The ultimate thesis in Thomas Piketty’s best-selling Capitalism in the Twenty-First Century is that the return on capital is higher than the growth in output and wages, so the owners of capital will see their wealth, and therefore, incomes, rise faster than those who earn the bulk of their incomes through labor.
The Senate has confirmed Stanley Fischer to the Federal Reserve Board of Governors, where he will soon become the Fed’s #2 official as Vice Chair. Fischer is an eminent mainstream macroeconomist and former Governor of the Bank of Israel (he was also chief economist at the World Bank and a top official of the IMF). His monetary policy views are largely indistinguishable from those of Ben Bernanke and Janet Yellen.
Butler Shaffer writes:
Gabriel Kolko, the influential New Left historian whose Railroads and Regulation (1965) and The Triumph of Conservatism (1963) offered a radical challenge to the prevailing, “public interest” account of business regulation, died yesterday.
A very interesting post on the bionic mosquito blog elaborates the insights of Hans Hoppe and myself into a persuasive argument that the only reason that modern fractional-reserve demand deposits are accepted as money today is because of the federal deposit insurance guarantee backed up by the Fed as the monopoly money issuer and bailer-outer-of-last-resort.
Let’s not kid ourselves: the so-called party of free markets and business supports minimum wage hikes, at least when put to a vote. Ramesh Ponnuru reminds us how GOP Senators voted on the issue back in 2007, and even offers a different approach for conservatives seeking to win the hearts and minds of working-class voters: forget wages, just subsidize low-income folks directly by expanding Nixon’s brainchild, the earned income tax credit.
As Jeff Deist pointed out in an earlier post, in a national referendum over the weekend, the Swiss heroically and overwhelmingly rejected what would have been the world’s highest minimum wage. Switzerland currently has no minimum wage.
