Regular readers may realize that there are regular sources for many of the video clips I feature on my miscellany posts: John Stossel, Johan Norberg, FEE, Reason.com, the Acton Institute, not to mention regular samples from Ron Paul and Matt Kibbe. I'm not afraid to feature a debate or people with opposing views. (I sometimes write an introduction to the clip emphasizing certain points in the clip.)
Youtube had teased me with a recommendation of a clip about some libertarian guy schooling this articulate but sadly deluded young black male "Democratic Socialist" who is picketing for a hike to the minimum wage (I think in Pennsylvania). The white male libertarian somehow starts talking about inflation and, like any good Austrian School of Economics troll, starts talking about the Fed (mentioning how the government debased silver coins around 1964, how much silver sells for today, and the black guy starts talking about indexing the minimum wage for inflation. I thought, "Oh my God, this discussion is so clueless on both sides that if I clip it into the blog, I'll have to write a long commentary prelude.
Whereas it is true in some sectors where government has had counterproductive intervention, like colleges and healthcare we have had huge inflation. But for the most part, across the economy the Fed doesn't see inflation rising rising rates (beyond their slow return of rates to "normalcy"), even as Trumpkins like Hannity ludicrously promote this is the hottest domestic economy in 50 years. What they don't tell you, for instance, is that Obama's second quarter in 2014 reached 5.1% growth (which wasn't enough to reach 3% for the full year). Moreover, we're likely to see a slide in the current quarter. Just citing one example reason, the Chinese announced a retaliatory tariff hike on soybeans, so domestic farmers did everything they could to push sales into last quarter from this quarter. Trump's unnecessary, counterproductive tariffs have mucked up the statistics, and no doubt Democrats will politically exploit any drop-offs in September's numbers.
Going back to this video, the minimum wage is fundamentally unjust. For example, as an IT professional with experience, degrees and professional certifications, I earn significantly more than minimum wage. But if I found myself laid off with other DBAs in a recession, I can offer to cut my compensation demand to make myself more acceptable to employers, so long as it is above minimum-wage. People who work at lower-level/paying jobs don't have that ability: the government arbitrarily says their right to make a deal is "illegal".
A business can't arbitrarily change its prices. The law of supply and demand says that you have fewer customers at higher prices. If and when you increase wages, your costs go up, and many (particularly small) business operate at razor thin margins. It's not a matter whether an employer bases compensation based on what he considers is "fair". Pay is based on a market and contribution your labor brings to the marketplace. Take mopping floors, something I did on my first college job. Needless to say, a high school valedictorian really felt overqualified to mop floors at 6 AM. Mopping requires little training, and I would be one of a huge number of potential moppers. What would justify an employer doubling my wages as a mopper? Maybe I can mop twice the number of floors in the same amount of time so he doesn't have to hire a new mopper.
But suppose the government tries to buy my vote, voting to double my wages without an increase in productivity. He really can't afford it. Maybe he buys some sort of mopping iRobot who won't bitch about mopping floors on an empty stomach at 6 AM. Maybe he reduces my hours. Maybe his business goes under, and I can't find a replacement mopping job.
Going back to the debate (and the Mises Institute guy starts talking about Bitcoin as a decentralized alternative to the currency-manipulating Fed), the black guy proves that he stayed awake in history class when they talked about the greenbackers, i.e., inflation basically making loans easier to pay off. Of course, that's a double-edged sword because inflation is a cruel de facto regressive tax on the poor (just ask the people living in Venezuela and Argentina, among other places).
You could talk about strong dollar policies (including the central bank raising rates, the federal government balancing its budget and paying down its debt, engaging in long-overdue entitlement reforms, etc.), open-trade policies, which allow competition for the lower-income dollar, etc. What you will find that government is not the friend of the poor. For example, rent control and strict zoning laws discourage the free market's ability to meet the need for affordable housing
So what does have to do with cheesy promotions of Trump's economic policies? Well, regulation reform is important, but to be honest, there's not a lot Trump can due without sweeping federal legislative reforms. We're talking about a nearly $2T choke hold on the economy.
Tax reform is a step forward (especially its approach to territorial tax vs. worldwide tax system), but it's temporary (e.g., individual taxpayer cuts), in part due to budget reconciliation rules to avoid a filibuster by Senate Democrats.
Trump has done nothing about huge, ongoing deficits; he has done nothing to reform Medicare and social security, both of whose reserves will be exhausted in 15 years (i.e., Congress will need to cover out of its operational funds or cut benefits), his trade wars are quixotic, counterproductive and distorting (e.g., soybean sales). Trump's thuggish threats to Harley-Davidson exploring international expansion in the wake of retaliatory tariffs are morally corrupt and unacceptable; his attempts to subsidize farmers hurt by retaliatory tariffs against his own unprovoked tariffs are self-serving and immoral (I reject a welfare state for farmers).
I do think Presidential actions have an impact on an economy, but they are mostly indirect and even then the Congress makes laws or ratifies treaties. Trump's version of Obama's pen-and-phone autocracy, an expansion of the imperial Presidency, his opposition to open trade and immigration policies--are all bad for the US economy. We can no longer afford an 800-base empire overseas. A modest uptick in the economy is an improvement over Obama's disastrous policies, but it may not be sustainable. The 4.2% QUARTERLY increase may be the high water mark of the Trump Presidency.
