SOTU Notes


I tuned into the State of the Union address roughly around the time that Obama was talking about preschool, so I suppose I will start there. Read it here.

Preschool

Obama proposed universal preschool. Probably the best domestic welfare policy idea of the night. Even if children get nearly zero value from preschool its probably still a good idea. Now, contrary to Obama’s claims we don’t have nearly the data to justify this as a silver bullet…but really, that’s like all other education experiments. In the grand scheme of things, universal preschool doesn’t cost much, and even if it is simply a day care for young kids, provides value.

Minimum Wage

Obama proposed raising the Federal minimum wage to $9 an hour. This is probably the worst idea I heard all night. Even worse than the proposal was hearing left-leaning economists falling over themselves to justify the proposal. The evidence of the overall effect of a minimum wage increase is — as you can expect — inconclusive. However, while minimum wage likely has a negligible effect on employment levels as a whole (in the long run), it certainly does concentrate chronic unemployment among the least productive; including the disabled, the young, and the least-educated.

The confusing part of the situation is that economists know that the EITC, or a simple tax-and-transfer scheme strictly dominate the minimum wage from an efficiency and flexibility standpoint. At least this would be confusing if you didn’t understand that the minimum wage isn’t about income support at all — it’s about mood affiliation.

Withdrawl from Iraq

As soon as possible, and then sooner.

Those are the issues I remember off the top of my head. Obama wasn’t nearly liberal enough on immigration. I doubt cap and trade or a carbon tax could pass, but if it did, it would be another exercise in signalling — it would likely have a minuscule impact on global emissions. Making the clean energy tax credit permanent is a really bad idea, and I am anti-gun control for more squishy reasons.

The Republican response was a disaster in my perspective, and that has nothing to do with the water bottle incident.

Update: While Kevin Drum is mostly wrong about the minimum wage, he is certainly right here:

Obama’s other proposal dear to my heart was his call for universal pre-K.The truth is that age four is too late. Age two would be better. Age one would probably be better still.

The truth of the matter is that one is probably even too late.

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