Four years ago, on the Van Wie Financial Hour radio program, we discussed the economic power of fear and greed, and how mass media headlines are often designed to appeal to those emotions. Far too many headlines espouse wild claims that defy established economics, crossing over to the murky area of economic theory, practice, and real-world experience. My term for these dubious claims is Bizarro Economics.
The year 2020, being a Presidential election year, means that economic policies of both sides were and are on display. One side proposes further tax cuts to stimulate a COVID-19-related soft economy. After all, they claim, tax cuts worked every time they were tried, and as a result employment rose, as did government revenue.
Competing would-be political powers claim that they will achieve fairness by raising taxes on the rich. After all, they claim, our economy was “built from the bottom up.” That qualifies as Bizarro Economics, as there are no known instances where workers went out and hired themselves a boss. This false claim of power fosters greed.
Further “Bizarro” examples abound, such as offshoring factories to reduce the cost per unit of manufactured goods, therefore (supposedly) improving general prosperity. This pipe dream has been in place for many years, and results from the Bizarro concept that “free trade” apparently means not charging tariffs on imports, but allowing foreign companies to impose harsh tariffs on our exports to them. “Free trade” may sound good, but as millions of Americans lost solid Middle-Class employment, the American standard of living took a downturn. Declining domestic purchasing power resulted in fewer and fewer consumers, and fostered widespread economic fear. We now realize that “free trade,” as implemented prior to 2016, was not “fair trade.”
In recent years, new trade policies have resulted in factories closing overseas and reopening here. Employment was rising, wages increasing, and productivity escalating. Unfortunately, COVID-19 caused a sudden, but temporary, setback to our progress.
COVID-19 also exposed another truly frightening feature of Bizarro Economics, when we discovered that our necessary pharmaceuticals are manufactured overseas, in countries that don’t necessarily share our national security concerns. This created real, rather than politically motivated, fear. Solid economic policy must assure that our national sovereignty remains intact. Bizarro Economics apparently does not consider this a priority.
Following an election that still is not decided, the two sides are staking out their positions, and they could not be more different. I would much prefer to return to an early 2020, pre-COVID-19 economy, than to implement Bizarro Economic Theory on the false premise that it will create some hypothetical version of fairness. That simply plays to greed. Good luck, America.
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