Frequently, we are told by the right that progressive taxation is bad policy, that it diminishes the motivation of entrepreneurs and “job creators”. But what is the relationship between money and motivation? Does more income lead to higher productivity? It turns out, if you phrase the question correctly, the answer is already well known, and the implications of that answer comprise today’s topic.
Continue reading “Money and Motivation: A Shocking Contradiction”
Recently, Barack Obama was accused of “gutting welfare reform” in some of Mitt Romney’s ads of which the following is an example:
This has been widely recognised as a distortion; PolitiFact calls it a “pants on fire” lie. In reality, Obama is allowing state governments to waive certain parts of the welfare reform’s performance measures in favour of alternatives, provided that there is evidence that the state is achieving the principle aim of the reforms–putting people on welfare to work.
That’s all widely known at this point. What I’d like to talk about today is why we really would be better off if Obama had in fact gutted American welfare reform. It’s a bold claim, and not a very politically popular one in the times in which we live, but hear me out. I propose that a welfare system with no demand or encouragement to reenter the workforce is in fact better for the capitalist system.
Yesterday, I ran across a new paper from economist Robert Gordon that suggests that long-term innovation and technological development may be slowing, at least in the case of breakthrough technologies. I found Gordon’s paper interesting, and would like to use today’s post to discuss it and its possible future implications.
Continue reading “The Demise of the Scientific Breakthrough?”
I keep seeing a certain political sentiment expressed. It goes a little something like this, from James Pethokoukis of the New York Post:
So what’s the problem with the Obama recovery? Why is it the weakest since the Great Depression?
Maybe it’s the Obama policies, like a stunning disregard for the trillion-dollar deficits that are likely already a dead weight on growth. Or maybe it’s the Obama guarantee of more tax hikes and regulation that makes US business too worried to hire and invest.
But it’s not too late to start shrinking unproductive government, cut debt and reduce penalties on work and investment — just like in those recoveries that we used to know.
Then there are the political cartoons, things like this:
Here’s the structure of the idea:
The first point is correct, the other two points are simplistic and anti-intellectual, and I intend to illustrate both how and why.
Background: recently, pizza shop CEO John Schnatter decided to raise his pizza prices by up to 20 cents giving this reason:
If Obamacare is in fact not repealed, we will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto consumers in order to protect our shareholders’ best interests.
In other words, the provision in the recent health reforms that private enterprises with in excess of 50 full time employees provide health insurance or pay a penalty has convinced Schnatter that he must raise his pizza prices in order to maintain present profit margins. Today I’d like to investigate whether or not the Affordable Care Act should be opposed on this basis.
Benjamin Studebaker 