How Lawsuits against the Trump Organization Have Weakened the Presidency

Trump’s critics chopped down another tree in the forest of laws and legal norms to pursue their devil, but to the harm of future presidents and the country.

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And think of the future possibilities for political theater. If a state DA can subpoena presidents, he theoretically can arrest and fingerprint them, bring them before a court for arraignment, detain them until posting bail, and even place travel restrictions on them. He could even conduct a trial where the president would have to appear for all proceedings for weeks. A Republican DA not only could charge Hunter Biden for his sleazy business dealings, he could investigate President Biden himself as a co-conspirator.

It is not just the president who would suffer, but the American people. As Justice Thomas wrote in his dissent in Trump v. Vance: “The President has vast responsibilities both abroad and at home,” such as protecting the national security, conducting foreign policy, and executing federal law. In order to give the nation the benefit of “energy in the executive,” the Founders made the conscious choice to vest these many responsibilities in a single individual who could act with “decision, activity, secrecy, and dispatch,” as Alexander Hamilton argued in Federalist No. 70. The investigation will consume the time, energies, and resources that the president should devote to carrying out his constitutional and political duties and advancing the agenda upon which the American people elected him. As Thomas Jefferson had argued when served with a subpoena in the Aaron Burr treason trial, the president’s “duties as chief magistrate demand his whole time for national objects,” rather than racing from one end of the nation to the other to defend himself in court. Even if the president were not immune from state criminal investigation, the Supreme Court should have required — as Justices Thomas and Alito urged — that state proceedings wait on hold until Trump had finished his term in office.

 

Source: How Lawsuits against the Trump Organization Have Weakened the Presidency

A new take on the devastating effects of ‘political wage-setting’: the ‘minimum wage paradox’

There are some uncomfortable truths about raising the minimum wage from its current level of $7.25 per hour to $15 per hour that are revealed by an online tool created by our Center for the Study of Economic Mobility (CSEM) at Winston-Salem State University. The tool, which we call the Social Benefits Calculator, enables anyone to go online and experience for themselves what it is like to be receiving social benefits and experience a monthly wage increase. Designed for Forsyth County (North Carolina), the calculator shows that with more than a 100% rise in the minimum wage, many people who currently receive social benefits will barely experience a change in their standard of living.

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Let’s use the calculator and create a hypothetical example: a full-time working parent earning the minimum wage, who is unmarried with two children in subsidized day care. As seen in Table 1 (above, click to enlarge), after his or her wages more than double from $7.25 an hour to $15 an hour, earnings rise from $1,160 to $2,400, or a $1,240 change.

Sounds good, right? That’s an enormous bump up of wages by 107%. But after subtracting the decrease in benefits and higher taxes, that $1,240 increase erodes to just a $199 net improvement, or just a 16% change.
Imagine getting a big raise and seeing 84% of it go away. In comparison, millionaires and billionaires pay just 37% for the federal marginal tax rate on higher income. Through multiple scenarios using the CSEM calculator, I have found long ranges of income where work barely pays — what I call “disincentive deserts” in my published research. In some cases, individuals are actually worse off by accepting wage increases because of larger drop-offs in benefits, in what are called “benefits cliffs.”

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Notice another surprising consequence: dependency on social programs drops with higher wages. For the full-time employee making $7.25 an hour, social benefits make up 74.3% of the overall wage and social benefits package; at $15 an hour the share drops to 52.3%.

This is a finding that may irk both conservatives and liberals since the chief beneficiary of a $15 minimum wage is the government itself. If passed, the cost of providing social programs will fall (though I don’t expect taxes to fall anytime soon). But from the workers’ perspective, little has changed in their lives after a huge wage hike. Moreover, employers will see little return on investment from higher wages, such as greater retention, loyalty and productivity.

Source: A new take on the devastating effects of ‘political wage-setting’: the ‘minimum wage paradox’

Lockdowns Didn’t Stop Covid

A new study finds more virus spread inside homes than work places.

Covid-19 lockdowns shaved 3.5% off U.S. GDP in 2020 even as the federal government spent more than $2.6 trillion in relief measures. Millions of children fell behind in learning and nearly 100,000 businesses closed for good.

Conventional wisdom holds this was worth it because lives were saved by shutting workplaces and schools and telling people to stay home. But a new study by University of Chicago economist Casey Mulligan shows the opposite. After the first month of the pandemic, organizations that adopted prevention protocols became safer places than the wider community. Officials who didn’t see that coming forgot that organizations are rational and look for cooperative solutions that improve the welfare of the group, such as reducing the risks of communicable disease.

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There is little doubt that infection would spread faster in congregations than in smaller groups if both engaged in similar practices. But since larger groups have an incentive to spend on expensive methods of prevention, larger organizations might be better at prevention than households with fewer people.

