Born On This Day- June 5th... John Maynard Keynes

"Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone." 

John Maynard Keynes

I have never had much interest in economics. Those who know me, would not be surprised. I think possibly I could choose to comprehend global economics, political economics, recessions, depressions, macroeconomics, business cycles, social liberalism, & Keynesian thought. I should, I do the budget for, manage, staff, schedule & train, & buy for a retail spot with revenues close to 2 million. I just go with my instincts, which are almost never wrong.

What I do knowing about economist, one of the most important figures of the 20^th century; John Maynard Keynes is he kept a written record of all his sexual encounters, even the assignations where he was alone, from his days at Cambridge until his death. I don’t know why I admire that idea.

Keynes moved in the Bloomsbury Group, of which I have done plenty of posts about. A member of that literary & artist circle was his longtime lover artist- Duncan Grant. The pair remained friends long after the romance was over.  For much of their time together Grant was also involved with Leonard Strachey.

Grant & Keynes

Grant & Strachey set up households with women, while they both continued to have sex with men. Keynes soon followed, marrying Lydia Lopokpva, a ballet start in Diaghilev’s Ballet Russes. They seem to have had satisfying partnership.

On the good side: Keynes spent his life working energetically for the benefit of mankind & he was considered to a fine & generous friend. On the bad side: he was a a racist & supporter of Eugenic a movement that supported enforced "racial hygiene", human experimentation, & the extermination of "undesired" population groups.

Keynes died of a heart attack at age 62, in 1948, at his farm in England. Both of his parents: John Neville Keynes, also an economist & Florence Ada Keynes, one of the first women to graduate from Cambridge & later the mayor of that city outlived him. Lydia Lopokpva lived into the early 1980s.

"Something Wal-Mart this way comes"

God bless Gerard Connelly. He's all for a Wal-Mart, just so its near one of his stores and not in Pullman.

The naivete of Pullman Mayor Glenn Johnson and Pullman Chamber of Commerce Executive Director Fritz Hughes is simply stunning with respect to the effect a Wal-Mart Supercenter will have on the community of Pullman.

- Gerard Connelly, "Mayor's reaction to Wal-Mart naive," Moscow-Pullman Daily News, December 14, 2004

Depending on the price of real estate, you like to be as close to Wal-Mart as you can get.

- Gerard Connelly, "Something Wal-Mart this way comes," Lewiston Tribune, February 3, 2008

From today's Lewiston Tribune:

One, two, three or four.

That's about as specific as Wal-Mart officials are willing to get about how many super centers the nation's largest retailer might locate in the Quad Cities.

Karianne Fallow, a spokeswoman for Wal-Mart, points to a news release from the company's June annual shareholders meeting that states the retailer is getting pickier in setting its criteria for new super centers. "They're doing a lot of due diligence to make sure we're making the right decisions," Fallow said.

The national chain expects to add 190 to 200 super centers in the present fiscal year, down from a previous estimate of 265 to 270, according to the news release. The number will drop to 170 for the next three fiscal years.

"The priority for a potential store is selecting a location that makes the most efficient use of capital resources and aligns with market growth priorities," according to a Wal-Mart executive quoted in the news release. "We also have been focused this year on reducing cannibalization of existing stores via our more strategic selection of U.S. real estate properties."

Assuming Wal-Mart moves ahead with super center plans in this region at a number of three or fewer, a University of Idaho economist believes the outcome will be positive for existing businesses.

Steve Peterson, a research economist at the UI, did a study about the issue for the Moscow Chamber of Commerce.

Wal-Mart could put one in Clarkston, another in Lewiston and a third in Pullman. Or it might choose Pullman, Moscow and Clarkston.

Regardless of the combination, super Wal-Marts would attract shoppers from at least as far away as Grangeville, the Montana border, Pomeroy, Potlatch and Colfax. They will shop at Wal-Mart first and then make other stops, Peterson says. "If you look at retail trade partners, it is the large stores and shopping centers that draw the customers."

Numerous residents of the Palouse visit Clarkston to shop at Costco, which, incidentally, Peterson believes won't be hurt by having a Wal-Mart across the street.

The stores serve completely different demographics, Peterson says. Nationally, the average household income of a Costco customer is $80,000 and higher, compared with about $35,000 for a Wal-Mart shopper. "Costco is one of the biggest sellers of fine wines. You're not going to find fine wines at Wal-Mart."

And Wal-Mart already has stores in Lewiston and Moscow, so the only new elements of competition the super centers would bring would be for tires and groceries, Peterson says.

One of the businesses in Clarkston that will likely be hardest hit is the Albertsons because of the similarity of its products and its proximity to the store, Peterson says.

A spokeswoman from Albertsons declined to comment for this story.

But even those kinds of businesses could find successful ways to compete as long as they're not trying to beat Wal-Mart on price, Peterson says.

Les Schwab operates numerous tire dealerships in places with super Wal-Marts. It does so by offering outstanding customer service, such as free road-side repairs for tires, Peterson says.

Safeway in Moscow seems to compete with Winco by having a larger selection of upper-end products in a more relaxed environment where shoppers can get in and out quickly, Peterson says.

Similarly, some grocery stores in Lewiston or Clarkston will likely keep customers because they're in a different part of town or because people don't want to fight Wal-Mart crowds, Peterson says.

"The opening of a Wal-Mart doesn't necessarily guarantee success," says Bill Wertz, a spokesman for Wal-Mart in Denver. "Customers make a choice as to where they want to shop and only if they find good value, good service and good products at a Wal-Mart do they give us their business."

It started as a mom-and-pop store carving out a niche in the face of the giants of that era such as Sears, Wertz says. "We succeeded even though we were small because we offered something of value to the customer."

Gerard Connelly, president and majority owner of Tri-State Distributors, employs a strategy similar to the one Peterson recommends. Nothing in the shoe department of his stores can be purchased at Wal-Mart.

Achieving that is easier than it sounds. Numerous manufacturers will not sell to Wal-Mart, such as North Face, Adidas, Keen, Under Armour, Patagonia and Mountain Hardware, Connelly says.

Companies fear Wal-Mart's purchase practices, Connelly says. One of the most famous examples is Rubbermaid.

It raised its prices to Wal-Mart after the cost of a key ingredient in plastic containers increased, according to a U.S.A. Today story from Jan. 23, 2003. Wal-Mart gave more shelf space to less expensive items from competitors, helping drive Rubbermaid to merge with a rival.

Consumer demand for the types of brands not available at Wal-Mart is strong, partly because they often offer higher quality, Connelly says.

He runs five days a week - never in $30 shoes - because he would rather avoid the injuries that happen when people do so in shoes not designed for that kind of activity.

