Coyote Blog

The title of this post is my alternative to Politico's headline which reads, "Barack Obama poised to hike wages for millions." What is actually happening is that Obama is proposing to raise the threshold for how much money an employee can make before he or she can be considered exempt from overtime rules (and thus exempt from filling in a time sheet).

As early as this week, the Labor Department could propose a rule that would raise the current overtime threshold — $23,660 – to as much as $52,000, extending time and a half overtime pay to millions of American workers.

The Obama Administration and its supporters (and apparently Politico, by how they wrote the headline) are smoking something if they think employers are going to react by raising salaries of current exempt employees being paid 23,660 or 30,000 or 40,000 to $52,000.  Absolutely no way.  There may be a few just under the $52,000 threshold that get a bump, but that will be a minor effect.

Everyone else is going to suddenly find themselves converted from a junior manager back to a wage earner.   Companies are not going to allow these newly minted wage earners to earn overtime, and so I suppose one good outcome is that we may see a new boost in productivity as companies find ways to automate or eliminate junior management tasks to get all these folks down to 40 hours a week.

Five years ago, I might have really been in a panic over this in my company, but fortunately our experience with Obamacare has given me confidence we'll figure it out.  With Obamacare we were facing enormous costs which we (like many service and retail companies) managed to eliminate by converting almost all of our full-time employees to part-time.   Compared to that effort, figuring out how to get all of our managers down to 40 hours seems like child's play.

As usual, most of the costs of this regulation will be born by workers.  As with other minimum wage-type laws, some will be better off, actually getting the "raise" promised by Politico, while some will be worse off, dropped to straight 40-hour work which does not pay as well, or out of work entirely.

However, this law has an even bigger impact-- it changes the relationship between the worker and their employer.  There are important differences between hourly and salaried work in the relationship with employers.  Some are psychological -- for better or worse, management things of salaried workers differently than hourly workers.  And some are real -- salaried workers can try to demonstrate that they are worthy of promotion by working extra hours and taking on extra tasks, things that hourly workers really can't do.

As a final note, I have to give the Coyote Academic Arrogance Award to Daniel Hamermesh of UT Austin who is quoted as follows:

“It’s hard to believe that somebody making $30,000 is a supervisor,”

He knows this, how?  We have supervisors who do a fabulous job for $2500 a month and are happy to be making that.

But that is actually not the Hamermesh statement that I would rank most ignorant of reality.  This is:

But Hamermesh said that to whatever extent employers reduced hours to avoid overtime the result would be more job creation, not less, since someone else must [be] hired to perform that work. Jared Bernstein, an economic adviser to Vice President Joe Biden during President Barack Obama’s first term, added that for many workers reduced hours would be a plus: “Their salary is the same but they have more time with their families.”

Are these guys for real?  Employers are not going to give employees the same salary for fewer hours.  They are going to try pay them less if they are getting fewer hours of work (of course their ability to do so depends on the labor supply).  But the change is worse than this.  They are not only getting fewer hours, but they are getting a different person and a different relationship.  Before, say for a junior manager job, employers could get go-getters who worked 60 hours a week to impress management with their diligence and dedication, signaling they were ready for promotion.  Now, employers will get time-clock punchers.

via Bruce McQuain:

David Freddoso reports that the CRS's Senior Foreign Law Specialist Norma Gutierrez has completed a study of the Honduran actions as they relate to former president Mel Zelaya and they don't reflect well on the US. Freddoso has distilled them to the following:

* The Honduran Congress appears to have acted properly in deposing President Manuel Zelaya. Unlike in the United States, the Honduran Congress has the last word when it comes to interpreting the Constitution. Although there is no provision in Honduras's Constitution for impeachment as such, the body does have powers to disapprove of the president's official acts, and to replace him in the event that he is incapable of performing his duties. Most importantly, the Congress also has the authority to interpret exactly what that means.

* The Supreme Court was legally entitled to ask the military to arrest Zelaya. The high court, which is the constitutional venue for trials of the president and other high-ranking officials, also recognized the Congress's ouster of Zelaya when it referred his case back down to a lower court afterward, on the grounds that he was "no longer a high-ranking government official."

* The military did not act properly in forcibly expatriating Zelaya. According to the CRS report and other news stories, Honduran authorities are investigating their decision, which the military justified at the time as a means of preventing bloodshed. In fact, Zelaya should have been given a trial, and if convicted of seeking reelection, he would have lost his citizenship. But he is still a citizen now, and the Constitution forbids the expatriation of Honduran citizens by their government.

