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Liberal Myths That Seem Superficially Plausible, But Are Dead Wrong
The Advocate
By Herb Denenberg, The Bulletin
Much of the liberal agenda is based on myths rather than facts. But when liberal mythology is promoted by the mainstream media, it has an enduring position in our national debates.
No one does a better job of fighting that liberal mythology than the Heritage Foundation, an organization you should join. But in any event, it is an organization whose Web site and research and advocacy output you should take advantage of — check out www.myheritage.org. Here are some of those myths identified by the Heritage Foundation:
Myth: Amnesty Halts Illegal Immigration
One of the most dangerous myths is that amnesty for illegal immigrants will halt illegal immigration. That is ridiculous on its face but still has remarkable currency. Why would rewarding illegal immigration discourage more illegal immigrants from pouring in to get a free ride on the amnesty train? What’s more, we’ve tried amnesty in the past and it doesn’t work, compounding problems rather than easing them.
The Heritage Foundation has sound ideas for a better approach. It is one that:
• “Does not grant amnesty to illegal aliens
• Provides the infrastructure to properly implement a guest worker program
• Ensures internal enforcement of immigration laws
• Effectively engages the cooperation of states in Latin America
• Requires an effective border control strategy.”
I would add that before even considering so-called comprehensive immigration reform, we should first seal our borders against illegal immigration. That’s a national security and economic security imperative. With the flood of illegal immigration stopped, then some of the other proposals, such as guest worker programs, should be on the table.
Myth: Increasing The Minimum Wage Helps Workers
This myth, like most of the liberal mythology, seems plausible until subjected to close analysis. But once the minimum wage is unmasked as a fancy form of price control, it’s true nature can be realized. Once the minimum wage is established it simply means that it will cause higher unemployment among the least skilled, as their wages will simply exceed the value of their productivity.
Here is how the Heritage Foundation makes the case against the minimum wage. It finds it harms the very people it is supposed to help since minimum wage laws:
• “Artificially increase the cost of unskilled labor
• Encourage employers to minimize their demand for low-wage employees, either by using more machines or by changing the way that they offer services
• Create a surplus of unemployed unskilled workers, further depressing bargaining power
• Draw young students away from school and into the labor market prematurely. This causes teenage unemployment to rise.”
The impact of minimum wage laws requires an understanding of who ends up with that minimum wage. Few minimum wage workers support families on their own. When you look at minimum wage workers, this is what Heritage Foundation found:
• “Over half were teenagers or adults under 25 years old
• A third were enrolled in school
• More than half were voluntary part-time workers
• Only 7 percent were heads of families
• Their average family income is $45,200.”
Myth: Income Inequality Is A Serious Problem
The liberal view is that the increase of income inequality over the last 30 years is a serious problem and requires a remedy by Congressional intervention.
This overlooks the benefits of income inequality. We live in a nation where most wealth is earned, not inherited, and that means the inequality actually has benefits, which the Heritage Foundation catalogs as follows:
• “Innovators and billionaires such as the founders of Google are creating products that greatly benefit the public and U.S. competitiveness, but their $16 billion annual income also increases the income disparity.
• There is no reason for Congress to enact legislation to decrease disparity occurring due to highly beneficial invention and innovation.
The income disparity is also explained by greater use of performance pay in the last 30 years. That’s a beneficial development as it encourages workers to be more productive and rewards them in accordance with their hard work and contribution to the economy. In fact, 24 percent of the increase in wage inequality occurred because of performance pay. Our policies should encourage hard work, not indolence.
Myth: Anwr Drilling Is Harmful
The myth holds that drilling in the Arctic National Wildlife Refuge (ANWR) will kill thousands of animals and not solve our energy shortage.
The National Geologic Survey found ANWR could produce up to a million barrels of oil a day or maybe more. That’s 5 percent of American oil usage or more. And that production would be forthcoming for several decades. That 5 percent figure is conservative, as there may be more, as was the case with the Prudhoe Bay oilfield.
The Prudhoe Bay drilling proves that ANWR could be drilled without environmental damage. Decades of drilling on a much larger scale than would take place in ANWR did not harm animals in the area. What’s more, we have better technology now, which is more environmentally friendly.
It is wildly irrational to pour billions into importing oil from countries that are often are enemies and often support and export terrorism, and fail to exploit the resources in our own back yard.
Myth: Death Tax Repeal Only Benefits The Wealthy
The class warfare card is played by claiming that the death tax repeal only benefits the wealthy.