He observed what skiers were wearing on a recent trip to Schweitzer. "I can guarantee you that not one single coat up there was one someone bought at Wal-Mart."

A Wal-Mart spokesman declined to respond specifically to Connelly's comments. Wal-Mart works cooperatively with its suppliers to make sure its customers can buy quality goods at the lowest possible price, Wertz says. "Wal-Mart considers itself an agent for the customer. In order to do that effectively for the customers, we have to be a good negotiator."

Even Connelly acknowledges Wal-Mart has helped him in some ways. Its sales associates have referred customers to him for heavy-duty tools and outdoor gear.

Tri-State's Lewiston store is within view of Wal-Mart by design. "Wal-Mart does choose good retail real estate," Connelly says. "Depending on the price of real estate, you like to be as close to Wal-Mart as you can get."

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Quote of the Day

A Wal-Mart or some other big box store would increase the value of port property.

- Reporter Stephanie Smith, in a story titled "Port holding on to property for now" aired on KLEW TV News, debunking yet another anti-Wal-Mart myth. Clarkston (a town with no major university or college) is enhancing its dominance of retail sales per capita in the Quad Cities by welcoming a Wal-Mart Supercenter across the street from Costco. The Port of Clarkston is preparing to reap the economic windfall.

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Quote of the Day

"There's a lot of people who go to Moscow to grocery shop, particularly those who have children, because groceries in Pullman are expensive. I hope Wal-Mart shows up. Their groceries are going to be cheaper than what you can buy in Pullman now."

- Pullman City Councilwoman Ann Heath as quoted in yesterday's Moscow-Pullman Daily News

The Daily News ran a three-part series this week on dempgraphics on the Palouse that dispelled the PARDners notion that Pullman is full of wealthy Ph.D.s and students from affluent west side suburbs flush with cash, yearning for something more upscale like Target or Nordstrom. The paper reported that while about 20 percent of people in Whitman County earn more than $75,000 a year, more than a quarter of families earn somewhere between $15,000 and $35,000 a year, according to U.S. Census data, with 16.6 percent living below the poverty line The median home price in Pullman is a whopping $207,000

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Here's My Beef with Mitt Romney

I am not a fan of Mitt Romney, and as I have stated earlier, it has nothing to with him being a Mormon.

No, it appears as if Mitt Romney is one of these elitist, "smart growth," drawbridge types. I guess you would have to be if you were Governor of Massachusetts. We'll see if Romney backflips on these statements they way he has on gay rights, gun control, abortion, etc. After all, there are a lot of votes in Texas....

The Irony of Gov. Romney's Urban Planning Proposals

By advocating tighter land use controls, and using public funds to buy up open space, Romney ensures that housing costs will continue to climb and congestion will continue to worsen

by Owen Courrèges
Owen Courrèges is a Research Fellow in the Urban Futures Program at the Reason Foundation

May 5, 2004 -- Just this February, Massachusetts Governor Mitt Romney had the opportunity to visit Houston for Superbowl XXXVIII. Later, in he was quoted in the Boston Globe describing the experience as a “eyeful,” saying that Houston was a negative example of “what happens when you don’t have zoning.”

He then clarified, “We don't want to see strip mall after strip mall. We want to see lovely town centers and villages.”

Apparently, Romney decided to run with this characterization. In a speech given in Littleton in early April, he again mocked Houston ’s planning policies, noting that during the course of his visit, “I couldn’t find the town center.”

Now it goes without saying that Governor Romney is entitled to his opinion. He can cite Houston as an example of what no city aspires to become as often as he pleases to whatever accolades he may receive. However, it would be useful to understand the flaws inherent in the alternative proposed by Romney, flaws which are far from inconsequential.

First, there’s the issue of cost. Romney’s vision of highly-centralized urban planning serves as a major financial strain on homeowners. For example, if you earned $70,000 per year in Houston , you would need to earn more than $134,000 in Boston , the largest city in Massachusetts , just to maintain the same standard of living. That’s nearly double. Just imagine what a person could save for retirement with an extra $64,000 in disposable income every year.

The reasons for this disparity in cost-of-living should be readily apparent. Houston , as Romney notes, does not have a single business district. Instead, it has several, and thus there exists a greater supply of real estate available close to employment. This drives down prices.

It also decreases traffic congestion and travel-to-work times. Out of four indicators of congestion utilized by the Surface Transportation Policy Project, Boston only edges out Houston in one indicator – Annual Delay per Capita. However, the only reason for this is that more Bostonians use public transit, and for transit users, the annual delay due to congestion is zero. It doesn’t mean, however, that they do not experience delays.

According to the US Census, between the 1990 and 2000 travel-to-work times increased by 17.9% in Boston , but by only 10.4% in Houston . Moreover, Houston increased in population by approximately 8.7% during this period, while Boston grew by a mere 2.2%. Put these together, and it’s clear that Boston is experiencing far greater increases in commuting times despite anemic population growth.

Massachusetts as a whole, in fact, is losing population. According to a study by MassInc released in December 2003, “over the last 12 years -- including those of unprecedented economic expansion -- Massachusetts lost, on net, 213,000 residents to other states.”

What is the reason for this migration? According to MassInc’s survey, the number one motive for migrating was “to go somewhere with a lower cost of living or taxes.”

Ironically, in his speech delivered in Littleton Governor Romney billed his urban planning agenda as necessary “[t]o keep Massachusetts economically competitive.” As has been shown, the opposite is the case. By advocating tighter land use controls, and using public funds to buy up open space, Romney ensures that housing costs will continue to climb and congestion will continue to worsen.

None of this is to argue that Houston is necessarily a better place to live, but it does demonstrate that “lovely town centers and villages” are not enough to foster economic development. Indeed, the pursuit of these things have left Massachusetts on the cusp of economic stagnation.

Houston , conversely, has grown to be fourth largest city in the country. This is because Houston has realized that, as World Bank researcher Gregory Ingram wrote in 1996, “industry is attracted by freeways and special facilities such as airports, but not by central locations.” Romney doesn’t seem to recognize this. His agenda drives business away.

Ultimately, the most forward-thinking urban planning does not regulate, but instead allows the market to flourish. It makes it inexpensive for people to live and travel. By these standards, it would seem that Massachusetts has fallen well behind the curve.

Romney should think twice before derisively citing Houston as a case of planning gone awry. That distinction deservedly belongs to his own state.

It's Not The Economy, Stupid

Democratic strategist James Carville coined the phrase "It's the economy, stupid." Apparently not. As President Bush's job approval rating hovers in the mid-thirties, the Dow Jones on Friday chalked up the best bull market run in 80 years.

Congrats to the liberal media for distracting voters from the real accomplishments of the Republican administration.

