R.W. Hafer

Rik Hafer is a distinguished research professor in the Department of Economics and Finance at Southern Illinois University Edwardsville and a scholar at the Show-Me Institute.

Marinela

Income inequality in the United States is a hot-button political issue in this mid-term election year. Advocates for substantial increases in the minimum wage, for instance, believe that imposing higher wages on employers will reduce poverty and lessen income inequality. The evidence just does not justify this claim. Workers who remain employed after the increase are made better off on the backs of those workers who face reduced hours or unemployment following government-mandated wage hikes.

linder6580 | sxc.hu

“Capitalism is the crisis.” So read a banner hung off of an overpass on eastbound Interstate 44 heading toward downtown St. Louis. But what did it mean?

Capitalism is characterized by private as opposed to government ownership of the capital used in the production and distribution of goods. This is done in the pursuit of profit.

a rolling dollar bill
dleafy | sxc.hu

The end of the year is always a time to take stock of what has transpired during the past year and what is likely to happen in the one about to begin.  Let’s do so by considering several key economic measures.

Economic expansion limped along for another year.  Gross Domestic Product (GDP), adjusted for inflation, is the best measure of the economy’s total output. It increased this year, but not nearly as fast as many would hope, especially three years out form the end of the Great Recession.

This article originally appeared in the St. Louis Beacon. - The Senate Banking Committee, in a 14-8 vote, recently sent to the full Senate, President Barack Obama’s nominee to become the next chair of the Federal Reserve Board of Governors. With the change in filibuster rules, Janet Yellen’s confirmation is a near certainty.

This article first appeared in the St. Louis Beacon: Missouri’s budget priorities have long-term consequences and they are not good.

The recent snafu over the fiscal budget, the debt ceiling and the continued funding of Obamacare provides a teachable moment. Spending choices, whether at the federal or state level, have economic consequences.

This article first appeared in the St. Louis Beacon: The time for enrolling in health exchanges is now upon us. Recent polls show that the majority of Americans continue to disapprove of the health care law — the Affordable Care Act, commonly referred to as Obamacare — enacted in 2010. But how many of us really understand what we can expect and what we will pay for this “affordable” health program? The simple fact is that most of us are just plain bewildered, not knowing how the controversial law will affect us.

This article first appeared in the St. Louis Beacon: After reading the president’s “Plan to Make College More Affordable” I couldn’t help but recall the scene in the “Wizard of Oz” in which the Wizard awards the stalwart travelers symbols of their true characteristics. The Cowardly Lion receives a medal, for he truly was brave. The Tin Man a heart, for he truly was compassionate. And the Scarecrow gets a diploma because even though he actually was quite intelligent, he just didn’t have the college degree to prove it.

This article first appeared in the St. Louis Beacon: The disparity in income between the top 1 percent and the other 99 percent fueled the Occupy Wall Street movement and gave momentum to the ongoing push to raise taxes on the rich. As important as this is both as a social topic and an economic policy issue, there is much confusion that hinders rational debate.

This article first appeared in the St. Louis Beacon: Other than obeying laws and being generally civil, are you obligated to ensure the economic success of others in society? Put another way, what determines your social responsibility? To answer that question, let’s first consider the issue of social responsibility at the personal level and then reflect on the social responsibility of business.

This article first appeared in the St. Louis Beacon: CNBC recently released the 2013 results of its best state to do business in analysis. Its computations put South Dakota at the top and Hawaii at the bottom. As so often happens, Missouri came in right in the middle of the pack with a mediocre ranking of 26.

This article first appeared in the St. Louis Beacon: Looking at stock prices over the past few months, May 22 stands out. That was the first time Fed Chairman Ben Bernanke “rocked” the markets with his comment that maybe the Fed would reconsider the magnitude and duration of its current buying scheme.

This article first appeared in the St. Louis Beacon: The good news is starting to percolate up from a still recovering economy. The Conference Board recently released its May Consumer Confidence Survey and our subjective appraisal of current economic conditions has improved over April, a trend over the past few months. This tentatively rosy outlook is matched by the Thomson Reuters/University of Michigan consumer sentiment index, which also is on the rise.

On Labor Day, President Barack Obama unveiled a $50 billion plan that he said would create more jobs and energize a lackluster economy. It will do neither.

Expectations play a significant role in explaining human behavior. Expect a slight chance of rain and you may not take an umbrella. Expect that the hurricane gaining strength off the coast is going to hit your town and you are likely to take precautions. Expectations also are important in explaining the current economic situation.

The news that China has surpassed Japan as the world's second largest economy sent a shiver through the collective soul of economic pundits. It needn't have.

During the late 1980s, we were warned of Japan's expanding economic machine. The Japanese economy was then expanding at a rate that made ours look puny. Everyone looked to Japan as the source for economic inspiration and guidance: Recall the movement to adopt their management techniques or face economic defeat?

Executive compensation is a hot-button topic. Numerous reports document that chief executives of major corporations earn salaries that far exceed those of their workers. And, amid the financial crisis and recession, we have seen that compensation and performance are not always linked.

The possible takeover of Anheuser Busch by the Belgian brewer InBev has sparked the predictable political outcry.

Claire McCaskill, the junior yet up-and-coming Democratic senator from Missouri, announced that she would block the takeover. Supporting the deal wouldn’t be “patriotic.” 

The senior senator from Missouri, Kit Bond, also is flat out against the deal. From our nation’s capital to Jefferson City to city hall, politicians are lining up to keep the Belgians from the brewery gates on Pestalozzi.