Fed study finds Trump tariffs backfired

By Greg Robb of Market Watch. Excerpts:

"“We find that the 2018 tariffs are associated with relative reductions in manufacturing employment and relative increases in producer prices,” concluded Fed economists Aaron Flaaen and Justin Pierce, in an academic paper.

While the tariffs did reduce competition for some industries in the domestic U.S. market, this was more than offset by the effects of rising input costs and retaliatory tariffs, the study found.

“While the longer-term effects of the tariffs may differ from those that we estimate here, the results indicate that the tariffs, thus far, have not led to increased activity in the U.S. manufacturing sector,” the study said.

Tit-for-tat trade retaliation is an idea best relegated to the past, given the presence of globally interconnected supply chains, the Fed researchers found.

The top ten manufacturing industries hit by foreign retaliatory tariffs were producers of: magnetic and optical media, leather goods, aluminum sheet, iron and steel, motor vehicles, household appliances, sawmills, audio and video equipment, pesticide, and computer equipment.

The top ten industries hit by higher prices were: aluminum sheet, steel product, boilers, forging, primary aluminum production, secondary aluminum smelting, architectural metals, transportation equipment, general purpose machinery and household appliances.

The researchers don’t measure the effects on business confidence resulting from the uncertainty regarding U.S. international trade policy. Many economists see this doubt about future government policy as a primary driver in the decline in business investment this year.

While the Federal Reserve did not specify companies affected by the U.S - China trade dispute of the past 18 months, semi-conductor and electronics manufacturers that depend on China for sales, like NVIDIA Corp. NVDA, +1.28%, Micron Technology MU, +0.11%  and Intel Corp. INTC, +0.39%  are seen as especially vulnerable in a trade war scenario.

Apple Inc. AAPL, +0.04%  has been able to escape tariffs on its China-assembled phones to date.

While Chinese consumers mostly buy locally made automobiles, U.S. manufacturers like Tesla Inc. TSLA, +0.06%   have been at risk. The electric vehicle maker first raised the price of its Model S and Model X cars by $20,000 after a new round of trade tariffs but then cut and decided to absorb the difference. However, together with its Chinese partners, General Motors GM, +0.44%  sold 3.6 million vehicles in China in 2018, more than in the United States.

Some executives have blamed import tariffs for higher costs including heavy equipment manufacturer Caterpillar CAT, +0.11%."

Fed study: Trump tariffs backfired, caused job losses and higher prices

Brooke Seipel. Brooke Seipel is a reporter currently based in the greater D.C. area and working at The Hill as the Deputy Managing Editor of social media.

"President Trump's tariffs on imports — meant to boost the economy — ultimately led to job losses and higher prices, a new study from the Federal Reserve has found.

"We find that tariff increases enacted in 2018 are associated with relative reductions in manufacturing employment and relative increases in producer prices," the report by Fed economists Aaron Flaaen and Justin Pierce reads.

MarketWatch first reported the study, noting that 10 primary industries were hit by retaliatory tariffs and higher prices, including producers of magnetic and optical media, leather goods, aluminum sheet, iron and steel, motor vehicles, household appliances, sawmills, audio and video equipment, pesticide, and computer equipment.

The Trump administration first implemented steel and aluminum tariffs in March of 2018, with the president declaring at the time that "aggressive foreign trade practices" related to the trade goods amounted to an "assault on our country" and the U.S. steel industry.

Since then, Trump has announced new rounds of tariffs on billions of Chinese goods in a retaliatory back-and-forth with the country.

U.S. and Chinese officials say they have neared a preliminary trade deal that would grant China relief from some tariffs in exchange for drastically increasing purchases of American farm exports.
The escalation of the U.S.-China trade war prompted a tumultuous market at some points throughout the year, amid fears of a possible global recession.

In September of this year, U.S. consumers and businesses paid a record $7.1 billion in tariffs."

Taxing the “Rich” Won’t Pay for Politicians’ Promises

By Brian Riedl of The Manhattan Institute.

"The Narrative

"I believe that we should be asking the very wealthiest people in this country to start paying their fair share of taxes. That way, we will not only lower the deficit, but we will bring in enough revenue to invest in our economy and create the millions of new jobs we desperately need."[1] — Bernie Sanders "My vision for Medicare-for-All does not include a middle-class tax hike. I’m not prepared to do that."[2] — Kamala Harris "If we have enough money to pay for tax breaks for corporations. We have enough to invest in Medicare-for-All, Green New Deal and cancel student debt."[3] — Ilhan Omar

Reality

Politicians claim that agendas costing approximately $40 trillion over 10 years can be financed mostly by taxing wealthy families and corporations. Essentially, they promise a European-style welfare state without Europe’s burdensome taxes on middle- and lower-income earners. This is not possible.

Combining popular proposals to tax the wealthiest Americans and corporations would likely raise $3.9 trillion over the decade. This revenue could not even eliminate half the $15.5 trillion budget deficit that is already projected over the next decade, much less pay for $40 trillion in more spending. The overwhelming majority of new tax revenue to finance such expenditures would have to be raised from the middle- and lower-income earners.

---

Key Findings

• Leading presidential candidates are proposing a combined $40 trillion in new federal spending, yet the combined proposals to tax wealthy Americans and corporations would raise $9.3 trillion under the best-case, rosiest scenario and, more realistically, $3.9 trillion.
• Even annually seizing 100% of all income earned over the $1 million threshold could not generate more than $8.9 trillion in additional revenues.
• Funding $40 trillion in new spending would require raising the payroll tax by 38 percentage points or imposing an 88% national sales tax—even after cutting defense spending to European levels.
• Depending on the choice of taxes, the median American household’s $5,000 federal tax burden would double or even triple.
• Were Americans to accept all the taxes to finance this spending spree, it would still leave an escalating $15.5 trillion baseline budget deficit over the next decade under current policies.

