Why Millennials Don’t Understand Economics

February 19, 2016 | Filed Under Gary Krasner | Comments Off on

Why Millennials Don’t Understand Economics

-By Gary Krasner

THAT is the question. It is not “why do they love Bernie.” Bernie is just another product of the liberal educational system that produces economic ignorance.

So the reason Millennials are for Bernie is the same reason economic ignorance prevailed in 2008 when people voted for Obama.

And some of that begins with GW Bush, who spent government money like a liberal does, and never explained supply side economics, let alone know what the hell it was. Faux conservatives McCain and Romney were no different.

That is why, to this day, Americans blame Republicans for the recession. Democrats came out of the gate with political demagoguery, and Bush and McCain looked like deer caught in the headlights. They own that legacy, which remains dead weight around the neck of every conservative running for office today. We needed moderate, “compassionate” conservatives like we need Pope Francis’ advice on immigration policy.

Here’s what these moderate Republicans should have said then, and what Trump can say today if he were articulate on public policy:

First, equal pay for equal work?! Show me two people who produce equal amounts of work! I once asked my boss why a female prepress operator in my shop was earning more than me. He said she did more work with less mistakes, and showed me the output logs to prove it. That gal sure didn’t want to receive the same wage I was earning!

There’s no such thing in economics, or even in politics, as “equality”. Framers never intended it. They even say so affirmatively in the Federalist Papers. It doesn’t exist because it cant exist, given our individual differences in intelligence, ambition and capabilities. Beyond the right to vote, no one is equal, unless they’re equally impoverished, as they were under Soviet and Chinese communism then, and Cuba and Venezuela today.

And you can tell that Democrat leaders don’t actually want income equality, as they would have proposed the maximum allowable wealth anyone may possess long ago, which would have included themselves. For them, the complaint is merely a vehicle for pandering to people who resent the fact that other people have expensive shit that they can’t afford. So they propose the fallacy that taxing the wealthy – those who worked hard and took risks to become wealthy — can fund the government. It can, but only for a few weeks. Because that’s stagnant wealth.

Wealth must be continually generated. And for societies to advance and grow for the next generation, there must be the aggregation of wealth. It can be accumulated by thousands of Trumps around the country, or it can be held by the federal government, as per socialism.

Anyone can invest in building a small business with limited cash reserves or borrowed money. But it takes very wealthy people and companies for investment in high capital projects or high risk venture capitalism.

Paying teachers and police is fine for government to do. But that doesn’t expand the economy. It’s closer to one to one yields (one dollar in and one dollar of value produced). But private capital investment can generate huge yields — which are profits, which is the measure of how much wealth was created. The value added to electronic components that make up a smart phone, for example, is many-fold. That comes from the self-interest inherent in private investment in business enterprises.

That’s why government doesn’t generate the wealth needed to builds roads and pays wages for firefighters. It comes from taxes on the wealth created by businesses, and employees who are given part of that wealth as wages. It doesn’t come from the money tree, which apparently Obama and Liz Warren believe exists. Wealth comes from the value added to a service or product which makes people want it, and are willing to pay more than it cost to produce or provide.

Why can’t government replace the Trumps in high capital investment? Because whether the government controls prices, wages and resources of small businesses, or it controls it for large enterprises, its decisions are never as good as that produced from the free market, where millions of suppliers meet millions of buyers.

In other words, there’s no federal commissioner of lead pencils or course grains that can control the supply and prices of those products better than the actual producers and purchasers of those products or services. Venezuela has been in a crisis for months with the lack of availability of toilet paper! Please. And don’t expect Bernie to educate Millennials about the decades-long bread lines in the Soviet Union, behind the walls that imprisoned millions within that worker’s paradise.

Also, when government imposes equality of results (i.e. income) on a people, those people will have little incentive to produce superior products and services. Why work harder than the next person when the benefits you get are the same? Communist China and Russia just couldn’t compete in production or investment with the US. That’s why immigrants from the Soviet Block nations tell us their entire nation was run like our Post Office and Department of Motor Vehicles.

Finally, a word about socialized medicine. What the left calls a “right”, but is actually just a moral obligation. Through an artifact of history and mid-century laws, our employers decided what health coverage we’re allowed to have, along with some government control. That wasn’t alarming enough for the faux conservatives that predated Obama to attempt to change, so now we’re out of the pan and into the fire. Now — only now — conservatives are complaining about freedom of choice and high costs. But not the faux conservatives. Not the Bushes or Romneys.

And if the moderate conservatives are clueless that government control can’t reduce the price of medicine, you can see why the national debate is devoid of the solution. Indeed, prices aren’t even discussed anymore, except for whom is going to pay it. The fact that a complete free market in medicine is the solution isn’t even on the table. Low cost, quality, and choice all come from unregulated competition. We’ve never had that in healthcare, and that’s why costs have always rose steeply and consistently.

As a result, Obama took full control of healthcare and promised we can keep our plans and doctors. If Obama was president of an insurance company instead of the US, subscribers could have sued him for breach of contract. But you can’t seek such redress from the government. Millennials who imagine the marvels of “democratic” socialism don’t know that government has only the take-it-or-leave-it health plan. They’re not old enough to have tried negotiating with an administrator of a government agency. Because it’s not a negotiation. Government, they will eventually learn, serves the interests of people in government, whereas private corporations must meet the desires of consumers, or else they lose them to the competition and go out of business.

You’re concerned about income ienquality? You’ll never eliminate it. You want fair competition and quality products and services? Then we should have less monopolistic conditions. You get that by eliminating crony capitalism. And that, in turn, comes when you eliminate all government tax subsidies, loopholes, credits and write-offs. Just a flat tax for all.

What I just said in 900 words, Bush, McCain, Romney and Beltway incumbents failed to say in years, and with millions of dollars.



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