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IPFS News Link • Economy - Economics USA

The 5 Biggest Economic Myths Of 2011


Financial misinformation gets circulated around the Internet and repeated ad nauseam on cable news.

Here are the five biggest economic myths of 2011.

1. Rich people create jobs. This is a favorite line of certain politicians, but it’s not really true–unless you count the hiring of a few English butlers and undocumented gardeners. The people who create jobs are middle class consumers.

Investors and entrepreneurs do create small companies. But even with all the capital in the world, a small company will not succeed without customers to buy its products. The largest portion of customers, by far, is the middle class, which spends most of what it earns. In contrast, the super rich save a lot of their money and store it in banks and non-productive assets like art or real estate.

3 Comments in Response to

Comment by Dennis Treybil
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 Concerning the "rich people create jobs" remark, this idea obscures what drives the economy.  So does the writer's explanation of why it's a lie.

The economy is driven by appetites.  Appetites include a desire to consume (universally recognised) as well as a desire to actively participate in other ways (almost universally ignored).  One other way to participate in the economy is to produce!

Jefferson's warning about the "tendency of liberty to yield and 'government' to gain" is true.  It is SO true that consumption is subsidised in the form of entitlements while production is so regulated and taxed, it is TOO COSTLY to undertake.

Hence, misery.

I have just watched J. Snelson's two hour lecture at the bottom of

Part of my understanding of this is written in my own book.  Snelson's comments brighly illuminated that understanding.  Watching that lecture is two of the best hours I've spent recently.

DC Treybil

Comment by Ernest Hancock
Entered on:

US News and World Report... what did you expect :)

Comment by Matt Schnackenberg
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I disagree with 4/5 of their reasons.