stuclach

Congratulations.

Mr. Movie,

Without knowing some specific examples of traders receiving bonus while hurting their customers and the details of that specific situation, I can't really provide a satisfactory answer. I will say that any trader who is consistently under performing the market should not receive a bonus and, in some cases, shouldn't have a job.

However, if the market lost (for example) 20% of its value and a trader's clients only lost 10%, then he/she actually did a solid job and might deserve a reward. Their productivity was higher than their competitors'.

I am not sure if this is what you are referring to when you mentioned the effect on the county, but a number of people have put a lot of the blame for the mortgage crisis on financial organizations and representatives. While they deserve some of the blame, we must again keep in mind that there is some personal responsibility, as well. If I knowingly apply for and sign a loan agreement to buy a $200,000 house while earning only $30,000 a year, I am responsible (to a large extent) for defaulting on my mortgage. The bank shouldn't have given me to offer, but it was me promising to make the payments outlined in the agreement.

If the bank misled the borrower, then clearly the blame shifts back to an extent.

If that isn't what you were referring to, then please disregard.

Chris

P.S. Sorry to comment and run, but my kids and I have to head to vacation bible school, so we can get our dose of brainwashing (no offense intended, just the way it has felt this week). Thank you for indulging me in my rambling. Have a good weekend.

Here is the article:
http://hercules.gcsu.edu/~cclark/Survey%20of%20Republicans,%20Democrats,%20and%20Economists.pdf

Mr. Movie,

I tried to be clear that Min. Wage isn't the sole cause or even the biggest cause, just that it was a significant, but seemingly ignored cause. Sorry if I didn't make myself clear. I get excited. You should see me in the classroom.

Excellent question.

I feel earnings should be based on productivity. Not effort, not intelligence, not skill, not potential, but actual output and its value (just like a student's grade in a course should be based on actual performance, not effort, etc). I feel that IF these hard working men and women who are earning minimum wage are actually becoming more productive, then they deserve a raise. If they are not becoming more productive, then I don't see how a raise is justified.

The same should be true for a CEO. If I am a CEO and am able to expand my company in such a way that it creates say 1,000 jobs (min. wage or otherwise) and that my company's profitability increases the average value of 401k/pension plans, then yes, I deserve a nice bonus because I have been very productive and society benefits from my work. However, if my company fails and/or hemorrhages jobs, then no, I don't deserve a bonus (or my job, in some cases).

This doesn't mean that I feel minimum wage should never move. Inflation requires that it move if we wish for it to serve a meaningful purpose. I prefer a minimum wage that tracks inflation to one that jumps by large chunks every 5 to 10 years. It is much less jarring for our economy if we raise minimum wage by (for example) 2% per year every year than 10% every 5 years. And the actual wage after five years would be same.

Keep in mind that that $2.10 raise, from $5.15 to $7.25 is a roughly 41% raise. That is a very, very large raise in percentage terms. If I told you a man making $30,000 year working in a factory (for example) was going to get a raise to $42,300 without doing any additional work or being any more productive would you feel that was excessive? I do.

The distribution of income and/or wealth in this country is certainly skewed (as it is in all countries). However, I feel it must be skewed to provide motivation. If income were perfectly equal, there would be near zero incentive for hard work and society would suffer. I have no problem with a more equal distribution, but I want to make sure the methods and motivations are sound.

(I don't mean to give the impression that ALL economists feel the way I do. I am giving you my feelings on these topics. I feel they are in line with most economists. However, we economists are a surly lot, so there are a great many opinions on some of these issues.)

You may want to check out this article to get a feel where we (and the majority of Democrats and Republicans) stand on a number of issues.

Chris

Sorry, that should read "I am an Economics professor...".

Also, I meant to mention that I worked for minimum wage for two years while I was in High School. Interestingly, roughly two thirds of all minimum wage workers are third wage earners like I was.

Mr. Movie,

I am a Economics professor at Georgia College & State University. I received my Ph.D. in Economics from the University of Kentucky in 2005. My two fields of specialization were Labor Economics and Public Economics.

Chris

Mr. Saget,

I enjoyed your work on Full House.

I also enjoyed your post. It is refreshing to see someone actually thinking for five seconds before playing the "it was those greedy people over there that cause it" card. You are correct that a number of issues are being ignored.
I find it particularly fascinating that the steady and sizable minimum wage increases that have taken effect in each of the last 3 years are being completely ignored as causes of and contributors to our current economic situation. If you own a store and I tell you I am increasing the wage you have to pay your workers by roughly 30%, what are you going to do? Fire some workers and raise your prices, so you can stay in business. Economist have shown repeatedly that increasing minimum wage generally (but not always) has these effects. I am not trying to say that minimum wages are inherently bad, just that there are consequences and that those consequences are contributing to what we are experiencing right now.

I also don't mean to imply that min. wage is the sole cause of our situation. Just that it is a significant contributor that is being ignore because we asked for it and don't want to take responsibility for the consequences. Instead, we blame "those guys on Wall Street" who are so damn greedy.

The next time you meet someone who is unemployed ask him if he would rather have a job that pays a minimum wage of $5.25 or no job and a minimum wage of $7.25.

Master Chief

Season 5: "Going to California"

It was cool to see Eric disobey and make a very long trip to save the day. Plus, Jessica Simpson is smoking in this episode.

What percentage of the $600 price of the PS3 (or a $3000 TV) is going to R&D on garbage like this irrelevant technology? IF Sony had competent leadership they would have cut the strings on this proprietary crap long ago.