A Conservative Argument for Raising the Minimum Wage

The American Conservative has a lengthy article arguing for a raise in the minimum wage from a conservative perspective. A couple of highlights:

Although the direct financial benefits to working-class Americans and our economy as a whole are the primary justifications for the proposal, there are a number of subsidiary benefits as well, ranging across both economic and non-economic areas.

First, the net dollar transfers through the labor market in this proposal would generally be from higher to lower income strata, and lower-income individuals tend to pay a much larger fraction of their income in payroll and sales taxes. Thus, a large boost in working-class wages would obviously have a very positive impact on the financial health of Social Security, Medicare and other government programs funded directly from the paycheck. Meanwhile, increased sales tax collections would improve the dismal fiscal picture for state and local governments, and the public school systems they finance.

Furthermore, as large portions of the working-poor became much less poor, the payout of the existing Federal Earned Income Tax Credit (EITC) would be sharply reduced. Although popular among politicians, the EITC is a classic example of economic special interests privatizing profits while socializing costs: employers receive the full benefits of their low-wage workforce while a substantial fraction of the wage expense is pushed onto the taxpayers. Private companies should fund their own payrolls rather than rely upon substantial government subsidies, which produce major distortions in market signals.

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Public policy experts sometimes glorify complexity, proposing intricate, interlocking systems aimed at a desired result. But such structures are only as strong as their weakest link, and a proposal too complex to fully understand is also too complex to fix. Our government has sought to ensure a decent living for American workers through an enormous array of income subsidies, public benefits, training programs, and educational loans; at this point, many of these components have accumulated powerful and parasitic side-beneficiaries while leaving the working class behind.

Since this vast and leaky conglomeration has failed at its intended goal, perhaps we should just try raising wages instead.

Reducing the quoted material to its essence, the argument has 3 parts. First, raising the minimum wage will help the economy and the federal budget by increasing demand and tax revenues, by reducing the amount government pays out in various subsidies, and by strengthening social programs like social security. Second, it will be simpler and less costly than the ungainly patchwork of programs necessitated by poverty-level wages.

Third (and in my opinion most compelling), it will require employers to pay their own workers (and not so incidentally, compete with others in the market on equal footing) rather than depending on taxpayers to subsidize those wages as we do now.

Back when the GOP was a genuinely conservative party, it would have understood–and embraced–these arguments.

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Teaching Creationism

Creationism is a religious belief. It can be taught in classes on comparative religion, or in courses on the history of science, but it can’t be taught as science. 

Recently, I stumbled on a blog post that says it better than I ever could. The blogger quoted a Congressman who is running for the Senate in Montana–and who clearly has no freaking idea what a scientific theory is— saying “teach students that there are evolutionary theories, there’s intelligent-design theories, and allow the students to make up their minds.”

And presumably they can also decide for themselves whether the earth goes around the sun…or

We can believe that the earth is balanced on the back of a giant space turtle. After we go to space and take pictures that show no turtle there, however, we can no longer “believe” that with any credibility. We don’t (most of us) suggest that the turtle is simply invisible. We don’t (most of us) say that the turtle only exists when nobody is looking at it. We don’t (most of us) suggest that scientists have spirited the turtle away because they don’t want us to know the truth about the giant space turtle, or that they are involved in the lucrative cash business of pretending there are no turtles in places that there are turtles. We don’t (most of us) do that.

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So we’ve got yet another actual maker of our laws and decider of the rules of our civilization saying that the space turtle theory must be taught, because while there is no actual evidence of the space turtle so far, students whose parents believe in the space turtle must not just be accommodated or treated politely, but given public validation, under rule of law.

We are so screwed.

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Dr. Faustus, I Presume?

The term, “Faustian bargain” refers to the deal struck between Goethe’s Dr. Faust and the devil: the devil will do everything that Faust wants while he is alive, and in exchange Faust will serve the devil in Hell. (See also: selling one’s soul.)

Since the GOP’s capture by its extreme fringe, moderate Republicans have had to decide whether to leave office (Olympia Snowe), leave the party (Charlie Crist et al), stay and argue for moderate policies and risk losing to a True Believer (Dick Lugar et al) or accept the Faustian bargain by falling in line with the Tea Party agenda.

Indiana Representative Susan Brooks has fallen in line.