On the Record “This presidential campaign is replete with economic proposals that are extraordinarily unrealistic. Facing an overall deficit that is already projected to total $15 trillion over the next decade, politicians are promising $40 trillion in new spending. Vague ‘tax the rich’ rhetoric cannot obscure a cold mathematical reality: that even 100% tax rates on the wealthy could finance only a fraction of this spending. Paying for these things will require doubling—at the least—the typical American family’s total tax burden.” —Brian Riedl, Senior Fellow

Adding Up the Check

The federal government is on an unsustainable fiscal path toward consistent $1 trillion budget deficits. Annual Social Security and Medicare shortfalls will rise from $440 billion to $1,656 billion over the next decade, pushing annual budget deficits above $2 trillion under current policies.[4] These shortfalls are the predictable result of 74 million retiring baby boomers, which will produce benefits that far exceed the payroll taxes (collected from younger workers) and Medicare premiums (from seniors) flowing into the two systems each year. Overall, the Congressional Budget Office (CBO) forecasts $15.5 trillion in total budget deficits over the next decade under current policies.[5]
Nevertheless, presidential candidates promise a dramatic increase of federal spending. Medicare-for-All has been estimated to cost at least $32 trillion in its first decade—although Bernie Sanders has admitted that his recent addition of broad, long-term-care coverage could bring the federal cost to $40 trillion.[6] The combination of student debt cancellation, free public college tuition, and forgiveness of future private-college debt would cost $3 trillion over the decade.[7] Climate-change plans have totaled approximately $2 trillion in federal funds (while Sanders’s would cost $16 trillion, and some congressional plans would cost more).[8] Other typical candidate spending promises include Social Security expansion ($2 trillion), infrastructure ($1 trillion), universal child care and family leave ($1 trillion), affordable housing ($2 trillion), and K–12 education ($300 billion).[9] Sanders has proposed a government jobs guarantee that would cost nearly up to $30 trillion over the decade, and Andrew Yang would likely distribute $30 trillion over the decade in Universal Basic Income grants.[10]
While not all candidates have endorsed each of these policies, the campaigns of leading presidential candidates are typically promising new spending over the decade on the order of $40 trillion.

Sanders’s tab is as high as $97 trillion.[11] To put these figures in context, the entire GDP over the next decade is projected by CBO to be $262 trillion, and current federal spending is projected at $60 trillion.

Who Will Pay?

Candidates claim that they can finance their proposals without burdening middle- and lower-income families. Kamala Harris has proposed a $3 trillion tax cut for non-wealthy families, on top of her spending plans. Sanders concedes that some middle-class taxes must rise but insists that wealthy families and corporations will bear most of the burden. Elizabeth Warren emphasizes proposals to tax “billionaires and corporations” while deflecting questions about middle-class taxes.[12]

As the table nearby shows, the most common proposals to increase taxes on wealthy Americans and corporations would struggle to raise $5 trillion over 10 years.

The cumulative effect of these proposals likely approximates the revenue-maximizing tax rates on the wealthy. The payroll tax increase would raise the combined marginal tax rate (payroll, federal income, and state income) to approximately 60% (depending on the state) on upper-income earners, which is within the range of the consensus revenue-maximizing rate.[22] In fact, a top 70% income-tax bracket described above would produce combined rates over 90% for the highest-income earners. The 37% capital-gains rate is in the range of what economists consider the revenue-maximizing rate. Both CBO and the Tax Policy Center estimate that a financial transaction tax above 0.1% would not significantly add revenues.[23] The corporate tax increases described above would push those revenues far higher than their pre-2017 tax-cut levels.[24] The proposed estate- and wealth-tax rates are at levels that would generate massive tax avoidance, and therefore higher rates would generate little to no additional revenue.[25]

The combined proposals would generate $9.3 trillion over 10 years, according to the most optimistic, static scores—meaning without consideration of macroeconomic effects or many behavioral changes and often relying on inflated estimates produced by the campaigns themselves. More realistic, dynamic scores that account for economic effects and that use third-party estimates when possible yield a combined $3.9 trillion in revenue. Even that total may be too high because it estimates each policy in isolation, without accounting for the negative economic effects of layering new taxes on top of other new taxes—bringing some combined marginal tax rates past 90%. While the 2017 tax cuts are not directly addressed, these steeply higher tax rates would more than reverse most of the law’s provisions that benefit wealthy families and corporations.

Regardless of the estimate used, taxing the rich and large corporations cannot even close CBO’s projected $15.5 trillion budget deficits by 2029 (which are based on current policy), much less finance new spending.

Even if the full $40 trillion could be paid for in new taxes, it would still significantly worsen the federal budget outlook. This is because the underlying budget deficit is already close to surpassing $1 trillion, on its way to $2 trillion within a decade and 9% of GDP within 30 years. Applying nearly all plausible taxes to today’s new spending would leave few, if any, taxes to close this escalating baseline deficit, or address any new fiscal needs that arise down the road.

Medicare-for-All

Some question the $32 trillion Medicare-for-All price tag by claiming that the law would reduce health costs. This confuses the effect of the program on national health expenditures (NHE) with its effect on the federal budget. Regardless of whether NHE slightly rises or falls (and even liberal economists believe that it would rise),[26] Medicare-for-All would shift approximately $32 trillion of the health economy from the private sector (and state governments) to the federal government’s ledger. This means that Washington would have to create a $32 trillion “single-payer tax” to capture the money that would have been paid in private premiums, out-of-pocket expenditures, and state taxes to fund Medicaid.

To date, no politician has figured out how to design and defend a tax this large. Sanders includes no taxes in his Medicare-for-All legislation and instead offers on his website a menu of $16 trillion in possible single-payer taxes.[27] Harris has suggested that the middle class will pay no health premiums or new taxes for Medicare-for-All, implying that their health care will be free.[28] But any Medicare-for-All proposal that does not include a $32 trillion tax to replace today’s premiums and out-of-pocket costs should not be considered a serious one.

Blood from a Stone

Even those who support higher taxes on the rich should acknowledge that high-income households do not earn anywhere near enough to fund even a fraction of the welfare-state expansions on offer this campaign season. Income for the top-earning 5% of families and pass-through businesses (including capital gains and dividends)—which begins at a family-size-adjusted cash income of $172,205—currently accounts for only one-third of the national total. That means that two-thirds of the tax base comes from those below the top 5%. The top 5% already pay 48% of all federal taxes, including 69% of all federal income taxes, which leaves less room for additional taxes from them.[29]

If Washington seized all the currently untaxed income earned over the $1 million threshold, it would raise $8.9 trillion—not enough to balance the existing budget (lowering the threshold to $500,000 brings the total take to $12.3 trillion).[30] Such figures implausibly assume that those affected continue working and investing despite facing 100% tax rates. In reality, individual income-tax revenues in the U.S. have historically remained between 7.0% and 9.5% of GDP, even as the highest tax bracket fluctuated between 28% and 91%. There has been no long-term correlation between income-tax revenues and the top income-tax rate (the performance of the economy more strongly correlates with tax revenues).[31]

If America wants to spend like Europe, it must tax like Europe—and that means large payroll and value-added taxes on the middle class. First, closing the underlying $15.5 trillion baseline budget deficit would require an across-the-board 17-percentage-point income-tax rate hike (e.g., the median household’s top income-tax bracket would rise from 12% to 29%).[32]

From there, suppose that the goal were to raise $34 trillion: the $40 trillion in proposed new spending, less $3 trillion from hypothetically reducing defense spending to European levels (a popular goal for which there is no plausible blueprint), and another $3 trillion from reducing state-level Medicaid costs with Medicare-for-All.[33] A CBO analysis shows that raising $34 trillion in tax revenue would require creating a new 38% payroll tax (on top of the current 15.3% combined Social Security and Medicare tax rate) paid by all workers from their first dollar earned, or imposing an 88% value-added tax (i.e., nearly doubling the cost of all consumer purchases).[34]"

Tyler Cowen on Piketty's latest book

See *Capital and Ideology*, by Thomas Piketty. 

