Economics @ ITT

Does government regulation really kill jobs?

Posted in economics, employment, macroeconomics, Policy Issues by ittecon on November 14, 2011

Not so much:

In 2010, 0.3 percent of the people who lost their jobs in layoffs were let go because of “government regulations/intervention.” By comparison, 25 percent were laid off because of a drop in business demand.

via Does government regulation really kill jobs? Economists say overall effect is minimal. – The Washington Post.

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Jobs Returning Slowly as Wages Lag

Posted in economics, macroeconomics by ittecon on November 11, 2011

The pressure on wages has multiple causes. None of the main factors seems poised to change for the better. Advanced information technologies have slashed the ranks of many careers, such as travel agents. Competition from emerging markets has sliced away jobs on the factory floor and customer-service phone banks. Union membership has plunged, from some 35 percent of private sector workers in the early 1950s to 6.9 percent in 2010.

via Jobs Returning Slowly—as Wages Lag – Businessweek.

Corporations Hate Regulation, Until They Love It

Posted in economics, Regulation by ittecon on November 11, 2011

[B]usiness prefer[s] no regulation at all, but they know that’s not in the cards. So in public they bemoan complexity, but in private they fight endlessly for more of it. To their lawyers, every single extra page is an extra opportunity to make more money.

via Corporations Hate Regulation, Until They Love It | Mother Jones.

A Tax on Christmas Trees?

Posted in economics, microeconomics, Taxation by ittecon on November 9, 2011

The Obama administration has imposed a 15-cent tax on Christmas trees in order to pay for a new board tasked with promoting the Christmas tree industry. 

In classic media reporting bias, Fox released this non-news article in faux outrage. The author trips over himself trying to position this as a slam on the Obama administration.

Nonetheless, the article has intermingled with tid-bits of facts a heaping dose of subterfuge. The bottom line is this, economically, the tax incidence is likely to be shared between suppliers and consumers. I don’t presume Christmas trees to be particularly inelastic, so there may not be a lot of leeway anyway.

Of course, Fox and its Conservative ilk, go on at length to marginalise government involvement in private affairs, and so when a private industry group effectively requests assistance and government agrees (and wants to do the sensible thing, which is to ensure the programme costs are covered), we hear complaints about government meddling.

Moreover, whether government assessed the fee or not, the industry would still have to pay for the campaign, in which case the costs still need to be covered.

Finally as with any advertising or PR campaign, the goal is to increase demand in order to diminish the marginal costs of operation. So, sorry, Judson Burger, you are the Grinch here.

via Merry Christmas? Agriculture Department Imposes Christmas Tree Tax | Fox News.

Large Conservative Bias in Undergraduate Economics Textbooks

Posted in economics by ittecon on November 8, 2011

The Occupy Wall Street movement has extended to college campuses—or to at least one college campus, in the form of a protest against an economics professor’s alleged conservative views.

Around 70 students at Harvard College walked out of economics professor N. Gregory Mankiw’s class last week after expressing discontent with what they viewed as conservative bias in course materials, as reported by The Harvard Crimson. The protest was intended to express solidarity with the Occupy Wall Street Movement, according to the story, as the students felt that Mankiw’s biases had led to policies that exacerbated income inequality.

Bottom Line – Hell no, we won’t go … to economics class.