Thursday, July 23, 2009

Prosperity By Referendum

Is there any leader among Michigan Democrats who took Economics 101 in school? From the latest news coming out of party headquarters in Lansing, I'd say they couldn't reconcile a checkbook, let alone address supply and demand. The most astounding proposal is a referendum on raising the state minimum wage to $10 an hour or 30% more than the federal wage. I didn't realize there was so much excess wealth in the Automotive State.

Michigan has bled jobs for thirty years. Detroit and Flint now symbolize the nation's post-industrial decline. Under pro-union Governor Jennifer Granholm, an Ivy League leftist shaped by the machine politics of Detroit, nanny statism will continue to grow at least through the end of her term in 2011. Most economists would tell us that the best hope for prosperity in the United States rests in the nation's millions of small businesses. Raising the costs of small businesses in Michigan by 30% would be disastrous for existing companies and a risible disincentive for potential ones. And placing the decision in the hands of an electorate hungry for high wages makes little sense as well. Perhaps they'll come to their senses and avoid the massive layoffs that will surely follow if voters approve the increase. I have my doubts.

Either way, I'm sure the party in power will find some way - stimulus funds - to throw billions in tax revenues into massive infrastructure projects. And, should that wage increase be approved, all those rebuilt interstates will make it much easier for businesses owners and the unemployed to escape the madness.

1 comment:

Emmy said...

Not that this post is about people not understanding economics (as opposed to just not caring about it), but was economics a required class in high school for you? It wasn't for us, even though Ethan and I took economics with Joint Enrollment. I don't even think there was an economics class available for regular students.