As we watch Britain collapse under the weight of its own moonbattery, we should remember exactly what it is that has been lost:

Federal minimum wage rises to $6.55 today

About 2 million Americans get a raise Thursday as the federal minimum wage rises 70 cents. The bad news: Higher gas and food prices are swallowing it up, and some small businesses will pass the cost of the wage hike to consumers.

You don’t say.

The increase, from $5.85 to $6.55 per hour, is the second of three annual increases required by a 2007 law. Next year’s boost will bring the federal minimum to $7.25 an hour.

Workers like Walter Jasper, who earns minimum wage at a car wash in Nashville, Tenn., are happy to take the raise, but will still struggle with the higher gas and food prices hammering Americans.

The worker whose potential job was lost to help pay for mandated, above-market rates to the Walter Jasper ’s of the country won’t be identified in this article, because his or her name will never be known. Those who pay the cost of such foolish polices like minimum wage laws are not as readily identifiable as those who benefit, even though that cost is significantly higher.

The surest way to create a surplus is to raise the price of something beyond its market rate. The question is, why does government insist on creating a surplus of labor (otherwise known as unemployment)? How many more people has the federal government just prevented from ever getting their foot in the door and from gaining valuable experience that would lead to much greater rewards in the future? We’ll never know, but at least Walter Jasper got his $0.70 raise.

Phil Gramm, top economic adviser to the McCain campaign, correctly diagnosed a problem with contemporary Americans society:

“You’ve heard of mental depression; this is a mental recession,” he said, noting that growth has held up at about 1 percent despite all the publicity over losing jobs to India, China, illegal immigration, housing and credit problems and record oil prices. “We may have a recession; we haven’t had one yet.”

“We have sort of become a nation of whiners,” he said. “You just hear this constant whining, complaining about a loss of competitiveness, America in decline” despite a major export boom that is the primary reason that growth continues in the economy, he said.

“We’ve never been more dominant; we’ve never had more natural advantages than we have today,” he said. “We have benefited greatly” from the globalization of the economy in the last 30 years.

Mr. Gramm said the constant drubbing of the media on the economy’s problems is one reason people have lost confidence. Various surveys show that consumer confidence has fallen precipitously this year to the lowest levels in two to three decades, with most analysts attributing that to record high gasoline prices over $4 a gallon and big drops in the value of homes, which are consumers’ biggest assets.

“Misery sells newspapers,” Mr. Gramm said. “Thank God the economy is not as bad as you read in the newspaper every day.”

Gramm is right on the money. Economists have for years been mystified by the stark divergence between actual conditions and public opinion about the economy.

This is not to say that everything is fine. Indeed, the last year has seen objective indicators turn for the worse, thanks largely to the skyrocketing price of oil, though it still doesn’t merit the level of national angst we see today. Nor does this recent change retroactively justify the people who have been crying “recession” for the entirety of the Bush administration.

The overly sour public mood is easily attributable to the grossly distorted and hyperbolic news coverage we’ve been inundated with. One of the primary indicators that the public mood is not justified has been the disparity between how people rate their own finances versus how they think others are doing. Generally they have said their situation is okay while everyone else is doing poorly. Well how would they know? They get it from news, of course.

McCain, sadly, has no room for such honesty on his Straight Talk Express, though there’s plenty of room under it:

“So, I strongly disagree,” McCain told reporters gathered for a press conference that was added to his schedule following a town hall meeting near Detroit at least in part to deal with Gramm’s comments that the economy was not in as poor shape as is portrayed.

…”I believe that the person here in Michigan who just lost his job isn’t suffering from a ‘mental recession,’” McCain said, citing Gramm’s remarks published in the Washington Times. “I believe that the mother here in Michigan, around the country trying to get enough money to educate her children isn’t ‘whining.’”

America, McCain made sure to note, “is in great difficulty.”

“Vote McCain: Because the democrats just aren’t gloomy enough!”

Obama, for his part, thought whining about the comments would be a perfect response to being accused of belonging to a nation of whiners:

“It’s not just a figment of your imagination,” Obama said. “Let’s be clear. This economic downturn is not in your head.”

“It isn’t whining to ask government to step in and give families some relief,” he said, drawing a standing ovation from the nearly 3,000 people in a high school gymnasium. “And I think it’s time we had a president who doesn’t deny our problems or blame the American people for them but takes responsibility and provides the leadership to solve them.”

Rumor has it Obama then passed out tiny violins.