"Business plan competition good for area growth"

I have been harsh on the Moscow-Pullman Daily News as of late, but full kudos to editor Steve McClure for his cogent explnation of the role of government in economic development in yesterday's edition:

No one wants to start throwing around thousands of dollars without a plan. In the world of business, success and failure often can be traced back to a solid game plan.

That's why the program sponsored by Washington State University, the Port of Whitman County and the Palouse Economic Development Council makes so much sense.

In the spirit of promoting business growth, the three organizations combined to put together a business plan competition for those folks who might want to get in touch with their entrepreneurial spirit.

The competition ended earlier this month and called for people to put together a plan for a business they hope to start. The idea was to help those individuals put ideas into action and give them a better understanding of what their business needs in order to survive.

While that might not attract a bunch of attention in comparison to more high-profile projects, it's a serious investment in economic development.

As Port Commissioner Bob Gronholz noted, "Even if we can get one or two start-ups in the county every other year from this competition it would be a great success."

For all the talk that's bandied about among government officials, their role in actual business growth is a support role. Government can create a climate that's open to new ideas and new investments. It can build up infrastructure that's attractive to companies, and it can create a clear path for prospective business owners to travel on the road to success.

Government also can put up roadblocks, particularly when it forgets what role it's assigned in this mix.

Economic development, though, doesn't come from the halls of government. It comes from individuals who put their ideas - and their money - on the line to break into the competitive marketplace.

In A Word: Ouch

HT: Captain Capitalism


At least we don't live in Connecticut.

[Cross-posted from Versus the Mob]

"Downtown and Wal-Mart: A perfect match?"

No, not downtown Pullman. Downtown Tacoma. This column from Dan Voelpel appeared in Sunday's Tacoma News-Tribune. Pullman Wal-Mart opponents and supporters need to read it carefully.

Ask folks to identify two things downtown Tacoma needs and you’ll usually get the same answers – some big-name retail and a grocery store. What if both came in one big box?

A box called Wal-Mart.

Imagine the barbs from those uppity Seattle pundits.

But what if I told you scouts for the world’s largest retailer have requested traffic counts at multiple downtown sites for Wal-Mart’s newest format – a multi-story, inner-city supercenter, with its own parking, woven into the urban landscape?

Jennifer Holder, Wal-Mart’s Seattle-based public affairs manager, declined to discuss specific plans, potential sites or demographic conditions that precipitate location decisions, but …

“We definitely have an interest in Tacoma,” Holder confirmed.

Does the prospect of a Wal-Mart in downtown Tacoma strike terror in your heart, tick you off, make you salivate at the opportunity or cause you to yawn?

Let’s look at White Plains, N.Y. – the best real-life example of what could happen in Tacoma.

Sears abandoned its hulking department store next door to historic White Plains City Hall for a shopping mall and its concrete shell sat vacant for years at Second and Main streets, the heart of downtown. A downtown that had started to undergo a bit of a renaissance with a new hotel, some luxury condominiums and apartments, but no grocery store. Sound familiar?

A New Jersey developer, Ivy Equities, partnered with an investment company, Barrow Street Capital, to buy the shell and an adjacent parking garage in 2003.

A year later, in a news release, came this revelation:

“(New York, N.Y-based) Staubach Retail announces that Wal-Mart Stores Inc., has leased 186,000 square feet at Shoppes on Main, a new retail center being developed at 275 Main St. in White Plains, New York.”

“When they were first proposing it, there was a lot of opposition,” said Richard Liebson, a reporter for The Journal News in White Plains. “People were skeptical and cynical.”

At City Hall and in the entrenched downtown merchant community, the first conversations started with, “How can we stop Wal-Mart?”

People were concerned about what it would do to our businesses,” said Melissa Lopez, coordinator of economic development for the mayor’s office. “I mean it’s right next to City Hall, and we’re right smack in the middle of downtown.”

A Wal-Mart in a downtown core didn’t compute in minds of White Plainsians. Wasn’t Wal-Mart a more suburban conqueror?

Yes, but downtown White Plains gave Wal-Mart executives the chance to show off its latest brainstorm, a new configuration that had potential to expand the retailer’s domain to inner-cities. They called it, perhaps sardonically, “a stacked deck.”

In White Plains that meant: groceries on the ground floor, general merchandise on the second floor, levels of parking above that, a newfangled escalator that carries shopping carts and a downtown-looking exterior in a shared building with other retailers and restaurants.

And yet.

Even in the days before Wal-Mart opened last July 19, some locals railed against it with picket signs and protest lines.

And then.

“It’s always crowded, and it’s been very well received,” reporter Liebson said.

What about the merchants’ collective fear that Wal-Mart’s discount smiley-face pricing would suck away customers?

The opposite happened.

“We’ve actually received very good feedback from our merchants,” Lopez said. “Our downtown business improvement district says Wal-Mart has brought a lot of foot traffic downtown.

What Wal-Mart may or may not do in downtown Tacoma remains undisclosed – for now.

The “stacked decks are looked at as an option in each individual market” and could include underground parking with office space and condominiums above the store and a mix of other retailers, Wal-Mart’s Holder said.

“How we pick any of our store markets is confidential, and we don’t disclose any of it,” she said.

Downtown Tacoma and Wal-Mart. The White Plains experience would foreshadow a match made in heaven. But my gut says it would face a heckuva battle. Except from the Seattle pundits.

I wish Tacoma good luck, but I imagine whatever "grassroots" group springs up in opposition will be represented by union hired-guns Bricklin Newman Dold. Opening a Wal-Mart anywhere in the Watermelon State is getting to be as difficult as building a nuclear reactor.

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A Brand for the Palouse?

According to today's Moscow-Pullman Daily News:

"A group of representatives from throughout the Palouse are looking to create a branding image for the so-called "Knowledge Corridor."
...
[Moscow Chamber of Commerce Interim Director Janice] McMillan said through the Knowledge Corridor concept she hopes to attract businesses that can help the area grow.

Considering Nancy Chaney, Mark Solomon, PARD, No Super WalMart, stalking herons, frolicking cute bunnies, viewsheds, used $40 bikes, charming valleys, tiny brooks, European cities, sweatshop forums, Main Street, unique rural character, a thousand other places, etc. ad nauseum, here is my entry for the "knowledge corridor" branding contest:


Why not? My brand would accomplish the same thing as what we read in the newspaper every day and save both paper and ink.

Why bother encouraging growth at all when there are people in the community doing everything they can to stop it?

BBOC (Big Blogger on Campus)

“Did you ever think that making a speech on economics is a lot like pissing down your leg? It seems hot to you, but it never does to anyone else.”