In fact the death tax repeal protects the American dream. The repeal assures that the rewards of hard work will be protected and can be passed on to the earner’s family. Furthermore, the repeal benefits all workers as it means that the continuation of small businesses will be assured and their employees will be continued in their jobs. A death tax as now operating often kills off small business, as liquidation is necessary to pay the death tax.
The Heritage Foundation also documents how the death tax is economically unsound, and is bad tax policy because it:
• “Discourages savings and investment — the tax urges consumption today to avoid taxes later
• Undermines job creation and wage growth — the tax costs between 170,000 and 250,000 potential jobs each year
• Prevents the economy from achieving its full potential — by discouraging investment, prosperity is curtailed
• Contradicts the central promise of American life: wealth creation — Americans cannot pass on their prosperity to others.”
The Heritage Foundation also makes the case that the death tax not only punishes Americans but punishes the very people that tax policy is intended to help:
• “Women and small business owners — the financial legacy of their hard work, which they hoped to pass on to their children, instead will fall victim to confiscatory taxation and liquidation
• Farmers — family farms are disappearing because the federal government heavily taxed the estate of people who invested most of their earnings back into their farms and had only meager liquid savings
• Workers — ordinary workers can lose their jobs as small- and medium-sized businesses are liquidated to pay death taxes
• Low-income people — America’s most vulnerable are hurt not only when they lose their jobs but also because the death tax discourages savings and encourages consumption.”
A final count against the death tax is that it is regressive. That’s because the wealthiest end up paying less. Taxpayers who can’t pay tax-planning fees end up paying the most death taxes. The very wealthiest are able to pay the highest fees for tax planning, and consequently end up with the smallest tax liabilities.
Again, this myth is typical of the liberal ideology. It is superficially plausible, but when subjected to analysis it turns out it harms every wealth and income bracket including the very people that the liberal proposal is supposed to help. The liberal ideology pushes the economy and especially low-income workers into financial holes.
Herb Denenberg is a former Pennsylvania Insurance Commissioner, Pennsylvania Public Utility Commissioner, and professor at the Wharton School. He is a longtime Philadelphia journalist and consumer advocate. He is also a member of the Institute of Medicine of the National Academy of the Sciences. His column appears daily in The Bulletin. You can reach him at advocate@thebulletin.us.
No one does a better job of fighting that liberal mythology than the Heritage Foundation, an organization you should join. But in any event, it is an organization whose Web site and research and advocacy output you should take advantage of — check out www.myheritage.org. Here are some of those myths identified by the Heritage Foundation:
Myth: Amnesty Halts Illegal Immigration
One of the most dangerous myths is that amnesty for illegal immigrants will halt illegal immigration. That is ridiculous on its face but still has remarkable currency. Why would rewarding illegal immigration discourage more illegal immigrants from pouring in to get a free ride on the amnesty train? What’s more, we’ve tried amnesty in the past and it doesn’t work, compounding problems rather than easing them.
The Heritage Foundation has sound ideas for a better approach. It is one that:
• “Does not grant amnesty to illegal aliens
• Provides the infrastructure to properly implement a guest worker program
• Ensures internal enforcement of immigration laws
• Effectively engages the cooperation of states in Latin America
• Requires an effective border control strategy.”
I would add that before even considering so-called comprehensive immigration reform, we should first seal our borders against illegal immigration. That’s a national security and economic security imperative. With the flood of illegal immigration stopped, then some of the other proposals, such as guest worker programs, should be on the table.
Myth: Increasing The Minimum Wage Helps Workers
This myth, like most of the liberal mythology, seems plausible until subjected to close analysis. But once the minimum wage is unmasked as a fancy form of price control, it’s true nature can be realized. Once the minimum wage is established it simply means that it will cause higher unemployment among the least skilled, as their wages will simply exceed the value of their productivity.
Here is how the Heritage Foundation makes the case against the minimum wage. It finds it harms the very people it is supposed to help since minimum wage laws:
• “Artificially increase the cost of unskilled labor
• Encourage employers to minimize their demand for low-wage employees, either by using more machines or by changing the way that they offer services
• Create a surplus of unemployed unskilled workers, further depressing bargaining power
• Draw young students away from school and into the labor market prematurely. This causes teenage unemployment to rise.”
