been commentary about the fact that the stand your ground laws in Florida were not used as a defense in the case."
"And for those who resist that idea that we should think about something like these “stand your ground” laws, I just ask people to consider if Trayvon Martin was of age and armed, could he have stood his ground on that sidewalk? And do we actually think that he would have been justified in shooting Mr. Zimmerman, who had followed him in a car, because he felt threatened?"
I grouped this together to point out first that what cops do are don't do was irrelevant to this case and that it is just a continuation of his previous actions regarding Mr. Gates ie. the cops are always to blame (in this case even though they weren't there). Then he amazingly tells the truth, stand your ground law was not used in this case then goes on to show he doesn't know what it means (which is unlikely since he was a co sponsor of the stand your ground law when he was a state senator in Illinois article can be read here).
Whatever happened on the night of this incident everyone (or almost everyone) knows that this was a tragedy for all involved. One cannot help but feel sympathy for the family of Mr. Martin and even for Mr. Martin himself, no matter what the errors of judgment he made on that night. Further, I feel sympathy for Mr. Zimmerman who was forced to take a life on that night to protect his own. I doubt that there is anyone involved who doesn't wish that night would have turned out differently, but nothing the President said addresses any of the problems that caused the night to turn out the way it did on this occasion. Did Zimmerman make errors of judgment as well I think the answer is yes he did.
Now what do I think really happened that night (although I have no absolute proof) based on the evidence and speculation on my part. George Zimmerman spotted Trayvon Martin walking near the houses in his subdivision and perceived it to be suspicious. There had been many break ins and he was part of the neighborhood watch although on this night he was on his way to the store and not on neighborhood watch (I know this is news to many, tells you how good our news media really is doesn't it). I think Martin was probably walking close to the houses to try and stay out of the rain as much as possible. Zimmerman called the police and watched as Matin approached his vehicle.
As a side note here for those who are not aware Zimmerman didn't bring up race, the dispatcher asked him what race the person was (for those who think that isn't important, how will the cops know who to look for when they show up) he said "I think he is black" (I know some have only heard the doctored (they say edited) NBC 911 tape that takes out the dispatcher asking what race he is and making it look like Zimmerman said "He is acting suspicious, he looks black". This kind of race baiting is something the President could have addressed but didn't. Martin passed the vehicle and started to run Zimmerman got out to pursue him when the dispatcher heard Zimmerman's breathing become heavier he asked "are you following him" Zimmerman "yes" Dispatcher "we don't need you to do that" around 13 seconds later his breathing returned to normal. He then lost sight of Martin and continued to talk to the dispatcher for another 90 seconds. That is the evidence here is the speculation I think Zimmerman walked around the Apartment building to looked down the sidewalk in the middle to see where Martin went not seeing him I think he intended to walk around the building and go back to his car but half way down the sidewalk Martin jumped him from the bushes. Knocked him to the ground (despite the pictures you have seen Martin was 6'2" Zimmerman only 5'7" ) and commenced to beating him (here we have some evidence Zimmerman's knuckles not skinned Martins knuckles very skinned, and we have the witness that said that Martin was straddling him and raining down blows toward him. At this point Zimmerman is able to get his weapon out and shoot Martin in the chest (the ballistic evidence also supports this as the expert testified that the muzzle was in contact with his hoody sweatshirt and the shirt was between 3 and 4 inches from his skin which is consistent with some one leaning forward over the shooter).
This was a tragedy the only winners here are the race baiters and there cronies, and it appears the President is one of them.
Here is a breakdown of what he said:
" You know, when Trayvon Martin was first shot, I said that this could have been my son. Another way of saying that is Trayvon Martin could have been me 35 years ago. And when you think about why, in the African- American community at least, there’s a lot of pain around what happened here, I think it’s important to recognize that the African- American community is looking at this issue through a set of experiences and a history that -- that doesn’t go away."
