Why Saudis are upset with Obama

When it comes to Arab Spring, Obama and the Iranian leadership happen to find themselves largely on the same page

By M K Bhadrakumar

The Saudi Foreign Minister Prince Saud Al-Faisal used the meeting of the Friends of Syria ministerial forum meeting at New York on Friday to launch an attack on the US-Russian initiative on chemical weapons. He said the initiative should have been followed up with a UN Security Council resolution under Chapter VII so as “to guarantee the Syrian regime’s commitment without any delay or procrastination”, and as things stand, the Syrian regime intends to take advantage of the initiative “to impose more killing and to torture its people.” 

Faisal also warned against using the Geneva process “as a way to legitimize Assad regime.” Instead, he called for the intensification of political, economic and military support of the Syrian opposition in order to enable it to defend itself and change the balance of powers on the ground, which will push the political solution.” 

Clearly, the Saudi Arabian regime is seething with anger over the US-Russian initiative on Syria’s chemical weapons as well as President Barack Obama’s overture to the Iranian leadership (WSJ). Saudi Arabia can be expected to step up the support for the rebel fighters in Syria and it may not care to do any hair splitting between “moderate” Islamists and extremist groups. 

Conceivably, the newly-formed islamic Alliance in Syria may have tacit Saudi backing. Turkey is known to keep underhand dealings with extremist groups who act as counterweight to Syrian Kurds. 

All these cross currents come out vividly in the sharp criticism of Obama’s policy featured in the Saudi establishment daily Asharq Al-Awsat today, here, under the byline of Abdul Rahman Al-Rashed, who is also the general manager of Al-Arabiya television — “Obama would be committing an irreparable error if he lets Iranians fool him with Rouhani’s smiles and sweet words…” 

It seems the Saudis have been taken by surprise. They probably didn’t expect a direct contact between Obama and Iranian president Hassan Rouhani or the great thaw to begin in right earnest so soon. 

Obamanomics, RIP

An autopsy of an idea

By Arthur Laffer & Stephen Moore 

AN OLD SAYING sometimes attributed to Mark Twain goes: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” And so it is with the current view that government spending stimulates the economy. It doesn’t. Government stimulus spending, paid for by running up the federal credit card, is why we have the never-ending Great Recession, though the left keeps fantasizing that spending “saved us from a second great depression.”

Now for the good news: The spending spree is over and Barack Obama is a lame duck. He is legislatively paralyzed. The signature achievement of his first term, the Patient Protection and Affordable Care Act, is under steady fire, and his job approval rating continues to slip. But the best evidence of his shrinking agenda is the trend in federal spending. It’s falling, and not at a trickle. Think Niagara (figure 1).

Washington is experiencing one of the biggest fiscal retrenchments in modern history, and almost no one is paying attention. In the wake of the Bush-Pelosi-Obama spending splurge from 2008-11, federal spending has fallen by 3.1 percentage points of GDP. In the second quarter of 2009, according to National Income Products Account data, federal spending hit 26.5 percent of GDP, thanks to the Obama stimulus and the Bush recession. As of the second quarter of 2013, just as the sequester was beginning to take effect, federal spending as a share of GDP is down to 23.5 percent and, barring some unforeseen emergency, is on track to fall to around 23 percent by the end of this year. The turning point in spending from the binge years of 2009 and 2010 came when the Republicans took control of the House in 2011. 

Americans Now Lab Mice for One of the Greatest Experiments in US Government History

The great experiment has begun

By Michael D. Tanner

Obamacare officially debuts today with the opening of health care exchanges in all 50 states. Some of these exchanges may be more ready than others — exchanges in Colorado, Oregon, Vermont, and the District of Columbia, for example, will not be fully operational. Still, the opening of exchanges will give most Americans the first view of Obamacare in operation.

That first view might not provide the best first impression. After all, there have already been more than a few of what the administration euphemistically calls “glitches.” For example, the software that determines how much people actually have to pay for the insurance can’t actually calculate the price. Then again, the system also can’t verify your income or whether your employer offered you “affordable” coverage.

