Asymmetrical Information

If the "mess" in Iraq was responsible for the republicans losing, then why did Lieberman win? Just askin'.

The estate tax doesn't finance much of the federal budget because only 2% of estates are taxable. Many estates too small to owe estate tax benefit, though, from the step-up in cost basis of inherited assets to market value as of date of death. If the estate tax elapses as it is scheduled to do under present law, that step up in cost basis will elapse, too. The effect will be that rich heirs will no longer owe estate tax but middle class heirs will owe a lot more capital gains tax. The redistributionist crowd were wrong about the tax shifting effect of Bush's income tax cuts but about the regressive tax shifting effect of repeal of the estate tax and the step up in cost basis they were right as rain.

They think they have a mandate. So, isolation/appeasement will be the order of the day. A "feel good" message to paint over the increasing violence of failing world civilization. Dark ages are coming, the worst days in human history.

"Dark ages are coming, the worst days in human history."

I will be your kids' next school librarian.

the GOP took its heaviest losses within its moderate ranks.

So Republicans running in centrist/swing districts were more likely to lose than those running in hard-core Republican districts? I'm shocked, shocked.

Seriously, how radical is the Dem base? MoveOn.org isn't a bunch of squishy centrists on abortion and gun control.

Things are bad for the GOP, no question, but this is just silly.

If the "mess" in Iraq was responsible for the republicans losing, then why did Lieberman win? Just askin'.

Yeah, everyone likes "pay-as-you-go budget rules" like everyone likes puppies and sunshine. But what about when you ask if new spending should be funded by spending cuts in other areas, tax increases, or both? That's an interesting question but would probably not give answers useful for clubbing your opponent. Same with "electoral fairness." What the heck does that mean? Some think it means photo ID to vote, others think it means paper ballots, and still others think it means letting felons vote.

"Stem-cell research?" I get the feeling that 90% of the electorate doesn't even know what the issue is. But even so, the latest poll I see, "Do you favor or oppose using federal tax dollars to fund medical research using stem cells obtained from human embryos?", is 50-40 in favor. Hardly a "radical" position to oppose. Also I note that none of the questions ever say anything like, "obtained from destroying human embryos." I bet this is an area, like abortion, where wording can cause 20-point swings. Then there's this one:

"Statement A: Those OPPOSED to this type of research say that it crosses an ethical line by using cells from potentially viable human embryos, when this research can be done on animals or by using other types of cells.
"Statement B: Those IN FAVOR of this research say that it could lead to breakthrough cures for many diseases, such as cancer, Alzheimer's, Parkinson's, and spinal cord injuries, and this research uses only embryos that otherwise would be discarded."

Hmm. Seems a bit loaded (and inaccurate) to me.

Guess we have no choice but to continue to act like anyone who disagrees with our own camp is evil or insane and doesn't just disagree with us.

Re: polling, I couldn't agree more. I've been "randomly selected" to participate in quite a few political telephone polls and the questions are so loaded, the answers so constrained, and the quantity of questions so few, that I have never felt that I have expressed my true opinions to any one of those polls.

Come election time, I can see why people misread non-electoral polls all too often.

*sheesh* Who makes those things up?

Rex,
Lieberman won because there was not even a halfway decent Republican in the race. The war is not popular in CT, even a lot of Republicans are backing away from it like Chris Shays. Republicans voted for Lieberman because the GOP candidate was so awful and didn't even get token support from the state or national party.

Jack Olson,

I'm not sure you're right about this: "Many estates too small to owe estate tax benefit, though, from the step-up in cost basis of inherited assets to market value as of date of death. If the estate tax elapses as it is scheduled to do under present law, that step up in cost basis will elapse, too."

I cannot find any indication in the code that sec. 1014 step-up basis will expire when the estate tax provisions terminate in 2010. You got a source for that or are you just BSing?

It wasn't too long ago that the pundits were predicting the permanent minority status of the Dems, with the GOP being able to paint them into a corner as wingnut leftists and appeasers.
How quickly the worm turns...because it only takes
maybe 5% of voters at the margin of each Party
to decide it is time to give the others a shot.

if the Democrats continue to confuse their ideas about where the center should be, with where it actually is, they'll be out of power again by 2008

Fixed.

It does matter, though.

The Democrats are vulnerable to losing their majority in a wave election like 2006 or 1994, certainly. They don't have a permanent majority.

But you have to look at it from the point of view of the Democrats who tried to claw their way back to a majority position from a higher level after 1994. In 1996, 1998, 2000, 2002, and 2004, we fought and won scattered seats but never got close to overturning the Republican majority. Redistricting in 2002 and 2004 in particular ratcheted back our numbers, even with all else being equal. And Republicans continued to win open seats.

What were we up against? A serious disparity in funding. George Bush could jet into a district like MO-6 to do a fundraiser for a freshman in 2001 and immediately take that seat off the competitive list. Democrats couldn't compete financially and had to choose our targets carefully, which made regaining a majority even more unlikely. Republicans could sell access to lawmakers, even the right to write legislation, and then use that money to drown out the competition. They could recruit candidates more easily by promising them a chance to participate in Congress and then a cushy K Street job after retirement. They could put threatened candidates on Appropriations to shower their districts with pork to win over the middle. They got media attention that made them look like the people who mattered, and Democrats who by definition had no influence on the press, into whiners. Legislators would bleed away to the majority party to enjoy influence and access, further demoralizing the minority. Pundits looked at two elections and decided the sweep of history was flowing away from your party.

Power attracts more power, and Tom Delay knew this better than anyone. Democrats were left with the crumbs of dedicated partisans and people who were repelled by the majority. People who just wanted Congress to do stuff and fund them, could continue to vote Republican.

This is what they're talking about. Yes, it's possible Democrats won't accomplish much; it's also possible that 2006 will come sooner rather than later for the Democrats. But the Republicans have just lost MANY tools they relied upon to hold their majority, and it's going to make it that much harder, financially and emotionally, to become winners again.

And George W. Bush deserves much of the credit. But there's plenty to share.

Sorry RMc, but Bush is the Democrats' best ally for staying in power past 2008. No way can the Republicans make the next presidential election all about Nancy Pelosi.

Democrats who by definition had no influence on the press,

If you're shaking your head at this, it's because I meant "process."

Eamon,

If the war was truly responsible for the defeat of many republicans, then why didn't Lamont win instead of Lieberman? Just how many democrats in Conn. are anti-war? Certainly can't be all of them, or even a majority of them, or Lamont would have won. Of course, there are anti-war sentiments in the country, but the anti-war sentiments I am familiar with have to do with not using force and politics properly to go ahead and WIN the darned thing, not because we are against the war in the first place. Add those people who think like me to those who are truly against war and you get a majority of people. This is far from a mandate that we should cut and run, again, as we have so many times in the past.

