February 15, 2012
A Modest Proposal for the NY times
Noting that “New York is an expensive place to live,” you call upon the legislature there to raise New York’s hourly minimum-wage from $7.25 to $8.50 (“Raise New York’s Minimum Wage,” Feb. 13).
In the same spirit of demanding that government improve people’s economic well-being simply by ordering that people be paid more, allow me to make a similar plea on your behalf.
The newspaper business today is in difficult straits. So I hereby call upon the legislature in Albany to force you and other newspapers in New York to raise your subscription and advertising rates by 17.2 percent (the same percentage raise that you want to force low-skilled workers to demand from their employers). Voila! If your economic theory is correct, your profits will rise. And the magnitude of these higher profits, we can assume (just as you assume in the case of low-skilled workers), will be greater than any negative consequences that might be unleashed by such legislative interference in your ability to determine the terms on which you sell your services.
Posted by Cassandra at February 15, 2012 08:40 AM
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Back during the height of the "obscene oil profits" nonsense, I posed a challenge to my leftist friends:
I will give you $100 with which to turn into an "industry". You must choose the newspaper industry, the oil industry, or the supermarket industry. You will then be given the profits that they make from the $100 "investment" on the sale of their product, and have the original $100 taken back. So in effect, your choice will determine how much money you make.
Now, none of my friends were stupid, they suspected that I was tricking them, so they did not choose "oil". But almost universally, they chose the supermarkets (since oil was a "trap".
Here are the facts:
If you chose supermarkets, you get ~$2, give or take some change.
If you chose oil, you get $7 (give or take).
If you chose newspapers, congratulations, you have $25.
The mark up on newspapers is already incredibly high. Mostly because the per unit cost for a newspaper is very, very low. The reason the newspaper industry is failing so badly is not because they're failing to make "obscene profits", but because their sales are tiny, and shrinking. Supermarkets are not going under because they're making no profit, their volume of sale is incredibly high, so a low profit margin on sales is no hindrance.
But again, while my left leaning friends are not stupid, they don't really gather economics all that well. They assume "record profits" must mean that they're making obscene amounts of money at someone else's expense. I also have great fun explaining to them that if you want to complain about someone making "obscene profits" off of gas sales, look to the government. They make about $0.50 off of each dollar of gas sold in taxes. The "poor" oil company is only making $0.07.
Posted by: MikeD at February 16, 2012 10:15 AM
I also have great fun explaining to them that if you want to complain about someone making "obscene profits" off of gas sales...
...then buy gas stocks. That way it's not only the "Bad Guys" making the money and you can send that money where you think it best.
Posted by: Yu-Ain Gonnano at February 16, 2012 10:48 AM
Which is ANOTHER excellent point about these "evil corporations". Who actually benefits from the "obscene profits"? The CEO? Sure, he gets a good deal out of it. But the majority of the profits go to shareholders, who tend to be less of the Rockefeller types, and more of the retiree types. Say you want to take money away from the pensions of senior citizens, and watch the uproar. But talk about taking money from "the oil companies" and no one seems to be upset.
Posted by: MikeD at February 16, 2012 04:50 PM
Any time I read "obscene profits" I assume the speaker is brain-dead, and incapable of understand what a profit is.
Posted by: Texan99 at February 17, 2012 11:44 AM