The defunct American Jobs Act, which Hans skewered so well a while back, contains a provision to end “discrimination against the unemployed.” Apparently, there are thousands of job advertisements out there that say “unemployed need not apply” or words to that effect. So not only would this be made illegal, but bureaucrats would be empowered to punish firms that exhibited such discrimination. The threat of investigation would probably be enough to kill off what hiring is currently going on overnight.
But is this even a problem? There’s anecdotal evidence, but anything more than that? Online job board ResumeBear.com took a look:
What I didn’t find:
Any results in the first few pages that specifically excluded the unemployed. None.
Conclusion:
Hiring managers discriminate for and against employment candidates for a host of reasons. Some of their reasons are rational and some of them aren’t. Some of their reasons are legal and some of them aren’t.
You can only control your own behavior. Focusing on someone else’s inappropriate behavior doesn’t advance your job search. In fact, it hinders it by sucking your energy.
Don’t believe that employers won’t hire you because you’re unemployed. Believe that they will hire you because of what you can do for their organization – and make sure that your marketing materials tell them exactly what that is.
Now this isn’t a detailed statistical study or anything, but it does suggest that the problem is exaggerated. This is often the way of government — a small problem is dealt with by giving the government sweeping new powers to punish. It’s how we got the ridiculous situation where most student loan debt (which is ultimately debt to the government) is uniquely protected against bankruptcy, without which the Occupy protests would probably fade away…
Much of the cybersecurity focus this year has been on Congress’s efforts to mandate data breach notifications and security standards. Now the Securities and Exchange Commission (SEC) is entering the fray. On Friday, The Washington Post reported that the agency issued a guidance document instructing publicly traded companies on the procedures they must follow relating to cybersecurity issues.
The SEC makes clear that these obligations are preexististing, and that the guidelines merely clarify the requirements as they pertain to cybersecurity. For example, regarding risk disclosure, the SEC states:
Consistent with the Regulation S-K Item 503(c) requirements for risk factor disclosures generally, cybersecurity risk disclosure provided must adequately describe the nature of the material risks and specify how each risk affects the registrant. Registrants should not present risks that could apply to any issuer or any offering and should avoid generic risk factor disclosure.5 Depending on the registrant’s particular facts and circumstances, and to the extent material, appropriate disclosures may include:
- Discussion of aspects of the registrant’s business or operations that give rise to material cybersecurity risks and the potential costs and consequences;
- To the extent the registrant outsources functions that have material cybersecurity risks, description of those functions and how the registrant addresses those risks;
- Description of cyber incidents experienced by the registrant that are individually, or in the aggregate, material, including a description of the costs and other consequences;
- Risks related to cyber incidents that may remain undetected for an extended period; and
- Description of relevant insurance coverage.
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Today, CEI releases the first of a series of studies on chemicals and the precautionary principle. Activist groups around the nation have been calling for greater regulation of chemicals, which they say would protect the public from the scourge of such things as cancer. In reality, their claims are based on junk science and their prescriptions threaten to undermine public health.
CEI’s first paper addresses activist hype related to cosmetics. Author Dana Joel Gattuso explains why consumers should not fall for the activist hype attacking cosmetics and other personal care products. In particular, she points out that if lawmakers followed consumer advice and removed certain chemicals from cosmetics, public health would suffer: “Present in quantities so small—typically, less than 1 percent of a product’s total weight—they are added to prevent contamination and to protect consumers from the buildup of dangerous bacteria that can cause eye infections, skin rashes, and even deadly infections such as E. coli and Salmonella,” Gattuso notes. She explains further:
In spite of the lack of scientific evidence of health risks from these ingredients, the anti-chemical groups have been successful in creating a climate of fear among many consumers—and lawmakers. The legislation they are promoting, the Safe Cosmetics Act of 2011, would ban any cosmetic and skin care ingredients that exceed a one in a million risk of an adverse health impact—which is to say it would ban most ingredients since almost everything carries risk greater than one in a million. While the risks from products not containing these additives would be much higher, those risks would not be considered. In effect, the bill would ban the very chemicals that protect consumers.
