I have pointed out that the so-called “living wage” ordinance will actually hurt the poor. That raises a question: who will actually benefit from this wage floor? The answer: labor unions. They enjoy the spoils of reduced competition.
Here is a great summary of the logic by John Stossel in context of Davis-Bacon. And New Mexico exacerbates the situation with its “little Davis-Bacon.”
And now Albuquerque may increase the spoils of these selfish scoundrels with its “living wage” proposal. The voters have the opportunity to say “NO” on this October 4. And they will have future opportunity to say “NO” to the state’s union-legislature monopoly.
Most people do not understand inflation. They notice the price of gasoline increasing; and they think that is inflation. They may also notice that housing and health care prices are rising; then they are really convinced that inflation is on the rise.
They are wrong. And Craig Newmark briefly explains why here, while correcting the errors of some thoughtful commenters. I recommend you check it out.
Robert J. Samuelson’s recent article in the Washington Post got the discussion going. Newmark provides a link to Samuelson’s article.
Speaking of inflation, we can now obtain all kinds of insights from scholars like Craig Newmark for practically nothing (all you need is access to the Internet). Insights at a price of almost zero — and they are not included in measuring inflation!
From RGF President John Dendahl:
The Rio Grande Foundation is a new, and small, part of the network of think tanks giving so much heartburn to the wealthy bunch of Leftists discussed today in the Washington Post. Excerpt:
“At least 80 wealthy liberals have pledged to
contribute $1 million or more apiece to fund
a network of think tanks and advocacy groups
to compete with the potent conservative
infrastructure built up over the past three
The Heritage Foundation is probably the largest and best known, but our movement may include one hundred or more.
The Left has just one problem, but it’s a fatal problem: its answer is always some version of socialism. In the memorable words of Lady Margaret Thatcher: “President Reagan and I knew … what didn’t work –
namely socialism in every shape or form. And how many forms there are! Socialism is like one of those horrible viruses. You no sooner discover a remedy for one version, when it spontaneously evolves into another … Nowadays socialism is more often dressed up as environmentalism, feminism, in international concern for human rights … New slogans; old errors.”
Matt’s recent posts on pork barrel spending and lack of fiscal discipline made me curious about voting records on the “transportation” and “energy” bills. I decided to create an honor roll of representatives and senators who voted against both bills. Here are the few, the proud, the defiant.
No to Corporate Welfare Honor Roll:
Flake, Jones (NC), Royce
Gregg (R-NH), Kyl (R-AZ), McCain (R-AZ)
BTW, if you would like to see how members voted during the last session of congress look here for the senate and here for the house.
The Albuquerque Journal reported yesterday (subscription required) that some of the spending is coming our way.
Here is how I described the incentives of pork-barrel spending in the public choice class I taught earlier this summer (those familiar with public choice may recognize this as a modified version of “Tullock’s roads example”):
Imagine you and two friends are out to dinner at Sadies (a fantastic Albuquerque restaurant for you non-New Mexicans). After a delicious meal, the waiter asks if anyone would be interested in dessert. You look at the menu and think, “I like mousse. I might be willing to spend $5 on one. They cost $6, though, so I think I’ll pass.” Let us assume that your two companions think the same thing. No one orders mousse because no one feels that it is worth it.
But, now something happens to change the incentives. The waiter informs you that he is sorry, but he forgot to split the check and it is impossible for them to itemize the bill. Did I mention that your two friends happen to be from the Democracy for New Mexico group? Well they are. Being a “social progressive,” one of your friends suggests that you just split the tab into equal thirds—everyone paying the same amount, even if some eat more than others. And being enamored with democracy, the other suggests that you take another look at the dessert menu and take a vote on whether or not you will have any dessert. The decision to have dessert has just been collectivized.
One of your friends has enjoyed many margaritas and when he gets up to go to the bathroom, you and your other friend make a deal. You will form a coalition: each voting for mousse for the other guy. When you do this, there will be two mousses (misse?) ordered at a cost of $6 a piece. Total cost will be $12, split three ways. The two of you in the majority coalition will each pay $4 for mousse which you value at $5. Pretty good deal for the majority. The (minority) third dinner-companion will also pay $4, but he gets no mousse! Pretty bad deal for the minority.
But notice what happened. The table collectively ordered $12 worth of mousse which it valued at only $10! That is insane!
Now, imagine if you made all of your dining choices this way. We could imagine shifting coalitions among the three parties: a carne adovada coalition, a tamale coalition, a chile relleno coalition. When you add up all the costs, you can expect to lose in the long-run. The table will order way more food than it really wants.
Where you went wrong was in collectivizing the decision in the first place. By doing so, you were able to concentrate benefits on the few, but diffuse the costs over the many. You should have kept dessert a private, individual decision.