Looks like this is just another instance of democrats promising more than they can deliver.

“It’s the economy, stupid,” James Carville famously said during the 1992 campaign, when a young Bill Clinton was running against the other President Bush. The same could be said during this presidential campaign. The headlines are full of economic bad news — mortgage foreclosures, the collapse of an investment bank, higher gas and food prices and lower home prices. Voters routinely list the economy as their chief concern, and consumer confidence has sunk to low levels.

Yet at the same time, the economic numbers are not so bad. A recession is defined as two quarters of contraction. But we haven’t had one yet. The gross domestic product has grown, albeit only by 0.6 percent, in the last two quarters. As my U.S. News colleague James Pethokoukis blogged after the most recent numbers came in, “Dude, where’s my recession?”

By any historic standard, our economic numbers are good, though possibly headed in a negative direction. April’s unemployment was 5 percent — a figure that once upon a time was considered full employment. The Consumer Price Index was up 3.9 percent, largely due to price rises in energy and food. “Core inflation” was 2.3 percent. Productivity was up 2.2 percent.

Those are numbers that would have been taken as a sign of very good times when I was growing up. Then, we had recessions every four or five years and bad bouts of inflation in the 1940s, 1950s and 1970s, and unemployment sometimes surged to 10 percent nationally and to 15 percent in industrial states like Michigan. In contrast, we’ve had only two mild recessions since 1983, with a third now possible but not yet in view.

Manufacturing also did better than expected:

Manufacturing in the U.S. shrank less than forecast in May, further evidence that international demand for American-made goods is keeping factories busy amid the domestic economic slump.

The Institute for Supply Management said its factory index rose to 49.6 from 48.6 in April; 50 is the dividing line between contraction and expansion. Production expanded for the first time in three months while a measure of prices climbed to the highest level since 2004, the group also reported.

The figures, along with a Commerce Department report today showing April construction spending dropped less than forecast, eased concern that the economic downturn will intensify. U.S. gross domestic product rose at a 0.9 percent pace in the first quarter, capping the weakest six-month performance in five years, the government said last week.

“These reports are showing some stabilization in the economy,” said Peter Kretzmer, a senior economist at Bank of America Corp. in New York, who forecast the ISM index would rise to 49.5. “There is just a very strong level of competitiveness for U.S. manufacturing firms.”

Clearly, the cries of “Recession!” and in some cases “Depression!” were at best premature.

What do you call a recession where the economy keeps going up and up, even if a bit sluggishly? Well, my friends, you call that an expansion. And that is what we seem to have right now, despite all the economic doomsaying about a recession or even a Great Depression 2.0. Today, the Commerce Department revised its first-quarter estimate of gross domestic product upward to 0.9 percent from 0.6 percent. That follows 0.6 percent GDP growth in the final quarter of 2007. The revision also makes it more likely that the second quarter will be positive, maybe 1.5 percent, maybe even higher.

Now I went back and checked the numbers for the past 50 years and didn’t find a single case of a recession—as calculated by the National Bureau of Economic Research—that started with or contained two straight quarters of positive GDP growth, much less three quarters. In a recent interview with the Financial Times, former Federal Reserve Chief Alan Greenspan admitted he was puzzled that the economy hasn’t fallen off a cliff, given the housing crisis, credit crunch, and oil price surge. He told the FT: “A recession is characterized by significant discontinuities in the data…. It started off that way—there was a period of sharp discontinuity from December to March. But then it stopped…. No one knows how this tug of war will end—specifically, whether the financial crisis will end before it drags down the real economy.”

If this dearth of dour economic news continues, it will be the democrats suffering from depression come November.

I’m a few days late on noting F.A Hayek’s May 8th birthday, but the occasion provides a great opportunity to highlight the continuing relevance of his work. At a time when many in the West believed in the idea of a “democratic socialism,” Friedrich Hayek warned, in The Road To Serfdom, that economic planning of the type advocated by many on the left would inevitably lead to totalitarian dictatorship, on top of being poor economics.

Unfortunately, many leftists today are just as intent on traveling down the road to serfdom as they ever have been. Representative Paul Kanjorski (D-PA) is at the front lines of the liberal war on oil companies. His proposed legislation, the Consumer Reasonable Energy Price Protection Act of 2008, not only imposes an economically damaging windfall profits tax, but creates a Reasonable Profits Board to sit in judgment of private activity and determine how much profit is reasonable for a company to make.