"This book is more than 1000 pp., here are my impressions:

1. About 600 pp. of this book is a carefully done history of the accumulation and sometimes dissipation of wealth and property.  You can evaluate that material without reference to any particular set of political views.

2. At some point the book veers into partisan issues such as the wealth tax.  Many of those parts remain interesting, but it also becomes clear that Piketty is “out to lunch,” to wit (p.591):

To return to the Soviet attitude toward poverty, it is important to try to understand why the government took such a radical stance against all forms of private ownership of the means of production, no matter how small.  Criminalizing carters and food peddlers to the point of incarcerating them may seem absurd, but there was a certain logic to the policy.  Most important was the fear of not knowing where to stop.  If one began by authorizing private ownership of small businesses, would one be able to set limits?

I can think of a less naive explanation of Soviet attitudes toward the private sector.  Piketty also calls for “participatory socialism” (p.592), a dubious doctrine not to be confused with say Nordic social democracy.  For instance, Sweden (among other countries) seems to have fairly extreme wealth inequality.

3. The sentence “Real wages are much higher in America than in Western Europe” does not come easily to his pen.  Nor does “The United States is a remarkably successful innovator, let’s see what we can learn from that.”  Or even “Raising wages is more important than merely limiting inequality.”  Those seems to be banished thoughts in the Piketty intellectual universe.

4. The sections on Soviet and socialist experience can only be called “delusional.”  In his account, if only a few political decisions had gone the other way, the USSR might have ended up on a path similar to that of Norway (p.603 and thereabouts).

You know, maybe you think that the inequalities of the current day are much worse than people had been expecting.  but that should not revise your view of socialism and the Soviet Union, two matters fairly well settled by historical research.

5. Give these lenses, it is impossible for Piketty to offer any commentary on recent events (about the last 400 pp. of the book) that is anything other than distorted and unreliable.  There is massive distrust of the wealthy in this book, and virtually no distrust of concentrated state power.

6. There is a considerable sum of useful and valuable material in this book, and I would not try to dissuade anyone inclined from reading it.  Nonetheless I suspect its main import is as another sign of the growing compartmentalization of academic discourse — good work intermingled with highly questionable partisan material — and how so many academics, if the mood affiliation tilts in the right direction, will tolerate or even encourage that."

An estimated one million people—mostly children—die annually from vitamin-A deficiency: Golden rice could reverse that

See ‘Golden Rice’ Review: Against the Grain by Hugo Restall. He is a former editor of The Wall Street Journal Asia’s editorial page. Excerpts:

"Every year an estimated one million people, mostly children, die, and another half a million more lose their eyesight, from vitamin-A deficiency. Golden rice—with its yellow grains rich in beta carotene, which the human body turns into vitamin A—could virtually eliminate this problem in countries where rice is the staple food."

"Defenders of golden rice, meanwhile, hold environmentalists responsible for impeding the project. In 2013, for instance, vandals in the Philippines destroyed a site where an important test crop was ready to be harvested. Given the number of lives at stake, some have accused the activists of mass murder and sought to bring them to trial for crimes against humanity."

Other genetically modified crops, including those developed by companies with deep pockets, have taken a similarly long and expensive path to the dining table. And green activists didn’t slow down golden rice by much, at least not directly. The real villain, according to Mr. Regis, is the overly restrictive regulation of all genetically modified organisms world-wide, which delayed the progress of golden rice by more than 10 years.

Most countries’ treatment of genetically modified organisms is based on the “precautionary principle,” which requires that all hypothetical risks be addressed before development can proceed. The level of risk and the potential benefits are not weighed in the decision. Such an approach would stymie innovation in any field, but its effect on the breeding of new organisms is particularly harmful.

The insertion of individual, well-understood genes into an existing crop is safer than traditional methods of genetic manipulation such as cross-breeding. The definition of what constitutes genetic modification, moreover, is arbitrary and many of the restrictions imposed on it are perverse. Take, for instance, the Rio Red grapefruit, which, as Mr. Regis tells us, is “a genetically modified mutant fruit plant five times over,” including genetic manipulation via “repeated doses of thermal neutron radiation.” Yet the Rio Red “is nowhere regarded as a GMO, nor is it labeled, regulated, or sold as such.”"

"One of the many rules regulating the development of golden rice stipulated that, once scientists chose a particular prototype to pursue, all previous research materials had to be destroyed “to minimize the risk that seeds of those strains previously experimented with but subsequently rejected for further development work would somehow make their way onto farmlands and contaminate crops.” This forced the team to start from scratch with each new prototype. The pursuit of a single prototype at a time, instead of several simultaneously, was itself also driven by regulatory restrictions."

"in 2001, after Greenpeace International’s genetic-engineering campaign coordinator, Benedikt Haerlin, admitted that golden rice “posed a moral dilemma” for his organization given the claims that the grain could save lives, he quickly recanted and closed ranks against the project. This is ironic considering that the environment also benefits from genetically modified crops, which can reduce the area of land under cultivation as well as the use of fertilizer and pesticide."

"“there have been no major or minor GMO disasters, mini-catastrophes, or indeed any documented instances of human health being compromised by the consumption of genetically modified foods.” The precision of inserting individual genes means the risk of allergic reactions or other harm is significantly reduced compared to traditional techniques."

Was the American Revolution fought in defense of slavery?

See Fact Checking the 1619 Project and Its Critics by Phillip W. Magness. Excerpt:

"One of the most hotly contested claims of the 1619 Project appears in its introductory essay by Nikole Hannah-Jones, who writes “one of the primary reasons the colonists decided to declare their independence from Britain was because they wanted to protect the institution of slavery.”

Hannah-Jones cites this claim to two historical events. The first is the 1772 British legal case of Somerset v. Stewart, which reasoned from English common law that a slave taken by his owner from the colonies to Great Britain could not be legally held against his will. England had never established slavery by positive law, therefore Somerset was free to go.

The second event she enlists is a late 1775 proclamation by Lord Dunmore, the colonial governor of Virginia, in which he offered freedom to slaves who would take up arms for the loyalist cause against the stirring rebellion. The measure specified that it was “appertaining to Rebels” only, thereby exempting any slaves owned by loyalists.

