Did the minimum wage help the worker who got the raise, or the one who lost the job? Did capitalism cause the Great Depression, or did the Federal Reserve, the Smoot-Hawley tariff and a doubled income tax? Did the men in Upton Sinclair's meat vats ever exist? Lawrence Reed goes through the myths one at a time: the minimum wage, the Great Depression, the trade deficit, higher taxes and more revenue, The Jungle, greed, profit, the War on Poverty, and the idea that government can be both big and good. Jenny Beth Martin adds the story of a Radio Shack coworker who lost her job four months after the minimum wage went up.
Lawrence W. Reed, president emeritus of the Foundation for Economic Education and author of Born of Ideas and Was Jesus a Socialist?, joins Jenny Beth Martin for the fourth and final part of a four part economics course. Parts one through three cover economics 101, capitalism versus socialism, and money and inflation.
Today's topics:
• Minimum wage: wages are the price of labor, and a higher price means less of it gets bought
• Reed: you cannot make a person worth $15 an hour by making it illegal to pay him $8
• If raising the minimum wage helps workers, why stop at $15? Why not $50?
• Jenny Beth Martin's Radio Shack story: a coworker lost her job within four months of a minimum wage increase
• Why fewer high school students work today, and why a $15 chicken meal is part of the same story
• The Great Depression was not caused by capitalism: Reed on the Federal Reserve's 66 percent money expansion of 1924 to 1929, then a one-third contraction
• June 1930: Hoover signs the Smoot-Hawley tariff with unemployment at 8 percent, and world trade grinds to a halt
• The Revenue Act of 1932 doubled the income tax in the middle of a depression
• FDR ran in 1932 on cutting federal spending 25 percent and called Hoover's the greatest taxing and spending administration in history. Then he did the opposite
• The balance of trade deficit: Reed's own trade deficit with Walmart, and why the number leaves out services
• Do higher taxes bring in more money? The Laffer curve, the 91 percent top rate of the 1950s, Kennedy's cut to 70, Reagan's to 28
• Tariffs in the nineteenth century: when Democrats were the low-tariff party and Republicans the high-tariff party
• Income tax, sales tax, or tariffs? Reed's answer: quit spending so much, then keep taxes light and low
• Upton Sinclair's The Jungle: a work of fiction paid for by socialists, called a lie by Theodore Roosevelt, taught as a documentary
• Does capitalism foster greed? Blaming greed for price hikes is like blaming gravity for a rash of plane crashes
• Elon Musk and the trillion-dollar question: who did he harm?
• Reed: about $7 trillion spent on the War on Poverty, and the poverty rate sits about where it started
• How welfare paid fathers to leave, and why private charity asks questions that government never does
• Jenny Beth Martin on government-funded NGOs: taking money by force and giving it away is not charity
• Big government and good government: Reed says you cannot have both, because good people stop wanting to serve
• Jenny Beth Martin: what was done to President Trump was a message to every businessman thinking about running
• Reed's reading list: Frederic Bastiat's The Law, Henry Hazlitt's Economics in One Lesson, Thomas Sowell, and seventy years of archives at fee.org
The Jenny Beth Show airs live Monday through Friday at 1:00 PM ET. Hosted by Jenny Beth Martin, co-founder of the Tea Party movement and Chairman of Tea Party Patriots Action. Subscribe for daily analysis of politics, policy, and the fight for constitutionally limited government. teapartypatriots.org
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