Do Any Democrats Know Anything About Economics?

Here we go again. Another couple of interviews at the Democrat Convention. They speak for themselves. Hat tip to Rush and Breitbart TV, both, for bringing this one to my attention.

Here’s another from Reason.TV.

Be sure to check out more of their excellent videos.

Fairness dictates that I at least explain why I consider those being interviewed as ignorant. The first video discusses the proposition that we make profits illegal. Now a Marxist believes that profits are the unfair share of labor that the capitalist confiscates merely because he owns the means of production. That Marxism has been almost completely debunked doesn’t seem to change their appeal for some people.

However, profits serve a very important function in an economy. They, along with prices and costs are important signals that determine the allocation of resources. Without them the economy would not function. (And it doesn’t function in communist countries) But, looking at profits from a macroeconomic perspective isn’t the most enlightening.

On a more concrete level, generally, almost any job or project, say building a house or even mowing a lawn, requires two components, labor and tools. Sometimes a tradesman provides both, especially if he is self-employed. But if a person is an employee, some if not all the tools, including machinery, computers, buildings and more are provided by the employer.

To create a $50,000 a year job, the employer provides about the same dollar amount, or order of magnitude, in tools, buildings etc., some more some less. Profits can be seen as the compensation for the tool provider just as wages are compensation for the labor provider. The tools, the “means of production” according to Marx, have a value. Marx did not recognize that value, treating the tools as merely a way for the capitalist to hold the wage earner hostage. But the tool provider is critical.

Moreover, those in the business of providing tools to support new ideas and new ventures look for the most profitable use of their funds. This benefits the whole of society because the result of there efforts, called greed by many, is for the most important goods and services to be produced. There is no profit in some products because few want those products. There is more profit in products that many want but that are harder to come by. Which is why those goods exist at all.

The other Democrat meme is that the debt bomb we face is a fiction that can be cured by simply raising taxes on a few people and ending “George Bush’s unfunded wars.” Simply running the numbers would prove this is delusional. But, for more evidence, I present a video I showed previously.

And here is a great one from the Institute for Humane Studies.

Nuff said.

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