Hannah-Jones argues that these two events revealed that British colonial rule presented an emerging threat to the continuation of slavery, thereby providing an impetus for slave-owning Americans to support independence. The American Revolution, she contends, was motivated in large part to “ensure slavery would continue.” The five historians vigorously dispute this claimed causality, indicating that it exaggerates the influence of these events vis-à-vis better known objects of colonial ire, as stated in the Declaration of Independence.

There is a kernel of truth in Hannah-Jones’s interpretation of these events. Somerset’s case is traditionally seen as the starting point of Britain’s own struggle for emancipation, and Dunmore’s proclamation certainly provoked the ire of slaveowners in the southern colonies – although they were more likely to interpret it as an attempt to foment the threat of a slave revolt as a counterrevolutionary strategy than a sign that Britain itself would impose emancipation in the near future.

Curiously unmentioned in the dispute is a much clearer case of how the loyalist cause aligned itself with emancipation, albeit in a limited sense. As part of his evacuation of New York City in 1783, British commander Sir Guy Carleton secured the removal of over 3,000 slaves for resettlement in Nova Scotia. This action liberated more than ten times as many slaves as Dunmore’s proclamation, the earlier measure having been offered as part of an increasingly desperate bid to retain power long after colonial opinion turned against him. Carleton’s removal also became a source of recurring tensions for U.S.-British relations after the war’s settlement. Alexander Hamilton, representing New York, even presented a resolution before the Confederation Congress demanding the return of this human “property” to their former owners.

That much noted, Hannah-Jones’s argument must be assessed against the broader context of British emancipation. It is here that the five historians gain the stronger case. First, despite both its high symbolic importance and later use as a case precedent, the Somerset ruling was only narrowly applied as a matter of law. It did not portend impending emancipation across the empire, nor did its reach extend to either the American colonies or their West Indian neighbors where a much larger plantation economy still thrived.

It is also entirely unrealistic to speculate that Britain would have imposed emancipation in the American colonies had the war for independence gone the other way. We know this because Britain’s own pathway to abolition in its remaining colonies entailed a half-century battle against intense parliamentary resistance after Somerset. 

Simply securing a prohibition on the slave trade became a lifetime project of the abolitionist William Wilberforce, who proposed the notion in 1787, and of liberal Whig leader Charles James Fox, who brought it to a vote in 1791, only to see it go down in flames as merchant interests and West Indian planters organized to preserve the slave trade. Any student of the American Revolution will recognize the member of Parliament from Liverpool who successfully led the slave traders in opposition, for it was Banastre Tarleton, famed cavalry officer under General Cornwallis on the British side of the war.
Tarleton’s father and grandfather owned merchant firms in Liverpool, and directly profiteered from the slave trade. When Fox and Wilberforce’s slave trade ban came to a vote he led the opposition in debate. The measure failed with 163 against and only 88 in favor.

After more than a decade of failed attempts Fox eventually persevered, steering a bill that allowed the slave trade ban through the House of Commons as one of his final acts before he died in 1806. It would take another generation for Wilberforce and Thomas Clarkson, invested in a decades-long public campaign that highlighted the horrors of the institution and assisted by a large slave uprising in Jamaica, before a full Slavery Abolition Act would clear Parliament in 1833.

Nor was Tarleton the only loyalist from the revolutionary war with a stake in slavery as an institution. Lord Dunmore, whose 1775 proclamation forms the basis of the 1619 Project’s argument, comes across as a desperate political opportunist rather than a principled actor once he is examined in light of his later career. From 1787 to 1796 he served as colonial governor of the Bahamas, where he embarked on a massive and controversial building project to fortify the city of Nassau against irrational fears of foreign invasion. Dunmore used more than 600 enslaved laborers to construct a network of fortifications, including a famous 66-step staircase that they hand carved from solid rock under the threat of whipping and torture. Responding to a parliamentary inquiry on the condition of the colony’s slaves in 1789, Dunmore absurdly depicted them as well cared for and content with their condition.

Curiously enough, a British victory in the American Revolution would have almost certainly delayed the politics of this process even further. With the American colonies still intact, planters from Virginia, the Carolinas, and Georgia would have likely joined their West Indian counterparts to obstruct any measure that weakened slavery from advancing through Parliament. Subject to greater oversight from London, the northern colonies would have had fewer direct options to eliminate the institution on their own.

These state-initiated measures came about through both legislative action and legal proceeding, including a handful of “freedom cases” that successfully deployed reasoning similar to Somerset to strike against the presence of slavery in New England. The most notable example occurred in Massachusetts, where an escaped slave named Quock Walker successfully used the state’s new post-independence constitution of 1780 to challenge the legality of enforcing slavery within its borders.

Although they had significantly smaller slave populations than the southern states, several other northern states used the occasion of independence to move against the institution. The newly constituted state governments of Pennsylvania (1780), New Hampshire (1783), Connecticut (1784), Rhode Island (1784), and New York (1799) adopted measures for gradual but certain emancipation, usually phased in over a specified period of time or taking effect as underage enslaved persons reached legal majority. Vermont abolished slavery under its constitution as an independent republic aligned with the revolutionaries in 1777, and officially joined the United States as a free state in 1791. Antislavery delegates to the Confederation Congress were similarly able to secure a prohibition against the institution’s extension under the Northwest Ordinance of 1787, ensuring that the modern day states of Ohio, Michigan, Illinois, Wisconsin, and Indiana entered the Union as free states.

While these examples do not negate the pernicious effects of slavery upon the political trajectory of the former southern colonies, they do reveal clear instances where the cause of emancipation was aided – rather than impeded – by the American revolution. Britain’s own plodding course to emancipation similarly negates an underlying premise of Hannah-Jones’ depiction of the crown as an existential threat to American slavery itself in 1776. Indeed, the reluctance of the slaveholding West Indian colonies to join those on the continent in rebellion despite repeated overtures from the Americans reveals the opposite. The planters of Jamaica, Barbados and other Caribbean islands considered their institutions secure under the crown – and they would remain so for another half-century.

The Verdict: The historians have a clear upper hand in disputing the portrayal of the American Revolution as an attempt to protect slavery from British-instigated abolitionism. Britain itself remained several decades away from abolition at the time of the revolution. Hannah-Jones’s argument nonetheless contains kernels of truth that complicate the historians’ assessment, without overturning it. Included among these are instances where Britain was involved in the emancipation of slaves during the course of the war. These events must also be balanced against the fact that American independence created new opportunities for the northern states to abolish slavery within their borders. In the end, slavery’s relationship with the American Revolution was fraught with complexities that cut across the political dimensions of both sides."

