Government Trying to Raise any Group’s Wages is Always a Bad Deal

Among the different discussions following every Super Bowl, a prominent source of debate seems to always be the game’s commercials. This year, in addition to the typical opinions about which ads were good or not, the underlying politics of the companies’ messages became a hotly held conversation. The two spots that seemed to cause the most political intrigue were Budweiser’s brief history of their German-born founder as he immigrated to America and Audi’s pledge to equal pay for women. Both of these advertisements were seen as being controversial by at least some.

It’s not hard to see why these corporations chose to convey these messages in what would assuredly be their most watched commercials. Embracing immigrants (or those different from you) and paying different people the same salary for the same work regardless of gender is usually looked at as a social good to be strived for. Thus, those companies who champion those ideals would be looked at favorably by the public. But are women really paid less for the same work and what parallels can we see by observing the misguided legislation to raise the wages of both women and immigrants in the American workforce?

The gender wage gap, as defined by the left (and almost certainly Audi), is a complete myth. When adjusted for hours worked, type of job and time spent away to have and raise children that pay gap shrinks to virtually nothing. So a woman getting paid less than a man is not about sexism and more about the choices women make during their lives. Valuing things like spending time away from work due to lifestyle differences, women will inevitably be somewhat less valuable as an employee when compared to a male counterpart who can focus more of his time on his job.

So what will happen if “equal pay” legislation is introduced to the American workforce? Well, rather than an employer simply raising the salaries of all of his female employees to the level of males, the options that women have with regard to their jobs will simply cease to exist. For example, a women with small children may choose a lower salary if it means she can work from home. The introduction of a new law forcing her employer to pay her the same as a man who shows up at the office every day (and is thus worth more to the company) will not cause the employer to cave and pay her the new, higher amount. Instead, the option of working from home will now disappear since it will now not be worth it for the company to pay an at-home worker the same salary as an office worker.

Similarly, progressive activists have the same effect on immigrants when advocating for increased wages in the form of minimum wage laws. According to Cato Institute economist Alex Nowrasteh:

“Immigrants are more likely to be lower-skilled workers, exactly the types of workers most likely to be harmed by a higher minimum wage.”

Due to less education, a lack of experience and a more limited grasp of English, the labor of immigrants is often not as valuable as that of than their native-born counterparts. This would certainly account for a lower wage being made by those immigrants who fit any of these descriptions.

Now, if there were a law which increased the amount an employer had to pay an employee, would all of those employers who had hired immigrants all of the sudden pay them as much as the more valuable and more experienced workers? Most likely they would not. Rather, the opportunities for those inexperienced and uneducated immigrants would simply disappear. Raising the minimum wage would eliminate the bottom rung of the ladder that these individuals would often use as a stepping stone to gain the experience which they currently lack.

Fortunately for many immigrants of America’s past that there was no barrier to entry like the minimum wage to keep them out of the workforce and prevent them from making better lives for themselves. Had there been laws like this, many immigrants hired at Budweiser’s St. Louis brewery (and other jobs) would have been unable to have that opportunity. Likewise, preventing women from having the flexibility to choose a lower salary has the same effect. Writing laws to force employers to pay a higher salary to a particular group, whether immigrants or women, destroys the opportunities for both groups by failing to account for the situational differences that result in the difference in pay. Getting rid of both so-called equal pay laws and minimum wage laws is what will actually help the groups that this legislation was intended to benefit.

New Los Angeles Stadium to Attract Big Events and Bigger Cronyism

After more than two decades without a professional football team, the city of Los Angeles is about to land their second NFL franchise in as many seasons. After the Rams relocated from St Louis before this past NFL season (they had played in LA previously from 1946-1994), the San Diego Chargers have followed suit and made the same move for 2017. The big draw for these teams, other than Los Angeles being the second largest city in the nation, is that there is a new stadium being built that both teams will share as their own. That stadium will be located in Inglewood, CA (an LA suburb) and is set to open in 2019. The NFL has also selected the stadium to host the 2021 Super Bowl.

Although developers and city officials claim that the stadium will not rely on public funding (an extreme rarity in the world of sports), it turns out that’s not 100% accurate. The plan would eventually recoup tens of millions from Inglewood taxpayers through reimbursements once it opens. The tax breaks obtained by the developers could also total as much as $100 million after the plan is put into place. So it’s not quite the exclusively private endeavor that the state officials would have the taxpaying public believe.

