Apparently understanding economics is not a prerequisite to running for President of the United States, judging from the flawed rhetoric we're hearing from some of the candidates.  Either that, or we have some truly remarkable candidates, who are able to suspend the laws of supply and demand through the exertion of willpower.  My bet is with the former rather than the latter.

Hillary Clinton has proclaimed that as President, she will create jobs, good jobs at that.  Never mind that under a capitalist system, the government is not responsible for employment policy of businesses and industries.  No amount of Presidential bluster will cause Microsoft to hire more engineers or GM to hire more assembly line workers.  Both Sens. Clinton and Obama are choosing instead to pursue policies that would dissuade businesses from hiring more workers, by raising taxes on capital, corporations, and individuals.  Every additional dollar that a business or individual sends to the government is one less dollar that can be used to purchase equipment or hire employees; every additional tax levied on American businesses puts them at even more of a disadvantage when competing against foreign companies.

Both Obama and Clinton have also decried free trade agreements, such as NAFTA, on the flawed premise that opening up foreign markets to American products somehow hurts American workers and that families having access to less expensive goods and services somehow hurts American families.  Clinton in particular tries to have it both ways — she claims to be the natural heir to the economic success of the 1990s, while pursuing policies in direct opposition to those that helped create that success:  free trade (which is, of course, lower taxes on imports and lower taxes on exports) and decreased capital gains taxes.

Meanwhile, Obama practices anti-free trade demagoguery in areas like Ohio, blaming factory closings on competition from foreign products or the so-called outsourcing of jobs to foreign countries.  This was the message in Michigan, where the auto industry remains decimated.  In doing so, he ignores the fact that while manufacturing jobs are departing the highly unionized, highly taxed, highly regulated areas of the so-called "Rust Belt", they are springing up in less unionized, lower tax states of the American South.  Ford and GM might be closing factories in Ohio and Michigan, but Nissan and Mercedes are expanding factories in Tennessee and Alabama.  Of course, to criticize states for anti-business policies would highlight the corresponding anti-business platform on which both Democrats are running.  Seemingly forgetting that businesses create jobs while providing goods and services we want, economic populists denigrate job-creating entrepreneurs and corporations.

On issue after issue, we're seeing a lack of economic understanding.  Obama and Clinton decry high gasoline prices, yet block drilling for American oil and expansion of our refining capabilities.  Restrict supplies of gasoline, and prices increase — simple Economics 101, but apparently beyond the comprehension of Democratic candidates for President.  Both candidates want to increase government interference in health care, ostensibly to make it more affordable; yet there are no examples of any industry that has become more efficient or effective with increased government control.

If we want to increase economic prosperity, we need less government intrusion into the marketplace, not more.  When something is taxed, we get less of it.  The solution to economic malaise is not to increase taxation and interference on corporate profits, individual income, job creation, and health care — in each case, the government "solution" ultimately reduces the incentives for providing them.  The road to a stronger, more prosperous economy is to remove the shackles of high taxation and regulation.  The strongest economies are the ones with the most economic freedom — we should be moving towards more freedom, not less.