Diary

WOW! Jerry Brown practically admits liberals are nonsensical!

Jerry Brown, at his signing of the increase in CA’s minimum wage to $15:

Economically, minimum wages may not make sense. But morally, socially, and politically they make every sense because it binds the community together to make sure parents can take care of their kids.  

http://abcnews.go.com/Politics/wireStory/california-enacts-highest-statewide-minimum-wage-us-38139591

Wow! I mean, just WOW!

What does he mean when he says that minimum wages may not make sense economically? It sure seems that he is admitting that what he is doing harms people economically more than it helps people. And we know how it does so: more people will be unable to get or keep jobs (in the direct sense by being priced out of the market, and indirectly via a downward effect on GDP due to less business expansion, lower sales, going out of business, etc.), and everyone (consumers) will pay higher prices.

So what is he really saying? Well, I like to go out of my way to try to be fair, so I searched for and listened to his whole statement at  http://youtu.be/CjduaZw_UeU. It’s utter nonsense. As far as I can tell — and it’s hard to try to see what reasoning he could possibly have here — either he is admitting the above about net economic effects on people, or he is implying that economics is nothing more than some far-fetched theoretical construct that gives no indication of actual likely effects.

I suspect he means the former. The most charitable guess I could make is that he’s saying that, although more people will be hurt economically, the segment of people who need help the most will, on balance, benefit, albeit at the cost of the rest of the people. But that’s not only wrong on the economics (in my view, based on fundamental principles of economics and on common sense), it’s also just my charitable speculation. I’d say it’s at least as likely that he is implicitly acknowledging that there are many people who desperately need jobs (or second jobs) — including “parents [trying to] take care of their kids” — who will not get those jobs because they won’t exist due to the $15 minimum wage, and acknowledging that this same segment of people will also pay higher prices as consumers, and acknowledging that the economics are such that he’s aware that the harm even to this segment will exceed the benefit.

And that, in a nutshel, is how liberals approach economic policy: Not just seeking wealth redistribution, but also limiting thought about economic policy to mindlessly considering in the narrowest sense what the most immediate effect is (e.g., some people will immediately get a raise in their wages), feel good about providing that benefit, and either don’t bother thinking through the subsequent reactions and adverse effects or just disregard/discount/deny them, because the only thing that matters is just feeling good about supposedly helping people, even if the policy actually causes much more harm than benefit.