Has the world taken the holidays off from reading their weekend JAM VIEWS? They must have because the news is overflowing with dumb projects which violate every behavioral economics truism we attempt to populate in order to save the world! I think they must be doubling up on the brunch mimosas and bellinis and forgetting their 10-minutes of weekend JAM VIEWS wisdom. Let's do a quick review:
1. Simone Barron, a restaurant worker in Seattle, wrote that she lost her job because "the restaurant where I've worked for six years is closing as a consequence of the city's harmful minimum-wage experiment." Simone worked for Tom Douglas, one of Seattle's best known chef-restaurateurs for 30 years, but he couldn't overcome the 73% rise in minimum wages from $9.47 in 2015 to $16.39 today, not including the significant tips! That's just plain dumb. So Tom's restaurant Tanakasan had to close. Simone attempted to return to working at Sitka and Spruce, operated by James Beard Award-winning owner, Matt Dillon, but after 14 years it is closing also. Finally, Simone landed an interview at Super Bueno, owned by established chef Ethan Stowell, but before she could make her pitch Mr. Stowell announced that Super Bueno will close at the end of the year. Simone summarized, "I'm proudly progressive in my politics, but my experience shows that progressives should reconsider minimum wage laws that hurt the very workers they're trying to protect." A central JAM VIEWS theme.
2. The House passed the $738 billion National Defense Authorization Act, the Senate is expected to approve, and President Trump is expected to sign. On top of including payments to the military-industrial complex defense contractors whose cost-plus contracts go over budget by, literally, billions of dollars (another Post), the compromise pork added to the bill includes 12 weeks (3 months) of PAID leave for all 2.1 million civilian federal workers.
So, if John's wife has a baby, John may take 3 months off work and receive his normal paycheck, and his desk will, by law, be waiting for him. Now, I am a huge believer and supporter of early child care, bonding, and this neuroscience. You label it, I love it! Yet, I love it with my own money, and you can choose to love it with your own money, or not. Where is this in the Constitution? Can you envision walking into Joe's Auto Body and saying, "Hey Joe, if you didn't hear, Roxanne and I just had our fourth, so I will be gone for the next 3 months. Oh, and remember just like last time, keep sending my checks to the house and make sure my stall is waiting for me when I get back."
Of course, no real business could stay alive if this was the case, but government employees can do it because there is no bottom line, no stock options, no incentive to operate under-budget, and they are spending YOUR money. (Remember Post: "The Government Has No Money"). Michael Jackson told us, "If you can't feed the baby then don't have the baby!" Then once John eventually returns to work, and the Chinese are 3-more months ahead of him, he then wants YOU to pay for the childcare for John Junior. Bad policies incentivize unproductive, irresponsible, nanny-state behavior. Maybe that's the plan?
3. Speaking of unproductive nanny-states, French President Emmanuel Macron is again trying to find a capitalist bone in his body and extend France's retirement age and pension payouts. He is attempting to consolidate the country's 42 different pension plans into one universal system, and he has tried to pay bonuses to get people to work to age 64. They are rioting in the streets! I know plenty of 64-year-olds who can work circles around French 40-year-old C-Players, not to mention they possess incredible wisdom and experience so valuable to any organization.
With increased life expectancies, what do Jean val Jean and Cosette plan on doing for the next 30 years? Better yet, the Paris Opera Ballet is on strike because Macron wants to extend their pension eligibility date past age 42. "If the government insists on making dancers perform beyond a youthful age, it won't be pretty, argued dancer Alexandre Carniato." Will someone please tell Alexandre we are not asking him to dance Swan Lake until age 62, but instead telling him to go get another job and support himself once he decides to make a change? (see Rockettes, B-52's, et. al.). We laugh at much of this, but it is overtaking the U.S. while we sleep (and dream of dancing sugar plums).
4. Pay attention to elite coasties in New York, Connecticut, New Jersey and California attempting to quietly pass a new bill in the House which raises the $10,000 cap on state and local taxes (SALT) deductible on federal returns. These politicians for the elites are attempting to raise income tax rates to offset this end-around, because there is a giant sucking sound of citizens leaving these states for the American freedom of Texas and Florida. They again want to nullify the tax reforms of 2017 which canceled your state (you) and my state (me) paying for their "luxurious lifestyles," to borrow a phrase from some U.S. Attorneys I know. Wait, I thought these were all the same people saying they help the poor and middle class!
5. Finally, as you likely know, Elizabeth upped her wealth tax from 3% to 6% per year. Now since these rich people don't keep their billions sitting in a Navy Federal Credit Union Passbook Christmas Fund Account, they have to sell shares of their companies each year to pay Elizabeth. They will have to first pay capital gains tax (rising from 20% to 39.6%), plus the state and local taxes, before getting her the check. All of her Silicon Valley supporters will have to actually pay 71.5% to get Elizabeth her money. The hilarious part will be watching Zuckerberg and Bezos sell 61% of Facebook and Amazon to pay the income, capital gains and wealth taxes over just the first five years. Now this has potential! Professor Hank Adler of Chapman University calls this the "trifecta of tax increases!"
Over the holidays, try to keep you blood pressure low as the proposals get crazier and crazier, but stay diligent. The more they repeat the false narratives, the more we begin to think they may be true. This is how it works. This week nod your head as the visiting relatives pull from the Cornucopia of Dumb, and just order another mimosa. Merry Christmas, Happy Hanukkah and a peaceful and prosperous New Year!
"Great leaders don't just out-perform their rivals. They transform the sense of what's possible in their fields." - Bill Taylor
**Photo credit goes to KLM Royal Dutch Airlines.
** Thank you to the WSJ, Forbes and Fortune for the above quotes and statistics.
** For more information on Jeff's Books, Blog, and Legal Challenge, please visit www.jeffmartinovich.com.
** To access JAM Views directly please visit jeffreyamartinovich.blogspot.com
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