Krazy Krugman on Minimum Wage Laws

Embarrassing Economists

By Walter E.Williams

October 22, 2014

So as to give some perspective, I’m going to ask readers for their guesses about human behavior before explaining my embarrassment by some of my fellow economists.

Suppose the prices of ladies jewelry rose by 100 percent. What would you predict would happen to sales? What about a 25 or 50 percent price increase? I’m going to guess that the average person would predict that sales would fall.

Would you make the same prediction about auto sales if cars’ prices rose by 100 percent or 25 or 50 percent? Suppose that you’re the CEO of General Motors and your sales manager tells you the company could increase auto sales by advertising a 100 percent or 50 percent price increase. I’m guessing that you’d fire the sales manager for both lunacy and incompetency.

Let’s try one more. What would you predict would happen to housing sales if prices rose by 50 percent? I’m guessing you’d predict a decline in sales. You say, “OK, Williams, you’re really trying our patience with these obvious questions. What’s your point?”

It turns out that there’s a law in economics known as the first fundamental law of demand, to which there are no known real-world exceptions. The law states that the higher the price of something the less people will take of it and vice versa. Another way of stating this very simple law is: There exists a price whereby people can be induced to take more of something, and there exists a price whereby people will take less of something.

Some people suggest that if the price of something is raised, buyers will take more or the same amount. That’s silly because there’d be no limit to the price that sellers would charge. For example, if a grocer knew he would sell more — or the same amount of — milk at $8 a gallon than at $4 a gallon, why in the world would he sell it at $4? Then the question becomes: Why would he sell it at $8 if people would buy the same amount at a higher price?

There are economists, most notably Nobel Prize-winning economist Paul Krugman, who suggest that the law of demand applies to everything except labor prices (wages) of low-skilled workers. Krugman says that paying fast-food workers $15 an hour wouldn’t cause big companies such as McDonald’s to cut jobs. In other words, Krugman argues that raising the minimum wage doesn’t change employer behavior.

Before we address Krugman’s fallacious argument, think about this: One of Galileo’s laws says the influence of gravity on a falling body in a vacuum is to cause it to accelerate at a rate of 32 feet per second per second. That applies to a falling rock, steel ball or feather. What would you think of the reasoning capacity of a Nobel Prize-winning physicist who’d argue that because human beings are not rocks, steel balls or feathers, Galileo’s law of falling bodies doesn’t apply to them?

Krugman says that most minimum-wage workers are employed in what he calls non-tradable industries — industries that can’t move to China. He says that there are few mechanization opportunities where minimum-wage workers are employed — for example, fast-food restaurants, hotels, etc. That being the case, he contends, seeing as there aren’t good substitutes for minimum-wage workers, they won’t suffer unemployment from increases in the minimum wage. In other words, the law of demand doesn’t apply to them.

Let’s look at some of the history of some of Krugman’s non-tradable industries. During the 1940s and ’50s, there were very few self-serve gasoline stations. There were also theater ushers to show patrons to their seats. In 1900, 41 percent of the U.S. labor force was employed in agriculture. Now most gas stations are self-serve. Theater ushers disappeared. And only 2 percent of today’s labor force works in agricultural jobs. There are many other examples of buyers of labor services seeking and ultimately finding substitutes when labor prices rise. It’s economic malpractice for economists to suggest that they don’t.

From Creators.com, here.

נגד הזכרת תאריכים למניינם

אחד הקוראים החביבים הראני מכתב בעל סגנון מעניין מלפני כמה שנים בנושא הזכרת תאריך לועזי, ואני מעתיק אותו לפניכם כאן.

בס”ד                                                                                        [שם וכתובת]

מכיון שבהזמנתך לשמחה הופיע התאריך המתועב “למניינם” דהיינו למניין ע”ז שלהם, ובזה עברת על “ו-אלהים אחרים לא תזכירו” (שמות כג, יג) – שלא יאמר לו – שמור לי בצד…” (עי”ש ברש”י); באתי להסביר מדוע אני מקפיד על כל מכתבי וכן על השיקים שאני כותב – לשים רק את התאריך שלנו ולא של אלה הרוצחים שהרגו את אבותינו בכל מיני מיתות משונות בכל הדורות, ובכל ארצותיהם. ותאריך זה בעצם מציין את תולדות “אמונת החסד והרחמים” שבשמה ולכבודה רצחונו וטבחונו ושרפונו, וכו'”.

            ושמעתי שהחת”ס סבר שהשמוש בתאריך ההוא אסור מן התורה, וכמדומני שהוא לומד את זה מ-רמב”ן.

