July 8, 1996

Clintonomics 101

Interestingly, CNN reported this as "good news for workers; bad news for corporations." The argument is that rising wages are good for workers, but that the "evil corporations" suffer (and rightfully so) because they have to pay more for labor.

The rest of the story...

Rising labor costs means rising prices. If one employee manufacturers one widget in one day, and if his daily pay rate goes up by one dollar because of low unemployment, the retail price of the widget will go up from two to four dollars. The employee is happy for a while, because he's getting an extra dollar. Unfortunately, it costs him two bucks to buy a widget now, so his buying power is actually less.

Low unemployment is good to a point, but in general it means inflation. It was disappointing (but not surprising) to hear the "unbiased media" toe the administration line, telling the truth only to a point.

By the way, another number they didn't report: 1995 tax expenses as a percentage of Gross Domestic Product is higher than it's ever been in the history of the country. We spent more of our income on taxes last year than any Americans ever have.

Meanwhile the President says the economy is his best re-election issue.

I agree. But I suspect it will affect my vote differently than it will affect his.