How to boost America’s economy now Reply

By Tom Quiner

Time to get America's economy back on track!

This Labor Day, 2010, our economy is hurting.  Everything the President and his party has tried has failed.

Unemployment is way up.  Economic growth is stagnant. Net job creation doesn’t exist.  The stock market is going nowhere fast.

The underlying premise of the President is that only government can get the economy back on track.  I would suggest that, if anything, the federal government has made things worse in many (but not all) respects.

Here are some concrete suggestions on how to get America back on track:

1. Renew the Bush tax cuts.  The last thing we need now is a tax increase on America’s most productive Americans. In addition, we need to reduce the uncertainty that is paralyzing economic decision-making.  Renew the tax cuts and get out of the way!

2. Sign the Korea-Free Trade Agreement.  Senator Grassley has been a huge advocate of this agreement.  The Bush administration got the agreement negotiated, the Obama administration essentially has killed it.  And yet the upside to the agreement is enormous.

Did you know Korea is the sixth largest export market for pork?  Japan is number one.  But according to the Iowa Pork Producer’s website, pork exports to Korea could surpass Japan’s once the treaty is fully implemented.  Even more, they project the agreement would give our pork producers an increase of $10 per hog marketed.

3. Allow individuals and families to shop for health insurance products across state lines.  This is one of the few products where interstate commerce is prohibited. Increased competition would generate more choice and lower prices for consumers.

4. Along that line, provide a refundable tax credit – $2,300 for individuals and $5,700 for families – to purchase coverage in any State, and keep it with them if they move or change jobs.  This is a key component of the Republican’s “Roadmap for America’s future” as authored by Wisconsin Congressman, Paul Ryan.

5. Rescind the requirement for Project Labor Agreements (PLAs) on Federal construction projects.  As former Administrator for the General Services Administration, Lurita Doan, said:

[PLAs] “punish non-union, small construction businesses and often prevents them from bidding or performing federal construction work in their communities.”

6. Suspend the Minimum Wage (MW) until the national unemployment rate falls below 7 percent.  As discussed in previous posts, the minimum wage punishes workers with low skills.  It takes a devastating toll on teens, especially black teen aged males. The MW forces employers to pay some workers more than they’re worth, which suppresses employment.  Lack of job opportunity drives some of these young men into gangs.

The minimum wage affects the nation’s economy in other ways.  For example, it has encouraged illegal immigration.  Employers who had jobs that weren’t worth the minimum wage filled those positions with illegals who were willing to work for what the job was really worth.  By suspending the MW, we discourage illegal immigration.

Milton Friedman explains the fallacy of a minimum wage 3

By Tom Quiner

The late Nobel Laureate economist, Milton Friedman, explains why minimum wage legislation is counterproductive. He explains it better than anyone.  The clip above was made when the minimum wage was around $2.50, which dates the interview around 1977.  Unemployment for teens, and especially black teens, has only gotten worse, as I highlighted in my previous post.

The mock-benevolence of “compassionate” legislation 1

By Tom Quiner

The Americans with Disability Act (ADA) was a compassionate piece of legislation, right? It prevented discrimination against individuals with disabilities.

Anyone who opposed that piece of legislation is considered mean-spirited, devoid of a drop of humanity.

How about the extension of jobless benefits from a standard half year to closer to two years (99 months)?  These are tough times, right?  In the name of compassion, let’s subsidize unemployment.

Anyone who opposed that piece of legislation is considered mean-spirited, devoid of a drop of humanity.

And what about the minimum wage?  People should be paid what they need, not what they’re worth, right?

Anyone who opposed the two recent bumps in the minimum wage is considered mean-spirited, devoid of a drop of humanity.

These legislative initiatives are compassionate.  They make us feel good.  But do they work?

The ADA was designed to make it easier for folks with disabilities to find jobs. Researchers at MIT studied it. They found that, in fact, employment for men with disabilities between the ages of 21 and 58 dropped after the passage of the ADA.  They found it dropped for women between the ages of 21 and 39.  Why?  Because the disabled became a protected class. The number of lawsuits increased when they lost a job.  The threat of increased lawsuits is a deterrent to employers, because the cost and aggravation went up to hire the disabled.

The “hire the disabled” programs that were in place before the ADA have gone away.

What about the extension of jobless benefits from 26 to 99 weeks. Beside the cost to taxpayers for subsidizing unemployment, what could be wrong with that?  According to Harvard economist, Robert Barro, it has actually worsened the unemployment rate. I quote him from his piece in the Wall Street Journal:  “My calculations suggest the jobless rate could be as low as 6.8% instead of 9.5%, if jobless benefits hadn’t been extended to 99 weeks.”

Why?  According to Barro, more compassionate benefits distort efficiency, prolonging unemployment due to insufficient job search.  Unemployment was higher in 1982 than now, but it wasn’t as prolonged, because unemployment wasn’t subsidized as long by the taxpayers.

Finally, what about the minimum wage, what could be wrong with that?  Here’s what: it suppresses employment for the least skilled workers in society, teenagers. It especially hurts employment prospects for black teenage males.  A year ago, the minimum wage was increased to $7.25.  Unemployment for these black young men immediately shot up from about 39% to about 50%.

