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What if the candidates pandered to economists?
Do read Greg Mankiw on this topic. The list of policies favored by economists includes support free trade, oppose farm subsidies, leave oil companies and speculators alone, tax the use of energy [does he mean carbon-based energy?], raise the retirement age, invite more skilled immigrants, liberalize drug policy, and raise funds for economic research.
I don't disagree that there is a consensus on retirement age but it was news to me to read that. My informal impression had been that many economists on the left felt this would place undue burdens on people with physically demanding jobs. And personally I would sooner subsidize hard science than economics; I don't think we've earned our keep lately!
Or maybe Greg is just saying that it would win economists' votes. Like Alex, I wonder if economists vote on a more rational basis than do other people. If I meet a French economist, I suppose that his views are more shaped by his being a Frenchman than by his being an economist. I'd like to see a poll of Canadian economists on health care reform.
Posted by Tyler Cowen on July 12, 2008 at 07:17 PM in Political Science | Permalink
Comments
too bad economists don't opine much on budgetary policy. I'd like to hear the consensus on military spending. It would probably be to cut it down. However, I'm not too sure that reasoning would be based on uniform economic principle like most of the things on Mankiw's list.
Is there sound economics to support cutting the military that would get support from most economists?
I also wonder why economists are not in more uniform agreement based on market economic principles to lower the tax burden on about 90% of the population as well as cutting corporate tax . Is economics or ideology that causes this?
Posted by: john v at Jul 12, 2008 8:11:10 PM
Unfortunately, I agree with you about economists and research. I also wonder if politicians not listening to economists says less about the politicians and more about economists doing a poor job at making themselves heard?
Posted by: Brian Hollar at Jul 12, 2008 8:15:37 PM
You know, I really don't think the gas tax is as clear-and-cut as economists make it sound. If you implement a $4/gallon gas tax tomorrow, I am going to be mighty screwed if I had just bought a gas guzzling automobile today.
You might say "that's the point!" but I don't think people should be punished just for playing by the old rules.
I am not sure how much this applies to other taxation of externalities...
Posted by: Robert Olson at Jul 12, 2008 8:29:48 PM
I also wonder why economists are not in more uniform agreement based on market economic principles to lower the tax burden on about 90% of the population as well as cutting corporate tax. Is economics or ideology that causes this?
There, once again, seems to be a conflation between economics and economists. Economics attempts to say what happens to the market under specified conditions. It may suggest conditions for maximizing growth. However, it has nothing to say about whether that growth is "worth" the conditions that would be required to obtain it.
In making decisions about whether high-growth policies are worth the costs, economists are no different from anyone else - their choices are simply value judgments.
While economists may tends to share certain values and thus cluster around advocating high-growth policies, it is vital to avoid confusing the (social) science from the personal views of many economists. We can credit physicists with allowing us to understand nuclear reactions, but we would not consider them any wiser arbiters of nuclear weapons policy than the voters.
Posted by: Tom West at Jul 12, 2008 9:07:10 PM
Would that be a Canadian economist's opinion of US health care reform or Canadian health care reform? A
s a Canadian grad student in econ one of my favourite American moments is being told that universal health care is "bad, like socialism" and that it would never work without the entire country "ending up like Cuba" at a conference at a nice US university. To be fair it was an IR conference not an econ one.
On the other hand there seems to be a healthy debate over background checks for gun owners while we just dogmatically think that's a good idea.
Posted by: cdn econ at Jul 12, 2008 9:13:42 PM
AFAICT, to the extent that there's a debate about health care in Canada, it's about introducing market-based incentives to the supply side of the market. There doesn't seem to be a significant challenge to the idea of universal insurance and a single payer.
Posted by: Stephen Gordon at Jul 12, 2008 9:30:19 PM
I'm an undergrad at a Canadian university and there is no doubt in my mind that you would see huge differences in health care opinions on both sides of the border. I took a health care economics course this year and the professor would routinely say "this is an idea that only people in the states believe." I would like to believe these differences are caused by reasonable differences in research, not nationalism. However, there is little doubt in my mind that nationalism is the cause. More evidence that economists haven't earned their keep lately.