If you want to see the real reason so many of us who normally support republicans (which we do only because they tend to be slightly more representative on a broad range of issues than do the democrats) didn't support the republicans this time is because the republicans were not acting like republicans. Look again at The Contract With America and see just how far the republican party has strayed from those ideals. We're fed up and disgusted with paying through the nose for programs that (1) don't work and/or (2) are targeted primarily at likely democratic voters. We're all for a safety net of some sort, but the safety net shouldn't be fringed with lace and ribbons, and the net should be examined from time to time to ensure that it is really catching what it should be.

Brittain33: "What were we up against? A serious disparity in funding."

Yeah, yeah. Everybody knows that the trial lawyers and large labor unions have ab-so-lutely no money.

-dk

Rex, exit polls showed that Republicans did overwhelmingly support Republican candidates, and did turn out. It was losing the Independents by 20 points while Democrats turned out in a percentage competitive with the Republicans that did in the Republican majority. That's why most Democrats wins were in seats that voted for Kerry or voted for Bush by a relatively narrow margin, spectacular exceptions like TX-22 and PA-10 aside.

Rex,
The flaw with your reasoning is that Lieberman is not a Republican. He got about a third of the Democratic votes. Many Democrats felt no problem with voting for Lieberman since he promised to caucus with the Democrats and Harry Reid promised him that he would retain his seniority if he won and remained in the caucus. No way a pro war Republican senate candidate would have done that in a hotley contested race. I think you are also underestimating the role that Seniority and experience in the senate played in the campaign as well as a lousy general election campaign by Lamont. Lamont had his foot on Lieberman's throat right after the primary and instead of tryign to follow it up and build some momentum, he went on vacation. He was also an inexperienced debater and it showed.
I think those who are pointing to Lieberman's win as proof that the war is somehow popular should look more closely at the results. Lieberman despite his big advantages coming into this campaign (incumbency, experience, money, seniority) was held to 50% of the vote against a novice, empty suit candidate. Also, in CT, two pro war Republican house members lost and a third nearly did so.

I didn't claim that the war was popular; what I am saying is that the war wasn't the reason the republicans lost. As Britain33 points out, a lot of independents did not vote for the republicans, and as far as I know, it was not because of the war, but because of the republicans moving further and further away from the ideals expressed in the Contract For America.

I also think that if the war were truly the all-consuming issue that some try to make it out to be, Lamont would have won instead of Lieberman, in which race two democrats differed only in their war views.

Rex,
fair enough. I agree that the war wasn't the sole reason that the GOP lost, but I think it was probably the issue that most unified the opposition. There were others and it varied from race to race. For example, I think stem cells and Michael J. Fox brouhaha pushed Talent over the age and Conrad Burns was probably beaten more by age and Abramoff (and a good opponent)than the war.

"a moderate increase in the minimum wage which will benefit millions of affluent teenagers"

What exactly is wrong with assuring that affluent teenagers get paid a fair wage for their labor?

But if they are really so affluent, why are they workign for a crappy $5.15/hr in the first place?

As much as I'd like to see a return of the Republicans, 2008 isn't likely to be the year. A lot more Republican Senators are up for reelection in '08 than Democrats and the headline name will still be George W. Bush. As unfair as it may be, barring a very active campaign of media management, public dissatisfaction will still accrue to the Presidential party.

Since WW II, the average swing in the 6 year election of a sitting president is something like 29 House and 6 Senate seats to the opposite party. That means that 2006 is nowhere near the wave that many in the media try to make it. Even with the current feelings on the war, the Dems were still only able to pull off an average swing.

2008 is a political life time away. In '91, Bush the Elder's polls were in the stratosphere. None of the major Dems entered the presidential race for fear of getting slammed by GHWB. You know what happened.

Can it go the other way? None of the current Republican front runners are very close to this Bush. And now, the Dems have two years running Congress to make mistakes.

Drum thinks most rank-and-file Republicans don't realize how "radical" the GOP has become.

Why does Drum get to define (with apparent authority) what qualifies as mainstream and radical/extreme?

If Mr. Drum did more traveling and got to see more of the country, he might meet a lot people who consider their conservative views mainstream while viewing him as a radical or extremist.

The "R" and the "E" words are just empty labels used to demonize political opponents (liberal or conservative). They are usually employed when the less intelligent have trouble winning arguments and focusing on facts.

Anyway, remember a great line from the film "Death in Venice" (1971). The young man asks the conductor, "Do you what lies at the bottom of the mainstream? Mediocrity."

If a political mainstream exists, is it good or even useful? Does it hold solutions to our problems?

When liberals disagree with what is thought to be majority opinion (such as the death penalty), liberals are principled. By contrast, when conservatives disagree with what is believed to be majority opinion, it's always called "extremism." Make sense?

But if they are really so affluent, why are they workign for a crappy $5.15/hr in the first place?

I don't know. I was a pretty affluent teenage, my father is a doctor, and I worked a minimuim wage job.

If the job is strictly to generate spending money, 10 hours a week would give you $51.50, say $40 after taxes. When I was in high school this was nothing to sneeze at since most of my discretionary expenditure was movies and food.

lannychiu has it right. The studies show that the vast majority of minimum wage jobs are held by teenagers who are working for spending money. The last study I saw (over 10 years ago) said that there were only 100,000 hard core (i.e., permanent) minimum wage workers in the U.S. Out of 300,000,000 that's not very many. The average length of time that any person spent in a minimum wage job was 2 years, which I find hard to believe, because when I worked minimum wage (summer between 2nd & 3rd year of college), I got a 5 cent/hour increase after 8 weeks.

> Sorry RMc, but Bush is the Democrats' best ally for staying in power past 2008. No way can the Republicans make the next presidential election all about Nancy Pelosi.

You folks do know that Bush can't run for re-election in 08, right?

Why would someone who isn't on the ballot influence how folks vote?

Why would someone who isn't on the ballot influence how folks vote?

Because we won't have had two years of Democrats running the country unchecked, which is what people are counting on to provoke a backlash.

Anyway, I disagree with your premise. Don't you think Clinton influenced how people voted in 2000? Certainly a lot of people voted for Bush as a way of voting against the Clinton era.

The real effect of raising the minimum wage will be to make it illegal to provide employment to any person whose productivity is so low as to be worth no more than $5.15 in wages plus related expenses. It will also put upward pressure on all wages at the low end of the labor market.