“The opening of exchanges will give most Americans the first view of Obamacare in operation.”

So there might be a few problems.

The American people are about to be the lab mice for one of the great experiments in government, and there is going to be a great deal of confusion. Among people’s most common questions:

What is an exchange?
An exchange is a government regulated insurance marketplace designed to help consumers purchase individual insurance plans. Think of it as e-surrance as designed buy a committee of government bureaucrats. Essentially, it’s a website where shoppers can compare and buy health insurance. Some states are operating exchanges on their own, but in most states the federal government will be running it. While the government runs the exchanges, the insurance is being sold by private companies. It is not a government insurance plan, in the sense of a single-payer system like in Canada or Europe. However, it is also not a free market; the insurance plans are highly regulated and choice is limited.

Do I have to do anything?
Probably not. Despite all the hype, the opening of the exchanges won’t impact the average American. If you receive insurance through your job, for example, nothing much is likely to change, at least in the short-term. However, if you are uninsured, buy your insurance on the individual market, or the insurance that your employer provides costs you more than 9.5 percent of your income, you will be able to purchase insurance on an exchange. Others may also be able to buy insurance on an exchange if they want to, but will not be eligible for subsidies.

Greece : A Dark Day For Democracy ?

However much you hate GD, you should worry about the Greek state’s war on it.

By Brendan O’Neill

Why isn’t there more discomfort, or at least the asking of some awkward questions, about the arrest of Golden Dawn MPs in Greece? Yes, Golden Dawn is a profoundly unpleasant organisation. Virulently racist, anti-Semitic, allergic to the ideals of free speech and free movement, and supported by people who are quite happy to use violence against those they hate, especially immigrants, it makes our own British National Party look like a chapter of the Women’s Institute in comparison. Yet that doesn’t mean we should give a nod to, far less cheer, the Greek state’s incarceration of GD’s leaders and members of parliament, who were democratically elected. Any police sweep on elected politicians should make those of us who call ourselves democrats anxious; that Greece’s military-style assault on GD hasn’t is very worrying.

In total, 22 of Golden Dawn’s politicians have been arrested, including its leader, deputy leader and four sitting MPs. The party has 18 MPs in total, in a parliament with 300 seats, having won just under seven per cent of the vote in last year’s national elections. The GD leaders were arrested in the wake of the murder of the radical anti-racist rapper Pavlos Fyssas, which caused uproar in Greece. The suspect in the killing of Fyssas claims to be a GD supporter, though GD denies having any connection with him. The charges against GD’s arrested leaders are all criminal in nature, ranging from running a ‘criminal organisation’ to overseeing assaults to possessing illegal weaponry.

Far from asking critical questions about what is motivating the Greek state’s clampdown on Golden Dawn, sections of the Greek left and vast swathes of the European left are celebrating it as a victory for democracy. They echo Greece’s public order minister, Nikos Dendias, who described the sweeping-up of GD’s leaders as ‘a historic day for Greece and Europe’. Greek newspapers are competing to see who can be the most effusive in their support for the clampdown. The brilliant arrests are ‘Golden Dawn’s Holocaust’, said one, rather tastelessly. Another claimed that ‘democracy is knocking out the neo-Nazis’. A left-wing British magazine described the arrests as ‘a victory for democracy in Greece’ and demanded to know why the Greek state isn’t doing more to shut down GD. SYRIZA, the left-wing opposition party in Greece which numerous European leftists have excitably hailed as a radical voice against austerity, has stood shoulder-by-shoulder with the state against Golden Dawn, claiming the arrests show ‘that our democracy is standing firm and is healthy’.

Leading Scientists Want You to Be … Afraid?

Be Scared and Give Us More Funding

by Pater Tenebrarum

The IPCC recently released its 'boo!' report, which is supposed to scare us into accepting a great deal more government control over our lives as well as much higher taxes on account of global warming – which allegedly industrial civilization is responsible for.

