Here's an excellent article by a BLACK, AFRICAN-AMERICAN ECONOMIST, Thomas Sowell, that rightly criticizes the economic stupidity of Barack Obama: Barack Obama, Control Freak
Excerpt:
Senator Barack Obama recently said, “let’s allow our unions and their organizers to lift up this country’s middle class again.”Source: National Review Online: Barack Obama, Control Freak: Feb 22, 2007
Ironically, he said it at a time when Detroit automakers have been laying off unionized workers by the tens of thousands, while Toyota has been hiring tens of thousands of non-union American automobile workers.
Labor unions, like the government, can change prices — in this case, the price of labor — but without changing the underlying reality that prices convey.
Neither unions nor minimum-wage laws change the productivity of workers. All they can do is forbid the employer from paying less than what the government or the unions want the employer to pay.
When that is more than the labor in question produces, some workers who are perfectly capable become “unemployable” only because of wages set above the level of their productivity.
The point of Sowell's critique is this: government intervention in terms of subsidies and minimum wage laws and other such garbage all have the exact same net effect: they raise prices, and sometimes raise prices quite substantially.
Why are higher prices a bad thing? Well, the more something costs (in general) the less people buy, hence less is produced, hence the resouces needed for producing it are not longer needed...and often these "resources" are human beings--the American worker.
Here's another article from National Review Online that proves the point: The Corn Threat:
Excerpt:
Economic forecasters of all stripes should be impressed by the accuracy of Governors’ Ethanol Coalition study. It was virtually spot-on. In August of 2006, the sum of actual ethanol production-capacity in place, plus the planned capacity of those ethanol facilities that were already under construction passed the eight billion gallon mark as ethanol plants overshot the 7.5 billion gallon mandate. The average corn price in August 2006, at the end of the last crop year, was $2.09, but when current and prospective ethanol capacity hit the eight billion gallon level, corn prices started a bull trend, still in place. On January 23, the day of the State of the Union speech, corn was $4.09 per bushel. Many analysts expect $5.00 per bushel before this is over.Source: National Review Online: The Corn Threat: Feb 22, 2007
Some context on corn prices. For the past ten years, the average price has been $2.05 per bushel; in only three years have corn prices ever topped $3.00 per bushel. The all-time record-high season-average corn price is $3.24 per bushel in 1995/96 — a year that saw many ethanol mills shut down because of too high corn prices. But now, the use of ethanol is mandated by law, and as such price does not necessarily impact demand. Instead, the burden of record corn prices falls on the livestock and meat sector — typically the economic engine of the rural and farm economy.
In early December, the Nebraska Cattlemen’s Association — the group of cattle ranchers and farmers from Secretary Johanns’ home state — passed a resolution at their convention calling for ethanol to “transition to a market based approach,” and opposing “any additional federal or state mandates for ethanol usage and/or production.” The National Cattlemen’s Beef Association passed a similar resolution at their convention in February calling for an end to ethanol subsidies. The National Turkey Federation and the National Chicken Council — producers of turkey and chicken meat — had both testified before congressional panels as early as the summer of 2006 that ethanol mandates posed a threat to their industries’ economic viability.
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