The pen is mightier than the sword… (Photo credit: mbshane)
ECONOMIC LESSONS ABOUT PRICE FLOORS AND CEILINGS
NYC Mayor: Lets Bomb New York City With Rent Controls, at economicpolicyjournal.com. Rent control is a price ceiling. When the price of rent is not allowed to go above what the price would be under normal market conditions, an artificial shortage is created. Less is supplied at a lower price than a higher price, and more is demanded at the lower price than a higher price, creating a shortage of housing and a surplus of renters. It’s simple supply and demand.
Robert Reich: Economic Malpractice On The Minimum Wage, by Mark J. Perry, at carpediemblog. A minimum wage law is a price floor that a wage can’t go below. Watch the difference between the explanation about the minimum wage from Robert Reich, and the explanation by the Kahn Academy. Robert Reich is trying to fool people who are economically ignorant. When a wage is set at a rate higher than what that labor produces, the demand for that labor will decrease, creating unemployment. Less labor will be demanded at a higher rate than a lower rate, and more labor will be supplied at a higher rate than a lower rate, creating a surplus of labor or a job shortage.
Meet The Hotel Robot That Will Battle Minimum Wage Hikes, at economicpolicyjournal.com. When a wage is set higher than what the labor produces, the labor will go away. Automation is one way this will happen. Robert Reich forgot to mention this as well as some other salient points.
Free market prices coordinate supply of and demand for scarce goods and services. Government price controls, like minimum wage laws and rent control laws, are interventions that are factored into the economic law of supply and demand. Government force can’t do away with the economic reality of scarcity, it can only distort the coordination process.
MORE GOVERNMENT INTERVENTION
Ripple Labs Faces Fines From FinCEN, at payments.com. Ripple Labs is the first virtual currency exchanger to be fined by the Financial Crimes Enforcement Network. The Government wants to keep its monopoly on money creation via the Federal Reserve, by making virtual currency providers comply with anti-money laundering laws. This is curious because the US Treasury and the Federal Reserve are running the biggest money laundering operation in the history of the world.
Obamacare Killer? Global Spending On Cancer Drugs Surges To $100 Billion, at economicpolicyjournal.com. Obamacare has taken over decision-making from what was left of a free market system in the healthcare system. Coordination of supply and demand through prices barely exists. Lobbying Government for protection and favors through Government decision-making is no way to run an industry, just ask the former USSR.
The Mysterious Source Of Surging Demand For GM Cars, Revealed, at zerohedge.com. The first trick to increase sales was channel stuffing. The second was subprime car loans. Now the Government has increased its purchases from Government Motors. Maybe it does pay to get into bed with the Government! They bailed GM out. They subsidised purchases of the Chevy Volt. Now they are buying cars, (for whom, I don’t know).
Government Using Subprime Mortgages To Pump Housing Recovery, Tax Payer Will Pay Again, at zerohedge.com. This didn’t end well last time, did it?
MISCELLANEOUS
Meet Three Kids Alive Today Thanks To 3D Printing, by Ashley Welch, at cbsnews.com. We are only scratching the surface of what can be done with 3D printing.
Creative Destruction: Newspaper Ad Revenue Continues Free Fall, by Mark J. Perry, at carpediemblog. The market (decisions by individuals), picks the most productive goods and services. I predict the print media will, at some point, ask for a Government bailout.
CNN Anchor, Chris Cuomo, Ignorant About The Constitution And Hate Speech, by Robby Soave, at reason.com. And Chris Cuomo has a law degree from Fordham University? He must have missed the class when they talked about the first amendment!
Hello Al Gore: Low Sun Spot Cycle Could Mean Another ‘Little Ice Age’, by Chriss Street, at americanthinker.com. Who would have ever thought that the sun is the most important factor when it comes to the earths temperature.
CARTOONS THAT MAKE YOU THINK
AUSTRIAN ECONOMICS ADDICT 