Monday, August 26, 2013
Tuesday, July 9, 2013
Are unpaid interns exploited?
Welcome to the Unpaid Interns Lawsuits Website
"Unpaid interns are becoming the modern-day equivalent of entry-level employees, except that employers are not paying them for the many hours they work. The practice of classifying employees as “interns” to avoid paying wages runs afoul of federal and state wage and hour laws, which require employers to pay all workers whom they “suffer or permit” the minimum wage and overtime. Employers’ failure to compensate interns for their work, and the prevalence of the practice nationwide, curtails opportunities for employment, fosters class divisions between those who can afford to work for no wage and those who cannot, and indirectly contributes to rising unemployment.
"According to the U.S. Department of Labor, an unpaid internship is only lawful in the context of an educational training program, when the interns do not perform productive work and the employer derives no benefit. “If the employer would have hired additional employees or required existing staff to work additional hours had the interns not performed the work, then the interns will be viewed as employees and entitled to compensation under the FLSA.”
"The U.S. Department of Labor’s test is not new. It is based on the United States Supreme Court’s 1947 opinion in Walling v. Portland Terminal Co., 330 U.S. 148, 152-53 (1947), which held that the FLSA’s definition of “to employ” as “to suffer or permit to work” does not include student participation in an educational or vocational training program, so long as the employer derives no benefit from the trainees’ work. The Court cautioned against arrangements “in which an employer has evasively accepted the services of beginners at pay less than the legal minimum without having obtained permits from the [Secretary of Labor].”
"Outten & Golden LLP is committed to ensuring that interns are fairly compensated for their work. To learn more about our class action litigation on behalf of unpaid interns, please peruse the information in the case-specific tabs above, or contact us directly.
QUESTIONS:
1. Do you believe that businesses should be allowed to have unpaid interns?
2. If the government requires businesses to pay interns a wage equal to at least the minimum wage, do you think this will help, or hurt, young people?
"Unpaid interns are becoming the modern-day equivalent of entry-level employees, except that employers are not paying them for the many hours they work. The practice of classifying employees as “interns” to avoid paying wages runs afoul of federal and state wage and hour laws, which require employers to pay all workers whom they “suffer or permit” the minimum wage and overtime. Employers’ failure to compensate interns for their work, and the prevalence of the practice nationwide, curtails opportunities for employment, fosters class divisions between those who can afford to work for no wage and those who cannot, and indirectly contributes to rising unemployment.
"According to the U.S. Department of Labor, an unpaid internship is only lawful in the context of an educational training program, when the interns do not perform productive work and the employer derives no benefit. “If the employer would have hired additional employees or required existing staff to work additional hours had the interns not performed the work, then the interns will be viewed as employees and entitled to compensation under the FLSA.”
"The U.S. Department of Labor’s test is not new. It is based on the United States Supreme Court’s 1947 opinion in Walling v. Portland Terminal Co., 330 U.S. 148, 152-53 (1947), which held that the FLSA’s definition of “to employ” as “to suffer or permit to work” does not include student participation in an educational or vocational training program, so long as the employer derives no benefit from the trainees’ work. The Court cautioned against arrangements “in which an employer has evasively accepted the services of beginners at pay less than the legal minimum without having obtained permits from the [Secretary of Labor].”
"Outten & Golden LLP is committed to ensuring that interns are fairly compensated for their work. To learn more about our class action litigation on behalf of unpaid interns, please peruse the information in the case-specific tabs above, or contact us directly.
QUESTIONS:
1. Do you believe that businesses should be allowed to have unpaid interns?
2. If the government requires businesses to pay interns a wage equal to at least the minimum wage, do you think this will help, or hurt, young people?
Tuesday, June 18, 2013
King of My Castle? Yeah, Right - NYTimes.com
King of My Castle? Yeah, Right - NYTimes.com
"The City by the Bay is going through one of its worst housing shortages in memory. With typical high demand intensified by a regional boom in tech jobs, apartment open houses are mob scenes of desperate applicants clutching their credit reports. The citywide median rental price for a one-bedroom is $2,764 a month, but jumps to $3,500 in trendy areas."
"One reason for the shortage? Me.I’ve recently joined the ranks of San Francisco landlords who have decided that it’s better to keep an apartment empty than to lease it to tenants. Together, we have left vacant about 10,600 rental units. That’s about five percent of the city’s total — or enough space to house up to 30,000 people in a city that barely tops 800,000...