- Lyndon Baines Johnson

Today, I had the privilege to speak with Steve Peterson's Environmental Economics (ECON 385) class at the University of Idaho. My presentation was titled "Some Perspectives on Growth and Conflict Over Growth in Pullman and Whitman County" (Palousitics regulars should know exactly what those perspectives are.) The PowerPoint file can be downloaded here.

It was very enjoyable. I think I can say, with an absolutely unblemished record as a Cougar fan, that the UI campus is very nice. The students were great. They had some excellent questions and I could see some nodding in agreement but I'm sure others thought I was a crazy right-wing nut. Thanks to Steve Peterson (of "Moscow at a Tipping Point" fame and my favorite economist) for all his hospitality.

I have also had a lot of fun working this semester with a group of students in the WSU PR Techniques and Media Usage (PR 313) class. Hi guys!

The funny thing about all this is that I'm a computer programmer by trade who majored in International Relations. I would love to go back now and major in either Economics or Public Relations. Oh, well. This "old man" can still be a "silly shill for Wal-Mart" and advocate "saturated development" without a Ph.D. in either Sociology or Comparative Literature.

Moscow's water use washes away your arguments

Mark Solomon, who observes the Palouse from his homestead on top of Moscow Mountain and is hopefully not ruining the views for other people said:

Big boxes and car dealerships or knowledge-based industries? Are you listening Whitman County? There's only so much water to go around.

Sure, we are listening. Why does it have to be an either/or situation? No one is trying to stop "knowledge-based industries" from locating on SR270. But that is because there is no one to stop! No one is lining up to do it. Stop with this PARD like tactic. PARD uses Target to try to stop WalMart. Moscowites (who love our tax dollars) try to stop retail development in Whitman County by using "knowledge-based industries" as a distraction.

Oh, yeah, about that water comment...

Since 1992 Moscow has exceeded their targeted water use by 763 million gallons. While during the same period Pullman has come in below their target by 644 million gallons.

Maybe if Moscow didn't hog all the water in the aquifer, we would have some for the Hawkins development.

New Study Reveals Minimum Wage Hikes Lead to Job Loss for Minorities and High School Drop-Outs

Speaking of room for improvement in the state of Washington, how about our nation-high minimum wage. Take a look at this new minimum wage study by the Employment Policies Institute.

The author of the study, David Neumark (a former Wal-Mart Watch "Person of the Week" so let's dispense with the "conservative hack" labels in advance), concludes that :

For every 10% increase in the minimum wage:
• Minority unemployment increased by 3.9%
• Hispanic unemployment increased by 4.9%
• Minority teen unemployment increased 6.6%
• African American teen unemployment increased by 8.4%
• Low-skilled unemployment (i.e., those lacking a high school diploma) increased by 8%

An EPI press release states:

Minimum wage hikes jeopardize entry-level jobs: Separate studies from economists at Duke, Michigan State, and Boston University all conclude that minimum wage hikes attract teenagers from wealthy families into the workforce, displacing low-skilled adults in the process.

Economists at Cornell University and the University of Connecticut found that a 10% increase in the minimum wage results in an 8.5% increase in unemployment for young African Americans and adults lacking a high school diploma.

That's bad news for a college town like Pullman, especially if we hope to increase the diversity at WSU. That's the irony of liberalism and statism. It always hurts the ones it supposedly means to protect the most.

HT: Dale Courtney

How Friendly is Washington for Small Business?

Scotty and I were just talking about this yesterday on The PES. Is Washington friendly to small business? Caitlin the Carpetbagger claimed that "Washington is ahead of both Idaho and Oregon in its business climate."

So what's the truth? A good indication is entrepreneurship. Fortune Small Business just released the results of a nationwide study that examined how many people who started their own business per 100,000 residents of a state.

Washington comes out in the bottom tier. At 230 entrepreneurs per 100,000, Washington is tied with Massachusetts, Michigan, Nebraska, North Carolina, and Tennessee. Only seven states have a worse ratio (Virginia, Missouri, Pennsylvania, Kentucky, West Virginia, Alabama, and Delaware).

By comparison, Idaho's ratio is 470 (among the top 10), Montana is 490 and Oregon is 330. Even California is at 320.

So what's wrong with Washington? Again, Scotty and I discussed this briefly yesterday. Possible reasons include an onerous B&O tax, restrictive L&I laws, restricive environmental laws, the lack of affordable housing (brought about by those restrictive environmental laws), and last but certainly not least, the highest minimum wage in the country.

"The Reality of Markets"

This 2005 column from Russell Roberts, professor of economics at George Mason University, is dedicated to WSU engineering student Alex McDonald, in hopes he can gain a better grasp of economics before he makes any more wild accusations in the newspaper again:

You're sitting in your house and it seems unusually chilly for a hot summer day. The air conditioning is roaring away. You get up and check the thermostat. When your suspicions are confirmed—someone has turned the thermostat way down—you know what to do. You adjust the dial to a more comfortable setting and go back to your reading.

Or suppose you're heading out to run some errands and when you open the door, it's raining. There's no switch to turn to off, no dial to set to "dry." You go back inside and grab a raincoat or an umbrella.

It's easy to divide the world we experience into these two types of phenomena—things like the temperature in your house that are the result of human activity and human intention and things like the rain outside that are not the result of human activity or human intention.

But there is a third category of experience—phenomena that are the product of human action but not of human design.

Language is one example. No one designs or controls the English language. There are self-appointed experts who try and influence the way English evolves but they have no real control anymore than the French government can stop the French people from calling Saturday and Sunday "le weekend" rather than the government-approved "fin de semaine."

Who invented the verb "to google?" Or the nouns "cyberspace" or "blog?" More crucially, who decided that these words could be used in common parlance without explanation? No one. Because no one is in charge, we might expect language to be chaotic and random. But words don't fall like rain. Which words live and which words die, which words delight the mind and which words get ignored, isn't a random phenomenon. Human beings and their choices make these words (and not others) part of the English language because they are useful. But no one person is the arbiter. We all are, in some sense. But not in the usual sense that we use the word "we," the sense of a collective decision. There is no collective decision, merely the result of a sufficient number of individuals using particular words that spread by word of mouth. Language emerges from the complex interaction of those who speak, read and write it.

Ironically, we don't have a vocabulary to describe this peculiar form of group influence. There's no vote and no delegation of power to experts or a committee by the group. The speakers of English "decide" which words live and die but not in the way we usually mean the word "decide" which implies a conscious decision. There is no group consciousness.