Um, Jane, you do know that the Senate is evenly divided, the Fed, White House, Pentagon, Justice Department and Homeland Security are wholly Republican, the Supreme Court is 7 to 9 Republican, and only the House will be controlled by the Democrats for the next two years?
Or don't you?
Try writing what you think instead of what you feel.
It's more interesting.
I did remember what you wrote about how it was so easy for most American teenagers to get access to birth control pills that it was unlikely to reduce the abortion rate much if we gave all of them that access. That even free birth control pills through the mail to all teenage girls so that the ones with sane parents could share them with their classmates would not reduce the pregnancy rate and abortion rate to zero, or even cut it by half.
That was a valid point that I had not previously considered.
I read this blog in the hope that you might change my mind about something again.

Well, when you point out that the American public polls in a way that actually sounds pretty pro-life (over 50% of Americans say that abortion should only be in cases of rape, incest, or where the lfie and health--not the state of her delicate psyche, but actual physical health--of the mother are in danger), Democrats ably point out that they also support Roe. To the Republicans I talk to, this indicates that polls are worthless for discerning anything except very broad trends. For Democrats like Hacker, that means that Republicans are "Right of center", while the Democratic party's NARAL-driven policy is firmly aligned with the deepest longings of the American heartland.

Assuming the word "legal" is not missing from that sentence, as in "should only be legal", it sounds like the Dems are, in this case, exactly right: the common position is to object to abortions but also to object to making them illegal, and it's hardly an incoherent position.

Half Sigma: "What exactly is wrong with assuring that affluent teenagers get paid a fair wage for their labor?"

A "fair wage" is one mutually accepted by willing-but-unforced buyers and sellers of labor. What business is it of the government to decide what's a "fair wage", for people who aren't even supporting themselves, much less dependents? And, as has been pointed out, the cost is borne by those whose labor is worth less than the legal minimum. Are they better off unemployed at $7/hr than employed at $2/hr?

On the other hand, Rex: "The studies show that the vast majority of minimum wage jobs are held by teenagers who are working for spending money."

The numbers I recall are that about a third of people working for minimum wage are teenagers, for whom the money is at most a supplement to their family's income; about a third are single adults, for whom full-time work at minimum wage puts them slightly above the poverty line; and about a third are adults with dependents. The last are a genuine problem — and the solution is things like the earned income tax credit.

wkwillis wrote: "Um, Jane, you do know that the Senate is evenly divided, the Fed, White House, Pentagon, Justice Department and Homeland Security are wholly Republican, the Supreme Court is 7 to 9 Republican, and only the House will be controlled by the Democrats for the next two years?"

Senate is 51-49 at the moment, hovering on 51-50. It will be interesting to see what the organizing resolution looks like.

The Fed works for stability no matter who's in office, and is not partisan.

The Supreme Court is 5-4 conservative-liberal, with 2 RINOs.

Homeland security includes the CIA, which has been running actions against the president, and also lots of bureaus that can't be called partisan or relevant.

And if the Pentagon was working for the Republicans, it would have won the damn war by this time.

the Democrats will win it all in 2008 because of historical trends. Jane may be right about 2012.

The Democrats have a problem because they delude themselves with polls. They know some of their ideas, such as tax increases, are unpopular, so they just keep reworking the message until it gets over 50% in the polls. They set themselves up for failure that way. One thing that Democrats fervently believe is that government cannot spend too much. They can easily find public support in the polls for more spending on specific things. Then they have the problem of paying for it. Sometimes they try to raise taxes with demagogic attacks on the rich. Sometimes they use regulatory agencies to raise taxes. Sometimes they advocate easy money.

The 2006 republicans, though, were completely cynical. They used BOTH spending AND tax cuts to curry favor with key constituencies without giving a shit about deficits. Then they tried to divert attention with homophobia and racist attacks on immigrants. They deserved to lose, and lose big. Anyone associated with the gang that ran Congress should not be allowed back in power.

Rex -- what studies show that the majority of minimum wage workers are teenagers?

The BLS reports that 24.5% of minimum wage workers are teenagers.

So what studies are you citing?

You are due your opinion, but not your own "facts".

Spencer, using an inaccurate, but in this debate relevant, definition of "teenager" as "very young worker who is not expected to be self-supporting", he's right; the vast majority of minimum wage workers are part time, and something in the neighbourhood of half are under 24.

A recent New York Times article on the minimum wage says that the great majority of people now earning it are full time adult workers. You say that most minimum wage earners are teenagers working part-time jobs. Is the Times wrong? If so, what are your sources? You also say that an increase in the minimum wage will hurt low income workers because it will increase the unemployment rate. I know of studies of restaurant workers in New Jersey and Pennsylvania suggesting that modest increases in the minimum wage will have no discernable effect on employment. Is there any empirical backing for your side of the argument? I really have difficulty in believing most of the stuff I read on this blog.

Jane is incorrect about the Republicans making a comeback because of the demographic trends in the US. The groups that vote 60% or more for Democrats are growing (blacks, hispanics, and Asians). The groups that votes the best for Republicans white middle class males is shrinking.

In the future, the Democrats will dominate the political scene to the points that the US will quickly become a one party state.

Having access to power is so important and money so important to getting access to power that no group can afford to fund the losing political side.

The worst case scenerio will be a dominate Democratic party and a virtually irrelevent Republican party that is incapable of winning. That would give the Democrats the benefit of having a token opposition to run against while now having to worry about losing.

A future token Republican party will be enough for the Democrats to keep blacks and Hispanics in line while not having to risk losing power.

Stanley, could you provide a link to the New York Times article? Because it's dead wrong. According to the latest data, , less than 40% of minimum wage earners work full time, and 53% of them are under the age of 25. It seems reasonable to assume that we're looking at a wage class comprised mostly of students, entry-level workers, and second incomes.

> Don't you think Clinton influenced how people voted in 2000? Certainly a lot of people voted for Bush as a way of voting against the Clinton era.

I think that the people who voted for Bush in 00 as a vote against Clinton are "broken glass" Repubs. They were going to vote Repub no matter what.

Is there any reason to believe that the "vote Dem in 08 as a vote against Bush" folks would otherwise have voted Repub?

Remember, both parties have a 30-40% "core". You can safely ignore any "reasons" they give for their vote as they've got another if the one they give doesn't pan out or is inapplicable in a different situation.

Jim Linnane writes:
"Then they tried to divert attention with homophobia and racist attacks on immigrants."

Exactly what policy besides open borders is not racist to you?

