The One Dead Giveaway That Somebody Is Absolutely Clueless About Economics

2

The comedian Bill Engvall, who announced he’s retiring from comedy this year, made a career by saying that stupid people “should have to wear signs that just say, ‘I’m stupid.’ That way you wouldn’t rely on them.”

In the complicated world of economics, there is a similar sign you can look for that will instantly tell you the author has no idea what he or she is talking about. It’s a simple turn of phrase which, once you’ve seen it, you’ll never be able to unsee; you will always know the author has no comprehension of his chosen topic.

Here are a few examples. Let’s see if you can find the common thread:

  • During a debate in 2019, Senator Bernie Sanders (I-VT) said that Democrats “have to have an agenda that brings our people together so that the wealth and income doesn’t just go to the people on top but to all of us”;
  • Alexandria Ocasio-Cortez (D-NY) tweeted in 2018, “There are enough gains in this country for us all to live well. The problem is when 86% of wealth goes to the top 1% of people”;
  • NPR reported in 2019, “The top 20 percent of households received more than half of all income”;
  • The Associated Press reported that, while household wealth “jumped 80% in the past decade[, m]ore than one-third of that gain — $16.2 trillion in riches — went to the wealthiest 1%, figures from the Federal Reserve show. Just 25% of it went to middle-to-upper-middle class households”;
  • In 2018, the Milwaukee Journal Sentinel ran a story titled, “Massive wealth flowing to relatively small number of individuals, businesses”;
  • The Washington Post reported earlier this week, “The top five billionaires saw their wealth increase 82 percent since the pandemic began, adding $370 billion since theS&P 500′s pre-pandemic peak in February 2020, according to calculations based on the Bloomberg Billionaires Index”; and
  • In March, Bloomberg News told its readers: “The richest 1% of households saw their net worth rise by some $4 trillion in 2020, meaning that they captured about 35% of the extra wealth generated nationwide … The poorest half of the population, by contrast, got about 4% of overall gains.”

What do all of those examples have in common? They all use passive verbs. In their telling, wealth simply “goes to” certain people; those people passively “saw” their incomes increase. Wealth just “flows” to certain people. That kind of language betrays their deep-seated ignorance of how wealth is created. It’s true that someone who uses passive language about wealth creation may own a large body of facts; he may know many figures and statistics about specific industries. But it’s the equivalent of someone identifying many trees without seeing the forest.

In their minds, wealth just happens. Their understanding of the economy is no more sophisticated than picturing heaps of money sitting on a table, waiting to be scooped up (or “captured”) and handed out to people like sides of mixed fruit in a school lunch. Senator Huey “Kingfish” Long (D-LA), who proposed to end the Great Depression with a national program to “Share Our Wealth,” (our?) once used that very analogy:

How many men ever went to a barbecue and would let one man take off the table what’s intended for nine-tenths of the people to eat? The only way you’ll be able to feed the balance of the people is to make that man come back and bring back some of that grub that he ain’t got no business with! 

People on the Left spend an inordinate amount of time and concern talking about wealth distribution but give almost no thought to wealth creation. That’s why it’s imperative to understand: Abundance doesn’t occur naturally. Wealth creation is a deliberate process of planning, creativity, innovation, investment, effort, marketing — and often prayer — that involves a vast amount of work from people who may never know one another’s names. The process begins when an entrepreneur comes up with an idea for a new good or service that he knows people need; he gets (or borrows) enough capital to finance his business, buys the equipment, hires workers, advertises to the public, and hopes that consumers agree he has invented a must-have product. As we are learning, every step in the complex supply chain requires the work of multiple industries working in harmony to create a prosperous market.

Put another way, wealth is produced by human action.

Contrary to the common stereotype of “inherited wealth,” only 8.5% of Americans with a net worth of at least $30 million inherited all their money. But 68% of America’s wealthiest people earned their wealth on their own, often coming from humble origins.

In fact, the amount of work performed is one of the greatest differences between the richest and the poorest Americans. Harvard Business Review noted in 2006 that “62% of high-earning individuals work more than 50 hours a week, 35% work more than 60 hours a week, and 10% work more than 80 hours a week. Add in a typical one-hour commute, and a 60-hour workweek translates into leaving the house at 7 am and getting home at 9 pm five days a week.” It is unlikely the workweek has decreased after the Great Recession and the global pandemic.

Work increases on every step up the ladder of success — and decreased every rung down. As Mark J. Perry of AEI reported:

More than four times as many top quintile households included at least one adult who was working full-time in 2017 (77.4%) compared to the bottom income quintile (only 18.4%), and five times as many households in the bottom quintile included adults who did not work at all (68.5%) compared to top quintile households whose family members did not work (13.2%). The share of householders working full-time increases at each higher income quintile (18.4% to 47.1% to 61.2% to 71.0% to 77.4%).

The fact that so much of wealth creation depends on work explains why there is so much social mobility in the United States — upwards and downwards. “28 percent of the children of parents in the top [20%] of the residual wealth distribution will end up in the bottom two [fifths], and 28 percent of the children of parents in the bottom quintile of the residual wealth distribution will end up in the top two quintiles,” according to a 2016 study by the Federal Reserve Bank of St. Louis. Yes, even millionaires are subject to churn. In 2019, there were a record-high 11 million U.S. millionaires; by March 2020, the pandemic had wiped out 500,000 millionaires.

What modern-day journalists and reporters don’t understand about wealth, the sages of the past did. A prayer in the modern Roman Catholic Mass, modeled on the Jewish table grace, says, “Blessed are You, Lord God of all creation, for through Your goodness we have received the bread we offer You: fruit of the earth and work of human hands, it will become for us the bread of life.” God gives the resources; the work of human hands transforms and multiplies them, producing wealth.

So, when you see anyone implying that this wearying work of wealth creation happens passively, you know he has no clue what he’s talking about.

The views expressed in this piece are the author’s own and do not necessarily represent those of The Daily Wire.

The Daily Wire is one of America’s fastest-growing conservative media companies and counter-cultural outlets for news, opinion, and entertainment. Get inside access to The Daily Wire by becoming a member.

View original post