You can read what we would refer to as the 'professional scaremongers perspective' in this article in the Atlantic. It's 5 minutes to midnight! We can no longer delay! Taxes must be raised immediately! Cars? Forget it, they are poison! Actually, all of humanity is really a virus on the face of the planet, right? Especially what is generally referred to as civilization is apparently just too ghastly to contemplate.

Somehow, the IPPC report completely neglects to mention that the earth has not warmed since 1998, in spite of CO2 concentrations in the atmosphere increasing by about one third since then, from one totally negligible value to another totally negligible value. But why quibble over such details? We are supposed to be scared after all! And see, there are giant killer hornets in China, whose presence, just as about 5 million other things that are ailing humanity, is clearly traceable to global warming. The same warming that stopped almost 16 years ago, but why should one engage in such fruitless debates in the face of killer hornets! If they don't scare you, what will?

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Hide the women and children! Evil killer hornets are about to descend on us!

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The Professional Doomsayer Class

One must keep in mind that professional doomsayers have made a living from their prophecies for as long as there have been human societies. The IPCC in particular is a bureaucracy that would lose its raison d'être if it were not pushing an ever more impressive sounding scare story. Thus its utter silence on the embarrassing absence of warming since 1998.

Contrary to the portrayal in the media, it is by no means an unbiased arbiter of scientific thought free of conflicts of interest. It is in fact the exact opposite. As Donna Laframboise wrote in the WSJ shortly prior to the report's release: 

“The IPCC's 2007 climate findings were rather vague. In the opinion of the 60 individuals who wrote the chapter "Understanding and Attributing Climate Change," "most" of the rise in global average temperature since the mid-20th century was "very likely" caused by human-generated greenhouse-gas emissions. Recent leaks suggest that the 2013 report will twirl the knob a little further: The world will apparently be advised that the (entirely subjective) certainty level among IPCC experts that their above opinion is correct has risen to 95% from 90%. Whether the IPCC will acknowledge and address the recent, 15-year pause in global temperatures remains to be seen.

Hayek, the End of Communism, and Me

The new “fatal” conceit

By Václav Klaus

We all have our heroes, and Hayek was, for me, one of the greatest ones. It all started in the 1960s. My country, then Czechoslovakia, experienced at the beginning of the decade an unexpected and, for communist leaders, ideologically unexplainable and indefensible economic recession — the first that had happened in a centrally planned communist country in peacetime. It was something unheard of, something unimaginable. Planning was supposed to guarantee permanent and harmonious economic growth. That surprising and unpleasant experience led even the most dogmatic communist politicians to think about a relatively far-reaching economic reform and to start implementing it. As is well known now, they tried to accomplish an impossible mission, to put into reality “a third way,” this utopian dream of all socialists and progressives, based on a belief in a fuzzy combination of plan and market.

That reform led to the weakening of the planning system and to the increased independence of firms, most of them state owned. It was movement in the right direction. The Soviet politicians and our own hardliners criticized the reform from the left. The Czech economists of my generation (I founded and became president of the Club of Young Economists) criticized the reform from the right, for its evident insufficiency and inconsistency.

At that moment, in the mid-1960s, we discovered the famous dispute about socialism, the so-called socialist calculation debate, between the Austrian economists Ludwig von Mises and F. A. Hayek on one side and the socialists Oskar Lange and Abba P. Lerner on the other, during the 1930s. This debate gave us many powerful arguments about the impossibility of economic calculation under socialism and about the futility of the idea of playing at markets instead of introducing a real market.

It enhanced the doubts we were developing from observing the evident inefficiency of our own economic system. It is a pity that this famous debate is not required reading for contemporary students. The highly regulated and subsidized economies in Europe (and in this country as well) should be discussed in light of Hayek’s arguments.

The real revelation came when we came across Hayek’s article “The Use of Knowledge in Society,” originally published in 1945. You may ask how it was possible to get access to such articles in a totalitarian communist regime. Yet, it was possible.