How could it do anything else?  If you require employers to pay people more than what they’re worth, more employers will take a pass.

So, in the name of compassion, we have passed legislation that ultimately hurts the people we’re trying to help.  Feelings trump critical thinking.

So, in the name of feelings, take a few minutes to listen the song above.  It pays tributes to legislation that truly is “nothing more than feelings.”

ObamaCare hurts Health Savings Accounts 4

By Tom Quiner

I am self-employed, the owner of a small business.  In order to control health insurance costs, my wife and I purchased a policy with a high deductible supplemented by a Health Savings Account (HSA).

The high-deductible policy reduced my premiums substantially.

The HSA allows me to save up to $5000 of tax deductible dollars to be used toward medical expenses, including dental, eyeglasses, and over-the-counter medications.

Because I pay many doctor bills directly until my deductible is reached, I have incentive to shop for the best price on prescriptions and some medical tests.  In other words, I am a conscientious consumer of medical products and services.

It makes sense.

Beginning January 1st, ObamaCare will cap my annual contribution at $2500 and will no longer allow me to purchase over-the-counter medications using my HSA (Section 9003).  ObamaCare reduces my benefits and raises my costs.  It creates a perverse incentive to purchase higher priced prescription medications which are deductible.

This is but one way ObamaCare will raise healthcare costs for middle America.

In praise of Dr. King and Mother Teresa 1

By Tom Quiner

Mother Teresa of Calcutta

August 26th was a big day.  That was the 100th anniversary of the birth of Mother Teresa of Calcutta.

August 28th was another big day.  That was the 47th anniversary of Martin Luther King’s epoch “I Have a Dream” speech.

Mother Teresa didn’t know how to deliver a speech very well.  She’d stand at a podium and read her speech without looking up at the audience.  When she finished, she’d leave without fanfare.

Martin Luther King knew how to deliver a speech very well.  He’d engage his audience with the passion of man on a Godly mission.  His speeches had a rhythm, a carefully controlled cadence that kept listeners enraptured.  He was a leader, a moral authority sent by God to right a terrible wrong in this country.

Interestingly, despite her rhetorical shortcomings, Mother Teresa, too, kept her audience on the edge of the seat through the sheer power of her moral authority.

Dr. Martin Luther King

Dr. King’s “I Have a Dream Speech” is a work of art. Read it in the quiet of your room and you will be roused from your chair.

Mother Teresa’s speech at the National Prayer Breakfast in Washington D.C. in 1994 is also a work of art.  Read it in the quiet of your room and you will be moved to tears.

Let us compare a few similarities in their messages.

Dr. King said,

We can never be satisfied as long as the Negro is the victim of the unspeakable horrors of police brutality.

He was addressing one of the shames of this great country, violence directed at innocent people by the people who were supposed to protect them.  Mother Teresa had a similar concern:

But I feel that the greatest destroyer of peace today is abortion, because it is a war against the child, a direct killing of the innocent child, murder by the mother herself.  And if we accept that a mother can kill even her own child, how can we tell other people not to kill one another?

She, too, addressed the issue of violence directed at innocent people by the people who were supposed to protect them.

Dr. King voiced his concerns about the children:

We can never be satisfied as long as our children are stripped of their self-hood and robbed of their dignity by signs stating: “For Whites Only.” We cannot be satisfied as long as a Negro in Mississippi cannot vote and a Negro in New York believes he has nothing for which to vote. No, no, we are not satisfied, and we will not be satisfied until “justice rolls down like waters, and righteousness like a mighty stream.”

Mother Teresa talked about how our hope lies in children, just as Dr. King said children must have hope:

“Let us bring the child back.” The child is God’s gift to the family. Each child is created in the special image and likeness of God for greater things – to love and to be loved. In this year of the family we must bring the child back to the center of our care and concern. This is the only way that our world can survive because our children are the only hope for the future. As older people are called to God, only their children can take their places.

Hope.  We thirst for hope.  In one of the great inspirational flourishes of his generation, Dr. King invoked his hope for America

I have a dream that one day this nation will rise up and live out the true meaning of its creed: “We hold these truths to be self-evident, that all men are created equal.”

I have a dream that one day on the red hills of Georgia, the sons of former slaves and the sons of former slave owners will be able to sit down together at the table of brotherhood.

I have a dream that one day even the state of Mississippi, a state sweltering with the heat of injustice, sweltering with the heat of oppression, will be transformed into an oasis of freedom and justice.

I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.

I have a dream today!

Mother Teresa invoked the beauty of hope in an incident that occurred in Calcutta:

Then there was the man we picked up from the drain, half eaten by worms and, after we had brought him to the home, he only said:  “I have lived like an animal in the street, but I am going to die as an angel, loved and cared for.” Then, after we had removed the worms from his body, all he said, with a big smile, was: “Sister, I am going home to God” -and he died. It was so wonderful to see the greatness of that man who could speak like that without blaming anybody, without comparing anything. Like an angel – this greatness of people who are spiritually rich even when they are materially poor.

Dr. King and Mother Teresa loved the poor and the downtrodden.  They taught us to respect the dignity of life.  We live in undignified times.  We need their message today, a message of human rights from conception to natural death.  From their perch in heaven, we humbly ask them to pray for us.