The claim that sporting events cause a significant increase in economic success to a certain area has been met with high levels of skepticism for quite some time. This is partly because of would-be patrons of local businesses avoiding the large crowds that these types of events bring. But even if the boost in local economic activity is true, the NFL has fewer games to host than any other professional sport. Despite two different teams playing in the new Inglewood stadium, that’s only 16 home games every calendar year (perhaps 1-4 more including playoffs). So how does the stadium generate revenue for the other three hundred forty plus days of the year?

The NFL isn’t the only sport eyeing the brand new LA stadium for future plans. The International Olympic Committee (IOC) will announce in September of this year which city will host the 2024 Summer Games. Los Angeles is one of the five cities currently in the running. The new stadium looks to play a key role with the opening and closing ceremonies, as well as other events that may end up being held there. If LA is selected, the Inglewood stadium may end up being the deciding factor.

The economic increases surrounding a city landing the Olympic Games are arguably even less of a cause for excitement than the NFL. The combination of the IOC taking half of the income generated, the infrastructure spending seemingly always going over budget and the lack of the ability to find a use for the newly built facilities after the Olympics end results in mostly lousy financial returns. Cities often end up buried under a mountain of debt with little to show for it. There is not much reason to believe that Los Angeles would be any different in this regard.

All of this reinforces the San Diego voter’s decision during this past election to reject tax increases in a ballot measure directed at raising funds for a new stadium. While knowing it could spell the end for professional football in their city, the voters still refused to go along with the plan. Considering the lack of evidence for a significant economic benefit from the would-be stadium, it appears as if the San Diego electorate did indeed make a wise decision. Keep all of these things in mind in 2019 when people start praising the wonders of LA’s new stadium complex.

Trump Embraces Migration Restrictions of Both Rich and Poor

“A free and prosperous society has no fear of anyone entering it. But a welfare state is scared to death of every poor person who tries to get in and every rich person who tries to get out.”

-Harry Browne, former Libertarian nominee for President

This quote seems to ring especially true any time that politicians (or those who aspire to be) propose either immigration restrictions or economic protectionism. The reasoning for those proposals is quite obvious. Those who fear the migration of the poor to their country are concerned about the cost of lavish welfare benefits available for disadvantaged individuals (despite evidence that immigrants are less likely to use such benefits). Those who fear the fleeing of the rich do so out of concern that fewer tax dollars will be available to pay for extravagant government spending programs. Methods imposed by the state to dictate both inward and outward migration are often totalitarian in nature and stem from the fact that the society enacting those methods is not a free one.

Perhaps no recent federal level candidate has exemplified this way of thinking more than presumptive Republican presidential nominee Donald Trump. The desire of Trump to impose heavy-handed immigration restrictions as the potential commander-in-chief is well known to the American public. He plans on having a wall built that stretches the length of the US-Mexico border that Mexico is allegedly going to pay for. He very much wants to round up and deport the estimated 11 million immigrants living illegally in the United States. Certainly part of this desire stems from the fact that Mexicans (and other immigrants) are often poor and unskilled. Trump made this very clear in the speech he made while announcing his presidential run when he said, “When Mexico sends its people, they’re not sending their best. They’re sending people that have lots of problems, and they’re bringing those problems with us.” Many people who agree are fearful that the American taxpayer will have to foot the bill for the fact that many of these immigrants are from the lower economic class and therefore are not “the best” Mexicans.

But Trump’s desire to restrict voluntary migration doesn’t just apply to poor Latinos. It also applies to rich businessmen and wealthy organizations who may choose to do business elsewhere. Trump conveyed his supposed need to prevent this occurrence when the World Golf Championships decided to opt for Mexico City over the Trump owned course in Doral, FL (where it had been held since 1962) for the event next year. The billionaire real estate mogul then addressed this decision at a campaign rally in Sacramento, CA by saying, “They moved the World Golf Championships from Miami to Mexico City. Can you believe it? But that’s OK. Folks, it’s all going to be settled. You vote for Donald Trump as president, if I become your president, this stuff is all going to stop.”