* The proper line of succession was followed after Zelaya's ouster. Because there was no Vice President in office when Zelaya was removed (he had resigned to run for president), Micheletti was the proper successor, as he had been president of the Congress.

Remember Y2K?  If you took the media and politicians seriously, this sure did seem like it was going to big a big apocalyptic deal (see survey in the postscript about economic depression and civil insurrection).  Until it wasn't.

Odd Citizen points to an interesting study on this topic.  The author links this
Australian study looking retrospectively at the Y2K scare, trying to understand
why an irrational collective hysteria developed that allowed for no skepticism
(seem familiar).  The whole thing is interesting, but here is the money
quote:

From the perspective of public administration, the two most
compelling observations relate to conformity and collective amnesia. The
response to Y2K shows how relatively subtle characteristics of a policy problem
may produce a conformist response in which no policy actors have any incentive
to oppose, or even to critically assess, the dominant view. Moreover, in a
situation where a policy has been adopted and implemented with unanimous
support, or at least without any opposition, there is likely to be little
interest in critical evaluation when it appears that the costs of the policy
have outweighed the benefits.

The article is written without any reference to current
climate issues, but wow, does this sound familiar?  It is a dead-on description of what is occurring with global warming. 

The author also goes on to discuss public choice theory and why it is not necessarily a good explanatory model for the Y2K scare.  He argues that a better explanation was the asymmetry of blame:

Individuals and groups who argued for a 'fix on failure' approach stood to benefit only modestly if this approach avoided unnecessary costs, but faced the risk of blame in the event of significant system failures attributable (accurately or otherwise) to Y2K related problems. Conversely, it was evident in advance that there was little risk of loss to individuals who advocated comprehensive remediation. The absence of any serious Y2K problems could always be attributed to the success of the remediation program.

The asymmetry of incentives was amplified by the possibility of litigation, particularly in the United States and, to a lesser extent, in other English-speaking countries. The reliance of the United States on tort litigation as a method of compensating those experiencing adverse outcomes of various kinds produces a strong bias in favour of 'defensive' expenditures. In particular, jurors have been highly unsympathetic to individuals and organisations that have chosen to disregard known low-probability risks.

The special characteristics of the Y2K problem were ideally suited to produce this kind of reaction. On the one hand, the problem was both widespread and comprehensible to non-experts, such as potential jurors. On the other hand, if 'embedded systems' are disregarded, the Y2K problem differed from most other computer 'bugs' in that a complete solution was feasible, though very expensive.

In these circumstances, litigation against organisations that had failed to undertake comprehensive Y2K remediation, and experienced any form of system breakdown in early 2000, was virtually guaranteed of success. By contrast, the risk of blame being allocated to organisations that overspent on Y2K remediation was perceived to be minimal. The absence of litigation or other processes for the allocation of blame in the aftermath of the Y2K non-event shows that this perception was accurate.

A rough parallel to this in the global warming world is the apparent ease of assigning blame for CO2 emissions to energy producers and car manufacturers (despite the fact that it is all of us who uses this energy and buys these cars) vs. the reluctance of media and others to quantify and assign blame for reductions in wealth and economic prosperity that might result from CO2 limitations.

Postscript:  One other thing that is interesting to me as a libertarian:  I often point out that the political parties are a joke, a mish-mash of shifting political positions that has little to do with deeply held theories of government and more to do with branding and populist electioneering.  The Y2K-Climate comparison caused me to find a good example.  In 1999, it was the Republicans using the Y2K issue as a club on the Democrats, arguing that the Clinton Administration, and Al Gore in particular, were ignoring this critical end-of-the-world crisis and that the government needed to be doing more.  Really.  Just check this out from Dec, 1999:

Last year, The National Journal devoted an entire issue to the subject, with headlines such as "The Big Glitch" and "Sorry, Al, This Bug's for You." In the special issue, Neil Munro cites a survey of industry and government executives and
programmers concerning potential fallout from the millennium bug, showing that 70 percent
anticipated a negative effect on the economy, with 10 percent of respondents not ruling
out the possibility of economic depression and civil insurrection.   

With a technology problem of this magnitude on the national horizon, where was the leadership of the nation's No. 1 techno-nerd and self-proclaimed creator of the "information superhighway," Vice President Al Gore?   

Gore's familiarity with and personal interest in technology, specifically computer technology, makes suspect his long silence on the Y2K issue.   

In his biography, "Gore: A Political Life," Bob Zelnick writes that Gore "had nothing to say during the first five-and-a-half years of his vice presidency
about the biggest problem in the history of high-tech America."

Let the record show that I was a Y2K skeptic before I was a climate skeptic.

