Apparently the president of France has discovered econ 101. President Francois Hollande, France’s socialist president is making a u-turn and looking to tax and spending cuts to create jobs and prosperity. Here is an interesting line from the story on the President’s change of heart in Forbes Magazine.
In particular, President Hollande is proposing to lower the payroll taxes that businesses pay on all their workers. This is not only a big win for businesses, but also recognition that making labor less expensive will encourage business to use more of it.
To that president on this side of the pond, did you hear that? The lower the cost of doing something the more of it you are likely to do. And by the way, just in case your powers of inference are those of the typical progressive, the higher the cost of doing something the less of it you are likely to do. And continuing on the inference thing–the higher the minimum wage the fewer the number of workers you are likely to employ. And here’s another law of nature for you, water flows down hill–the same direction demand curves slope.