I think it’s fair to say that the GOP presidential nominee has said, oh, a few things that would have sunk the candidacy of a politician.
politicking
From the campus to the ballot box
It’s amazing to me how much this presidential election reflects ideas and conversations that have been percolating around college campuses for the past several years. I often tell students that their movements have an uncanny way of being on the right side of history (OK, I see that I’m begging the question, sue me) and I think that this is being borne out in all caps this year.
Local news
Olympic fever. My TV has been pretty much stuck on NBC this week (fine, NBC, I guess I see why you paid $1.23 billion for the broadcast rights!), their questionable programming choices aside. (And I certainly did NOT find… other means to watch the women’s gymnastics all-around final live today. Nope, nothing to see here.)
More on higher ed funding
Following up on my post from yesterday about higher education funding, I’d like to discuss this article from William G. Bowen and Michael S. McPherson from last week at Vox. I think it is quite representative of the wonky, centrist view—dare I say consensus—that casts the student pays model as a self-evidently “right” approach.
There are many illuminating points in the article. In particular I am quite receptive to their “proposals for reform”: briefly, work to improve graduation rates, reform PhD programs to reduce the oversupply of PhDs relative to academic jobs, professionalize teaching faculty to address the outrageous reliance on mistreated adjunct faculty, and consolidate some small colleges to avoid costly duplication of administrative spending. I think these are excellent starting points for a healthy debate.
But nevertheless I would like to strongly object to the characterization of the funding debate that runs through the first half of the article. I’ll pull a few excerpts that I believe get it wrong on the student pays versus society pays debate.
Who should pay for higher education?
Details might change, but the really big question in higher education funding is always the same: public funding versus private funding. I’m not breaking any new ground here and I’m certainly not advocating anything radical, but it’s on my mind today with “debt-free college” very much in the discussion on the first day of the Democratic National Convention. Every so often I like to refresh my memory on the fundamentals and reaffirm why, on balance, I favor the availability of ambitious, quality, zero-tuition higher education.
Learning from your mistakes
The big policy lesson from our current recession is: save money in good times to see you through the bad. Obvious? Apparently not, especially in Britain, where the government spent the unprecendentedly long expansion period from the late 90s to 2007 running deficits. But it’s good to know that we can learn from our mistakes, right?
But [Alistair Darling] made clear his plans depended on a rapid economic bounce-back – with a forecast of 1.25% growth next year rising to 3.5% in 2011. [link]
The IMF World Economic Outlook (WEO) report predicts the UK economy will shrink by 4.1pc in 2009, with the downturn expected to continue into next year when the economy will fall by 0.4pc. [link]
This is unacceptable. After years of squandering prosperity by running deficits in boom years, now the government proposes to dig even deeper.
My university, Brown, is cutting staff right now. By anecdote, it is far from alone in the higher education world in doing so. Why is it that a bad year means the operating budget is slashed? Why was the financial plan based on an assumption of constant, unlimited growth in the endowment (i.e. a constant, unlimited rise in stock prices)? Why were national governments operating under the same assumptions?
Strange quotations
I’m scratching my head at this one from Barack Obama:
He added, “Senator McCain – you can’t run away from your words and you can’t run away from your record. When it comes to this economy, you’ve stood firmly with George Bush and a failed economic theory, and what you’re offering the American people is more of the same.”
I struggle to even offer a guess as to what ‘economic theory’ he’s talking about.
Ideology, politics, economics
Simply excellent paragraph from Free Exchange:
I have trouble with any ideological reading of the economics, because the two (ideology and economics) so rarely fit well together. I don’t want to elect a free-market supporter or an interventionist. I want to elect someone who will carefully consider the issues and determine that here the government ought to assign pollution property rights, while here the government should reduce licensure, and so on. I want, in short, someone with enough intellectual heft to know the difference between good policy and good politics.
This promotes the idea a kind of cipher-wonk as a political leader, which is an interesting idea – do we want ideology-free politicians? – but I think extrapolating the point to economics in general is worthwhile. Ideology and economics really don’t get on, and perhaps a lot of the misuse and misunderstanding of “economics” in political stumping and election coverage is indeed due to that tension, that ideology infests politics more than it can get into economics.
The very concept of positivist economics is precisely what the Free Exchange quotation is invoking when arguing that we should be electing someone who can do a proper analysis – an objective analysis – instead of someone whose prejudices and ideology biases them consistently in one direction or the other, regardless of the evidence.
Laudable? Probably. The sticking point, again, is that pesky word ought, as in “I want to elect someone who will carefully consider the issues and determine that here the government ought to assign pollution property rights, while here the government should reduce licensure, and so on.” Then we’re back to square one: we can elect our wonk, who does an objective analysis before enacting any policy, but at some point we need to figure out which option to take, and all the objective analysis in the world can’t prescribe; again, there’s no such thing as technocratic economics. Surely that makes it impossible to avoid ideology in politics? Surely, also, that’s why sterilizing economics can’t also sterilize economic policy. We can do that economic analysis, but we always have to answer the normative question of what we want if we are to make use of it.
‘Good’ versus ‘bad’ economics
A peculiar distinction is often made between ‘good’ and ‘bad’ economics when analyzing economic policy. The current hot potato of a gas tax holiday in the US is a case in point – though it might be a trivial issue in the scheme of things, it did provide this absolutely outstanding moment from Hillary Clinton:
“Well I’ll tell you what, I’m not going to put my lot in with economists,” Clinton said, a response in line with some of the populist notes she’s been hitting in recent stump speeches on the gas tax.