Commuting time in major American cities is another example. Why does it take so long to get around during rush hour? Whose fault is that? No one's. But it's not a random or a natural phenomenon. Traffic is the result of human activity but not the result of human design. The time it takes to get from here to there emerges from the complex interaction of the decisions made by those who drive. It has a predictability despite the fact that no one is intending it to be that way. Traffic is slower in rush hour than during the middle of the day. Traffic is slower in big cities relative to small ones.

This doesn't mean there aren't ways to affect commuting time or emergent phenomena. Traffic congestion isn't like the rain. But the obvious ways, the ways that are akin to turning a dial don't work the way people anticipate. Widening the freeways and adding public transit options fail to reduce rush hour traffic for anything other than the very short term. These "solutions" treat the outcomes of an emergent process as if they were the temperature on the thermostat. They inevitably fail.

We have no trouble wrapping our minds around the concept that no one individual is in charge of how long it takes to get from here to there during rush hour in a major American city. No one would argue that just because I drove the car and it took an extra half hour for my trip during rush hour that it was my intention that the trip would take that long. Even though I drove the car, even though I was at the wheel, we all understand that it wasn't my intention to take an extra half hour. We understand that the extra half hour was due to the individual choices of all the other drivers. We also understand that it would be absurd to suggest that "we," all of the drivers combined, have a collective intention that the drive at rush hour takes longer than outside of rush hour. It's no individual's intention. And it isn't the result of a collective intention, either. That concept has no meaning.

Similarly, if you move from St. Louis to Washington D.C. as I did two years ago, you'll find that a house in Washington D.C. is more expensive than a comparable house in St. Louis. When I bought my house in Washington, I wasn't angry at the seller for charging such a high price. I didn't blame him for the price discrepancy between his house and a similar one in St. Louis. I didn't express outrage that he was charging almost ten times what he had paid for the house when it was new in 1969. Most people understand that the price of a house isn't really set in any real sense by the seller or by any one person or by any collective will. No one intended that the price of housing in Washington DC double over the past five years as it has.

Economics is the study of such emergent phenomena, particularly when prices, monetary or non-monetary are involved. We call these phenomena "markets." It's an unfortunate term, but one of course, that I have no control over. It's the term that has been used for a century or more and is likely to endure. But I say unfortunate, because in the mind of the public, the term "markets," conjures up either the New York Stock Exchange or a farmer's market, highly organized, centralized interactions between buyers and sellers. Most of what we study in economics called markets are decentralized non-organized interactions between buyers and sellers.

Yet these decentralized, non-organized interactions result in prices, either monetary in the case of houses or non-monetary in the case of traffic, that have an orderliness to them in spite of their not being organized by any individual or even a group. That orderliness, that predictability, runs through our lives in ways we rarely appreciate.

To take one very important example, the orderliness of prices and the resulting lack of shortages allows knowledge to be widely dispersed via specialization. Such specialization sustains our standard of living. The level of specialization emerges alongside the prices, but the prices make it all possible. A pencil company never worries about there being a graphite shortage or a cedar shortage or a shortage of yellow lacquer. That lets the pencil factory outsource these materials and avoid the accumulation of knowledge necessary to master all of the processes involved in pencil making. The emergence of prices allows a world to emerge where no one knows how to make a pencil. That world is a pleasant one because it is a world where pencils are inexpensive, abundant and always available.

Understanding the emergent phenomena economists call a market is the essence of the economic way of thinking. In contrast, the human brain seems more accustomed to what might be called the engineering way of thinking where human action and human design work together. If I'm dissatisfied with the size of my kitchen, I make a plan and by following the plan, if it's a good plan, the result is a bigger kitchen. A person who sits around hoping for a new kitchen without design or action is going to be disappointed. Or if I notice the leaves falling from the trees, I don't hope that they're going to clean themselves up. I have to plan to rake them and then do the actual raking. Changing my thermostat to alter the temperature inside my house is another such example.

But the engineering way of thinking doesn't work with emergent phenomena. Trying to change emergent results is inherently more complex than building a bridge or expanding your kitchen or even putting a man on the moon. Understanding the challenge involved is to begin to answer the old question that asks why we can put a man on the moon but we can't eliminate poverty. Putting a man on the moon is an engineering problem. It yields to a sufficient application of reason and resources. Eliminating poverty is an economic problem (and by the word "economic" I do not mean financial or related to money), a challenge that involves emergent results. In such a setting, money alone—in the amounts that a non-economic approach might suggest, one that ignores the impact of incentives and markets—is unlikely to be successful.

Thomas Sowell likes to say that reality is not optional. But we oh so want it to be. We want to change outcomes without consequences with the ease of adjusting the thermostat on the wall of our house. We want to dial incomes upward and gasoline prices downward. We want to blame Wal-Mart for the fact that its employees earn below the national average. We want to blame China (or Mexico or Japan or India) for our trade deficit. We want to blame or honor the occupant of the White House for whether new jobs are high-paying or low-paying. This worldview that flies in the face of reality and that ignores the inherent complexity of the real world is the bread-and-butter of journalism and the breeding ground for unintended consequences.

Consider the average employee at Wal-Mart who earns less than the average and has no health care benefits. If the seller doesn't set the price of the house why do people blame Wal-Mart for paying low wages or offering inadequate health care benefits? It seems obvious that Wal-Mart sets its wages, but that is as naïve is thinking that the seller of the house determines its price.

My income, for example, is higher than the average Wal-Mart employee. That might fool you into thinking that my employer, George Mason is compassionate while greedy Wal-Mart only cares about the bottom line.

But the real reason I make more than the average employee at Wal-Mart has nothing to do with the compassion of George Mason University compared to the greediness of Wal-Mart. It has everything to do with my alternatives outside of George Mason compared to the alternatives of the average Wal-Mart employee, just as the price of my house depends on the prices of alternative houses of similar quality. If we want the Wal-Marts of the world to pay higher wages, low-skill workers have to acquire more skills, more education, more higher-paying alternatives.

When I made this point to a student he countered by asking why Wal-Mart has a right to exploit low-skilled workers who have such limited alternatives.

It would be tempting to answer that question with a similar question—what right does the seller of houses in Washington, DC have to exploit the prospective buyer by charging a higher price than people pay in St. Louis. But that answer misses two deeper points. The first is that Wal-Mart isn't exploiting people by hiring them. In fact, the opposite is the case. By creating a business model that allows low-skill workers to serve customers hungry for low-price goods, Wal-Mart increases the alternatives available to low-skill workers and raises their wages above what they would otherwise receive in a world without Wal-Mart.

The second point is that viewing Wal-Mart as the cause of low wages can lead to destructive policies like banning Wal-Mart from opening a store in your city. When Wal-Mart opens a new store, workers eagerly line up for the opportunity to work there. How can it help them to reduce their opportunities?

