Tag Archives: Economics

Obama restricts government contracts over 25M to unionized labor

From Erick Erickson at Red State. (H/T IHateTheMedia via ECM)

Excerpt:

Barack Obama and his administration are about to significantly drive up the costs of federal building construction. This is an astonishing reach. The Office of Management and Budget has directed that any federal construction over $25 million benefit unions.

The order would make all federal construction projects 10-20% more expensive by requiring all contractors to either use union workers or apply inefficient union apprenticeship and work rules to their employees. Contractors would also be required to make contributions to union pension funds and other union programs that non-union workers will never benefit from.

This will hugely drive up the cost of construction of federal buildings and line the pockets of unions without even having union workers involved in the projects. The Bureau of Labor Statistics shows that only 15.6% of private construction workers in America belong to unions. In other words, 8 out of 10 construction workers in America will be legally denied the right to work on federal building projects.

Now you say to me, “Wintery! What’s wrong with unions?”

And I refer you to this article from the extremely leftist NYT. (H/T Sweetness and Light via ECM)

Excerpt:

No one got the chance to say goodbye to Café des Artistes, the storied New York City restaurant that served up Old World fare under the gaze of the painted nubile nudes that perkily graced its walls.

The restaurant had closed on Aug. 9 for a month-long vacation and was to reopen Sept. 14. But on Friday, facing steady losses and a union lawsuit, its owners made what they described as a wrenching decision to close the landmark cafe on West 67th Street for good.

“It’s a very sad day for us,” said Jenifer Lang, whose husband, George Lang, has owned the restaurant since 1975. “It’s a death in the family.”

It was also the death of an intrinsic part of old New York. Countless couples got engaged in the glow of the restaurant’s dim, romantic lighting…

Mrs. Lang, 58, said that the restaurant’s business had been hurt by the economic crash but that its problems ran deeper. Café des Artistes was unionized, and she said the restaurant paid about $250,000 a year to cover its employees’ health and pension benefits, an amount she said the restaurant struggled to cover. Mrs. Lang also said the couple, whose home is half a block from the restaurant, put in $2 million of their own money to keep it running over the last 10 years.

“It makes it difficult to run a restaurant most of the time,” Mrs. Lang said of the union benefits. “When the economy is down, it makes it impossible.”

The final straw, Mrs. Lang said, was a lawsuit recently filed against the restaurant by the union demanding past benefit assessments.

Bill Granfield, president of Local 100 of Unite Here, the union representing the cafe’s 50-odd employees, said the restaurant had fallen behind on its payments for medical insurance and welfare funds, forcing the union to demand payment in court. He also said workers in 2003 took a pay cut and agreed to switch to a cheaper medical plan to ease the restaurant’s financial pressures…

Unions kill jobs by raising the price of labor with no compensating rise in worker productivity. When you raise the price of labor, businesses die. When businesses die, unemployment goes up. That’s the way the world works.

Does the death penalty discourage crime?

ECM sent this essay which explores whether capital punishment deters crime.

Excerpt:

“Science does really draw a conclusion. It did. There is no question about it,” said Naci Mocan, an economics professor at the University of Colorado at Denver. “The conclusion is there is a deterrent effect.”

A 2003 study he co-authored, and a 2006 study that re-examined the data, found that each execution results in five fewer homicides, and commuting a death sentence means five more homicides. “The results are robust, they don’t really go away,” he said. “I oppose the death penalty. But my results show that the death penalty (deters) — what am I going to do, hide them?”

Statistical studies like his are among a dozen papers since 2001 that capital punishment has deterrent effects. They all explore the same basic theory — if the cost of something (be it the purchase of an apple or the act of killing someone) becomes too high, people will change their behavior (forego apples or shy from murder).

The studies all concluded that between 3 and 18 innocent lives were saved by each execution of a convicted killer.

MUST-LISTEN: Dr. Jennifer Roback Morse explains basic economics!

Wow, I thought that her earlier podcast on marriage and family was good.

This new podcast is a MUST for social-conservatives who nevertheless like big government, taxing the rich, public schools, and single-payer health care. I listened to this twice already, and it’s going to become one of my favorites for sure!

The MP3 file is here.

Topics:

  • The study of economics is anti-postmodern – there is objective truth independent of what people think
  • The study of economics believes in fixed principles of human nature
  • Economics studies the allocation of scarce resources that have alternative uses
  • Economics studies how people exchange resources
  • How both people who engage in a voluntary trade always believe that they will be better off
  • How both people who engage in a voluntary trade both benefit from the exchange
  • How incentives motivate people to act
  • Understanding supply and demand
  • Understanding how “free” government services are rationed
  • Understanding opportunity costs
  • How prices signal producers to produce more or less, and consumers to buy or not buy
  • Market-driven prices versus price controls
  • The role of substitution
  • The necessity of allowing failure in a free market

The requirements of economic growth:

  • private property
  • contracts
  • the profit motive
  • competition
  • free trade
  • entrepreneurship, creativity and innovation
  • the rule of law

DOWNLOAD THE PODCAST. LISTEN TO THE PODCAST. REPEAT.

The Ruth Institute accepts donations. I sent her TWO already this year. She does on-campus events, just like William Lane Craig. If you want to have an impact on the university, she should be considered for funding.

You can find more economics lectures at the Acton Institute.