Issues & Insights

COVID Confirms It: Dems Don’t Understand Economics

Matt Johnson

I&I Editorial

From Sen. Bernie Sanders demanding that a coronavirus vaccine be free for all and that “profiteering” from it cannot be tolerated, to New York Gov. Andrew Cuomo, who said “if everything we do saves just one life, I’ll be happy,” when he ordered the state to shut down, Democrats are demonstrating they don’t know how an economy works. This is as dangerous as it is maddening.

Though he is an open socialist, Sanders’ rant is typical of most if not nearly all of today’s Democrats. Their view of profit is that it is an evil that must not be allowed. This is at odds with what we know: Profits are necessary to human lives. When profits are not being pursued, an economy can never develop. We can’t all work for non-profit interest groups and expect to move forward. How Democrats are unable to understand that the potential to earn profits is what drives companies to make lifesaving and life-enhancing drugs, as well as every other good out there, is a modern-day mystery.

While Cuomo is not necessarily taking a party line when he says he believes an economic shutdown is necessary to save lives, it’s not a big leap for Democrats, given their leftward orientation, to characterize an eventual reopening of the economy as a conflict of “lives vs. money” when it is in fact a case of “lives vs. lives.”

Roger Kimball, writing in American Greatness, outlined this perfectly:

Friedrich Hayek observed while it ‘may sound noble to say, “Damn economics, let us build up a decent world,” … it is, in fact, merely irresponsible.’ Something similar can be said about the false opposition between humanitarian concerns and attention to the economy. Tending the economy is just as much a humanitarian concern, just as much a life-or-death matter, as manufacturing new ventilators.

Then there’s the foggy thinking of the Washington Post — yes, we’re still talking Democrats here — which tells us “the coronavirus recession is exposing how the economy was not strong as it seemed.” Whether ignorance or simply another eruption of Trump Derangement Syndrome, this fevered report was corrected on Twitter by level-headed responses such as “No, it shows that when the government forces businesses to shut down, they can’t survive without sales,” and, “If the government orders businesses to shut down, they don’t produce at the same robust rate as they did pre-order.”

Finally, we point out the foolishness of left-wing pundits who, as David Bernstein noted on Instapundit, are suggesting “that being concerned about the economic toll of widespread shutdowns reflects concern about ‘protecting corporate profits’ instead of worrying about human suffering.” Don’t like living with corporate profits? Try living without them.

Lacking the capacity to make economic sense is not a new affliction. Democrats have been failing freshman economics for decades.

Setting a wage floor by government order, for instance, is a repeated offense against economic reality. And while Republicans have gone along with minimum-wage hikes through the decades, this is one of Democrats’ top permanent priorities, though it is inarguably a job killer.

Rent control is another offense the political left can’t break away from. It seems to be unable to comprehend that placing an artificial ceiling on what landlords can charge is a primary component of housing shortages and increased housing costs.

The left is similarly confused by the effects of professional licensing requirements, environmental regulations, business mandates, forced unionism, and efforts to eliminate or close income and wealth inequities.

Democrats seem to think government is the source of wealth, that it can create “high-paying” green jobs out of nothing, provide affordable, health care for all, and finance K-PhD educations. Yet government produces nothing. It can only redistribute what others have made. And there are limits to that practice, another constant Democrats can’t fathom.

A paper that appeared a decade ago in the Journal of the American Institute for Economic Research found that those on the political right demonstrated greater economic enlightenment than those on the left, who had a hard time correctly identifying what a monopoly is, were oblivious to the fact our standard of living had improved over the previous 30 years, and could not identify development restrictions as a factor that negatively affects housing costs.

We could go back much further to demonstrate our point. Democrats have been on the wrong side of economics for decades. One would think their pendulum would eventually drift back toward center. But it keeps moving ever harder left, pulled by Sanders, Rep. Alexandria Ocasio-Cortez, and a host of others whose thinking hasn’t progressed since they were in grade school.

— Written by J. Frank Bullitt

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21 comments

    • Yes, Mr. Smith what a powerful link! Joint Economic Committee, Democrats. This is like asking an axe murderer if he accidentally killed 10 people with a machete.

    • Your comment and point is that of a VERY NARROW minded person. You cannot draw conclusions like that. One of the best economies ever was during the Clinton years. But anyone with even half a brain knows he had nothing to do with it!
      And by the time all of his policies had taken effect, the economy was almost ruined.