Andy, they don't have to vote against Bush, they could vote against his pigheaded policy on the war and other issues and the Republicans in Congress who enabled and covered for his every move. There are a lot of independents who feel that way who didn't identify with Democrats before 2006. Similarly a lot of those "broken glass Republicans" in 2000 were conservative Democrats in 1992 or not extremely political. The complexion of the electorate does change from decade to decade with trends carrying over and shaping responses.

I didn't know that this site even still existed. I thought somebody finally used the 2X4 on Jane that she sought to use in 2003 on those opposed to the Iraq misadventure. Oh well.

Jane - The article I mentioned about the ages of minimum wage earners was written by Lewis Uchitelle and appeared in the business section of the Dec. 20 New York Times. I can't give as precise a reference for the effect of changes in the minimum wage rates on the employment of restaurant workers in New Jersey and Pennsylvania, and you'll have to consult Brad DeLong's blog or DeLong himself to get the literature citations. Finally, I don't impugn your honesty or your good intentions in writing as you do on economic matters, but I feel very strongly that you're a slave to theory. What I see is that a 40% increase in the minimum wage will have a wonderful effect on the lives of millions of our fellow citizens, and the bad effects, if any, will be lost in the noise.

"the bad effects, if any, will be lost in the noise."

I predict Stanley will be one of the first to whine about rising unemployment and inflation as evidence of the "failed Bush economic policies."

Liberals are generous with the money of others, and tight with their own.

Jane I suggest you use this link:
http://www.bls.gov/cps/minwage2004tbls.htm#1

It is the BLS tables on the characteristics of Minimum Wage Workers.

What I did was correct someone who said that half of minimum wage workers were teenagers.
The BLS reports that those under age 20 account for 24.5% of minimum wage workers. Aother almost 25% of minimum wage workers are over 20 but less then 25. You are assuming that these young adults are all part time student-workers that get the bulk of their support from their parents.
While this is true for some of them, we actually do not have data on what share of 20-24 yer olds fall into this category or how many are self-supporting.

Interestingly, about a third are women over 25 years old and 71% have a high school degree-- that kind of excludes the part-time teenager.

This same source reports that 38% are full time workers, so you are correct that most are part time.

Of course all of this data is just for recent years after the real minimum wage fell to all time record lows and the minimum wage is at its lowest level ever relative to average wages. It might be more interesting to go back to some earlier data and see what the characteristics of minimum wages workers were when they were a larger share of total employment. I suspect teenagers would be a much smaller share of minimum wage employees when the real minimum wage was higher. Minimum wage employent is now only some 1.6% of toal employment. But in 1980 it was 8.9% of total employment. Of course the real minimum wage in 1980 was almost double its current level.

The really interesting point is that 59.1% of minimum wage workers are in the food prepration and service industry. So what is it about our market system that we have an industry with essentially no foreign competition that is so highly dependent on minimum wage workers.

In other words, are we exploiting some group of workers to keep the price of restaurant food -- fast food -- cheap? I do not know the answer to that, but I think it is a much more interesting question. Why does the restaurant industry find it more profitable to use minimum wage employees rather then make the type of investments that generates much higher productivity and justifies higher wages as other industries do? I would much prefer to see someone discuss this issue.
then the usual stupidity we hear about minimum wages.

Stanley, could you provide a link to the New York Times article? Because it's dead wrong. According to the latest data, , less than 40% of minimum wage earners work full time, and 53% of them are under the age of 25. It seems reasonable to assume that we're looking at a wage class comprised mostly of students, entry-level workers, and second incomes.

Perhaps us economic conservatives are being duped. The argument for increasing the minimum wage is not to lift the incomes of the poor, but to depress the incomes and limit the work experience of the affluent. This would help level the playing field by removing this valuable head start in the working world that is enjoyed by affluent youth.

I see is that a 40% increase in the minimum wage will have a wonderful effect on the lives of millions of our fellow citizens

Why 40%, as opposed to some other figure?

If a 40% increase will have a wonderful effect, then wouldn't 100% have a stupendous effect, and 200% a rapturous effect?

If we're going to pluck a figure out of the air, why not shoot high?

Why 40%, as opposed to some other figure?

If a 40% increase will have a wonderful effect, then wouldn't 100% have a stupendous effect, and 200% a rapturous effect?

I'm an economic conservative and I oppose minimum wage laws. But you are objecting to a naive position.

naive argument: the free market wage for unskilled is not high enough, therefore lets raise it

sophisticated argument: the free market wage for unskilled labor is based upon imperfect competition, namely monopsony. Therefore lets raise it to what we suspect it would be with perfect competition. Employers are using their superior market power to depress the wage they pay to unskilled labor.

Rex Wrote:

If the "mess" in Iraq was responsible for the republicans losing, then why did Lieberman win? Just askin'.

Speaking as a CT native, I think it's because although it is a strong blue state, Connecticut residents are too practical to vote for a leftist, one-note goober like Lamont.

Yeah, I've seen the claim that raising the minimum wage can fail to reduce labor demand in a monopsony. I've read the standard argument in detail. There are two problems with that argument:

1: The standard argument, for example http://en.wikipedia.org/wiki/Monopsonistic_competition , assumes that all employees must be paid the same amount in the monopsonist's shop, even absent the minimum wage. This is obvious nonsense. Just as monopolists and local monopolists can exercise price discrimination [ie., movie theater popcorn, high prices for beverages in restaraunts, Byzantine airline fare tariffs], a true labor monopsonist could pay those employees less who were willing to work for less. That means that a marginal employee who would demand a wage greater than the smaller minimum wage but less than hir value added is still worth hiring, because there's no need to go back and raise the wages for those employees who will work for less. Therefore, increasing the minimum wage won't increase employment.

2: Can you really claim there exists a labor monopsony with a straight face? There are locally owned dry cleaners on every corner, and most places which have any fast food joints at all have several stores from several chains. I understand franchisees set wages at their individual shops. Although I could easily be wrong on this, my argument does not depend on it.

The argument requires a monopsony to have any significant force. Even a small handful of employers [ie., McDonalds, Burger King and Taco Bell and Jack in the Box and ...] will make the argument fail, because most of the cost of one employer raising his wage is borne by hir competitors who must follow suit.

-dk

Justin,

Not THAT sophisticated! In one sentence you hypothesize a monopsonistic labor market, and two sentences down you refer to employers in the plural, which, of course, means the labor market is not a monopsony. It could still be an oligopsony, but of course that is preposterous based strictly on casual observation.

> Andy, they don't have to vote against Bush,

They do for the claim I'm discussing to be true. I'll quote it again.