FedEx Delivers Billions to the Taxman

The New York Times runs a misleading story on our 2018 tax return. Here’s the real story.

By Frederick W. Smith. Excerpts:

"We at FedEx were very pleased when he signed the Tax Cuts and Jobs Act into law on Dec. 22, 2017. In response, we increased capital expenditures. We placed a major order for 24 Boeing wide-body freighters, funded major facilities modernizations and expansions, put additional funds in our pension plan, and increased wages by more than $200 million.

Had the tax cuts not passed, we would have significantly lowered capital expenditures in 2018. Instead, the expensing provision of the legislation encouraged FedEx to buy new 777F and 767F aircraft. During the debate on tax reform, the chief executive of UPS, David Abney, and I jointly penned an op-ed in these pages urging passage of corporate tax reform.

I know the FedEx aircraft orders created thousands of incremental new jobs for Boeing, General Electric (the engine supplier on freighters), and a multitude of smaller suppliers. In fact, each order of a 777F injects about $540 million into the U.S. economy, supports 1,850 jobs, and generates roughly $45 million in federal, state and local taxes.

While major capital expenditures under the tax-cut legislation can be expensed, thereby initially deferring U.S. corporate tax receipts, these assets should produce significant revenues for the U.S. Treasury in the years to come while also providing great jobs for the thousands of people who will operate, maintain and provision FedEx and UPS aircraft.

There is little doubt the significant increase in U.S. employment and wages since the tax cuts were passed is due to the decrease of corporate tax rates from 35% (which we used to pay) to 21%, which is competitive with the rest of the industrialized world. Over the past five years, we have paid more than $10 billion in U.S. taxes. After the temporary effect of capital expensing wears off, I expect FedEx will pay billions more into the U.S. Treasury from the earnings produced by our investments."

"With the above background in mind, I urge readers to review the New York Times’s disparaging story from Nov. 17 about FedEx’s involvement in corporate tax reform and see a great example of polemics: printing selected facts, connecting unrelated events, and implying nefarious activities when there were none whatever. FedEx takes great pride in being a good corporate citizen—here and abroad—at all times.

The Tax Cuts and Jobs Act was a great achievement for the American people, and we are proud to have played a small role in passing this important legislation."

The Big Lie About Charter Schools

Democratic presidential candidates claim they take money away from public schools. That’s nonsense.

By David Osborne. Mr. Osborne, whose latest book is “Reinventing America’s Schools: Creating a 21st Century Education System,” leads the education work of the Progressive Policy Institute. Excerpts:

"To begin with, charters themselves are public schools. The only difference is that they are operated independently of district bureaucracies, with more freedom to design their programs and choose their teachers but also more accountability. If charters fail—if their students fall too far behind—they are usually closed.

The same arguments made about charter school funding don’t make sense in other contexts. When a family moves out of a district, the district loses state and federal money for its child’s education, but no one accuses the family of draining funds from the district. When parents move their child to a private school, no one accuses them of sabotaging public schools.'

"Whether charters drain money from public school districts depends on the state. In over half the states with charters, when students decamp some or all districts get to keep their local tax revenue but no longer have to educate the children, so they actually increase their spending per pupil. In Massachusetts and New York (outside New York City), the state cushions any revenue loss. By law, Massachusetts districts should be reimbursed 100% of the state money for the student for a year, then 25% for the next five years—though the state has only met about 60% of that funding since 2015."

"And the pension problem is exaggerated. As districts lose students, they reduce their number of teachers, which also reduces payments to the pension fund. If the pension system has been properly funded, there’s no negative impact. The real problem is that most states have fallen behind on their funding obligations, and now some districts are being forced, as in California, to play catch-up.

Mitigating the cost of building maintenance and utilities takes a little creative thinking. Districts can rent empty classrooms to preschool and adult-education providers. Once their schools are down to 75% capacity or below, they can lease the extra space to charter or private schools. In cities that aren’t afraid of charters, such as Washington and Denver, many school buildings house both a charter and a district school. When that’s not enough, districts can close buildings that are more than half empty and lease or sell them to charter schools.

None of this decreases the public education available to students, and it often improves the quality. But leaders of the teachers unions scream when school boards contemplate any of it."

"Charter schools give millions of children—two-thirds of them nonwhite—the opportunity to get an education, go to college and move up the socioeconomic ladder. Even the unions’ favorite source of charter studies—they keep calling back to an outdated report of theirs—Stanford University’s Center for Research on Education Outcomes, has found that by their fourth year in a charter, students learn about 2.5 months more in reading every year and around two more in math than demographically similar students with the same past test scores who stayed in local district schools. In urban districts, by their fourth year students are gaining a little under half a year in reading and a little over in math—every year—over their district peers.

Graduation rates, college-going rates and college completion rates are also higher among students who enroll in charter schools. And as a handful of studies have shown, competition from charters can push district and school leaders to improve their schools, to make them more attractive to parents."

The economists are right: Rent control is bad

Washington Post editorial.

"RENT CONTROL is back. Economists have long criticized government price controls on apartments, a concept that had its first moment in the 1920s and that some cities reintroduced in a modified form in the 1970s. Now, decades later, California and Oregon are moving forward with statewide rent-control laws. Meanwhile, presidential candidate Sen. Bernie Sanders (I-Vt.) has made a national rent-control standard the centerpiece of his sprawling new housing plan.

The economists are right, and the populists are wrong. Rent-control laws can be good for some privileged beneficiaries, who are often not the people who really need help. But they are bad for many others.

The California law would cap the rise in rents statewide to inflation plus 5 percent annually. Oregon would set the cap at inflation plus 7 percent. Mr. Sanders would restrict rent increases nationally to 3 percent or 1.5 times inflation, whichever is greater. To many struggling to afford housing in super-expensive parts of New York, San Francisco or the District, these plans no doubt sound great. Yet these cities already have rent-stabilization policies, and they have not worked.

For example, a March study from a group of Stanford University researchers shows that San Francisco’s rent-stabilization efforts failed. It’s true that the policy kept some residents’ rents lower. But landlords responded by converting their buildings into condos they could sell or business properties they could lease without rent-control restrictions — or by demolishing their old buildings and replacing them with new ones that did not qualify for rent stabilization. Effects such as these drove down the supply of rental housing and, therefore, drove up rents across the city — by 5.1 percent.

These costs fell on those seeking to move into San Francisco or between apartments within the city. The city’s housing tended to cater more to high-income condo-buyers or renters willing to pay top dollar for apartments in brand-new buildings. “It appears rent control has actually contributed to the gentrification of San Francisco, the exact opposite of the policy’s intended goal,” the researchers concluded.