This is what happened. “Available data from schools, hospitals, nursing homes, food processing plants, hair stylists, and airlines,” Mr. Mulligan writes in the study, “show employers adopting mitigation protocols in the spring of 2020.” These were “physical barriers,” like masking and air filtering, but also included distancing protocols, pods and screenings. Households were less likely to implement similar precautions.

Source: Lockdowns Didn’t Stop Covid

Unintended Consequences of De-funding the Police

There exists an essentially universal belief that generally reducing adverse criminal justice outcomes will tend to reduce (a) relative racial differences in rates of experiencing the outcomes (as commonly presented in terms of the ratio of the rate for Black individuals to that of white individuals) and (b) the proportion Black individuals make up of persons experiencing the outcomes (compared with the proportion they make up of the population).

The belief underlies the calls for defunding the police that were heard in many places over the past year. The belief also plays an important role in support for criminal justice reforms aimed at generally reducing prison populations, expanding options for pretrial release and diversion programs for defendants with low risk of recidivism, de-incentivizing traffic stops, and modifying police practices in ways that can reduce all adverse interactions between the police and the public.

Law 360

That is, when two groups differ in their susceptibility to an outcome, generally reducing the outcome tends to increase, not reduce, relative differences in rates of experiencing the outcome while reducing relative differences in rates of avoiding the outcome, i.e., experiencing the opposite outcome.

Correspondingly, reducing an outcome tends to increase the proportion the more susceptible group makes up of persons experiencing the outcome and persons avoiding the outcome. The pattern can be easily illustrated with test score data where two groups differ in the average performance on the test, as in Table 1 below.

The table is a slightly modified version of a table I used in my testimony at a December 2017 U.S. Commission on Civil Rights hearing on discipline disparities in public schools, where I attempted to explain the effects of reducing adverse discipline outcomes.

If your goal is to reduce disparities, being more strict seems to be the way to go.

You Can’t Make Up Stuff Like This

Here’s a letter to a high-school senior who regularly reads Café Hayek:

Colin:

Thanks for your e-mail in which you ask my opinion of your “teacher’s proposition to sue businesses who don’t pay workers enough to keep them off welfare.”

The idea is terrible, especially for poor workers. Adoption of your teacher’s scheme would turn all low-skilled workers into potential legal liabilities for their employers.

Of course this policy would render unemployable all workers who cannot now produce enough to enable them to earn wages sufficiently high to make them ineligible for welfare. Who’s going to hire a 100-percent-certain legal liability?

But your teacher’s policy would also render unemployable even many workers whose pay makes them currently ineligible for welfare. The reason is that employers know that governments can, and sometimes do, lower welfare-eligibility requirements. And so many workers who today are paid enough to be ineligible for welfare might tomorrow – simply because of a change in welfare standards – become eligible. Because these workers would suddenly subject their employers to your teacher’s proposed legal actions, these workers would be unemployable.

Source: You Can’t Make Up Stuff Like This

This payout by the city of Minneapolis won’t affect the Chauvin trial – no, not at all

This may be the sound of justice being Crumpled.

The Minneapolis City Council has made a decision to settle a civil lawsuit:

The city of Minneapolis on Friday agreed to pay $27 million to settle a civil lawsuit from George Floyd’s family over the Black man’s death in police custody, as jury selection continued in a former officer’s murder trial.

Council members met privately to discuss the settlement, then returned to public session for a unanimous vote in support of the massive payout. It easily surpassed the $20 million the city approved two years ago to the family of a white woman killed by a police officer.

Floyd family attorney Ben Crump called it the largest pretrial settlement ever for a civil rights claim…

These cases are Crump’s specialty, and lying to the press about them is also his specialty (I’ve written about Crump before, in particular here in connection with the Jacob Blake case, and he was involved in the Trayvon Martin case as well as the Michael Brown case and of course the Floyd case). I don’t know exactly how it works, but I’ve read that lawyers take one-third of settlements, and if so then Crump will net a cool nine million.

Source: This payout by the city of Minneapolis won’t affect the Chauvin trial – no, not at all

‘Hero Pay’ Requirement for Grocery Workers Results in Unemployed Heroes

Mandated “hero pay” will add up to about $0 an hour for some grocery store workers in Los Angeles. Grocers there are closing three stores in response to newly enacted legislation that requires them to pay their workers an additional $5 an hour during the pandemic. “It’s never our desire to close a store, but when you factor in the increased costs of operating during COVID-19, consistent financial losses at these three locations, and an extra pay mandate that will cost nearly $20 million over the next 120 days, it becomes impossible to operate these three stores,” said grocery store chain Kroger in a statement given to CBS Los Angeles, announcing that two Ralphs-branded stores and one Food 4 Less location, would be shutting down.

