News Story of the Day: why can’t teenagers get jobs these days? Oh, that’s easy: a higher minimum wage.
According to a new study by the Mercatus Center at George Mason University, teen employment in the United States declined to its lowest level since 2000. Researchers found that the minimum wage was the primary reason, followed by a return to school and competition from immigrants.
The study authors write:
Thus, the evidence, if anything, says that teens exposed to higher minimum wages since 2000—the same teens who left combined employment and school enrollment for enrollment only—had lower human capital investment.
Chart of the Day: this week, the stock market experienced a near 10 percent correction. But how does this week’s crash compared to previous stock market plunged? Quartz put together this interesting chart:
Illustration of the Day: U.S. oil production has topped 10 million barrels per day (bpd), and even reached a record high of 10.2 million bpd. So, what happened to peak oil? Well, it looks like no one is even searching for the term on Google anymore.
Quote of the Day: why doesn’t Keynesian economist Paul Krugman love President Donald Trump’s infrastructure spending? It’s a typical Keynesian measure. That’s what economist Robert Murphy wonders:
On Krugman’s own description of it, Trump’s plan has private investors put up a bunch of their own money to do the lion’s share of infrastructure spending, in exchange for the revenues that flow to the projects over time from fees levied on the citizens who use the items (bridges, roads, etc.). In other words, the plan is economically equivalent to financing public works projects through privately financed deficits, except it cuts out the IRS middleman.
Krugman should be a huge fan of this approach. After all, Krugman tells us that sure, the economy seems to be doing OK in the first year under Trump, but that “when the next big shock comes…we’ll need an effective, coherent response from officials beyond the world of central banking.” This is because—Krugman claims—we are dangerously close to the “zero lower bound” world of the liquidity trap, so that the Fed can’t just cut interest rates when the next shock hits us.
In that context, then, Krugman should be ecstatic to learn that the Trump Administration has already gotten the wheels in motion for private investors to put up $1.3 trillion on the front end to build infrastructure, in exchange for revenues to be collected over the following decades. That is exactly the kind of plan to promote investment spending via deficit finance that Krugman thinks is necessary when the Fed is rendered impotent because interest rates hit 0%.
Tweet of the Day: SpaceX just had a historic moment this week, and now Space Man is exploring space. But the PostModernists are upset because of something about gender. But one Twitter user had it right:
Whatever happened to “be the change you want to see in the world?”
Best way to fight the “patrairchy?” Pursue a STEM degree, ladies.
The @SpaceX launch was a uniting moment for our humanity. Why would anyone try to see gender and race in this?! pic.twitter.com/oo6Z4um3yn
— Melissa Chen (@MsMelChen) February 8, 2018
Video of the Day: up until last Thursday, the stock market boom was because of President Obama, or at least that is what the media believed. Since then, the market has belonged to President Trump – again, that’s what the media thinks. Here is President Obama tying himself to the stock market (hint: it’s really the Federal Reserve):
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