It’s not clear what measures Trump would go to in order to prevent a private organization (like the PGA) from voluntarily moving one of its events out of the US. But his desire to use the power of government to stop such action reflects his fondness for economic protectionism. It is not much different from the plan once proposed by Senator Chuck Schumer (D-NY) to levy taxes on wealthy individuals after renouncing US citizenship. The bill, often nicknamed “The Ex-Patriot Act,” was motivated by the fact that Facebook co-founder Eduardo Saverin had renounced his U.S. citizenship. Clearly the legislation served as a last ditch effort for the American government to obtain some portion of a wealthy person’s money before they lost the ability to do so. It’s difficult, however, to see how an action like this could be directed at the PGA since they are not treated as an American citizen. Perhaps only Trump knows the strong arm tactics he would use to prevent something like this from happening.

It shouldn’t be surprising to anyone who has followed Trump’s campaign thus far in the 2016 election cycle that he would embrace totalitarianism espoused by both the left and the right. His need to vilify poor foreigners and prevent their entrance into the country delights many on the right. His desire to keep rich organizations and the individuals associated with them from exiting the country embraces a philosophy often championed by the left. Considering the fact that the Trump has backed extraordinarily expensive proposals such as a gigantic border wall to keep Mexicans out, a police state to hunt down illegals and some sort of unspecified government run health care system, it isn’t hard to see why he would want to prevent both entrances from the poor and exits from the rich. If a country rejects these types of expensive and expansive policies, our fear of these types of migrations across our borders will dissipate. Harry Browne was right; a truly free society has no concern over such things.

The New York AG’s Baseless and Hypocritical Ban on Fantasy Football

The government of the state of New York has once again shown itself willing to prohibit peaceful activities in the name of its own warped version of a greater good. The activity supposedly in need of a statewide ban—at least this time, is online fantasy football betting. Specifically the betting that takes place on popular sites like DraftKings and FanDuel. New York Attorney General Eric Schneiderman has ordered these sites to cease and desist the taking of bets from New York residents. In his statement explaining his motivation for this, the AG claimed:

“It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country,” adding, “Today we have sent a clear message: not in New York, and not on my watch.” But who is actually being harmed by fantasy sports participation and what are the New York State Government’s real motivations for making it illegal?

The prime motivation cited for the need of government protection from fantasy football mega-sites is rooted in a recent scandal involving an employee at DraftKings obtaining knowledge of selected players within his company to win $350,000 at FanDuel. His advantage in this case has been compared to the illegal activity of insider trading. Responses from the New York Times, Sports Illustrated, and Deadspin either accuse or imply that the world of fantasy sports is “unregulated” and must be dealt with.

Even if this employee’s large pay day was due to inside information, it is still not a justification for government involvement. After the employee’s winnings were made public, the two sites claimed that they would each stop their employees from participating in each other’s fantasy sports contests. Each site then announced it would come up with a more formal policy to further govern employee behavior. This all occurred without the heavy hand of government, because those in the business of fantasy sports have a vested interest in keeping their customers coming back. If those customers feel that the game is rigged against them, then another site will emerge that regulates its employees in a way that the average fantasy sports participant feels comfortable with.

But this new attempt to better protect the integrity of their brand was apparently not good enough for Schneiderman. The Attorney General still went through with his statewide prohibition. Because he feels that fantasy sports represent contests of chance and not skill, they are therefore illegal in the state of New York. But if there is no skill involved, then what benefit could there even be to obtaining inside information?

The ultimate hypocrisy is that the New York state lottery is not only gambling, but also a complete game of chance. The odds of hitting the lottery are significantly lower than winning money in fantasy sports. Yet the lottery remains perfectly legal despite requiring no skill whatsoever. Does insider information about the lottery even exist? Would there be any point in trying to obtain it? Of course not, because there can be no strategically obtained information for games of total luck.

New York is not the only state with politicians needlessly beating the drums against online fantasy sports betting. Nevada’s Gaming Control Board issued its own cease and desist order to DraftKings and FanDuel ten days after the “scandal” broke. Two federal politicians from New Jersey; Rep. Frank Pallone and Sen. Bob Menendez, called for an investigation by the Federal Trade Commission (FTC) to “ensure a fair playing field.” The fact that Nevada is home to Las Vegas gambling interests, including billionaire casino owner Sheldon Adelson (who has consistently crusaded against online gambling), is no doubt a motivating factor in online fantasy sports prohibition in that state. Also included are the interests of Atlantic City gambling to Pallone and Menendez. The gambling establishment doesn’t like competition and has no problem using the state to spread enough fear to stifle it.