Source: ‘Hero Pay’ Requirement for Grocery Workers Results in Unemployed Heroes

A Serious Argument Contains Serious Argumentation

(Don Boudreaux) Here’s a letter to a college student who tells me that she was “shocked,” when while doing research for a debate on welfare policy, she encountered my blog posts on minimum wages.

Ms. L___:

Thanks for your e-mail.

You allege that my and other “neoliberals’” opposition to minimum wages “shows” our racism. You reach this conclusion by asserting that, because blacks generally are paid less than whites, “raising the minimum wage to $15 will raise more black than white incomes.” Therefore, you reason, opposition to raising the minimum wage must be rooted in racism.

Are you aware that most research on the effects of minimum-wage hikes shows that, while some workers do get higher hourly pay, some other workers lose employment? Pushing up employers’ costs of labor makes labor less desirable to employ. And so especially if you’re correct that “America as a nation is inherently racist,” then do you not worry that blacks will bear a disproportionately large share of these job losses? Might it then be said that support for minimum-wage hikes is evidence of racism?

I happen now to be re-reading a book that I recommend to you; it’s my late colleague Walter Williams’s 2011 volume, Race & Economics. In this book Walter presents ample documentation of the racist consequences of minimum wages, as well as of other smiley-face-wearing government interventions, such as statutes mandating equal-pay-for-equal-work. Walter shows also that blacks would now bear a disproportionate share of the unemployment caused by minimum wages even in the absence today of racism.

Ms. L___, you might in good faith disagree with the arguments, and question the data, that are presented in Walter’s book, in the paper linked above (and in those linked below), and in the mountains of other research that reveal minimum wages to be an enemy of blacks and other minorities. I would welcome your reaction to this research after you study some of it.

But even if you have no wish to communicate further with me about minimum wages, it’s in your own interest to carefully study this research. If you’re genuinely convinced that minimum wages are “one of society’s best antipoverty and pro-equity tools,” then you owe it to the groups whose welfare you champion to make yourself as informed as possible in order to be as effective as possible an advocate for minimum wages. You’ll want to know your opponents’ strongest arguments so that you’ll be prepared to counter these with your strongest arguments.

To learn your opponents’ strongest arguments against minimum wages, consult the works of scholars such as – to name only a few – Walter WilliamsThomas SowellDavid Neumark and William WascherJeffrey ClemensJonathan Meer, and Richard Burkhauser.

You’ll greatly improve your prospects of swaying people to support minimum wages if, rather than accusing opponents of minimum wages of racism, you instead address the best arguments offered by these people and then do your best to explain why they are mistaken. If you’re correct about minimum wages, you should have no trouble doing so.

Source: A Serious Argument Contains Serious Argumentation

Sounds Like Something Out of an Ayn Rand Novel

Here’s a letter to someone in California who apparently believes that economic reality is optional:

Mr. Víctor Sánchez, Director
Long Beach Coalition for Good Jobs and a Healthy Community

Mr. Sánchez:

You call “shameful” the decision by Kroger to close stores in Long Beach after the City Council there ordered certain supermarkets to raise the hourly pay of some workers by $4 (“Kroger to close 2 California stores instead of giving $4 hourly ‘hero pay’”). This decision by Kroger, you allege, will “deny their workers the compensation they deserve.”

Put your money and action where your mouth is. If these workers really are worth employing at the wage mandated by the City Council, you should have no trouble convincing investors to back you in efforts to buy Kroger’s Long Beach facilities in order for you to keep these operating as supermarkets that pay wages as high as those ordered by the City Council.

If, however, you’re unwilling to make this effort, then your talk is cheap. No one has any reason to trust that you actually believe that the workers who you pose as championing really deserve a $4 per hour raise.

Sincerely,
Donald J. Boudreaux
Professor of Economics

Source: Sounds Like Something Out of an Ayn Rand Novel

Portland police leaving the poorly run city

Daily Wire:

Portland, Ore., police officers are fleeing the city’s force, and often taking a hit to pay and benefits to do so. The flight of law enforcement from the city is “unprecedented,” Assistant Chief Michael Frome told the Portland Tribune.  “We really have not seen this many people leaving at this stage in their career.”

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The activists’ calls to cut police budgets were picked up by some of Portland’s elected officials. In June, the City Council approved a $15 million cut to the police department’s budget to funnel more money into spending on social programs.

The cut sent the bureau reeling as it laid off some officers and cut its recruiter position since the department did not have money to make new hires anyway. The department cut vacant positions that it had historically held open to keep a steady stream of recruits, which require 18 months of training to begin independent police work, coming into the force.

“When the cuts came in and we basically lost our vacancies, that put us in a bigger fiscal hole than we were anticipating being in,” Frome said. “We didn’t have the money to hire, so we laid off basically half of our background investigators. We laid off our recruiter, because we just did not see a position in the near future where we were going to be able to use them to capacity.”

 

Source: Portland police leaving the poorly run city