We scholars couldn’t get our hands on the Wall Street Journal, Newsweek, or Time, but in the libraries of academic institutions we could get the American Economic Review and similar journals. They were sufficiently scientific as to be incomprehensible for the communist censors. Even now, I give this article to my students as the best introduction to rational economic thinking. The impossibility of centralizing dispersed knowledge is one of the most important ideas in economic science, comparable to the classic formulations of Adam Smith.

BRINGING HAYEK TO LIFE IN PRAGUE
Our relatively far-reaching, and for that time, unique economic reforms led to significant changes in political life as well. In this respect, we got a lot of inspiration from Hayek’s The Road to Serfdom.

That book was illegally and unofficially translated in my country in the 1960s. It was widely read, and — what is even more important — it was understood as a decisive and final rejection of all kinds of totalitarianism, collectivism, and interventionism and as an authoritative defense of liberty. At least it was understood that way by my generation, which saw its task differently from students in Western Europe and America at that time. We wanted to introduce capitalism, not to destroy it.

It's a Wonderful Crisis

Fed's Forward Guidance Policy in Comic Form

Here is an amusing as well as accurate assessment of the Fed's forward guidance policy in comic form, courtesy of The Telegraph 
Inquiring minds and comic addicts may appreciate more from Alex, including a 15 part series It's a Wonderful Crisis

Swiss war game envisages invasion by bankrupt French

Hordes of bankrupt French invade Switzerland to get their hands on their “stolen” money — such is the imaginary scenario cooked up by the Swiss military in simulations revealed over the weekend

The current number of recruits in the Swiss army stands at around 155, 000 — the biggest army in Europe relative to population size.

By Henry Samuel

Carried out in August, the apparently outlandish army exercise was based on the premise of an attack by a financially stricken France split into warring regions, according to Matin Dimanche, the Lausanne-based daily.

One of these, “Saônia,” corresponding to the existing Jura region, was preparing attacks on Switzerland to retrieve money it had apparently swiped from France.

Operation “Duplex-Barbara” went as far as imagining a three-pronged invasion from points near Neufchâtel, Lausanne and Geneva, according to a map published in the Swiss newspaper.

Behind the dastardly raid was a paramilitary organisation dubbed BLD, the Dijon Free Brigade bent on grabbing back “money that Switzerland had stolen from Saônia”.

“For its credibility, the Swiss army must work (to ward against) threats of the 21st century,” Antoine Vielliard, Hauate-Savoie councillor, told Matin Dimanche.

However, Daniel Berger, captain of the Swiss armoured brigade, sought to play down the specificity of the threat.

"The exercise has strictly nothing to do with France, which we appreciate" he told the Swiss press. “It was prepared in 2012, when fiscal relations between both countries were less tense.” “French towns were cited to provide soldiers with a real scale,” he said.

Famous for its bank secrecy laws, Switzerland often comes under criticism for allowing foreign account holders to hide their wealth from tax officials at home.

But these opaque laws are coming under increasing fire as France and the US, among others, are cracking down on tax evasion during a period of economic hardship.

This is by no means the first imaginary scenario dreamed up by the Swiss army. Last year, it carried out an exercise based on the premise that a huge wave of refugees crossed into the country after the implosion of the European Single Currency and ensuing chaos across the continent.

“Stabilo Due” centered around a risk map created in 2010 and envisaged internal unrest between warring factions as well as the possibility of refugees from Greece, Spain, Italy, France, and Portugal.

Warning of an escalation of violence in Europe, defense minister Ueli Maurer said at the time: “I can’t exclude that in the coming years we may need the army.” The military is a hot topic in Switzerland, which has mandatory military service. Under Swiss law, all able-bodied men at age 19 have to undergo five months of training, followed by refresher courses of several weeks over the next decade.

A referendum held a week ago saw a large majority of Swiss voters reject plans to abolish conscription.

The current number of recruits stands at around 155, 000 — the biggest army in Europe relative to population size.

Some 73.2 per cent of Swiss said “no” to proposals by the anti-military group, Group for a Switzerland Without an Army, to have either a professional army or one made up of volunteers.

Neutral Switzerland has not been invaded since the Napoleonic Wars of the early 19th century.