First of all what happened to Trayvon Martin happened to Trayvon Martin and has nothing to do with the historical experiences of African- Americans. The pain created in the African- American community is a pain created by the false narrative explicit in this statement by the President. What is the false narrative: 1. That George Zimmerman is white (he is not) 2. That this was the result of racism, which was never brought up by either the judge or the prosecution. Further, no one has any evidence to support this claim, which is why Attorney General Eric Holder is setting up his email account so if anyone has any evidence of George Zimmerman being a racist they can submit it to the Justice Department. 3. That the verdict was somehow improper. 4. The law (self defense) is unjust when used against someone who "looks like the president".
"There are very few African-American men in this country who haven’t had the experience of being followed when they were shopping in a department store. That includes me. And there are very few African-American men who haven’t had the experience of walking across the street and hearing the locks click on the doors of cars. That happens to me, at least before I was a senator. There are very few African-Americans who haven’t had the experience of getting on an elevator and a woman clutching her purse nervously and holding her breath until she had a chance to get off. That happens often."
There are very few young men (white or black or Mexican like George Zimmerman) who haven't been followed in the department store (I know I was as a teenager, I found it rather amusing). The fact that older women are cautious around young men was not at all offensive to me then and it sure isn't now. Might they have a legitimate reason for this concern? Even Jesse Jackson said he was relieved when the person coming up behind him on the street was white and not black. Why did he say that? He must have had a reason. That said I do believe that this probably happens to young black men more often, but what does that have to do with this, nothing unless you accept the original false premise that George Zimmerman was white and his altercation with Trayvon Martin was racial in nature.
"And you know, I don’t want to exaggerate this, but those sets of experiences inform how the African-American community interprets what happened one night in Florida. And it’s inescapable for people to bring those experiences to bear."
Again we continue with the false premise. Should we interpret what happened one night in Florida to those sets of experience that make up our lives. If this is the case then allow me to talk like President Obama. In 1982 my brother was stabbed to death by a 17 or 21 year old black man in Arizona (each claimed the other did the actual stabbing) during a robbery. So based on my past history I should ignore all the facts and proceed on emotion and bring that experience to bear on every incident that involves people who look like the President or his son that he imagines. As a mater of fact either of them could have been the President 35 or 31 years ago.
"The African-American community is also knowledgeable that there is a history of racial disparities in the application of our criminal laws, everything from the death penalty to enforcement of our drug laws. And that ends up having an impact in terms of how people interpret the case."
This is where he might have a point. I do think it is probably time we took a look at the racial application of our laws. This however is the action of the state, and not just the state of Florida but the state as represented by the President. That said this also continues from the false premises, George Zimmerman does not represent the state, nor has there been on shred of evidence presented that this attack was racially motivated.
"We understand that some of the violence that takes place in poor black neighborhoods around the country is born out of a very violent past in this country, and that the poverty and dysfunction that we see in those communities can be traced to a very difficult history."
If this is true, maybe he can explain why that community wasn't like this 60 or 70 years ago. Why does he always blame this country for problems largely created by his philosophy of government and those who advanced it before his arrival. Further, are Africans who live in Africa better off or worse off then people who live hear of African decent?
"So -- so folks understand the challenges that exist for African- American boys, but they get frustrated, I think, if they feel that there’s no context for it or -- and that context is being denied. And -- and that all contributes, I think, to a sense that if a white male teen was involved in the same kind of scenario, that, from top to bottom, both the outcome and the aftermath might have been different."
Seriously, it might have different if Trayvon Martins attitude had been different. It might have been different if he just went home if he was being followed, after all he was out of the sight of Zimmerman for at least 1 and 1/2 minutes and he was less then 500 feet from his door the last time Zimmerman seen him, plenty of time to just go on home. Now I will commit the sin that all the liberals have done from the beginning and assume something that I don't know for a fact. Maybe if he would have stopped by the car and said to Zimmerman (while they were both on the phone) Why are you following me? Then Zimmerman would possibly have said "you where acting suspicious and I am part of the neighborhood watch" and Martin being an understanding person could have said "well I am not from this area and normally I live in (wherever) but I got in some trouble today at school and my mom sent me to stay with my dad, and he went out so I went to the store to get this ice tea (holds up ice tea) and this (holds up skittles) and the reason I was walking so close to the houses was I was trying to keep out of the rain. I am staying at (whatever the address is) and I am on my way there now" Zimmerman to the police dispatcher "never mind I just talked to the young man he is new to the neighborhood and was near the houses trying to stay out of the rain. Sorry for the bother." Zimmerman to Martin "Hop in I'll give your a ride". That might have been the way it turned out except for society and Martin's culture, reinforced here by the President (virtually guaranteeing that this will happen again) made Martin react just as the Presidents friend Henry Gates did when the police arrived after he broke into his own apartment. Both of these incidents would probably have ended different if the person were white because the person would have reacted to the situation differently and thus instead of escalating the situation would have defused it instead.