A significant unintended consequence is that fantasy sports actually are regulated, but will now cease to be so, creating a black market as a result of banning the activity. The FTC can regulate all legal businesses in the US to prevent cases of fraud and other unlawful activities. The only way an American business can be truly unregulated is if it is operating in a black market. Making an activity people want to participate in illegal—like fantasy sports, (or drinking alcohol, smoking marijuana, gambling, etc.) creates these unregulated black markets and the social problems that come with them. So as a result of the bogus complaints about an unregulated practice, a ban has now been put in place that will cause true unregulated activity.

Once again the media and powerful members of the government have come together to scare society away from something that is not worthy of their attention. The outcome of their actions create enough fear to cause the people to look to the state as the solution to a manufactured problem that they no doubt will make worse by trying to solve.

 

Walker’s Stadium Deal Highlighted Inconsistency of Failed Campaign

Scott Walker has now suspended his campaign for the 2016 presidency. The Wisconsin Governor saw his candidacy go from being a true contender for the nomination to having almost no support at all among likely voters. Before dropping out of the race, his campaign canceled trips to Michigan and California in order to focus more on early primary states. Many said this was a sign that Walker’s presidential bid is officially in panic mode. They were not wrong.

Like anyone running for public office that experienced plummeting popularity, there were certainly some things that the Walker campaign could have done better. His two debate performances were mostly forgettable and he struggled to articulate a number of positions on key issues. But for those who paid attention to Walker’s record as governor, a big problem was his inconsistency on the very core positions that were supposed to help his cause. The most notable of these may be the plan he unveiled to build a new stadium for the Milwaukee Bucks in order to keep them from leaving town.

Walker’s administration has put forward a proposal to spend $250 million dollars (with interest) of taxpayer money toward building a new arena in Milwaukee. The governor defended the plan by making the bogus claim that “Our return on investment is three to one.” This claim is widely debunked by recent economic data. Projected gains made by subsidized stadiums are almost always overstated. This is because of what economists sometimes call “the seen vs. the unseen.” Economic activity taking place at a venue like a stadium (buying tickets, paying for parking, concessions, etc.) can always be seen. But what can’t be seen are the activities at other places of business that are reduced by those wishing to avoid the excessive traffic and crowds that come with those games at the stadium.

This expensive and ill-advised deal is especially troubling considering Walker’s frequent claim to be a fiscally conservative budget hawk. His campaign website claims that:

“he has proposed bold reforms that have eliminated the state’s $3.6 billion budget deficit without raising taxes…these profound changes have saved Wisconsin taxpayers more than $2 billion.”

To have a record demonstrating these things and then to display such inconsistency and recklessness with taxpayer money is not a promising sign.

It’s been rather interesting to see members of both the left and the right come together in opposing Walker on the stadium issue. On the right, Americans for Prosperity, Reason Magazine and the Cato Institute have objected to the plan. On the left, NPR contributor Charles Peirce, Bloomberg and Think Progress have also been critical. With this kind of bipartisan opposition, Walker’s recent actions have become a frequent target.

The “average” Republican voter may still be unaware of the Walker stadium debacle. Other candidates hadn’t aggressively criticized him on the issue and it didn’t come up in either of the GOP debates. In the last debate, frontrunner Donald Trump did bring up an example of Walker’s lack of fiscal restraint as governor. But the accusation was proven to be misleading. Perhaps Trump is hesitant to criticize his rival over crony capitalist deals out of fear that it may shine a light on The Donald’s own use of eminent domain laws to pad his personal bank account.

Even though the $250 million dollar stadium deal may not be one of the major causes of Walker’s downfall, it looks to be one of several examples of his incoherent message. From flip flopping on support for ethanol subsidies to briefly backing a wall along the US-Canada border, missteps and inconsistency have been the norm. Spending the kind of money Walker wants to spend on a new stadium doesn’t appear to be the cause of his electoral collapse. It’s simply a symptom of it.

 

 

 

Government Does The Worst Kind Of Gambling. But Of Course, It’s Legal When They Do It.