            ואני חושב שבשבתנו באה”ק, ובדברנו לה”ק הרי זו התגמדות מצדנו (“ונהי בעיננו כחגבים”) – והשפלת עצמנו לכתוב תאריך שאינו שלנו (וסבה זו כבר מספיקה: התאריך אינו שלנו!)

            ואעפ”י שלפעמים אנו מוכרחים לכתוב אותו בכתבנו לגויים שאנו עמהם בקשרי מסחר וכדומה – אין שום סיבה לכתבו בפניותינו לאחינו בני אבר. יצ. ויעקב, שהם נמולים כמונו, וקבלו בהר סני את התורה כמונו, דמצוותיה מתחילות מ”החדש הזה לכם וכו'” (ר’ רמב”ן)

            הרי אין אדם שאין לו לוח בכיסו (או בביתו על הקיר או על שולחנו ואין בא”י לוח שלא יהא גם התאריך העברי; אז שיטריח את עצמו לחפש את התאריך, וישמש לו דבר זה ל”תזכורת” שיש אלקים בישראל (ר’ מל”ב ב, ג) שנתן לנו תרי”ג מצוות, שהראשונה היא “החדש הזה לכם”.

            ושקיים תאריך עברי (מל’ “אברהם העברי” שהוא מעבר אחד, ו-הם מהעבר השני) היהודי (מל’ “הפעם אודה” – שלא שם חלקנו כהם!)

            ואני מקוה שתקבל דברי ברצון, שאם חכמה אין בי, הרי זקנה יש בי!

                                                                                                ומזל טוב, ותזכה להרבה נחת,

ועתה שמעתי שהסטייפלר זיע”א נהג                                                                    כי”ר!

להמנע מלילך לחופת מי שבהזמנות ציין                                                                ___

התאריך המתועב “למניינם”. כדאי לברר אם הנכון!

                                    (אין בידי אני לברר!)

Nope, Germany Is Still Controlled by the US

After slaughtering Jews recently, Germany has seen a major decline (as has frequently occurred throughout history to our oppressors). Germany is now a vassal state of America.

Trump recently said Germany are held “captive” by Russia, instead, but this is not true. NSA spies on their politicians and the CIA controls their media.

Here’s an excerpt from Russia Today:

Members of the German media are paid by the CIA in return for spinning the news in a way that supports US interests, and some German outlets are nothing more than PR appendages of NATO, according to a new book by Udo Ulfkotte, a former editor of Frankfurter Allgemeine Zeitung, one of Germany’s largest newspapers.

Ulfkotte is a serious mainstream journalist.  Here he is on Germany’s leading political talk show a couple of years ago.  The book is a sensation in Germany, #7 on the bestseller list.  Its political dynamite, coming on the heels of German outrage of NSA tapping of their phones…

This is Germany’s largest, most serious newsweekly. The headline reads “Stop Putin Now”, and shows pictures of the victims of MH17. Their coverage of Russia over the years has read like a US state department memo.

Here at Russia Insider, it has long been apparent to us that there is something distinctly odd about the German media regarding Russia.  We follow it, and it is much more strident than even the anglo-saxon media regarding Russia, while German public opinion is much more positive towards Russia than in other countries.

Another interesting thing about it is that it is very disparate.  Some major voices are very reasonable about Russia, but most are negative, and some are comically apocalyptic.  This is what one would expect if there was some financial influence ginning the system.

We’ve been talking about this for a while now.  German public opinion is becoming more and more fed up with the what they increasingly believe to be a rigged media, and its starting to come out everywhere.

The allegations, while shocking, are consistent with the CIA’s long and well-established history of media infiltration.

Operation Mockingbird, which began in the 1950s, was a secret CIA operation which recruited journalists to serve as mouthpieces for the American government. The program was officially terminated after it was exposed by the famous Church Committee investigations, but evidence of ongoing CIA influence over the media continues to accumulate.

You know you’re in the dirt when your captors’ worst lie is you are beholden to another slave-holder. Baruch Hashem, and may we merit to see their full fall!

The state of Israel is still colluding with them (of course).

See Before You Swallow!

Chochmas Adam 38:20:

ראוי לאדם להסתכל במה שאוכל ועל ידי זה ינצל מכמה תולעים ומעיד אני עלי שכמה וכמה פעמים ניצלתי על ידי זה בעזר ה’.

I don’t think this is because of מיעוט המצוי, but because of bugs that might be near or on the surface of the food. There is no hetter there.

Why does the Ohr Hachaim on eating sheratzim beshogeg keep getting dragged into everything?!