Posted by: tony trepanier at Jul 12, 2008 9:58:14 PM
I think money needs to be poured into computer science, biology, physics, and chemistry research. The users of these funds would be all the new immigrants we allow in from foreign lands.
Here is the platform to get my vote as a student of economics:
1.) Drastically cut defense-related spending (I'm talking 80-90% here)
2.) Substitute those funds 1:1 towards research in the aforementioned fields
3.) Allow anyone with a valuable brain into America
Does anyone disagree that this policy would lead to dramatic increases in growth rates?
Posted by: a guy at Jul 12, 2008 9:58:40 PM
Well, *this* economist thinks that IP reform would introduce a much, much larger increase in US welfare than any marginal gains from furthering opening trade. Beyond that, loosening "white collar protectionism" would also be much more beneficial than lowering the tariff on Timbuktu Cotton from 15% to 10%.
Posted by: cure at Jul 12, 2008 11:23:16 PM
I wonder how much of defense spending goes towards research in CS, physics, bio and chem?
Posted by: a man at Jul 12, 2008 11:55:04 PM
"Does anyone disagree that this policy would lead to dramatic increases in growth rates?"
Yes. I find it hard to believe that a military incapable of defeating Canada would be able to secure us.
Posted by: Robert Olson at Jul 13, 2008 12:38:58 AM
It would be nice to see a more pragmatic, empirical approach to economic policies in the U.S. What sort of policies have worked in other countries with similar characteristics? What hasn't worked? Why not learn from others' successes and failures?
Posted by: DaveinHackensack at Jul 13, 2008 1:26:10 AM
I think economists would be much more wary of getting into wars (not necessarily defense spending generally) because of the historical association with printing money and rampant inflation.
Maybe I should say 'should be more wary' because I don't recall much objection to the Iraq war from economists on inflationary grounds.
Posted by: PJ at Jul 13, 2008 1:41:46 AM
I think TC has missed that GM was making a joke at the end of this article, by advocating more money to economic research.
GM was demonstrating that when politicians want the votes of special interest groups, they usually end up by buying them (with subsidies, tax breaks, trade protections or the like).
Perhaps this would have been clearer if the NYT had allowed GM to use the ;=) symbol?
Posted by: BGC at Jul 13, 2008 1:42:18 AM
I think difference caused by research only, not by nationalism.some of the suggestion you made is good, but for economy we should do some more work.
Posted by: eCurrency Arbitrage at Jul 13, 2008 3:07:33 AM
Perhaps economists should cluster together in a swing state, so that they could overcome collective action problems, form a staunchly free-trade constituency, and exploit the logrolling vulnerabilities of the American electoral system. Size surely hasn't suppressed the message of agricultural producers.
Posted by: Marshall at Jul 13, 2008 9:47:47 AM
I would like to believe these differences are caused by reasonable differences in research, not nationalism. However, there is little doubt in my mind that nationalism is the cause.
A lot of this is caused by the fact that in policy discussions in the public eye you cannot acknowledge that your position has *any* trade-offs. To do so is to then be shouted into oblivion by the other side who merely repeats that your words over and over again to the voters.
Take health care for example: the single payer system means rationed health care.
Pro: much cheaper, allows voters to feel that right to medical care (life) doesn't hinge upon wealth, greater feeling of security when freed from fear of high medical expenses
Con: longer wait times on average, less high end health care, less innovation
Given that values tend to cluster with nationalities, it's not surprising that Americans will tend to weigh the pros and cons and choose the American system, while Canadians can look at the same pros and cons and choose the Canadian system. However, because you can't acknowledge the costs of whatever your choice, those advocating an American style system are obliged to pretend it wouldn't be cheaper and provide greater access to the poor, while those advocating for a Canadian style system cannot acknowledge that the level of health care will not be the same as most Americans experience now.
Given how politics plays out, you cannot afford to acknowledge any of the cons of your preferred policy. Which means there is enormous pressure for economists studying the health care systems to either consciously or unconsciously (I suspect mostly unconsciously), shape their research to either minimize the cons or neglect to study the cons altogether. And given that economics is already a pretty 'bendy' subject (dealing with humans and all), it's incredibly easy to have results come out the way you need them to come out.
So, in the end, it isn't so much nationalism that causes divergent economic beliefs, but differing values between differing nationalities.
