Marcos Portillo

The Costs and Incentives of the Labor Market

Dec 16, 2011 at 6:28 PM

By Marcos Portillo

Today, we’re faced with continued high unemployment and slow economic growth. The unemployment rate dropped slightly to 8.6%, but considering the holiday season and influx of temporary workers this drop is only temporary not to mention that the real unemployment is much higher than 8.6% the government reports.

The problem with the high unemployment is that there is an abundance of labor but the demand for labor is still quite low. There are a few reasons for such a high and persistent unemployment rate. The cost of labor is just too high for employers. Not only has the government made low-skilled workers artificially more expensive but certain policies have contributed to additional costs that make employing people in general more expensive. Another contributing factor is that unemployment has been made more financially attractive to individuals causing them to have unreasonable expectations in their search for employment.

If we break it down to the basic economic principles of supply and demand we can see that our nation has a surplus of labor due to a low demand for it. Demand is always a function of price. The higher the price, the lower the demand. These principles apply to the labor market just as much as any other industry.

Concealed Carry Guns on Campus -- Why Not?

Aug 2, 2011 at 1:38 PM

By Marcos Portillo

Why do concealed carry licenses (CCLs) not apply on most college campuses? The purpose for a CCL is self protection. Does one not need the ability to self protect on a college campus? Are people really that much safer on college campuses?

Let's examine the most common objection to allowing concealed carry on campus:

Gun Control

"You can’t allow guns on campuses, crazy! Haven’t you heard of Virginia Tech?!"

The Virginia Tech shooting might have actually been preventable had the VT campus allowed CCLs. In fact, disallowing concealed carry will do nothing to stop a deranged shooter's plans -- though it will deprive law-abiding students of a means of stopping his crime.

What would have happened if concealed carry was allowed on campuses? How differently would the outcome have been during Tech's tragic shooting? Maybe a student or teacher could have stopped the slaughter?

'We Don’t Need Congress -- Invoke the 14th Amendment, Raise the Debt Limit!'

Aug 1, 2011 at 2:31 PM

By Marcos Portillo

As everyone knows, the debt ceiling debate currently dominates Washington. Even though Obama has said invoking the 14th amendment and bypassing Congress isn’t a “winning argument,” there are those on the left urging him to do so, including a former president:

Former President Bill Clinton would invoke the 14th Amendment -- “without hesitation, and force the courts to stop me,” he says -- to raise the debt ceiling if he were in President Barack Obama’s shoes.

The question is, does the President have the authority to bypass Congress on budgetary issues and unilaterally raise the debt ceiling without congressional approval?

Well, let’s start with what the 14th Amendment states:

Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any state shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

The argument is that since the Amendment states “The validity of the public debt...shall not be questioned...” that the President somehow has the authority to raise the debt ceiling.

Moral Hazard -- Cancer to the Economic System

Jul 25, 2011 at 3:34 PM

By Marcos Portillo

Moral Hazard: lack of incentive to guard against risk where one is protected from its consequences, e.g., by insurance.

Moral hazard is a growing problem in our economic system. The recession is often attributed to faults in the "free market" or "lack" of regulations on corporations, which allows these greedy, unrestrained businesses to gain too much power and end up in trouble which only good ol' Daddy Washington can fix.

First of all, that isn't the fault of free markets. Actually, it's the fault of the lack of free markets. The system we currently have is what Ron Paul calls, "corporatism" or "crony capitalism" -- a partnership of government and big corporations in which the printing policies of the Federal Reserve are a major player.