In today’s Wall Street Journal, Amity Schlaes notes that cuts in the capital gains tax were one of the key factors that paved the way for Steve Jobs and other innovators, and increased the flow of venture capital that created jobs and resulted in technological advances. (Schlaes recently wrote an interesting book about the economic history of the Depression, The Forgotten Man: A New History of the Great Depression.)
I wrote earlier about double standards contained in the capital gains tax, which result in it being higher and more burdensome than people commonly assume; and how it effectively punishes investors for investing during periods of inflation, since the government ignores inflation in calculating the cost of your investment. Moreover, while capital gains are taxable, capital losses often are excluded from consideration, and cannot be taken into account, in calculating your overall income for the year in which they occur; for example, you cannot list more than $3,000 in net capital losses on your tax return, but you have to list all of your net capital gains. That results in a “heads I win, tails you lose” situation in which the government effectively rips off investors. This encourages people to hold cash rather than invest in risky start-up enterprises that could create jobs, since it makes sense to hold cash rather than investing if you think you could lose money on a large scale due to either a depression or a jump in investor risk aversion that cuts the resale value of risky stock (for example, a shift by the investing public away from risky assets during a financial panic, or period of falling public confidence in the economy).
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In 1920, Austrian economist Ludwig von Mises predicted that the Soviet socialist system would fail. “Imagine the plight of a [Soviet] director when faced with a project,” he wrote later in Human Action. “What he needs to know is whether or not the execution of the project will increase well-being, that is, add something to the wealth available without impairing the satisfaction of wants which he considers more urgent. But none of the reports he receives give him any clue to the solution of this problem… Eliminate economic calculation and you have no means of making a rational choice between the various alternatives.”
After he retired, former U.S. Department of Commerce’s Economic Development Administration Director Orson Swindle admitted that Mises was right. “The minute politics enters the equation,” he said, “rational financial management and economic decision making goes out the window.” While a project may seem perfectly good to a Soviet director or EDA bureaucrat, they have no means to judge between multiple projects that seem equally good. In the market, prices, profits, and losses guide producers only to projects that create wealth and away from ones that destroy wealth. This is the most important market process. It assures that resources are not wasted and used most productively.
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Conservatives who are enjoying a chuckle over the protesters occupying Wall Street (and an increasing number of public spaces across the country) would do well to hold their mockery and reflect on a few sobering facts:
- The post-industrial economy demands highly-specialized skills in order to fill ever-fewer highly specialized jobs.
- An entire generation has been raised by YouTube and Twitter to believe that their every thought and want is worthwhile, that they are born stars inherently deserving of wealth and success.
- Structural deficiencies “baked into the cake” of our socioeconomic fabric — the entitlement state, a vast and expensive federal bureaucracy, punitive tax and regulatory policies — have made it harder and harder for businesses to grow and create jobs, and thus harder and harder for the economy to grow.
These propositions add up to a frightening conclusion: An expanding, enervated, and highly-entitled young workforce is competing for fewer and more demanding jobs. Prospects are shrinking even as expectations have never been higher. That is a recipe for violence. Always has been. Always will be.
Some conservatives mock the protesters because the masses holding forth on Wall Street are ignorant and restless. And indeed they are. But they are dangerous precisely because they are ignorant and restless, precisely because they have so little to lose. The protesters know their future will be one of debt, not prosperity, one of stagnation, not mobility.
The irony is that they will not understand that it is the very politicians and policies they have supported which have handed them this grim fate.
Deirdre McCloskey thinks that a shift in rhetoric and public opinion is what made possible what she calls the Great Fact – the tenfold rise in global per-capita GDP from $3 per day in 1800 to around $30 today, and growing. The average person in rich countries make over $100 per day, more than a 30-fold increase. Remember, even the mighty U.S. was once a $3 a day nation. We had to start somewhere.