> Sorry RMc, but Bush is the Democrats' best ally for staying in power past 2008.

Note "Bush is", the "Bush" that won't be on the ballot.

> they could vote against his pigheaded policy on the war and other issues and the Republicans in Congress who enabled and covered for his every move.

In 08 Bush won't be on the ballot AND the Dems will have had both branches of congress for two years.

In 06, Dems got to argue "we can do better". In 08, Repubs get to argue "they didn't". Neither of those arguments sway 60-80% of the population.

I know folks who will tell you that they voted Repub in 06 because they were still mad about Clinton. However, I'm pretty sure that they'd have voted Repub even in 06 even if Repubs had held the White House since Reagan, so I wouldn't take their statements as telling me anything about how the switchable minority thinks.

So, I'll repeat my question. How do you know that the folks who will vote Dem in 08 "because of Bush" aren't folks who would have voted Dem in 08 even if Bush had never won?

Rex: "As Britain33 points out, a lot of independents did not vote for the republicans, and as far as I know, it was not because of the war, but because of the republicans moving further and further away from the ideals expressed in the Contract For America."

Yup. I live in TX-22 and that's why I voted Dem for the first time in my life. the GOP didn't seem to have an agenda besides "we should be in power," and Bush seemed to care less about competance than loyalty (Rumsfeld, Harriet Miers, Brownie).

Andy,
The Republicans will only be able to argue that the Democrats didn't do better if they really didn't. Congress is so unpopular right now that the Democrats don't even need to accomplish a lot to appear better to voters than the GOP.

I don't see much sophistication in the minimum wage law. It's just a tax on people who employ low wage workers. Not all will be able to avoid the tax, but those who can find a way, will.

Jane, I apologise. I reread the posting. It was Drum who implied that the Democrats were now in charge, not you.

> The Republicans will only be able to argue that the Democrats didn't do better if they really didn't.

That's completely untrue. The Repubs can argue that the Dems didn't do better no matter how well the Dems do. The validity/truthfulness of that argument is as irrelevant as the validity/truthfulness of the Dem's 06 "we'll do better" argument. (Whether or not the Dems will do better is actually an unknown at this point.)

Remember, the relevant question in an election is whether enough voters believe your argument, not whether it's valid/truthful/low-calorie.

"Then they tried to divert attention with homophobia and racist attacks on immigrants. "

That's just silly.

Actually, one place they lost lots of votes is with people who thought they were *insufficiently* pro-law ("racist" by your terms) regarding immigrants. Most people I know in the South, on either side of the Dem-Rep line, including a big chunk of Hispanics, were disgusted with the de facto amnesty and the fact that no one wants to enforce the stinking immigration laws.

And regarding "homophobia", I ain't scared of them, I just don't believe that judges ought to be rewriting the law - like the Mass constitution, to add what they think ought to be there, rather than what is. When the judges extend a clause to include something that was specifically excluded during the legislative debate and wording of the clause, they have stepped over the line into writing law, not interpreting it.

The problem is, conservatives aren't imaginative enough to take what the judges do and hang them with it. If homosexuality is "similar enough" to the listed items - land of origin, sex, ethnicity - to grant protection, then so is belonging to the conservative half of American culture. So conservative academics ought to begin suing all universities in Mass that show selection bias against conservatives. Hang them with their own rope.

The Reps deserved to lose for what they did, not for what the Dems said about them.

The really interesting point is that 59.1% of minimum wage workers are in the food prepration and service industry. So what is it about our market system that we have an industry with essentially no foreign competition that is so highly dependent on minimum wage workers.

In other words, are we exploiting some group of workers to keep the price of restaurant food -- fast food -- cheap? I do not know the answer to that, but I think it is a much more interesting question. Why does the restaurant industry find it more profitable to use minimum wage employees rather then make the type of investments that generates much higher productivity and justifies higher wages as other industries do? I would much prefer to see someone discuss this issue.
then the usual stupidity we hear about minimum wages.

The restaurant and bar industry is one of the most volatile in existence. The initial investment costs are comparatively high (commercial rent is pretty much mandatory for any food service industry other than light catering, the equipment is expensive, and there are several regulatory hurdles to clear), the time commitment is substantial, and many of your labor requirements cannot be mechanized -- or else can be, but only at some loss of either flexibiliy or quality.

By the time you get around to establishing a payroll, either your labor had better be cheap or your product had better be pricey. The latter only works once you have established a first-class reputation and can afford an appropriate location to attract top-dollar clientelle. So, until if/when your business achieves Cloud 9 status, you depend upon cheap labor.

Meanwhile, you and that cheap labor must earn your reputation through a consistent quality of both product and service, and the latter (in particular) is basically a crapshoot since you cannot really test a potential waitstaff member in an isolated setting before turning him or her loose on the main floor. Hence, the low-wage/tipping system, so that the waitstaffer has at least some incentive not to wreck your reputation in a single evening.

And if this weren't enough, food service expenditures are one of the first things people reduce or remove from their budgets when economic circumstances take a downturn.

Moreover, in many regions and even apart from chains, this same system has generally arisen and has proven the most successful. The market has given plenty of evidence -- perhaps the real question is, why are some people not smart enough to believe it?

(On a related note, possibly some of the most successful start-up restauranteers in the business are the Asians, particularly the Chinese; and to a lesser extent, the Mexicans. And in almost every case, they operate as extended-family businesses using minimal payroll-listed waitstaff, and informally network their money and resources in a pseudo-franchise fashion.)

Minimum wage debates are always fun. As Randy said "It's just a tax on people who employ low wage workers", but this doesn't mean its not a fair "tax". The people who "live" on minimum wage are subsidized by the rest of us. And I agree that most people don't "live" on minimum wage jobs, but I think all of this talk about guest worker and amnesty changes that calculus. If employers profit by employing workers that are net drains to society isn't increasing the minimum wage just one way to remove that subsidy/perverse incentive? Maybe its not the most efficient way because it gives extra money to everyone on minimum wage and takes away entry level jobs (ok, its definitely not the most efficient way), but I value it as insurance in case a guest worker program passes.

Andy, let's get to the point. Are you arguing that in 2008, independent and nonpartisan voters are going to look at all the candidates and their parties as a clean slate, with no thought to what their parties did in the previous two years? They're going to say "Bush is over, doesn't matter what he did, let's give Romney/McCain/Giuliani a fresh start and assume he's starting from zero?"

I suppose that some voters think that way, but if so, why would Republicans have had such success tying each new Democrat to Carter or Dukakis, and why did Gore feel it necessary to vocally distance himself from Clinton? Why did George H.W. Bush have to state "I am my own man" in 1988?

