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Tomorrow (Thursday) in Urbana, IL, my noble colleague Bryan Caplan will speak in support of open borders.  (I wish I could be there – or at tomorrow’s talk at GMU by Richard Epstein – but I will be speaking tomorrow afternoon at Wake Forest University.)

Bob Murphy has another excellent essay at EconLib on the dangers of drawing conclusions from empirical studies about the consequences of minimum-wage legislation when those conclusions run counter to the predictions of basic economics.  A slice:

In the 1980s, there was a genuine consensus that a 10-percent hike in the minimum wage would reduce teenage employment by 1 to 3 percent. However, in the 1990s, various “case studies” began challenging this orthodox view, and more recent studies have generalized techniques to apparently find negligible employment effects. Many economists have used this new research to assure policymakers and the public to pay no heed to warnings about harmful job losses from even aggressive minimum wage hikes.

However, in reality, the employment effect of the minimum wage is still an open question even for modest hikes. Since the 1990s, scores of articles have found negative effects of minimum wage increases. These include “case studies,” with one serving as the mirror image of the famous Card and Krueger study. Furthermore, critics have challenged the entire premise of the new techniques, which claim to construct better control groups than the traditional approaches.

James Pethokoukis doubts that economic productivity in the U.S. is as low as official data suggest.  I share his skepticism.

In my most recent column for the Pittsburgh Tribune-Review, I review some of the bad economics often trotted out to support cronyism (with particular application to that great geyser of cronyism, the U.S. Export-Import Bank).  A slice:

One fallacy especially useful to cronyists portrays international trade as a competitive struggle among countries, with the winning country being the one that exports the most and gets in return the fewest imports.

GE, Boeing, and other large corporations profit if this fallacy is widely accepted because it clears the way for Uncle Sam to help them, at the expense of unwitting taxpayers, to artificially boost their overseas sales.

Yet just a moment of thought explodes this fallacy. No household thinks that it “wins” only if the amount of labor that it supplies to others rises while the amount of goods and services that it receives in exchange from others falls. If this crazy criterion were a valid measure of economic success, slaves would have been the most prosperous people in history, for they were forced to export a great deal of what they produced to others — namely, to slave owners — and they received in return only very little.

What’s true for households is true for countries. Americans get rich not by exporting as much as possible but by receiving as many imports as possible for as few exports as possible.

Recently minted GMU Econ PhD Abby Hall explains that those who call for the state to redistribute income or wealth are lowbrow.

Historian Burt Folsom, in this new Prager University, rightly praises John D. Rockefeller, Sr.


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