Research also indicates that landlords have less incentive to maintain their properties in a rent-controlled environment. Governments can impose maintenance requirements on landlords — but they are tough to enforce. Depending on how the policy is designed, stiff rent-control policies with few exceptions could also discourage investors from building new homes, which would also constrain rental unit supply. And since rent-stabilization policies often tend to discourage people from moving, they harm worker mobility and the economic dynamism associated with it.

In the long run, the key to making housing more affordable is to build more homes. In desirable urban environments, that means more construction and more density than municipal policy — not to mention benighted NIMBY activism — often allows, which would also require better walking, biking and public transportation options in dense city centers. (To his credit, Mr. Sanders also embraces this policy.) This approach is not as bumper-sticker-ready as rent control. But it would be far more effective."

There are many positive trends in human well-being spawned by free markets and powered by carbon fuels

See Why Should Serious People Take Such Reporting Seriously? by Don Boudreaux.

"Here’s a letter to the Program Director of NPR’s Here & Now:

Sir or Madam:

Your segment today on climate change unwittingly offers reasons why so many people not on the political left remain skeptical of entrusting governments with more power to regulate in the name of protecting the environment. Almost every second of this segment’s nine-plus minutes portrayed life today as ghastly, treacherous, and destined only to get more hellish. Yet reality is very different.

Your reporting would be more credible if you at least acknowledged such facts as these – facts that uninformed members of your audience would be shocked to learn:

– Global death-rates from natural disasters have fallen dramatically. This rate is today 1/14^th what it was a century ago and ½ what it was a half-century ago.

– The proportion of the world’s population with access to clean water is at an all-time high.

– The risk of dying from air pollution is at an all-time low. (Ditto the risk of dying of famine.)

– Life expectancy today continues to rise and is at an all-time high; today it’s much more than twice what it was before the industrial revolution. This happy trend is due in part to the fact that…

– Child mortality is at an all-time low. (Ditto for the maternal mortality rate.)

– People worldwide are better educated.

These and many other positive trends in human well-being are the direct consequence of economic growth – most of which is spawned by free markets and powered by carbon fuels. Your apparent blindness to this reality casts doubt, if not on your objectivity, certainly on your sense of historical perspective. (I laughed out loud when host Jeremy Hobson – talking about Europeans who today suffer from heat waves – said that “Many people don’t have air-conditioning because, over the course of centuries, they haven’t needed it.” In reality, of course, pre-20^th-century Europeans didn’t have air-conditioning because innovative free markets hadn’t yet made it possible.)

The general public would surely pay more attention to climate reporting if programs such as yours were to substitute realism for incessant apocalypticism.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030"

Indonesia shows that bans of the mercury trade lead to black markets and government corruption

See The Hidden Cost of Gold: Birth Defects and Brain Damage by Richard C. Paddock of The NY Times. Excerpts:

"More than a hundred nations have joined a global campaign to reduce the international trade in mercury, an element so toxic there is “no known safe level of exposure,” according to health experts.

But that effort has backfired in Indonesia, where illicit backyard manufacturers have sprung up to supply wildcat miners and replace mercury that was previously imported from abroad. Now, Indonesia produces so much black-market mercury that it has become a major global supplier, surreptitiously shipping thousands of tons to other parts of the world."

"Indonesia, the world’s fourth most populous nation, stands out for its huge number of outlaw gold miners and for concerns that some law enforcement officials assigned to police the trade are instead profiting from it."

"For decades, Indonesia got most of its mercury legally from the United States and Europe. But recognizing the harm it was doing, Western countries began reducing mercury exports six years ago.

Since 2013, 114 countries, including Indonesia, have signed on to the Minamata Convention, a treaty that took effect in 2017 and that requires participating nations to reduce the export and use of mercury in a variety of industries.

Nevertheless, United Nations trade data shows that Indonesia became a significant exporter of mercury from 2015 to 2017, peaking at more than 320 tons in 2016."

"The government banned the use of mercury in gold mining in 2014, but has done little to curb its use, clean up contaminated sites or warn the public of the danger."

"The mercury trade is lucrative, but the gold business it supports is far more profitable. By some estimates, Indonesia’s illicit small-scale gold miners produce as much as $5 billion a year.

"Poverty is widespread in Indonesia, and many people, jobless and desperate, have flocked to the gold fields.

As miners, they often live outside the law, digging for ore on land without permission or government permits, sometimes in national parks and protected areas.

To extract gold, the miners mix liquid mercury with crushed ore. Gold in the ore binds with the mercury to produce an amalgam of the metals. The miners heat the small lump with a blowtorch, sending mercury vapors into the air and leaving the gold behind."

"The president also has directed police and military commanders to take action against personnel found to be involved in the illegal metals trade. Officials said they were unaware of anyone being disciplined. Spokesmen for the national police and the military declined to be interviewed.

Officials say the public has been warned about mercury’s dangers, but there is little evidence of this in mining areas. Many miners insist it is not hazardous.

The role of corrupt officials in the gold and mercury trade is widely recognized but seldom addressed by the government.

Some members of the police and military are said to finance gold mining operations, extort protection money, oversee their own mines and ensure the safe transit of mercury and gold. Many tons of mercury seized by the police have gone missing."

“When we went to the field and talked to the people there, they admitted that the police gave them the mercury,” said Putu Selly Andayani, head of the West Nusa Tenggara Province Trade Agency. “They said the police helped them to set up the illegal mining.”

Throughout the country, miners work with mercury in plain sight without fear of punishment. The occasional arrests of furnace workers and smugglers have barely dented the supply.

Mercury remains cheap and plentiful in the gold fields, where it is sold in mining supply shops or by dealers who travel from village to village. Dozens of Indonesian websites offer mercury for sale."

Before affirmative action, blacks were already entering middle-class professions at unprecedented rates

See Michelle Obama Is Racially Insensitive? She and Pete Buttigieg come under attack from progressives for expressing common-sense views by Jason L. Riley.

"Today, such talk is derided by many on the left, but a focus on self-regard and self-respect was once seen as essential to economic progress, and the results speak for themselves. Census data show that in the 1940s and ’50s black poverty rates plummeted, black incomes grew at a faster rate than white incomes, and the racial gap in years of schooling narrowed from four years to less than two. It’s worth noting that all of this was achieved prior to passage of the landmark civil-rights bills of the 1960s that so often receive exclusive credit for black advancement. And as more blacks became more educated, they qualified for better jobs. Which helps explain why in the decades before affirmative action policies were implemented in the 1970s, blacks were already entering middle-class professions at unprecedented rates."

