Wednesday, April 23, 2014


Supply and demand is seemingly simple. Trouble is that many of the prices and wages that result strike many people as "wrong".  The "just price" discussion is ancient but has not gone away.

I watch the PBS NewsHour because I expect it is the adult rendition of TV News. The program has recently looked at the $15 minimum wage proposal in Seattle ("How much does it really cost to live in a city like Seattle?").  Wages should be linked to what people "deserve" or what they "need". Supporters also expect that more "justice" would follow from politicizing the whole thing.

The report also includes a researcher who cites "hundreds of studies" that show "no impact" when there are "moderate" wage hikes. Many people, even the adult PBS audience, cannot square supply and demand with their own subjective feelings about who and what should fetch how much.

Part of the problem is that so many cannot abide high levels of CEO compensation.  The WSJ's Holman Jenkins addresses this in "Mulally vs. Piketty ...The great inequality theorist offers a shallow analysis of CEO pay." He argues that Ford's stockholders got a pretty good deal with Alan Mulalley.

The very readable and  enjoyable The Second Machine Age by Brynjolfsson and McAfee includes an endorsement of a of higher marginal tax rates on high salaries. But why does the IRS code take up 73,954 pages? Does it take that much heft to get a "just" result? Or does it take that many pages to spell out all the special dealing that our lawmakers specialize in?

I suspect that greater justice would be via a postcard-size flat tax with a very high exemption.