I knew Susan for over 25 years as an intelligent and reasonable individual. Then she ran for Congress, portraying herself as a far-Right conservative. Those of us who knew the more moderate incarnation chalked that up to a primary in which the candidates were trying to out-conservative each other, and assumed that once elected, she would be the moderately conservative person we’d known, but the new, partisan Susan Brooks has proved more durable–and disappointing.

In Congress, her party-line voting record has been so extreme, it’s earned her a 92% approval from Concerned Women for America–and you can’t get much crazier than CWA.

Now, she’s joined the “Select Committee” that will be investigating Benghazi for the 14th time.

The Washington Post’s Richard Cohen–a frequent critic of the Obama Administration–noted his bemusement over the GOP’s obsession with Benghazi.

I recognize it as a transparent Republican attempt to provide the party’s base with grist for its fantasy mill. Is it possible the Obama administration fudged the nature of the attack, refusing to apply the term “terrorist”? Yes, of course. Did the White House spinmeisters put their hands all over it? Could be. But is any of this so momentous that it has required 13 public hearings and now a select House committee that will delve and delve feverishly — for what?

Sometimes you have to choose: sell your soul to appease a rabid base, or refuse to play that game.

Congresswoman Brooks has clearly made her choice.

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Tax and Mend

In the last few days, I’ve come across a couple of intriguing tax proposals aimed at reducing the gap between the 1% and everyone else.

We already index taxes for inflation, so Yale economist Robert Shiller wants to know why we can’t index them for inequality as well — and tax the rich at higher rates as the nation’s income becomes more concentrated at the top.

Shiller and his colleague Leonard Burman suggest a plan that would offset the loss in tax revenue that occurs when we index for inflation by imposing higher tax rates on income falling in the top tax brackets.  (Shiller, clearly an optimist, thinks this approach might even be achievable in the current political environment.)

Shiller thinks we need to see our income taxes “as a colossal insurance system, guarding against extreme income inequality.”

Good idea, but I’m not as optimistic as Shiller–I don’t think such a proposal would survive the displeasure of the guys who pay the lobbyists.

A bill I really like has somewhat better prospects, and has actually been introduced in California.

California’s pending Senate bill 1372, introduced by state senators Mark DeSaulnier and Loni Hancock would tie state corporate income tax rates to corporate pay disparities.

Corporations in California currently face an 8.84 percent tax on their profits. The DeSaulnier-Hancock legislation would up that rate to 13 percent for companies that pay their top execs over 400 times what their typical workers are making.

The same legislation lowers the state corporate tax rate to 7 percent on companies with a CEO-worker pay divide less than 25-to-1. Under the bill, all firms with a ratio under 100-to-1 would end up with a tax cut, all above with a hike.

Carrots and sticks….

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Gambling on Gambling Was Always a Bad Bet

The Indianapolis Business Journal recently reported that the state’s gaming revenues are declining.

The money the state collects from casino taxes has dropped from a peak of nearly $876 million in 2009 to about $752 million in fiscal 2013, according to figures from the Indiana Gaming Commission. Indiana’s three casinos near Cincinnati have seen big declines since a downtown casino opened in the Ohio city last year.

In recent years, Indiana’s casino industry has pleaded with state legislators for economic protection from the increasing state competition.

Let’s recap: the Indiana legislature (like those of many other states) lacked the cojones to raise taxes. In the mid-1990s, lawmakers turned to gaming to fill the state’s coffers. Many of us pointed to the irony involved: the same moralists who had passed strict limits on private gambling (it’s sin, you know…) somehow saw nothing wrong when government was promoting that sin.

At the time, I said this was upside down: the government has no business telling people they can’t have a poker night at their club, and it likewise has absolutely no business making money off gambling venues that are effectively a tax on poor people.

The New York Times recently editorialized about a proposal for additional casinos in that state. Their reasons are equally valid here: a wealth of studies show that gambling is a regressive tax that takes its highest toll on those who can least afford it; the experience of states and municipalities that have depended on gambling have not been positive (construction jobs aren’t permanent, and–as we are now seeing in Indiana–competition from other states quickly erodes revenues).

Indiana Senate President David Long says he supports assigning the issue to a summer study committee.

I have no problem with study. But I would have a huge problem with any proposal to “bail out” Indiana’s casinos–and I think most Hoosier taxpayers would agree with me.

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