I may be making common cause with some Republicans on the climate issue at the moment, but I don't trust them.  In fact, already we see McCain jumping on the climate bandwagon (as he does with every populist issue -- he believes in nothing) and I have a strong sense GWB may dive into the climate fray quite soon.

It is good to know that Al Gore is proud of supporting, even "saving," corn-based ethanol (from a pro-ethanol site):

Vice-President Al Gore
Third Annual Farm Journal Conference, December 1, 1998
http://clinton3.nara.gov/WH/EOP/OVP/speeches/farmj.html

"I
was also proud to stand up for the ethanol tax exemption when it was
under attack in the Congress -- at one point, supplying a tie-breaking
vote in the Senate to save it. The more we can make this home-grown
fuel a successful, widely-used product, the better-off our farmers and
our environment will be."

It is good to know that when the economic and environmental toll from our disastrous subsidization of corn ethanol is finally tallied, we will know where to send the bill.

HT: Tom Nelson

Update: More Here on Ethanol Craziness

Via Instapundit comes the separation of powers is slowly starting to work, with the Senate starting to reign in the Administration:

In a break with the White House, the Republican-controlled Senate
overwhelmingly approved a measure Wednesday that would set standards for the
military's treatment of detainees, a response to the Abu Ghraib scandal and
other allegations that U.S. soldiers have abused prisoners.

Sen. John McCain, R-Ariz., a victim of torture while a prisoner during the
Vietnam War, won approval of the measure that would make interrogation
techniques outlined in the Army Field Manual the standard for handling
detainees in Defense Department custody and prohibit "cruel, inhuman or
degrading" treatment of U.S.-held prisoners.

Its good to see Congress getting off its butt and seeing it stop relying on the Supreme Court to deal with these issues.  I thought this was overdue a while back when I posted this.

Of course GWB, who is the only president in history to go 5 years without vetoing anything, is threatening a veto of this sensible regulation:

The White House has threatened to veto the $440 billion military spending
bill to which the measure was attached, and Vice President Dick Cheney has
lobbied to defeat the detainee measure. White House spokesman Scott McClellan
objected that the measure would "limit the president's ability as
commander-in-chief to effectively carry out the war on terrorism."

Uh, how?  Glenn Reynolds responds:

This resistance seems to me to be a mistake. First -- as Lamar
Alexander noted on the Senate floor, in a passage I heard on NPR
earlier this morning -- it is very much the Congress's responsibility
to make decisions like this; the President might do so in the first
instance, but we've been at war for more than four years and Congress
is actually doing its job late, not jumping in to interfere. If the
White House thinks that the Senate's approach is substantively wrong,
it should say so, but presenting it as simply an interference with the
President's Commander-in-Chief powers is wrong. Congress is entitled,
and in fact obligated, to set standards of this sort. It's probably
also better politically for the White House, since once the legislation
is in place complaints about what happened before look a bit ex post facto.

Perhaps current practices are producing a treasure trove of
intelligence that this bill would stop, but I doubt that -- and if I'm
wrong, the Administration should make that case to Congress, not stand
on executive prerogatives. And this bill seems to be just what I was calling for
way back when -- a sensible look at the subject by responsible people,
freed of the screeching partisanship that has marked much of the
discussion in the punditsphere. That should be rewarded, not blown off.

A Bush veto of this measure is likely to touch off the perfect political storm within his own party.  This would make the trifecta of alienation from the more sober parts of the Republican Party, following on his profligate spending tendencies as revealed post-Katrina and his cronyism as reveled first at FEMA and now with his recent Supreme Court nomination.

Well, it worked for Johnny Carson, why not for me?  Instead of
leaving you with dead air (photons?) while I am knocking the rust off
my beer pong skills back at Princeton, I will share with you a few of
my favorite posts from my early days of blogging.  Since most of these
posts were viewed by about 5 people, there is a certain temptation to
just recycle them without attribution, given the unlikelihood of
getting caught.  Instead, though, I will share them as my best of
Coyote...

This post was from just after the last election, and was titled "Something Unusual Will Happen in 2008".  This was my first ever Instalanche (though the record books put an asterisk next to this one because it was from one of Glenn's guest bloggers) and I still think it makes an interesting point about the next election.

