One of the great mistakes made by public officials is that they think economic forces are more or less fixed and unchanging.

They typically believe an x percent increase in a tax rate will result in a corresponding x percent increase in revenue, not realizing that tax increases inspire changes in behavior from those that are meant to pay higher taxes. For example, the new bill that will expose Amazon to California sales tax due to the presence of its small affiliates in the state is expected by its authors to raise hundreds of millions of dollars. But that money will never make it to Sacramento coffers if Amazon follows through on its threat to terminate its relationship with said affiliates.

That sort of behavior cannot be predicted in whatever estimates the "experts" cooked up.

Similarly, public officials are also constantly worried about monopolies (unless the monopoly is one of their campaign contributors). However, since the only constant in life is change, "monopolies" tend to disappear on their own over time, which means they weren't really monopolies to begin with. Smith Corona  had a monopoly on typewriters. Who cares if a firm had a monopoly on buggy whips? Microsoft supposedly had a monopoly as well, and look where they are.

Those sorts of changes don't show up in the reports or projections that public policymakers rely on.

The Ventura County Supervisors (save Foy) are guilty of the same one-dimensional mindset. They voted 3-1 to increase the minimum wage paid to government workers to $10 an hour (plus benefits).

On paper, they gave a raise to county workers making that minimum wage. However, because economic forces that don't show up in projections are always at play, the increase in minimum wage will lead to unemployment.

If a worker's labor is only worth $9/hour, they may find themselves employable if the minimum wage is $9/hour. If it's raised to $10/hour--they have a problem, since businesses tend not to hire people whose labor isn't worth what they are paying.

This is especially harmful to teenagers and the uneducated--private employers won't eagerly hire unskilled high school students if the state is forcing them to pay wages that are more appropriate for someone who is older and more skilled.

The county's minimum wage increase only affects public employees, but the same market forces are at play, even though governments are much more likely to pay employees more than their labor is worth. In the county's case, it will spend $145,000 on employees making minimum wage. The extra expense will have to come out of somewhere else. Perhaps three fewer minimum wage workers will be hired next year.

"The voters voted for him to make this decision, and now he's going to put it back on the voters," she said. "I think it's a waste of taxpayer money."

Why would experienced politicians repeal an ordinance that enhances their reelection prospects? Such a rare and beneficent act should be lauded if done for the right reasons; for it's contradictory to the nature of every office holder to have a hand in his own defeat, no matter how noble the cause they purport to uphold. But seeing as how contradictions can't exist in nature, let's peek behind the political curtain to see if we can't spot ulterior motives that would wake us from our dream of a selfless politician.

Supervisors Bennett, Long, and Parks would have us believe that a section of the ordinance in question--an ordinance they authored to establish contribution limits on independent groups, such as political action committees--has been rendered unconstitutional by a recent U.S. Supreme Court decision, and on Tuesday they'll propose to delete that provision from the county books.

The county ordinance caps contributions to independent expenditure committees to $700 per contributor, in an effort to limit the effect of special interest money on local elections.  Campaign finance reform laws are popular, and Supervisor Bennett crusaded for this ordinance a decade ago when he leapt from city council to county supervisor.

It should be pointed out that the contribution limit benefits incumbents. Since there is no limit on the free publicity and name ID associated with public office, an incumbent doesn't mind expenditure and contribution limits if his opponent, who is usually relatively unknown, is also saddled with them. For the challenger has a high--and expensive--hurdle to clear to raise his name ID and the incumbent does not.

This is why it's so strange for three incumbent supervisors to move to repeal the limit. [continue reading]