Furthermore, those economists who actually do "play fair" and acknowledge the cons of all positions are not going to provide data that is useful to one side or the other of a policy 'debate', and so will not have influence in the public debate.
Posted by: Tom West at Jul 13, 2008 10:02:10 AM
It will be interesting to where economists end up on a public poll in the ratings of respect for professions, after this current crisis is over.
Will economists be as highly regarded as firemen, or lawyers?
Not a trivial question at all.
Posted by: James at Jul 13, 2008 10:25:38 AM
Tyler, I think your statement that economists haven't earned our keep is intellectually honest and interesting, but needs some unpacking. What should economists have done to earn our keep? What are some economists that did earn their keep?
Do you count Dean Baker as earning his keep, since he predicted the housing crisis back in 04-05?
Posted by: Keith at Jul 13, 2008 10:46:23 AM
Economist almost universally misuse mathematics, mistaking mathematical constructs for causal explanations -- and don't even get me started on all of the misuses of the logic of statistics you will almost works of economic research.
And who has paid the economists to think and work like this? Well, the biggest funder has been the Federal government. Read Mirowski's _Machine Dreams_ for a real eye opener on this.
There's good reason to believe that the interference of government funding in the economic "research" sector has been as destructive of economic understanding among economists as government funding has been destructive of the environment in America's wetlands (e.g. the Army Corp of Engineers), or in a hundred other domains.
Posted by: PrestoPundit at Jul 13, 2008 10:58:33 AM
Economist almost universally misuse mathematics, mistaking mathematical constructs for causal explanations -- and don't even get me started on all of the misuses of the logic of statistics you will almost works of economic research.
And who has paid the economists to think and work like this? Well, the biggest funder has been the Federal government. Read Mirowski's _Machine Dreams_ for a real eye opener on this.
There's good reason to believe that the interference of government funding in the economic "research" sector has been as destructive of economic understanding among economists as government funding has been destructive of the environment in America's wetlands (e.g. the Army Corp of Engineers), or in a hundred other domains.
Posted by: PrestoPundit at Jul 13, 2008 10:59:43 AM
They'd be crazy to up funding for economics research. If they wanted you to publish opinions, they'd have issued them to you already. If they wanted your real opinions, they'd get them for free from your blogs.
"Yes. I find it hard to believe that a military incapable of defeating Canada would be able to secure us."
Robert, you must not think much of our military if you think they couldn't beat Canada with a 3-fold spending advantage? If you cut the military budget by the high end (90%) of the proposal, they'd still be roughly on par with China, basically tied for 3rd in spending, and still way ahead technologically. With no major foes on contiguous land, this would be a reasonable level of spending for any country interested in defense rather than offense or empire maintenance.
http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures
Whether an empire is good for the economy in the short, mid, or long-term is open to debate.
Posted by: Andrew at Jul 13, 2008 12:13:56 PM
How about an army that couldn't beat Somalia with an asymptotically infinite spending advantage?
Posted by: usa at Jul 13, 2008 12:56:38 PM
There's good reason to believe that the interference of government funding in the economic "research" sector has been as destructive of economic understanding among economists as ...
Is there any other agency that is likely to fund economic research with less bias? If the results of your research don't follow the government line, are government grants to your university likely to dry up? Are they more likely to dry up than you are to get fired if the results of your research are damaging to the company that's employing you?
Government funding of pure research may not be ideal, but it's probably the least un-ideal :-)
Posted by: Tom West at Jul 13, 2008 2:35:44 PM
Tom, I've worked for a company and for grants. I'd be hard-pressed to say which is more likely to compromise a researcher's integrity. But, at the company, they really pushed to see whether the data was inconclusive or negative. They really really really didn't want to kill customers. This conservatism is why I left. Not that I wanted to kill customers, but because I believed you could could cut costs AND improve quality. I proved it. Again and again and again. The conservative engineers were incredulous, as I'm sure many readers are now.
Anyway, companies don't really do fundamental research and I'm pretty sure they'd be even more interested in the truth on that. It would be pretty embarrassing to fudge a fundamental principal. I think it's the free-rider problem (overblown) and not private sector conflict of interest that is the main economics rationale for publically funded research.
Posted by: Andrew at Jul 13, 2008 3:13:30 PM
