Attention Washington wonks, hack and enablers: The way to raise the minimum wage and create jobs is very simple. It doesn’t take an act of Congress or an executive order; it doesn’t take a bi-partisan commission; and it’s wholly, 100 percent, ultra-constitutional.
I know the idea that it’s constitutional probably worries you, but hang on and hear me out.The way to raise the minimum wage is to get out of the way and let the economy create jobs.
Bing! Both problems solved.
The economy is very good at creating jobs and wages. The private economy has been creating jobs and wages since the profit motive was introduced to the colonies.
And here’s the awful truth about you: all of you guys have proven to suck at creating jobs
But even worse, looming over the economy, like a menacing storm—a storm created by the great gobs of hot air that always seem to follow him-- is your Dear Leader who wants us to adopt another of his can’t-miss, sure-fire 5-Year Plans.
The new plan is so great that the Obama administration won’t even tell us how much it will cost. I think people call that “priceless.”
I call it “jobless.”
Whatever else it will produce, it won’t produce jobs or increase wages.
All previous Obama “jobs” plans have produced so far is increasing misery and a wholly artificial crisis in capitalism.
The quantitative easing (QE) program is indictment enough of his job prowess, if people care to look at it.
While producing records amount of money stock through QE, the velocity of that money has plummeted under Obama. A whole bunch of money does no one any good if you can’t spend it.
And this is a political phenomenon not economic. Despite what commentators, liberals and Ezra Klein tell you, money isn’t moving robustly within the financial sector. The broadest look at monetary velocity, MZM, which includes financial assets, also has been plummeting for years.* In fairness it started under Bush, but accelerated under Obama.
Above: The Velocity of Money (M2) is Plunging.
So, the idea of speculation run amuck with jobs stuck in neutral because traders are making money is just a far left fantasy, not a reality.
And don’t look for it to get better either.
Now that Obama has announced that he’s going to spend more time on economic matters, there’s a growing consensus that Obama should go back to playing golf. I know a number of GOP leaders, members of the business community, legal scholars, janitors, movie theatre projectionist and mattress store sign wavers who would support a budget bill that would cover the costs for 180,000 holes of golf for Obama.
Perhaps he can play those holes back to back to back?
Because lost amongst the various mythical “wars” that Obama says are being waged on his left-leaning constituencies, is the simple fact that Obama has been terrible for the poor on job creation and wages.
Top-line unemployment for blacks is 12.6 versus a national average of 7.4 percent. For Hispanics unemployment is 9.4 percent.
As I have written elsewhere, when you look at employment underutilization, you could easily triple the rates of the unemployed and the underemployed. I suspect for poor folks and underserved communities that the employment underutilization rate is even worse than the national average of around 24 percent. This would mirror the disparity in unemployment that we find in these populations.
And then there’s Obamacare.
Despite what Ezra Klein told you, Obamacare is not a deficit fighter it’s a budget buster.
UPS just announced that they would be cutting the healthcare benefits of 15,000 spouses because insurance premiums for healthcare are going up, not down as Obama- and Ezra Klein- promised.
The city of Chicago has also announced that it will be transferring retirees from private health insurance paid for by the city to Obamacare paid for by you.
The fact that most job creation in this country has come at the expense of full-time employment-- and has been, in fact, only part-time employment—is largely due to Obamacare, as has been covered here and elsewhere.
But still it’s not too late for you to do something positive for our economy.
Midterms are right around the corner.
2014 is just five fundraising quarters away.
You need to face the facts: Obama IS the job’s problem in this country.
I dare you to argue otherwise.
I double dare you.*[From the St Louis Fed: The velocity of money is the frequency at which one unit of currency is used to purchase domestically- produced goods and services within a given time period. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy.
The frequency of currency exchange can be used to determine the velocity of a given component of the money supply, providing some insight into whether consumers and businesses are saving or spending their money. There are several components of the money supply,: M1, M2, and MZM (M3 is no longer tracked by the Federal Reserve); these components are arranged on a spectrum of narrowest to broadest. Consider M1, the narrowest component. M1 is the money supply of currency in circulation (notes and coins, traveler’s checks [non-bank issuers], demand deposits, and checkable deposits). A decreasing velocity of M1 might indicate fewer short- term consumption transactions are taking place. We can think of shorter- term transactions as consumption we might make on an everyday basis.
The broader M2 component includes M1 in addition to saving deposits, certificates of deposit (less than $100,000), and money market deposits for individuals. Comparing the velocities of M1 and M2 provides some insight into how quickly the economy is spending and how quickly it is saving.
MZM (money with zero maturity) is the broadest component and consists of the supply of financial assets redeemable at par on demand: notes and coins in circulation, traveler’s checks (non-bank issuers), demand deposits, other checkable deposits, savings deposits, and all money market funds. The velocity of MZM helps determine how often financial assets are switching hands within the economy.