Howard Baetjer Jr. is a Lecturer in the Department of Economics at Towson University in Towson, Maryland, where he teaches courses in microeconomics, money and banking, comparative economic systems, and the history of economic thought. He blogs at freeourmarkets.com. He is the author of Free Our Markets, A Citizens’ Guide to Essential Economics, which explains why people flourish better, the freer the markets they live in. Dr. Baetjer is also a frequent faculty member at IHS Summer Seminars.
Dr. Baetjer earned a B.A. in psychology from Princeton in 1974, an M.Litt. in English literature from the University of Edinburgh in 1980, an M.A. in political science from Boston College in 1984, and a Ph.D. in economics from George Mason University in 1993.
Baetjer was a founding trustee of Children’s Scholarship Fund Baltimore (www.csfbaltimore.org), which provides nearly partial scholarships to low-income Baltimore children, to help them attend private and parochial schools their parents choose.
Students: Want to hear Professor Baetjer in-person? Apply for the free IHS Summer Seminars and spend a week discussing ideas with great faculty and participants from around the world. Find out more.
If you develop an expensive chronic illness, you might think the Affordable Care Act (ACA) will protect you. Instead, you’re likely to end up with subpar coverage or no coverage at all for your condition — a major problem the ACA was supposed to solve. This problem has arisen, however, as an unintended consequence of the ACA — in particular, the way the law tries, misguidedly, to address a prior problem: that when people with employer-provided health insurance get sick and stay sick long enough to lose their jobs, they lose the health insurance that goes with those jobs. As I described
Have you ever wondered why, in the United States, we get our health insurance through our employers, but not our car insurance or home insurance? A 1943 New Deal decision making health benefits tax exempt is the answer. As a believer in small government, I usually favor anything that reduces taxes. But this tax break has wreaked havoc on American health care. As Congress struggles to fix, or “repeal and replace,” the Affordable Care Act (ACA, or “Obamacare”), probably no single policy change is more important than getting rid of that tax break. Because the health insurance premiums
Who has the wealth of wealthy stockholders? The question seems absurd: the stockholders have it, of course. But I’m not asking who owns the stock; I’m asking who has the wealth? There is a difference. And the difference matters because many good people condemn the free market system on the mistaken belief that the wealth of the wealthy benefits only the wealthy. One such well-meaning but mistaken person is Amy Traub, Associate Director of Policy and Research at Demos, an equality-focused public policy organization. Here follow excerpts from her arguments against the motion in a recent
Have you ever thought your employer was exploiting you? That the company you work for doesn’t really earn its profits — it just rips off its workers? If so, you’re on to something — at least, that’s what Professor Richard Wolff says in a YouTube video (with half a million views!) called “Marxism 101: How Capitalism is Killing Itself.” The video is well made, and Prof. Wolff is charming. He is also persuasive. And a Marxist. And his explanation is so smooth and compelling that it rattled me. I had to work to discern where his reasoning is invalid. I offer the same challenge
What rights are at stake in immigration? The issue is often framed as an either-or question of whether would-be immigrants have a right to immigrate or the native-born have a right to exclude them. I think that’s an unhelpful way of framing it; it’s collectivist. It seems to ask whether any and all immigrants should be free to go anywhere they wish, or whether (a majority of) the native-born may exclude all immigrants from going anywhere in the country. Isn’t there some middle ground, whereby some of the native-born may admit some immigrants to some places but not others? A property
Dear Ms. Murray, Your article in the Baltimore Sun (“A $15 minimum wage benefits Baltimore business”) almost completely ignores the most important economic argument against minimum wage laws: that they cause unemployment. Young people from awful schools in awful neighborhoods with skills worth only $8 an hour will not be hired at $9 an hour. Hiring them would cost their employers $40 a week, $2080 a year. It won’t happen. Minimum wage laws cause unemployment for low-skilled people. Most of your arguments ignore this. For example, you write that “[i]t's worth noting that the bill does
Last week when one of my students caught sight of me approaching on a campus walk, he pulled out his smartphone to show me a picture he had taken. “Look at this,” he said, disgusted, “it was in the Liberal Arts building.” The picture showed a hand-lettered sign, hung over an atrium railing, that read, “No free speech for fascists.” Because I care intensely about free speech, especially in a university, and more especially still in my university, I was sorry and angry to see the sign. It pained me that shutting down the opinions of others, even fascists, should be publicly advocated. “I
In Kentucky, says scholar Caleb Brown, it’s easy to find a barista who has a bachelor’s degree, but manufacturing companies can’t find the machinists they desperately need — whose pay would start at $60,000–$80,000 a year. That slice of modern economic life comes from Brown’s Cato podcast conversation with Jim Stergios of Massachusetts’s Pioneer Institute. Listening to it, I realized a problem with government schooling that I had never zeroed in on before. In criticizing government schooling, I have always focused on the failure of government schools to provide as high quality instruction
As a professional teacher of economics, I wish to go on record about President Trump’s proposal to build a wall to keep people from Latin America out of the United States, and to charge a 20% tax on imports from Mexico to pay for it. The idea is wrongheaded on both counts: they would harm citizens of the US as well as those of Latin America. The wall would cause harm because human beings are “the ultimate resource,” as Julian Simon taught us in a book by that name. Human ingenuity and creativity are the most valuable and productive forces known. They are at the root of our technology and
In the year 2076, the inhabitants of a prison colony on the moon rebel and demand their freedom, sparking a war for independence against all of Earth.This is the story of Robert Heinlein’s classic novel, The Moon Is a Harsh Mistress. My message to you today is simple: don’t miss this book. Not only is it a gripping story, it is also an intriguing examination of government, governance, and politics. There is a lot to be learned about liberty here.The book explores anarchism deeply throughout. Because the “Loonies” (the moon is known as “Luna”) are convicts or the descendants of convicts,