There are a couple of things going on here. First, it just shows that declaring opposition to economists is just as popular a political strategy as declaring opposition to ‘business’ or ‘the elite’ or ‘greedy oil companies’. This is almost certainly because ‘economics’ is perceived as being one and the same with these things, an ax wielded by the establishment to crush little people under the wheels of capitalism. Again, true economic analysis is valueless, and is subjective only once we evaluate the outcomes or the processes that would lead to or from one thing or another.
The other point, related, is the implicit invocation of a consensus among ‘economists’. It’s related because it is unambiguously true that the majority of economists evaluate things in a particular way – the subjective part is a collective subjectivity rather than a diversity of opinion. Why is that? Are economists molded into a particular normative stance that evaluates policies or outcomes in a particular way? A significant amount of work has been done on the question of which way the causality runs between studying economics and policy opinions: do economists dislike the gas tax holiday because they’ve studied economics or because people who dislike these kind of policies study economics?
The truth is that it’s very easy to identify what ‘good’ and ‘bad’ economics are, because that label can be attached only to the logical, scientific chain of argument – the positive side – that draws the map from cause to effect. Of course we can argue about the validity of the links in the chain, test our assumptions, look to evidence, but the fact remains that ‘bad’ economics is that which fails to acknowledge the true effects of an action.
By contrast, the normative side cannot be labeled ‘good’ or ‘bad’, because it is only opinion. To argue against a normative stance is to argue against an opinion. This is why it is so dangerous for the ‘Principles of Economics’ to include value-loaded statements; this is why it is so dangerous to have a normative consensus among people who call themselves ‘economists’. When that happens, we risk confusing the normative opinions of these people with a scientific conclusion; it is not.
If a politician was to ignore or lie about the tangible consequences of a policy, that is bad, in the sense of being misleading or untrue. However, if a politician acknowledges the best guess of the consequences, whether they argue for or against the policy is neither bad nor good. Economists would do well to remember that they are part of the second group, not the first. It is fine to point out misinformation, but to argue that ‘economics tells us what to do here’ is to assume that their opinion is good, which is a great sin of arrogance.
When one responds to the gas tax stuff with a line like (from Paul Krugman)
Why doesn’t cutting the gas tax this summer make sense? It’s Econ 101 tax incidence theory…
I’m sure they are really pointing out the tangible consequences of the policy, but the line between the positive and the normative is fuzzed, the value-free analysis becomes loaded with subjectivity. The two must be separated.
Sensible economic policy is not just found in textbooks
Standard caveat: I remain apolitical here. Hat tip to Economist’s View, whose discussion of Andrew Leonard’s Salon article on some current trade policy touches on a lot of interesting things.
Apparently there’s a “Trade Adjustment Assistance” program on the Senate radar. Now, this could be considered sensible economic policy, whether or not you agree with it.
“The Trade Adjustment Assistance program is designed to compensate manufacturing sector workers who are displaced by trade. It includes financial support for education and training, a health care credit, wage insurance and other goodies.”
It’s a well-worn argument that long-term benefits from trade with other countries might come with short-term costs for those workers who find employment in industries which produce goods most likely to be imported. Social justice might argue for support for such workers; help the worker, not the industry is not an original maxim. It can be applied equally to “dying” industries. If the typewriter industry is becoming obsolete, do you subsidize the typewriter producers or let them die and use your welfare state to support the people who are affected?
Maybe it’s too harsh to say that this is not a textbook argument, but one certainly can’t gloss over the negatives of any policy, no matter how positive the positives, and, recall, those pesky Principles of Economics said that Trade Can Make Everyone Better Off.
The Salon article refers to this, from The Atlantic, makes the forceful and obvious point (I will paraphrase) that a proper welfare state doesn’t ask why, just helps the needy while they need, and that this trade adjustment business is a band-aid, a facsimile of a real solution for the problems of the consequences of harsh and widespread unemployment in whole communities at a time.
Not to wade into the politics where I don’t belong, but I like this:
“Preaching the benefits of free trade without being willing to take care of the “losers” created by trade isn’t very bright in an election year when workers are feeling squeezed, and the opposition party controls Congress.”
Ignoring the electioneering stuff, the direct analog to an economics class or an economic policy debate would be to actually have a proper debate, an acknowledgment that everything isn’t always super-awesome. Similarly, the Economist’s View take:
“It seems to me that an administration that truly cared about the working class would be eager to find a way to help those who are hurt from trade, that they would make it a high priority and insist it get done, but there’s little indication – through actual action – that helping workers hurt from trade, or from economic conditions more generally, is a priority.”
This is perhaps one of the biggest economic policy questions: how big should your welfare state be? Design is one thing, but we have a fundamental philosophical question here, which is bigger than technicalities. Let’s brawl that one out, historically, globally, politically, morally, economically.
Except for poor old John McCain, who gets kicked again. Hard. I’m on record: I think he is an economist (for a suitable definition of economist). Not Economist’s View.
“I think a lot of people are missing the point about John McCain’s lack of knowledge about economics… Anyone who really cared about economic policy and its effect on households would have taken the time to become familiar with the basics. How will he know how best to help workers if he has no idea about the underlying economics? If he asked, there are very prominent economists who would be happy to spend an hour once or twice a week – kind of like a principles course – explaining how the economy operates. But he never bothered, never took the time, because he apparently doesn’t care enough to give up the time necessary to actually understand the polices he is voting on. I wouldn’t mind the ignorance so much if there was any indication at all that he had tried to over come it, any indication he thought it was important enough to learn about, but there isn’t.”
We’re going to give McCain the Principles of Economics course? I just got chills. Surely not the one we give the poor undergraduates? From me:
“A list of “principles” pregnant with loaded statements is not the right way to present our discipline.”
Let’s not indoctrinate John McCain too!
Jim Campbell 