Stephen Moore Unwittingly Advocates for Higher Minimum Wages

@TBPInvictus here.

In the wake of last Friday’s October jobs release, conservative economist Stephen Moore (Heritage Foundation, Club for Growth) did a quick hit on Fox Business news with Maria “Should We Believe These Numbers?” Bartiromo (yes, she actually said that).

Before getting into the jobs numbers themselves, Moore laments the fact that sometimes, on Wall St., good news is bad news. In this case, stock futures had turned lower on the near-pristine report because of a “fear” that it will provide further inducement for the Fed to hike in December. (In this regard, I agree with Moore – good news in this case should be perceived as good news, not bad. If the economy is continuing to gain strength, that should be a positive, not a negative. That said, I still think the Fed should hold off.) Moore’s argument that more and more jobs enable a virtuous cycle (i.e. why the jobs report is good news) went like this, by my transcription. This comment begins at the 00:35 into the clip (emphasis mine):

Let me make it very clear to people cause this is very simple as an economist: If people have more jobs, if they’re earning more money, guess what? They can go into stores and they can buy more things and the value of stocks goes up.

Very simple indeed, is it not?

This truism – that the more money people earn, the more they spend – is especially valid at the lower end of the income scale, where we know additional income has more of a multiplier effect than it does elsewhere (the “marginal propensity to consume” versus the “marginal propensity to save”).

Without realizing it, Moore advanced a very simple, cogent argument for a higher minimum wage. Welcome aboard, Stephen! Happy for your epiphany.

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  1. Expat commented on Nov 13

    There are statistics and interpretations of those statistics bouncing around all over the place, but I tend to agree with the view that real wages are lower today than thirty years ago, that labor force participation is a huge problem, and a larger percentage of jobs are McJobs than before. Therefore, I would say that the employment numbers are crap (bullshit, fantasy, irrelevant…) and the economy sucks.

    Perhaps I am a dinosaur, but my grounding in economics (Masters) is that savings precede investment. But apparently the new paradigm is to simply wish money into existence (what is the multiplier for non-existent money using a 10% reserve rate?) rather than create it through real economic growth. Basically we have swapped money for wealth.

    As for minimum wage, I earned somewhere around $8-10 an hour working summer construction jobs back in 1984. This was almost three times minimum wage. Today it’s just about minimum wage. Shame on you, America. Really.

  2. lshane commented on Nov 13

    With flat wages for at least the last 15 years, the equation is more people paid less with generally increasing costs. Perhaps this the path to a sustainable future but a lot of bills will either be avoided or unpaid. This not our parents or grand parents economy.

  3. howardoark commented on Nov 13

    You could also argue that he wants a lower minimum wage because that would produce even more jobs – at $2 an hour we could employ a lot of people to pick up trash and repair potholes (and storm the Bastille once they figured out what was going on).

    • thatguydrinksbeer commented on Nov 13

      “at $2 an hour we could employ a lot of people to pick up trash”

      It’s probably better than that. A $2 you could probably get away with fewer employees. Just let the new population of dumpster divers take care of it; and there would probably be less trash anyway, who could afford to buy anything? Seems like a win-win to me.

  4. RW commented on Nov 13

    One of the tell’s exhibited by ideologues is a reliance on axioms or principles that are not really either; e.g., they cannot be extended to subjects the ideology identifies as unworthy or benefits to same even though, logically, they clearly can so be extended.

    Moore’s ideology requires that (a) government fiat is not the same as private, (b) those who gain wealth must deserve, and (c) government fiat is not only grossly inferior to private but intrinsically benefits the undeserving therefore the principle that more people with more money to spend is good for the economy cannot be extended as justification for something like minimum wage because it would benefit the unworthy and the benefit it conferred on the economy as a whole would be negated.

    Everyone has some degree of bias and some struggle is required to identify and, if not compensate for it, at least make it explicit. The signature of the ideologue is not simply a refusal to do that it is a refusal to acknowledge the problem even exists. Moore’s analytic framework is riddled with confounding variables.

    “Every philosophy is tinged with the colouring of some secret imaginative background, which never emerges explicitly into its train of reasoning.” –Alfred North Whitehead

    • bkilz commented on Nov 13

      It’s much hard to be liberal than conservative. It’s harder to reach out a hand than give someone the finger.

  5. VennData commented on Nov 14

    The same Bartiromo who defended bankers pay, keeping it right where it is AFTER Bush’s TARP bailout.

    Her argument was “Well they can all move to Europe and use their skill there!”

    Yeah, Europe totally sidestepped the Ownership Society leverage crisis, Maria.

    What a clueless talking head.

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