Thursday's interesting reads

"Immigrant Scapegoats" WSJ op-ed by Jason Riley:

"At the behest of unions seeking to restrict the supply of labor in order to inflate its price, pols and interest groups are already citing the state of the economy as a reason to scale back immigration...

The common assumption is that a job filled by an immigrant is one less job for a native.

But this reasoning is based on a fundamental misunderstanding of how our labor markets operate. The U.S. job market is not a zero-sum game. The number of jobs is not static. It's fluid, which is how we want it to be. In 2006, 55 million U.S. workers either quit their jobs or were fired. Yet 57 million people were hired over the same period. In a typical year, a third of our workforce turns over.

Immigrants help keep our labor markets flexible. And flexible labor markets – the kind that minimize the costs to a business of hiring and firing employees – enable workers and employers alike to find the employment situation that suits them best. Flexible labor markets make it easier for an employee who doesn't like his job to find another position somewhere else. And flexible labor markets make it more likely that an employer will expand his workforce or take a chance on a less experienced job-seeker.

A better fit between employers and employees increases productivity and makes markets more responsive to consumer demand...

The question is not whether the U.S. can survive without foreign labor. The question is whether the country would be better off economically by moving in a protectionist direction. Social conservatives fret that too many immigrants will have America slouching toward Guatemala. The bigger concern is that too few immigrants will have us slouching toward France."

"'Stimulus' and the States" WSJ op-ed by Janet Napolitano:

"As a result, states must now carry the additional burden of providing health care for these children...

Instead, these regulations are simply a maneuver to have someone else (i.e., the states) foot the bill...

Washington's failure to meet its obligations is forcing states to cut education, health care and other vital services. The federal government should accept its responsibility, do no harm and pay its bills. Once it does, we can work together to improve the quality of life for those we are privileged to represent."

I have two issues with this. First, if a state decides it wants to provide a benefit to its citizens, it shouldn't rely on federal tax receipts to pay for it. In fact, I'm nor sure I'd support any federally funded program that only benefits the members of a particular state. Second, I'm not a fan of politicans taking it as their personal responsibility, in their position as politicians, to improve my quality of life; that should be our own responsibility. It's just like how we shouldn't rely on government to teach our children about the creation; that should be our responsibility. And we shouldn't rely on the government to make sure we have the skills to compete in the workplace; that should be our responsibility.

"Bailout of the Year" WSJ editorial:

"To summarize: Congress mandated a return on student loans that is too low to attract private capital in the current market. So Congress will now use your money to create artificial investor demand. Taxpayers will bear more risk so that Congress can fashion a new business model to replace the one it just destroyed. The Bush Administration, unwisely but typically, has endorsed this approach."

I don't fully understand all that happened, but apparently congress lowered the rate lenders can charge students on loans. "Citibank subsidiary Student Loan Corporation cited "unprecedented federal legislation" in announcing its recent withdrawal from much of the market." Now, they want to subsidize lenders to get them back in the market. Another example of bad legislation needed to fix bad legislation.

Neal McKluskey with Cato had this to add about the "student loan crisis":

"In light of all this, the funny thing about the as-yet nonexistent student loan crisis is that taxpayers should actually hope it materializes. The only way to slow the vicious tuition-inflation cycle is to cut down on the cheap aid that fuels it, and since politicians are going to act as if there's a crisis no matter what, we might as well benefit from some of the market discipline a real crisis could bring."

"Evil Exxon" Jerry Taylor at Cato quoting Bill Dunkelberg from Temple University:

"Some presidential candidates have decided that Exxon is a symbol of what is wrong with America. Recent ads complain of Exxon’s 40 billion in profits as if Exxon is some evil entity. First of all, Exxon is not a person, it is millions of owners owning over 5 billion shares in their investment portfolios. Vanguard holds over 160 million shares for its clients, Fidelity over 100 million shares. Taking Exxon’s profits for hair-brained government schemes will just mean millions of people will have to work longer to accumulate their retirement assets. And, doesn’t return on investment count? 40 billion may not represent a particularly good return on the capital invested in the company. Size is not the issue, the percentage return is what counts.

And the government takes over 40 cents a gallon in tax, far more than the profit per gallon made by refiners. And the government doesn’t make any gas for you.

Hopefully voters will catch on to this sham. The last thing we need is government confiscating private sector profits and driving stock prices down. No help for our retirement and no help for the economy."

I wish I could think of a way to resolve the disconnect that exists that causes people and politicians to forget that taxing corporations is simply taxing shareholders and that fining corporations is simply fining shareholders. If making corporations no more than a passthrough entity wouldn't be such an administrative nightmare, I'd like to see a system where individuals paid the corporations taxes on their own returns. That would keep those profits from being taxes twice and would leave more cash at the corporations themselves, enabling them to make growth stimulating capital investments.

"Higher Prices" by Thomas Sowell at National Review Online (HT: Neal McCluskey at Cato):

"[M]aking economic policies on the basis of human interest stories — which is what politicians increasingly do, especially in election years — has a big downside for those people who do not happen to be in the categories chosen to write human interest stories about.

The general thrust of human interest stories about people with economic problems, whether they are college students or people faced with mortgage foreclosures, is that the government ought to come to their rescue, presumably because the government has so much money and these individuals have so little...

Costs are not just things for government to help people to pay. Costs are telling us something that is dangerous to ignore.

The inadequacy of resources to produce everything that everyone wants is the fundamental fact of life in every economy — capitalist, socialist, or feudal. This means that the real cost of anything consists of all the other things that could have been produced with those same resources...

Prices force people to economize. Subsidizing prices enables people to take more resources away from other uses without having to weigh the real cost."

"Los Angeles Bans Bacon" by Drew Carey with Reason.tv. Just a great video.