Recent scholars have questioned the belief that the Swiss military’s complex of underground bunkers deterred an invasion by the Nazis during the Second World War.

Some historians argued that Adolf Hitler left the Swiss alone because he wanted to use their banks. 

They Shall Not Pass!

The Unknown Story of the Southern Maginot Line

By Eric Margolis

The wild Maritime Alps are the most remote and least known part of this country, a chain of vertiginous, snow-capped peaks and narrow defiles running due south along the Franco-Italian border from Switzerland down to the Mediterranean on the Riviera.

As a military historian, I’ve come here to remember the heroic stand against overwhelming odds in June, 1940 of Gen. René Olry’s Army of the Alps: a little French Thermopylae.

The German offensive in the West that erupted on 10 May, 1940 was a revolutionary kind of fluid warfare based on fast-moving armor and mechanized units, close air support, and advanced communications.

In only six weeks – by 20 June 1940 – France’s proud army, considered the finest in the world, was shattered; 240,000 French soldiers were killed or seriously wounded; 2,000 French tanks were destroyed by the German “blitzkrieg.”

Germany’s generals had learned much from the slaughter of World War I, vowing to make their troops mobile to avoid static warfare. France’s hidebound generals, by contrast, planned to refight World War I in a defensive campaign based on fortified regions and massed artillery.

France’s powerful Maginot Line forts, backed by 400,000 interval troops, was not outflanked, as is wrongly believed. The Line achieved its twin goals of defending Lorraine’s iron and steel industry from a surprise German attack and forcing the Germans to attack through Belgium or Switzerland’s fortress chains.

The Maginot Line was never designed to defend the entire Franco-German frontier. Not one of its major forts was taken by German assault.

France’s unwieldy field army was scattered by flank and rear attacks by German armor. France’s air force proved ineffective. Britain’s army abandoned its French ally and ran for the coast.

As France lay dying, Italy’s swaggering dictator, Benito Mussolini, frantic he might miss out on the spoils of war, declared war on 10 June on France and Britain. Italy demanded France return former Italian possessions of Nice, Cannes, Marseilles, and Menton.

France’s first Maginot fort, Rimplas, was begun in 1928 after “Il Duce” intensified his irredentist demands. A score of major forts and smaller works were built to guard the river valleys and passes leading into Italy. Sospel, the back door into Nice, received particular attention.

France’s Army of the Alps has been denuded of men and material to oppose the relentless German advance on its rear down the Rhone Valley. General René Olry, had only 35,000 men. Among them were light ski units and elite Alpine infantry in their trademark big berets known as “tartes.”

Italian troops swarmed over the high mountain passes and ridges running at high as 2900 meters. But their main attacks concentrated on the Col de Larche with the road leading from Turin to Grenoble, Sospel, and Menton.

The southern Maginot forts performed perfectly. They spotted the advancing Italians and brought down a devastating crossfire of 75mm shells on them. Other French 155mm heavy artillery units blasted the Italian columns, guns and armored trains, forcing the Italians to retreat in disarray. The famed French 75mm field and fortress gun was light but it could fire up to 18 shrapnel shells a minute, producing a lethal a blizzard of steel.

Are the Producers Losing to the Predators?

Larger distributional contests loom

By Robert Samuelson

We are, I fear, slowly moving from "the affluent society" toward a "spoils society." In 1958, Harvard economist John Kenneth Galbraith published his bestseller, "The Affluent Society," which profoundly influenced national thinking for decades. To the Great Depression's survivors, post-World War II prosperity dazzled. Suburbia offered a quiet alternative to crowded and noisy cities. New technologies impressed - television, frozen foods, automatic washers and dryers. Never, it seemed, had so much been enjoyed by so many.

This explosive abundance, Galbraith argued, meant the country could afford both private wants and public needs. It could devote more to schools, roads, parks and pollution control. Economic growth became the holy grail of government policy. Production was paramount. It muted social conflict.