"To stabilize rents and prevent eviction abuses that are typical when housing is scarce, the city developed some of the nation’s toughest housing policies. Rent-control ordinances, for example, sharply limit rent increases after the initial lease for most housing constructed before 1979. As a result, many leases morph into lower-rent tenancies for life, subsidized by landlords, even when the tenants are wealthy.
"In addition, a complex legal structure has been created to make evictions for just cause extraordinarily difficult.
Saturday, May 11, 2013
Thursday, May 9, 2013
Monday, April 29, 2013
Saturday, April 13, 2013
Wednesday, April 3, 2013
Shakespeare: poet, playwright, hoarder
Shakespeare: all about the pounds and pence, not the poetry? - latimes.com
EXCERPTS:
"Shakespeare, Mr. “I can raise no money by vile means” [“Julius Caesar”], was in fact a tax dodger, a grain hoarder and a determined debt collector [“Neither a borrower nor a lender be” -- “Hamlet”].
"Nowadays, we’d call him a profiteer and a scofflaw. In Tudor England, where he was investigated for his laconic tax observances and once prosecuted for his hoarding practices, it’s a surprise that he didn’t end up swinging from a gibbet “for daws to peck at” [“Othello”]. No wonder he vigorously wrote, in “Henry VI part 2,” “The first thing we do, let’s kill all the lawyers.”
"Researchers turned up archival evidence that for a decade and a half – including some very hungry years for England -- Shakespeare “purchased and stored grain, malt and barley for resale at inflated prices to his neighbors and local tradesmen.” When they couldn’t or wouldn’t pay, Shakespeare went after them full-throatedly, and the profits he did make he used “to further his own money-lending activities.”
"Not all of this is new, but Jayne Archer, one of the researchers, suspects that the fact that so little of this information has made its way into Shakespeare’s public profile may be laid to “willful ignorance on behalf of critics and scholars who … cannot countenance the idea of a creative genius also being motivated by self-interest.”
"There’s evidence that the memorial raised up to him in his hometown not long after his death originally showed him with an image with which his neighbors associated him: a bag of grain, not the writerly accouterments of quill and parchment added later. Four hundred years later, the tourists still make pilgrimages to Stratford because, face it, who’s going to go home with souvenir paperweights and china thimbles commemorating the Tudor equivalent of a commodities trader?
EXCERPTS:
"Shakespeare, Mr. “I can raise no money by vile means” [“Julius Caesar”], was in fact a tax dodger, a grain hoarder and a determined debt collector [“Neither a borrower nor a lender be” -- “Hamlet”].
"Nowadays, we’d call him a profiteer and a scofflaw. In Tudor England, where he was investigated for his laconic tax observances and once prosecuted for his hoarding practices, it’s a surprise that he didn’t end up swinging from a gibbet “for daws to peck at” [“Othello”]. No wonder he vigorously wrote, in “Henry VI part 2,” “The first thing we do, let’s kill all the lawyers.”
"Researchers turned up archival evidence that for a decade and a half – including some very hungry years for England -- Shakespeare “purchased and stored grain, malt and barley for resale at inflated prices to his neighbors and local tradesmen.” When they couldn’t or wouldn’t pay, Shakespeare went after them full-throatedly, and the profits he did make he used “to further his own money-lending activities.”
"Not all of this is new, but Jayne Archer, one of the researchers, suspects that the fact that so little of this information has made its way into Shakespeare’s public profile may be laid to “willful ignorance on behalf of critics and scholars who … cannot countenance the idea of a creative genius also being motivated by self-interest.”
"There’s evidence that the memorial raised up to him in his hometown not long after his death originally showed him with an image with which his neighbors associated him: a bag of grain, not the writerly accouterments of quill and parchment added later. Four hundred years later, the tourists still make pilgrimages to Stratford because, face it, who’s going to go home with souvenir paperweights and china thimbles commemorating the Tudor equivalent of a commodities trader?
Saturday, March 30, 2013
Florida County Spends Tens Of Thousands On Ambulance For Obese Patients « CBS Tampa
Florida County Spends Tens Of Thousands On Ambulance For Obese Patients « CBS Tampa
EXCERPTS:
ORANGE COUNTY, Fla. (CBS Tampa) —
"Central Florida News 13 reports that the ambulance was purchased after emergency responders had to transport at least two dozen patients who weighed more than 500 pounds last year.