Sometime around the Enlightenment, public opinion shifted from hostility to entrepreneurship and innovation to at least a grudging acceptance. We liberals need to take great care to keep public opinion tolerant, or else the Great Fact could become a relic of history. Traders can only trade, and inventors can only invent, when people let them. Unfortunately, the clerisy (McCloskey’s word for the intellectual class that drives long-run public opinion) is strongly anti-commerce, as she points out:
Such antibourgeois people (many of them my good friends) do not believe the bourgeois axiom that a deal between two adults has a strong presumption in its favor, practically and ethically and aesthetically. They deny hotly that allowing such deals and honoring their makers has resulted in the modern enrichment of the poor. They think instead quite against the historical evidence, that governments or trade unions did it.
Deirdre McCloskey, Bourgeois Dignity: Why Economics Can’t Explain the Modern World, p. 397-98.
The liberal’s job, then, is to legitimize the entrepreneur and the innovator, morally, ethically, and aesthetically, as well as economically. That wonderful project we call modernity hinges on it.
It’s much more fashionable to attack Adam Smith these days than to read him. Yes, he favored economic liberalism, which wasn’t exactly in style in his time. Nor is it in ours. History remembers him as cold and calculating. But in real life, he was neither.
There are two main drivers behind Smithian liberalism, neither of them cold or calculating. One is that man is a social animal. The foundation of Smith’s moral theory is the impartial spectator theory. People figure out the right thing to do by asking themselves if an impartial third party would approve of their actions. Empathy — thinking of others and feeling for them — is at the very heart of Smithian morality.
Take trade, for example. Smith is well known for being an ardent free trader. But why? Because trade is an inherently peaceful act.It is moral.
If you have something I want, I’m not going to hit you over the head and steal it. No impartial spectator would approve of that. Instead, I’ll trade it to you for something you value even more. Everyone wins.
If you don’t think you’ll gain from the exchange, then nobody can force you to make it. And no one will trade with you unless you treat them with civility and dignity. Trade is much more moral than the alternative.
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In the evening of October 12, the U.S. House of Representatives and the Senate both passed the Free Trade Agreements with Colombia, South Korea and Panama. The press, members of Congress and senators all highlighted the job-creating potential of these treaties, because of their boost to exports and the manufacturing sector.
These stories leave out an important element: The value of imports. In an open market system, where countries are able and willing to trade with one another, imports play an important role in providing choices and in the development of new and better products. They also contribute to the specialization of the domestic labor force, which ultimately increases welfare and output.
However, critics point to the trade deficit as a problem that costs American jobs. The U.S. trade deficit has indeed grown since the 1970s, and in 2010 equaled US$500 billion (in 2008, it equaled nearly US$800 Billion). These critics argue that as people substitute domestic goods with imports, domestic industry employment will fall, and many people will lose their jobs. However, a simple analysis of unemployment, output and trade deficit data shows almost no relationship between a rise in the trade deficit and a rise in unemployment or a decrease in economic output.
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Yesterday, the Government Accountability Office released a report concerning the grim financial future of the Postal Service. It may not come as a shock, but GAO refutes the USPS claim of paying billions of dollars in surplus to the federal government pension fund and the USPS plan to attain fiscal solvency as a whole.
USPS estimates their pension over-payment is in the ballpark of $50-$85 billion. Even if USPS had paid a surplus to the federal government and the full $85 billion was reimbursed, it would only briefly loosen their liquidity constraints. USPS annual losses would dissolve the funds shortly. USPS the past two years lost $8.5 and $10 billion.
GAO’s report exposes the faulty solutions of the USPS plan and for that matter Rep. Stephen Lynch’s quick-fix postal bill. Their plans do not attempt to reform USPS structural problems or lack of flexibility to meet market demand, the true plagues preventing USPS profitability. USPS and Rep. Lynch rely solely on taxpayer bailouts to remedy USPS fiscal woes.
The lack of real solutions from USPS makes their response to the report all the more disheartening. The USPS statement on the GAO conclusions claims the office “ignores actuarial principles that would govern in the private sector, as well as fundamental principles of fairness.” And “GAO’s discussion of ‘fairness’” was “flawed and incomplete.”
Is USPS really trying to claim it is against the “principles of fairness” if Congress does not mandate a taxpayer bailout? Sadly, it is clear the USPS and some members of Congress associate the concept of “fairness” with taxpayer bailouts.
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