Hopefully by now you see the purpose of our little parable. Every time legislators get together to vote pork for their district they are doing the same thing as our dinner companions. They are concentrating benefits on their constituents and diffusing the costs over the rest of us. For a particular project, the constituents may be better off, but in the long-run, we all lose!
We don’t even have to assume greedy, avaricious or immoral legislators. Even good people trying to help out their constituents face an incentive to spend on pork. The problem is not with the people, but with the democratic system.
The founders, of course, knew this. Franklin argued that, “Democracy is two wolves and a lamb voting on what to have for lunch.” Washington warned that “Government is not reason; it is not eloquent; it is force.” Armed with this knowledge, the founders did not create a democracy, but a constitutionally-limited republic. Under such a system, a Constitution limits government to only those powers which are specifically enumerated. In the words of Madison, “The powers delegated…to the Federal Government are few and defined.”
Unfortunately, too few people respect the Constitution these days and too many have fallen in love with unchecked democracy.
The Washington Post has a nice piece on the GOP’s profligacy today. Congressman Flake of Arizona, one of only 8 House members to vote against the recently passed $285 BILLION transportation bill is quoted: “If you look at fiscal conservatism these days, it’s in a sorry state….Republicans don’t even pretend anymore.” In addition to being the former head of the Goldwater Institute (he left for Congress shortly before I worked there), Flake was also my representative when I lived in Arizona. I’ve lived in three congressional districts in my short voting lifetime and he is the only representative of whom I can say I am proud.
I just saw Mario at lunch and he was a little chagrined that I characterized his blog as “usually-reasonable.” For the record, I am a big fan of his blog and have to date not found an unreasonable post. Perhaps I am subconsciously jealous that his blog is more widely-read than our own?
On another note, I now realize I should not have characterized Joe Monahan’s blog as right-of-center. I apologize if I have offended either Joe or bona fide righties.
Unlike some politicos, we here at the Foundation are not ashamed to admit our mistakes.
New Mexico has a small but growing community of bloggers. Here, in no particular order, are some of my personal favorites:
Mario Burgos: His is a usually-reasonable right-of-center perspective from an active Republican.
New Mexico Politics with Joe Monahan: Another right-of-center perspective from an even more active Republican.
Duke City Fix: A mostly-apolitical mélange from a very diverse group. Their newest writer is a senior at my alma mater!
Albloggerque: A left-of-center chronicle of life around Nob Hill from a socially-conscious educator named Jon Knudsen.
Gregpayne.com: A right-of-center blog from a New Mexico State Representative and ubiquitous commentator.
Democracy for New Mexico: At face-value it would appear that we at the Foundation have very little in common with this decidedly lefty-group. That said, I’ve always believed that libertarians and progressives have a lot more in common than most people think. Both groups are skeptical of “big power,” “special interests” and invasions of civil liberty. Furthermore, both share a deep concern for the plight of the poor and the powerless. Now, if we could only get the progressives to appreciate that the best way to lift the poor out of poverty is to permit free individuals to interact in a free market.
And finally, we have the latest entrant:
NewMexicoMatters: A blog from a self-proclaimed “non-blogger,” this center-left New Mexico patriot’s commentary looks promising. Welcome!
More proof today that New Mexico’s education system is moving (running?) in the wrong direction. As many states and communities around the country are contemplating education reform which would break the public school system’s monopoly on education, we in New Mexico are talking about strengthening that monopoly.
This morning’s Albuquerque Journal reports (subscription required) that six Albuquerque schools are going to start requiring that parents produce four proof-of-residency documents in order to enroll their students. Apparently, there is a concern that these schools are overcrowded. Many suspect that there are students going to these schools who—gasp!—don’t live in the district!
James Monroe Middle School principal Vernon Martinez said that his school is even considering home check-ups to verify residency.
This is very sad.
Wouldn’t it be wonderful to see a day when providers of education are subject to the same level of competition as grocery stores? Wouldn’t it be great to see a day when schools are no longer assigned their customers but actually have to work for them like any other business? I hope that some day every public school in the state will compete with every other public AND private school for the privilege of educating our youth. Economics would predict and empirical evidence has shown that when schools do compete, education standards improve.
When I was in grade school I was lucky enough to have an industrious mother. She and an equally-industrious mother of my good friend worked diligently to navigate the red-tape and get us transferred to Jefferson Middle School. I feel that the education I got there was far superior to what I would have received in my home-district school (which shall remain anonymous). Every year our mothers hunted down the obscure forms and applied for a transfer. My friend and I came from a privileged background. We had parents who could afford to spend the time to figure out how to get around the red-tape. Unfortunately, most in New Mexico are not so lucky. Most are forced to accept the school to which they are assigned. Now it looks like even more students will have to accept mediocrity.