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Dan McLaughlin


NextImg:The Corner: Economic Progressivism Fails Again — No Matter Which Party Tries It

Putting a red hat on blue economics doesn’t change what we know to be true.

The consequences of populist progressive policies on the economy and public safety are as predictable as the sunrise. While conservatives find no joy in seeing those consequences visited upon ordinary people, we will always get a good laugh at the expense of the fools in public office and public advocacy who discover, again and again and again, that doing the same thing yields the same results — and then never learning from that.

So it is with D.C.’s foolhardy move to jack up the minimum wage for tipped restaurant workers, which has predictably cost many of those workers their jobs as it drives restaurants out of business. Our James Lynch quotes Sean Higgins, an economist at the free-market Competitive Enterprise Institute, stating the obvious: “There’s no way for restaurateurs to absorb the higher costs other than passing them on to customers. And that’s always just basic economics 101. . . . Most of these restaurants operate on very thin margins. A lot of them are always teetering around closure even at the best of times. Forcing them to pay their workers more is just a problem for them.”

We’ve enjoyed a similar I-told-you-so moment whenever big-city progressives have effectively legalized shoplifting, as has happened in California and New York. The completely predictable consequences: low-margin convenience stores, drug stores, and bodegas either close, raise prices to pass the added cost on to consumers, and/or make the shopping experience more miserable by keeping basic products under lock and key — locking up deodorant instead of criminals. Even California voters rebelled in November.

And yet, somehow, conservatives are supposed to forget these elementary lessons when the economic populism is coming from the Republican side of the aisle. Here’s the truth: there’s really no such thing as right-wing economic populism. Economic populism is big-government progressivism, no matter what rhetorical coat of paint is slapped on it. Consider Donald Trump’s shot across the bow at Walmart:

Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain. Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China they should, as is said, “EAT THE TARIFFS,” and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!

Now, we can stipulate a couple of things. You can argue that the economic pain of tariff hikes will be worth it for some noneconomic reason. You can argue that the economic pain will be short-lived, because these are just temporary negotiating positions that aim at an end-state of freer bilateral trade. You can argue — much less convincingly — that a high-tariff world will produce more domestic manufacturing, ultimately replacing low-cost foreign goods.

But one way or another, there is economic pain here, and only a progressive would believe that this can be confined to inflicting pain on a large corporation — much less one whose core business is low-margin retail — without also hitting the company’s workers and/or its customers. Just as is true for restaurants forced to pay higher wages or drug stores forced to absorb more losses to theft, Walmart will inevitably do one or both of two things when hit with higher taxes on the products it sells: pass on price hikes to customers and/or lose sales, which in turn leads (if prevalent enough) to store closures and layoffs. You do not need a Ph.D. in economics to understand this; anybody who has run a retail business could and would tell you the same thing. We already know this. Putting a red hat on blue economics doesn’t change that.