It is unfortunate that well-meaning people often join in concert with self-interested competitors of Wal-Mart to hamper Wal-Mart and other employers from expanding. It is tragic when a lack of economic understanding pushes a nation to the edge of economic chaos.

As I write these words, New Orleans is in chaos. A number of oil refineries have been knocked out of commission by Hurricane Katrina. Gas prices have spiked upward. Politicians are threatening suppliers with legal action for "price gouging," raising prices at a time of crisis. Politicians from President Bush on down are asking drivers to drive less or "only when necessary" as if that phrase had meaning. These politicians evidently believe that begging and lecturing citizens can perform the role that prices do in creating and sustaining order, an order where I never have to think twice or even once about whether gasoline will be available at the corner for my vacation or drive to work or to take an emergency trip to the hospital.

But reality is not optional. You cannot have a sudden reduction is gasoline available to the market and low prices at the same time. There is no dial for gasoline prices. The result of these threats is easily predicted—suppliers are already rationing. Drivers are worried about shortages and in the face of threats to punish 'gougers' they are right to worry. As a result, lines are forming in some cities, and gasoline retailers are closing early in the day, out of gasoline, the same results we saw when explicit rather than implicit price controls were put in place in the 1970s.

Friedrich A. Hayek, in The Fatal Conceit, wrote that "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." Unfortunately, when politicians try to dial down prices to preserve order, they only worsen the problem. We would do well to remember the emergent nature of prices, especially in times of crisis.

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Hayek and What's at Stake in Our Debate Over Growth

By popular demand, some more quotes from Nobel prize winning economist Friedrich Hayek's The Road to Serfdom. When you read these, think about Matt Saavedra and how he wants government to choose between "good corporations" and "bad corporations." Think about Alex McDonald's accusation that Wal-Mart's "millionaire" owners "steal" from their employees. Think about Mark Winstein's argument that the city of Moscow should determine how people work, live and commute to preserve the "small-town college atmosphere."

Hayek warns us that all this central planning leads to collectivism, and collectivism leads to totalitarianism:

Most of the people whose views influence developments are in some measure socialists. They believe that our economic life should be "consciously directed," that we should substitute "economic planning" for the competitive system. Yet is there a greater tragedy imaginable than that, in our endeavor consciously to shape our future in accordance with high ideals, we should in fact unwittingly produce the very opposite of what we have been striving for?

In order to achieve their ends, the planners must create power—power over men wielded by other men—of a magnitude never before known. Their success will depend on the extent to which they achieve such power. Democracy is an obstacle to this suppression of freedom which the centralized direction of economic activity requires. Hence arises the clash between planning- and democracy.

There is, in a competitive society, nobody who can exercise even a fraction of the power which a socialist planning board would possess. To decentralize power is to reduce the absolute amount of power, and the competitive system is the only system designed to minimize the power exercised by man over man. Who can seriously doubt that the power which a millionaire, who may be my employer, has over me is very much less than that which the smallest bureaucrat possesses who wields the coercive power of the state and on whose discretion it depends how I am allowed to live and work?

Our generation has forgotten that the system of private property is the most important guaranty of freedom. It is only because the control of the means of production is divided among many people acting independently that we as individuals can decide what to do with ourselves. When all the means of production are vested in a single hand, whether it be nominally that of "society" as a whole or that of a dictator, whoever exercises this control has complete power over us. In the hands of private individuals, what is called economic power can be an instrument of coercion, but it is never control over the whole life of a person. But when economic power is centralized as an instrument of political power it creates a degree of dependence scarcely distinguishable from slavery. It has been well said that, in a country where the sole employer is the state, opposition means death by slow starvation.

"Planning" owes its popularity largely to the fact that everybody desires, of course, that we should handle our common problems with as much foresight as possible. The dispute between the modern planners and the liberals is not on whether we ought to employ systematic thinking in planning our affairs. It is a dispute about what is the best way of so doing. The question is whether we should create conditions under which the knowledge and initiative of individuals are given the best scope so that they can plan most successfully; or whether we should direct and organize all economic activities according to a "blue-print," that is, "consciously direct the resources of society to conform to the planners' particular views of who should have what."

Although competition can bear some admixture of regulation, it cannot be combined with planning to any extent we like without ceasing to operate as an effective guide to production. Both competition and central direction become poor and inefficient tools if they are incomplete, and a mixture of the two - means that neither will work. Planning and competition can be combined only by planning for competition, not by planning against competition.

What is promised to us as the Road to Freedom is in fact the Highroad to Servitude. For it is not difficult to see what must be the consequences when democracy embarks upon a course of planning. The goal of the planning will be described by some such vague term as "the general welfare." There will be no real agreement as to the ends to be attained, and the effect of the people's agreeing that there must be central planning, without agreeing on the ends, will be rather as if a group of people were to commit themselves to take a journey together without agreeing where they want to go: with the result that they may all have to make a journey which most of them do not want at all.

Democratic assemblies cannot function as planning agencies.They cannot produce agreement on everything — the whole direction of the resources of the nation-for the number of possible courses of action will be legion. Even if a congress could, by proceeding step by step and compromising at each point, agree on some scheme, it would certainly in the end satisfy nobody.

Planning leads to dictatorship because dictatorship is the most effective instrument of coercion and, as such, essential if central planning on a large scale is to be possible. There is no justification for the widespread belief that, so long as power is conferred by democratic procedure, it cannot be arbitrary; it is not the source of power which prevents it from being arbitrary; to be free from dictatorial qualities, the power must also be limited. A true "dictatorship of the proletariat," even if democratic in form, if it undertook centrally to direct the economic system, would probably destroy personal freedom as completely as any autocracy has ever done.

Individual freedom cannot be reconciled with the supremacy of one single purpose to which the whole of society is permanently subordinated.

Collectivism means the end of truth. To make a totalitarian system function efficiently, it is not enough that everybody should be forced to work for the ends selected by those in control; it is essential that the people should come to regard these ends as their own. This is brought about by propaganda and by complete control of all sources of information.

The most effective way of making people accept the validity of the values they are to serve is to persuade them that they are really the same as those they have always held, but which were not properly understood or recognized before. And the most efficient technique to this end is to use the old words but change their meaning. Few traits of totalitarian regimes are at the same time so confusing to the superficial observer and yet so characteristic of the whole intellectual climate as this complete perversion of language.

If we are not to destroy individual freedom, competition must be left to function unobstructed. Let a uniform minimum be secured to everybody by all means; but let us admit at the same time that all claims for a privileged security of particular classes must lapse, that all excuses disappear for allowing particular groups to exclude newcomers from sharing their relative prosperity in order to maintain a special standard of their own.

