Monday, April 7, 2008

Econ 101

The alarm clock rings pretty early around here. 5AM to be precise. So the last time I saw The Tonight Show the host was a youthful chap named Carson. He was great by the way. That Art Fern stuff? Killer. But, I digress.
I learned today at the indispensable Cafe Hayek that Hillary! (TM) related a story to a fellow named Leno while she was on the show last week. According to Russ Roberts this is the transcript of a telling section on basic economics:
HRC: "I was in Indianapolis the other day and I was shaking hands after I spoke. And there was this young boy about eleven years old and he's trying to tell me something—you know the crowd was yelling—so I leaned over and he said, 'You know, my mom makes minimum wage and even though it went up, her hours were cut. So we're not making any more money. Can you help her?' You know, when somebody says something like that to you, it really does kind of energize me. I think, yeah, I can, I'm going to really try to help you, because this is wrong."
Now I'm sure that this story is as phony as the Bosnian machine gun tale and the current Ohio hospital whopper. As Russ points out, it's unlikely that an 11 year old boy tells her anything of the sort in confidence while a screaming crowd surrounds them. The Clinton Crew built their decades-long empire on well-documented (now) howlers and by advancing a story line through anecdotes about imagined or distorted events. But that's not the point.
The point is that Hillary, despite her tortured syntax and her use of "you know" in every sentence (she even gives the 11 year old a "you know"), is teaching a valuable lesson. She is the unwitting professor as she gives us a view at how the mind of a statist works.
First the state commands that private enterprises pay a wage higher than they otherwise might. Where in the US Constitution this magic power to set private wages resides has never been found, but they do it anyway like millions of other unconstitutional things.
Then, free people running their free enterprises respond to the state's demand by cutting employee hours, firing employees, suspending hiring programs, shutting down divisions, moving their operations to other countries where labor costs are better etc. This is done in an attempt to remain a profitable business. Remember, they're also paying huge corporate tax rates or sub chapter S rates, complying with thousands of costly regulations, and on and on.
Seeing this response the statist (Prof. Hillary! will play that role nicely) says, "This is wrong." It's wrong in the way that the sun coming up every morning is wrong if you want to live in total darkness. It is actually ironclad logic. But the statist is certain that bigger government will solve every problem. How? By caring, and fighting, and legislating, and regulating and and and.... even more stuff. Lots more really great stuff. Really. Eventually all of that caring and fighting and regulating and governing and blocking of free trade, and populist demagoguery leads to a command and control economy. The late Soviet Union leaps to mind. But North Korea is looking a little worn out today Hillary. Let's try freedom and liberty instead. If it isn't already too late.