Benjamin Studebaker

Yet Another Attempt to Make the World a Better Place by Writing Things

Tag: Jean-Baptiste Say

The Assimilation of François Hollande is Complete

We are the Borg. Your biological and technological distinctiveness will be added to our own. Resistance is futile.

If the French thought their 2012 election of socialist François Hollande over former president Nicolas Sarkozy meant that they would have their Keynes and avoid austerity, they have been proven fatally wrong. Hollande has just announced plans for a €50 billion austerity package, a cut of 4% of France’s GDP. He has promised to cut taxes on businesses by €30 billion, but this will come in the form of the elimination of a requirement that French businesses fund a family welfare program. Based on the IMF’s multiplier estimate for depressed economies (1.5), France will lose 6% in potential GDP growth over the next 3 years under this plan, potentially resulting in a new French recession. Hollande’s argument for this plan betrays a stunning incompetence on economic matters and illustrates that French voters have been played–there was no democratic alternative to Sarkozy in 2012.

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Raising the Minimum Wage

So Barack Obama wants to raise the federal minimum wage to $9.00 an hour from its current $7.25 level. Is this a good idea? Many bloggers and economists will argue that lower wages mean more jobs and that this relationship is mathematically fixed and a basic fact of economics. They will seek to paint a picture in which all serious or reasonable people agree that higher wages will hurt business or stifle growth. I intend to show their line of reasoning to be overly simplistic and to question this consensus.

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