Liberty is the great parent of science and of virtue;
and a nation will be great in both in proportion as it is free.
Thomas Jefferson
Image of the Day
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| Courtesy of the Libertarian Republic |
People are willing to leave behind the places they grew up, their relatives and friends, their culture, for a new land, with a different government and culture, often with limited contacts, resources and uncertain employment prospects. These are, by and large, younger, able-bodied people motivated by our ideals and opportunities, not by a pathetic welfare system, which creates a vicious cycle of poverty and government dependence. (And our welfare net is not nearly as generous and comprehensive as that in many advanced economies.) When, for instance, a born American can make more from unemployment payments than, say, harvesting apples in Washington, should we be surprised that foreign-born workers are willing to take advantage of those opportunities?
More on Public Sector Teacher Compensation
From newsmax:
According to a new report from the Department of Education's National Center for Education Statistics (NCES), the average base salary for a full-time public school teacher in the 2011-2012 school year was $53,100. When all sources of income [e.g.,extracurricular activities in the same school system, students' performance, and state supplements] are included, the average public school teacher earned $55,100 in the school year studied. The income earned by public school teachers is also significantly higher than the base salary of the average private school teacher, $40,200 a year, according to the NCES.
The Census Bureau estimated that the median household income in the United States was $50,054 in 2011, the latest year for which figures are available.A few things to point out: there is considerable variation in level (e.g., high school teachers generally make more than elementary school teachers) and location (suburbs > small towns). (I have two nieces whom work at the lower end of the range, at least one whom was offered paid after-hours work.)
Second, public school teachers have far better job security than the typical private-sector worker. (This does not means layoffs don't occur; one of my (junior nontenured) nieces had been earlier laid off according to seniority rules in her home state district.) Third, compensation goes beyond those 9-month salaries; teachers often have far better and/or lower-costing benefits than comparable private-sector workers, including those famously underfunded retirement pension and/or healthcare plans.
Some Thoughts From a Non-Economist
I was listening to a Cato Event podcast featuring Harvard economist Jeffrey Miron; during Q and A, Miron was explaining how price-fixing in terms of rent control is almost universally panned, the same is not true of the minimum wage. (Don Boudreaux of Cafe Hayek has one of his relevant pithy signature letters to the editor to that bastion of economic illiteracy, Media Matters.) Miron correctly noted that the economists in question have a bias in favor of public policy to allegedly alleviate income inequality. And notice that the population of minimum wage workers, often entry-level workers, is fairly limited compared to the overall labor force; labor costs are not necessarily the only relevant factor. But economic decisions are made at the margins.... In the long run, we know how the law of supply and demand works...
I read a number of financial newsletter emails, and one might be surprised how many writers are "progressive" Keynesians; I think one commentary on taxing the upper 1% recurred so frequently, it was beginning to annoy me; so help me if I hear one more sophistic macroeconomist argue that modest steps to close the budget deficit are a drag on the economy... Yeah, right: pencil-pushing, economic rent-seeking, ineffectual, government program toll-collecting bureaucrats need to find more productive employment in the real economy; arguing that cutting the spending of our grandchildren's hard-earned tax dollars on frivolous, unnecessary paperwork is a drag on the economy is little more than a modern-day example of the broken window fallacy. Excess government spending beyond core competencies like common defense and a justice system protecting individual rights steals resources from the far more efficient, effective private sector. It suppresses savings, investment and consumption in the real economy.
Yet occasionally out there I find something interesting and worthwhile. Professor James D. Hamilton writes about the "Geography of Success". Anyone who stops by Mark Perry's Carpe Diem blog is well aware of the nonstop hyping of low unemployment in and around the Bakken formation in North Dakota and the Eagle Ford and other formations (e.g., Cline) in Texas (e.g., Midland). I want to borrow one table from Hamilton's piece:
| Region | Change in production |
|---|---|
| US | 2041 |
| Texas | 1454 |
| North Dakota | 595 |
| US (excluding TX and ND) | -8 |
| Oklahoma | 123 |
| New Mexico | 117 |
| Colorado | 75 |
| California | -41 |
| Alaska | -56 |
| Federal Offshore--Gulf of Mexico | -348 |
Hamilton further notes: "Texas and North Dakota accounted for only 8% of all U.S. jobs in 2009, but between them produced 18% of the increase in employment between 2009 and 2013". He then points out an obvious conclusion to anyone studying the table: "But the declines in production from Alaska, California, and offshore were all the results of deliberate policy choices. Permit delays are one reason Shell's $5 B investment in Alaska has yet to produce oil, and developing the potential of ANWR has yet to be approved. Some analysts think that California's Monterey Shale has even more potential than Texas's Eagle Ford or North Dakota's Bakken, though the political challenges are daunting. The big losses in offshore U.S. production were another deliberate policy decision."
