In today's America, I can't be both an economist and a liberal.
Economists should be bound by facts and reason. And I can't do that and embrace liberal positions on the minimum wage, climate change and gender discrimination.
Raising prices for most anything reduces purchases. Simply put, if beef or a plumbers’ visit gets too high, folks start to eat more chicken and fix their own faucets.
The Congressional Budget Office estimates raising the federal minimum wage to $10.10 an hour, as President Obama proposes, would eliminate 500,000 to 1,000,000 jobs. Businesses will be forced to raise prices, lose customers and lay off employees. Fast food restaurants will begin to use more machines and we'll see something similar to automated checkout devices at drug stores and supermarkets.
Past increases in the federal minimum wage did not have large impacts on employment, because those were in line with inflation, and businesses adopted strategies expecting such periodic adjustments. The minimum wage was last reset in 2009 and we knew that raising it one dollar to $8.25 to preserve purchasing power would not cost many jobs.
Jumping it up to $10.10 an hour, however, would fundamentally redefine the tradeoffs businesses face regarding unskilled labor and automation. The workers left standing would have more spending power but overall, increasing unemployment by at least 500,000 would take a bite out of GDP and growth from an already anemic economic recovery
Economists, fancying themselves liberal and advocates of the working poor, deny the lessons of hundreds of years of economic theory and history. Most act out of expediency to win favor with the media and powerful politicians.
The erosion of the Antarctic ice shelf and glaciers elsewhere should confirm to even casual observers that global temperatures are rising. Scientists arguing that CO2 emissions contribute to this are not quacks but their prescriptions, and those of the president, have a naïve quality bordering on willful and malicious ignorance.
The new abundance of natural gas and market forces are already rapidly driving down U.S. CO2 emissions from power plants and other industrial facilities. A forced acceleration imposed by the EPA would cost billions of dollars and make economic and environmental problems worse.
With an economy half the size of the United States, China emits almost twice as much CO2. Raising costs for U.S. manufactures though the president’s program will only send jobs to China, where industrial production is dirtier, and increase global emissions.
Liberals argue that by setting a good example the United States can bring China along.
Nonsense! American diplomats have not been able to get Beijing to respond on its undervalued currency or protectionism generally, abandon the use of force to settle territorial disputes in the China seas, or anything else the Chinese Communist Party sees as impairing economic growth or its quest to wrest leadership from the United States on global economic and security issues.
Universities are under constant pressure to ensure wider opportunities for women and as a matter of policy have programs to encourage enrollment, hiring and promotion of women that discriminate against men.
All the data indicates that boys and young men are not doing as well in high school and are obtaining many fewer college degrees than women.
It seems to me that if American universities must discriminate against men to bring female faculty representation to parity with males—no matter their performance on the basis of objective criteria—it is only reasonable that universities be held accountable for not granting men as many degrees as women.
That has about as much chance of happening as I have to succeed Derek Jeter as shortstop for the New York Yankees. That would make about as much sense as liberal positions on the minimum wage, climate change and gender discrimination at universities.
Peter Morici served as Chief Economist at the U.S. International Trade Commission from 1993 to 1995. He is an economist and professor at the Smith School of Business, University of Maryland, and a widely published columnist. He is the five time winner of the MarketWatch best forecaster award. Follow him on Twitter @PMorici1.