The Road to Serfdom is available at WSU's Holland Library. If you're too lazy, the Reader's Digest condensed version is here. Read it and learn what's going on before it's too late.

As I told Scotty today on The PES, PARD has every right to protest against Wal-Mart. They have every right to be critical of Wal-Mart. They can choose not to shop there and actively encourage others not to shop there either. I would fight to the death for their free speech rights.

Where they, and the other Wal-Mart opponents are dead-wrong is advocating that the government must get involved. PARD wants the government to plan AGAINST competition and not plan FOR it. Their approach is misguided. Worse, it is un-American and frankly, evil. That path will lead to totalitarianism and ruin. And as Hayek predicted, PARD uses proaganda constantly to convince others that PARD's arguments are the same arguments that others, whose opposition is not as politically motivated, have against Wal-Mart. Hence the "kitchen sink" approach that Scotty always mentions.

In essence, regardless of whether Wal-Mart opens in Pullman or not, PARD has won. The decision about Wal-Mart will be made by three judges in a Spokane courtroom, not the free market. PARD has used the judicial process to accomplish what they couldn't do legislatively, "central planning by lawsuit" if you will. We all have a little less individual freedom as a result.

That's what the battle over growth on the Palouse is all about. There's a lot more than money at stake.

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“Let’s not be a big-box town”

There was another letter in Saturday’s Moscow-Pullman Daily News that is going in “The Carnival of Hypocrisy” file should Mayor Moonbat announce plans for a Home Depot in Moscow:

I am writing to express my support for the size cap on big-box stores.

My family moved to Moscow after a three-year search of small towns in the United States. There is something unique and wonderful here that will be destroyed if huge stores come in. Most importantly, all those stores rely on car traffic. It is no longer correct for a city or region to make the automobile the dominant design element in planning. At present, Moscow is one of the best cities for bike and foot transportation I’ve ever seen. Cities that focus on nonmotorized transit have healthier communities, healthier economies and healthier people.

Regarding economic development, expanding big-box retail is a dead end — not a sustainable approach to the economy. In fact, it’s quite the opposite. And of course, all the direct environmental degradation, and the indirect degradation due to car traffic are well understood by most people who live here.

Moscow is situated ideally for a different form of sustainable, long-term economic growth. For example, the University of Idaho has taken steps to become a leader in the exploding field of helping make the economy more reflective of ecological values — the “sustainability” movement. There are huge economic opportunities available in commercializing strategies and technologies that are being developed now by the university. Focusing on this rapidly growing sector instead of on the rapidly self-destructing big retail field will create far more jobs and far better-paying jobs in Moscow over both the short and long haul while allowing us to maintain what is already great about living in a small college town.

Mark Winstein
Moscow

Ahhh, the truth comes out. It’s not big-box stores; it’s the wider war against the internal combustion engine.

Let’s throw the tree hugger/global warming part of the anti-car argument out for a moment and concentrate on the social engineering aspects. Winstein, the founder of Ecostructure Financial, whose purpose is to “develop and provide ecological financing for businesses and projects that are working to benefit forests, rivers, coral reefs, open space and people,”(notice people come last) claims nonmotorized transit gives us “healthier communities healthier economies and healthier people.”

See, the left-wingers have always hated cars, because cars make us independent. Cars mean freedom. And of course, independence and freedom are anathema to the statists. They want you to be dependent on big government for your housing, your job, and your transportation. For once they control the infrastructure, then they control you. The former Soviet Union didn’t have many cars. You had to either walk or take public transportation everywhere you went. But I don’t remember any studies pointing out how much healthier people were back in the USSR, or more prosperous.

There are probably few people in Pullman that walk more than me. I walk at least 20 miles every week. But I do it because I WANT TO, not because the government MAKES ME. The government has NO BUSINESS meddling in personal choices.

Similarly, people drive cars and go to big-box stores because they WANT TO, not because some evil cabal in Bentonville forces them to do it. Can you imagine going to the grocery store to do the weekly shopping for a family of five ON A BIKE? How about the farmers? Should they walk 20 miles to town? If you want to live crammed in like a sardine and taking the bus or subway everywhere you go, then there are plenty of places like that to live. Please move there, by all means.

Places like Pullman were founded because people wanted to escape such statism. Our forefathers left Europe and headed for the New World because it was too crowded and had too little freedom. After they could see another person’s house in Virginia and Pennsylvania, they headed to Kentucky. When Kentucky got “too crowded,” they headed to Missouri. Finally, they headed to the Palouse Country. Now, we have nowhere left to run away from the meddling “smart growthers” that want to turn Pullman and Moscow into midtown Manhattan. I'm not against, for example, someone living in a loft apartment in downtown Pullman and walking or biking everywhere they go. Heck, I'd probably do it myself if I were younger and single. But that should be a PERSONAL DECISION made in a free market, not a government MANDATE. It's all about having choices.

For more on collectivism and social engineering, read Friedrich August von Hayek's The Road to Serfdom. My favorite quote from Hayek is:

It is the price of democracy that the possibilities of conscious control are restricted to the fields where true agreement exists and that in some fields things must be left to chance. But in a society which for its functioning depends on central planning this control cannot be made dependent on a majority's being able to agree; it will often be necessary that the will of a small minority be imposed upon the people, because the minority will be the largest group able to agree among themselves on the question at issue. Democratic government has worked successfully where, and so long as, the functions of government were, by a widely accepted creed, restricted to fields where agreement among a majority could be achieved by free discussion; and it is the great merit of the liberal creed that it reduced the range of subjects on which agreement was necessary to one on which it was likely to exist in a society of free men. It is now often said that democracy will not tolerate "capitalism." If "capitalism" means here a competitive system based on free disposal over private property, it is far more important to realize that only within this system is democracy possible. When it becomes dominated by a collectivist creed, democracy will inevitably destroy itself.

Sound familiar?

"For $7.93 an Hour, It’s Worth a Trip Across a State Line"

I guess the New York Times didn't check with Paul before they wrote this story:

LIBERTY LAKE, Wash., Jan. 9 — Just eight miles separate this town on the Washington side of the state border from Post Falls on the Idaho side. But the towns are nearly $3 an hour apart in the required minimum wage. Washington pays the highest in the nation, just under $8 an hour, and Idaho has among the lowest, matching 21 states that have not raised the hourly wage beyond the federal minimum of $5.15.

Liberty Lake and Post Falls are divided by more than the state line. Nearly a decade ago, when voters in Washington approved a measure that would give the state’s lowest-paid workers a raise nearly every year, many business leaders predicted that small towns on this side of the state line would suffer.