The obvious political point is that the anti-fossil fuel White House (Alaska and offshore) and California governor's mansion is directly responsible for our having to make up our daily oil requirements from outside the US, basically offshoring well-paid domestic oil jobs to anti-American or unstable sources. Obviously not every state is sitting on top of a huge shale formation, but in the case of California, the Gulf of Mexico region, and Alaska, we are seeing "progessive" policymakers deliberately shooting themselves in their feet. And there are lots of collateral jobs for out-of-state blue-collar workers, like building apartments, hotels, restaurants and other businesses in the Williston area.
What I find even more intriguing what his focus on the supply side versus the demand side for future economic growth. Hamilton wrote an earlier post: "What could America be good at?" His point is that Japan's challenges had less to do with with monetary (in particular, loose money) policy than structural problems, in particular, it lost its competitive edge to other Asian manufacturing countries. He suggests that America is seeing a similar day of reckoning. He quotes Sachs whom points out that fiscal and monetary policy have been biased towards non-traded sectors, like construction.
Every business school student knows about the pick-and-shovel play. For example, not everybody struck it rich during the California gold rush. But every prospector needed a pick, shovel, pan, food, rugged jeans or other clothing, and vendors could run a profitable business fulfilling one or more of these needs. On a more general level, despite only possessing a small proportion of the world's land mass and population, we have been blessed by an abundance of natural resources, fertile farmland, etc. Hamilton cites a fascinating quote from Gavin Wright over a period of rapid economic growth in American history:
The United States became the world's preeminent manufacturing nation at the turn of the twentieth century. This study considers the bases for this success by examining the factor content of trade in manufactured goods. Surprisingly, the most distinctive characteristic of U.S. manufacturing exports was intensity in nonreproducible natural resources; furthermore, this relative intensity was increasing between 1880 and 1920. The study then asks whether resource abundance reflected geological endowment or greater exploitation of geological potential. It was mainly the latter.As I read this, I naturally thought of clueless, counterproductive Europeans whom seem seduced by Hollywood fear-mongering anti-fracking propaganda flicks and would prefer to import their supplies, providing an opening for American shale gas producers.
The rest of the article involves a wonkish discussion of whether or not regulations have exacerbated problems in employment recovery. Hamilton agrees that the world is complex, not all regulation is intrinsically bad, but suggests we should examine what we got right between 1880 and 1920; I believe that he is fundamentally correct.
To What Extent Is Public Policy Color-Blind?
I'm not particularly interested in using this blog to exacerbate divisive race- or class-based rhetoric, point out hypocrisy of the racial grievance industry, etc. But what struck me as I read the following WND quote below is why race/ethnic profiling is morally acceptable in college admissions and job applications (how many scores of times have I been asked by employers to identify my race, work eligibility (citizen, legal resident, etc.) , or veteran status?), but not when we're dealing with crime, terror, etc.? Since when is political correctness a compelling intervention in private sector hiring, but not relevant in analyzing public safety performance? Apparently Minneapolis knows more about racial cross-breaks in its police force but not among those arrested, even if that factor is statistically significant...
“We don’t keep track of arrestees by race,” said [Minneapolis] police spokesman William Palmer. “And frankly, no, it doesn’t matter. We arrest and prepare criminal cases for consideration of prosecution for those people who choose to break the law. Race has nothing to do with it.”Capitalism Works--Without Meddling Legislators or Bureaucrats
I did a gig in southern Maryland back in 2004-2005. It was about a 90-mile commute each way, and the most price-competitive gas was a Wawa station roughly halfway through the commute I visited every other day. Wawa uses discounted gas to lure customers to their fully-stocked convenience stores including attractively-priced sandwiches and beverages.
Choose Life
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| Faith Massey, a beautiful gift from God |
Political Cartoon
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| Courtesy of Gary Varvel and Townhall |
Marvin Gaye & Tammi Terrell, "If I Could Build My Whole World Around You". I've featured one of the great duos in modern pop/R&B music; as most fans know, Tammi died in her mid-20's of brain cancer. Done too soon...
