SOME ECONOMICS AGAIN

The excellent Arnold Kling takles a look at a whiny Leftist article in "The Washington Post" which claims that it is now harder for Americans to stay in the middle-earning income range than it once was. The article is right -- but not for the reason it implies. There are fewer middle-income people now because the number of people in the upper income brackets (adjusted for inflation) has roughly doubled in the last 35 years! The only "problem" is that more people are getting rich. I guess Leftists would see that as a big problem!

Jobs and snow jobs: "Our current unemployment rate -- 5.4 percent -- is one of the lowest in the world and one of the lowest in our own history. Why then the hysteria about jobs? Because this is an election year and Senator Kerry is desperate for some issue that will rescue his faltering campaign. According to the Kerry campaign, President Bush has "lost" over a million jobs since taking office. This of course assumes that jobs are Presidents' to win or lose..... Few things have been more grossly distorted than tax cuts. Liberals in politics and the media seem to think that what matters is what happens to the money. In reality, what matters is how the cut in tax rates affects people's behavior. Time and again, lower tax rates have led to higher tax revenues. That is because lower tax rates make it profitable to take money out of tax shelters like municipal bonds and put it into something that is more productive, now that taxes are no longer taking such a big bite. When more money is invested in more productive economic activities, more output results -- and more jobs are created while generating that increased output. That is the whole point.... Jobs hysteria is only the latest in a series of evasions and distractions"

Sarcasm alert! Unions versus wages: "Somehow, over the last 50 years, while unions have become a less important force in the labor market, workers have managed to raise their wages and do better. This is one of the great mysteries of life. How can it be possible? It is not unrelated to the question as to how workers manage to earn so much more than the minimum wage. What protects workers from greedy employers? The simple answer is that there's more than one place we can work. Without unions, without minimum wages, workers thrive because of the competition of employers for our skills"

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