What Leftists Don't Understand About Economics

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by Daniel Carter
Much has been said recently about California becoming the most impoverished state in America. California has diminished the middle class so badly that one in four people are now living below the poverty line. The leftists have done this with the big government policies (I.e. high taxes and lots of regulation) they claim are good for the working class. When Trump slashed business regulations and lowered taxes for working people and corporations on the federal level, the left cried out that it was “trickle-down” economic policy. Sadly, “trickle-down” is essentially the only economic concept they know.

Leftists in California, and across the country, are convinced that the only way to benefit the working class is through the government’s confiscation and redistribution of wealth. Whenever there is a problem in the economy, they invariably call for higher taxes and more regulation. They believe in a zero-sum game, where someone’s success means another person’s loss. The truth is, market-based economics has lifted huge portions of the world out of poverty at breakneck speeds.

California’s political ideology has pushed them away from markets and towards a centrally planned, socialist system. In their minds, government knows how to run the economy better than private companies and individuals. They have some of the highest corporate and income taxes in the country so that they could fund their massive government expansion.


Apparently, California’s high tax rates have not stopped the government from mismanaging their budget. California’s credit rating is substantially below the country’s average. This means that creditors trust California less than most states to pay back their loans. Even though California has one of the highest tax rates, it hasn’t helped them reduce their debt. They have one of the largest debt piles in the country.

The socialist policies that leftists argue for aren’t translating into positive economic outcomes. The left complains about “trickle-down” economics, but they do not understand that is what they are advocating for. Instead of wealth trickling down from large corporations, it trickles down from large, highly inefficient government institutions. They also fail to realize that big government and big business have become inseparable. Not only is government inefficient, it puts corporate interests above the interests of individuals. A perfect example of this would be Kamala Harris, former California Attorney General and current superstar of the Democratic Party, helping lending institutions break foreclosure laws after the housing crisis. Large governments don’t work for you. So, why trust them to run your economy?
Some critics of my assessment may say that California still isn’t even close to representing the social democracies of the Nordic region. I would agree, but the solution is not to centralize economic power even further. The key is decentralization. California has 13 million more people than all the Nordic countries combined. The Nordic system is based on very small communities paying taxes to spend it almost directly on themselves. Most of their taxes are on the county level, which can be as small as 10,000 people. There will inevitably be less corruption when you know exactly who your regulators are.
California is so big that we have no idea who are regulators are or exactly how they spend our money. With such a “black box” system, corruption becomes commonplace because average people simply don’t know what’s going on. Now, imagine if someone like Bernie Sanders got his policies through on the federal level. It would immediately become a cesspool of waste, mismanagement and corruption. The federal government is already at that point, but more centralization would make it even worse.
We’ve seen leftist economic policy fail time and time again. We can see it on the state level and the federal level. The left does not understand that empowering the government to make economic decisions is also “trickle-down” policy. It’s partly because they believe the fantasy that government is benevolent. If we want a better economic system, we should be focused on decentralization first and foremost.
 

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17 thoughts on “What Leftists Don't Understand About Economics

  1. Regardless of taxation, the simple economics are that businesses are much better efficient allocators of both capital and labor with a higher multiplier for the economy in economic growth and capital formation. Politicians are the worst.

  2. Leftists think about economics the way SJW’s think about politics. It’s all about the FEELZ, facts and cold reality have little to do with their machinations.

  3. No matter how much income equality there may be, there will always be a bottom fifth of society. Always. So we (THEY) move up the asset-held level to whatever that bottom fifth’s assets happen to be, creating a new ‘poverty line,’ which doesn’t ease poverty but merely redefines it.
    The only way to eliminate poverty is what communism advocates, but does not attain, by keeping everyone at the same asset level. The problem with that is it destroys the incentive to perform, and the free-riders will dominate until no one has anything.
    Don’t take poverty away from poor folks. Good lord, man, it’s the only thing they have!

  4. While I don’t disagree with the premise of the article, there is one huge factor not discussed, illegal aliens. These invaders are treated as equal to US citizens in Cali. Since they are on the lowest end of the socio economic ladder, they take more from the society than they put in economically. When crime is factored into the equation it looks worse. The worst example are anchor babies. Some women cross the boarder, birth a brat, get a lawyer and a PO box, return to Mexico and live on California welfare.

    • That is Cal.’s problem and their tax payer. They elected the turds if thats what they want have at it but don’t expect the rest of the country to bail you out. They went from 5th in the country to 35 in econ. growth read it yesterday. #1 in the country in welfare I wonder why.

  5. The problem with this article, is it assuming leftists care about state economic results. They care about their own personal economics.
    What leftists understand about economics, is that government force can be used to take from some for the benefit of others, just as two wolves and a sheep voting on what’s for dinner. Many leftists pay little in income taxes and benefit from government welfare; thus, since it doesn’t cost them anything, they vote for more of it. They also don’t understand, that taxes others pay, are included in the cost of everything they buy from them.
    They vote to tax the rich guy, but eventually like all socialist economies, they run out of other people’s money, and then the government comes for what they have, and they can’t get what they need at any price, because no one produces when the government just takes it.

    • Like in Cal where they want 1/2 of the Trump tax you are saving if you run a business. Well there goes the raises and bonuses in that crappy state.

  6. Liberal logic?? Friend of mine was poo poking the increase in her paycheck, saying I got another $26, but that just means the government will tax me more because I made more. Then bad mouthing the tax cuts, because now that they made more they are paying even more taxes. LOL really, that was the logic being used. I tried but then stopped trying to point out the fallacy of her statement.

    • I will take your friends extra money and pay the taxes on it. As a matter of fact I will take all the liberals extra money and pay the taxes.

  7. There are many simple economic principles the political left doesn’t understand, yet they act as though they do and proceed to implement them, often with disastrous results that take years to become obvious.
    Their insistence that economics is a zero-sum game is so incorrect, it’s not even wrong and the evidence proves it. If it were true, there would be no economic growth at all. The previous statement is an oversimplification, but the point remains indisputable.
    Wealth is created everywhere there is freedom. America’s free-market economic engine (with individual freedom as its foundation) has done more to raise the standard of living for the world than any other society in history.
    Government is a consumer of resources, not a creator of it. It acts as an anchor upon the economy. The bigger the anchor becomes, the more it inhibits progress. It’s in everyone’s interest to keep it as small as possible and to make certain that the laws and regulations it enforces have a common-sense value that works to benefit everyone.

  8. Well the first chart is wrong Tennessee has no income tax thats why I moved here from Md. For a 2k sq ft brick house I pay 1800 in prop. tax my buddy in Md. that didn’t move has the same sq footage in a sided house pays 5k. Holy crap. Back in 74 when I moved my dad was strapping out his elect meter for 2 weeks a month so he could afford his elect bill ha ha He was an electrician and better yet chief electrician at the WH. His house he bought for 12.5k sells now for around 300k ridiculous. He’s dead now so forget about it PEPCO

  9. Liberal economist Paul Krugman said immediately after Trump was elected that the market would crash we would be plunged into a depression. Need I say more?

  10. There are so many homeless people in San Francisco that tourists get maps so that they know what areas to avoid because of so much human feces. How disgusting!

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