Reich Is Wrong on the Minimum Wage

Watching Robert Reich’s new video in which he endorses raising the minimum wage by $7.75 per hour – to $15 per hour – is painful.  It hurts to encounter such rapid-fire economic ignorance, even if the barrage lasts for only two minutes. 

Perhaps the most remarkable flaw in this video is Reich’s manner of addressing the bedrock economic objection to the minimum wage – namely, that minimum wage prices some low-skilled workers out of jobs.  Ignoring supply-and-demand analysis (which depicts the correct common-sense understanding that the higher the minimum wage, the lower is the quantity of unskilled workers that firms can profitably employ), Reich asserts that a higher minimum wage enables workers to spend more money on consumer goods which, in turn, prompts employers to hire more workers.  Reich apparently believes that his ability to describe and draw such a “virtuous circle” of increased spending and hiring is reason enough to dismiss the concerns of “scare-mongers” (his term) who worry that raising the price of unskilled labor makes such labor less attractive to employers. 

Ignore (as Reich does) that any additional amounts paid in total to workers mean lower profits for firms or higher prices paid by consumers – and, thus, less spending elsewhere in the economy by people other than the higher-paid workers.

Ignore (as Reich does) the extraordinarily low probability that workers who are paid a higher minimum wage will spend all of their additional earnings on goods and services produced by minimum-wage workers. 

Understanding the World’s Energy Needs

A new documentary by Cato Senior Fellow Johan Norberg, shown recently on PBS stations nationwide, is a non-political look at the reality of the world’s energy problems. “Energy questions are complicated, and there are always trade-offs,” Norberg notes.    While bringing electricity to many remote villages in India and the Sahara causes an increase in carbon emissions, it also allows families to have refrigeration for their food, electricity to light their homes and the time to develop their lives beyond working just to sustain themselves every day.   “Don’t they deserve the same kinds of life changing benefits that power has brought the west?” Norberg asks.

This program explains how ALL sources of energy have their attributes and drawbacks.   It will take large amounts of low-cost power to fuel economic development in the third world, while also keeping up with growth in the developed world.  There is no “perfect” source to meet these needs:  Coal and oil make up a third of the current world energy supply, so while the infrastructure is in place and works fairly inexpensively, these fossil fuels are consistently tagged as “dirty.”  Natural gas is abundant and clean, and cheap and easy to use, but the means of getting to it (fracking) is controversial.  Nuclear energy power is one of the only large-scale alternatives to fossil fuels, but nuclear accidents like Chernobyl and Three Mile Island have made the public wary.  Hydro power is clean and fairly cheap, but dams have been targeted by environmentalist for harming fish populations. And, Norberg notes, most good sources of hydropower are already being utilized to their full capacity, leaving little chance to expand this resource.  Solar power is clean and abundant, but it doesn’t work when the sun doesn’t shine, and the infrastructure to capture it is expensive.  Wind supplies only one percent of energy globally because while it’s clean, it’s intermittent and doesn’t always come at the right velocity.

Norberg doesn’t make judgements, for the most part…except to say that top-down, government imposed “solutions” to the world’s energy problems have not worked yet, and are highly unlikely to suddenly start working. 

This is an excellent program for people who really want to understand the basics of world energy needs.  Watch it at Cato’s site here, and read more about the Free to Choose network here.

Second Circuit Declares NSA’s Telephone Dragnet Unlawful

In a ruling certain to profoundly shape the ongoing debate over surveillance reform in Congress, the U.S. Court of Appeals for the Second Circuit today held that the National Security Agency’s indiscriminate collection of Americans’ telephone calling records exceeds the legal authority granted by the Patriot Act’s controversial section 215, which is set to expire at the end of this month.  Legislation to reform and constrain that authority, the USA Freedom Act, has drawn broad bipartisan support, but Senate Majority Leader Mitch McConnell has stubbornly pressed ahead with a bill to reauthorize §215 without any changes.  But the Second Circuit ruling gives even defenders of the NSA program powerful reasons to support reform.

McConnell and other reform opponents have consistently insisted, in defiance of overwhelming evidence, that the NSA program is an essential tool in the fight against terrorism, and that any reform would hinder efforts to keep Americans safe—a claim rejected even by the leaders of the intelligence community. (Talk about being more Catholic than the Pope!)  Now, however, a federal appellate court has clearly said that no amount of contortion can stretch the language of §215 into a justification for NSA’s massive database—which means it’s no longer clear that a simple reauthorization would preserve the program. Ironically, if McConnell is determined to salvage some version of this ineffective program, his best hope may now be… the USA Freedom Act!

The Freedom Act would, in line with the Second Circuit opinion, bar the use of §215 and related authorities to indiscriminately collect records in bulk, requiring that a “specific selection term,” like a phone number, be used to identify the records sought by the government.  It also, however, creates a separate streamlined process that would allow call records databases already retained by telephone companies to be rapidly searched and cross-referenced, allowing NSA to more quickly obtain the specific information it seeks about terror suspects and their associates without placing everyone’s phone records in the government’s hands.  If the Second Circuit’s ruling is upheld, NSA will likely have to cease bulk collection even if Congress does reauthorize §215.  That makes passage of the Freedom Act the best way to guarantee preservation of the rapid search capability McConnell seems to think is so important—though, of course, the government will retain the ability to obtain specific phone records (albeit less quickly) under either scenario.  With this ruling, in short, the arguments against reform have gone from feeble to completely unsustainable.