“With some of these morbidly obese patients, we have to send more firefighters just to lift and to move the patient. So once they’re in and we get them to the hospital, someone has to be at the hospital to unload them,” one Orange County fire official told News 13. “That’s pulling a lot of resources from emergency calls just to do that.”
"Orange County paid $23,000 alone for the lift gate and stretcher and the stretcher is 10 inches wider than the average one.
“In the past you’d have to get five, six, seven firefighters to physically lift the patient in. It increases the chance that something could happen to the patient,” a fire official told News 13. “It also greatly increases the chance that something could happen with back injuries within fire services.”
EXCERPTS:
ORANGE COUNTY, Fla. (CBS Tampa) —
"Central Florida News 13 reports that the ambulance was purchased after emergency responders had to transport at least two dozen patients who weighed more than 500 pounds last year.
"Orange County paid $23,000 alone for the lift gate and stretcher and the stretcher is 10 inches wider than the average one.
“In the past you’d have to get five, six, seven firefighters to physically lift the patient in. It increases the chance that something could happen to the patient,” a fire official told News 13. “It also greatly increases the chance that something could happen with back injuries within fire services.”
Tuesday, March 26, 2013
On failing to see the obvious
10 Things Minimum Wage Haters Don't Want To Admit
It is amazing the extent to which people can fail to see the obvious when it conflicts with what they want to believe. In this list of arguments for raising the minimum wage, compiled by a proponent and published at a well-known media site,
1. Compare point 3 with point 4.
2. Compare point 5 and point 10.
See any problems here?
It is amazing the extent to which people can fail to see the obvious when it conflicts with what they want to believe. In this list of arguments for raising the minimum wage, compiled by a proponent and published at a well-known media site,
1. Compare point 3 with point 4.
2. Compare point 5 and point 10.
See any problems here?
Tuesday, March 19, 2013
$175,000 Mattress Sold as 'Investment' in Good Sleep
$175,000 Mattress Sold as 'Investment' in Good Sleep
EXCERPTS:
URL: http://www.cnbc.com/100563624
EXCERPTS:
"British mattress manufacturer Savoir Beds this week is launching a limited edition "Royal Bed" with a $175,000 price tag at Kensington Palace in London. Savoir describes its mattress as "an investment" in your well being – presumably since "buying" a $175,000 mattress would just seem ridiculous.
"Ultimately, a "great night's sleep" is what it's all about, said Savoir Beds' managing director Alistair Hughes. "It's an investment that pays off every morning of your life."
"Each mattress will require more than 700 hours of labor. It will contain "masses and masses" of curled Latin American horse tail, "mountains" of pure Mongolian cashmere, and enough specially woven silk to be strung from New York to Miami and almost halfway back again (more than 1,600 miles worth).
"Only 60 of the beds will be made."
"The mattress is fully customizable in size and support – each side of the bed can be made with a different firmness to make both you and your significant other as comfortable as possible.
"Of course it's a massive amount of money and it will only appeal to the very lucky and very wealthy," Hughes acknowledged. But "if you're buying Gucci handbags, a suit from Saville Row or a Rolls Royce, you're looking for the best. And you spend a third of your life in bed."
"And consider this: the bed, mattress and box spring are guaranteed to last at least 25 years (although you'll have to replace the topper every 5-7 years for $5,000-$10,000).
If you divide $175,000 by 365 nights for 25 years, it comes out to less than $20 per night.
Sounds completely reasonable.
"Ultimately, a "great night's sleep" is what it's all about, said Savoir Beds' managing director Alistair Hughes. "It's an investment that pays off every morning of your life."
"Each mattress will require more than 700 hours of labor. It will contain "masses and masses" of curled Latin American horse tail, "mountains" of pure Mongolian cashmere, and enough specially woven silk to be strung from New York to Miami and almost halfway back again (more than 1,600 miles worth).
"Only 60 of the beds will be made."
"The mattress is fully customizable in size and support – each side of the bed can be made with a different firmness to make both you and your significant other as comfortable as possible.
"Of course it's a massive amount of money and it will only appeal to the very lucky and very wealthy," Hughes acknowledged. But "if you're buying Gucci handbags, a suit from Saville Row or a Rolls Royce, you're looking for the best. And you spend a third of your life in bed."
