A few interesting reads

Since I obviously don't post as often as I'd like, I thought it might be easier to simply post several articles with my thoughts:

"Beyond the Noise on Free Trade " -- Greg Mankiw in the the NYTimes [HT: Club for Growth]:

"The general public, however, is less likely to take its cue from Adam Smith than from Lou Dobbs."

I think this is so unfortunate. I really do. I think it was Bryan Caplan who said somewhere that if you don't know enough about a particular arena of expertise, you really should be agnostic with respect to policies that concern it. In other words, if we don't know at least a little about economics, we should bow out of the debate and let those more knowledgeable create policies. I'll admit it's a pessimistic point of view about democracy, but I agree. More democracy (defined simply as majority rule) isn't necessarily a good thing. For example what if the poorest 70% of voters decided to vote for a one-time 100% wealth tax on the richest 30%? They could pass a constitutional amendment and everything if they wanted. What would stop them? Well, their sense of decency and fairness for starters, but it's possible in a democracy, even if it would have detrimental effects on the economy. Back to the free trade argument about free trade.

Lou-Dobbs populists are creating a huge backlash against free trade, contrary to the opinions of the experts, which, Mr. Mankiw points out, are overwhelmingly supportive of free trade. Either the people who have collectively devoted centuries to the study of economics or the people who have devoted as much time as it takes to turn on CNN at night are wrong.

However, Arnold Kling makes the point that this (economists support of free trade) shouldn't be the reason we support free trade, and I agree with him in the long run. (I really do like his parable, by the way; I've used something similar myself before.) He argues we should put the arguments in terms everyone understands, but I just don't have a lot of faith in our ability to educate the general populace at large in the short run. I think this is especially true with politicians and commentators yelling in our ears and our general unwillingness to change our minds.

Mr. Mankiw also goes on to make a very good point in explaining why not all economists are Republicans: it's because economists, as all of us should be in my opinion, "are not single-issue voters. Like everyone else, they are divided over contentious issues like health policy, the Bush tax cuts and the war in Iraq." Another reason, he adds, is that "many economists don’t really believe the populist rhetoric coming from the Clinton and Obama campaigns." They believe, and I sure hope this is true, that when in office they will likely adopt more reasonable policies.

"It's My Way or No Highway" -- Brandon Arnold at Cato@Liberty:

"But the full story on earmarks isn’t simply their direct impact on the budget. Earmarks are also used by Congressional leadership to raise the public profile of incumbents in tough reelection fights, entice members to vote for controversial bills, and enforce party discipline."

Last week there was a vote on an amendment proposed by S.C. Senator Jim DeMint that would impose a one-year moratorium on the use of earmarks within the Senate. I was 100% behind the amendment and was disappointed it didn't pass. I wish the earmark process was more transparent and these special projects weren't funded by bypassing debate, but to me the biggest issue, like Mr. Arnold, isn't the dollar impact of the earmarks, which is in relative terms quite small. The thing I don't like is that they've become a type of political currency, freely traded on the Senate floor like smokes at the state pen. Their abuse has simply been the attempts of elected pols doing all they can to stay in power. (See the long careers of John Murtha and Robert Byrd.) A podcast about political survival I heard recently talked about how leaders, elected or otherwise, often try to stay in power by handing out goodies to the "selectorate". A $3 million earmark certainly won't break the budgetary bank but it can sure help get the requesting congressman (or woman) get re-elected by "bringing some of their tax dollars home." And if the support of a few key colleagues can ensure the passing of a critical bill (that, presumably, wouldn't pass on its own merits), why not try to persuade them with the funding of a pet local project or two?

"How Minimum Wage Hurts Teens" -- IBD Editorial:

"As a basic point of economics, it's a given that anytime you raise the cost of anything, you will use less of it. As such, the minimum wage hike that took effect in Massachusetts this year has been a job-killer for thousands of untrained youths, many of them minorities...

It's the same everywhere, nationwide or by state: Hiking the minimum wage sounds generous and decent, but in fact hurts small businesses and workers alike, squeezing profits, destroying jobs and forcing businesses to pare back their paid benefits...

Faced with a mandatory hike in their wage costs, small businesses have a choice: either fire workers, raise prices or do both. Just letting people go often is easiest."

Econ 101 (or 110 if you went to BYU).