Thinking Citizen Blog — One Macro Lesson (Capitalism Versus Socialism), Two Micro Lessons (Minimum Wage, Rent Control)
Thinking Citizen Blog — Tuesday is Economics, Finance, and Business Day
Today’s Topic: One Macro Lesson (capitalism versus socialism), Two Micro Lessons (minimum wage, rent control)
Economic creationism is alive and well! Two hundred years of economic data are as easily ignored by professional economists as centuries of biological data by creationists! Today, I decided to put together, three ideas — one macro, two micro. Experts — please chime in. Correct, elaborate, elucidate.
“CAPITALISM TURNS LUXURIES INTO NECESSITIES, SOCIALISM TURNS NECESSITIES INTO LUXURIES” — do you understand why? are you sure? do you know why North Korea is so dark at night relative to the south? Do you know that 42% of Democrats view capitalism favorably? as compared to 66% who view socialism favorably!!!!!
1. Do you know why Venezuela and Cuba are so relatively economically weak?
2. Socialism is an irresistible idea to those who have not studied history. Why?
3. It’s so appealing to blame “them.” The greedy capitalist pigs. This is the same spirit that led Cain to kill his brother Abel. God had smiled at his brother but not him. Unfair! Kill him!
NB: The fact is that, as a general rule, in free markets you make the most wealth by improving the lives of others — reducing their pain or increasing their pleasure.
The human capacity to ignore the obvious is mind-boggling.
One thing was to be a Marxist in 1848 when over the previous 30 years life expectancy in towns like Liverpool had declined from 50 years to 25 years.
It’s another to be one in 2025!
THE MINIMUM WAGE — morally repulsive, economically pernicious, politically irresistible. If you are not familiar with the work of Thomas Sowell (below), do yourself a favor and read the second link below.
1. The minimum wage is apartheid for the unskilled. It condemns those most in need of on-the-job training to unemployment.
2. Historically, it was a racist tactic in both the United States and South Africa to reduce competition from relatively unskilled black workers.
3. It is politically irresistible because it makes you appear to care deeply about the needy without having to raise taxes on yourself or anybody else!
NB: What a lay-up!
RENT CONTROL — “about as disgraced as any economic policy in the toolkit” (Jason Furman, Harvard Professor, former chair of Barack Obama’s Council of Economic Advisors, below)
1. “Zohran Mamdani, winner of New York City’s Democratic mayoral primary, has built his campaign around a striking pledge: a four-year rent freeze on New York City’s nearly one million rent-stabilized apartments.”
2. “Tenant advocates estimate that such a freeze could save renters as much as $6.8 billion over four years, which also means it could cost rental property owners $6.8 billion over four years.”
3. “A rent freeze may also unravel the city’s already strained housing market by cutting off the primary revenue owners use to pay for taxes, maintenance, and debt service.”
NB: What could go wrong? A quote attributed to Albert Einstein is “Insanity is doing the same thing over and over again and expecting a different result.” Remember Santayana’s quote: “Those who ignore history are condemned to repeat it.”
What is the case for and against the minimum wage? | Liberal Arts Academy
https://www.investors.com/politics/columnists/thomas-sowell-minimum-wage/
Mamdani’s rent freeze: Politics, policy, and the fate of small property owners
QUOTE OF THE MONTH
“Make your own Bible. Select and collect all the words and sentences that in all your readings have been to you like the blast of a trumpet.”
- Ralph Waldo Emerson
My spin — then periodically review, re-rank, and exchange your list with those you love. I call this the “Orion Exchange” because seven is about as many as any human can digest at a time. Game?
ATTACHMENTS BELOW:
#1 A graphic guide to justice (9 metaphors on one page).
#2 “39 Songs, Prayers, and Poems: the Keys to the Hearts of Seven Billion People” — Adams House Senior Common Room Presentation, (11/17/20)
NB: Palestine Orion (Decision) — let’s exchange Orions, let’s find Rumi’s field (“Beyond all ideas of right and wrong, there is a field. Meet me there” Rumi, 13 century Persian Sufi mystic)
THE LAST FOUR YEARS OF POSTS ORGANIZED THEMATICALLY INTO FOURTEEN BOOK-LENGTH PDFs:
PDF with headlines — Google Drive
YOUR TURN — Please share:
a.) the coolest thing you learned this week related to business, economics, finance.
b.) the coolest thing you learned in your life related to business, economics, finance.
c.) anything at all related to business, economics, finance.
d.) anything at all
