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I have to confess to feeling great contempt of Congress. My fantasy is to see the captains of industry who actually create wealth in this country give Congress a dope-slap of this sort to the twits and brigands in our legislature.

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The topic was smoke-free bars in the City of St. Louis. I hate smoking, for the record. I think smokers have a nasty history of being thoughtless in the pursuit of their habit. I am surprised at how offensive I find the smell. Long gone, the stink of cigarettes linger in public spaces where smokers have traveled. The curbs are clotted with filthy little butts. I see nothing whatsoever to recommend smoking…except that it is perfectly legal.

In discussing the liberty aspects of a bar owner choosing whether or not to offer a smoke-free environment, my friend noted that he was surprised that the free market failed to provide more smoke-free environments. He planned to vote in favor of a smoking ban because he liked bars but hated smoke.

First, free markets are not a guarantee that we will eventually get what we want, but that in generally, the free market will provide enough of something to meet demand at a given price, all things being equal. As smoking has become less popular, I don’t think we will get a wide variety of smoke-free bars to choose from, but rather enough to meet demand. Eventually. All things being equal.

The statist is an impatient creature. Once they settle into their heads they wish something, they will get it however they feel they can. Smoking ban fans are certainly well-meaning, and the “work environment” arguments about employees who work in bars and their exposure to smoke have a solid point not easily defeated. Still, my friend was simply voting in favor of a ban because he wanted more smoke-free bars.

It disturbs me when an American will go to the government to demand of a property owner a thing that the owner is not willing to provide. My friend is not being denied a smoke-free bar based on race, color, creed or religion. He is being denied because the bar owner thinks there are more customers to be had by allowing smoking in his bar. While there is a principled argument on health to make about a smoking ban, simply voting for the ban for my own preference of environment is simply participating in mob rule.

Nobody has the guts to just ban cigarettes. If they are so damn dangerous, then just ban the stupid things. The thing is, they are not dangerous enough to ban in the mind of the public, so nanny-state do-gooders get together and nibble at the edges. This is bad enough, but to join in in a form of soft tyranny for no other reason than to expand your selection of watering hole is downright un-American. We are either free men, or we are slaves to the mob. Unfortunately this sort of me-centric thinking is very common today, and I don’t see it changing anytime soon.

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It will be interesting to learn how this particular little gift to the American people will play out.  If I recall correctly, most givernment project typically require a “prevailing wage” be paid.  If in a given region your typical concrete guy makes $28.00 per hour plus benefits, the prevailing wage requirements require that anyone performing a contract would pay some percentage of the prevailing wage.  While this does keep non-union contractors from deeply undercutting union contractors, at least it introduces some competition into a labor pool.  Prevailing wages are calculated from non-union workers as well as union workers.

Now a government project can demand not that prevailing wages be paid, but that only union members be offered jobs.  Nice work.  If a fancy project in President Obama’s native Chicago begins, the local political thugs can see to it that only their union pals need bother applying for the job.

Only 16% of Americans work in a union.  Millions of employees will get sent the bill for this pork-laden stimulus package – The Milwaukee School District will receive 84 million of our hard-earned dollars to build new schools even though 15 buildings are already vacant.  In return, the overwheliming majority of them will not be allowed to work on the projects if the project managers elect to require union-only labor to perform them.

OK class, what happens when you increase demand and reduce supply – in this case labor? That is correct, you have wage inflation.  Of course wage inflation will only affect the union labor force.  Non-union labor will be frozen out of many projects.  Prevailing wages will probably go up, however, so now the price tage of other projects will rise.

Couple this with Obama’s pomise to sign legislation eliminating secret ballots in union elections and you can see who his administration thinks about first.  Good deal for the 16% of Americans who are union, but I guess the rest of us can just suck it up andcut the checks.

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My hat has fallen on hard times.  I wore it in lieu of a bandanna when working out, so it needed to be washed with the rest of my togs lest it become as fragrant as the south end of a northbound buffalo.  In the wash it became twisted up with other clothing and the Velcro closure tore off.  The hat has been sitting in the laundry room for a week or so, and this morning I decided to do something about it.  

I have no particular affection for it, it is not a memento.  It was free, and I have several other similar hats that would work just as well keeping sweat from my eyes.  I could likely score a half dozen more just like it if I paid attention.  Nevertheless, I broke out a needle and thread, and spent a few minutes repairing the hat.  I have been preternaturally dismayed at how disposable our things have become.  Blowing and throwing a tissue is more sanitary than handkerchiefs, so I am fine with things meant to be used and tossed meeting their appointed fate.  Still, a few stitches in my hat, and it was back in business.  I imagine that more people would patch up little things like this, but who today knows how to sew?

As a teenager, I bought a used backpack.  After a few trips the hip belt was ready to fail.  A new one was more than I could afford.  On an inspiration, I took he belt to a shoemaker.  He was able to sturdy as new for just a few dollars.  I felt very clever, and have been a fan of shoe repair shops ever since. There is a skill in identifying things that can be mended, and yet more skills in mending.  Money spent on a new thing to replace a repairable thing is money that could be put to better use.  It further exacts a cost in the lost opportunity to feel satisfaction in keeping one’s world in order.  Any fool can dispose and buy, it takes wisdom and foresight to repair, to add a rivet, drive a nail or choose the right glue.  Necessity may breed being handy, surely our fathers learned this when money was scarce, but learning to fix a thing has it’s own rewarding virtue even if you can afford a new one.  I hope to pass this on to my grandkids.

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To detractors the centerpiece of supply side economics, namely tax cuts, are merely a sop to the rich. However, this understanding strikes me as less rational, and more borne of envy.I would argue that I have no real claim on another man’s income beyond the sort of basic government services we all consume. Even so, there is the reality that most people who reflexively dump on Reaganomics have no clue what a Laffer curve is, much less the logic behind it.

Let me begin by asking how long you would work if you knew that 100% of your income would be taxed? If you answered zero hours, welcome new member of the of supply side economics fan club. Economist Arthur Laffer reasoned that there is a point where taxation tells a worker or an entrepreneur to not bother working. I remember when a guy would lose more in taxes than he’d gain in a raise. People who would be otherwise enterprising decide, Laffer reasoned, to forego doing extra work because there would be little reward. When Reagan took office, the highest tax rate was 70 percent. Pile on top of that state and local taxes, and you might see a man taking home a mere 20 cents on the dollar earned. It is perfectly intuitive that unless earning the dollar you get 20 cents out of is VERY easy (like say a massive trust fund left behind by a former bootlegger father), you are not going to be in a big hurry to earn it.

The Laffer Curve

The Laffer curve seeks to point this out, showing that from 0% up to about 28%, tax revenues collected increase. After that point, they slowly start to decline, and begin a dramatic drop-off as rates approach the upper end. In fact, under Reagan, tax revenues ballooned. Unfortunately, so did spending. Today tax cuts are blamed for the soaring deficits of the Eighties, but at least as strong an argument could be made that deficits were the result of out of control spending (At least Reagan’s military spending had the desired effect – the collapse of the Soviet Union. Can we say the same of welfare?).

Low tax rates, the main tool of supply-side economics, has had the desired effect of letting the creative, enterprising people out there know that their extra effort will benefit themselves and their families, not just the Government. Rich people don’t put their money in coffee cans in the backyard, they spend it, creating demand for goods and services which spell jobs. Moreover, the cost of government over the last few decades has shifted to the wealthiest Americans, something the anti-supply-siders seem to want. I’m not sure why people getting the golden eggs are resentful that we haven’t killed the goose in the process.

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