“Unexpected”

Canadians raise the minimum-wage – in other words, force people to pay more for a commodity, labor, then it is otherwise worth – and are, inevitably, shocked, shocked, when it backfires.

I’ve always joked, without really joking, that being a progressive requires being ignorant of history as well as economics. It would seem current events also has to be pretty dodgy as well.

9 thoughts on ““Unexpected”

  1. Somewhere in the first week of a competent Econ 101 course, the Prof draws a supply and demand curve and calmly explains what happens when an outside force sets the price point at a different spot than the market would.

    This is when the average student starts complaining: “Zzzzzzecon is soooo boring!”

  2. Econ 101 tells you that in an open market, the price you can charge for a good or service can only cover cost. The economic profit line trends towards 0.
    Smart business people do not want to sell their product in an open market and will use all kinds tricks (like branding) to avoid selling at an open market price.
    Labor, however, is expected to sell in an open market. The same business that will do everything it can to avoid selling in an open market will insist that its workers must sell their labor in an open market.

  3. The economics of monopolies are worth studying. A monopoly is a closed market. If people want to buy a product, they can only buy it from you. But that does not mean that you can charge whatever you like for the product. The buyer still has the option of not buying your product. He can buy a substitute or go without. If the monopolist keeps increasing his price, at some point his return will diminish.
    Copyrights, trademarks, and patents are awards of monopoly for a set period of time. Most people defend the idea of intellectual property, though they may disagree with the way intellectual property laws are implemented. It is assumed that the economic inefficiency caused by a non-open market for intellectual property is made up for in innovation.

  4. And at Tim Horton’s no less. That’s a national crisis, eh?

    Seriously, one thing that strikes me as really interesting–funny–odd about the juxtaposition of microeconomics and macroeconomics is that you start more or less with syllogisms like MP notes, and then you get smarter and you advance to being able to ignore basic logic, and finally you get to the notion (per Keynes) that the exact same dollar, stored in the exact same banks and spent on the exact same commodities, will do more economic work because it’s been spent by the government.

    Yeah, right. Neat end run around the concept of ROI, but shouldn’t people claiming to tell us how to run our country, you know, have a clue about this?

  5. Bikebubba, believe it or not, Keynes gave government spending a multiplier 1.0 because consumers only spend $1.00 if they believe tht they are getting more than $1.0 of value in return, and people don’t invest money unless they expect a return > 1.0. The economic ideas of so-called Keynesians like Krugman would not be recognized by John Maynard Keynes.
    Sometime, beginning in the 1990s, liberal economists threw all classical economics out the window because they did not like the restrictions classical economics placed on the power of government to manipulate the economy. The problem is that Keynesian economics did not replace the foundations of classical economics, it modified them. So you can’t have a Keynesian economic model that works unless you have a classical economic model that works.
    How do they get away with it? By ignoring reality in favor of a model that promises the Left more power.

  6. The HTML filter mangled that last response. Should have been “Keynes gave government spending a multiplier of LESS THAN OR EQUAL TO 1.0 . . . “

  7. BB – Macro economics is supposed to be aggregated micro economic transactions. “What is true below is true above.” There are no emergent properties where the rules of economics change because some magic number of transactions is reached.
    Hillary’s chief economic adviser was Joseph Stiglitz. Stiglitz is highly credentialed. You can see many of his lectures on Youtube. Stiglitz has zero ability to make economics interesting, or even comprehensible, to the common man. Less than half of the people that attend his lectures have any idea what he is talking about, but they attend and applaud anyhow. Stiglitz has negative charisma, but the libs love him because he seems to be saying that economics is all about numbers that the government can change.
    I’m not really an economics nerd. Really, I’m not.

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