A common criticism of Bernie Sanders is that “he doesn’t know anything about economics.” If only he had studied economics in college, some say, he would realize how destructive and illogical socialism is. However, if progressive heroine Alexandria Ocasio-Cortez’s recent interview on PBS’s “Firing Line” is any indication, a degree in economics is no longer a valid signal of understanding the subject.
Ocasio-Cortez captured the public’s attention in June when she won the Democratic primary in New York's 14th congressional district, handily defeating the ten-term incumbent Joe Crowley by a margin of 57 percent to 42 percent. The Guardian called it “one of the biggest upsets in recent American political history.” She is heavily favored to defeat her Republican opponent in the general election to complete her journey to Congress.
A self-identified Democratic Socialist, Ocasio-Cortez has repeatedly worn her economics degree from Boston University as a badge of honor.
Her degree didn’t help her in the PBS interview though, as she revealed an ignorance of basic economics and argued multiple points that objective data contradict. Here are three of her worst quotes.
1. “Unemployment is low because everyone has two jobs”
As Robby Soave at Reason explains:
“People working multiple jobs has no distorting effect on the unemployment rate, which is calculated by taking the number of unemployed people and dividing it by the number of people in the labor force. The raw number of jobs being worked by Americans has no bearing on these numbers.”
Additionally, only 4.8 percent of workers hold more than one job, which, as the American Enterprise Institute notes is “lower than before the Great Recession and lower than during the 1990s boom,” and “has been declining for years.”
2. "Unemployment is low because people are working 60, 70, 80 hours a week.”
The number of hours you work also does not affect the unemployment rate in any way. Whether you work 1 hour per week or 100, you count as employed.
Ocasio-Cortez misleads people to think working such long hours is a national epidemic – it’s not. The average annual hours worked by employed Americans is at its lowest point since 2011, and the U.S. is very close to the OECD average in that regard.
3. “One of the largest drivers of wealth inequality in the United States is inherited wealth.”
On the contrary, NYU professor of economics Edward N. Wolff explains that inheritances actually decrease wealth inequality. He writes:
“Wealth transfers generally flow toward poorer individuals or households, especially from richer parents to poorer children. This effect becomes even more pronounced when the estate of a single person or household is divided among multiple heirs – a very common occurrence. The massive wealth of the original plutocrat is thus dissipated over several generations – as has occurred with the Rockefellers – with the rate of dissipation depending on how many children each heir has.”
He also notes the increasing share of estates being bequeathed to charitable organizations and the similar equalizing effects.
Additionally, economics professor Steve Horwitz has argued that “the percentage of rich households has grown significantly in the last few decades", and that income mobility in the U.S. is much greater than commonly believed.
[Image Credit: PBS]