Daily Archives: 8 March 2011

New York public employee compensation

open quoteA very informative editorial from the New York Times that gives you some idea of what is going in New York with public employee compensation.

The Times observes:

In all, the salaries and benefits of state employees add up to $18.5 billion, or a fifth of New York’s operating budget. Unless those costs are reined in, New York will find itself unable to provide even essential services.

To point out these alarming facts is not to be anti- union, or anti-worker. In recent weeks, Republican politicians in the Midwest have distorted what should be a serious discussion about state employees’ benefits, cynically using it as a pretext to crush unions.

But after you read the editorial, you may actually come to conclude that the political power of unions could have something–maybe almost everything–to do with the problem.

. . . .

In 2000, employee pensions cost New York State taxpayers $100 million. They now cost $1.5 billion, and will be more than $2 billion in 2014. Wall Street’s troubles are a big part of that. But so are state politics. The Legislature, ever eager to curry favor with powerful unions, added sweeteners to pensions and allowed employees to stop making contributions after 10 years…

close quote (Read more from cafehayek.com)

The Social Snobbery of Free Trade

open quote7 March 2011

Mr. Ian Fletcher

Dear Ian:

In your latest essay at The Huffington Post, you allege that supporters of free trade are guilty of “social snobbery” (“The Social Snobbery of Free Trade,” March 7). You offer three, and only three, pieces of evidence for this proposition. The first is a quotation from New York Times columnist Thomas Friedman, and the second is a quotation from Barack Obama – each suggesting that working-class people too quickly blame trade for whatever economic misfortunes they suffer. The third piece of evidence is the fact that, while most members of the mainstream media are center-left on a majority of issues, they are well-paid and “lean right” on trade.

You masterfully massacre a straw man. Contrary to your explicit claim in the case of Friedman, and your implication in the case of Obama, the pronouncements of economically confused journalists and professional politicians aren’t even remotely appropriate examples of the best arguments for free trade.

Here’s a challenge for you. Search for examples of snobbery in the arguments for free trade made by scholars such as Adam Smith, Frederic Bastiat, Jagdish Bhagwati, Henry George, Daniel Griswold, Douglas Irwin, Fritz Machlup, Martin Wolf, and other economists and researchers who are recognized authorities on trade. You’ll come up empty. (Note: pointing out that many people do not understand economics is not an instance of snobbery.)

If nothing else, you have chutzpah to pin the label “snobs” on free traders – who argue that individuals ought simply be left free to spend their money in whatever ways they choose – while you promote a policy of giving third-party strangers in Washington the power to obstruct, for some allegedly higher good, these private, individual consumption choices.

Sincerely,
Donald J. Boudreauxclose quote (Read more from cafehayek.com)

Protectionists are to Economics What Astrologers are to Astrophysics

open quoteHere’s a letter to the editor of the website Economy in Crisis:

Setting up a straw man for the slaughter, Dustin Ensinger asserts that “Proponents of unfettered free trade have long claimed that lowering trade barriers will allow America to export more and more goods, eventually leading to trade surpluses and economic prosperity” (“Exports Won’t Solve America’s Many Trade Woes,” March 6).

Wrong.

Proponents of unfettered free trade have long claimed that lowering trade barriers will allow America to import more and more goods, eventually leading to greater economic prosperity. Period.

Proponents of unfettered free trade – at least those who understand economics – don’t give a damn about trade ‘deficits’ or ‘surpluses.’ They agree with Adam Smith that “Nothing, however, can be more absurd than this whole doctrine of the balance of trade.”*

Sincerely,
Donald J. Boudreauxclose quote (Read more from cafehayek.com)

Israeli Defense Minister: Israel may ask US for additional $20 billion in military aid in response to Arab pro-democracy upheavals

open quoteIsrael will need to boost military spending and may seek an additional $20 billion in U.S. security assistance to help it manage potential threats stemming from popular upheavals in the Arab world, Defense Minister Ehud Barak said Monday.close quote (Read more from online.wsj.com)