from --Investor's Business Daily
Mon Dec 18, 7:00 PM ET
The Economy: As they get ready to take control of the House and Senate, Democrats have a long legislative wish list. Notably lacking, however, are any meaningful proposals that would bolster economic growth.
So far, Democrats have mainly offered a litany of new mandates and regulations. Not one could even charitably be called pro-growth. Consider what they have in store for businesses:
Higher wages. Nancy Pelosi has pledged to make boosting the federal minimum wage by 40% one of the first legislative acts of 2007. At best this will raise wages for some workers, but it will do so at the expense of small businesses forced to pay the higher rate, and at the expense of the many minimum wage earners pushed into unemployment.
Given that most minimum wage workers get promoted to higher-paying jobs within a year, cutting off the first rung of the ladder by hiking the minimum isn't just bad economics, it's bad public policy.
New mandates. According to the Washington Post, Democrats plan to push a bill requiring that any company with more than 15 employees offer at least seven days of paid sick leave for full-time employees. Sounds great, but won't that further raise the cost of doing business, particularly for the thousands of small businesses trying to cope with the minimum wage hike?
Price controls. Another Democratic priority will be to enact anti-price-gouging laws, allegedly to prevent gas stations from taking advantage of a crisis to jack up pump prices. Never mind that the Federal Trade Commission studied the sharp price hikes after Hurricane Katrina and found nothing to suggest price gouging. And never mind that any such law would essentially amount to price controls on gasoline -- the very thing that caused the gasoline shortages in the 1970s.
Union rules. Also at the top of the Democrats' wish list is the "Employee Free Choice Act." This would require employers to recognize a union after a majority of workers sign cards authorizing union representation. Today, companies can choose whether to recognize such nonsecret ballots, and for good reason. Past "card check" elections saw examples of union threats, coercion, promised benefits and the like to get workers to sign the cards.
As liberal commentator Mickey Kaus put it, the law "could dramatically change the structure of the American economy for the worse, spreading unproductive, legalistic, Detroit-style union practices (by) subjecting nonunion workers to thuggish peer pressure."
Trade. As USA Today said recently, the November election "propelled a phalanx of trade skeptics onto Capitol Hill" who have little interest in expanding free trade. Meanwhile, the House Democrats' Web site talks about restricting trade agreements to those that "keep jobs here."
But given that the "fair trade" crowd considers any free trade deal a job killer, that will almost certainly mean scuttling new agreements -- such as pending deals with Peru and Colombia. That will appease labor unions but do nothing to help the economy.
To be sure, Democrats do eventually get around to talking about growth. But what they offer is little more than a grab bag of new federal spending, highly targeted tax breaks and greater support for "public-private" initiatives.
They'd pump money into new broadband subsidies, even though broadband penetration is skyrocketing. They'd also double funding for programs such as the Manufacturing Extension Partnership, a piddling $110 million program that the Congressional Budget Office concluded was of questionable value. And they'd pour more money into federal research programs that rarely produce market breakthroughs.
Paying lip service to the free market while choking it with costly new rules and regulations is no recipe for sustaining economic growth.
Copyright 2006 Investor's Business Daily, Inc.
Mon Dec 18, 7:00 PM ET
The Economy: As they get ready to take control of the House and Senate, Democrats have a long legislative wish list. Notably lacking, however, are any meaningful proposals that would bolster economic growth.
So far, Democrats have mainly offered a litany of new mandates and regulations. Not one could even charitably be called pro-growth. Consider what they have in store for businesses:
Higher wages. Nancy Pelosi has pledged to make boosting the federal minimum wage by 40% one of the first legislative acts of 2007. At best this will raise wages for some workers, but it will do so at the expense of small businesses forced to pay the higher rate, and at the expense of the many minimum wage earners pushed into unemployment.
Given that most minimum wage workers get promoted to higher-paying jobs within a year, cutting off the first rung of the ladder by hiking the minimum isn't just bad economics, it's bad public policy.
New mandates. According to the Washington Post, Democrats plan to push a bill requiring that any company with more than 15 employees offer at least seven days of paid sick leave for full-time employees. Sounds great, but won't that further raise the cost of doing business, particularly for the thousands of small businesses trying to cope with the minimum wage hike?
Price controls. Another Democratic priority will be to enact anti-price-gouging laws, allegedly to prevent gas stations from taking advantage of a crisis to jack up pump prices. Never mind that the Federal Trade Commission studied the sharp price hikes after Hurricane Katrina and found nothing to suggest price gouging. And never mind that any such law would essentially amount to price controls on gasoline -- the very thing that caused the gasoline shortages in the 1970s.
Union rules. Also at the top of the Democrats' wish list is the "Employee Free Choice Act." This would require employers to recognize a union after a majority of workers sign cards authorizing union representation. Today, companies can choose whether to recognize such nonsecret ballots, and for good reason. Past "card check" elections saw examples of union threats, coercion, promised benefits and the like to get workers to sign the cards.
As liberal commentator Mickey Kaus put it, the law "could dramatically change the structure of the American economy for the worse, spreading unproductive, legalistic, Detroit-style union practices (by) subjecting nonunion workers to thuggish peer pressure."
Trade. As USA Today said recently, the November election "propelled a phalanx of trade skeptics onto Capitol Hill" who have little interest in expanding free trade. Meanwhile, the House Democrats' Web site talks about restricting trade agreements to those that "keep jobs here."
But given that the "fair trade" crowd considers any free trade deal a job killer, that will almost certainly mean scuttling new agreements -- such as pending deals with Peru and Colombia. That will appease labor unions but do nothing to help the economy.
To be sure, Democrats do eventually get around to talking about growth. But what they offer is little more than a grab bag of new federal spending, highly targeted tax breaks and greater support for "public-private" initiatives.
They'd pump money into new broadband subsidies, even though broadband penetration is skyrocketing. They'd also double funding for programs such as the Manufacturing Extension Partnership, a piddling $110 million program that the Congressional Budget Office concluded was of questionable value. And they'd pour more money into federal research programs that rarely produce market breakthroughs.
Paying lip service to the free market while choking it with costly new rules and regulations is no recipe for sustaining economic growth.
Copyright 2006 Investor's Business Daily, Inc.
), but the challenge of running a business and the risk that is involved on the owner's part must be compensated or we will thwart American's desire to create new businesses. If you expect someone to go through the hassle of operating a business and make the same amount as someone who just works to collect a check, then we disagree on this entire subject. Don't gouge, but you have to be fairly compensated.