The impact of minimum wage laws requires an understanding of who ends up with that minimum wage. Few minimum wage workers support families on their own. When you look at minimum wage workers, this is what Heritage Foundation found:
• “Over half were teenagers or adults under 25 years old
• A third were enrolled in school
• More than half were voluntary part-time workers
• Only 7 percent were heads of families
• Their average family income is $45,200.”
Myth: Income Inequality Is A Serious Problem
The liberal view is that the increase of income inequality over the last 30 years is a serious problem and requires a remedy by Congressional intervention.
This overlooks the benefits of income inequality. We live in a nation where most wealth is earned, not inherited, and that means the inequality actually has benefits, which the Heritage Foundation catalogs as follows:
• “Innovators and billionaires such as the founders of Google are creating products that greatly benefit the public and U.S. competitiveness, but their $16 billion annual income also increases the income disparity.
• There is no reason for Congress to enact legislation to decrease disparity occurring due to highly beneficial invention and innovation.
The income disparity is also explained by greater use of performance pay in the last 30 years. That’s a beneficial development as it encourages workers to be more productive and rewards them in accordance with their hard work and contribution to the economy. In fact, 24 percent of the increase in wage inequality occurred because of performance pay. Our policies should encourage hard work, not indolence.
Myth: Anwr Drilling Is Harmful
The myth holds that drilling in the Arctic National Wildlife Refuge (ANWR) will kill thousands of animals and not solve our energy shortage.
The National Geologic Survey found ANWR could produce up to a million barrels of oil a day or maybe more. That’s 5 percent of American oil usage or more. And that production would be forthcoming for several decades. That 5 percent figure is conservative, as there may be more, as was the case with the Prudhoe Bay oilfield.
The Prudhoe Bay drilling proves that ANWR could be drilled without environmental damage. Decades of drilling on a much larger scale than would take place in ANWR did not harm animals in the area. What’s more, we have better technology now, which is more environmentally friendly.
It is wildly irrational to pour billions into importing oil from countries that are often are enemies and often support and export terrorism, and fail to exploit the resources in our own back yard.
Myth: Death Tax Repeal Only Benefits The Wealthy
The class warfare card is played by claiming that the death tax repeal only benefits the wealthy.
In fact the death tax repeal protects the American dream. The repeal assures that the rewards of hard work will be protected and can be passed on to the earner’s family. Furthermore, the repeal benefits all workers as it means that the continuation of small businesses will be assured and their employees will be continued in their jobs. A death tax as now operating often kills off small business, as liquidation is necessary to pay the death tax.
The Heritage Foundation also documents how the death tax is economically unsound, and is bad tax policy because it:
• “Discourages savings and investment — the tax urges consumption today to avoid taxes later
• Undermines job creation and wage growth — the tax costs between 170,000 and 250,000 potential jobs each year
• Prevents the economy from achieving its full potential — by discouraging investment, prosperity is curtailed
• Contradicts the central promise of American life: wealth creation — Americans cannot pass on their prosperity to others.”
The Heritage Foundation also makes the case that the death tax not only punishes Americans but punishes the very people that tax policy is intended to help:
• “Women and small business owners — the financial legacy of their hard work, which they hoped to pass on to their children, instead will fall victim to confiscatory taxation and liquidation
• Farmers — family farms are disappearing because the federal government heavily taxed the estate of people who invested most of their earnings back into their farms and had only meager liquid savings
• Workers — ordinary workers can lose their jobs as small- and medium-sized businesses are liquidated to pay death taxes
• Low-income people — America’s most vulnerable are hurt not only when they lose their jobs but also because the death tax discourages savings and encourages consumption.”
A final count against the death tax is that it is regressive. That’s because the wealthiest end up paying less. Taxpayers who can’t pay tax-planning fees end up paying the most death taxes. The very wealthiest are able to pay the highest fees for tax planning, and consequently end up with the smallest tax liabilities.
Again, this myth is typical of the liberal ideology. It is superficially plausible, but when subjected to analysis it turns out it harms every wealth and income bracket including the very people that the liberal proposal is supposed to help. The liberal ideology pushes the economy and especially low-income workers into financial holes.
Herb Denenberg is a former Pennsylvania Insurance Commissioner, Pennsylvania Public Utility Commissioner, and professor at the Wharton School. He is a longtime Philadelphia journalist and consumer advocate. He is also a member of the Institute of Medicine of the National Academy of the Sciences. His column appears daily in The Bulletin. You can reach him at advocate@thebulletin.us.
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