Caleb Fuller explains five different ways in which many empirical studies of the consequences of minimum wages fail. A slice:

Price controls can’t stipulate every aspect of an exchange. Usually, the only contractual term they alter is price. Market participants are free to change other margins of the exchange, and the disequilibrium created by a (binding) minimum wage gives them an incentive to do so.

Gordon Tullock offered the following famous example. Imagine factory workers on a hot summer day. The plant manager gets the bright idea of cutting costs by shutting off the AC. Before long, the workers begin complaining. If the owner wishes to retain these workers, he’ll likely respond by flipping the AC back on—he doesn’t want to lose these laborers to the employer across town who offers better working conditions.

So how does the minimum wage alter this calculus? If it’s binding, it transforms a situation of market-clearing, the process of moving towards an equilibrium of quantity supplied and quantity demanded, into one of surplus. And a labor market surplus shifts power from sellers (laborers) to buyers (employers). A surplus of labor means a buyer’s market. Employers can pick and choose, and their offer on margins other than wage needn’t be as attractive as it had been.

Now when the plant shuts off the AC and the workers begin complaining, the owner metaphorically responds: “You don’t like it here? Feel free to leave. There are a hundred other workers who will take your place tomorrow.” The labor supply curve is at work to the employer’s advantage. More workers are entering this labor market due to the minimum wage (what economists refer to as the “extensive margin”). Notice something else: It will be harder for workers to find alternative employment precisely because a labor surplus prevails. As a result, the workers are less likely to leave and seek another job.

It’s, therefore, possible that a.) the total number of laborers employed remains unchanged and b.) employers restore profitability by cutting their electricity bill. Again, enabled by the “power” the minimum wage affords these employers.

(DBx: I believe that my first publication in The Freeman is this one: “The Minimum Wage: An Unfair Advantage for Employers.”)

David Henderson laments the fact that some of the prominent economists recently surveyed about so-called “price gouging” do not seem to fully understand the economics of the matter.

Wall Street Journal columnist Holman Jenkins understands climate-change ideology and politics. A slice:

Mr. Muffley is a perfect example of something I’ve been telling readers about for a decade. Every politician has a picture of Alvin Muffley in his head by now: Alvin is “passionate” on the subject of climate change to the point of name-calling but doesn’t actually know anything about it. He votes for politicians who give him a tax rebate for his Tesla and pretends that’s doing something. He’s sanctimonious around the house but AWOL when the hurly-burly begins. For 30 years, every economist of note has explained why a carbon tax is the efficient way to moderate emissions, but politicians know Alvin Muffley isn’t there for the compromises and horse trading. Alvin’s investment in the issue is superficial. Result: Michael Moore and Donald Trump can both be right about something—climate politics devolves into a corporate welfare scam.

(DBx: Anticipating reactions from some Cafe patrons: I do not single out the above paragraph because of the kind word Jenkins says about a carbon tax. Although such a tax is indeed likely the best means of reducing carbon emissions if further reductions in carbon emissions are desired, it’s not at all clear to me that the current level of taxation imposed on petroleum production and consumption isn’t already ‘optimal’ or even excessive. The complexity and dynamism of the global economy combine with both the inability to predict future innovations and the inevitable role of politics in the setting of taxes to make the case for a government-engineered reduction in carbon emissions, regardless of the chosen means, wholly speculative. There can be nothing truly scientific about any such case.)

An authoritarian muscle exercised vigorously during covid is now being used to threaten freedom of expression about climate matters. (HT Iain Murray) A slice:

Gina McCarthy, President Biden’s top domestic climate adviser, said tech companies should do more to prevent the spread of inaccurate information about climate change and clean energy.

Excellent news! “U.S. to Scrap Covid-Test Requirement for Travelers Flying into Country.” (HT Dan Klein)

Writing at Discourse, Robert Tracinski explains how “China’s Ongoing COVID Disaster Exposes the Failure of Authoritarianism.” A slice:

Having failed at all other pandemic measures, what does China have left? Something that comes naturally to a regime that also runs vast prison complexes and concentration camps: locking people up. It’s the Law of the Instrument: When all you have is a hammer, everything looks like it needs to be pounded down.

The essence of China’s “Zero COVID” policy has been to lock down whole neighborhoods and even whole cities upon detection of the first case. This strategy had a certain blunt effectiveness in the early stages of the pandemic. But the highly contagious omicron variant spreads too easily and rapidly and has made it necessary to impose larger and longer lockdowns, with ever more devastating effects. The result is the massive effort over the past two months to put most of the population of Shanghai, a city of 26 million, under house arrest.

Shutting down all activity in one of China’s economic powerhouses is likely to cause an economic contraction for the whole country, just at the point when most of the world’s other economies have come roaring back from the pandemic. But the economic impact is just part of a massive human toll. The stories coming out of Shanghai indicate a lockdown so draconian that people were trapped in their homes without food or medicine.

Jeffrey Tucker decries the covidocracy’s betrayal of the public trust.

Raymond March reviews Scott Atlas’s A Plague Upon Our House. A slice:

Although unintentional, Atlas’s book also illustrates fundamental public choice economics insights into political decision-making during the pandemic. While Dr. Atlas frequently expresses bewilderment that few seem interested in his advice or improving guidelines – these actions are easily explained. Even during a crisis, bureaucratic decision-making is sluggish because it lacks incentives to adapt. Public agencies succeed by acquiring more resources and influence. Dr. Atlas advises measures that would give them less of each. Developing effective guidelines to address COVID is essential, but less important than reelection. These realizations are unfortunate, but obvious from reading his frustrating interactions.

Sanjeev Sabhlok tweets: (HT Jay Bhattacharya)

Gigi Foster makes a point in an Epoch Times interview that GOVERNMENTS IN AUSTRALIA HAVE KILLED THOUSANDS MORE with cancers, diabetes, etc. in order to “save” COVID deaths.

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