AOC, the Gal With an Economics Degree, Gets an Economics Lesson

It has been said that more suffering is caused by ignorance than intended iniquity. One of the best examples of this, too, may be in economics. And with socialism gaining currency in our society, economics warrants serious discussion.

Doing this Tuesday, longtime columnist Cal Thomas used as a good example of a bad example Miss Socialism USA herself, Alexandria Ocasio-Cortez. He wrote that “AOC, the youngest woman ever elected to Congress, graduated from Boston University cum laude.…” She then moved into an apartment her family owned in the Bronx. From there she worked as a bartender and waitress to, the story goes, help fight foreclosure on the family home in tony Yorktown Heights in Westchester County, N.Y. “Nothing wrong with that,” Thomas states, “but her life experience apparently has taught her little.” He then continued:

In some recent comments she claimed that the very wealthy became that way, not from salaried work, but from investments. A version of this economic envy has been told and re-told ever since the days of President Franklin D. Roosevelt.

“The central flaw in this ‘reasoning,’” as Thomas puts it, is oft repeated by demagogues and reinforced via popular culture. It brings to mind, in fact, a scene from the “woke” 1991 horror film The People Under the Stairs. Trapped in a house of horrors owned by a maniacal white couple in a black neighborhood, the main child character stumbles upon a money vault strewn with oodles of cash. “No wonder there’s no money in the ghetto!” the lad says, incredulous.

The realism here is that we might expect such an opinion from a child. Cortez expresses it, though, despite having an economics degree. Yet as Thomas points out, in reality, the

money supply is unlimited. People are only limited in the amount they can earn by their talents, persistence and a willingness to take reasonable risks.

Living Like a Caesar

To illustrate this, consider: In biblical times, a man might be well off if he owned 50 goats. We’re now infinitely richer. In fact, “The world today is roughly 100-300 times wealthier overall,” a Grok AI analysis I ran informs. Moreover, the United States is “about 40-80+ times wealthier than the Roman Empire average,” Grok further states. That empire was, too, one of its times’ wealthiest places on Earth.

“Biblical-era wealth was mostly land, livestock, basic tools, grains, metals (gold/silver), and simple shelter,” Grok elaborated. “No electricity, engines, antibiotics, refrigeration, plastics, computers, or global trade networks. A single modern car, refrigerator, or smartphone embodies vastly more real value/utility than most ancient households’ total possessions [emphasis added]. Indoor plumbing, sanitation, and vaccines alone have transformed health and longevity (life expectancy ~25–30 years then vs. ~70+ today).”

So, clearly, there is no “fixed” amount of wealth. But where did all this additional wealth come from?

Thanks to Einstein’s E=mc² formula, we now know that even matter can be created or destroyed (converted into energy). And wealth certainly can be. Man creates it by taking the matter we find in and on the Earth and combining it in unique ways. This is how we have all the infrastructure and manifold luxuries we enjoy today. It’s why we no longer endure what had long been man’s default: grinding poverty.

Catalyzing Creation

And what drove this wealth creation? Economic freedom — aka the market system — did. It catalyzes the creative capacities of the common person through the profit motive. Put simply, you can attain wealth by creating wealth (e.g., goods), things others value. And the more wealth you produce for others, the more you make for yourself.

Famed Nobel Laureate economist Milton Friedman explained the market system’s virtues well in the short 1979 clip below.

What, however, about “obscene” riches? Some will point out that, for example, tech maven Elon Musk may become the world’s first trillionaire. Yet is this to be lamented? Well, here’s a question:

Would everyone else be richer if Musk had never existed? After all, the Hollywood/AOC “money vault” theory holds that his trillion dollars would then have been distributed among others.

In reality, though, it never would have existed. The U.S. would in fact be poorer, “likely by hundreds of billions to over a trillion dollars in cumulative economic activity and wealth creation — if Elon Musk had never existed,” Grok AI estimates. No wealth creators=no wealth.

Investment Iniquity?

In truth, there is no Hollywood-like money vault. Rather, rich people’s wealth is generally invested. Yet Cortez doesn’t like this, either; she essentially says that robustly capitalizing off investments is immoral.

As Thomas points out, however, money invested in stocks provides capital for corporations. They can then expand and provide jobs (wealth) for employees. And money kept in banks can be used to provide loans for businesses.

Thomas also addresses the socialist lust for taxation. Stating that lowering taxes can actually yield more citizen wealth and government revenue, he provides one example:

The Revenue Act of 1926 promoted by President Calvin Coolidge benefited all classes, not just the wealthy. Before Coolidge entered office, the federal income tax rate was 73 percent. The Revenue Act lowered it to 25 percent.

In his first message to Congress in 1923, Coolidge said: “High taxes reach everywhere and burden everybody. They diminish industry and commerce. They make agriculture unprofitable. They increase the rates on transportation. They are a charge on every necessity of life.” Instead of reducing federal revenue, the Revenue Act caused more money to flow into the Treasury. The government ran surpluses every year Coolidge was president.

All this said, Cortez, New York City mayor Zohran Mamdani, and other socialists are smart enough to grasp these simple economic principles. They just don’t want to. At best they’re lying to themselves (rationalizing) — at worst they’re lying to us. Regarding the latter, Thomas suggests the following motivation:

Socialists don’t want people to become financially independent because that means they won’t be addicted to government and the politicians who poorly manage it to the tune of a $39 trillion debt.

Thomas then concludes with a quotation from late economist and social philosopher Ludwig von Mises:

The champions of socialism call themselves progressives, but they recommend a system which is characterized by rigid observance of routine and by a resistance to every kind of improvement. They call themselves liberals, but they are intent upon abolishing liberty. They call themselves democrats, but they yearn for dictatorship. They call themselves revolutionaries, but they want to make the government omnipotent.

History has proven repeatedly that socialism simply doesn’t work, and we know why. The real problem is masses of people who, owing to virtue’s lack, have reasoning powers that don’t work any better.