Demand Exceeds Supply of Common Sense

Having been awarded a bachelor’s degree in economics recently from a local university, I felt compelled to warn my Orange County neighbors, as well as incoming college hopefuls: Beware of the soothsayers who dish out simple theoretical solutions to perplexing economic problems. This Sig Alert is being posted because two hot issues--the minimum wage debate and the gas hike fiasco--aren’t as easily explained away as my hypothetical professor Freih Marquette from the University of Traditional and Conventional Economics thinks.

Thanks to an iconoclastic professor who enlightened me on today’s crop of professional and academic economists, and a good dose of common sense, I realized that the subject is not a very solid science as Milton Friedman et al. would have us believe. The Nobel laureates who, for reasons that escape me, get rewarded for doing “social” science, as opposed to “physical” science, have been telling us for years that the “laws” of economics are absolute and indisputable, as if human behavior is as predictable as molecules in a petri dish.

With the confidence of a Jean Dixon-esque psychic, some Republican legislators have been telling us that increasing the minimum wage will result in massive unemployment and economic downturns. Where did they get this notion? From Mr. Marquette back in school. They rant, “You learn this in Economics 101,” as if those who disagree are uneducated fools. I guess they forgot their history lessons that show that since its creation during the New Deal, the 30-plus times the minimum wage has been increased have had negligible effects on unemployment. The economy grew at a steady pace and the sky didn’t fall.

Next, put on your “economically incorrect” hat when you hear defenders of corporate greed spewing conventional supply-demand gibberish in an attempt to rationalize why it will cost you a couple of dollars more to go from Tustin to Costa Mesa. Usually they begin with the premise that the oil business is highly competitive; it’s just like buying artichokes and bananas at Vons or Ralphs. You’ve probably heard conservative talk show hosts and a few Republican lawmakers whip up condescending “Mr. Marquette”-style explanations like: “The price hikes are simply the residual effects of dynamic market forces at work.”

What they don’t tell you is Big Oil earned its nickname because of its monopolistic tendencies which began way back with Rockefeller and Standard Oil. Don’t let them fool you. If not for the wrath of the general public, not to mention the Justice Department, Big Oil would squeeze every additional dime out of helpless consumers.

Furthermore, they don’t tell you that there are some economists who attach moral questions to the study of economics. Unfortunately, the Nobel committee members put earmuffs on when they start talking. It’s not always OK to pay a poverty wage or to maintain exorbitant profits in the name of economic efficiency, just because Mr. Marquette says so.