There are a few irrefutable laws of basic economics that are understood by practically everyone. When the price of a good rises, people will buy less of it. This is common knowledge to anyone who has bought anything ever. There is also the law of unintended consequences which states that actions, laws, and policies often have secondary effects that differ from the original actions intentions. We have seen this inevitably played out in most laws passed by Congress. Both of these ideas have been around for thousands of years and the father of economics, Adam Smith, articulated them himself back in the eighteenth century.
However, an article in Tuesday’s Los Angeles Times demonstrates how little of these truths liberals understand. “Study offers new support for taxing soda and other junk foods,” written by Karen Kaplan, expressed surprise that foundational building blocks of economic thought were at play in our world. Kaplan looked at various studies done recently on the effects of taxing junk food on the public’s health to find that taxes on sugary drinks resulted in less sugary drinks being bought.
Kaplan’s article references a study that discovered, “Overall… consumers buy less of something when the price goes up and they buy more of it when the price goes down.” The fact that consumers base decisions on what to buy off of the price of the good is completely foreign to many on the left.
Granted, Kaplan did say this was “not exactly a new idea.” But then she continued to treat other findings as if they were earth shattering realizations rather than concrete facts that have been proven hundreds of years ago.
Discussing the merits of a tax on sugary foods, Kaplan was surprised research found that taxing fatty foods led to consumption of less expensive, but not necessarily healthier, foods. “But there was a twist,” she remarked, astounded that anything could have happened beyond the intended consequence, “the tax would prompt people to switch from fatty dairy foods to foods that were higher in salt, sugar and total calories, undermining the reason for the tax in the first place.”
This article actually explains a lot about the mentality that guides liberal policies. The fact that it seems ridiculous for them to even consider what the unintended consequences of their actions might be shows a lack of foresight present in all discussions of policy.
We see this unwillingness to think ahead present in today’s debates. With negotiations regarding the fiscal cliff, liberals fail to pay attention to, or even consider, the detriments their politically popular plan to “tax the rich” might have on the economy. They have no problem heading over the fiscal cliff, demonstrating their lack of concern for consequences and inability to see beyond immediate results of their actions.
At least Kaplan, unlike Washington Democrats, learned something about what needs to be done to achieve her goal. After discovering economics, Kaplan found that to influence consumer’s diets to be healthier, you need to “make vegetables cheaper and soda more expensive.”