Henry Hazlitt long ago observed that “economics” is stalked by fallacy. That’s no doubt true, which is why it’s easy to nod along to Washington Post columnist Megan McArdle’s assertion that “Both parties’ pet economic theories are kaput.” She speaks the truth. To watch MSNBC or Fox is to frequently witness economic confusion.
At the same time, it’s not just the Parties that are mistaken. While McArdle is an entertaining writer, she would similarly profit from putting some theories to rest that seemingly won’t die.
In her recent column critiquing Democrats and Republicans, McArdle writes of “upward pressure on prices,” and that “much of that pressure is because of Biden’s fiscal policies, which have seen the president approve more than $4 trillion in new borrowing during just 20 months in office.” About the government spending, it should be made clear up front that it is a hideous tax; arguably the biggest tax of all on freedom and economic progress. While Jeff Bezos, Mark Zuckerberg and Fred Smith would theoretically work at much higher income tax rates given their passion to create, none of the three could or can overcome a lack of capital. Government spending is the ugly, progress-arresting process whereby Nancy Pelosi, Mitch McConnell and Joe Biden stand athwart market-driven capital allocation in favor of their own.
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