NBA Commissioner Adam Silver sparked some significant discussion back in November when he came out in support of legalized sports gambling. He submitted an article to the New York Times where he proposed that wagering on professional games should be legalized and regulated. These comments made him a revolutionary voice among other sports commissioners both past and present. So much talk was initiated by Silver’s opinion that ESPN devoted their entire February 2015 magazine publication to the debate by titling it “The Gambling Issue.”

Part of Silver’s reasoning for his new position stems from a desire to better eradicate some of gambling’s shadier characteristics rather than a support for every consequence that gambling may entail. In the aforementioned ESPN the Magazine issue, he is quoted as saying:

“One of my concerns is that I will be portrayed as pro sports betting…But I view myself more as pro transparency. And someone who’s a realist in the business. The best way for the league to monitor our integrity is for that betting action to move toward legal betting organizations, where it can be tracked. That’s the pragmatic approach.”

Of course, libertarians and other liberty minded people know this argument all too well. It is the argument they use to support the legalization of other vices that the government has criminalized. Their support for ending the drug war (for example) is more about taking power away from drug cartels and drug dealers through the same transparency Silver describes rather than championing actual drug use. Yet uninformed people will no doubt label Silver as “pro sports betting” just as they label those who advocate drug legalization as “pro drug use.”

But when one thinks about the audacity of a government preventing its citizens from engaging in voluntary wagers of their own money, it becomes easy to see the hypocrisy at play. First of all, Merriam-Webster’s Dictionary defines “gamble” as “to play a game in which you can win or lose money or possessions.” And of course, no one gambles with money or possessions quite like governments do. It’s easy to see why they do this. Since all money government has it obtained from other individuals, it is less likely that government will behave responsibly with it.

The examples of these failed state supported gambles with public money are numerous and seemingly never ending. Senator Tom Coburn (R-OK) publishes his annual “wastebook” detailing the ridiculous programs the federal government spends money on. On the state level, boondoggles like California’s high speed rail, Seattle’s highway tunnel and Pennsylvania’s incinerator are only some of the more glaring cautionary tales.

Add to all of this the fact that the money spent to build the stadiums where the sporting events take place is often seized via taxation from the public. And so many times those subsidies are not even worth the return on investment.

So it’s not just that government gambles away money that initially belonged to other people. It also prevents those people from gambling on sports with their own money despite the fact that the facilities containing the sporting events are paid for by those same taxpayers. Perhaps it’s time for members of government to enter a gamblers anonymous program.

Realizing the Folly of Sports as Economic Stimulus

As Super Bowl XLIX descends upon us, once again we see evidence that sporting events are not responsible for wildly successful economic surges. The most recent blow dealt to this bogus claim came from Glendale, AZ (the sight of this year’s Super Bowl) mayor Jerry Weiers when he said of the game “I totally believe we will lose money on this.” Weiers also claimed that that Glendale lost more than one million dollars when it hosted their last Super Bowl in 2008. So it appears he knows what he’s talking about.

These claims come as no surprise to libertarians who know that sports events and complexes are often nothing but public works projects involving shady deals between governments and corporations. But what is somewhat of a surprise is that an article highlighting these shortcomings was featured on ESPN. It was rather strange to see an organization so consumed with sports actually feature an article admitting the failure of sports as an economic godsend. So perhaps there is some hope in challenging this fallacy.

But of course, it isn’t just the Super Bowl that is guilty of mass corporatism. The entire NFL operates this way. Billionaire owners often get the cities they reside in to shell out tax dollars for new stadiums. Subsidies toward NFL teams are so common and yield so little in return that it’s legitimate to wonder if a city having an NFL team is worth it.

So what is the libertarian, free market solution to fix the problem of the rampant corporate-state sports alliance? Well, like most of our other solutions, it would involve the complete removal of government from being able to offer this money in the first place. No doubt many will claim that those who want this money removed from the process will cause these sporting events, stadiums and professional leagues to not exist. But of course, this is complete nonsense. It’s no different from the claim that libertarians objecting to the government funding of transportation, science or commerce would cause those things to not exist. It harkens back to the quote from Frédéric Bastiat in his legendary 1850 masterpiece The Law:

“every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.”

Since there was no NFL at the time of Bastiat, he wasn’t around to see the state involve itself in that organization. But it would echo the theme of The Law to say that “we object to having state sponsored sports franchises. Then they will say that we want no sports franchises at all.” Given the amount of revenue professional sports leagues generate in America, it would be quite difficult to claim that they would not exist without the state’s involvement.