Obama to Nominate Extremist To Head Council Of Economic Advisers

Reports are circulating that President Obama will nominate Alan Krueger to head the White House Council of Economic Advisers.

What do you need to know about Krueger? First he thinks that higher minimum wages do not cause unemployment. In fact, he wrote a book saying such. Since wages are set by the dynamics of supply and demand, it is pretty easy to understand that if you raise the minimum wage, fewer people will be hired. For example, if a person is hired at $6.00 an hour, because he only adds just above $6.00 in marginal revenue to a firm, he is going to become unemployed if the minimum wage is raised to $7.00. But not in Krueger's world, in Krueger's world people don't lose jobs under these circumstances, they get pay increases. Got that? Produce marginal revenue of $6.00 per hour and, if you live in Kreuger's world, if the government raises the minimum wage to $7.00, you will get a raise to that level.

Krueger reaches these mad conclusions by using the empirical methods of the natural sciences as his form of scientific inquiriy. This means Kreuger doesn't understand the lesson taught by Friedrich Hayek in his book The Counter Revolution of Science, where Hayek explains in detail why the methodology of the natural sciences is an inappropriate methodology for the social sciences.

So in Kreuger we will have an economist, who denies the basic logic of the cause and effect of minimum wage laws and who uses faulty methodology, as one of the top economic advisers to the President.
More