"And consider this: the bed, mattress and box spring are guaranteed to last at least 25 years (although you'll have to replace the topper every 5-7 years for $5,000-$10,000).
If you divide $175,000 by 365 nights for 25 years, it comes out to less than $20 per night.
Sounds completely reasonable.
© 2013 CNBC.com
Saturday, March 16, 2013
Thursday, March 14, 2013
Greek unemployment reaches record 26 percent
News from The Associated Press
ATHENS, Greece (AP) -- "Unemployment in debt-crippled Greece rose to a record of 26 percent in the last quarter of 2012, as austerity measures combined with a deep recession took a harsh toll on the workforce.
"The figures were worse than the previous quarter's 24.8 percent, and 20.7 percent a year earlier.
The national statistical authority said Thursday that 1.29 million people were out of a job in October-December 2012. In the under 25 age group, unemployment was 57.8 percent.
"The rate for women was 29.7 percent, compared with 23.3 percent for men.
"Greece's economy has been falling apart over the past three years, savaged by its financial crisis. The country is surviving on international rescue loans, released on condition it keeps up a tough program of spending cuts and tax hikes.
Thursday, March 7, 2013
Macroeconomics in two pictures (from Greg Mankiw)
This is really good. Macro policy summarized in two pictures:
Thursday, February 28, 2013
The Future of Keynesianism - Know Your Limits
Russ Roberts | The Future of Keynesianism - Know Your Limits | The European Magazine - The Debate Magazine
This is an interesting critique of Keynesian economics.
EXCERPT:
"Economics isn’t rocket science; it’s a lot harder. We should be wary of governments trying to solve the crisis with sweeping policy proposals."
This is an interesting critique of Keynesian economics.
EXCERPT:
"Economics isn’t rocket science; it’s a lot harder. We should be wary of governments trying to solve the crisis with sweeping policy proposals."
Thursday, February 21, 2013
Desperate Postal Service tries to find its cool factor | Reuters
Desperate Postal Service tries to find its cool factor | Reuters
EXCERPTS:
"The federal government's mail transport and delivery agency this week said it will roll out a line of apparel and accessories it plans to sell in department and specialty stores.
"The "Rain Heat & Snow" brand of clothing, named after the Postal Service's motto trumpeting its carriers' determination to overcome whatever Mother Nature can throw at them, would put USPS in the "cutting edge of functional fashion," it said.
"The idea is to blend in with the younger audiences as well as the more educated consumer," said Roy Betts, a spokesman for the Postal Service.
***
"The mail carrier lost about $16 billion last year and expects to run out of money by October if legislation isn't passed soon.
"Because of its dire financial situation, Geddes said, lawmakers need to free the Postal Service to operate more like a commercial business, with the leeway to try out innovative new ways to create revenue and stay relevant.
QUESTIONS:
EXCERPTS:
"The federal government's mail transport and delivery agency this week said it will roll out a line of apparel and accessories it plans to sell in department and specialty stores.
"The "Rain Heat & Snow" brand of clothing, named after the Postal Service's motto trumpeting its carriers' determination to overcome whatever Mother Nature can throw at them, would put USPS in the "cutting edge of functional fashion," it said.
"The idea is to blend in with the younger audiences as well as the more educated consumer," said Roy Betts, a spokesman for the Postal Service.
***
"The mail carrier lost about $16 billion last year and expects to run out of money by October if legislation isn't passed soon.
"Because of its dire financial situation, Geddes said, lawmakers need to free the Postal Service to operate more like a commercial business, with the leeway to try out innovative new ways to create revenue and stay relevant.
QUESTIONS:
- I think it would be a good idea to have the Postal Service operate like a commercial business.What does a commercial business do when it loses money year after year with no end in sight?
- When a private business decides to provide a new product it is because its owners believe this will be profitable. They willingly risk their own money, knowing that if they are wrong the company will lose money and their own wealth will suffer. When the Postal Service, whose area of expertise is in delivering mail, decides to add a new product line (apparel and accessories), whose money are they risking? Who will bear the cost if it turns out that the people who deliver mail don't have any special expertise in designing clothing?