“I learned in economics that in ‘perfect competition’ profits are zero, so any actual profits come from some kind of monopoly power. So how could profits be good?”This question was asked of me by a student at a recent economics seminar hosted by the Institute for Humane Studies. Supposing other readers of this blog have the same question, I offer my answer here. The simple explanation is that while the model of perfect competition is helpful for understanding certain economic phenomena, its simplifying assumptions make it useless for understanding profit and loss in a real economy.My in-depth
This is the full text of a letter Prof. Howard Baetjer wrote the Wall Street Journal, an edited version of which the WSJ published on Oct. 6. Senator Tom Cotton (R-Ark.) and Representative Mike Pompeo (R-KS) argue for immigration restrictions in a Wall Street Journal opinion piece, “What We Learned in Scandinavia About Migrants,” on September 27. They reach wrong conclusions from wrong premises. Wrong Premise #1: Immigrants are a net burden on society Cotton and Pompeo write, “Norwegians understand that an open-border policy would strain their resources.” But, as Julian Simon has taught
Pretend you are a poor, single parent of two in Chicago, earning $12 an hour, working full time, and determined to do what is best for your family. And suppose your employer, impressed with your work, offers you training for and promotion to a new job paying $15. Should you take the offer? It sounds like a no-brainer, but it’s not. At your present $12 an hour you are eligible for refundable tax credits, food assistance, housing assistance, child care assistance, and medical assistance worth $41,465 combined. Together with your earned income after taxes of $22,121, you are now bringing home about
In the current debate about the minimum wage, some argue that higher minimum wages boost the economy overall. If workers receive higher wages, the reasoning goes, then they will have more money to spend, and their increased spending will boost business all around. In this news video, for example, an activist in the citizen action committee #FightFor15 says (at 1:44), “There’s a simple economic fact: When there is more money in the hands of people, it’s going to help the economy all across the board.” Similarly, a friend of mine commented on a recent post that “One can suppose the benefit
Editor’s Note: This is part 2 of an open letter from Prof. Howard Baetjer to a friend who commented on one of his Facebook posts about minimum wage laws. You can view part 1 here.Baetjer and his friend, Adam, look at the minimum wage issue from very different perspectives, so Baetjer wrote an open letter. What do you think about the issue? Check out Baetjer’s response to Adam and let us know what you think in the comments below.Adam,On April 27, I wrote Let me try to refocus this discussion on the way minimum wage laws hurt the very people you are trying, mistakenly, I believe, to look after.
Editor’s Note: This is an open letter from Prof. Howard Baetjer to a friend who commented on one of his Facebook posts about minimum wage laws. Baetjer and his friend, Adam, look at the minimum wage issue from very different perspectives, so Baetjer wrote an open letter. What do you think about the issue? Check out Baetjer’s response to Adam and let us know what you think in the comments below. Adam,Here is my rejoinder to your response to my Facebook post on April 21, in which I wrote, Minimum wage laws are immoral. Those who enact and enforce them should be punished for interfering
“That, gentlemen, is freedom.”So spoke an esteemed friend and mentor to me, decades ago, on listening to clarinetist Edmund Hall play an effortlessly glorious solo on the Louis Armstrong record Ambassador Satch. “What could he mean?” I wondered. “What has making music to do with freedom?” He did not explain.I now believe what my friend had meant (he had played the clarinet himself) was that Edmund Hall had trained himself to such mastery of the instrument that he could produce whatever sound a clarinet could produce. As a clarinetist, Edmund Hall faced no limits. He had overcome them
“Is Now the Time to Kill the $100 Bill?” That’s the title of a Wednesday, February 17 article in the Wall Street Journal, prompted in part by a blog post from former Secretary of the Treasury Lawrence H. Summers.The article states that the Treasury Department has no current plans to eliminate the $100 bill, so the suggestion seems for now to come from the ivory tower, but the very question is astonishing. The $100 bill is “America’s most popular currency denomination.” Private enterprises strive to give customers more of the goods and services they want, so why should the US government
A student recently asked me why unemployment remains so stubbornly high, especially for lower-skilled people. Here’s an adaptation of my answer. No one can know for sure the precise causes of unemployment; the economy is a fantastically complex system, like an ecology but still more complex, so unemployment is sure to have a variety of interacting causes. I do, however, have a strong opinion as to what some of the main factors are that affect employment. For the least skilled, the main problems are legal obstacles to working. One that has a terrible effect on the least skilled and educated is
One of the most valuable economic insights is that human creativity is The Ultimate Resource. (The great economist Julian Simon wrote a book by that name.) It follows that as long as we are free to use our creativity, we don’t have to worry about running out of resources. Truly, human creativity makes resources of mere stuff, because only when people figure out what to do with some particular stuff does it become a valuable resource. The world has been experiencing a powerful illustration of this fact with respect to oil. For over a century, people have been worrying about running out of oil.
I got a powerful reminder a few months ago of a lesson I learned in grad school: numbers don’t speak for themselves. We must interpret them alertly if we are to learn from them.The numbers I came across are these: [Medicare] spends roughly $3 on administration for each $100 of medical services it buys for its beneficiaries, compared to as much as $17 by private insurers."]That’s from an article in Reason.By chance, I had come across a reference to these numbers two days earlier, in an article in Econ Journal Watch:There is a similar story with Medicare and indeed publicly run health care
Want to know more about Student For Liberty’s impact, new initiatives, and other efforts made to advance liberty around the world?
Sign up for our email newsletter to stay connected.
Subscribe Now