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Horner and Penny offer bad advice
Tom Horner and Tim Penny were off the mark in “Five ways to promote job growth” (Sept. 8). Chief among their errors is their citation of the infamous Reinhart-Rogoff piece that linked public debt to slow growth and job creation. Professors and students at the University of Massachusetts-Amherst debunked that piece months ago.
Perhaps Horner and Penny should learn from economists like Paul Krugman and Ben Bernanke, who have studied the Great Depression and have concluded that we need more spending to fix our ailing economy. During the Great Depression and World War II, we borrowed and spent our way to the largest budget deficits in our nation’s history. Those deficits and accrued debt led to the greatest expansion of the middle class we’ve ever seen, decades of economic prosperity, and a rapid decline in the deficit.
THOMAS SHERMAN, Golden Valley
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Economic professor’s views didn’t add up
Michael J. McIlhon’s commentary stated that “the law of demand predicts that when the price of low-productivity labor is increased, employers will respond by purchasing less such labor” (“Raise wages? Actually not so helpful,” Sept. 8) My understanding of the “law of demand” is that it pertains to goods and services, and not labor. Putting academic theory aside and not to discount it, from my experience of selling goods and paying labor, when I pay a higher wage it does not directly translate to cutting workers. I have other choices. I can reduce my profit, reduce other expenses or raise my prices, to name three obvious and preferable outcomes. I’m surprised that as an educator, McIlhon did not proffer those outcomes.
STEVE EIDE, Buffalo, Minn.
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McIlhon wrote that it is foolish to raise the minimum wage because “employers will respond by purchasing less labor.” He may be right, but why is it that this “law of economics” does not apply to executive pay, which continues to soar? How is it that increasing wages for those who live on the edge of poverty has such ugly such side effects as to make the very idea so ridiculous, yet it makes perfect sense to increase the already ridiculous pay of those who already make more than they can ever need?
DONN SATROM, Roseville
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A suggestion for the team’s owner
Regarding “Zygi Wilf sees threats in sharing info” (Sept. 11): Wilf can easily avoid financial scrutiny by paying his share of the proposed stadium up front, along with a 25 percent security deposit for possible cost overruns. Indeed, such managed trusts might be a standard for all such projects.
DOUGLAS ALLCHIN, St. Paul
The Opinion section is produced by the Editorial Department to foster discussion about key issues. The Editorial Board represents the institutional voice of the Star Tribune and operates independently of the newsroom.