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To celebrate the new year, here are some economic resolutions from Greg Mankiw.

In memory of one of the greatest minds of the 20th century, one of my favorite clips from youtube.

An Op-Ed in the New York Times describes how the profit motive can be used to save endangered tigers.  This idea is well-known among economists, but badly in need of publicity. 

If activists and policy-makers can learn to work with markets rather than against them, we’ll have a bright future indeed.

Protectionists never cease to amuse me.  Take this article on the European Commission’s attempt make permanent their “emergency” import duties on foreign shoes for example:

The temporary system was introduced following allegations that shoes were being “dumped” - or sold for less than it cost to make them - by manufacturers eager to gain a share of the EU’s markets.

Oh the humanity!  Cheap shoes will surely mean the end of Europe! 

The Commission said at the time it had clear evidence that both China and Vietnam were unfairly subsidising their shoe industries.

Just like the EU unfairly subsidizes their farmers?  Oh, I suppose they forgot about that. 

Why are the most advanced nations on earth so economically backward?

Why the dollar might be on a path towards appreciation.  I know it sounds crazy, but take a look.  The reasoning is not so easy to dimiss, but I’m still not sure I buy it.

It’s refreshing to find reasoned an cogent analysis of politically-charged issues.  On Chicago’s new minimum wage law, you can’t do much better than Gary Becker and Richard Posner.  Becker here, and Posner’s response here.

The New York Times has nothing constructive to add to the debate, just the usual platitudes.  Why do social reformers insist upon using ineffective and likely counterproductive tools such as the minimum wage and rent control?  Here’s an idea: just give the poor money.  Or better yet, give them an education.

A much better piece argues that theory should weigh more heavily than empirics, at least sometimes.

Read it here.

This is the most absurd immigration reform proposal that I have ever heard.  The proposal:

If we are really serious about turning back the tide of illegal immigration, we should start by raising the minimum wage from $5.15 per hour to something closer to $8. 

The Reasoning:

But if we want to reduce illegal immigration, it makes sense to reduce the abundance of extremely low-paying jobs that fuels it. If we raise the minimum wage, it’s possible some low-end jobs may be lost; but more Americans would also be willing to work in such jobs, thereby denying them to people who aren’t supposed to be here in the first place.

Now the debunking.  No matter what you assume about unemployment and compliance, raising the minimum wage to $8/hour will have perverse effects.

First, assume that no jobs will be lost and that all employers will happily comply.  In this case it will become more attractive for Mexicans to illegally enter the States.  There will be as many low-skilled jobs as before, but with a higher salary.  Low-paying jobs do not fuel illegal immigration; low-skilled jobs do.

Of course, in reality some employers will not obey the minimum wage law.  Whom will they hire on the black market for labor?  Illegal immigrants of course.  Raising the minimum wage serves to expand the black market for labor.

Now what about unemployement?  Such a large minimum wage increase will absolutely decrease the number of low-skilled jobs available.  Who will be hurt by this?  Not just illegal immigrants–who are probably more willing to sell their labor on the black market anyway–but American citizens as well.

In order for this plan to work, it must eliminate the low-skilled jobs that attract illegal immigrants.  Raising the minimum wage may well accomplish this.  I suppose Michael Dukakis considers mass unemployment of the working poor to be collateral damage. 

Read an enlightening debate over human gender differences here, and a very nice piece on rent-seeking here.