Modern economics is riddled with unwarranted – and often just plain wrong – assumptions that nevertheless dictate economic policy for nations around the world.


That’s why we’re here to separate fact from fiction. On our podcast, Pitchfork Economics, we spoke to Tom Bergin, who wrote “Free Lunch Thinking: How Economics Ruins the Economy” – which catalogs eight misconceptions about economics.

Bergin breaks it all down – from trickle-down lies to unproven theories. To debunk some of your own misconceptions about the economy, listen to Pitchfork Economics now!

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What incorrect assumptions have you heard? Listen to the Pitchfork Economics podcast now to find out!

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Because even mainstream economists have an incomplete understanding of how the economy really works, chances are good you've heard some incorrect assumptions. Here are just a few of the theories that Bergin debunks on our podcast:

+ Raising the minimum wage kills jobs. For four decades, trickle-downers on the right and the left repeated the claim that raising wages for workers kills jobs – despite the fact that evidence collected as far back as David Card and Alan Krueger’s seminal 1994 minimum wage study showed no indication that increasing the wage decreases employment. Card won the Nobel Prize for his work debunking those claims, but holdouts like Sen. Joe Manchin still repeat the classic trickle-down argument that raising the wage kills business as an excuse for rejecting a bill to raise the federal minimum wage to $15.

+ Cutting taxes makes people work harder. In the 1990s, economist Martin Feldstein claimed that because the wealthy make more money when taxes are lower, that means lower taxes incentivize people to work harder. This is circular logic, however: Instead of looking at income to determine whether people work more when taxes are lower, economists should look at work hours or employment levels – and when you study that, there’s absolutely no evidence for this theory. Still, you’ll hear trickle-downers spout it off to justify cutting taxes on the wealthy.

+ Regulation hurts businesses. This is a common myth that you’ll hear often from a wide range of companies – especially the oil and gas industry. The truth is, federal regulation can actually prevent disasters and save companies money in the long run. For example, if there had been stronger federal regulations on BP’s equipment before the BP Deepwater Horizon oil spill in 2010, the company could have stopped the biggest oil spill in history, prevented the deaths of 11 workers, saved $70 billion, and avoided a public relations nightmare.

Even though fallacies like these have been debunked by a growing mountain of evidence to the contrary, they continue to spread because it's in the interest of economists to stay in the good graces of the wealthy Americans who sign their paychecks, endow their universities, and underwrite their studies and academic journals. 

To learn more about the economic fallacies that are being pushed by economists, talking heads, and the media, listen to Pitchfork Economics now.

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– Team Civic Action



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