Wednesday, October 25, 2006

Theory and Facts

Alex Tabarrok and Tyler Cowan write good denials that Natural Disasters bring a rise in measured GDP. I must supply a Dissent. The added Demand created in the Materials Markets raises Investments in Mining and Lumber operations; Business outside the Disaster area do not reduce their Construction schedules, they simply pay the higher Pricing for Materials and Construction labor. Business within the Disaster area receives new Plant and Equipment at below normal Market prices–due to Insurance and Government aid. Most of the Displaced Labor from a Disaster quickly find new Jobs either in Clean-up operations, or with the Specialty skills they possess elsewhere in the Country. All of these things bring increased measured GDP.

Kash works on the misconception of Minimum Wages costing Jobs. Where exactly does Business opposition stands to an increase in Minimum Wage? Business personnel do not fret about lost Jobs for the Poor, they knowing an minimum Labor force level remains necessary for business operation. They fear for the Profitability of Small Business, especially the Restaurant trade where they eat Lunch and often Dinner. They know they will not forestall the practice of Eating out, and Minimum Wage increases will be passed onto Menu prices. It is not only here! The Small Business Independent who clears only $2000/week finds a $75 per laborer per Week for Cleaning staff horrid. What am I getting at? There is no worry for Labor, simple worry over Profit margins. David Leonhardt says that a small reduction in Minimum Wage Jobs may be worth it, if it raised the Living Standard of all Minimum Wage laborers.

Ilyana Kuziembo and Eric Werker define the economic diplomacy of the United Nations. Their Stats are fairly accurate, but only reflect the state of International Politics. It could be slightly better if they researched the ‘feather-bedding’ of the United Nations itself, and examined the reasonable estimate by myself that less than 15% of all assistance actually gets to the designated Poor or Disadvantaged. lgl

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