Wednesday, February 20, 2013
Thursday, February 14, 2013
One of a market economy's greatest flaws.... silence
From Donald Boudreaux:
EXCERPTS:
EXCERPTS:
"One of the market economy's greatest flaws is the silence it maintains when it is working relatively flawlessly. When the market stumbles, though — or when it's tripped up by unwise government interventions — a great clamor is heard. Unemployment rises, stock prices and exchange rates plummet, and tales abound of this hardship and that lost dream. Pundits proclaim loudly that the unreliable market must be “corrected” or “tamed” by the wisdom and prudence of politicians.
But when the market works smoothly — as it typically does — hardly anyone notices. We take its successes for granted.
That's the thing about a steady stream of relatively small, almost daily improvements in our standard of living. We acclimate to them.
Recall the first time you saw someone unlock or lock an automobile by using a remote-keyless-entry device. When I first saw someone point a plastic nodule at his car to unlock it from a distance, I marveled. “One day I'll earn enough money to drive a car with that feature!” I told myself.
***
"That was 1994. I do indeed now drive a car with keyless entry. And so do most Americans. Keyless entry is standard on even low-end automobiles today. Seeing someone unlock or lock a car using a keyless-entry device is as remarkable to us now as seeing a pigeon in Central Park. It's just part of our world.
Yet who invented this device? Do you know? Even if you do know the names of the people whose creativity was key (!) to this invention, those people are likely complete strangers to you. And yet those strangers pondered and experimented and spent time on efforts that resulted in affordable and reliable keyless-entry systems that benefit you .
Why did they perform these tasks? What mechanisms and institutions bring together all the workers, materials and financing required for the continual production (and improvement) of these handy little devices?
The answer is “the market.”
The market is a vast and complex pattern of voluntary choices and exchanges — including the taking of financial risks — that emerge when each individual is free to produce, to sell and to buy according to his or her own individual lights. The only constraints upon such exchanges are the rules of private property and of freedom of contract. If I want your pet frog or your productive factory, I can get it only if I agree to give you something that you voluntarily accept in exchange.
Unlike in politics, market participants do not confiscate the property of others. Unlike in politics, where those with the most votes get to take unilaterally from those with the fewest votes, in markets, even those with the most money are prevented from unilaterally taking even from those with the least money.
Tuesday, February 12, 2013
Monday, February 11, 2013
A Simple Rule for a Complex World
From Don Boudreaux:
EXCERPTS:
"Saying “Let the market handle it” is to reject a one-size-fits-all, centralized rule of experts. It is to endorse an unfathomably complex arrangement for dealing with the issue at hand. Recommending the market over government intervention is to recognize that neither he who recommends the market nor anyone else possesses sufficient information and knowledge to determine, or even to foresee, what particular methods are best for dealing with the problem.
"To recommend the market, in fact, is to recommend letting millions of creative people, each with different perspectives and different bits of knowledge and insights, each voluntarily contribute his own ideas and efforts toward dealing with the problem. It is to recommend not a single solution but, instead, a decentralized process that calls forth many competing experiments and, then, discovers the solutions that work best under the circumstances.
***
"This process is flexible and it encourages creativity. It also denies to anyone the power to unilaterally impose his own vision on others.
"In brief, to advise “Let the market handle it” is a shorthand way of saying, “I have no simplistic plan for dealing with this problem; indeed, I reject all simplistic plans. Only a competitive, decentralized institution interlaced with dependable feedback loops — the market — can be relied upon to discover and implement a sufficiently detailed way to handle the problem in question.”
"None of this is to say that getting the government out of the way is sufficient to create peace and prosperity. Markets require a rule of law to ensure that, among other blessings, property rights are secure and exchangeable. At their best, governments can help to protect our rights. Markets also require a culture in which commerce flourishes.
***
"While declaring “Let the government handle it” comes across as a solution, it’s no such thing. Instead, it is merely a sign of a simple and baseless faith — a simple and baseless faith that people invested with power will not abuse that power; that political appointees possess or will find better answers than will millions of people pursuing solutions in their own ways, and staking their own resources and reputations on their efforts; that only those ‘solutions’ that are spelled out in statutes and regulations and that have officials paid to implement them are true solutions.
"So yes, show me a problem and I’ll likely respond “Let the market handle it.” I’ll respond this way because I know that not only is my own meager knowledge and effort never up to the task of solving big problems but that not even the Einsteins or Krugmans or Bushes amongst us can know the best solution to any social problem.
