Liberals fail economics 101

by Michael Tilley ([email protected]) 142 views 

Now comes Zeljka Buturovic and Daniel Klein with an interesting piece of research for those who sometimes, frequently or hourly wonder why some folks support government laws, programs and social-engineering containing flagrant violations of fundamental rules of economics.

Which is to say they offer a plausible explanation if you’ve ever:
• Wondered what the alleged smartest-kids-in-the-class are smoking when they would have you believe a multi-trillion national debt is merely a manageable problem;
• Been puzzled when a Republican or conservative Democrat complains about runaway government spending in Washington, but is there to take credit for $2 million in interstate landscaping from a federal agency you didn’t previously know existed;
• Wanted to slap the nonsense out of Harry Reid or Nancy Pelosi when they claim to save money and improve national health care by stepping completely between you and your doctor using the same federal government that has managed to be effective only in rendering ineffective (and bankrupt or damn near) Social Security, Medicare/Medicaid, public schools and the basic concept of federal government; and,
• Found yourself repeatedly frustrated by big-government supporters who want to convert marginally justifiable safety-net programs into personal incentive-killing and budget-busting safety-cocoon programs.

Buturovic holds a doctorate in psychology from Columbia University and is a research associate at Zogby International. Klein is an economics professor at George Mason University and the chief editor of Econ Journal Watch.

What their research indicates is that progressives, liberals and moderates have an “unenlightened” view of fundamental economic principles compared to conservatives and libertarians — “unenlightened” being the academic way to say “F’d up.”

Buturovic and Klein crafted a survey they conducted among 4,835 Americans. The survey posed eight economic statements for which the survey takers were to note their level of agreement or disagreement. The correct answer for each of the basic statements is undisputed. (The complete report, including a PDF of the research paper can be found at this link.)

Let’s provide three examples from that survey

• “Restrictions on housing development make housing less affordable.” A true statement. However, 67.6% of progressives and 60.1% of liberals disagreed with the statement. On the other side, 22.3% of conservatives and 15.7% of libertarians disagreed.

• “A company with the largest market share is a monopoly.” A false statement. But 30.8% of progressives and 27.9% of liberals agreed with the statement.

• “Free trade leads to unemployment.” A false statement. Not surprisingly, 60.8% of progressives and 44.6% of liberals believe free trade DOES lead to overall unemployment — this despite incontrovertible jobs data. On this matter, 16.1% of conservatives and 19.1% of libertarians also posted an incorrect response.

The authors note this of their research: “We think it is reasonable to maintain that if a respondent disagrees with the statement ‘Restrictions on housing development make housing less affordable,’ the respondent betrays a lack of economic enlightenment. Challengers might say something like: ‘Well, not every restriction on housing development makes housing less affordable,’ but such a challenger would be tendentious and churlish. Unless a statement in a questionnaire explicitly makes it a matter of 100%, by using ‘every,’ ‘all,’ ‘always,’ ‘none,’ or ‘never,’ it is natural to understand the statement as a by-and-large statement about overall consequences. Do restrictions on housing development, by and large, make housing less affordable? Yes they do. Does free trade lead, overall, to greater unemployment? No, it does not. For someone to say the contrary is economically unenlightened.”

Klein noted in this Wall Street Journal opinion piece about the research: “Adam Smith described political economy as ‘a branch of the science of a statesman or legislator.’ Governmental power joined with wrongheadedness is something terrible, but all too common. Realizing that many of our leaders and their constituents are economically unenlightened sheds light on the troubles that surround us.”

Political satirist P.J. O’Rourke said as much in his 1991 book “Parliament of Whores.” He noted: “The whole idea of our government is this: If enough people get together and act in concert, they can take something and not pay for it.”

In addition to the point that liberals and progressives often support big-government policies because they don’t know stuff from shinola about basic economics, there is also a point in the research that suggests universities have done and are doing a poor job of economics instruction.

“Our data indicate that Americans of the sort to participate in such a survey, those who are college-educated are no more economically enlightened than those who are not.”

Ouch. (Note to self: Call Arkansas Tech University and ask if they will issue a refund on Econ I and Econ II.)

One explanation Buturovic and Klein offer is that most college professors are liberal and unwilling or unable to point out how economic fundamentals clash with most liberal government views.

Specifically, they note: “The college professoriate is very preponderantly centrist, center-left, or left. … Once a person has been acculturated and committed to the pattern of social-democratic political aesthetics, she might become not only unreceptive to economic enlightenment, but actually unfriendly to it, especially where it upsets cherished beliefs and values.”

The point here is that we should all bone up on basic economics before we establish, alter or consider an ideology.

I’ve often said Logic is no match against Loud. As we consider, for example, the national economics of energy (do we drill for oil, build nuke power plants, or hug trees?), the economics of Arkansas tax policy (how do we balance consumption and income taxes?), and local economics (what do we do with a convention center?), we should seek to first challenge what we think we know. And we should do that even if it begins to upset our “cherished beliefs and values.”