The "spoils society" reverses this logic. It de-emphasizes production and fuels conflict. Here's why:

There are two ways to become richer. One is to provide more goods and services; that's economic growth. The other is to snatch someone else's wealth or income; that's the spoils society. In a spoils society, economic success increasingly depends on who wins countless distributional contests - not who creates wealth but who controls it. This can be contentious. Winners celebrate; losers fume.

Of course, the two systems have long coexisted - and always will. All modern societies chase growth; all redistribute income and wealth. Some shuffling is visible and popular. Until now, that's been the case with America's largest transfer, which is from workers to retirees through Social Security and Medicare. In 2012, this exceeded $1 trillion. Still, for the nation, the relevant question is whether productive behavior (generating economic growth) is losing ground to predatory behavior (grabbing existing wealth and income). There are good reasons to think it is.

Since 1950, the U.S. economy has grown slightly more than 3 percent annually. But projections for the future are just above 2 percent. The slowdown mostly reflects an aging population, which translates into less expansion of the workforce. Indeed, overall growth of 2 percent may be unattainable if, as some economists argue, the pace of innovation is slackening. All this suggests diminishing economic gains in the productive sector.

The smaller the gains, the more people will fight over existing income and wealth, because - as has been said - that's where the money is. The United States' annual income (gross domestic product) now exceeds $16 trillion; the value of all fixed assets owned by businesses and individuals is roughly $50 trillion. Diverting even a small sliver of these sums can be hugely enriching. Distributional battles involve attacking and defending bastions of wealth and income. Consider three examples:

The oil giant BP and plaintiff lawyers are fighting over how it provides compensation for damages from the 2010 Deepwater Horizon oil spill. The process has been so perverted, says BP, that it's paying "hundreds of millions of dollars - soon likely to be billions - for fictitious and inflated ‘losses.' " Naturally, the plaintiffs' lawyers disagree.

 "Patent trolls" are firms that amass huge patent portfolios and then harass and sue high-tech companies for alleged infringements. Companies often pay up rather than face a threat to their products. Extortion, they say. A legitimate return, retort the patent companies.

CEOs are routinely accused of padding their pay by using friendly compensation consultants. Naturally, CEOs contend they're being rewarded for performance, not plundering their own companies.

Larger distributional contests loom. Growing income inequality has intensified pressure to raise taxes on the rich and near-rich, however defined, to support the middle class and poor. The massive transfers from workers to retirees are starting to sow a backlash among the young, who wonder whether all the elderly's benefits are justified.

Most Americans seem indifferent as to how they get ahead, whether by wealth creation or redistribution. The choice seems abstract. Fair enough. But for the country, the choice matters enormously. The appeal of the affluent society was that one group's gains didn't have to come at the expense of others'. The promise of economic growth was oversold, but it had the healthy effect of encouraging an expansive and inclusive vision of America.

What's emerging today is more self-interested and self-destructive. The dilemma of a rich society is that its prospects can be undermined by its very abundance. Countries preoccupied with distributional wars are distracted from production. The ambitions of many of its most talented members can be satisfied not by adding to the total output but simply by subtracting from someone else's. They are merely rearranging economic assets among themselves. If taken too far, this promises more political division and economic decline. 

Obama moves on Iran, Putin keeps Syria

A diplomatic pirouette

By M K Bhadrakumar 

The euphoria over the Syrian chemical weapons resolution passed by the United Nations Security Council on Friday is swirling around making the headlines, but a sense of dark foreboding also lurks below the surface threatening to spoil the party. 

True, after an inordinately long interval when nothing seemed to be going well between them, the United States and Russia agree on something. That calls for celebration. But then, details are emerging that there was much wrangling between the two foreign ministers, John Kerry and Sergey Lavrov, including some tense moments. The trust deficit is palpable. 

Potentially significant step 
To be sure, there is testiness in the air. President Barack Obama hasn't spoken a word with his Russian counterpart, Vladimir Putin, since their 20-minute chat during the Group of 20 summit in St. Petersburg almost a month ago. 