The Wall Street Journal Blames Marijuana Legalization for Vaping-Related Lung Injuries, a Black-Market Hazard

The main danger to vapers is illicit cannabis extracts of unknown provenance and composition.

By Jacob Sullum of Reason.

"Demonstrating a fundamental misunderstanding of how black markets work, a Wall Street Journal editorial blames marijuana legalization for vaping-related lung injuries involving illicit cannabis extracts. "A surge in vaping related lung illnesses this year caught the medical community by surprise, with the Centers for Disease Control and Prevention (CDC) reporting more than 2,500 lung illnesses and 54 deaths," the Journal says. "This is another reminder that America is undertaking a risky social experiment by legalizing and especially destigmatizing cannabis, and the potential effects are hard to foresee or control."

Since those lung illnesses overwhelmingly involve black-market marijuana products, the lesson from the outbreak is exactly the opposite of the one the Journal draws. The CDC's map of cases shows they are concentrated in states where marijuana remains illegal for recreational use, including Florida, Illinois (where legal recreational sales do not begin until next week), Minnesota, New York, Pennsylvania, Texas, and Utah. The one major exception is California, where illegal dealers still account for nearly three-quarters of the market, thanks to heavy taxes, licensing delays, onerous regulations, and local bans.

The CDC itself highlights the dangers of THC vapes obtained from "informal sources like friends, family, or in-person or online dealers." In a CDC survey reported last month, 96 percent of patients who developed respiratory symptoms after vaping THC said they had obtained the products "informally." While two people in Oregon died after vaping THC cartridges they said they had bought from state-licensed shops, those are exceptions to the general pattern. The main problem is a black market in which consumers do not know the provenance and composition of the products they are buying.

In a legal market, it is much easier to guard against potential hazards. Legal manufacturers tell consumers the ingredients in their vapes, and they are liable for fraud if they lie. Marijuana regulators in Colorado, Oregon, and Washington have banned the use of vitamin E acetate, a cutting and thickening agent strongly implicated in the lung injuries. State-licensed laboratories in places where marijuana is legal can test products for that ingredient and other potentially harmful additives or contaminants. Vitamin E acetate, which the CDC has found in nearly all of the lung fluid samples from patients it has tested, is a relatively new additive that started showing up in illegal THC cartridges this year, which coincides with the recent outbreak.

The Journal's reasoning, in short, is completely backward. By the same logic, the hazards of black-market booze, such as government-mandated poison in diverted industrial ethanol, would have counted as an argument against repealing alcohol prohibition."

Don’t Blame Tech Bros for the Housing Crisis

Rising housing costs predate the tech bubble. And it will take more than Apple and Facebook’s billions to fix it.

By Margaret O’Mara of The NY Times.

"The spiraling housing costs in West Coast tech hubs are the result of 40 years of tax and land use policy — a period that mirrored the explosive growth of the tax-averse tech industry. This was also a time of continued activism by homeowners against higher-density zoning. Together, this has severely limited housing construction, particularly lower-cost houses and apartments. It is a chronic condition, inflamed by the current tech boom.

California’s saga began in the 1970s, when sprawling growth and spiking taxes seemed to threaten the quality of life so many came to the Golden State to find. Citizen activists created “urban growth boundaries” and land trusts to preserve open space and delicate coastal habitats. Yet these important moves also limited where developers could build new homes. Meanwhile, homebuilders chafed under what they saw as burdensome state rules about how many approvals they needed to build new housing."

"There was some substantive action: In 1994, two of the state’s largest pension funds announced more than $340 million in construction loans for affordable development. But 25 years later, distressingly little has changed. California is America’s largest economy; but when its politicians have pushed to diversify its housing mix, they have been batted back by homeowners who resist new development in their neighborhoods."

"Seattle also has an affordable-housing shortage that predates the tech boom. Since its first zoning restrictions in 1923, the city has steadily expanded single-family residential zoning in ways that have limited housing supply and preserved racial and economic segregation. Today’s Seattle is larger, richer and more crowded, but remains overwhelmingly a city of single-family homes. The city abandoned plans to increase housing density in some neighborhoods after pressure."

‘Free College for All’ Is an Experiment That Has Already Failed

In 1970 New York’s City College had the best of intentions. It tried ‘open admissions.’ It was a bust.

By Jackson Toby. He is a professor of sociology emeritus at Rutgers. His latest book is “The Lowering of Higher Education in America: Why Student Loans Should Be Based on Credit Worthiness.” Excerpt:

"When students realize that they will get into college no matter what they learn in grade school or high school, they will have no incentive to forgo activities that are more fun than attending school, listening to teachers, and doing homework.

As Albert Shanker, the late president of the American Federation of Teachers, wrote in 1993, “Kids are just like adults: they will work to get what they want. If they know they have to work hard, listen in class, and come to school every day with their homework done to get into college, they’ll do that. If they know they can get by with less and still get into college, that is what they’ll do.”

New York’s City College was once known as “the Harvard of the proletariat.” As the flagship college of the City University of New York, it charged no tuition but admitted only applicants who scored well on an academically difficult test. After African-American and Puerto Rican protesters chained shut the gates of the college in 1969 to call attention to the relatively low numbers of minority students, in 1970 City College adopted a policy of “open admissions” and began accepting underprepared students.

Remedial education was to be the solution. By 1978 the New York Times reported that “two out of three students entering City College now require remedial work in writing, mathematics or reading, and one in five needs it in all three.”

Twenty-two years after open-admissions experiment started, liberal journalist James Traub spent 18 months observing how it worked. He interviewed hundreds of City College students and attended classes. On the first day of a remedial course in basic skills, Mr. Traub saw Prof. Rudi Gedamke show students a headline from the student newspaper: “Student Turnout Nil at Games.”

Mr. Gedamke asked the students what the headline meant. One student wrote: “He/she is not good for nothing.” Other tries, all quoted verbatim, included: “Students spend most of their studies time as their leisure times” and “Students are getting addicted toward it.” “Students act uncivilized at games” or “Students turnout facinate at games.” There was only one answer Mr. Gedamke deemed correct: “No one didn’t go.”

Mr. Traub’s 1994 book, “City on a Hill,” revealed students with academic handicaps too severe to be repaired by their efforts or the efforts of their teachers. His anecdotal accounts were confirmed by statistics. A City College study of 155 students placed in its remedial English program found, Mr. Traub reported, that only seven had graduated after six years, and another half-dozen or so after seven years. Only 15% were projected to complete college after a decade. They weren’t flunked out; they gave up and dropped out.

In 1998 the City University’s board of trustees voted to end the open-admissions policy at four-year colleges, requiring applicants to pass proficiency tests in reading, writing and mathematics to gain entry. The experiment had revealed the limits of good intentions and remedial education alike.

