Ep. 54 Watch Out: Hillary and the Government Want to Help Families

30 September 2016     |     Tom Woods     |     7

All the Republicans want to do is cut taxes on the rich, says Krugman, but Hillary has lots of programs she wants to enact for “working families.” And each one is obtuse in its own special way.

Krugman Column

Progressive Family Values” (Sept. 26, 2016)

Contra Columns

Government Is to Blame for High Child Care Bills,” by Diana Furchtgott-Roth
Why Is Day Care Scarce and Unaffordable?,” by Jeffrey Tucker
Paid Family Leave Is a Great Way to Hurt Women,” by Bob Murphy

Article Mentioned

KRUGMAN: Obamacare Was Done ‘on the Cheap’ and Now It Is Struggling,” by Noah Friedman and Josh Barro

Related Episode (Tom Woods Show)

Ep. 738 What’s Wrong With the Trump Proposal for Mandated Paid Maternity Leave

The Contra Cruise

Join us October 9-16 for an unforgettable week at sea!

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  • SamGeoghegan

    I think you might increase your exposure by posting these on You Tube

  • http://www.economicmanblog.com Roger Barris

    One of the most frustrating things about these types of policies is that they are proposed by politicians and academics who have absolutely no experience of business. If they did, then they would realize that one of the hardest things about running a company is finding and retaining good employees. If they understood this at all, they would not make policies the implicit assumption of which is that companies will fire employees at the slightest provocation, including changes in their family life. The reality is the opposite. To avoid the costs of hiring someone new — the advertising costs, the headhunter fees/search costs, the downtime for interviewing, the training costs and ramp-up costs, and, most important of all, the very substantial risk that the new employee won’t work out and you’ll have to do it all over again — every company that I have ever worked for, including my own, has in fact been very accommodating of employee’s personal needs. For the simple reason that it is good business.

    • Kenn Williamson

      Great point Roger! Turnover is the great bottom line killer, especially for highly skilled professions. Of course some of it is governments fault by putting a huge regulatory apparatus in the way of hiring and firing people, but it is totally unrealistic to think that even if there were zero artificial barriers to employing people there wouldn’t be significant natural barriers as you’ve described above.

      What get’s me fired up though is that if the policies proposed by the technocrats and politicians were so great they wouldn’t need the government to implement them. If offering more benefits for families meant better employees then businesses would be offering them.

      Lastly and some might disagree with this point but I think this is the bottom line. Monetary + Non-monetary(fringe benefits) + regulatory costs/taxes < MRP (marginal revenue product). This inequality must be satisfied for someone to be employed or continue to be employed. So if we increase any of the three factors without also having an increase in the MRP of the worker then it follows logically that they will not be hired or might be fired. Admittedly it won't happen immediately but a business cannot stay profitable if the inequality is the other way.

      • http://www.economicmanblog.com Roger Barris

        Thanks, Kenn. Two further comments.

        One, when I was hiring people, I always assumed that I would have at best a 50% success rate. The hiring process is so fraught with uncertainty that even though we spent a lot of time and money on it — interviews, skills’ tests, references, personal contacts, etc. — this was the most we could hope for. So, if we had a good person, I wanted to keep that person in his or her seat.

        Two, your point on the inequality is gradually getting into the public discussion on lagging compensation, but not nearly as quickly as it should be. I commented on it in my blog back in 2015, citing this article from Bloomberg: https://www.bloomberg.com/view/articles/2015-07-26/american-capitalism-isn-t-broken-after-all. Bloomberg’s Ritholtz just ran another piece on it: https://www.bloomberg.com/view/articles/2016-09-28/health-care-costs-ate-your-pay-raises. Basically, one of the principal reasons why wages/salaries have been stagnant is the rising cost of healthcare and government mandates, in line with your inequality. Yet, when did you ever hear this from any of the campaigns?

        • Kenn Williamson

          Or any of the mainstream media. No they’re still pushing the women/minorities are oppressed and all wages are a vast conspiracy lines. It’s sad to me that it would even be controversial. But then again since it is difficult to test and prove it “scientifically” it must not be true.

  • https://www.facebook.com/david.rogers.hunt David_Rogers_Hunt

    Come on guys,… you know, as well as the media and left/progressives all know, that all businesses, including small businesses, have captive leprechauns locked in chains in their respective basements. Whenever businesses need money, they can always just extort it from their captives, as all leprechauns have an endless supply of gold from pots located reliably at the end of rainbows. Why create wealth when it is more reliable to just steal it! Works for the Government, welfare, child support, and plutocrats. See here how “trickle down economics” (4:18 minutes) works for our ‘betters’, so it can be made, with only enough goodwill, to work for you too! It’s just plain silly to suggest that it can’t be made to work for your business also!

    As all good keynesians, progressives, and evolutionary psychologists know, wealth comes from consumption, not production. Economic recessions come about only because of an irrational fall in consumption. Production is entirely incidental.

    Now stop trying to scare the sheeple by telling them there is no Santa Claus, and that there is no such thing as a free lunch. Party poopers! Get with the program! Turning everyone’s currency into a global ponzi scheme is a great idea! What could go wrong! Just don’t pay any attention to children shouting but, he’s nude! and things will continue to be just fine!

    “Have you anything to loot? If you didn’t see the nature of your policy before–it’s not possible that you don’t see it now. Look around you. All those damned People’s States all over the earth have been existing only on the handouts which you squeezed for them out of this country. But you–you have no place left to sponge on or mooch from. No country on the face of the globe. This was the greatest and last. You’ve drained it. You’ve milked it dry. Of all that irretrievable splendor, I’m only one remnant, the last. What will you do, you and your People’s Globe, after you’ve finished me? What are you hoping for? What do you see ahead–except plain, stark, animal starvation?”

    They did not answer. They did not look at him. Their faces wore expressions of stubborn resentment, as if his were the plea of a liar.

    Then Lawson said softly, half in reproach, half in scorn, “Well, after all, you businessmen have kept predicting disasters for years, you’ve cried catastrophe at every progressive measure and told us that we’ll perish–but we haven’t.” He started to smile, but drew back from the sudden intensity of Rearden’s eyes.

    Rearden had felt another click in his mind, the sharper click of the second tumbril connecting the circuits of the lock. He leaned forward. “What are you counting on?” he asked; his tone had changed, it was low, it had the steady, pressing, droning sound of a drill.

    “It’s only a matter of gaining time!” cried Mouch.

    “There isn’t any time left to gain.”

    “All we need is a chance!” cried Lawson.

    “There are no chances left.”

    “It’s only until we recover!” cried Holloway.

    “There is no way to recover”

    “Only until our policies begin to work!” cried Dr. Ferris.

    “There’s no way to make the irrational work.” There was no answer. “What can save you now?”

    “Oh, you’ll do something!” cried James Taggart.

    ~ “The Concerto of Deliverance” Atlas Shrugged

  • David Arum

    The only effect family leave can have is reduction of employment .