From article: 1) Government cannot create wealth, jobs, or income. Because government has to take money from somebody before it can spend it, there is no economic gain from anything the government does. 2) Income inequality does not affect the economy. Poor people do spend more or all of their income while people with higher earnings save some of their income. Saving is as good for the economy as consumer spending, or better. 3) Low wages are not corporate exploitation. In a free country, people voluntarily accept employment, so all workers believe their current job to be the best choice from among their opportunity set. If a business paid its workers much less than they were worth, a competitor would offer more and hire them away. 4) Environmental over-regulation is a regressive tax that falls hardest on the poor. When we reduce pollution more than we should, worry about climate change more than we should, or over-restrict access to natural resources, prices go up. Because the poor spend a higher percentage of their income, forcing up prices is a bigger penalty on the poor. 5) Education is not a public good. We provide publicly funded K-12 education to all, but the education provided produces human capital that is privately owned by each person. Yes, education helps people invent things that benefit society. However, they will expect to be paid for those inventions, not give them away for free in return for their education. 6) High CEO pay is no worse than high pay to athletes or movie stars. The high pay of CEOs, movie stars, and athletes all come out of the pockets of the owners of the business, movie studio, and team, respectively. Such pay reduces profits, but not the pay of other workers who are paid what they are worth in the marketplace. Shareholders have a right to complain about CEO pay, but other employees and labor activists do not. 7) Consumer spending is not what drives the economy. An extra dollar of investment, government spending, or net exports adds just as much to GDP as does a dollar of consumer spending. In fact, until recently, consumer spending was 65 percent of GDP. Then, as savings fell beginning in the 1980s and consumer credit became more widely available and less expensive, consumer spending rose to 70 percent of the economy. This is actually a bad thing. 8) When government provides things for free, they will end up being low quality, cost more than they should, and may disappear when most needed. Public education, free health care, welfare programs. Does anybody think these programs are high quality, reliable, and have no waste in their budgets? The sad reality is: when the customer does not pay, the product is rarely any good. 9) Government cannot correct cosmic injustice (an unfair outcome through no fault of the person who suffers the injustice). When government steps in to correct a cosmic injustice, the price must be paid by someone else—a someone else who had nothing to do with causing the injustice being addressed. Thus, every time government fixes or eases a cosmic injustice, it creates a new one by sticking somebody with the bill. 10) There is no such thing as a free lunch. Raising the minimum wage does not just take money out of employers’ pockets, but also raises prices for all customers and will cost some low-wage workers their jobs. If we help underwater homeowners, it will be harder for future borrowers to get a mortgage. Sooner or later, those free lunches get paid for and often the bill lands in an unexpected or unintended place. Liberals love to talk about their compassion. Compassion is great, but no amount of caring can repeal the simple facts of economics. Politicians love to claim the government spending which they direct creates jobs, but it only moves jobs from one place to another. Greedy businesses cannot exploit workers because another greedy business would be happy to exploit them a little less until greed removed all the exploitation. … forbes/sites/jeffreydorfman/2014/06/05/10-essential-economic-truths-liberals-need-to-learn/
Posted on: Fri, 14 Nov 2014 19:25:17 +0000
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