The Economics of $350 Wine

Outrage over Congressman Paul Ryan’s purchase of an expensive bottle of wine shows what’s wrong with leftists economics.

One economist and the leftist commentary website Talking Points Memo are outraged that Republican congressman Paul Ryan of Wisconsin, who drafted the opposition’s 2012 budget proposal which included deep spending cuts and the partial privatization of health-care support for the elderly, should have ordered two expensive bottles of wine in a Washington DC bistro Wednesday night.

The economist told Talking Points Memo that she was “stunned” to see the congressman and his guests buy two bottles of wine which each sold for $350 at the establishment. “I was an economist so I started doing the envelope calculations and quickly figured out that those two bottles of wine was more than two income working family making minimum wage earned in a week.” She was angered to see Ryan consuming hundreds of dollars in wine while Congress was in the midst of intense debates over whether to cut seniors’ safety net.

Ryan — who apparently didn’t know that the wine was so expensive — properly paid $472 for the drink and his meal and included a generous $80 tip.

Why is this story relevant? Because it plainly shows the left’s ignorance of basic economics. The instinct, that a wealthy congressmen shouldn’t order $350 bottles of wine while families all across America are suffering, is understandable but it’s also misguided. That wealth “trickles down” is a theory that leftists have never accepted but from the trivial example of Ryan’s dinner last week, it’s obvious that it’s true.

The extravagances of millionaires, whether it’s exclusive wines, private jets, yachts or designer clothes, provide income and employment for an exponential number of ordinary people. Imagine if, at a time of crisis, the rich would stop spending money on luxury items. There would be even higher unemployment and even less private-sector growth! Imagine if Congressman Ryan hadn’t dined at that Washington bistro on Wednesday night. The restaurant, its wine supplier and the producer would not only not have made fat profits on those two bottles; the waiting staff would have missed out on a big $80 tip.

If you’re serious about “stimulating” the economy, don’t tell the rich to give up on their luxuries. They should buy even more expensive wines!