EXCERPTS:
"Saying “Let the market handle it” is to reject a one-size-fits-all, centralized rule of experts. It is to endorse an unfathomably complex arrangement for dealing with the issue at hand. Recommending the market over government intervention is to recognize that neither he who recommends the market nor anyone else possesses sufficient information and knowledge to determine, or even to foresee, what particular methods are best for dealing with the problem.
"To recommend the market, in fact, is to recommend letting millions of creative people, each with different perspectives and different bits of knowledge and insights, each voluntarily contribute his own ideas and efforts toward dealing with the problem. It is to recommend not a single solution but, instead, a decentralized process that calls forth many competing experiments and, then, discovers the solutions that work best under the circumstances.
***
"This process is flexible and it encourages creativity. It also denies to anyone the power to unilaterally impose his own vision on others.
"In brief, to advise “Let the market handle it” is a shorthand way of saying, “I have no simplistic plan for dealing with this problem; indeed, I reject all simplistic plans. Only a competitive, decentralized institution interlaced with dependable feedback loops — the market — can be relied upon to discover and implement a sufficiently detailed way to handle the problem in question.”
"None of this is to say that getting the government out of the way is sufficient to create peace and prosperity. Markets require a rule of law to ensure that, among other blessings, property rights are secure and exchangeable. At their best, governments can help to protect our rights. Markets also require a culture in which commerce flourishes.
***
"While declaring “Let the government handle it” comes across as a solution, it’s no such thing. Instead, it is merely a sign of a simple and baseless faith — a simple and baseless faith that people invested with power will not abuse that power; that political appointees possess or will find better answers than will millions of people pursuing solutions in their own ways, and staking their own resources and reputations on their efforts; that only those ‘solutions’ that are spelled out in statutes and regulations and that have officials paid to implement them are true solutions.
"So yes, show me a problem and I’ll likely respond “Let the market handle it.” I’ll respond this way because I know that not only is my own meager knowledge and effort never up to the task of solving big problems but that not even the Einsteins or Krugmans or Bushes amongst us can know the best solution to any social problem.
Wednesday, February 6, 2013
Increasing the minimum wage in Illinois to $10 an hour - should you move there?
EXCERPTS:
"Gov. Pat Quinn is expected to call on lawmakers to raise the minimum wage, allow online voter registration and switch Illinois to open primary elections when he delivers his State of the State at noon today.
"Quinn wants Illinois' minimum wage to increase from $8.25 to $10 an hour, according to a source familiar with the planned remarks. The federal minimum wage is $7.25 an hour, but Illinois' rate has been higher for years.
"The Democratic governor, who faces re-election next year, also intends to focus on his accomplishments since taking office while delivering a frank assessment of the budget challenges the state still faces.
QUESTIONS:
1. Will increasing the minimum wage to $10/hour ensure that everyone will earn more?
2. Who will be hurt by this increase?
3. Do you think those who are hurt by the increase will realize that the governor's policy was the cause of their being hurt?
Tuesday, February 5, 2013
How Dictators Come to Power in a Democracy | Jim Powell | Cato Institute
EXCERPTS:
"Hitler gave speeches appealing to those he called “starving billionaires” who had billions of paper marks but couldn’t afford a loaf of bread. Altogether, during the inflation, Hitler recruited some 50,000 Nazis and became a political force to reckon with. Economist Constantino Bresciani-Turroni called Hitler “the foster child of the inflation.”
"To be sure, he attempted a coup that failed (November 8, 1923), and he was imprisoned. But he retained his key followers and wrote his venomous memoir Mein Kampf that became the Nazi bible.
Monday, February 4, 2013
Argentina freezes prices to break inflation spiral
BUENOS AIRES, Argentina (AP) — Argentina announced a two-month price freeze on supermarket products Monday in an effort to break spiraling inflation.
The price freeze applies to every product in all of the nation's largest supermarkets — a group including Walmart, Carrefour, Coto, Jumbo, Disco and other large chains....
The commerce ministry wants consumers to keep receipts and complain to a hotline about any price hikes they see before April 1.
Polls show Argentines worry most about inflation, which private economists estimate could reach 30 percent this year. The government says it's trying to hold the next union wage hikes to 20 percent, a figure that suggests how little anyone believes the official index that pegs annual inflation at just 10 percent.
