Liberals fail economics 101

Jim often asks if anyone on the left even walked by an economics class in college. Thanks to a fascinating study, we now know the answer…they didn’t.

Zogby researcher, Zeljka Buturovic and George Mason University economics professor, Daniel Klein conducted a study in which 4835 American adults participated.  Each participant was asked 8 questions about economic principles, and, each participant was asked to describe both their political leanings and their party affiliation.  For each question, actually each statement, the participants were asked whether they strongly agree with the statement, agree with the statement, disagree with the statement, strongly disagree with the statement, or, whether they weren’t sure.

Here are the statements.  (Take the test yourself, as, you will only learn the answers by going to the link…no peeking…but I will tell you that a “not sure” answer was not counted as a wrong answer.

Mandatory licensing of professional services increases the prices of those services.

Overall, the standard of living is higher today than it was 30 years ago.

Rent control leads to housing shortages.

A company with the largest market share is a monopoly.

Third World workers working for American companies overseas are being exploited.

Free trade leads to unemployment.

Minimum wage laws raise unemployment.

Restrictions on housing development make housing less affordable.

These statements are simply basic economic principles, not implicating political views at all.  And yet, the results of the testing are quite extraordinary when compared to the political leanings or party affiliation of those responding.

On average, those who consider themselves to be progressive/liberal got 5.26 of the 8 questions wrong, those considering themselves to be liberal got 4.69 of the 8 questions wrong.  Moderates got 3.67 wrong, conservatives got 1.67 wrong, libertarians got 1.38 wrong, and very conservatives got 1.3 wrong.  Breaking the results down by party affiliation, Democrats answered 4.59 of the 8 questions incorrectly, Republicans answered 1.61 incorrectly, and Libertarians answered 1.26 incorrectly.

The failure on the part of the left to have even a rudimentary knowledge of economics is leading this administration to make terrible decisions that will reverberate for decades.  Taking a “feels good” approach to economics is a disaster.  You can’t change the fundamental laws of economics no matter how well-meaning you are, and, no matter how hard you try.

5 replies
  1. enemyofthestate
    enemyofthestate says:

    SOS,  Although this survey was very enlightening,

    I take issue with 2 of the correct answers on this survey.

    I.  monopolies; Case 1.  There are only 2 companies in an industry.  Company 1 has an 85% market share.  Company 2.  Has a 15% market share.  In that case Company 1. Could be called a monopoly. 

    Case 2.  There are 10 companies in an industry.  Company 1 has a 12% market share and this graduates down to company 10 that has a .5% market share.  In this case company 1. would not neccessarily be a monopoly.  And, as i'm sure you are aware, being a monopoly is not illegal.  It is when a company uses the power of its monopoly to create a restraint on trade that causes a illegality.

    II.  My second issue is with the concept that free trade creates higher unemployment.  This only happens if the US''s currency is stronger than the other countries.  Which of course is usually the case.  Or if the other country's product is of higher quality than the domestic product.  Which is not usally the case.  An American company's correct response to imports taking away market share is to increase automation to lower the cost of manufacturing or to increase quality.  Some do, some don't and those who don't suffer.  It's their own fault for not staying competitive.

    I have a quick classroom exercise that can prove that free trade creates an invisible hand, to use adam smith's phase, that lifts all boats. 

    • joegutter
      joegutter says:

      Enemyofthestate, the actual definition of a Monopoly is: a market where there are many buyers but only a single seller (mono means single).  So actually, if a company has 85% share of a market it is not a monopoly.

    • SoundOffSister
      SoundOffSister says:

      Enemy, from your comments on the second point you raised, I think you misinterpreted the answer.  You disagree with the statement "Free trade leads to unemployment", and, that is the correct answer.  Go to the head of the class!

  2. Dimsdale
    Dimsdale says:

    I aced that puppy! 😉  Now you know why Øbama won't release his college transcripts!  😉  The big problem with lefties is that they see economics they way they want it to be rather than the way it is.  It is the big failing of Marxism etc., too.  One has to imagine that all the lefties can't be this ignorant; rather they abuse economic theory in a power grab.

     

    "The urge to save humanity is always a false front for the urge to rule it."

     

     

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