"Number one, precisely because law enforcement is often determined at the state and local level, I think it’d be productive for the Justice Department -- governors, mayors to work with law enforcement about training at the state and local levels in order to reduce the kind of mistrust in the system that sometimes currently exists."
I think the training needs to start in the homes of African Americans. Its time that African Americans examine their racism. Buying the false premise that all this hogwash the President spewed came from (that it is a white/black thing) white people have been examining their attitudes about race for 60+ years I think its time that African Americans do a little introspection of their own. After all Trayvon Martin acted just like Henry Gates the only difference is that Martin was a little less educated and a little less mature and attacked physically instead of verbally. Why is crime so much greater in some communities then in others? Attitude of the people who live there has a great impact. I was taught to do as the police told you and cooperate, even if they are arresting you wrongly, that can be sorted out later (that's why there are lawyers). I don't think that's the message the President is presenting here. He has however diverted our attention from things that might help to things that don't make a difference. Suggesting that training the police would prevent a private citizen (Zimmerman) from doing anything, further demonstrating the false narrative that the President is advancing all through this statement.
"You know, when I was in Illinois I passed racial profiling legislation. And it actually did just two simple things. One, it collected data on traffic stops and the race of the person who was stopped. But the other thing was it resourced us training police departments across the state on how to think about potential racial bias and ways to further professionalize what they were doing."
"Along the same lines, I think it would be useful for us to examine some state and local laws to see if it -- if they are designed in such a way that they may encourage the kinds of altercations and confrontations and tragedies that we saw in the Florida case, rather than defuse potential altercations.
I know that there’s been commentary about the fact that the stand your ground laws in Florida were not used as a defense in the case."
"And for those who resist that idea that we should think about something like these “stand your ground” laws, I just ask people to consider if Trayvon Martin was of age and armed, could he have stood his ground on that sidewalk? And do we actually think that he would have been justified in shooting Mr. Zimmerman, who had followed him in a car, because he felt threatened?"
I grouped this together to point out first that what cops do are don't do was irrelevant to this case and that it is just a continuation of his previous actions regarding Mr. Gates ie. the cops are always to blame (in this case even though they weren't there). Then he amazingly tells the truth, stand your ground law was not used in this case then goes on to show he doesn't know what it means (which is unlikely since he was a co sponsor of the stand your ground law when he was a state senator in Illinois article can be read here).
Whatever happened on the night of this incident everyone (or almost everyone) knows that this was a tragedy for all involved. One cannot help but feel sympathy for the family of Mr. Martin and even for Mr. Martin himself, no matter what the errors of judgment he made on that night. Further, I feel sympathy for Mr. Zimmerman who was forced to take a life on that night to protect his own. I doubt that there is anyone involved who doesn't wish that night would have turned out differently, but nothing the President said addresses any of the problems that caused the night to turn out the way it did on this occasion. Did Zimmerman make errors of judgment as well I think the answer is yes he did.
Now what do I think really happened that night (although I have no absolute proof) based on the evidence and speculation on my part. George Zimmerman spotted Trayvon Martin walking near the houses in his subdivision and perceived it to be suspicious. There had been many break ins and he was part of the neighborhood watch although on this night he was on his way to the store and not on neighborhood watch (I know this is news to many, tells you how good our news media really is doesn't it). I think Martin was probably walking close to the houses to try and stay out of the rain as much as possible. Zimmerman called the police and watched as Matin approached his vehicle.