Friday, February 1, 2013
Saturday, January 12, 2013
Politics Without Romance - James Buchanan
Review & Outlook: Politics Without Romance - WSJ.com:
EXCERPTS:
EXCERPTS:
With Gordon Tullock, Buchanan developed what became known as "public choice theory." Buchanan described it as the application of the profit motive to government: "It presupposes that if there is value to be gained through politics, persons will invest resources in efforts to capture this value.... in the early 1960s, the notion that politicians were anything but unselfish public servants was, well, under-appreciated. Public choice, he wrote, was nothing new but "incorporates an understanding of human nature" that prevailed in the 18th century.
In our own times "market failures were set against an idealized politics," Buchanan wrote in 2003. Public choice provided "a set of theories of governmental failures," or as Buchanan called it, "politics without romance."
So, for example, he could explain why bureaucracies had an incentive to expand their turf in order to increase their financial resources and power. Or why politicians keep tax rates high so they can dole out special credits and exemptions for those who would reward those same politicians. Or why pork-barrel politics is the abiding concern of legislators.
In Appreciation—James M. Buchanan
Donald Boudreaux: In Appreciation—James M. Buchanan - WSJ.com:
EXCERPTS:
EXCERPTS:
James M. Buchanan, who died Wednesday at age 93, was one of history's greatest economists. Though he won the Nobel Prize in 1986, Jim at heart was always a farm boy from Tennessee—an old-fashioned, hardworking American who disdained unearned privileges as well as deeply distrusting the promises of politicians and the passions of collectives.
The theme of his life's work is best summarized in the title of his 1997 article "Politics Without Romance." With longtime colleague Gordon Tullock, Jim launched a research program—public-choice economics—that challenged the widespread notion that politicians in democratic societies are more nobly motivated and trustworthy than are business people and other private-sector actors. In a wide river of books and papers, Jim warned against the foolishness of romanticizing government.
Jim regarded his work as simply extending and applying the insights of America's founding generation, especially those of James Madison. Unlike too many pundits and professors over the past century—but like America's founders—Jim understood that politicians' lovely proclamations of their desires to improve society too often camouflage unlovely venal motives that prompt politicians to disregard the general welfare in order to transfer wealth and privilege to powerful interest groups.
***
His deep skepticism of government, combined with his expert understanding of free markets, led Jim to describe himself as a "classical liberal." But it wasn't always so. Like many of his generation, the young Jim Buchanan was a socialist. His socialism was cured, though, by his studies in economics at the University of Chicago. While there, Jim polished his keen instincts for detecting nonsense.
***
Not that Jim held much hope that his speaking out against unwise government policy would do much good. He sought to prevent harmful policies by tying politicians' hands rather than by pleading with politicians to be more public-spirited. And to tie politicians' hands Jim championed constitutional reform. He believed that only binding, enforceable constitutional rules can prevent Leviathan from eventually suffocating private markets and stamping out human freedom.
Ironically, the constitutional reform that Jim advocated practically requires the cooperation of the politicians whom he so distrusted. Yet it is a mark of greatness in Jim Buchanan that he held out hope, until his dying day, that clear-eyed scholarship would eventually persuade people of the dangers of unconstrained government and of the need to somehow rein it in.
Mr. Boudreaux is professor of economics at George Mason University and chair for the study of free market capitalism at the Mercatus Center.
A version of this article appeared January 9, 2013, on page A17 in the U.S. edition of The Wall Street Journal, with the headline: In Appreciation: James M. Buchanan.
Tuesday, January 8, 2013
Income inequality can be explained by demographics, and because the demographics change, there’s income mobility
EXCERPTS:
Bottom Line: Household demographics, including the average number of earners per household and the marital status, age, and education of householders are all very highly correlated with household income. Specifically, high-income households have a greater average number of income-earners than households in lower-income quintiles, and individuals in high income households are far more likely than individuals in low-income households to be well-educated, married, working full-time, and in their prime earning years. In contrast, individuals in lower-income households are far more likely than their counterparts in higher-income households to be less-educated, working part-time, either very young (under 35 years) or very old (over 65 years), and living in single-parent households.
The good news is that the key demographic factors that explain differences in household income are not fixed over our lifetimes, which means that individuals and households are not destined to remain in a single income quintile forever. Fortunately, evidence shows that individuals and households move up and down the income quintiles over their lifetimes as the key demographic variables highlighted above change.
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