National studies show that the worse the academic preparation of admitted students, the lower the college graduation rate. Syracuse University’s Vincent Tinto, an expert on student attrition, reported in 1993 that colleges with an average SAT score of 1100 or higher have a first-year attrition rate of 8%. For colleges with an average SAT score of 700 or below, the first-year attrition rate is 45.5%.

For a student to understand what college teachers are teaching, he needs to have developed, grade by grade, a working vocabulary of several thousand words. Mr. Gedamke’s students couldn’t keep up."

A new study shows how a rising minimum wage hurts little companie

See WSJ editorial.

"Here’s another volley in the debate over the “Fight for $15”: As the federal minimum wage rose from 1989-2013, small businesses in affected states suffered “lower bank credit, higher loan defaults, lower employment, a lower entry and a higher exit rate.”

That’s according to a study last week from the National Bureau of Economic Research. The analysis by three professors at the Georgia Institute of Technology exploits the fact that many states—now more than half—set their own minimum wages higher than the federal standard. This provides a natural control group. When the nationwide minimum goes up, how do the states where it applies fare in comparison?

Start with data on one million loans, averaging around $100,000, made through the Small Business Administration. For each $1 increase in the minimum wage, the authors estimate that loan amounts dropped 9% more in the affected states. The risk of default was 12% higher. The average credit score for small companies in those states showed “a sharp decline.” Business entries fell 4% in the year the minimum wage went up. A year later, business exits rose 5%.

These results, the authors say, hold throughout various statistical analyses, such as while controlling for local economic conditions. The effects are stronger in businesses like restaurants and retail, which rely on low-skilled labor. Smaller and younger companies are more severely affected as well. In short, the authors conclude: “We find that increases in the federal minimum wage worsen the financial health of small businesses in the affected states.”

By now some readers are probably thinking: Well, duh. It does not take a University of Chicago Ph.D. to suspect that raising the price of labor will make it harder to sustain a small, labor-intensive business. Don’t forget that there’s no cost-of-living adjustment: A $15-an-hour federal minimum wage would apply equally to a French bistro in Manhattan and a pizza joint outside Manhattan, Kan.

Many progressives still insist this is a free lunch, and most of the Democratic presidential candidates support raising the federal minimum wage to $15. That includes the so-called moderates, like Amy Klobuchar and Mike Bloomberg. They ignore the millions of small businesses that are trying to make payroll and grow.

The churn of companies with fewer than 10 employees, this study says, accounts for “more than 70% of job gains and losses in 2018.” No matter what politicians say, inhibiting that dynamism hurts the smallest businesses and the least-skilled workers the most."

Forgiveness Isn’t Divine When It Comes to Student Debt

Those who struggle the most are dropouts who owe a few thousand. Here’s a plan to target help to them

By Beth Akers. She is a senior fellow at the Manhattan Institute and author of “Game of Loans: The Rhetoric and Reality of Student Debt.”

"Contrary to the popular narrative, high earners bear an outsize share of student debt as they’re much likelier to have attended an expensive college and stayed longer, sometimes borrowing again for graduate or professional school. Sen. Elizabeth Warren’s plan phases out eligibility for the highest earners but is still highly regressive overall. According to the Brookings Institution, the bottom 60% of borrowers by income would receive only about a third of the financial benefits of Ms. Warren’s plan."

"Those who struggle the most to make payments tend to have only a few thousand dollars in debt. Delinquency and default are most frequent among borrowers with less than $5,000 in debt, because many of them didn’t finish college. An effective debt-relief program would focus on aiding this class of loan recipients."

How Capitalist America Saved The Soviet Union In The 1920s

See ‘The Russian Job’ Review: Feeding the Enemy: Few remember that in the early 1920s America supplied food to a starving Soviet Union, quite possibly preventing its collapse by Andrew Stuttaford. Mr. Stuttaford, who writes frequently for the Journal, works in the international financial markets. Excerpt:

"The American troops who landed in Russia to help reverse the Bolshevik coup of 1917 did little to change history, but cast as imperialist villains, they were useful to Soviet propagandists charged with rewriting it. In “The Russian Job: The Forgotten Story of How America Saved the Soviet Union From Ruin,” Douglas Smith tells the remarkable tale of a different, largely forgotten yet infinitely more effective intervention.

Between 1921 and 1923, the United States, acting through Herbert Hoover’s American Relief Administration, supplied food and other aid to more than 10 million people caught up in the famine—created by war, revolution and the Bolshevik assault on the peasantry—then raging in the former Russian empire. The ARA operated, Mr. Smith tells us, “across a million square miles of territory in what was the largest humanitarian operation in history.”

Suspicious of, and embarrassed by, assistance from such a politically inconvenient source, the Kremlin accepted the ARA’s help only grudgingly and, once the crisis was over, “began to erase the memory of American charity,” Mr. Smith writes. “What it could not erase, it sought to distort into something ugly” by depicting the ARA as a nest of spies and reactionaries. For many of the thousands of Russians who had worked for the ARA, their reward was persecution."

Minimum Wage Increases and Vacancies (they reduce vacancies)

See Minimum Wage Increases and Vacancies from the Cleveland Fed.

"We estimate the impact of minimum-wage increases on the quantity of labor demanded as measured by firms’ vacancy postings. We use propriety, county-level vacancy data from the Conference Board’s Help Wanted Online database. Our identification relies on the disproportionate effects of minimum-wage hikes on different occupations, as the wage distribution around the binding minimum wage differs by occupation. We find that minimum-wage increases during the 2005-2018 period have led to substantial declines in vacancy postings in at-risk occupations, occupations with a larger share of employment around the prevailing minimum wage. Our estimate implies that a 10 percent increase in the binding minimum- wage level reduces vacancies by 2.4 percent in this group. The negative effect is concentrated not exclusively in the routine jobs, but more in the manual occupations.
Keywords: Minimum Wage, Vacancies, Hiring, Search and Matching.
JEL codes: E24, E32, J30, J41, J63, J64.

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Suggested citation: Kudlyak, Marianna, Murat Tasci, and Didem Tüzemen. 2019. “Minimum Wage Increases and Vacancies.” Federal Reserve Bank of Cleveland, Working Paper no. 19-30. https://doi.org/10.26509/frbc-wp-201930."

Steven Landsburg on the "stagnation" of incomes

This is from his book "Can You Outsmart an Economist?"

The table shows that from 1980-2005, all 4 groups (white men, nonwhite men, white women and nonwhite women) all had increases in median income (adjusted for inflation) of at least 15% while the overall gain was just 3%.

The reason is that the lower paying groups grew more than the higher paying groups, keeping the average increase low.