As a side note here for those who are not aware Zimmerman didn't bring up race, the dispatcher asked him what race the person was (for those who think that isn't important, how will the cops know who to look for when they show up) he said "I think he is black" (I know some have only heard the doctored (they say edited) NBC 911 tape that takes out the dispatcher asking what race he is and making it look like Zimmerman said "He is acting suspicious, he looks black". This kind of race baiting is something the President could have addressed but didn't. Martin passed the vehicle and started to run Zimmerman got out to pursue him when the dispatcher heard Zimmerman's breathing become heavier he asked "are you following him" Zimmerman "yes" Dispatcher "we don't need you to do that" around 13 seconds later his breathing returned to normal. He then lost sight of Martin and continued to talk to the dispatcher for another 90 seconds. That is the evidence here is the speculation I think Zimmerman walked around the Apartment building to looked down the sidewalk in the middle to see where Martin went not seeing him I think he intended to walk around the building and go back to his car but half way down the sidewalk Martin jumped him from the bushes. Knocked him to the ground (despite the pictures you have seen Martin was 6'2" Zimmerman only 5'7" ) and commenced to beating him (here we have some evidence Zimmerman's knuckles not skinned Martins knuckles very skinned, and we have the witness that said that Martin was straddling him and raining down blows toward him. At this point Zimmerman is able to get his weapon out and shoot Martin in the chest (the ballistic evidence also supports this as the expert testified that the muzzle was in contact with his hoody sweatshirt and the shirt was between 3 and 4 inches from his skin which is consistent with some one leaning forward over the shooter).
This was a tragedy the only winners here are the race baiters and there cronies, and it appears the President is one of them.
Tuesday, July 16, 2013
For those Who Support Minimum Wage Increases a Question?
Answer Me This About Mandated Minimum Wages
Here’s a letter to WTOP Radio:
You quote minimum-wage supporters who assert that hiking that wage will raise the pay of low-skilled workers if the legislation targets “industries that can afford to increase wages” (“Wal-Mart faceoff with DC fuels minimum wage debate,” July 15).
You should ask these minimum-wage supporters the following questions: “If government enacts legislation setting the minimum price that people can pay for a new car at $50,000, do you – you confident supporters of government-mandated minimum prices – believe that this legislation will result in people paying $50,000 for the likes of Toyota Corollas and Ford Fiestas? Or do you realize that if government obliges car buyers to pay at least $50,000 for a new vehicle, these buyers will choose to buy no low-end cars and opt (if they buy a new car at all) instead to purchase a new BMW, Lexus, or other luxury model?”
And here’s a follow-up question that you should ask: “Do your answers to the above questions change if the minimum-car-price legislation applies only to high-income people? That is, do you think that merely because an attorney or surgeon earns, say, an annual salary of one million dollars – and, hence, can “afford” to pay $50,000 for a Corolla or Fiesta – that that wealthy car buyer will be prompted by minimum-car-price legislation to fork out $50,000 for the likes of a Corolla or Fiesta, especially given that he or she can buy the likes of a BMW or Lexus for the same money?”
Unless you find a minimum-wage supporter who can plausibly explain why a legislated minimum price for cars will not reduce the income earned by sellers of low-end cars, you should be more skeptical of the analytical abilities of those who insist that a legislated minimum wage will not reduce the income earned by sellers of low-skilled labor.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
Monday, July 15, 2013
Walmart Myths? An economist responds.
Monday, June 3, 2013
Does Paul Krugman suffer from Confirmation Bias
There is a fight in the economics world caused by people who don't like the findings of a paper by Reinhart and Rogoff on the connection between the debt a country has and the GDP growth experienced by there economies. Admittedly some of the problems were caused by R & R by overstating the effect on GDP when the debt gets to 90% of GDP. However, it is relatively clear that debt does have some effect on GDP. Paul Krugman is the leading the attack of the paper while ignoring the data that clearly shows there is a connection between the % of debt to GDP and the % of growth in the GDP itself. A great article on this fight with links to the paper are here. This is the typical act of the progressive I don't agree with the facts/results so I attack the person who delivers the information with which I don't agree.
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