Since Represenative Kanjorski thinks this is a good idea, maybe he’ll like my own proposal: a Qualified Candidates Board. Rather than trusting those pesky voters to determine which public office candidates are qualified, just as he doesn’t trust consumers, the board would be tasked with determining which candidates are allowed to run for office. As its first order of business, I submit the name of Paul Kanjorski as one to be barred from office for his gross economic and political ignorances.

Writing in the New York Times, Yale University economics professor Robert Shiller says it’s time for the Fed to take on a new role: as overall economic watchdog and cheerleader.

The Fed Gets a New Job Description

THE plan of Treasury Secretary Henry M. Paulson Jr. to overhaul the financial system includes a crucial proposal: it would officially transform the Federal Reserve into a “market stability regulator” rather than merely a banker’s bank.

This aspect of the Treasury plan is a natural step in a historical trend. The Fed is no longer just a regulatory agency presiding over a narrow group of businesses called banks. Rather, its mission increasingly is to maintain macro confidence — confidence that the entire financial system is functioning well as part of the whole economy.

…Mr. Bernanke’s own analysis of history, as well as that of other economists, emphasizes the essential importance of confidence in financial institutions and the subtlety of the issues involved in promoting such confidence.

…CONFIDENCE is too complex for the consumer confidence indexes — which are based on surveys of ordinary people — to measure adequately. It has to do with confidence in specific institutions — confidence that they will behave properly and that the leaders who are trying to promote others’ confidence will act in a constructive way.

Formalizing the Fed’s transformation into a market stability regulator makes sense. The Fed has already begun to play this role. And by doing so, it is taking a significant step toward reducing the fundamental instability of our economy.

The professor correctly acknowledges the necessity of confidence for the proper functioning of a capitalist system, but he doesn’t provide much reasoning as to why expanded powers at the Fed is the best solution. The temptation to ease fears by promoting a new all-encompassing economic watchdog, and further supplanting the invisible hand, is always greatest when the economy takes a downturn. We barely fought off the worldwide march toward economic planning, which left numerous nations in ruin, at the beginning of the 20th century. Thus, it is at such times when we must be extra cautious of the choices we make and the changes we call for. Is it really good for the economy to hand over so much power to an independent and only quasi-accountable body? Is it good for democracy?

If increasing confidence is really the primary concern, perhaps we should start by looking at the political party whose members have spent the last seven years announcing that the sky is falling.

The top headline on Drudge today:

And now it’s time for the word of the day: “embellishment” - to exaggerate, dress up with fiction.

I don’t suppose it’s necessary for me to explain to our readership the absurdity of this headline. Calling the current state of the economy a recession is inaccurate - without even a single quarter of shrinkage. Drawing comparisons to the Great Depression is downright shameless.

Don’t let that stop the Independent. What all-telling indicator do they use to support their proclamation of depression? Food stamps, of course.

Dismal projections by the Congressional Budget Office in Washington suggest that in the fiscal year starting in October, 28 million people in the US will be using government food stamps to buy essential groceries, the highest level since the food assistance programme was introduced in the 1960s.

The increase – from 26.5 million in 2007 – is due partly to recent efforts to increase public awareness of the programme and also a switch from paper coupons to electronic debit cards. But above all it is the pressures being exerted on ordinary Americans by an economy that is suddenly beset by troubles. Housing foreclosures, accelerating jobs losses and fast-rising prices all add to the squeeze.

The piece goes on to state that as “a barometer of the country’s economic health, food stamp usage may not be perfect, but since the economy is still growing and unemployment and inflation are historically low, we’ve got to come up with something to justify our U.S. election year economic fear mongering. Hope/Change.” I believe they’ve taken it a bit too far.

With print outlets worldwide suffering dramatically shrinking revenues, and proportionate job losses, it’s no mystery why newspaper editors might see these as depressing times. The reality of the matter - reality being something wholly alien and often unwelcome in the propaganda factories of the left media - is that most of us are doing just fine. Despite the high gas and food prices (both at least partly attributable to the ethanol boondoggle). The people falling on hard times in today’s economy, like Joe Toothless from the article, cashing in his food stamps for seventy cents on the dollar, got where they are the same way people always do in a plentiful, growing economy - through some combination of mental illness, idleness, substance abuse, sore luck and living without their means. Any and all of these are a call to action on the part of community support structures; none of them are cause for national alarm. And they certainly don’t justify government interference in the private sector.

