Rep. Alexandria Ocasio-Cortez has a degree in economics, but you couldn’t tell it from her Twitter feed. Over the weekend, the New York Democrat and self-professed socialist responded to a record-breaking stock market surge by saying that “the Dow soars, wages don't. Inequality in a nutshell.”

AOC should ask Boston University for a refund, as she clearly hasn’t learned much about economics. After all, most economics students learn during the first week of lectures that we cannot compare stocks and flows. Wages are a flow; they're what people get each week, month, or year. Stocks are a stock, that is, a one-time valuation of future income. It’s simple, basic economics that wealth and incomes are different things, with different distributions.

The Dow soars, wages don’t.



Inequality in a nutshell. https://t.co/hD1g1y4uBk — Alexandria Ocasio-Cortez (@AOC) January 12, 2020

"The Dow soars, wages don’t. Inequality in a nutshell."



Rep. @AOC dismisses record stock market performances as not representative of a healthy economy.https://t.co/88lC2igtl7 — Washington Examiner (@dcexaminer) January 13, 2020

And the congresswoman’s claims are further undercut by the fact that wages are rising, and in fact, they’ve been rising for some time . But, you know, politics and facts are very infrequent bedfellows.

Back in 2007-2008, the Dow halved, yet, that's certainly not what happened to wages. When times are good, stocks do much better than wages, but when struggles arise they do much worse. In fact, so do profits and so do the incomes of the rich — that's why inequality almost always falls in a recession when high incomes take a much bigger hit. The recovery from the 2008 recession is, therefore, the cause of much of the rising inequality the past 10 years .

As to why wages are finally rising, this is a piece of economics so obvious even Karl Marx got it right — although it’s apparently beyond AOC’s comprehension.

When we've got essentially full employment, the situation today, most everyone who is willing to work already is employed. So, if you, that greedy and evil capitalist, want more workers to “exploit,” well, then you've got to tempt them away from another employer with higher wages. This is exactly what causes rising wages, and what’s happening now as we reach record-low unemployment. When the unemployment rate is as low as 3.5% , you've got to offer more to get people to come work for you.

It's just that old supply and demand thing that AOC might have missed on page one of the Economics 101 textbook. Yes, OK, reading the textbook is terribly old-fashioned. But it’s sad to see a sitting congresswoman fail to understand even the most basic of economic principles.

Tim Worstall (@worstall) is a contributor to the Washington Examiner's Beltway Confidential blog. He is a senior fellow at the Adam Smith Institute. You can read all his pieces at the Continental Telegraph.