6/9/2010 – Kim Priestap -
A survey conducted by Zogby to determine how well people of different political stripes understand economics found that progressives and liberals were woefully ignorant of even the most basic concepts of economics. Some might laugh, but this survey is more than just an academic exercise. It provides insight into why Barack Obama and the progressive Democrats in Congress continue to pass laws and implement policies that do nothing but drive down our economy and drive up unemployment. From the Wall Street Journal:

Consider one of the economic propositions in the December 2008 poll: “Restrictions on housing development make housing less affordable.” People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure.

Basic economics acknowledges that whatever redeeming features a restriction may have, it increases the cost of production and exchange, making goods and services less affordable. There may be exceptions to the general case, but they would be atypical.

Therefore, we counted as incorrect responses of “somewhat disagree” and “strongly disagree.” This treatment gives leeway for those who think the question is ambiguous or half right and half wrong. They would likely answer “not sure,” which we do not count as incorrect.

In this case, percentage of conservatives answering incorrectly was 22.3%, very conservatives 17.6% and libertarians 15.7%. But the percentage of progressive/very liberals answering incorrectly was 67.6% and liberals 60.1%. The pattern was not an anomaly.

The other questions were: 1) Mandatory licensing of professional services increases the prices of those services (unenlightened answer: disagree). 2) Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree). 3) Rent control leads to housing shortages (unenlightened answer: disagree). 4) A company with the largest market share is a monopoly (unenlightened answer: agree). 5) Third World workers working for American companies overseas are being exploited (unenlightened answer: agree). 6) Free trade leads to unemployment (unenlightened answer: agree). 7) Minimum wage laws raise unemployment (unenlightened answer: disagree).

How did the six ideological groups do overall? Here they are, best to worst, with an average number of incorrect responses from 0 to 8: Very conservative, 1.30; Libertarian, 1.38; Conservative, 1.67; Moderate, 3.67; Liberal, 4.69; Progressive/very liberal, 5.26.

Surprised? Well, you shouldn’t be. Progressives and liberals are driven primarily by emotion, not reason. In their minds, good intentions are all that’s required to make people’s lives better, which is why they insisted on passing their $787 stimulus bill, $1 trillion and counting health care bill, and student load overhaul. It’s why they are still trying to pass their cap and tax bill, financial reform bill, and all the other bills that will put even more of the private economy under government control. Because they know nothing of economics they’ve got no clue that when government over taxes and over regulates an industry, such as health care, it makes the products and services flowing out of that industry more scarce, which drives up costs.

It was economic ignorance that led Henry Waxman to demand that CEO’s of various corporations come before his committee to explain why they took write downs in the days after ObamaCare passed. He and other progressives and liberals in Congress had no idea that regulations they passed would have such a detrimental impact on so many large companies. And that ignorance continues, unabated, until November when hopefully the American people will trade out as many of these mindless fools as possible for representatives who understand the free market.

Added: If you read Thomas Sowell’s book Basic Economics, you’ll come across in Chapter 2 an anecdote that Sowell imparts about an exchange that is said to have taken place between Thatcher and Gorbachev about Britain’s economy:

“How an incredibly complex, high-tech economy can operate without any central direction is baffling to many. The last President of the Soviet Union, Mikhail Gorbachev is said to have asked British Prime Minister Margaret Thatcher: How do you see to it that people get food? The answer was that she didn’t. Prices did that. Moreover, the British people were better fed than those in the Soviet Union, even though the British have not produced enough food to feed themselves in more than a century. Prices bring them from other countries.”

It’s somewhat understandable that Gorbachev would know nothing about the role prices play in free market economies since his only experience was with a centrally controlled economy.

But it’s unfathomable that American progressives and liberals lack even a basic understanding of how a free market economy works when they have been marinated in one their entire lives. At least until Obama came to town and began dismantling it.

HT: Kim Priestap