B. Hussein Obama disagrees:

Now, as most experts agree, our economy is in a recession. To renew our economy and to ensure that we are not doomed to repeat a cycle of bubble and bust again and again and again, we need to address not only the immediate crisis in the housing market, we also need to create a 21st-century regulatory framework and we need to pursue a bold opportunity agenda for the American people.

Anyone who says we’re in a recession is NOT an expert. The economy is growing, not shrinking, albeit relatively slowly. And of course, to a leftist like B.O. the answer to this fictitious crisis, like all others, is bigger government. Democrats and their campaigners in the media need the economy to be in recession the same way they need the war in Iraq to be lost - to propel their idealogical allies to victory in the next election and facilitate massive socialist power grabs. How else to explain the relentless drumbeat of defeat, recession and depression despite all evidence to the contrary.

From Fox News:

Poor residents will be rewarded for good behavior ? like $300 for doing well on school tests, $150 for holding a job and $200 for visiting the doctor ? under an experimental anti-poverty program that city officials detailed Monday.

The rewards have been used in other countries, including Brazil and Mexico, and have drawn widespread praise for changing behavior among the poor. Mayor Michael Bloomberg traveled to Mexico this spring to study the healthy lifestyle payments, also known as conditional cash transfers.

Well, it’s better than welfare, I’ll tell you that. A part of me wants to say, “Why should government have to spend money treating people like mice to be trained?” Principally it’s an important question. Unfortunately, we already spend far more money on social programs and they aren’t going away. So if we can spend less to get them to avoid needing those programs, it’s a good deal at least in comparison to what we have now. This is certainly preferable to welfare, for instance. Not everyone is behind this idea, leftists are up in arms over the idea that people can affect their own destiny by making good choices (shocking).

But some critics have raised questions about cash reward programs, saying they promote the misguided idea that poor people could be successful if they just made better choices.

We certainly don’t want that. Far better to ram the idea down their throat that they are victims of oppression and there is simply nothing they can do to improve their lot in life except vote Democrat and wait for the inevitable handout, of course.

“It just reinforces the impression that if everybody would just work hard enough and change their personal behavior we could solve poverty in this country, and that’s not reflected in the facts,” said Margy Waller, co-founder of Inclusion, a research and policy group in Washington.

Waller, who served as a domestic policy adviser in the Clinton administration, said it would be more effective to focus on labor issues, such as making sure wage laws are enforced and improving benefits for working people.

Brilliant! It would be more effective to focus on implementing policies that prevent poor people from entering the labor market! I guess Mrs. Waller wants to make sure that making better choices can’t be a solution for the poor, by taking away any and all possible opportunities in order to benefit gangster labor unions. Ah, the modern democratic party, such champions for the poor they are!

Hat tip: Crush Liberalism

Workers of the World, Unite!

Presidential hopeful Hillary Rodham Clinton outlined a broad economic vision Tuesday, saying it’s time to replace an “on your own” society with one based on shared responsibility and prosperity.

The Democratic senator said what the Bush administration touts as an “ownership society” really is an “on your own” society that has widened the gap between rich and poor.

“I prefer a ‘we’re all in it together’ society,” she said. “I believe our government can once again work for all Americans. It can promote the great American tradition of opportunity for all and special privileges for none.”

That means pairing growth with fairness, she said, to ensure that the middle-class succeeds in the global economy, not just corporate CEOs.

Not only do these failed socialist policies represent economic suicide, but we’ve learned that the removal of first order concerns from the lives of citizens eventually leads to social suicide as well. It is precisely the kind of policies that Hillary wants to implement in America that have lead Europe to social disintegration, as shown by Mark Steyn’s excellent book America Alone. This absence of responsibility in taking care of oneself has left their societies both incapable of defending against the infringement of radical Islam and utterly apathetic to the fact that they are (un)breeding themselves into dissolution.

Almost the entire democratic House majority, aided by 56 wayward republicans, passed a blatant assault on free market principles in H.R. 1252: Federal Price Gouging Prevention Act. Price gouging is that terrible act of charging a price that the market will bear but that government or some other party judges to be “excessive”. Naturally, this attitudes prevents the rapid influx of needed goods from arriving into disaster areas by prohibiting the market from providing incentives for the selling of these goods. The result is a prolonged period shortages, but at least when you go to the store in search of needed supplies you can rest assured that, had they any to begin with, you wouldn’t have paid too much for them.

This particular piece of legislation is aimed only at gasoline and petroleum products, but that provides little comfort. Price controls are never good policy; but when you elect a group of demagogues you get demagogic policy.