      • Reagan’s budget deficits soaked up a lot of capital and for many years we ran the highest real interest rates in our history. Towards the end of Reagan’s presidency he started raising taxes. George H.W. raised them more and Clinton worked out an agreement that raised some taxes on the rich, but lowered them on the working class and balanced the budget. Clinton produced the only budget surpluses since LBJ.All of this led to much lower real interest rates, the best economy since Nixon and the only period since 1975 in which the working saw a substantial gain in real wages. That meant they had more money to spend and the economy did great. George W. Bush got elected and gave us the Great Recession.

  • With Interest rates at historic lows, I dare say it won’t be long before some on the Left argue for tax rates greater than 100% on the premise that the difference can be borrowed and paid for over time… ideally beyond the term of current D legislators

  • There is a deep flaw in your assertion -“Their view of profit is that it is an evil that must not be allowed”. This is NOT true: Democrats deeply want to manage your profits, will rename it something like “Societal Contribution”, until, under the management of one of their friends, the business dies, after which it will be designated as another failure of capitalism. The result is they are much richer, we are much poorer, they have destroyed more businesses, and they are even more in control as they have increased dependency.

  • In reality, Democrat thinking has progressed brilliantly. Their overriding goal is reelection, thus they pander to those whose thinking hasn’t progressed past grade school, repeatedly harvesting their votes while promising them freedom through economic magic. Democratic reelections are successful, while their economic policies are fantasy. Shame on the voters for believing them.

  • While I agree with this article, Hayek, and Adam Smith, seems a bit odd that the publisher is requesting donations, rather than depending on saving his enterprise via profits.

  • Any good or service has three descriptors : Quality, Price and Quality.
    Pick two. Any two.

  • Wow, so Democrats still hold the same economic beliefs they did before the crisis and conservatives still disagree? I am shocked

  • Don’t like living with corporate profits? Try living without them.

    It’s not profits that we need to defend. That’s up to the corporations themselves. It’s revenues. Those revenues pay the salaries and the taxes used to pay local, state, and federal employees.

    I don’t think that Democrats don’t understand economics. It’s that they the results it produces are beyond their control so they reject them.

  • Actually, I don’t understand Bernie’s comment. If the government bought up the vaccine, and gave it away free to everyone, the corporations they bought it from would still make a profit.

    Bernie seems to be conflating two completely separate issues. Making the vaccine freely available is one thing, and maybe doable. Demanding that it be produced through unpaid slave labor is another.

    Now, a partial case can be made for what Bernie said. Although the companies that develop and manufacture a vaccine are certainly entitled to benefit from their contribution, the government still may have a role in preventing price gouging.

    • Federal gov’t has for some time been buying the annual flu vaccine from pharma companies and distributing it without cost as a public health measure to Medicare/Medicaid enrollees. No reason the federal gov’t couldn’t do the same with a future CCP virus vaccine. Even a retail $20 price at a drugstore is subsidized. As a free-market economist myself who abhors whatever Bernie spouts off about, I have no problem with this flu vaccine arrangement. But it’s notable that even if free, many Americans never get around to stopping in for their low-cost or free flu vaccine. Go figure.

    • When you look at the private sector and the reaction you have carmakers turn around and making ventilators, pillow manufacturers now making surgical masks, vacuum cleaner makers making ventilatorsl, distillers making hand sanitizers, local restaurants transforming to family meals to go. The private sector can pivot on a dime and change the direction. The behemoth of government knows only one thing and the best you can hope for is a slight veer to change course. Government is never the answer unless we need the military.

      • Our government may not be able to. But the Chinese government built several 1,000 bed hospitals in 10 days or less, They didn’t convert convention centers, or soccer stadiums, or set up tent hospitals. They built fully functional 1,000 bed hospitals from the ground up in 10 days. We use to be able to do that, But, fortunately Republicans have controlled 1 or more branches of government 36 of 40 years, They always run on the idea that government is incompetent, then get elected and prove it.

  • Trump was tested.

    Trump choked.

    There will be a reckoning.

    Republicans are beginning to distance themselves from Trump, like rats fleeing a sinking ship. Smart rats.

    “Guilty Man” – How Trump Slept While Virus Crept‬

    https://link.medium.com/DJQZF3mH74

  • What BS. No, not all Democrats align with Sanders. And no, shutting down the economy for one life isn’t the trade off. And no, no one is legitimately suggesting the shut down is no big deal. And no, D’s haven’t been on the wrong side of economics for decades (are we forgetting the Clinton years?). And no, it wasn’t all Clinton but by that measure before Coronavirus the strong economy wasn’t all Trump either. But yes, if you present the falsehood that all democrats are as extreme as Sanders, then you and your readers will forget the total leadership vacuum in the White House that has made this pandemic far worse than it needed to be. Republicans and Democrats should both asking about that. Why aren’t you, instead of lambasting the far left and pretending all democrats are the same as Sanders?

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