In Holding NSA Spying Illegal, the Second Circuit Treats Data as Property

The U.S. Court of Appeals for the Second Circuit has ruled that section 215 of the USA-PATRIOT Act never authorized the National Security Agency’s collection of all Americans’ phone calling records. It’s pleasing to see the opinion parallel arguments that Randy Barnett and I put forward over the last couple of years.

Two points from different parts of the opinion can help structure our thinking about constitutional protection for communications data and other digital information. Data is property, which can be unconstitutionally seized.

As cases like this often do, the decision spends much time on niceties like standing to sue. In that discussion—finding that the ACLU indeed has legal standing to challenge government collection of its calling data—the court parried the government’s argument that the ACLU suffers no offense until its data is searched.

“The Fourth Amendment protects against unreasonable searches and seizures,” the court emphasized. Data is a thing that can be owned, and when the government takes someone’s data, it is seized.

In this situation, the data is owned jointly by telecommunications companies and their customers. The companies hold it subject to obligations they owe their customers limiting what they can do with it. Think of covenants that run with land. These covenants run with data for the benefit of the customer.

UN: Food Prices Are Lower Today than in 1961

Food prices are (slightly) lower today than they were in 1961. Yes, that’s right. Adjusted for inflation, the United Nations’ Food and Agriculture Organization calculates, the food price index in 2015 stood at 131.2. It was 131.7 in 1961.

In the meantime, the world population has increased from 3.01 billion to 7.28 billion – a rise of 4.2 billion or 135 percent.

If you are Paul Ehrlich, Lester Brown, William and Paul Paddock, Garrett Hardin, Rajiv Gandhi and countless other followers of Reverend Malthus, this should NOT be happening. But, it is. Human beings are intelligent animals. Unlike rabbits, who overbreed when food is plentiful and die out when it is not, humans innovate their way out of scarcity.

So, happy Thursday to you all.

The Common Core Conundrum

Common Core is either meaningless or antithetical to a free and pluralistic society.

That’s the key conundrum that Professor Jay P. Greene, chair of the Department of Education Reform at the University of Arkansas, identified yesterday during his testimony before the Arkansas Council on Common Core Review, which is currently considering whether to keep, modify, or scrap the standards:

Because standards are about values, their content is not merely a technical issue that can be determined by scientific methods. There is no technically correct set of standards, just as there is no technically correct political party or religion. Reasonable people have legitimate differences of opinion about what they want their children taught. A fundamental problem with national standards efforts, like Common Core, is that they are attempting to impose a single vision of a proper education on a large and diverse country with differing views.

National standards can try to produce uniformity out of diversity with some combination of two approaches. They can promote standards that are so bland and ambiguous as to be inoffensive to almost everyone. Or they can force their particular vision on those who believe differently. Either way, national standards, like Common Core, are inappropriate and likely to be ineffective. If national standards embrace a vague consensus, then they make no difference since almost everyone already believes them and is already working toward them. If, on the other hand, national standards attempt to impose their particular vision of a proper education on those with differing visions, then national standards are oppressive and likely to face high levels of resistance and non-compliance. So, national standards are doomed to be either unnecessary or illiberal. Either way, they are wrong. [emphasis added]

Supporters of Common Core clearly hope it does bend educators to their will induce “instructional shifts” in our nation’s classrooms, but as Greene points out, for Common Core to be more than “just a bunch of words in a document,” it needs some sort of mechanism to coerce schools and educators into changing their practice to align with the Core. Prominent backers of Common Core have long promoted a “tripod” of standards, tests, and “accountability” measures – i.e. rewards or (more likely) punishments tied to performance on those tests.

Sinking the Lusitania: Lying America into War, Again

The British luxury passenger liner RMS Lusitania was torpedoed a century ago. The sinking was deemed an atrocity of war and encouraged American intervention in World War I.

But the ship was carrying munitions through a war zone and left unprotected by the Royal Navy. The “Great War” was a thoroughly modern conflict, enshrouded in government lies. We see similar deceptions today.

World War I was a mindless imperial slugfest triggered by an act of state terrorism by Serbian authorities. Contending alliances acted as transmission belts of war. Nearly 20 million died in the resulting military avalanche.

America’s Woodrow Wilson initially declared neutrality, though he in fact leaned sharply toward the motley “Entente.” The German-led Central Powers were no prize. However, the British grouping included a terrorist state, an anti-Semitic despotism, a ruthless imperial power, and a militaristic colonial republic.

Britain was the best of a bad lot, but it ruled much of the globe without the consent of those “governed.” This clash of empires was no “war for democracy” as often characterized.