In his statement on Saturday, Obama was conspicuously modest. The eloquence was lacking. His understanding of the resolution probably needed a clarification by Lavrov on Russian state television the next day. 
Obama viewed the resolution as "legally binding, that would be verifiable and enforceable, where there will be consequences for Syria's failure to meet what has been set forth in the resolution", and to that extent he saw that the resolution "actually goes beyond what could have been accomplished through any military action". 

Obama noted the resolution's "explicit endorsement" of the Geneva process on Syria. He was "very hopeful" about the prospects but immediately voiced concern "whether Syria will follow through on the commitments" and agreed with "legitimate concerns" as to how the implementation of the resolution will be possible in civil war conditions. 

All things concerned, however, Obama cautiously estimated that the Security Council resolution "represents potentially a significant step forward". What probably was not audible was the sigh of relief on his part that a military action against Syria was not necessary - for the present, at least. 

Obama's reticence stands in comparison with the triumphalism with which Lavrov claimed the resolution as a victory of Russian diplomacy, which "did not come easy". Lavrov listed the gains:

Russia made sure the professionals of the Organization for the Prohibition of Chemical Weapons will be the main actors in the implementation of the resolution rather than the UN Security Council;

Russia "achieved its goal" of ensuring there are "no pretexts or loopholes" for the use of force, bearing in mind the Libyan experience and "the capabilities of our partners to interpret the UN Security Council resolutions".

Destroying Household Jobs

That Cold, Cruel Monster the State

By Thomas Sowell

This coverage is scheduled to begin in January 2015 — that is, after the 2014 elections and nearly two years before the 2016 elections. Politicians show a lot of cleverness in protecting their own interests, even if they show very little wisdom as far as serving the public interest.

If making household workers subject to the minimum wage law is expected to produce good results, why not let those good results begin early, so that voters will know about them before the next election?

But, if this new extension of the minimum wage law opens a whole new can of worms — as is more likely — politicians who support this extension want to insulate themselves from a voter backlash. Hence artfully choosing January 2015 as the effective date, to minimize the political risks to themselves

The reason this particular extension of the minimum wage law is likely to open a can of worms is that both household workers and those who employ them will face more complications than employers and employees in industry or commerce.

First of all, ill or elderly individuals who need someone to help them from time to time are not like employers who have a business that regularly hires people and may have a personnel department to handle all the paperwork and keep up with all the legal requirements when government bureaucrats are involved.

Often the very reason for hiring part-time household workers is that some ill or elderly individuals have limited energy or capacity for handling things that were easy to handle when they were younger or in better health. Bureaucratic paperwork and legal technicalities are the last thing they need to have to add to their existing problems.

The people being hired to do household chores also have special problems.

Often such people have limited education, and may also have limited knowledge of the English language.

Why make it harder for ill or elderly people to get some much-needed help in their homes, and harder for low-skilled people to get some much-needed jobs?

Despite all the talk about how we need more people with high-tech skills, there is also a need for people who can help clean a home or carry groceries or do other things that need doing, and which do not require years of schooling. As the elderly become an ever growing proportion of the population, there will be a growing demand for such people.

More precisely, there would be more jobs for such people if the government did not step in to complicate the hiring process and price potential workers out of jobs, with minimum wages set by third parties who do not, and cannot, know what the economic realities are for either the ill and the elderly or for those whom the ill and the elderly wish to hire.

Minimum wage laws in general are usually set with no real knowledge of the economic realities and alternatives for either employers or employees. Third parties are simply enabled to indulge themselves by imagining what is “fair” — and pay no price for being wrong about the actual economic consequences.That is why countries with minimum wage laws usually have much higher rates of unemployment than those few places where there have been no minimum wage laws, such as Switzerland or Singapore — or the United States, before the first federal minimum wage law was passed in 1931.

Government interventions in labor markets have already created needless complications, and not just by minimum wage laws. The welfare state has already taken out of the labor market millions of people who could perform work that would be well within the capacity of inexperienced young people or people with limited education.

With welfare, such people can stay home, watch television, do drugs or whatever — or else they can hang out in the streets, often confirming the old adage that the devil finds work for idle hands.