But instead of shriveling up, small-business owners in Washington say they have prospered far beyond their expectations. In fact, as a significant increase in the national minimum wage heads toward law, businesses here at the dividing line between two economies — a real-life laboratory for the debate — have found that raising prices to compensate for higher wages does not necessarily lead to losses in jobs and profits.

Idaho teenagers cross the state line to work in fast-food restaurants in Washington, where the minimum wage is 54 percent higher. That has forced businesses in Idaho to raise their wages to compete.

Business owners say they have had to increase prices somewhat to keep up. But both states are among the nation’s leaders in the growth of jobs and personal income, suggesting that an increase in the minimum wage has not hurt the overall economy.

“We’re paying the highest wage we’ve ever had to pay, and our business is still up more than 11 percent over last year,” said Tom Singleton, who manages a Papa Murphy’s takeout pizza store here, with 13 employees.

His store is flooded with job applicants from Idaho, Mr. Singleton said. Like other business managers in Washington, he said he had less turnover because the jobs paid more.

By contrast, an Idaho restaurant owner, Rob Elder, said he paid more than the minimum wage because he could not find anyone to work for the Idaho minimum at his Post Falls restaurant, the Hot Rod Cafe.

“At $5.15 an hour, I get zero applicants — or maybe a guy with one leg who wouldn’t pass a drug test and wouldn’t show up on Saturday night because he wants to get drunk with his buddies,” Mr. Elder said.

For years, economists have debated the effect that raising the minimum wage would have on business. While the federal minimum wage has not gone up for 10 years, 29 states have raised their wage beyond the federal minimum.

These increases, according to critics like Brendan Flanagan of the National Restaurant Association, are a burden on the small, mostly family-run businesses in fast food and agriculture that employ workers at the lowest end of the pay scale.

“We see the political momentum for this,” said Mr. Flanagan, a vice president at the association, “but we cannot ignore what our members are telling us, which is that it will lead to job losses.”

But the state’s major business lobby, the Association of Washington Business, is no longer fighting the minimum-wage law, which is adjusted every year in line with the consumer price index.

“You don’t see us screaming out loud about this,” said Don Brunell, president of the trade group, which represents 6,300 members.

“It’s almost a no-brainer,” Mr. Brunell said, that the federal minimum should go higher. Association officials say they would like to see some flexibility for rural and small-town businesses, however.

Washington’s robust economy, which added nearly 90,000 jobs last year, is proof that even with the country’s highest minimum wage, “this is a great place to do business,” Mr. Brunell said.

During a recession five years ago, the same group had argued that Washington’s high minimum wage law would send businesses fleeing to Idaho. The group sent out a news release with a criticism of the law from John Fazzari, who owns a family-run pizza business in Clarkston, Wash., just minutes from the Idaho town of Lewiston.

But now Mr. Fazzari says business has never been better, and he has no desire to move to Idaho.

“To tell you the truth, my business is fantastic,” he said in an interview. “I’ve never done as much business in my life.”

Mr. Fazzari employs 42 people at his pizza parlor. New workers make the Washington minimum, $7.93 an hour, but veteran employees make more. To compensate for the required annual increase in the minimum wage, Mr. Fazzari said he raises prices slightly. But he said most customers barely notice.

He sells more pizza, he said, because he has a better product, and because his customers are loyal.

“If you look 10 years down the road, we will probably have no minimum wage jobs on this side of the border, and lots of higher-income jobs,” Mr. Fazzari said.

Job figures from both states tend to support his point. While Idaho leads the nation in new job growth, it has a far higher percentage of minimum-wage jobs than Washington. Minimum-wage positions make up just 2.4 percent of the jobs in Washington, while about 13 percent of the jobs in Idaho pay at or less than the proposed federal minimum wage, according to a study done for the state last year.

Part of the difference could be accounted for by a lower cost of living in Idaho and the higher percentage of technology, manufacturing and government jobs in Washington, economists say. Still, it is hard to find a teenager in Idaho who lives anywhere near Washington who is willing to work for $5.15 an hour.

“Are you kidding? There are so many jobs nearby that pay way more than minimum wage,” said Jennifer Stadtfeldt, who is 17 and lives in Coeur d’Alene, which is just a few minutes from Washington. She pointed out that Taco Bell, McDonald’s and other fast-food outlets in her town were posting signs trying to entice entry-level workers with a starting pay of $7 an hour.

The House today passed a bill increasing the minimum wage, and about 13 million workers would see a pay raise if the Senate and President Bush approve it. Mr. Bush has said he would approve the wage increase so long as concerns of small-business owners were taken into account; the Senate has not yet taken up the bill.

Several studies have concluded that modest changes in the minimum wage have little effect on employment. A study two months ago by an economist at Washington State University seemed to back the experience of Clarkston and other border towns in Washington. The economist, David Holland, said job loss was minimal when higher wages were forced on all businesses. About 97 percent of all minimum-wage workers were better off when wages went up, he wrote.

But other business groups argue that an increase would hurt consumers and workers at the low end.

In a survey released on the eve of the November elections — in which voters in six states considered raising their minimum wages — the National Restaurant Association said restaurants expected to raise their prices and eliminate some jobs if the voters approved the measures. The initiatives all passed.

Here on this border, business owners have found small ways to raise their prices, and customers say they have barely noticed.

“We used to have a coupon, $3 off on any family-size pizza, and we changed that to $2 off,” said Mr. Singleton, of Papa Murphy’s. “I haven’t heard a single complaint.”

Leave it to the New York Times to quote from just one study and not interview a business owner that had a BAD experience in Washington with the the high minimum wage.

Help Not Affordable

I just read the news about the House of the U.S. Congress approving a proposed minimum wage hike, which I relayed to my business partner.

In the last few days, the return of WSU students to the area has seen a rush of job seekers visiting our shop to inquire about employment. Our standard response has been, "sorry, but we're not hiring right now."

Washington state's minimum wage, now $7.93 per hour, is ahead of the proposed Federal wage hike, so the Federal increase won't affect us that much. But this news has brought to mind again the business climate we face in this state, and today's announcement prompted my business partner and I to decide on a new policy of 100% honesty toward job applicants.

We will now tell each and every person who inquires about employment with our companies that the increases in the minimum wage have made hiring them too expensive, that we would have considered their applications in the past but, thanks to Olympia, now we simply cannot and will not. We will make it perfectly clear to job seekers at our store what hikes in the minimum wage really mean for them and others.

To business owners out there who may be reading this post, I encourage you to do the same if you will be curtailing hiring due to minimum wage hikes. Let's be completely honest with job seekers about what they are going to be facing. It's only fair that we tell each and every applicant why it is that we will not offer them jobs. Perhaps then, the next time some politico tries to buy votes by promising to redistribute other people's money, they will find their offers met with the hostility and rejection such theft deserves.