I can understand why a Republican *would* argue that voters will close the book on the Bush presidency and compartmentalize it away from the new candidate. But that doesn't make it seem real.

Andy,
I get your point and its well taken. You can argue whatever you like. The question is, can you look credible doing it? Voters won't believe GOP claims that the Democrats were no better if the Democrats actually were better and unfortunatley for the GOP, it won't take very much for the Democrats to look better. A few little things like action on the minimum wage, some modest ethics reform and getting the spending bills passed will likely be enough to make enough voters want to stay with a Democratic congress.

See, Eamon, those things you just mentioned are examples to a lot of us libertarians (small "L")of how the democrats make things worse, not better. So obviously we aren't the target audience, although I suspect we really are. More and more elections at different levels are being decided by the independents.

Anony-mouse, great post on the restaurant/bar buisiness.

Ben P, I don't disagree that we should help people who work but don't earn what the society believes is "enough". But I will say that the minimum wage is the wrong way to go about it. If the society thinks that people should be making more, then the society as a whole should chip in (i.e., Earned Income Tax Credit). The minimum wage method is targeted at only a few*, and doesn't accomplish much if anything. We have a situation in which the society's warped concept of "fair" is getting in the way of actually helping people.

* And a strong argument can be made that it is actually targeted at the very people it is intended to help.

So we can all agree that at least 30% of the minimum wage earners are teenagers. Why in the world would we want to "throw away" all that money to 30% of the target wage group when they don't need it and the extra income could possibly make them worse off. Ie teens don't necessarily need extra gobs of money lying around.

So the other 70%. Why do they need a wage increase? Are they single? If so, it's been pointed out they are living at the poverty line. Is that a bad thing? I live in a town where half of the people here live at the "poverty line". Funny thing, they don't know it. I was in a town meeting the other day where this group of people who would be classafied as "poor" any day of the week by my friends when I used to live in Chicago. And here were these poor people talking about who was struggling this christmas and how could we help them out with extra food, presents, etc for their family.

That being said, I can't possibly imagine a family existing off of one minimum wage job. If that cause truly exists on a long term basis, then those familys should be supported in other ways. And indeed they probably are through food stamps and other welfare means. So their total "compensation" for the year is significantly higher than what they earn through wages.

Oh, and what happens to all those workers who used to earn 7 to 8 an hour? I'm sure they won't go out and immediately demand a pay raise, in a year or two, it will be hard to tell someone who knows they are worth more than the minimum that you still can only pay them only 8 bucks. They'll be looking for 10. The net effect of this is just to make consumers pay more at the retail level to keep people away from the dreaded poverty line. Oh wait, with the wage increase across the board, inflation will kick in and the poverty line will have to go up eventually too. Oops.

Rex, there's been a lot of discussion about the "liberaltarian" alliance on the web the last few weeks. The conclusion seems to be that you guys are so few (albeit heavily represented on the Internet) that any votes gained from you by scrapping Social Security, Medicare, the FDA would be lost several times over among Democratic key constituencies. This is why Republicans have successfully taken you for granted for so many elections--you don't decide elections, and if they were to try to cater to your wishes, they'd lose too much off the center.

It's up to you to decide which party better serves your interests, Republican or Democrat. If you decide Republican, that's fine. Different libertarians have different priorities, and civil liberties and unpaid-for tax cuts appeal to different people.

> Andy, let's get to the point. Are you arguing that in 2008, independent and nonpartisan voters are going to look at all the candidates and their parties as a clean slate, with no thought to what their parties did in the previous two years?

I'll start by noting that the claim is changing. It's now not "Bush is the reason" but "Repubs are the reason".

Repubs, unlike Bush, will be on the ballot. Repubs running for re-election will be campaigning on their record. New Repubs will have to explain how they'll change that record, just as new Dems did this year.

Yes, "better than the 04 repubs" is a low-bar, but that doesn't mean that the Dems can successfully argue in 08 that they exceeded it. And, it doesn't even have to be their fault. A housing crash, a terrorist attack, giant sea monsters eating Atlantic City, etc, and the Dems could find themselves on the outs again.

> They're going to say "Bush is over, doesn't matter what he did, let's give Romney/McCain/Giuliani a fresh start and assume he's starting from zero?"

It depends somewhat on how the Repub campaigns. Just as it depended on how Dems campaigned in the past. If you can make a distinction, you get the fresh start.

That said, BDS, like CDS before it, doesn't extend outside the respective cores, and it doesn't change the cores' behavior.

Just let the Democrats have their way for awhile. If they really do everything they say they want to do, America will be screaming for a "change" within a very few years.

This whole notion of unpaid-for tax cuts is bogus. The idea of "balancing" the budget by Congress by looking at the so-called "cost" of tax cuts and increases all started with Congress trying to impose some rules on itself to limit its out of control spending. Of course, it didn't work, because Congress left istself the loop hole of being able to declare certain spending "off the budget" and thus not subject to its self-imposed rules, but the hassle is still with us.

So, sorry, I don't look at tax cuts as being paid for or unpaid for--that's a meaningless way of looking at them.

As for civil liberties, I have noticed that my civil liberties are much more likely to be denigrated by the democrats than the republicans. So, as you can probably tell, I tend to vote republican more often than I vote democrat.

I also believe in the adage that it is better to teach a person how to take care of himself than it is to just give him a handout. You know, that whole fish thing. Democrats like to spend other peoples' money to assuage their conscience, while republicans actually spend their own money to do what's right by their fellow man. Republicans are not troubled by the false guilt in the first place. Sure, I do well because of a few accidents--being born in the U.S., being born to middle class parents, and having above average intelligence. All accidental. But I got to the place where I am now by sacrifice and hard work, and I don't feel the least bit guilty about it. I know bunches of people who are not as smart as me who makes lots more money because they work incredibly hard. I don't feel entitled, nor do I feel dis-entitled.

For the most part, democrats and republicans are trying to accomplish the same objectives in this country, e.g., make sure no one starves, make sure people have access to emergency health care, etc., but the difference between the parties lies in the means to the end. Although there is an exception for the disabled, I believe that if you don't work, you shouldn't eat. Jamestown Colony rules, anyone? Too many of the democrats' policies either flat out don't work, or they create a dependent class in this country.

Okay, let me get off this soapbox now. My beliefs are shaped by my experiences, and I understand that liberals' beliefs are shaped by their experiences, too. What too many libs lose sight of is that non-liberals are also well-intentioned, but just don't believe that the liberal policies will work.

