Quote for the Day! From Henry Hazlitt

It is not merely a fallacy, therefore, but a sham humanitarianism, and a cruel deception, always to insist on wage-rate increases whether or not conditions justify them, and always to resist wage-rate reductions whether or not conditions require them.

From Hazlitt’s fantastic dissection of the whole system of Keynesian fallacies, in The Failure of the “New Economics.”  This is important for us to realize as Mr. Obama continues to advocate for an increase in the minimum wage, despite high unemployment rates among low-skilled workers.  It may indeed be good politics, but from an economic standpoint, it is “a sham humanitarianism, and a cruel deception.”  While the populist message plays well with the man in the street, who knows almost nothing of basic economics (since this siren song goes against one of the most basic economic truths, the Law of Demand), we should demand our leaders know better.  And our leaders should not deliberately fan the flames of populism to gain partisan advantage with policies that hurt the most vulnerable in our society (no matter how misguided they are–even when they endorse the policies that hurt themselves).  Hazlitt is once again spot on.

One thought on “Quote for the Day! From Henry Hazlitt”

  1. Not so fast, things don’t happen in a vacuum. Some academic studies do not find major negative effects of minimum-wage increases. New Jersey, governed by Republican Chris Christy, will raise the minimum wage one dollar Jan. 1. It will be interesting to see what happens there. Raising the minimum wage has poled above 70% among all voting Americans; this suggests a strong campaign strategy for Dems. Republicans will need to be careful how they proceed. In 1996 Republican leaders decided that fighting a wage increase was not worth the political trouble and let a bill raising the rate pass after inserting provisions helping small businesses.

    However, those who would be harmed by increasing the minimum wage are young people. Half of minimum-wage workers are under 25, and 24% are teens. This group’s unemployment rate is already higher than the 7.3% overall rate. The teen unemployment rate is 21%, and the African-American teen unemployment rate is 36%. The youth unemployment rate is 12%. This seems to be those most at risk.

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