The Frugal Libertarian

Minimum wage laws are supposedly meant to help the poor, but the reality is that it prices young low-skilled workers out of the job market.  Basically, employers cut jobs because the wage the government is forcing them to pay is worth more than the labor the employees could provide.   People would probably cut back on how much milk they drank if the government made us pay $10.00 a gallon.  It is the same for labor.  So, I was not surprised by this article saying that unemployment among young workers has increased dramatically since 2007.

According to the Pakistani government, the drone attacks that our “peace” President has been ordering have killed 700 civilians and only 5 accused terrorist.   Read about it here and here.  Still think they hate us because of our freedom?

The tallest man-made structure ever built opened this week in Dubai. The Burj Khalifa Tower stands at a little over 2,700 feet.  This opening comes at a time when Dubai is in the midst of a serious financial crisis.  So should the construction of the tower have clued us into the coming financial collapse?  Probably, according to the Skyscraper Index created by economist Andrew Lawrence.  A paper by Mark Thronton, Skyscrapers and Business Cycle, takes an in depth look at the Skyscraper Index.  It is long but worth a good skimming.   Basically, the paper explains that the Skyscraper Index “shows a correlation between the construction of the world’s tallest building and the business cycle.”  We often see a construction boom before a financial bust, but how accurate is the Skyscraper Index?  According to Thornton, accurate enough that we should probably pay attention the next time construction starts on one of these super-skyscrapers.

The Austrian Business Cycle theory argues that artificially low interest rates, set by central banks, lead to malinvestment of capital.  Businesses will start to favor long term capital projects.  What better example of a long term capital project than a big ass skyscraper.