Monday, February 7, 2011

Clueless Obama Channels His Inner Marx

This from Obama's speech at the Chamber of Commerce the other day:

If we're fighting to reform the tax code and increase exports, the benefits cannot just translate into greater profits and bonuses for those at the top. They have to be shared by American workers, who need to know that opening markets will lift their standard of living as well as your bottom line," President Obama told the Chamber of Commerce on Monday morning.

Its Obama channeling his inner Marx.

Obama wants to rule by fiat what markets ultimately determine. The laws of supply and demand apply to jobs and wages also. If our economy is booming and employers have to compete for employees, what then happens to employee wages and benefits? Indeed, that history is the history of our nation. Free market capitalism has been the single greatest boon to mankind in history. Ask Milton Friedman.

On a related note, as Friedman also points out, government regulation creates monopolies, it does not create competition.

Obama will never be mistaken for a free market capitalist. To the contrary, his push of our nation into crony capitalism, picking winners and losers in the marketplace, can only hurt the "have nots" he claims to be championing.

Update: Given that small businesses create the most jobs in America and provide perhaps the most direct avenue to increasing wealth, it would seem that one of the focuses of Obama should be on removing barriers to small business creation. Instead, we are seeing a growth at the state level of big businesses partnering with government to limit competition. This from Hot Air:

And this from the WSJ:

Amid calls for shrinking government, lawmakers across the country are vowing to cut regulations that crimp economic growth. President Barack Obama recently said it's time to root out laws that "are just plain dumb."

Tell that to the cat groomers, tattoo artists, tree trimmers and about a dozen other specialists across the country who are clamoring for more rules governing small businesses.

They're asking to become state-licensed professionals, which would mean anyone wanting to be, say, a music therapist or a locksmith, would have to pay fees, apply for a license and in some cases, take classes and pass exams. The hope is that regulation will boost the prestige of their professions, provide oversight and protect consumers from shoddy work.

But economists—and workers shut out of fields by educational requirements or difficult exams—say licensing mostly serves as a form of protectionism, allowing veterans of the trade to box out competitors who might undercut them on price or offer new services.

"Occupations prefer to be licensed because they can restrict competition and obtain higher wages," said Morris Kleiner, a labor professor at the University of Minnesota. . . .

While some states have long required licensing for workers who handle food or touch others—caterers and hair stylists, for example—economists say such regulation is spreading to more states for more industries. The most recent study, from 2008, found 23% of U.S. workers were required to obtain state licenses, up from just 5% in 1950, according to data from Mr. Kleiner. In the mid-1980s, about 800 professions were licensed in at least one state. Today, at least 1,100 are, according to the Council on Licensure, Enforcement and Regulation, a trade group for regulatory bodies. Among the professions licensed by one or more states: florists, interior designers, private detectives, hearing-aid fitters, conveyor-belt operators and retailers of frozen desserts.

At a time of widespread anxiety about the growth of government, the licensing push is meeting pockets of resistance, including a move by some legislators to require a more rigorous cost-benefit analysis before any new licensing laws are approved. Critics say such regulation spawns huge bureaucracies including rosters of inspectors. They also say licensing requirements—which often include pricey educations—can prohibit low-income workers from breaking in to entry-level trades.

Texas, for instance, requires hair-salon "shampoo specialists" to take 150 hours of classes, 100 of them on the "theory and practice" of shampooing, before they can sit for a licensing exam. That consists of a written test and a 45-minute demonstration of skills such as draping the client with a clean cape and evenly distributing conditioner. Glass installers, or glaziers, in Connecticut—the only state that requires such workers to be licensed—take two exams, at $52 apiece, pay $300 in initial fees and $150 annually thereafter.

California requires barbers to study full-time for nearly a year, a curriculum that costs $12,000 at Arthur Borner's Barber College in Los Angeles. Mr. Borner says his graduates earn more than enough to recoup their tuition, though he questions the need for such a lengthy program. "Barbering is not rocket science," he said. "I don't think it takes 1,500 hours to learn. But that's what the state says." . . .

Mr. Kleiner, of the University of Minnesota, looked at census data covering several occupations that are regulated in some states but not others, including librarians, nutritionists and respiratory therapists. He found that employment growth in those professions was about 20% greater, on average, in the unregulated states between 1990 and 2000.

Licensing can also drive up costs to consumers. Licensed workers earn, on average, 15% more than their unlicensed counterparts in other states—a premium that may be reflected in their prices, according to a study published by the National Bureau of Economic Research and conducted by Mr. Kleiner and Alan Krueger, an economist at Princeton University.

Mr. Kleiner estimates that across the U.S. economy, occupational licensing adds at least $116 billion a year to the cost of services, which amounts to about 0.1% of total consumer spending. In a look at dentistry, Mr. Kleiner found that the average price of dental services rose 11% when a state made it more difficult to get a dental license.

State regulators say licensing is vital to protect the health and safety of citizens, and industry experts generally agree that certain professions should be monitored. Inept or untrained electricians or tree-trimmers, for example, could put innocent bystanders in danger. Acupuncturists, tattoo artists and massage therapists can potentially inflict more direct harm.

However, in many service trades, licensure "is totally out of control," says Charles Wheelan, a lecturer in public policy at the University of Chicago. He says the marketplace might be a better judge than the government of whether a barber or a yoga instructor is competent. "It's fairly easy for you to tell whether you've gotten a bad haircut or not, and if quality turns out to be bad, it's not a big social problem," says Mr. Wheelan. . . .

1 comment:

joetote said...

And to think I and others are vilified for pointing out the fact that this moron is a Marxist/ socialist wannabe dictator. He openly spews his Anti-free market crap (business must learn to share their profits with the electorate) and then has the co-opted media lie about it so as to fill the electorate with false hopes and lies. Class warfare at it’s finest courtesy of a Marxist pig!