The Minimum Wage Helps the Poor


063The Minimum Wage Helps the Poor

Political Animal – The minimum wage, part 2: Casey Mulligan fail edition; or, the $100 minimum wage gambit

The vague suggestion that perhaps that minimum wage really does not “confer benefits on the poor” teeters dangerously close to the “opinions on the shape of the earth differ” school of journalism. Let’s talk specifics here. The impact of the minimum wage, and particularly the impact of the minimum wage on employment, is, as economist John Schmitt has noted, one of the most studied topics in all of economics. The results are most definitely in, and contrary to the clear impression Mulligan is trying to give, there is little reason to believe that the outcome from the years 2007 through 2009 would be any different than the results we have from any other year before that. And contrary to the neoclassical dogma so beloved by University of Chicago types, the overwhelming body of the most rigorous empirical evidence shows little or no relationship between employment and the minimum wage. When there does seem to be a negative relationship, it tends to be extremely small.

A review of the literature, and a summary of various theories as to why Econ 101 minimum wage models don’t turn out to hold up in the real world, can be found in Schmitt’s excellent recent report for the Center for Economic and Policy Research. The reasons are complicated, and there are competing hypotheses, but basically what it comes down to is that the many of the assumptions required for perfect competition in the labor market don’t hold. I know, I know — try to recover from the shock.

Political Animal – The minimum wage, part 2: Casey Mulligan fail edition; or, the $100 minimum wage gambit

 

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ExxonMobil, American Company or Independent Entity?


ExxonMobil, American Company or Independent Entity?

Global Ethics Forum: Private Empire: ExxonMobil and American Power – YouTube

(WordPress ate every word I wrote on this post – let me see what I can resuscitate.)

Steve Coll, speaking before the Global Ethics Forum, explains that ExxonMobil while based in the United States often behaves as a foreign entity.

James Pilant

 

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Banks Need to be Protected from Themselves


 

Waiting for a bank loan.

Banks Will Always Suck At Trading, Badly Need A Volcker-Like Rule: Study

A new study by economists Arnoud Boot at the University of Amsterdam and Lev Ratnovski at the International Monetary Fund finds that recent blow-ups in the banking sector — JPMorgan Chase’s $6.8 billion “London Whale” losses and that whole financial-crisis thingy, to name two — are not isolated events, but “a sign of deeper structural problems in the financial system.”

The only prescription? Less trading by big dumb banks.

“Without policy action, crises associated with trading by banks are bound to recur,” Boot and Ratnovski write in a blog post about the paper. “Even strong supervision will not be able to prevent them. Consequently, it appears necessary to restrict trading by banks.”

Banks Will Always Suck At Trading, Badly Need A Volcker-Like Rule: Study

If you read the fuller article, and I recommend you do, you will find that banks have incentives to do what is essentially speculative trading. Right now with interest rates low, there is a terrible temptation to take their money and gamble with it since there is little profit in traditional investments. And, of course, why do legitimate investments in business, industry and homes, when you can make so much more money speculating?

The banks have to be regulated to perform their traditional functions of lending to build a strong economy. We protect banks from collapse and insure their deposits with taxpayer money because when they loan money that develops the economy and creates opportunities. What we are getting now is a lot less useful investing and a lot more gambling at the public’s expense.

James Pilant

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Wall Street Suffers “Hard Times”


A few weeks ago there was a controversy over grants given to Planned Parenthood by the Susan Komen foundation. The vice president confronted by complaints that poor women would lose their access to health care responded dramatically –

Karen Handel, a former GOP candidate who ran on a pro-life platform, shows her true colors. She just happens to be Susan G. Komen’s Vice President of Public Policy now. “Just like a pro-abortion group to turn a cancer orgs decision into a political bomb to throw. Cry me a freaking river”

Disdain for poor women and their need for medical currently fashionable among some groups of Americans. There is a suspicion in some quarters that the top 1% find paying for social services an welcome burden.

Now, of course this behavior is contrary to the Greek concept of virtue ethics, modern Protestant business ethics and Catholic social doctrine. However a proportion of the the 1% are getting their comeuppance. It is a small comeuppance but nevertheless, any comeuppance is better than none.

Please read this excerpt –

Wall Street’s Average Cash Bonus Expected To Fall To $121,000

Wall Street cash bonuses for 2011 are expected to drop 14 percent and profits are expected to drop by half for the second year in a row, according to a forecast Wednesday by New York state Comptroller Thomas DiNapoli.

That would result in cash bonuses of $19.7 billion. Profits are expected to be less than $13.5 billion in 2011, compared to $27.6 billion in 2010.

The average cash bonus is expected to be $121,150 for 2011, down from $138,940 in 2010. Bonuses peaked before the recession in 2006 at $191,360.

Wall Street’s Average Cash Bonus Expected To Fall To $121,000

You read it right. Wall Street bonuses will only be $13.5 billion dollars. It’s a trifle, a small amount of money. Of course, it would pay for all the college tuition in the United States for the next year and still have a couple of billion walking around money left. But like I said that’s just a smidgeon on Wall Street.

You probably noticed that the average payout on Wall Street will be $121,000.

Let’s see what is said about this –

The average cash bonus is expected to be $121,150 for 2011, down from $138,940 in 2010. Bonuses peaked before the recession in 2006 at $191,360.

DiNapoli said the forecast for this bonus season shows continued hard times on Wall Street two years after the recession officially ended. The securities industry lost 28,000 jobs, including 9,600 that had been briefly recovered before the slide began in April.

“Continued hard times!” Wow! $121,150 is almost three times the average salary in the United Stand and these people also draw a regular salary. Average salary at Goldman Sachs is $367,057. But we know they’re suffering. 

Well to quote the former vice president of the Susan Komen Foundation, “Cry me a freakin river!”

James Pilant

Here is my take on the 1% with a little help from Garfunkel and Oates.

Save the Rich

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What’s a Little Corn Syrup Between Friends?


When I developed high blood pressure, I had to start eating healthy. It was a shock to find out how much it cost to eat healthy. The food in the supermarket was laden with high fructose corn syrup or salt. Once I had eliminated food that wasn’t good for me, there were a lot fewer choices and with a few exceptions (frozen vegetables), they cost more. One of the most important things I did was to drop soda pop from my diet. That helped a lot with my weight.

It seems to me that the way food is made and marketed in the United States is inimical to having a healthy diet. That a few large companies control food distribution in the nation does not surprise me.

There is something bizarre in the fact that costs more to eat healthy than badly.

James Pilant

Willie Nelson: Why We Must Occupy Our Food Supply

What does this matter for those of us who eat? Corporate control of our food system has led to the loss of millions of family farmers, the destruction of soil fertility, the pollution of our water, and health epidemics including type 2 diabetes, heart disease, and even certain forms of cancer. More and more, the choices that determine the food on our shelves are made by corporations concerned less with protecting our health, our environment, or our jobs than with profit margins and executive bonuses.

This consolidation also fuels the influence of concentrated economic power in politics: Last year alone, the biggest food companies spent tens of millions lobbying on Capitol Hill with more than $37 million used in the fight against junk food marketing guidelines for kids.

Willie Nelson: Why We Must Occupy Our Food Supply

High Fructose Corn Syrup & Obesity

King Corn

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