10 Essential Economic.....

I just stumbled upon a little bit of absolute rubbish in the pages of Forbes.  10 Essential Economic Truths Liberals Need to Learn.  It's been there for a couple of years.  All of these ten "truths" are false, many egregiously so.

1: Government cannot create wealth, jobs, or income.     Dorfman doesn't understand what money is.  government can obviously create jobs, by hiring teachers, soldiers, police, etc.  They create money too.  The purpose of money is to create liquidity in markets.  If money didn't exist or didn't have a competent government behind it, nobody would be wealthy except a few bandits.

2: Income inequality does not affect the economy.  Of course it does.  Inequality takes the value of the labor of the poor and gives it to the rich.  The rich don't spend all of it, so it's out of the economy.  Parking money (saving) doesn't help the economy at all, except insofar as some of it is used for real investment.    He understands the difference but he is absurdly wrong.

3: Low wages are not corporate exploitation.  Of course they are, although he's got the causality arrow backwards.  Low wages are about disenfranchisement.  If you have poor bargaining power, your wages tend to be low.  As a consequence, you have few choices but to take whatever abuse the employer wants to dish out.  Low wages are not the only abuse the employer might impose but they're a big one.

4: Environmental over-regulation is a regressive tax that falls hardest on the poor.  He takes a little germ of truth and turns it into a giant strawman.  Over-regulation might be a problem but nothing like that is happening, anywhere in the world.  Again, his almost complete ignorance of what money is misleads him.  Regulation does increase prices, across the board.   But because it's across the board, it's nominally fair.   The poor pay a much higher extrinsic cost for pollution.  Lead is a case in point.  From Tetra Ethyl Lead to lead pipes in Flint, to unmitigated lead paint, the children of the poor pay a much higher price.

5: Education is not a public good.  Of course it is.  Education can provide bargaining power, among other things, which leads to higher wages, not to mention increased ability to rebut ignoramuses like Dorfman.

6: High CEO pay is no worse than high pay to athletes or movie stars.  This is a strawman.  It's technically true: both are harmful.  These people have higher bargaining power and are thus able to get more money.  They spend some of it buying fancy clothes, fancy houses, etc.,  which does help the economy.  But a lot of it is simply parked.  See #2.

7: Consumer spending is not what drives the economy.    Yes it is.  Dorfman confuses GDP with "the economy".   Trade is mostly driven by consumer spending...most of what is not is driven by government: the military for example.  Big business buys from each other to make consumer products.    He is right to be concerned by consumer debt, but that's not what he says is wrong.  consumer debt is a big part of GDP, which is dangerous and in the long term harmful for the economy, although it makes a few people very rich.

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.     Only if you let idiots run the government.   There are actually very few cases of this.  For example, US public schools used to be of very high quality, and still are in many cases.  The fire department.  The military.  DARPA.  NSF.  NOAA.  it goes on and on.

9: Government cannot correct cosmic injustice.  No, but it can mitigate the consequences. "every time government fixes or eases a cosmic injustice, it creates a new one by sticking somebody with the bill."   So?   Compared to the problems, the bill is trivial.  The number of people with terrible debilities is fairly small, and assisting them creates jobs.   The multiplier effect almost pays for this by itself: these are low paying jobs, so all the money goes into housing and food and such.

10: There is no such thing as a free lunch. In a literal sense this is true, but the cost to society, for example of having hungry students in classes, is far greater than the cost of buying them lunch.  12 years of school lunch at $5 each costs about $12,000.   If that raises the student's GPA 1/2 point, that's worth several thousand dollars a year in income, every year, for 40 years.  It only takes 5 or so break even.  If the student would have been really hungry, it probably raises GPA more than that.  The student is also significantly less likely to need the dole later in life.