Federal and state politicians are eager to raise the minimum legal wage—again. They have raised the minimum legal wage many times before, but they complain that it is never enough. The last rise in the minimum wage wasn’t enough because the prices of food, clothing, and shelter keep going up faster than wages. Why do the prices of food, clothing, and shelter keep going up? Could this have something to do with the behavior of politicians and government? A general rise in prices is caused by government monetary policy. Yes, Ben Bernanke and kids at the Federal Reserve Bank had fun printing a couple trillion dollars over the past decade. As it takes more and more dollars to buy the same goods, the value of wages, savings, and pensions falls. Politicians could tell the Federal Reserve Gang to stop printing money, but they don’t. They don’t stop it because printing more money is useful to the spending plans of politicians. In this manner, politicians rob the value of wages, savings, and pensions. State politicians are also responsible for rising prices. They don’t print money, yet they raise prices by raising taxes on nearly everything. State politicians could give workers an effective pay raise by reducing taxes on the earnings, savings, and purchases of workers. But they don’t. Politicians don’t cut taxes because tax revenues are useful to the spending plans of politicians. Federal and state politicians could also lower prices in the islands by ending the Jones Act, a very old law that severely restricts shipping to the islands. Bloomberg editors recently commented on the effect of the Jones Act stating, “By some estimates, this makes goods in Hawaii a third more expensive than they otherwise should be.” Wouldn’t it be nice for politicians to end the Jones Act and …
How Land Use Restrictions Make Housing Unaffordable with Emily Hamilton
The following is an edited transcript from Economics Detective Radio, by Garrett Petersen. Listen to the full interview at economicsdetective.com. Petersen: My guest today is Emily Hamilton. She is a researcher at the Mercatus Center at George Mason University. Emily, thanks for being on Economics Detective Radio. Hamilton: Thanks a lot for having me. Petersen: So, Emily recently wrote a paper titled “How Land Use Regulation Undermines Affordable Housing” along with her co-author Sanford Ikeda. The paper is a review of many studies looking at land use restrictions and it identifies four of the most common types of land use restrictions. Those are: minimum lots sizes, minimum parking requirements, inclusionary zoning, and urban growth boundaries. So Emily, could you tell us what each of those restrictions entail? Hamilton: Sure. So, starting off with the first, minimum lots sizes. This is probably what people most commonly associate with zoning. It’s the type of Euclidian zoning that separates residential areas from businesses and then within residential areas limits the number of units that can be on any certain size of land. And this is the most common tool that makes up what is sometimes referred to as Snob Zoning, where residents lobby for larger minimum lots sizes and larger house sizes to ensure that their neighbors are people who can afford only that minimum size of housing. Petersen: So it keeps the poor away, effectively. Hamilton: Exactly. And then parking requirements are often used as a tool to ensure that street parking doesn’t get too congested. So when cars first became common, parking was really crazy where people would just leave their car on the street, maybe double parked, or in an inconvenient situation near their destination. And obviously as driving became more and more common and that was just an …
The Loophole in Copyright Law: Make it Funny
Copyright law is strange. While it’s almost impossible to copy someone else’s work of art and sell it as your own — there is one easy way to get around that. Make it funny. If you copy something and it’s funny for all the right reasons, no one can sue you. That’s because technically, parodies are protected under copyright law. Parodies fall under “fair use” of the United States copyright law, which means, it’s legal to make fun of something. But it’s illegal if it’s not funny. Beyonce’s “Single Ladies” has been parodied thousands of times on Youtube. And by ‘parodied’ I mean, performed exactly the same way. Groups of women (or men) will perform her routine with the exact same choreography and music as the original. People debate about whether the new performances are better than the original video all the time. But one thing’s for certain, lots of people profited from her work, and without a single lawyer getting in the way. Weird Al Yankovic has made millions of dollars stealing other people’s work and making it his own. Lots of musicians protest, but because he’s ‘funny’, he’s protected by the law. When the song “Barbie Girl” became a hit in 1997, Mattel sued Aqua for copyright infringement. The courts and lawyers debated endlessly about the ‘funniness’ of the song. And in the end, the case was dismissed because “Barbie Girl” was indeed, hilarious. It’s odd that humor is so important in American law. The argument is that no one should profit from someone else’s hard work. But as soon as something’s funny, the courts all laugh and throw their hands up in the air, yelling, “Case dismissed!” But how far could we take a parody? The hit musical “Wicked” is considered to be the holy grail for …
Mobile Apps Bringing a Taste of the Free Market to China
When Uber launched in Beijing, my first thought was that they were going to have a really hard time in China. However, this was not because I expected there to be protests from taxi drivers like in London or threats of jail time from city governments like in San Francisco, but because there is already so much existing competition from mobile taxi booking apps in the country. While in Shanghai this past March, I was introduced to the latest of these apps, DiDi Dache, which is built in to the popular messaging service WeChat. With DiDi Dache, you simply list where you are and where you want to go, leave a voice message for prospective drivers, and in my experience, within 5 minutes you have a taxi. Even more impressive than the speed with which your taxi appears, is the speed with which the technology has spread throughout the country. Within just a few months of the app being launched, nearly every cab in Shanghai now has it set up in their vehicles and is using it as their primary means of finding customers, which has greatly reducing the amount of time they must drive around searching for riders. Even my 70 year old great aunt was using it so frequently and naturally, it seemed as if she’d been using it for years. DiDi Dache, promoted itself initially with massive rebates and incentives for both riders and drivers, some have reported that they were able to take rides for just 2 yuan, approximately 33 cents. This is possible due to the company’s revenue model, where revenue comes not from taxi fares themselves, but instead from “location-based advertising,” which uses geo-tagging to target riders with advertisements related to their location. A unique feature of the app is that people seeking taxis …