Assuming Cheney does not want to run for president, which I think is
a given, something will happen in 2008 that has not happened in 56
years since 1952: Neither of the two major-party presidential
candidates will be incumbents of the President or Vice-President jobs.
In 1952 we had Eisenhower vs. Stevenson. Since then we have always had
incumbents running, though not necessarily successfully -
1956: Eisenhower
1960: Nixon
1964: Johnson
1968: Humphrey
1972: Nixon
1976: Ford
1980: Carter
1984: Mondale and Reagan
1988: Bush
1992: Bush
1996: Clinton
2000: Gore
2004: Bush v 1.1

I guess the only exception you could make to this is if you called Hillary an incumbent.  Full list of presidents and VP's here

UPDATE

I didn't just bury the conclusion, but left it out entirely. The
point is that 2008 is likely to be a zoo. Not one but two wide open
nominating battles, plus of course the general election. Can we please,
please before then try to figure out a way to choose our candidates
other than just letting Iowa do it?

UPDATE #2

Welcome Instapundit (guess I need to send a check to my host for
more bandwidth). While you are here, you might check out my latest
roundup on Kyoto and Global Warming, as well as an interesting analysis on the economic and political success of ex-French vs. ex-Anglo/American colonies.  Short answer is that you didn't want the French as masters.

UPDATE #3

Check out the comments section, which has several good posts
handicapping the Republican candidates in 2008. Several people suggest
a Republican strategy to replace Cheney mid-term with their next
candidate. I know that the leadership of both political parties lament
their loss of control, due to the primary system, in selecting their
nominee, and this certainly would be an intriguing way of getting
around that and the Iowa/NH problem. However, the move is so
transparently Machiavellian, and I think unprecedented, that the first
party to try it will probably get punished in the court of public
opinion.

Assuming Cheney does not want to run for president, which I think is a given, something will happen in 2008 that has not happened in 56 years since 1952: Neither of the two major-party presidential candidates will be incumbents of the President or Vice-President jobs. In 1952 we had Eisenhower vs. Stevenson. Since then we have always had incumbents running, though not necessarily successfully -
1956: Eisenhower
1960: Nixon
1964: Johnson
1968: Humphrey
1972: Nixon
1976: Ford
1980: Carter
1984: Mondale and Reagan
1988: Bush
1992: Bush
1996: Clinton
2000: Gore
2004: Bush v 1.1

I guess the only exception you could make to this is if you called Hillary an incumbent. Full list of presidents and VP's here

UPDATE

I didn't just bury the conclusion, but left it out entirely. The point is that 2008 is likely to be a zoo. Not one but two wide open nominating battles, plus of course the general election. Can we please, please before then try to figure out a way to choose our candidates other than just letting Iowa do it?

UPDATE #2

Welcome Instapundit (guess I need to send a check to my host for more bandwidth). While you are here, you might check out my latest roundup on Kyoto and Global Warming, as well as an interesting analysis on the economic and political success of ex-French vs. ex-Anglo/American colonies. Short answer is that you didn't want the French as masters.

UPDATE #3

Check out the comments section, which has several good posts handicapping the Republican candidates in 2008. Several people suggest a Republican strategy to replace Cheney mid-term with their next candidate. I know that the leadership of both political parties lament their loss of control, due to the primary system, in selecting their nominee, and this certainly would be an intriguing way of getting around that and the Iowa/NH problem. However, the move is so transparently Machiavellian, and I think unprecedented, that the first party to try it will probably get punished in the court of public opinion.

Got another email today from a friend sending around the "Its time to panic they are going to reinstate the draft" email. This is the third time in a week I have been forwarded this email. Unfortunately, the email is an urban legend at best, or a campaign tactic at worst, and has been debunked all over - the best is at FactCheck.org. I guess I can forgive my friends, since CBS News fell for it too. I once embarrassed myself forwarding a similar fake email about a change in credit privacy laws. I sent it indignantly to senators and web sites and friends. OOPS, all a hoax.

Please, please. Before you pass on these emails to your friends and embarrass yourself like I did, Google it. Just plug in the email subject line, like I did here for the draft email. You will see a bunch of fairly ideological sites promoting the same story - with exactly the same language - this should be big red flag. You will also see a number of credible 3rd parties and urban legend sites debunking it.

The point of this post was about crazy emails floating around, but given that I mentioned the draft one, the house voted down the draft bill sponsored by a Democratic representative 402-2 today.

PS - if you have not seen FactCheck.org, check it out. They seem as fair as anybody in terms of equal opportunity debunking of both political parties.

UPDATE

Never trust men over 60 with the computer. Our Vice President managed to direct tens of millions of debate viewers to FactCheck.com, which is a anti-Bush/Cheney site. LOL. Perhaps even funnier, by the time debate viewers found the real site at Factcheck.org, they likely saw this headline on the front page:

Cheney & Edwards Mangle Facts. Getting it wrong about combat pay, Halliburton, and FactCheck.org.

OOPS. Dick, just answer the question yourself.