Rex, it sounds like you're clearly more comfortable with the Republican Party than the Democratic Party. That's cool, and best of luck bringing them over to your views now and in the future. I can honestly say it's not worth the Democrats' efforts to win over your vote. Even if Nick Lampson tries, you'll vote against him in 2008 based on his support for a Democratic leadership you disagree with, unless the Republicans run someone flagrantry unacceptable in the district.

Andy, hope is a grand gift. Just remember that the Republicans can campaign how they want, but so can the Democrats, and if we're still in Iraq and the Gulf Coast is still a disaster area in 2008 we will be bringing up the recent record. It's up to the voters to decide how they care. Gore did do much better than predicted in 2000, winning despite everyone claiming that the stench of Clinton would sink any Democrat.

Randy, I don't think I made my point clear, my concern was the subsidy to the employer. I think that if someone is working at job and are a net drain on public resources, then there is an effective subsidy to the employer (someone is working at an unsustainable job). I am more than happy to subsidize the employer in this way, if the jobs have some good externalities, like providing entry level jobs.

But since these jobs are a net drain, society has an interest in limiting them, at least if labor is not a closed system. I think this is neglected positive of what minimum wage laws do. I agree this can take away someones job and increases their level of dependency on the welfare state. This is bad, but it also makes it harder to bring a legal foreign worker into this subsidized type job. These subsidized jobs are profitable to the employer (which is why they exist) and therefore they have the incentive to make more of them, which creates a perverse incentive with immigration. With all this talk of "guest" workers and amnesty, I see increasing the minimum wage as a hedge against this. Again its not the most direct or efficient remedy, but I don't mind if teenagers get a little more spending cash as a side effect.

> if we're still in Iraq

As Dems now control two houses and the purse strings, they'll be judged on Iraq. They campaigned on "we'll fix it" so it's fair to look at whether they did.

> Gulf Coast is still a disaster area in 2008

I note that the SF Bay area is still trying to replace a bridge damaged in an earthquake much longer ago.

I don't see how NO's failure to rebuild works to the Dems' advantage. They control the LA govt and we've thrown lots of money their way. They're basically a poster-child for not giving federal money to disasters and local infrastructure.

Then again, I suspect that we had different reactions to the "violence in the super dowe" stories. I didn't think "those people should have been protected", I thought "why can't those people behave".

I'm a guest worker. Myself and my family look forwrd to the day wage laws are changed to give us higher pay. How can increasing the minimum wage my employer is allowed to pay me make it less likely that myself and my family will want to work here? If anything it means more of me and my kind will flock across the borders to get this new wage that the government now says is the VERY least amount a person can be paid.

- not really a guest worker, but confused by Ben P's hypothesis.

guestworker, of course it increases your incentive to work in the US, but I am talking about the employer's incentives to hire you. As an employee you still have to be profitable. Minimum wages laws price unskilled jobs out of the market. It's one, albeit an indirect way, to limit the number of jobs available to unskilled legal immigrants, such as those in a guest worker program. I want to limit those jobs because they wouldn't exist without a direct subsidy from taxpayers, ie government services are part of the workers "pay". The problem is some employees (teenagers, living at home on their parents health insurance) are not subsidized, but new legal unskilled immigrants who try to actually "live" on minimum wage are subsidized heavily, while in both cases the labor is the same to the employer.

Yes there are down sides, cash will be transfered to teenagers, subsidized workers living on minimum wage will loose their job and become completely subsidized on welfare. But as someone who is fairly libertarian, this line of reasoning has made me okay with moderate increases in the minimum wage.

Think of it like a union wage only the "union" being the US.

Ben P,

I don't find plausible the idea that any job can be a net drain on society.

When an employer and employee transact for a job, the net is always positive. That is, we know that both employee and employer gain from the transaction or the transaction would not take place. I think your assumption that there is some sort of subsidy to the employer neglects major benefits provided to the employee. First and foremost is the opportunity to work. How does the register operator work if the store does not exist? The employee gains considerable value from the employer's entrepreurial talents. If anything, the subsidy is much more to the employee than to the employer.

But in any case, that society feels that the employee needs more than he or she earns in wages is irrelevant to the employment transaction. The transaction between the employee and society is an entirely separate transaction.

So the only question remaining is the method. Society can assist the employee by taxing the employer through a minimum wage law, or it can assist the employee by issuing an earned income tax credit or other form of assistance which is a tax on the entire society.

P.S. I also think that the idea that the subsidy actually goes to the employee explains illegal immigration. Those who cross the borders looking for work are well aware of the incredible value to them of the fact that the jobs exist. Perhaps that is your point? That if we lessen the subsidy to employees by taxing employers in order to limit jobs, then there will be less immigration? If so, then please forgive me for saying that this sounds like an excellent example of cutting off one's nose to spite the face.

> I don't find plausible the idea that any job can be a net drain on society.

> When an employer and employee transact for a job, the net is always positive. That is, we know that both employee and employer gain from the transaction or the transaction would not take place.

The above makes several assumptions that aren't always true.

Suppose that absent "the law", I could hire someone to do a particular task for $X but "the law" forces me to pay $Y. I have two choices. I can either not hire anyone or pay $Y. In the latter case, I don't have $Y-X to spend elsewhere because the employer has it. In the former case, I still have $X, but said job is undone.

It's easy to come up with cases where me spending the $Y-X provides more social benefits than the employee spending it. It's also easy to come up with cases where society would have been better off if I'd spend $X to get that job done than it is with me spending that $X elsewhere.

Randy,
What if I said it this way. A person can be a net drain on society (the tax base) while working full time? Someone's employed; the employer is benefiting and the worker is benefiting. But what if the employer knows that the government is paying all the health care for its unskilled workers, but that the social convention is that everyone is supposed to pay for their own health care. Isn't that a subsidy to the employer? It's workers can't actually work without health care.

Look there is no perfect way to spread costs across people and time. In a closed system its better to have the unskilled worker be employed, maybe they still get free healthcare, but they are obviously less of a drain. But in a system with open immigration there is a problem. The company find that low skill job profitable. If the company creates that job X times over, they can multiple their profit by X. In a closed system they will run out of workers, in an open system that meets any willing foreign worker with an open job the company won't run out. One way to prevent this is to raise the minimum wage and make that type of job unprofitable so it goes away. Whereas with no immigration I might be against this, with a guest worker program I would be for this.

Clearly, we can afford some unskilled workers who are a net drain, but we obviously have to be concerned about the total number.

Andy,

Re; "It's easy to come up with cases where me spending the $Y-X provides more social benefits than the employee spending it. It's also easy to come up with cases where society would have been better off if I'd spend $X to get that job done than it is with me spending that $X elsewhere.

First, consider that there are three separate transactions; employer and employee, employer and society, employee and society.

If the transaction between the employer and the employee is of zero or negative value to either, then the transaction won't happen. If a government tax tips the balance in such a way that the transaction is of less value to either, then a new calculation will be made, but the transaction still will not occur if if it results in a negative value to either party.

But it is true that the society might get a better value in its transaction with the employer and with the employee by not imposing a tax on the employment transaction. Good point that the society can and does participate in negative value transactions - perhaps due to measurement problems or inherent irrationality.

Ben P,

Re; Government provided healthcare.

Here we have another case of the government tipping the balance. By instituting a broad tax and providing a subsidy to employees, both the employer and employee can recalculate the values they need to gain from the employment transaction. Is the governments action a net subsidy to the employer or to the employee? Hard to say. Again we have the problems of measurement and inherent irrationality in transactions with society.

Re; Immigration.

Now that I'm thinking along these lines, it seems that the immigration issue is one of external forces (or government inaction) causing the parties to the employment transaction to recalculate.

In that light, is the minimum wage a rational means of addressing the immigration issue? I doubt it. It has too many secondary effects that are unrelated to immigration. I am also of the belief that over time, the minimum wage has absolutely zero effect. People adapt - the numbers change but the equilibrium is restored. And perhaps that is the real problem with immigration - that it is happening so rapidly that people are finding it difficult to adapt. I would therefore suggest a more direct approach to the problem*, e.g., a big fence, pumping up the border guard, or guest worker visas.

* Again, given measurement problems and inherent irrationality, can we really assume that it is on net, a "problem"?

Then again, I suspect that we had different reactions to the "violence in the super dowe" stories. I didn't think "those people should have been protected", I thought "why can't those people behave".

Why would someone who isn't on the ballot influence how folks vote?

Because we won't have had two years of Democrats running the country unchecked, which is what people are counting on to provoke a backlash.

Depends. If the Dems spend the next two years cutting and running from Iraq, impeaching Bush, raising taxes, and putting Hillary atop their ticket in '08, people are going to be begging for the Republicans to come back.

We'll see.

Then again, I suspect that we had different reactions to the "violence in the super dowe" stories. I didn't think "those people should have been protected", I thought "why can't those people behave".

I thought, "That can't possibly be true". It turns out I was right.

RMc, if Bush signs all of those acts into law and surrenders his foreign policy powers to Congress, the Republicans will have some 'splaining to do.

I don't think impeachment is on the table, and defunding the war is widely viewed as a very bad way to force policy changes. Ultimately, Congressional Democrats will have little leverage to stop "the Decider" from continuing our involvement in Iraq's Civil War. Whether this will make Americans more frustrated with Republican leadership, or less, is an exercise for the reader.

Brittain33,

I disagree that the Congress has little leverage with which to end the war in Iraq. They can pass a resolution that the troops be withdrawn. The President can veto it of course, but he won't. His bluff will be called. Also, for the Congress to fail to pass emergency spending measures for the war is not the "horrible idea" that many seem to believe. The military can transfer funds to maintain force protection. Not funding the mission will simply end the mission.

My belief is that an American public which does not support the mission in Iraq has given up its right to ask military men and women to put their lives on the line for that mission. Unless the American public finds a mission that it can support, the troops must be withdrawn, and I will view a failure of the Democrats to act on this matter as a betrayal of the first order. They cannot keep the troops in Iraq just to maintain a talking point for the next election. Support the mission or bring the troops home. They don't get to have it both ways.

Uhmm, Republicans seem to think that the minimum wage is directly tied to unemployment. Maybe if we lowered the minimum wage to 3.50 hr, we would cut unemployment?
This obviously would not work. due to a variety of factors. The relationship of the minimum wage to unemployment is NOT a strict X-Y relationship, and will never be. The learning curve of job skills, the greater wages generated by increasing job skills and the ability to change jobs all play a factor in the "true" minimum wage offered in the US today. Except for waitresses/waiters who work for $3.00 hr and tips, no one pays $5.15 an hours anywhere.
Beware specious arguments.

Carlos,

Until you or anyone can show me even one example of an employer hiring someone "because" the minimum wage tax was increased, I will continue to believe that it causes unemployment.

We know that there are employers who will lay off employees and/or avoid hiring new employees if the minimum wage tax increases their costs sufficiently to make the business unprofitable. Therefore, unless we know of employers who hire "because" the minimum wage tax increases, we know that the net effect on employment cannot be greater than zero, and that it is almost certainly less than zero.

Please note that I said "because" and not "regardless" of the minimum wage tax being increased. Certainly some employers will continue to hire regardless of the minimum wage tax, but not all. And if we increase the tax enough, not many.

People who want higher min wages will be the first ones complaining when manufacturing jobs go overseas and labor saving technology eliminates other low wage jobs. The guy who said

"What I see is that a 40% increase in the minimum wage will have a wonderful effect on the lives of millions of our fellow citizens, and the bad effects, if any, will be lost in the noise."

must think that somehow the additional costs associated with the increase are all going to be passed on to customers or absorbed by the employers and that will have no effect on consumer prices and small business retention rates.

Am I naive? The average member of Congress votes on about 350 bills each term. Some are cut and dried, i.e., “I always vote yes on education bills since that is part of my philosophy.” But how do I vote on a bill to rescind income tax paid by US citizens working overseas? I need a lobbyist who can give me quick answers. Does it really matter what side he represents? If I am penetrating in my questions I can quickly tree someone who is faking it.

If I am dishonest, don’t bother sending me to Hilton Head on a private jet for a golf game to influence my vote. Just give me the money in a paper bag so I can use it to pay rent on my paramour’s apartment.

Lobbying is a great institution which saves time and is a quick way to get facts on any issue.

Hooray for K Street.

Bandit,
Raising the minimum wage in won't send a single manufacturing job overseas. Manufacturing jobs in the US pay well over the minimum wage. The reasons that US manufacturers set up shop in other countries is that they can pay workers there way less than the minimum, have access to cheap land, lax enforcemement of labor laws, availability of child labor, tax breaks from the host country and no OSHA type regulations. Raising the US minimum wage by a dollar or two won't change this.

"Raising the minimum wage in won't send a single manufacturing job overseas. "

Really? Raising labor costs in associated industries, triggering raises in union contracts and raising consumer prices won't affect low wage job creation and retention in the US? You've got a shrewd grasp of economics.

Bandit,
yeah really. The labor cost incentive is already there overseas. A couple of dollar rise in the minimum wage wont change this.

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